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

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 1 of 29

IN THE UNITED STATES COURT OF FEDERAL CLAIMS WALTER B. FREEMAN, Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) )

No. 01-39L Honorable Bohdan A. Futey

DEFENDANT'S AMENDED RESPONSE TO PLAINTIFF'S MOTION FOR RELIEF FROM SUSPENSION OF PROCEEDINGS OR, IN THE ALTERNATIVE, FOR CONDITIONS

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 2 of 29

TABLE OF CONTENTS

BACKGROUND ........................................................................................................................... 1 ARGUMENT ................................................................................................................................. 6 I. THE COURT PROPERLY DECIDED, AND SHOULD CONTINUE, TO ALLOW THE INTERIOR DEPARTMENT THE OPPORTUNITY UNDER THE DOCTRINE OF PRIMARY JURISDICTION TO DECIDE THE VALIDITY OF MR. FREEMAN'S MINING CLAIMS .............................. 6 A. Granting the Plaintiff's Motion for Relief Will Raise a Jurisdictional Issue ..................................................................................... 6 The Doctrine of Primary Jurisdiction Recognizes that the Department of Interior Has the Expertise to Determine the Validity of Plaintiff's Unpatented Mining Claims ............................... 9 Plaintiff Does Not Disagree with the Court's Decision to Remand the Case Initially ........................................................................ 10 Granting Plaintiff's Motion for Relief Needlessly Wastes Time and Expense Incurred by Both Parties ........................................... 11

B.

C.

D.

II.

PLAINTIFF'S ARGUMENTS DO NOT OUTWEIGH THE BENEFIT OF ALLOWING THE DOCTRINE OF PRIMARY JURISDICTION TO OPERATE AND SHOULD NOT OVERRIDE INTERIOR'S PREROGATIVE TO DETERMINE THE VALIDITY OF PLAINTIFF'S CLAIMS .............................................................................................................. 12 A. Interior has Not Refused to Determine the Valididity of Plaintiff's Claims ..................................................................................... 12 Freeman Has Not Been Treated Unfairly ................................................ 13 The Federal Circuit Decision in Skaw v. United States Does Not Support Plaintiff's Argument .................................................. 15 Plaintiff's Contentions of Prejudice Do Not Justify Lifting the Stay ........................................................................................ 17 1. The Time Taken for the Administrative Proceeding is not Defendant's Fault ............................................................... 18 i

B. C.

D.

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 3 of 29

2.

Plaintiff Overstates the Burden of Paying the Mining Claim Maintenance Fees .............................................................. 20 Plaintiff Faces No Undue Risk From Witness Memories Fading Because of Passage of Time ............................................ 21

3.

III.

PLAINTIFF'S "CONDITIONS" FOR CONTINUING THE STAY ARE NOT APPROPRIATE AND UNACCEPTABLE ......................................................... 21

CONCLUSION ............................................................................................................................ 23

ii

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 4 of 29

TABLE OF AUTHORITIES CASES

Best v. Humboldt Placer Mining Co., 371 U.S. 334 (1963) ................................................ passim Cameron v. United States, 252 U.S. 450 (1920) ............................................................................ 7 Del-Rio Drilling Programs, Inc. v. United States, 146 F.3d 1358 (Fed. Cir. 1998) ...................... 7 Fisher v. United States, 364 F.3d 1372 (Fed. Cir.2004) .............................................................. 22 Freese v. United States, 221 Ct. Cl. 963 (1979) ........................................................................ 6, 7 Hafen v. United States, 30 Fed. Cl. 470 (1994) ......................................................................... 6, 9 Hoefler v. Babbitt, 139 F.3d 726 (COURT yr) .............................................................................. 6 Holden v. United States, 38 Fed. Cl. 732 (1997) ..................................................................... 8, 10 Khan v. United States, 201 F.3d 1375 (Fed. Cir.2000) ............................................................... 22 Payne v. United States, 31 Fed. Cl. 709 (1994) ....................................................................... 8, 10 Ryan v. United States, 75 Fed. Cl. 769 (2007) ............................................................................ 25 Skaw v. United States, 740 F.2d 932 (Fed. Cir. 1984) ........................................................ passim Skaw v. United States, 2 Cl. Ct. 795 (1983) .................................................................................. 6 United States v. King, 395 U.S. 1(1969) ............................................................................... 21, 22 United States v. Testan, 424 U.S. 392, 398 (1976) ...................................................................... 22

STATUTES 28 U.S.C. § 1491 .......................................................................................................................... 22 43 U.S.C. § 1201 ........................................................................................................................... 9 42 U.S.C. § 4654(c) ..................................................................................................................... 22

iii

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 5 of 29

Pub. L. No. 103-332, 108 Stat. 2499 (1994) ............................................................................ 2, 20 Pub. L. No. 110-161, 121 Stat. 1844 (2007) ................................................................................ 20

RULES Fed. R. Evid. 804(a)(4) .......................................................................................................... 21, 22

REGULATIONS 43 C.F.R. § 4.1(b)(3) ...................................................................................................................... 4 43 C.F.R. § 4.410 ........................................................................................................................... 4 43 C.F.R. § 4.451 .......................................................................................................................... 3 43 C.F.R. § 3830.21 ..................................................................................................................... 20 43 C.F.R. § 3830.22(b)(2) ............................................................................................................ 20 43 C.F.R. § 3834.11 ..................................................................................................................... 20 43 C.F.R. § 3835.11(e) ................................................................................................................. 20

iv

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 6 of 29

Defendant United States responds to "Plaintiff's Motion for Relief from Suspension of Proceedings Or, In the Alternative, For Conditions" (hereinafter, "Motion for Relief"). Contending that the remand proceedings before the Department of Interior have taken too long for a conclusion that Plaintiff believes is already pre-ordained, Plaintiff requests the Court lift the suspension, or, in the alternative, impose conditions. Defendant vigorously disagrees and respectfully requests the Court deny the Motion for Relief because it is premature until the Interior Board of Land Appeals decides a pending interlocutory appeal before it. Only at that time will it become clear whether the Federal Circuit's decision in Skaw v. United States, 740 F.2d 932 (Fed. Cir. 1984), with its holding that the doctrine of primary jurisdiction does not require an exercise in futility in awaiting an agency decision, applies or not. Further, Plaintiff's suggestion that the Court, in the alternative, allow the Department of the Interior proceedings to continue conditioned upon Defendant's payment of Plaintiff's mining maintenance fees, expenses, and attorney fees is beyond the authority of the Court. Background Mr. Walter Freeman filed a complaint in the United States Court of Federal Claims ("CFC") on January 22, 2001. Docket ("Dkt") #1. In his complaint, Mr. Freeman asserts that the United States has taken his alleged property right in 161 unpatented mining claims. The 161 claims are located in southern Oregon and cover an area of about 5,000 acres on open and not withdrawn lands administered by the Bureau of Land Management ("BLM") and the Forest Service. On September 28, 2001, the parties filed a Joint Preliminary Status Report ("JPSR"). Dkt. #17. The JPSR advised that "[t]he parties agree that this case should be deferred if the Court believes the proceedings should be stayed pending an administrative determination 1

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 7 of 29

regarding the validity of plaintiff's mining claims." JPSR at 2, paragraph d. On October 10, 2001, this Court entered an order suspending these proceedings until further order and remanded the case to "the United States Department of the Interior for determination of validity of plaintiff's mining claims." Order filed October 10, 2001. Dkt #19. Upon suspension, the parties conferred and stipulated that the Interior Department would make its validity determination as of the dates of the two events Mr. Freeman alleges in his complaint resulted in a taking of his property. Those two dates are October 1994 and October 2000. Exhibit ("Ex.") 1, Letter dated September 5, 2003, from Richard Stephens to Otto Schumacher and Dr. Terry Maley at 5-6; Ex. 2, Letter dated November 12, 1993, from Bradley Grenham to Richard Stephens at 2-3; and Ex. 3, Letter dated November 19, 2003, from Richard Stephens to Bradley Grenham at 2. The first date of alleged taking, October 1994, is the date that Congress enacted a moratorium on funding for patent processing. Pub. L. No. 103-332, § 112, 108 Stat. 2499, 2519 (1994). Mr. Freeman and co-locators had filed a September 1992 application for patent of 151 claims, and he alleges that the congressional patent processing moratorium amounts to a taking of a right to a patent for the 151 claims included in the patent application. The second date of alleged taking, October 2000, is the date of the final Forest Service adoption on administrative appeal of a Record of Decision issued in response to Mr. Freeman's proposed plan of operations. Mr. Freeman alleges that the Record of Decision amounts to a taking of the claims at issue in the Plan of Operations. In reliance on the parties' stipulation as to the alleged dates of taking to be analyzed, the government enlisted several experts to compile detailed analyses of the geology, mining, and processing relevant to the validity determination. The cost and market analyses for the validity 2

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 8 of 29

determination were tied to the stipulated dates of October 1994 and October 2000. Based on the Mineral Report, the Department of the Interior issued a mining contest complaint. By regulation, the contest was referred to the Department's Office of Hearings and Appeals, Hearings Division ("OHA") for a hearing before an administrative law judge. See 43 C.F.R. § 4.451. Administrative Law Judge (ALJ) Harvey Sweitzer presided over the contest. At Mr. Freeman's request, the parties conducted extensive pre-hearing discovery pursuant to Orders from Judge Sweitzer, including taking expert witness depositions in Boise, Spokane, Denver, Missoula, Pittsburgh, Toronto and elsewhere. The hearing began in March, 2007 and proceeded for twenty-five days on various dates in Portland, Oregon and Kirkland, Washington, and concluded on June 1, 2007. Contestant explained the validity dates and their relationship to the alleged taking events on the first day of hearing in its opening statement. See generally Ex. 5, Excerpt of Contest Hearing transcript, March 14, 2007 at 10-12. After 18 days of hearing, Judge Sweitzer issued an Order raising the jurisdictional issue due to a ruling by ALJ Robert Holt on in a separate case, United States v. Aloisi, CACA 41272. See Motion for Relief at Exhibit C (May 3, 2007 Order in United States v. Freeman, Contest No. OR-48970A) attached to Declaration of Richard M. Stephens. The parties elected to complete the hearing and brief the jurisdictional issue after the close of the hearing record. Contestant United States and Freeman agreed in post-hearing briefing before Judge Sweitzer that OHA has jurisdiction to determine validity as of October 1994 and October 2000. Freeman explained that "[s]urely, the Secretary of the Interior has the authority to hold a hearing consistent with due process and determine whether Freeman's mining claims were valid as of 2000 and 1994" and that "there is broad authority for the ALJ to carry out its function for the 3

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 9 of 29

Secretary and issue a ruling on the validity of claims in 1994 and 2000." Ex. 4, "Contestee Walter Freeman's Brief on Authority of Administrative Law Judge to Determine Validity As Of Certain Dates" at 7, 11. After briefing, Administrative Law Judge Sweitzer ruled, by Order of August 10, 2007, that he lacks jurisdiction to determine the contested claims' validity as of the date of either of the alleged takings in 1994 and 2000. Contestant United States sought interlocutory review and reversal of this decision by the Interior Board of Land Appeals ("IBLA"). The IBLA decides appeals from decisions rendered by Departmental officials relating to the use and disposition of public lands and their resources. 43 C.F.R. § 4.1(b)(3). In this capacity, the Board decides appeals from decisions of BLM officials and from decisions issued by administrative law judges. 43 C.F.R. § 4.410. The IBLA provides de novo review of ALJ rulings of law. United States v. Dunbar Stone Co., 56 IBLA 61, 67-68 (1981). For the reasons explained in Contestant's briefs to the Interior Board of Land Appeals, the Office of Hearings and Appeals does properly have jurisdiction to determine the contested claims' validity as of the date of either of the alleged takings in 1994 and 2000. Because the IBLA will consider this matter de novo, there is no basis at this time to predict, as Plaintiff does, that the ALJ's decision will be upheld. In fact, caselaw and regulation strongly support a finding that OHA has jurisdiction. Departmental regulations and the Mining Law impose no limitations on the Department's authority to determine the validity of mining claims as of the date of an alleged taking. See e.g. 43 C.F.R. § 4.451-1 (providing that "[t]he Government may initiate contests for any cause affecting the legality or validity of any entry or settlement or mining claim) (emphasis added); Best v. Humboldt Placer Mining Co., 371 U.S. 334, 336 (1963) ("The determination of the validity of claims against the public lands was entrusted to the General Land Office in 1812 4

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 10 of 29

(2 Stat. 716) and transferred to the Department of the Interior on its creation in 1849").

While the administrative proceedings were pending, the parties regularly reported to this Court progress toward analyzing the agreed-upon 1994 and 2000 dates. These Joint Status Reports apprised the Court of the exact progress in analyzing marketability as of 1994 and 2000. See e.g., February, 2004 Joint Status Report (stating on second-to-last page: "Th[e] mining plan and mine cost verification section of the report is 85 percent complete for the 2000 alleged taking date. On-going work is focused on completing the written narrative for this section of the [mineral examination] report and acquiring the necessary information for the 1994 alleged taking date."); October, 2004 Joint Status Report (stating on last page: "Economic Analysis section for 1994 and 2000 marketability dates [was] completed by Western Mining Engineering by September 30") (Dkt. #51); July, 2004 Joint Status Report (stating on last page the progress made on "Product Marketability (2000)" and "Economic Analysis of the 1994 Marketability Date") (Dkt. #50); April, 2004 Joint Status Report (stating on last page that "the draft section is now about 75 percent complete for the 2000 marketability date" and "a modification to the original contract to Western Mining Engineering ("WME") was completed in February to prepare an economic analysis of the 1994 marketability date") (Dkt. #48). All of the above Joint Status Reports note that they were reviewed and approved by counsel for Mr. Freeman. Mr. Freeman agreed in post-hearing briefing before Judge Sweitzer that OHA has jurisdiction to determine validity as of October 1994 and October 2000. Ex. 4, "Contestee Walter Freeman's Brief on Authority of Administrative Law Judge to Determine Validity As Of Certain Dates" at 7, 11. In the instant action, Mr. Freeman's allegations of a Fifth Amendment taking based upon 5

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 11 of 29

alleged property rights in unpatented mining claims is dependent upon a determination by the Interior Department that Mr. Freeman had valid mining claims - including a discovery - as of the alleged dates of taking. Freese v. United States, 221 Ct. Cl. 963, 964 (1979); Hafen v. United States, 30 Fed. Cl. 470, 473 (1994). Discovery of a valuable mineral deposit is a required element in determining the validity of a claim and, hence, in the existence of a compensable property right against the United States. Skaw v United States, 2 Cl. Ct. 795, 800 (1983) vacated on other grounds, 740 Fe.2d 932 (Fed. Cir. 1984)("Until there has been a determination that there has been a valuable discovery, the locator has only a gratuity from the United States," citing Ickes v. Underwood, 141 F2d 546, 548 (D.C. Cir. 1944)). ARGUMENT I. The Court Properly Decided, and Should Continue, to Allow the Interior Department the Opportunity Under the Doctrine of Primary Jurisdiction to Decide the Validity of Mr. Freeman's Mining Claims A. Granting the Plaintiff's Motion for Relief Will Raise a Jurisdictional Issue

A significant question exists whether this Court possesses jurisdiction to determine the validity of Freeman's unpatented mining claims. For this reason alone, this Court should deny Plaintiff's Motion for Relief and allow the IBLA to complete its deliberations. In order for an individual to establish a compensable property interest in an unpatented mining claim, there must have been an administrative determination by the Department of the Interior of the validity of that claim. Best v. Humboldt Placer Mining Co., 371 U.S. 334, 336 (1963) ("The determination of the validity of claims against the public lands was entrusted to the General land-Office in 1812 (2 Stat. 716) and transferred to the Department of the Interior on its creation in 1849."). See also Hafen v. United States, 30 Fed. Cl. 470, 473 (1994) (citing 43 U.S.C. § 1457); Hoefler v. Babbitt, 139 F.3d 726, 728 (9th Cir.) (holding "[t]he Department of the Interior 6

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 12 of 29

is therefore entrusted with the function of making the initial determination, subject to judicial review, as to the validity of the claims against mineral lands."), cert. denied, 119 S. Ct. 70 (1998) (citing United States v. Bagwell, 961 F.2d 1450, 1454 (9th Cir. 1992), quoting Adams v. United States, 318 F.2d 861, 866 (9th Cir. 1963)). As the Supreme Court in Cameron v. United States, 252 U.S. 450 (1920), noted: By general statutory provision the execution of the laws regulating the acquisition of rights in the public lands and the general care of these lands is confided to the land department, as a special tribunal; and the Secretary of the Interior, as the head of the department, is charged with seeing that this authority is rightly exercised to the end that valid claims be recognized, invalid ones eliminated, and the rights of the public preserved. ... Of course, the land department has no power to strike down any claim arbitrarily, but so long as the legal title remains in the Government it does have power, after proper notice and upon adequate hearing, to determine whether the claim is valid, and, if it be found invalid, to declare it null and void.

Id. at 459-60 (emphasis supplied). Accord Freese, 221 Ct. Cl. at 964 (citing United States v. Coleman, 390 U.S. 599, 600 n.1 (1968)). See also Del-Rio Drilling Programs, Inc. v. United States, 146 F.3d 1358, 1366 (Fed. Cir. 1998) (stating that an agency's adjudication of the scope of plaintiff's property rights, such as determining the validity of mining claims on public property, cannot be collaterally challenged in a Tucker Act suit). The BLM, has delegated authority to conduct mineral examinations of unpatented mining claims on National Forest System lands to the Forest Service. Decisions in this Court too have recognized the jurisdictional issues involved when a validity determination has not been made and concluded that the determination of validity of a

7

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 13 of 29

plaintiff's' unpatented mining claims lies generally outside the jurisdiction of this Court./1 Although a mining claim on public land is a "possessory interest in land that is `mineral in character,'" . . . a finding that the unpatented claim is valid against the United States, in turn can only be made "if there has been a discovery of mineral within the limits of the claim, if the lands are still mineral and if other statutory requirements have been met." .... Mining claims, as a form of property, are sui generis. Congress has given the Department of Interior the power in the first instance to inquire into the validity of mining rights claimed against the Government. . . . See also . . . Freese, 221 Ct. Cl. at 964-965 ("For this court to undertake a review of the validity of the claims . . . would be to assume a function lodged elsewhere by Congress."). Payne v. United States, 31 Fed. Cl. 709, 712 (1994) (internal citations omitted); see also Holden v. United States, 38 Fed. Cl. 732, 736 (1997). This Court properly remanded this case to the Department of the Interior. See Order of October 10, 2001. At that time the parties agreed "that this case should be deferred if the Court believes the proceedings should be stayed pending an administrative determination regarding the validity of plaintiff's mining claims." JPSR at paragraph d. Plaintiff now voices dissatisfaction with his choice because of the time it will take to complete the administrative hearing process. Motion for Relief at 3-4, 13, 14, 18-19. However, while empathizing with the plaintiff in Payne, the Court there noted that the fact that it might take a long time for the administrative process to determine validity "cannot create jurisdiction." Payne, 31 Fed. Cl. at 712. As explained below, this Court properly stayed this case pending the validity determination process. As these proceedings are ongoing, this Court should allow the process to

The only exception uncovered so far in case law was the Federal Circuit's conclusion in Skaw v. United States that the Department of Interior had "declined to decide the precise question on a prior reference by the court." 740 F.2d at 938. As discussed below, that situation is not the case in this matter before this Court. 8

1/

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 14 of 29

conclude, thus avoiding any jurisdictional issues. B. The Doctrine of Primary Jurisdiction Recognizes that the Department of the Interior Has the Expertise to Determine the Validity of Plaintiff's Unpatented Mining Claims

Plaintiff does not dispute that the Department of the Interior possesses the expertise to determine the validity of his mining claims. Indeed, both Congress and the courts recognize Interior's expertise. Statutory authority and case law confirm that the Department of the Interior has broad jurisdiction to consider all issues related to private claims over public lands, including the validity of mining claims. This plenary authority exists independent of whether contested mining claims may also be the subject of a proceeding in another forum. See Best v. Humboldt Placer Mining Co., 371 U.S. 334, 336 (1963); see also Hafen v. United States, 30 Fed. Cl. 470, 473 (1994). "[T]he Department has been granted plenary authority over the administration of public lands, including mineral lands; and it has been given broad authority to issue regulations concerning them." Best, 371 U.S. at 336 (citing 30 U.S.C. § 22 (Mining Law); 43 U.S.C. § 1201 ("The Secretary of the Interior, or such officer as he may designate, is authorized to enforce and carry into execution, by appropriate regulations, every part of the provisions of title 32 of the Revised Statutes not otherwise specially provided for."); see also Hafen, 30 Fed. Cl. at 473. In Best, the government brought an action in district court to obtain possession of certain lands but reserved the issue of validity of unpatented mining claims on those lands for administrative determination before the BLM. The mining claimants sued to enjoin an administrative contest proceeding. The Supreme Court upheld the district court's denial of the injunction, holding: If a patent has not issued, controversies over the claims "should be solved by appeal to the land department and not to the courts." . . . It is difficult to imagine a more appropriate case for invocation of the jurisdiction of an administrative agency for determination of one of the issues involved in a judicial proceeding.

9

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 15 of 29

Id. 371 U.S. at 338 (quoting Brown v. Hitchcock, 173 U.S. 473, 477 (1899)). The doctrine of primary jurisdiction operates to provide this Court with the benefit of that expertise. Payne v. United States, 31 Fed. Cl. 709, 711 (1994); Holden v. United States, 38 Fed. Cl. 732, 735 (1997) (the Court stayed proceedings and stated that "[t]he determination of the validity of such claims is entrusted to the BLM"). Relying upon his concerns about the length of time that has passed and his mistaken contention that Interior will not decide the validity of his claims,/2 Plaintiff's Motion for Relief amounts to a request that this Court ignore Interior's longstanding expertise in this field. The doctrine of primary jurisdiction, however, would counsel even putting aside for the moment the jurisdictional concerns - that this Court wait to obtain the benefit of that administrative process. C. Plaintiff Does Not Disagree with the Court's Decision to Remand the Case Initially

Another factor that helps place Plaintiff's Motion for Relief in context is that, even today, Plaintiff does not disagree with the merits of this Court's decision to remand the validity issue to the Interior Department for an administrative determination./3 Thus, Plaintiff's Motion for Relief chafes principally at the length of time the process chosen by and agreed to by Plaintiff is taking to resolve his claims, and his perceptions of the disadvantages associated with waiting for this

Plaintiff repeatedly attempts to portray the forthcoming IBLA decision as a pre-ordained conclusion. Motion for Relief at 6-8, 15, 17-18. Not only is this premature, Plaintiff=s mistaken opinion if given effect would pre-empt the IBLA from its appropriate role in deciding an issue of significant import to the Department of the Interior. That IBLA decision, in turn, may well also yield some helpful clarity to this Court about Interior=s perspective on matters of this sort in the future.
3/

2/

Necessarily, of course, Plaintiff's earlier concurrence that the case be remanded if the Court deemed it appropriate would present a problematic challenge for Plaintiff if he so chose to now change course. JSPR at 2, paragraph d. 10

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 16 of 29

process to conclude. Until some point before the IBLA interlocutory appeal by the parties, the record shows that Plaintiff believed that remand to Interior was appropriate. In those administrative proceedings, Plaintiff asserted that the ALJ has jurisdiction to determine validity as of the takings dates. Freeman noted in briefing to Judge Sweitzer that "[s]urely, the Secretary of the Interior has the authority to hold a hearing consistent with due process and determine whether Freeman's mining claims were valid as of 2000 and 1994" and that "there is broad authority for the ALJ to carry out its function for the Secretary and issue a ruling on the validity of claims in 1994 and 2000." See Exibit 4, "Contestee Walter Freeman's Brief on Authority of Administrative Law Judge to Determine Validity As Of Certain Dates" at 7, 11. Freeman now attempts to shift the legal landscape and argue as if it were clear all along that the ALJ did not have jurisdiction. D. Granting Plaintiff's Motion for Relief Needlessly Wastes Time and Expense Incurred by Both Parties

Another reason to allow the interlocutory appeal pending before the IBLA to be resolved is the substantial expenditure of time and money by both parties in proceedings before the Department. Both parties have incurred great expense. By 2003 the government had already spent or committed approximately $295,000 toward the mineral examination and expected to spend approximately $400,000 more. See Defendant's "Opposition to Plaintiff's Motion for Relief from Suspension of Proceedings and for Appointment of Special Master" at 15 (referencing Exhibit 1, Declaration by Dr. Terry Maley). Dkt. #35. Undoubtedly both parties expended significantly more money preparing for and conducting the contest hearing. The hearing included testimony by 16 witnesses in a transcript 11

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 17 of 29

of over 3,400 pages, and lasting 25 days. The parties submitted approximately 500 hearing exhibits. See Ex. 6, Excerpt of Contest Hearing transcript, June 1, 2007 (consisting of hearing transcript pages 3323, 3325-3326 and 3400-3401). The hearing record is established and, after closing briefs are submitted, is ready for decision by the Administrative Law Judge. To start the matter over entirely without allowing the IBLA to rule on the parties' interlocutory appeal would require extensive trial time before this Court on matters that could and should be determined by the ALJ. Mr. Freeman apparently concurs, noting in briefing to Judge Sweitzer that "while . . . Freeman and the United States could litigate the validity of Freeman's claims in 1994 or 2000 in the Court of Federal Claims, the waste of everyone's resources would be tremendous. . . ." as "the very extensive hearing has been completed." Ex. 4, "Contestee Walter Freeman's Brief on Authority of Administrative Law Judge to Determine Validity As Of Certain Dates" at 11 (emphasis in original). II. Plaintiff's Arguments Do Not Outweigh the Benefit of Allowing the Doctrine of Primary Jurisdiction to Operate and Should Not Override Interior's Prerogative to Determine the Validity of Plaintiff's Claims A. Interior has Not Refused to Determine the Validity of Plaintiff's Claims

Plaintiff erroneously states that the Department of the Interior refuses to determine the validity of his claims. Motion for Relief at 14. Based on this incorrect statement, Plaintiff invites this Court to determine the validity of his claims. The apparent support for this incorrect statement depends upon Plaintiff's repeated invocation of the fact that three administrative law judges have concluded that they lack jurisdiction to determine the validity of a claim at a time other than at the time of patent application, withdrawal, or the time of the contest hearing. Motion for Relief at 6-8, 15, 17-18. Conspicuously absent from Plaintiff's argument is the fact that the Contestant United States Department of the Interior has filed an interlocutory appeal of 12

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 18 of 29

the administrative law judge's opinion to the IBLA. This matter is not concluded and the IBLA has not yet ruled on the interlocutory appeal before it. Plaintiff's argument contains several notable fallacies. First, ALJ determinations do not bind the IBLA in its de novo review. Nor is one ALJ's determination binding on another ALJ. Second, Judge Sweitzer's decision and the Aloisi decision cite an unpublished ALJ Order from 1981 in United States v. Marie Story. Any statements in the Marie Story Order regarding the Department's relationship to the Court of Federal Claims were dicta since the Order plainly states that the contest was being dismissed because the BLM had found that the claims were null and void for failure to file evidence of assessment work. The more recent orders from Judge Sweitzer in Freeman and Judge Holt in Aloisi could be overturned given the Department's plenary role in adjudicating mining claims and broad authority to initiate contests for any cause affecting the legality or validity of any mining claim. As Mr. Freeman argued to the ALJ, "there is broad authority for the ALJ to carry out its function for the Secretary and issue a ruling on the validity of the claims in 1994 and 2000." Ex. 4, "Contestee Walter Freeman's Brief on Authority of Administrative Law Judge to Determine Validity As Of Certain Dates" at 11. Third, only the pending IBLA decision will determine whether the Skaw point of futility has been reached in deciding the validity of Mr. Freeman's mining claims. B. Freeman Has Not Been Treated Unfairly

Plaintiff places great emphasis on proceedings in Aloisi v.United States, (Fed. Cl.), No. 95-650 L, to mount an argument that the government is treating him unfairly. See Motion for Relief at 6-7, 15-16, 18-19. Defendant disagrees. Plaintiff overlooks the fact that every case turns on a host of different considerations, both factually and legally, as does the course of litigation a party believes best serves its interests. Even accepting arguendo Plaintiff's premise 13

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 19 of 29

does not explain why the Court should ignore the jurisdictional issues that granting Plaintiff's motion would raise or the benefits in allowing the doctrine of primary jurisdiction to operate. Some of the differences between this case and Aloisi, which inure at least in part to the different approaches by the government, include the fact that Aloisi could not be practicably appealed because Administrative Law Judge Holt declined to stay the imminently scheduled hearing (see Ex. 7, Order dated May 18, 2007 in United States v. Aloisi, CACA 41272 at 5) and did not certify the decision for interlocutory appeal. Consequently, the parties in Aloisi would have been required to conduct a hearing knowing that the ALJ had already ruled that he would not hear evidence to determine validity as of the dates of alleged taking. By contrast, in the present case, the parties had nearly completed the hearing before the ALJ raised the jurisdictional issue and the parties jointly agreed to finish the hearing and brief the jurisdictional issue. Another difference between the cases is reflected by the government's motion to dismiss Aloisi in the Court of Federal Claims, arguing among other reasons: (1) plaintiffs' claims were unripe as they did not submit to the Forest Service a proposed mining plan for operations; (2) plaintiffs allege a tort and not a taking (their takings claim is based upon the alleged failure to notify plaintiffs of a biological opinion issued by the FWS); (3) plaintiffs did not satisfy the Penn Central v. United States requirements for a regulatory taking; and (4) plaintiffs did not have a property interest in a subject patented mine at the time of the alleged taking. Even more telling is Mr. Freeman's own contentions regarding Aloisi to ALJ Sweitzer in the administrative proceedings. In his briefs, Plaintiff distinguished the ALJ decisions in United States v. Aloisi and United States v. Story from the present case. Ex. 4, "Contestee Walter Freeman's Brief on Authority of Administrative Law Judge to Determine Validity As Of Certain Dates" at 8. Mr. Freeman noted that the "Aloisi case is quite different from the present case." 14

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 20 of 29

Id. Mr. Freeman continued that "[t]he Storey/Skaw case is in a completely different posture than that of the Freeman case." Id. at 10. (The Story and Skaw decisions come from the same case. Story is reported at 2 Cl. Ct. 795, vacated by 740 F.2d 932 (Fed. Cir. 1982).) Mr. Freeman explained that in the Story/Skaw case, the ALJ "dismissed the case after the Idaho office had ruled that the contestee's claims were invalid for failure to file recordation of assessment work. Importantly, the dismissal was made prior to what would have been a relatively lengthy hearing and extensive discovery." Id. at 10 (emphasis in original). Mr. Freeman explained that, in the present case, "the very extensive hearing has been completed" and "the policy reason for the decision for Storey in avoiding unfairness calls for a conclusion that decisions as to validity in 1994 and 2000 should be rendered" by the ALJ in the present case. Id. at 11. Thus, Mr. Freeman's own arguments recognize that Aloisi posed a different situation since the hearing had not been conducted. C. The Federal Circuit Decision in Skaw v. United States Does Not Support Plaintiff's Argument

Plaintiff argues that the Federal Circuit's decision in Skaw v. United States, 740 F.2d 932 (Fed. Cir. 1984), demonstrates why the Court should end the suspension of proceedings. Motion for Relief at 17-19. Interestingly enough, Plaintiff argued exactly the opposite in the administrative proceedings. In briefing to Judge Sweitzer, Plaintiff noted that "the Storey/Skaw case is in a completely different posture than that of the Freeman case." Ex. 4, "Contestee Walter Freeman's Brief on Authority of Administrative Law Judge to Determine Validity As Of Certain Dates" at 10. As Mr. Freeman notes, there the ALJ dismissed the case prior to a hearing because BLM had found the claims to be invalid for failure to file a recordation of assessment work. Id. Mr. Freeman emphasized that, in the present case, it would be not be a good use of 15

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 21 of 29

resources to return to the Court of Federal Claims without first having the Department rule on validity since the hearing has already occurred. Id. at 11. In any event, Plaintiff now misreads the narrow holding Skaw to urge this Court to exercise jurisdiction over Plaintiff's validity determination. In Skaw, the trial court stayed proceedings in August 1979 to permit the Secretary of the Interior to determine the validity of the mining claims. Skaw, 740 F.2d at 935. In November 1981, while an administrative contest concerning validity was pending, the BLM declared the mining claims void by operation of law because of the holders' failure to make legally required annual filings. For this reason, the Department of the Interior dismissed the administrative proceeding contesting validity. Id. The Federal Circuit rejected the government's suggestion that the case be referred back to the Department of the Interior to determine validity. The Court believed that referral would be probably futile because the Department of the Interior had the opportunity earlier to address the discovery issue but had elected not to address that exact question, instead taking the position that the Department likely did not have jurisdiction having found the claims null and void. The Court explained as follows: The government candidly admits that since Interior has already ruled that the claims are null and void, it is doubtful whether that department now has jurisdiction to decide the discovery issue. We agree, and for several other reasons, reject the suggestion. We do not think that the doctrine of primary jurisdiction requires a court to refer a question to an agency where, as here, the agency has declined to decide the precise question on a prior reference by the court. See Atchison, Topeka and Santa Fe Ry. Co. v. Airport Transport Ass'n, et al., 253 F.2d 877, 886 (D.C. Cir. 1958). As the Supreme Court has observed, "the doctrine of primary jurisdiction is not a doctrine of futility." Local Union No. 189, Amalgamated Meat Cutters & Butcher Workmen v. Jewel Tea Co., 381 U.S. 676, 686, 85 S.Ct. 1596, 1600, 14 L.Ed.2d 640 (1965). . . . It is highly probable that a second referral to Interior would result only in further delaying the trial in the Claims Court, and increasing the expense to both parties. Id. at 938. 16

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 22 of 29

Plaintiff makes two arguments for why the Skaw decision purportedly supports his motion. Both are incorrect. Plaintiff assumes the IBLA will rule the same way as three different ALJ's on the jurisdiction question. Motion for Relief at 17-18. To Plaintiff this equates to a conclusion of futility and therefore, consistent with the Federal Circuit's decision in Skaw, Plaintiff urges this Court to forego waiting for the IBLA to rule. Id. at 17. By contrast, in the present case, the United States believes Plaintiff's mining claims are not valid and the matter continues to be litigated before the IBLA. Thus, Plaintiff's reasoning is premature and Skaw does not apply at this juncture. Plaintiff's second argument attempts to ride the coat tails of the Federal Circuit's decision in Skaw which also cited the delay incurred by plaintiff in that proceeding. Motion for Relief at 18. However, not only is Skaw factually distinguishable from Freeman, Plaintiff ignores the fact that the Federal Circuit's reference to delay was dicta. That is, the impetus behind the Federal Circuit's decision was the fact that it found that the Department of Interior had already declined to answer the question remanded to it. Skaw, 740 F.2d at 938. As mentioned above, the facts are different in this case. Plaintiff cannot make the argument that Skaw stands for the proposition that any asserted delay by a claimant justifies discontinuance of a pending validity determination before the Department of the Interior. D. Plaintiff's Contentions of Prejudice Do Not Justify Lifting the Stay

Plaintiff argues that the Court should lift the stay because he believes he has been prejudiced in several ways. First, Plaintiff cites no case law to support his position. Second, as explained below, Plaintiff's narrow view does not provide a complete picture of his complaints. In short, these contentions do not sufficiently justify the Court lifting the stay.

17

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 23 of 29

1.

The Time Taken for the Administrative Proceedings Is Not Defendant's Fault

To support his request, Plaintiff highlights the length of time the proceedings have taken and the prospect that even more time may be needed to resolve the administrative process before the Department of the Interior. Motion for Relief at 18. The Department of the Interior too has had to endure the lengthy proceedings. The length of time for litigation often proves longer than litigants prefer. However, Plaintiff makes no mention of the fuller picture. The mineral exam and hearing are required steps in adjudicating mining claim validity; they are not "delay." In fact, much of the time taken by the mineral exam was due to the minimal and poor quality of the data Mr. Freeman submitted. Ex. 8, Excerpt of Contest Hearing transcript, March 16, 2007, at 411413. In any case, the United States has been carrying out its obligation to complete this complex, expensive, and large validity determination in as timely a manner as possible. As explained in Defendant's Response to Plaintiff's Motion for Appointment of Special Master (Dkt. #35), Plaintiff's claims encompass far more land than most prior large-scale validity determinations previously conducted and required extensive research to determine the economic viability of Mr. Freeman's proposed use of his claims. Defendant's Opposition to Plaintiff's Motion for Appointment of Special Master, Declaration of Dr. Terry Maley at Ex. 1 ("Maley Dec.") at ¶¶ 6, 6a, and 6d. See Dkt. #35. Dr. Terry Maley explained that Plaintiff's claims comprise one of the largest, if not the largest, and most time-demanding, of any validity examination that he is personally aware of. Id. He explained that the examination demanded resources and processes exceeding almost any other examination including: 1) procuring and administering a large budget for contractors, professional services, and supplies; 2) assembling a 18

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 24 of 29

mineral examination team from the BLM, Forest Service, and private industry; 3) managing support personnel and logistics; 4) communicating with interested parties; and 5) coordinating information among agency headquarters, contractors, and team members - altogether some 30 people. Id. at Maley Dec. at ¶ 6e. By contrast to the considerable work ­ as measured by the time elapsed and the amount of work performed ­ undertaken by the government in expeditiously conducting the exam, it took Mr. Freeman until January, 2003 to submit an economic analysis to the BLM mineral examiners showing how he plans to process minerals on his claim (id. at Maley Dec. at ¶ 8), even though he asserts he has been ready to be issued a patent since 1992 (Motion for Relief at 2). Two, Plaintiff does not mention that he agreed initially to the administrative hearings already conducted and nearing completion. JSPR at page 2, paragraph d. In fact, Mr. Freeman says exactly the opposite. Motion for Relief at 21 ("Freeman did not request this suspension and has in the past requested that the suspension be lifted"). He now complains the process has taken longer than he anticipated. While the IBLA may have historically taken more than two years to decide the merits of some appeals, the present matter has been appealed as an interlocutory appeal with a request for expedited consideration. Moreover, while Plaintiff cites some historical time frames, the IBLA has focused on improving timeliness and, since April 1, 2007, has an average review and decision time of 9.5 months from the time the case is ripe for a decision (i.e., briefing completed). See Ex. 9, "Interior Board of Land Appeals Monthly Report Average Time For Final Disposition Pending Cases Summary of Board Activity By Category" for March 2008. Cases. Here, the parties completed the IBLA briefing in October 2007. Although the time needed to render an opinion for each case will vary, the IBLA March 2008 Monthly Report 19

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 25 of 29

suggests a picture much more palatable than the one portrayed by Plaintiff. A letter dated April 22, 2008, from the IBLA's Docket Attorney confirms that prospect, noting that the Board's Chief Administrative Judge has made "substantial progress in reviewing the case" and that the Board "believe that a decision will be issued well under the present average time for final case disposition." See Ex. 10, Letter dated April 22, 2008, from Margaret E. Walsh, Docket Attorney, to Bradley Grenham, Office of the Regional Solicitor, with a courtesy copy to Richard M. Stephens, counsel for Mr. Freeman. 2. Plaintiff Overstates the Burden of Paying the Mining Claim Maintenance Fees

Plaintiff also alleges a burden in paying the mining claim maintenance fee. Motion for Relief at 14, 19. The annual maintenance fee per claim is prescribed by law and cannot be waived except for specific circumstances. 30 U.S.C. § 28f; 43 C.F.R. §§ 3834.11, 3835.11(e). Plaintiff does not qualify for those exceptions. The fee per claim was $100 when Plaintiff filed this action, but has increased to $125. Id. It is the enormity of the number of claims that Plaintiff seeks to maintain (161) that makes the annual bill rise to the amounts stated by Plaintiff. See 43 C.F.R. § 3830.21 (2005) (describing amount of fee). Even if a tribunal determines that some or all of the claims are valid, Mr. Freeman will still have to pay the annual fee to maintain his claims determined to be valid. 30 U.S.C. § 28f; 43 C.F.R. § 3834.11. Further, if Mr. Freeman's claims are ultimately deemed invalid, then the BLM can refund maintenance fees paid if the mining claim or site was void at the time the fees were paid. 43 C.F.R. 3830.22(b)(2). A determination of validity will not lead to patent of any valid claims so long as Congress continues to prohibit the BLM from expending funds to process all patent applications. As discussed previously before this forum, Congress established and has regularly renewed a 20

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 26 of 29

prohibition on funding for patent processing. See Pub. L. No. 103-332, § 112, 108 Stat. 2499, 2519 (1994); Pub. L. No. 110-161, § 408(a), 121 Stat. 1844, 2145 (2007) (Consolidated Appropriations Act, 2008). Consequently, maintenance fees are a legally-required part of holding valid mining claims. 3. Plaintiff Faces No Undue Risk From Witness Memories Fading Because of Passage of Time

Plaintiff also expresses concern about the fact that memories fade. Motion for Relief at 13. Of course that is always a risk shared by both parties. However, unlike many cases, the parties have a complete administrative trial transcript available to refresh witness testimony. In the unfortunate event that a witness who testified at the administrative hearing is unavailable for any hearing before this Court, the Federal Rules of Evidence provide for the means to introduce that earlier testimony. See Fed. R. Evid. 804(a)(4). III. PLAINTIFF'S "CONDITIONS" FOR CONTINUING THE STAY ARE NOT APPROPRIATE AND UNACCEPTABLE Plaintiff argues that the government should pay certain costs of maintaining Plaintiff's claims while the stay continues. Motion for Relief at 19-22. Specifically, Plaintiff would require Defendant pay the (a) maintenance fees paid by Plaintiff since the case was remanded to the Department of Interior in 2001, and (b) expenses incurred by Plaintiff and "reasonable attorneys' fees for time spent in the OHA process" if the IBLA determines that OHA does not have jurisdiction. Motion for Relief at 22. The Court should deny Plaintiff's alternative request for "conditions." Not only are they unacceptable to the Defendant but, more importantly, the Court does not have the authority to order the United States to pay such costs. The Court of Federal Claims is not a court of equity. United States v. King, 395 U.S. 1, 3 21

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 27 of 29

(1969) (generally, the CFC lacks jurisdiction to provide equitable or declaratory relief). Thus, it cannot create the sort of conditions or remedies of a sort that Plaintiff argues as the cost for continuing a legitimate, authorized proceeding before the Department of the Interior. Plaintiff's "condition" that the United States pay his maintenance fees constitutes a claim against the Defendant. The United States Court of Federal Claims is a court of "limited jurisdiction." King, 395 U.S. at 3. The Tucker Act, 28 U.S.C. § 1491, confers upon this court jurisdiction over certain claims against the United States; however, the Tucker Act does not create a substantive right enforceable against the sovereign. United States v. Testan, 424 U.S. 392, 398 (1976); Khan v. United States, 201 F.3d 1375, 1377 (Fed. Cir. 2000). Rather, a claimant must base his claim "either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort." 28 U.S.C. § 1491(a)(1); see also Fisher v. United States, 364 F.3d 1372, 1377 (Fed. Cir. 2004), vacated on other grounds, 403 F.3d 1307 (Fed. Cir. 2005) ("The Tucker Act itself does not create a substantive cause of action; in order to come within the jurisdictional reach and the waiver [of the Government's sovereign immunity] of the Tucker Act, a plaintiff must identify a separate source of substantive law that creates the right to money damages."). Plaintiff cites no provision under the Tucker Act that authorizes a claim for maintenance fees. Plaintiff also asks the Court to impose a "condition" for reimbursement of attorneys' fees incurred during the OHA process. To the extent that this constitutes a claim, then Plaintiff's "condition" fails because the Tucker Act provides no jurisdiction for it. To the extent that this "condition" is tantamount to payment of attorneys' fees under the Equal Access to Justice Act ("EAJA") or the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 22

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 28 of 29

1970 (see 42 U.S.C. 4654(c)), then it is premature because the litigation is on-going, no apparent basis otherwise exists to require the Defendant to pay attorneys' fees, and either statute (if applicable) provides a statutory scheme for Plaintiff to request payment of such fees. CONCLUSION For the foregoing reasons, Defendant respectfully requests the Court deny Plaintiff's Motion for Relief in its entirety. Dated: April 16, 2008. Respectfully submitted, RONALD J. TENPAS Assistant Attorney General Environment & Natural Resources Division

__________________________ TERRY M. PETRIE Trial Attorney Environment & Natural Resources Division Department of Justice 1961 Stout Street 8th Floor Denver, CO 80294 Phone: (303) 844-1369 Fax (303) 844-1350 [email protected] Attorney for Defendant OF COUNSEL: Brad Grenham Office of the Regional Solicitor Department of the Interior Portland, OR Holly McLean Office of the General Counsel Department of Agriculture Portland, OR 23

Case 1:01-cv-00039-BAF

Document 88-2

Filed 04/23/2008

Page 29 of 29

CERTIFICATE OF SERVICE I certify that copies of the foregoing "DEFENDANT'S AMENDED RESPONSE TO PLAINTIFF'S MOTION FOR RELIEF FROM SUSPENSION OF PROCEEDINGS OR, IN THE ALTERNATIVE, FOR CONDITIONS" were served upon counsel for Walter B. Freeman by electronic filing with the United States Court of Federal Claims and for counsel for the Siskiyou Project and Mineral Policy Center by regular mail, postage prepaid, properly addressed this 23rd day of April, 2008, to:

Richard M. Stephens, Esq. Groen Stephens & Klinge, LLP 11100 NE 8th Street Suite 750 Bellevue, WA 98004 Attorney for Walter B. Freeman (By electronic filing) Roger Flynn, Esq. WESTERN MINING ACTION PROJECT P.O. Box 349 412 High Street Lyons, CO 80540 Attorney for the Siskiyou Project and Mineral Policy Center (By mail)

s/Terry M. Petrie__________ TERRY M. PETRIE