New West Materials LLC v. Interior Board of Land Appeals

398 F. Supp. 2d 438, 162 Oil & Gas Rep. 415, 2005 U.S. Dist. LEXIS 26690, 2005 WL 2895083
CourtDistrict Court, E.D. Virginia
DecidedOctober 28, 2005
Docket05CV403
StatusPublished
Cited by4 cases

This text of 398 F. Supp. 2d 438 (New West Materials LLC v. Interior Board of Land Appeals) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New West Materials LLC v. Interior Board of Land Appeals, 398 F. Supp. 2d 438, 162 Oil & Gas Rep. 415, 2005 U.S. Dist. LEXIS 26690, 2005 WL 2895083 (E.D. Va. 2005).

Opinion

MEMORANDUM OPINION

ELLIS, District Judge.

At issue in this Administrative Procedure Act 1 (“APA”) suit for review of final agency action is whether the reservation of “oil, gas, and all other mineral deposits” in the Small Tract Act of 1938 2 (“STA”) encompasses sand and gravel.

*439 I. 3

Because this dispute involves the interpretation of the STA’s mineral reservation, a brief recitation of the STA’s history and pertinent provisions is in order at the outset.

The STA, originally passed in 1938, authorized the Secretary of the Interior to sell or lease five acre tracts of public lands, 4 “which the Secretary may classify as chiefly valuable as a home, cabin, camp, health, convalescent, recreational, or business site.” STA 52 Stat. 609 (1938). The sales or leases were to be accomplished under “such rules and regulations as [the Secretary] may prescribe.” Id. In addition, the STA required the patents under which land was sold to contain a reservation to the United States of the “oil, gas, and other mineral deposits, together with the right to prospect for, mine, and remove the same under such regulations as the Secretary may prescribe.” Id.

When the STA was amended in 1954, the permissible purposes for which the Secretary could sell the land were expanded to include “residence, recreation, business, or community site purposes.” 68 Stat. 239. The statute was amended in order to: (i) expand the category of uses for which the Secretary could sell or lease STA land to include community site purposes, such as municipal, religious or educational purposes, (ii) simplify the STA’s administration, and (iii) allow the Secretary to dispose of unsurveyed lands through the STA. New West, 164 IBLA at 134 (citing H.Rep.No. 2212, 80th Cong. 2nd Sess., June 4 1948, to accompany H.R. 5555, at 2). The STA’s mineral reservation was unchanged except for the addition of the word “all” before the words “other mineral deposits.” As amended in 1954, therefore, the STA’s mineral reservation granted to the United States the “oil, gas and all other mineral deposits” on land sold or leased pursuant to the STA.

Approximately twenty years after the amendment, in 1976, the STA was repealed when Congress passed the Federal Land Policy and Management Act of 1976 (“FLPMA”). Importantly, however, the FLPMA expressly preserved the rights of the United States under the STA’s mineral reservation provision. See 43 U.S.C. § 1701 (2005).

The current dispute involves an 82 acre tract of land (“subject land”) conveyed by the United States in 1959 via patent deeds to several private owners in separate parcels approximately five acres in size. Pursuant to the STA the patent deeds reserved the mineral rights to the United States. 5 At the time of the conveyance, the subject land was essentially desert and it remained in this state and vacant for roughly forty years when, in August 2000, plaintiff JWR, Inc. (“JWR”) acquired the *440 individual parcels comprising the subject land from private owners.

The subject land is located in Maricopa County, Arizona, approximately 20 miles from downtown Phoenix, and extends along the Agua Fría River channel. River channels constitute an important source for aggregate materials such as sand and gravel because the sand and gravel is typically cleaner and less cemented. Accordingly, and in light of the continued expansion of metropolitan Phoenix, JWR entered into a lease agreement with plaintiff New West Materials (“New West”) in October 2000 for the express purpose of New West’s extraction of sand and gravel from the subject lands. 6 The record reflects that New West’s subsequent mining operation has extracted over 2.5 million tons of sand and gravel from two large mining pits, which are 20 to 28 feet deep, and cover an area of 268,000 square feet or roughly six and one half acres.

On November 1, 2001, defendant Bureau of Land Management (“BLM”), an agency of the U.S. Department of the Interior (“DOI”), asserted ownership on behalf of the United States of the sand and gravel found on the subject land by virtue of the mineral reservation clause of the STA and the patent deed. According to the BLM, New West was not authorized to remove the sand and gravel without the approval of the DOI and an associated BLM material sales contract. In addition to the mineral reservation clause of the STA, the BLM based its notice on the statutory authority of the DOI Secretary, 7 and DOI regulations which forbid the removal of materials from “public lands” except as permitted by the DOI. 8 The BLM’s interpretation of the mineral reservation was informed by the Supreme Court’s decision in Watt v. Western Nuclear, Inc., 462 U.S. 36, 103 S.Ct. 2218, 76 L.Ed.2d 400 (1983), which interpreted a similar reservation of “all coals and other minerals” in the Stock-Raising Homestead Act of 1916 (“SRHA”), 39 Stat. 862, repealed by 90 Stat. 2744 (1976), to include gravel.

On November 21, 2001, New West responded to the BLM’s trespass notice, noting its disagreement with the BLM’s interpretation of the STA and asserting its right to continue extracting sand and gravel from the subject lands. On January 3, 2002, the BLM issued a notice of trespass to New West and JWR for the unauthorized removal of the sand and gravel. This notice of trespass stated that the alleged trespass was non-willful. On February 1, 2002 New West and JWR appealed the BLM’s trespass determination to the defendant Interior Board of Land Appeals (“IBLA”) pursuant to the regulations set forth in 43 C.F.R. § 4.411. 9 Throughout *441 2002, the parties filed briefs contesting the legal issue before the IBLA. 10

While the appeal to the IBLA was pending, the Supreme Court issued its opinion in BedRoc Ltd. LLC v. United States, 541 U.S. 176, 124 S.Ct. 1587, 158 L.Ed.2d 338 (2004), interpreting a reservation of “all the coal and other valuable minerals in the lands so entered and patented” contained in the Pittman Underground Water Act of 1919 11 (“Pittman Act”) as not encompassing sand and gravel. Central to the Supreme Court’s decision was the fact that the reservation applied only to “valuable” minerals, which, according to the Court, did not include sand and gravel at the time the Pittman Act was passed. BedRoc, 541 U.S. at 184, 124 S.Ct. 1587.

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398 F. Supp. 2d 438, 162 Oil & Gas Rep. 415, 2005 U.S. Dist. LEXIS 26690, 2005 WL 2895083, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-west-materials-llc-v-interior-board-of-land-appeals-vaed-2005.