Residual Associates, LLC v. United States

46 Fed. Cl. 841, 148 Oil & Gas Rep. 130, 2000 U.S. Claims LEXIS 111, 2000 WL 798077
CourtUnited States Court of Federal Claims
DecidedJune 20, 2000
DocketNo. 98-99L
StatusPublished

This text of 46 Fed. Cl. 841 (Residual Associates, LLC v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Residual Associates, LLC v. United States, 46 Fed. Cl. 841, 148 Oil & Gas Rep. 130, 2000 U.S. Claims LEXIS 111, 2000 WL 798077 (uscfc 2000).

Opinion

OPINION

BRUGGINK, Judge.

This is an action asserting a taking pursuant to the Fifth Amendment to the Constitution. Plaintiff Residual Associates, LLC (“Residual”) owns several hundred acres of mountainous Utah land containing deposits of gold, silver, and other minerals. It brings this action asserting that the United States Bureau of Land Management (“BLM”) and the Bureau of Reclamation (“BOR”), by undertaking a large scale dam and reservoir project bordering plaintiffs land, effectively destroyed plaintiffs ability to use various easements needed to access its mineral deposits. These circumstances have been the subject of a prior decision of this court. See Park City Consolidated Mines Co. v. United States, No. 94-188L, slip op. (Fed.Cl. Nov. 5, 1996) (“Park City”).

Pending are cross-motions for summary judgment. Oral argument was heard at the conclusion of initial briefing. At the conclusion of oral argument, the court ordered supplemental briefing, which is now complete. Further argument is deemed unnecessary. For the reasons set out below, plaintiffs motion for summary judgment is denied, and defendant’s motion for summary judgment is granted.

FACTUAL BACKGROUND

Plaintiff is a successor in interest to Park City Consolidated Mining Company (“Park City”), having become the owner of the subject property and associated takings claim as the result of a corporate dissolution in 1998. Park City and its predecessors in interest will be referred to collectively herein as “plaintiff’ or Residual. Plaintiffs property consists of an approximately 815 acre tract located in the mountains of Summit and Wasatch Counties, Utah. Plaintiff operated a silver mine on this tract until the beginning of World War II. The mine has remained inactive ever since.

In 1951, plaintiff sought access to undeveloped portions of its mineral deposits by, commencing efforts to develop a horizontal tunnel, in hopes that such a tunnel would allow it to extract minerals without resort to the costly vertical shaft extraction method previously used. In connection with these efforts, plaintiff acquired two easements from the Fisher family, which owned a ranch adjacent to the plaintiffs tract. The first Fisher easement was a surface easement conveying the exclusive right to use of a five-acre tract for mining purposes only, and, subject to certain limitations, the right to vary the tract’s location. For purposes of this opinion, the court will accept that plaintiffs ability to locate its five-acre surface easement and the accompanying tunnel entrance at any one of a number of different locations "within specified boundaries on the Fisher Ranch makes the Fisher surface easement a “floating easement.”

The second Fisher easement, referred to as the “tunneling easement,” granted plaintiff the right to construct an underground mining tunnel to run westerly toward plaintiffs mineral deposits from a portal within the five-acre surface tract. This easement also granted the right to vary the course of the tunnel “should caving ground or other conditions require.”

Along with the Fisher easements, plaintiff took steps in 1987 to reinforce and extend its rights by filing a tunnel site location with the BLM. See 30 U.S.C. § 27 (1994) (“Tunnel Site Act”). The parties refer to this filing as [843]*843the Gordon-Stott tunnel claim. The tunnel site filing identified the Gordon-Stott tunnel as having a portal at a location on the Fisher surface easement. This was the same origination point described for the tunnel in the original Fisher easement agreement. The Gordon-Stott tunnel claim and the Fisher tunneling easement essentially contemplate construction of the same tunnel. According to their respective documentary descriptions, both tunnels would follow the same course to reach plaintiffs mineral deposits. As a legal matter, however, the Gordon-Stott claim was essential to plaintiffs access to its mineral deposits because the proposed Fisher tunnel site was bisected by land owned by Union Pacific Railroad Company. The railroad obtained this land from the Fisher family pursuant to a quitclaim deed in 1923. Plaintiffs concedes that its rights under the Fisher tunneling easement alone would not have been sufficient to permit tunneling under the railroad, but points out that because the mineral estate in the railroad’s land had been reserved to the United States, the proposed tunnel could be constructed by relying on the federally protected tunneling interest embodied in the Gordon-Stott tunnel claim.

According to plaintiff, it suffered a taking due to the BOR’s Jordanelle Project, which was begun in the 1970s and completed in 1993. The Jordanelle Project involved construction of a 3000-acre reservoir along the Provo River. Plaintiffs land, including its mineral deposits, lies approximately 4400 feet west of the reservoir. There is a mountain between the reservoir and the mineral deposits. The reservoir basin itself does not include any of plaintiffs mineral deposits; both the Fisher easements and the Gordon-Stott tunnel site, however, are located within the border of the reservoir basin’s management boundary. This means that in addition to complying with all relevant state, local, and federal regulations, plaintiff was required to obtain permission from BLM before commencing construction of an access tunnel within the reservoir basin’s management boundary.

Shortly after plaintiff executed the filings required for creation of the Gordon-Stott tunnel claim in January 1987, plaintiffs principals reached the conclusion that various aspects of the Jordanelle Project would make it impossible for it effectively to utilize the Fisher surface easement and the Fisher/Gordon-Stott tunnel easement to access its mineral deposits. They feared that overflow from the reservoir would result in periodic flooding of the Fisher surface easement, thus hindering access to any tunnel entrance. Residual was also concerned that if it reactivated its old mine to extract its undeveloped mineral deposits, water would gradually seep from the reservoir through subsurface fissures and eventually flood plaintiffs mine. Additionally, there was concern because the BOR, as part of the Jordanelle project, had acquired title to the Fisher Ranch. After it acquired title, the BOR granted three new easements across the Fisher property between 1990 and 1993. The first was for a public hiking trail. The second and third were public utility easements; one for an underground natural gas transmission line, and the other for above-ground electrical power lines. The utility easements bisected the area of the Fisher property that plaintiff had planned to use as its tunnel route. Residual’s principals believed that the presence of the competing easements prevented the company from completing an access tunnel.

They also believed that the presence of the public hiking trail would hamper efforts to obtain the necessary approvals from the BOR. This fear was strengthened by the language of the BOR’s Final Supplement to the Final Environmental Statement (“FSFES”) for the Jordanelle Project, issued in 1987.

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46 Fed. Cl. 841, 148 Oil & Gas Rep. 130, 2000 U.S. Claims LEXIS 111, 2000 WL 798077, Counsel Stack Legal Research, https://law.counselstack.com/opinion/residual-associates-llc-v-united-states-uscfc-2000.