Free Motion for Leave to File - District Court of Federal Claims - federal

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United States Department of the Interior
OFFICE OF HEARINGS AND APPEALS
Departmental Hearh~gs Division 405 South Main Street, Suite 400 Salt Lake City, Utah 8411 i "rt:LEeltONl~ (801) 524-S344

May 18, 2007 OR__DER

UNITED STATES OF AMERICA, Contestant
V,

CACA41272 Involving the Sunrise (CAMC 167529) Six O'Clock (CAMC 167538) lode mining claims, and the Sunset (CAMC 167530) Yankee (CAMC 167544) Compressor (CAMC 167546) East Fork (CAMC 167545) placer mining claims, all situated in

FRED ALOISI, et aL, Contestees

Sees.
9 & 10, T 39 N., R. 11 W., Mt. Diablo Meridian, Siskiyou County, California DENYING GOVERNMENT MOTIONS FOR RECONSIDERATION,TO AMEND COMPLAINT, AND FOR POSTPONEMENT DENYING CONTESTEE'S REOUEST FOR TIME TO REPLY

i. Introduction
This matter is before me on the Government's motions (1) for reconsideration of nay Order, dated May 2, 2007, which denied its motion to identify relevant dates; (2) for leave to amend the contest complaint; and (3) to postpone the hearing now set to begin June, 5, 2007. Contestees, (the "Aloisi Group"), have also requested time to file a response. The Government's motions cannot be granted because it has not shown error in the Order, because it seeks determinations in the amended complaint which this office does not have authority to make, and because it has not shown adequate

EXHIBIT 7

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CACA 41272 justification for a postponement. Further, a response from the Aloisi Group is not required because the Government's motions cannot be sustained on their merits. II. Discussion A. The Gqycrnment Has Not Shown Error in the Order

Courts have recognized that a motion for reconsideration "is not an appropriate forum for rehashing previously rejected arguments or arguing matters that could have been heard during the pendency of the previous motion." Ahmed v. Ashcroft, 388 F.3d 247. 249 (7'h Cir. 2004). Rather, the motion should "give the tribunal to which it is addressed a reason for changing its mind," like "request[ing] that the [tribunal] reexamine its decision in light of additional legal arguments, a change of law, or perhaps an argument or aspect of the case which was overlooked." Id. (citations omitted). I find little in the Government's motion that meets the standard described above. The motion cites to numerous authorities for the well-established principles that the Department of the Interior is entrusted with the function of malting the initial determination as to the validity of claims against public lands and that it has broad plenary power over the disposition of public lands so long as legal title remains in the Government. The former principle was acknowledged in the May 2, 2007, Order. However, as indicated in the Order, the existence of this principle does not dictate that this office should determine the validity of the claims for purposes other than discharging an administrative responsibility. Order Denying Government Motions 3-5. The Order explained that determining validity as of the dates the Aloisi Group alleges their property was taken does not discharge an administrative responsibility but, rather, serves the parties' needs stemming from the court of claims action. Under the facts of the present case, discharge of the Department's administratiw responsibilities requires only a validity determination as of fl~e date of hearing, id. None of the cases cited by the Government specifically address the issue of whether the Department has authority to determine validity as of dates pertinent to

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CACA41272 a takings claim in federal court. In fact, the Supreme Court, in one of the cited cases, specifically declined to address the mining claimants' concern that the date for determining validity or value would differ, depending upon whether the determination was made by the Department or by a federal court. In Best v. Humboldt Placer Mining Co., 371 U.S. 334 (1963), mining claimants brought suit in federal district court to enjoin a government contest before the Department challenging the validity of the claimants' mining claims. The land encompassed by the claims was also the subject of a condemnation action in another federal district court case. The court of appeals concluded that because the government went into the district court to condemn the claimants' property interests, the validity of the claims was, of necessity, left to judicial determinaticm. The Supreme Court reversed the court of appeals, finding that the Department could make the determination. The claimants opposed sending the issue to the Department, alleging that they would suffer disadvantages because the procedures before the district court were much less onerous on claimants than those before the Department. Among other things, the claimants complained that in the district court value woutd be determined as of the time of taking, while before the agency value would be determined as of the date of the hearing. The Supreme Court expressed no views on the claimants' contentions, opining that "each of them [could] appropriately be raised in the administrative proceedings and reserved for judicial review." Id. at 340 n.9. Two other court of federal claims opinions, cited by the Government, rely on Best as authority for staying a takings claim pending a determinatJon by the Department on the validity of the mining claim. Holden v. United States, 38 Fed. C1. 732 (1997); Payne "o. United States, 31 Fed. C1. 709 (1994). Both involved a situation where the surface of unpatented mining claims had been closed to public access because of a Navy bombing range. Similar to what the court of claims did in the Aloisi Group's case, the Holden and Payne courts stayed both proceedings to allow the Department to make a determination of whether the claims were valid. Neither opinion specified the date on which the determination had to be made.

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CACA 41272 These two opinions hold no more than that a taking action may be stayed pending a determination of validity by the Department. I see nothing in the two opinions that requires the Department to depart from its normal procedures for determining validity. As noted in my Order, the determination that results from the contest complaint now before me, will yield a validity determination, but under Department precedent, the determination will be effective as of the time of the hearing. Order on Government Motions 5. The Government argues that the Department's broad plenary authority over federal land and the regulation allowing contests for "any cause" (43 C.F.R. § 4.451-1 (2006)) includes "the responsibility and continuing duty, as well as the ability, to determine the validity of unpatented mining claims at any time." Contestant's Mot. 7 (Emphasis added). I find no persuasive authority that interprets the Department's duty this broadly. Indeed, a policy that interprets the duty this broadly may result in undesired consequences. The instant ease provides an example. The Government filed a contest complaint that would have determined validity as of the hearing date. Its original motion sought a determination on two additional dates based on the complaint in the court of claims. Its present motion to amend the complaint seeks to add two additional dates, based on findings in the mineral report, for a total of five determinations. The Government's interpretation would have the Department determining mining claim validity for a potentially endless array of times, even if the determinations did not aid the Department in carrying out its administrative responsibilities. Because the Government has provided no new arguments or persuasive authority that was overlooked in my Order, its motion for reconsideration must be denied.
B.

The Complaint Cannot be Amende~LT_o Seek a Determination This Office l-:fas No Authority to Provide

The Government also seeks to amend its complaint to obtain a determination that the claims were invalid on four dates described in the mineral report. Because I have concluded that this office only has the authority to determine the validity of the 4

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CACA41272 claims as of the date of hearing, the amendment would serve no purpose and therefore must be denied. C. The Motion to Postpone Does Not State Adequate Grounds

The only reason the Government provides for postponing the hearing, now scheduled for }'une 5, 2007, is the "issues raised in" its current motions. The Aloisi Group advises that it also supports a postponement stating that they have fallen off their preparation schedule by focusing on the May 2, 2007 Order and its consequences. I do not find either reason to be an adequate "showing of good cause and proper diligence." 43 C.F.R. § 4.452-3(a). The Contest Complaint has been pending since November 1999 (more than seven years ago). The hearing date has been set since the Preheating Scheduling Order, dated August 16, 2006 (nearly ten months ago). The parties, with proper diligence, have had adequate time [o prepare. Under well established precedent the omginaI complaint required a determination of validity as of the date of hearing. Further, the date of hearing is one of the dates for which the Government seeks a determination in its current motion. The Aloisi Group has also acknowledged that the date of hearing may be an appropriate date. Contestees' Resp. to Contestant's March ] Mots. 24. I see no reason why both parties should not be prepared to present their evidence on validity as of the date of hearing. The denial of the Government's motion to make determinations on additional dates cannot prejudice either parties preparation. It only reduces the evidence they may have anticipated presenting. Because neither party has shown good cause for postponing the hearing the Government's motion must be denied. D. A Response From Contestees is Not Necessary

Because I have denied the Government's motion based on the arguments it submitted, a response from the Aloisi group is not necessary.

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CACA41272

IIl. Conclusion Having considered the motions, and for good cause, it is ordered that: 1. Contestant's Motion for Reconsideration of this forum's May 2, 2007 Order denying its Motion to Identify Relevant Dates to Establish Discovery on the Contested Claims is denied. 2. Contestant's Motion For Leave to Amend Complaint is denied. 3. Contestant's Motion to Postpone June Hearing is denied. 4. Contestee's request for leave to respond to Contestant's motions is denied.

Robert G. Holt Administrative Law Judge See page 7 for distribution.

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CACA41272 Distribution By Facsimile Transmission and First Class Mail: Rose Miksovsky, Esq. Office of the General Counsel U.S Department of Agriculture 33 New Montgomery Street, 17~h Floor San Francisco, CA 94105 Fax (415) 744-3170 (Counsel for Contestant) Lawrence G. McBride, Esq. Foley & Lardner, LLP 3000 K Street, N.W., Suite 500 Washington, DC 20007-5143 Fax (202) 672-5399 (CounseI for Contestees)

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318 1 UNITED STATES DEPARTMENT OF THE INTERIOR OFFICE OF HEARINGS AND APPEALS 2

3 UNITED STATES OF AMERICA, 4 vs. 5 WALTEB B. FREEMAN, et al. 6 OR 48970 A

HEARING IN THE ABOVE-CAPTIONED MATTER

HELD AT PIONEER COURTHOUSE i0 ?00 SOUTHWEST SIXTH AVENUE PORTLAND, OREGON ii 12 13 14 15 16 WITNESS(S): OTTO L. SCHUMACHER 17 18 19 20 21 22 23 REPORTED BY: KAREN M. GRANT, CERTIFIKD COURT REPORTER NO. 2155 24 P.O. Box 328 Milton, Washington 9@354 25 Office: (253)927-4578, Cell: (253)376-4425 BEFORE ADMINISTRATIVE LAW JUDGS: HARVEY C. SWEITZER ~iARCH 16, 2007

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319 1 2 3 For Ehe Contestant: 4 MR. BRAD GRENHAM MR. BRIAN J. PERRO~ 5 Office of the Solicitor Pacific Northwest Region 6 500 N.E. Multnomah Street, Suite 607 Portland, Oregon 97232 (503)231-6826 [email protected] 8 9 For the Conrestee: i0 II MR. JOHN GREEN RICHARD M. STEPH~NS Green S
7

320 1 2 3 4
i . COUNSEL.

EXAMINATION INDEX

WITNESS: OTTO L. SCHUMACHE~

FAGS : 5

5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Direct examination by Mr. Grenham ..........

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pit . Q. 3 4 5 6 7 8 9 I0 iI 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. ~nd then how is the topsoil replaced? The topsoil is replaced by simply pushing it back

over the pit area with the dozer and the loader, again if necessary. Q. Page 5-3 of the Western Mine Engineering report

notes that native plants will be regenerated by the live transfer of soils. Could you explain this? A. It's best practice in reclamation work to utilize

soils that are directly derived from the local site, to put them right back where they came from because these soils will contain the original microorganisms and seeds and roots that survived there and flourished there to start with, so that's what's meant by putting the material live back into the pit. Q. I'm going to move now to Chapter 6 of your report

concerning capital costs for mining and hauling. Did you review Mr. Freeman's estimate of capital costs for mining and hauling? A. Q. estimates? A. Q. I could not verify them, no. Did Mr. Freeman provide adequate backup for his Yes. Did you find that you were able to verify these

estimates of mining and hauling capital costs in order to

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1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25

establish the credibility of the estimates? A. Q. A. No. Why do you need backup numbers? You need backup numbers to establish the

credibility of what you've done and to allow others to evaluate your work and gain the credibility that you need to move your estimate forward. Q. Have you participated in other validity

determinations? A. Q. Yes. How did the backup data or lack thereof supplied

by Mr. Freeman compare to that submitted in other cases you've worked on? A. In the cases that I've worked on in the last

decade or so, Mr. Freeman's submittal bore no comparison to the level of detail provided to me in the past. I've previously been provided with fully documented estimates, fully documented resource analyses, geotechnical studies, all that has been needed to verify the validity of the claims. Q. When you say this, are you holding Mr. Freeman to

the standards of a bankable feasibility study? A. Q. No. No way. In your prior work, have you found mining claims

to be economic in other validity determinations you have

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worked on? A. 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 In all of the validity determinations that I've

worked on in recent years, the major claim blocks involved all proved economic. There have often been extraneous claims associated with these that were separated from the main group, but basically the claim blocks were economic. Q. Page 6-2 of your report includes the statement

that Mr. Freeman's equipment productivity analysis is inadequate. Could you explain this? A. We've just gone through the procedure that a

prudent estimator would go through to do a study of the nature that we're doing here, and I did not see that sort of work in Mr. Freeman's report. Q. We discussed earlier the need for a fuel storage

facility and infill sampling. Did Mr. Freeman's cost estimate include the costs of these functions? A. Q. No. Did Western Mine Engineering find it necessary to

prepare a revised estimate of capital costs for mining and hauling? A. Q. Yes. I'd like you to look at page 6-8 of the Western

Mine Engineering report, Exhibit 2. It contains Table 6-3 entitled "Mining and Hauling Equipment Unit Capital Costs: October 2000." Could you explain how these capital costs

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Cumulative average time £or final case dispositi~ by the Board: since October 1988 17.6 months from date of receipt 13.2 months from time case is ripe

B.

Average time for final case disposition over last cal~idar year: Frcra April i, 2007, to March 31, 2008: 14.9 rnc~ths frQm date of receipt 9.5 mc~ths frc~.~te ripe

C. Attached to this report are lists of all cases pending before the Board, by administrative ju~e, along with e~qolar~tions of their current status. D, B~ of Board activity and pending cases~by subject matter category are attached. ~%lese breakdoga%s co~Itai~ both ~ative figures for FY 2008 and figures for March 2008.

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