Belville Mining Company, Cross-Appellants v. United States of America, Cross-Appellees

999 F.2d 989, 127 Oil & Gas Rep. 36, 1993 U.S. App. LEXIS 18809, 1993 WL 274362
Court of Appeals for the Sixth Circuit·Decided July 26, 1993·No. 91-3623, 91-3651·Published·Cited by 43 cases

Opinions

DAVID A. NELSON, Circuit Judge.

This case involves a dispute as to whether strip mining rights were reserved by certain Ohio landowners who conveyed four tracts of land to the federal government some years ago. In a decision reported at 763 F.Supp. 1411 (S.D.Ohio 1991), the district court determined that the grantors of three of the tracts [991] did reserve such rights and that the grantor of the fourth (a 5,763 acre tract known as the Culbertson property) did not. We find no error in these determinations. Contrary to a conclusion reached by the district court with respect to the Culbertson tract, however, we conclude that the Department of the Interior possessed authority to reconsider an administrative determination wherein the agency had erroneously recognized the existence of private strip mining rights in that tract. We shall therefore reverse the judgment of the district court insofar as it allowed private strip mining on the Culbertson tract. The judgment will be affirmed as to each of the other tracts.

I

Under the authority of the Weeks Act of 1911, as amended, 16 U.S.C. §§ 515 et seq., the Secretary of Agriculture has purchased many thousands of acres of land in Southeastern Ohio’s coal country for inclusion in the Wayne National Forest. In some of these purchases all mineral rights were included. In order to acquire more acreage for less money, however, the government often made purchases that were subject to a reservation of mineral rights by the grantor. (Land can cost significantly more with mineral rights than without, of course, if there is thought to be any possibility that the mineral rights might be exploitable.) Mineral rights of one sort or another were reserved by the grantors of each of the four tracts at issue here, and the plaintiffs (referred to collectively as “Belville”) eventually acquired the reserved mineral rights pursuant to deed, land contract, and option agreement.

The first of the four tracts to be purchased was the largest: 5,763.14 acres of land in Lawrence County, Ohio, acquired under two deeds executed by E.S. Culbertson and Alice C. Culbertson, husband and wife, on February 26, 1936. The stated consideration totaled $26,697.27, or about $4.63 per acre. Both of the deeds contained provisions reserving to the Culbertsons “the right to prospect for, mine, remove and/or produce coal, oil, [and] gas for a period of 99 years.... ” Other provisions will be described in the next part of our opinion.

In 1942 the government purchased 306.42 acres of land in Scioto County, Ohio, from Edward W. Bauer and Clarice Bauer, his wife, at a stated price of approximately $6.25 per acre. The Bauers reserved for a 99 year period “the right to prospect for and mine by means other than hydraulic ... coal, limestone, clays and shales of Ohio.... ”

By deed dated March 15, 1943, Harmon and Anna Simmering and three couples named Taylor granted the government 1,630.74 acres of land in Scioto County, Ohio, in consideration of -a stated price of $10.00 per acre. The deed contained a reservation of mineral rights similar to that in the Bauer deed.

In March of 1950, finally, a tract of 115 acres in Lawrence and Jackson Counties, Ohio, was granted to the government at a price of $11.00 per acre by Charles A. Jenkins and Beulah Jenkins, husband and wife. Subject to a right of renewal for five years, the grantors reserved “until the termination of December 31, 1989, the right to take and remove coal, clay, limestone, gas and oil.... ”

Strip mining for coal did not begin in Ohio until 1914, the district court found. By 1936, however — the year of the Culbertson conveyances — strip mining accounted for about 10 percent of Ohio’s total production of coal. See 763 F.Supp. at 1413. Strip mining accounted for more than half the total coal production in Ohio by 1948. Id.

During the 1950s, the record indicates, strip mining operations were conducted on both the Bauer and Simmering tracts pursuant to permits issued by the United States Forest Service. Strip mining was conducted on the Jenkins tract, under Forest Service permit, during the 1960s.

Congress subsequently enacted the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. §§ 1201-1328, a statute known by the acronym “SMCRA.”' Section 522(e) of SMCRA, 30 U.S.C. § 1272(e), provides that “[a]fter August 3, 1977, and subject to valid existing rights[] no surface coal mining operations except those which exist on August 3, 1977, shall be permitted ... on any Federal lands within the boundaries of [992] any national forest----” (Emphasis supplied.)

The administrative body charged with responsibility for making determinations as to “valid existing rights” (known to the cognoscenti as “VER”) is the Interior Department’s Office of Surface Mining, Reclamation, and Enforcement (“OSM,” for short). In September of 1985 plaintiff Belville applied for a determination that it possessed valid existing rights to conduct strip mining operations on the four tracts described above. OSM denied the application. Belville reapplied in August of 1988, submitting supplemental information. On December 23, 1988, OSM’s Assistant Director for Eastern Field Operations signed a short letter in which he said it was his determination that Belville “possess[es] valid existing rights” in the four tracts. The letter, sent to Belville with a copy to the Ohio Division of Reclamation, went on to say that Belville could now seek state permits to mine the properties.

In June of 1989, while applications for state permits were pending, a Congressional subcommittee issued a report highly critical of this particular VER determination. Two months later, before the necessary strip mining permits had been issued by the State of Ohio, a newly appointed Director of OSM notified Belville that the VER determinations were being suspended. On December 15, 1989, OSM reversed its determination as to the Culbertson tract. Reversals as to the other three tracts followed some months later.

Belville filed the present action in February of 1990. The complaint sought declaratory and injunctive relief against the United States and various federal agencies and officials. The district court conducted a four-day bench trial in the spring of 1991, and the decision referred to at the outset of this opinion was issued soon thereafter.

The government perfected a timely appeal. Belville cross-appealed from the portion of the decision in which the district court found that the grantors of the Culbertson tract had not reserved (and Belville had not acquired by deed) the right to strip mine coal on that tract. On motion by the government we stayed the judgment pending resolution of the appeals.

II

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Belville Mining Company, Cross-Appellants v. United States of America, Cross-Appellees, 999 F.2d 989, 127 Oil & Gas Rep. 36, 1993 U.S. App. LEXIS 18809, 1993 WL 274362 (6th Cir. 1993).

999 F.2d 989 (Belville Mining Company, Cross-Appellants v. United States of America, Cross-Appellees) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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