Duval v. Morton

347 F. Supp. 501, 1972 U.S. Dist. LEXIS 12232
CourtDistrict Court, D. Oregon
DecidedAugust 23, 1972
DocketCiv. No. 71-684
StatusPublished
Cited by2 cases

This text of 347 F. Supp. 501 (Duval v. Morton) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Duval v. Morton, 347 F. Supp. 501, 1972 U.S. Dist. LEXIS 12232 (D. Or. 1972).

Opinion

OPINION

SOLOMON, District Judge:

Plaintiffs filed this action to review a ruling by the Secretary of the Interior which disallowed plaintiffs’ mining claims for silica sand.

Between September and December, 1959, plaintiffs located 24 mining claims covering 3,080 acres of coastal sand dunes in Coos County, Oregon. On July 18, 1961, the United States Forest Service withdrew from further mineral entry the lands on which plaintiffs’ claims were located because these lands were to become part of the Oregon Dunes Recreation Area.

In 1967, the Forest Service contested the validity of plaintiffs’ claims on two grounds: one, the material found on the claims was not a valuable mineral deposit on July 18, 1961 (see 30 U.S.C. § 611); and, two, that on July 18, 1961, there had been no valid discovery because there were no valuable minerals on the claims.

By Act of Congress of July 23, 1955, no deposit of “common varieties” of sand, stone, gravel, pumice, pumicite, or cinders is thereafter deemed a “valuable mineral deposit” to give validity to any mining claim (30 U.S.C. § 611) except if “the deposit has some property giving it distinct and special value.”

A hearing examiner from the Bureau of Land Management, Department of the [503]*503Interior, held against plaintiffs on both grounds.

All appeals within the Department affirmed the examiner’s decision, but the Interior Board of Land Appeals (the Board) affirmed on the basis of the second ground only. The Board concluded that there had been no valid discovery under either the “prudent man” test or the “marketability” test of value.

Plaintiffs’ final administrative remedy was exhausted when their request for reconsideration was denied.

Milvoy Suchy, a registered mining engineer who graduated from the Colorado School of Mines in 1938, was the Secretary’s only witness. Suchy had worked in commercial mining operations and later as a geologist with the Corps of Engineers. During World War II, he was a marine engineer on a test crew out of San Francisco. Since 1952, he worked continuously with the Forest Service. Suchy had visited coastal and inland deposits in Oregon, Washington, and California. He also visited sand processing plants in the Monterey, California, area. He was familiar with methods of processing raw glass sand and had studied a United States Bureau of Mines report (Report of Investigations 6484) which examined the character and potential value of glass sand deposits on the Oregon coast.

He testified about the quality of sand deposits along the Oregon and Washington coasts, including deposits on the plaintiffs’ claims.

Suchy testified that glass sand from the California coast is of a higher grade than Oregon sand because the Oregon sand has a higher iron oxide content. Iron oxide in glass sand discolors the final glass product. Nevertheless, sand with a fairly high iron oxide content is suitable for making amber glass, and plaintiffs’ sand could be used to make amber glass bottles without extensive processing.

Suchy also testified that neither Owens-Illinois nor Northwestern Glass, the only glass manufacturers in the Pacific Northwest, was likely to turn to plaintiffs for a source of supply because both manufacturers had reliable “captive” sources of supply, which they would be reluctant to abandon, particularly since they would have to forego a tax advantage which they enjoyed. Owens-Illinois, for example, is entitled to a depletion allowance on its own sand, which comes from Monterey. It could not claim that allowance on plaintiffs’ sand. Plaintiffs were also faced with the problem of negotiating favorable rail freight rates.

In spite of these problems, Suchy concluded that Owens-Illinois was a possible market for plaintiffs’ sand, but not until some time in the future, when its Monterey sand supply is expected to give out.

Plaintiff Maurice Duval testified. He also called Henry Harris and George Carter, two ceramic research engineers. All three stated that the sand from plaintiffs’ claims had unique qualities because it could be used for making amber glass without any processing other than drying.

This testimony merely confirmed the testimony of Mr. Suchy on the unique character of this sand deposit and was the basis for the action of the Interior Board of Land Appeals in rejecting that portion of the examiner’s v decision which found that this sand did not have properties which gave it distinct and special value as required by 30 U.S.C. § 611.

The issue here is limited to determining whether on July 18, 1961, plaintiffs had made a valid discovery of valuable minerals.

The Secretary held that there was no such discovery.

Plaintiffs seek to set aside this holding on the ground that it was based upon incompetent evidence and that the [504]*504Secretary’s decision disregarded plaintiffs’ evidence and was contrary to the admissible evidence. Plaintiffs also contend that the Secretary misapplied the law of valid discovery and abused his discretion in denying their request for reconsideration.

There is no merit in any of these contentions.

Although Suchy had no prior experience with glass sand, he was familiar with sand processing techniques and with the qualities of the sand deposits in the Pacific Coast states. Suchy was an experienced and competent mining engineer, who had examined the area and studied the literature. In my view he was qualified to and did intelligently evaluate the economic aspects of the proposed mining operation.

His conclusion that there was no market for this sand in 1961 was amply supported not only by the facts which he developed, but also by the testimony of Duval and plaintiffs’ other witnesses. Harris testified that non-metallic minerals are usually sold through closed contracts to customers rather than on the open market. Duval admitted that he had done nothing other than make test samples of the deposit until after July 18, 1961. He did not apply for or obtain a rail freight rate until 1966 because, as he candidly admitted, “We were not in a position actually to approach the market.” Neither did he, until long after 1961, attempt to interest Northwestern Glass and Owens-Illinois in his sand. In 1966, his plan to send 150 tons of sand to Northwestern Glass for a “test melt” fell through because Northwestern told Duval that it could not then afford to interrupt its near-capacity production schedule, and no such test was made until 1967.

The Board did not misapply the law when it decided that valuable minerals had not been discovered by July 18, 1961. There are two tests of value, the “prudent man” test and the “marketability” test. Mineral deposits are not deemed valuable unless “a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine.” United States v. Coleman, 390 U.S. 599, 602, 88 S.Ct. 1327, 1330, 20 L. Ed.2d 170 (1968). It must be shown that mineral deposits can be “extracted, removed and marketed at a profit” to meet the marketability test.

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Cite This Page — Counsel Stack

Bluebook (online)
347 F. Supp. 501, 1972 U.S. Dist. LEXIS 12232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/duval-v-morton-ord-1972.