Free Motion for Summary Judgment - District Court of Federal Claims - federal

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EXHIBIT E

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS
ALFRED ALOISI, et aI.,
Plaintiffs,
v.

)
)

)
) ) ) ) ) )

THE UNITED STATES,
Defendant.

No. 95-650L Judge Lawrence S. Margolis

)

PLAINTIFFS' ANSWERS TO DEFENDANT'S SECOND SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTION OF DOCUMENTS

Pursuant to Rules 26, 33, 34 and 36 of the Rules of the United States Cour of Federal
Claims, Plaintiffs hereby respond to Defendant's Second Set of Interrogatories and Requests for
Production of Documents (Defendant's "Second Set of

Discovery") as follows:

GENERAL OBJECTIONS AND OBJECTIONS TO DEFINITIONS 1. Plaintiffs object to Defendant's Second Set of Discovery to the extent that it seeks
irrelevant information and/or documents.
2. Plaintiffs object to Defendant's Second Set of Discovery to the extent it seeks

information and/or documents that are protected by attorney-client privilege, work product
doctrne, or any other applicable protection against disclosure.

3. Plaintiffs object to Defendant's Second Set of Discover to the extent that it is overly
broad, vague and ambiguous, unduly burdensome and not reasonably calculated to lead to the
discovery of admissible evidence.

4.

Plaintiffs object to overly broad and unduly burdensome definitions of terms,

including pronouns, plural/singular, and entities/persons.

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5. Plaintiffs object to the instrctions relating to the identification of documents on the
basis that, as to produced documents, it is unduly burdensome, as the information is as readily
available to defendant as to plaintiffs.
6. Plaintiffs object to

the instrctions and questions asking for descriptions of oral

communications, as documented oral communications may be gleaned from any record of oral
communications as readily by defendant as by plaintiffs.
7.
Plaintiffs object to Defendant's requests to state all facts about contacts,

communications and events peraining to a response to an interrogatory because it is overly

broad and burdensome; Plaintiffs identify and describe suffcient facts to support their
substantive responses to Defendant's interrogatories as is practicable.
8.

Plaintiffs' general objections and objections to definitions and instrctions are

incorporated into each and every response herein, regardless of whether specific objections are
assered in response to a particular discovery request.

ANSWERS TO INTERROGATORIES
INTERROGATORY NO.1: For each and every mining claim that Plaintiffs contend was temporarly taken please identify:
a. the date upon which Defendant allegedly first temporarly took each
mining claim (the "date of

taking")

b.

the date upon which the alleged temporary taking ceased;

c. any interim or intervening time perod within the range of dates identified

in response to La. and Lb. during which Plaintiffs contend there was no taking;
d. each and every mineral deposit or resource site within each mining claim

that Plaintiffs contend was temporarly taken; and
e. those mining claims and mineral deposits or resources with respect to

which Plaintiffs intend to offer proof of a temporary taking at triaL
ANSWER No.

1:

Plaintiffs respond that Defendant's (Second) Interrogatory No. l(a)

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appears to seek a legal conclusion rather than factual information.

To the extent this

Interrogatory constitutes a contention interrogatory seeking explication of Plaintiffs' claims in
the action, plaintiffs respond as follows.

First, with respect to each lettered paragraph answer to this (Second) Interrogatory No.1,

Plaintiffs do not contend solely that unpatented mining claims were temporarly taken, but also

contend that specific property constituting patented, fully private land was also temporarly

taken, chiefly the Mt. Laurel parcel (U. S. Mineral Survey No. 3161, Lot 45A), by virte of
Defendant's letter order of January 4, 1990 (FS # 50) ("the Stop Work Order"), which stated, "I
must inform you that all activities, including activities on private land accessed through National
Forest must stop immediately."
Second, as a legal proposition, defendant has to acknowledge what its obligations to

plaintiffs were on July 23, 1990. On that date, the Forest Service no longer had any basis under

the Endangered Species Act: (i) not to rescind the Stop Work Order (as to the previouslyapproved elements of plaintiffs' mining plan of operations); and (ii) not to immediately process

the balance of the All Phase Plan of mining operations, as required by its mining plan rules, 36

CFR 228.5(a), and as it formally represented to plaintiffs in its November 1989 plan approval
letter, "The (balance of your proposed activities not approved here J wil be included in a master

Plan of Operation Two with an Environmental Analysis completed in the Spring of 1990 as we
agreed at our meeting." (FS # 46.). Until this legal obligation is acknowledged or resolved,

there is uncertainty as to the exact dates of the temporary taking, thus:
a.

Plaintiffs claim that Defendant temporarily took plaintiffs' rights on each mining

claim, and on the private parcel identified herein (and in the Complaint), and the period of the

compensable temporar taking commenced, either: (1) on July 23, 1990 (when the U. S. Fish

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and Wildlife Service tendered its biological opinion to the U. S. Forest Service that the 38-acre

projected area of surface disturbance for the plaintiffs' All Phase Plan of operations for the
Liberty Mine would not jeopardize the northern spotted owl); or (2) on the date shortly after July
23, 1990, when in the normal course of business the U. S. Forest Service would have notified

plaintiffs of its receipt of that biological opinion and taken the necessary administrative action to

authorize plaintiffs to return to work under the approved portions of their All Phase Plan of
mining operations.
below.)

(The "All Phase Plan" is described more specifically in Answer No.3

Plaintiffs wrote defendant on September 24, 1998, regarding this dating of the

temporary taking period (the USFS used other pages of this letter as an exhibit to its March 1,
2007, Motions in the administrative contest). We asked in 1998 that defendant provide plaintiffs

with information so that the paries could consider stipulating to these dates:
Assume the Forest Service had notified plaintiffs ofthe July 23, 1990, biological opinion on July 23, or on the same date it began taking action on the timber sales "cleared" by the same opinion. Without rereading Marc Wiliams's deposition, I believe that was actually July 23. How long would it have taken the Forest Service to rescind or undo its "stop order" of January 4, 1990 (Doc. FS #50), as to all previously approved activities (Phase I and those parts of Phase II approved in 1989)? In other words, how long would it have been before plaintiffs could have gone back to work both on the five claims the agency representatives have been sampling, and on the approved Mt. Laurel property apex cut?

"."'..."""'.'
The same exercise pertains to February 1994 when the second Fish and Wildlife
Serice clearance was rendered. It was only with the February 1994 second

clearance that beneficial use ofthe property for mining was restored to the status quo as of July 23, 1990, that is, with no Endangered Species Act objection to the resumption of operations previously ordered to a halt....
Plaintiffs submit that the dates the paries might establish using this principle would

shortly follow the dates of the Fish and Wildlife Service letters, but the dates canot be set
without fixing the Forest Service's obligations and process (see 36 CFR 228.5(a)) in light of

the

complete clearance of the entire all-phases plan of operations under the Endangered Species Act

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in both letters.
b.

Plaintiffs claim that Defendant's temporar takng of plaintiffs' rights on each

mining claim, and on the private parcel identified herein (and in the Complaint), and the period
of the compensable temporar ended, either: (1) on February 8, 1994 (this is when the U. S. Fish
and Wildlife Service tendered its second biological opinion (FS # 184) to the U. S. Forest

Servce that the 38-acre projected area of surface disturbance for the all-phase plan of operations

of the Liberty Mine would not jeopardize the northern spotted owl, in a consultation treated by
the U. S. Fish and Wildlife Service as an "informal consultation" not required by section 7 of

the

Endangered Species Act, in light of the fact that the projected area of surface disturbance and the

operations described in mining plan of operations undergoing informal consultation were the for
all purposes the same as those evaluated in the July 23, 1990, no-jeopardy opinion); or (2) on the

date shortly after February 8, 1994, when in the normal course of business the U. S. Forest
Service would have taken the related administrative actions: (i) of authorizing plaintiffs to return

to work under the previously-approved portions of their all-phases mining plan of operations;

and (ii) of recommencing processing the balance of the All Phases Plan of mining operations
under 36 CFR 226.5(a), consistent with the Forest Service's representation to plaintiffs in FS #

46 (plaintiffs refer here to the unanswered 1998 correspondence regarding temporary taking
dates set out in Answer 1.a. above); or (3) based on the Forest Service's failure ever to take
further action with respect to plaintiffs' mining plan of operations after its receipt of

the February

8, 1994, second biological opinion, some much later date.
c.

There was no period of time between the earliest date provided in Answer l.a.

(July 23, 1990), and the latest date provided in Answer l.b. above (in 1994 or thereafter) when
defendant, by virte of its failure to implement its obligations consistent with the 1990 no-

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jeopardy opinion, did not wholly prevent plaintiffs from engaging in beneficial use of the
property for mining purposes, and did not wholly prevent plaintiffs from working and mining
under the previously-approved mining plan of operations.
d.

Every "mineral deposit or resource site within each mining claim," and on the

private Mt. Laurel parcel, was wholly subject to the temporary taking, and plaintiffs were denied

beneficial use for mining purposes of any and all of them. More specifically, the mineral

deposits of economic value and present interest to plaintiffs in 1989 through 1995 were those

treated as ore blocks in "The Liberty - Eddy Gulch Gold Mines, A Discussion of Grade,
Tonnage, Recovery, Economic Calculations and Other Topics and Issues Related to the Liberty
vs. USFS Litigation," September 2007 (A-150), and on the nine Spreadsheets that are described
in the September 2007 Ferrero Analysis (A-151), and the three sets of

maps showing the location

and values of these ore blocks (A-152, A-153 and A-154), all of which A-150 through A-154
taken together constitute plaintiffs' working analysis of the design and profitability of

their Eddy

Gulch mining operation (together, "the September 2007 Ferrero Analysis").

Plaintiffs are not familar with defendant's phrase "resource sites," but answer that it was

not just the mineral deposits on the mining claims (and on and accessed through the private Mt.
Laurel parcel) that were temporarily taken for this entire period. It was also the use and

enjoyment of all of the same ground for related mine development purposes, transportation of
employees, equipment and ore, construction and operation of mining support facilties including

stockpiles, mil and related facilities, and as locations for disposal of mine and mil wastes.
These lawful mining uses of the mining claims and the private Mt. Laurel parcel render these
lands "resource sites" - and beneficial use for mining purposes of the entirety of this ground,

including as "resource sites" as so understood, was prohibited to plaintiffs through the entire

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INTERROGATORY NO.7: With respect to each and every lease or license relating to any of the mining claims at issue, please provide the following the information:

~aricipated in any communication. regardin,g leasng or licensing any mining claim at

issue; .
e.

a. the circumstances surrounding initiation of any negotiations leading to the

execution of each lease or license, inclu4ing the identity of the individuals who

b. the date upon which the initial contact between any party, or
representative of a pary, to the leases or licenses was made;
c. the time period during which each lease was. in effect (if the effective
period of any lease or license is disputed by the paries to the lease, provide the dates.

each party to the lease or license contends that the lease was in effect);
d. the amount and date of each payment received pursuant to each lease or

license, including in your response the identity of the lease under which the payment was received, from whom it was received, the date of receipt, and the amount received;
the total amount in rent or consideration received under each lease or

license;
f. whether any lessee developed to production a mIne on any leased or

licensed mining claim; .

g. the amount of gold, . or gold-bearing ore, produced from each leased or

. .
. 1",..:-

licensed mining claim; and '. ¡ .' .
h. the quantum of any and all payments received as a production or royalty

payment (such as was contemplated in Article 6 found in both FS Document Nos. 142
and 147) under each lease or license.
ANSWER

No. 7:

This Answer employs the same numbering as Answer No.6, to

identify the agreement or offer with respect to which the Answer pertains.
a.

(1) By 1991, plaintiffs had been allowed to do no more of the work the Forest

Serce approved in November i 989 than they had completed by January 4, i 990. Per the
sequence of events in the approved phases of the All Phase Plan, the test mìl could have been

erected, and operating under Forest Service approval, in 1990. Per the plan, Ìncome from gold

production would have begun to be available to fund succeeding stages in mine development.

_/

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,
As it was, not only had plaintiffs not been allowed

back to work, but the Forest Service had lifted

not a finger to process the rest of

the A1l Phase P!an.ofMining Operations, notwithstanding their

representation in November 1989 (FS # 46) to complete environmental analysis on the balance of
the All Phase Plan in the Spring of 1990. Plaintiffs mortgaged the Rollin and Mt. Laurel private

parcels, and used the loan proceeds to pay expenses, including servicing the equipment payment

expenses. The lender - mortgagee on the Mt. Laurel parcel was one David Davies, a business

associate of Aloisi's father, who leared of this property and became interested in that loan
opportnity at that time.
The Forest Servce in early 1992 finally acknowledged its receipt of the July 1990

biological opinion, but then the Forest Service's insisted that plaintiffs' April 1, 1992, version of

its All Phase Plan was a new plan, not simply a demanded re-statement of the several
. .: :!

submissions that constituted the 1989 All Phase Plan. Plaintiffs, unable to pay on the Mt. Laurel ,'¡"):
)

loan note, defaulted, and Davies foreclosed (A- I 62).

Davies had a business associate in Nortern California, in mining, named Mark Gavard,
also known to Mr. Aloisi. From Aloisi's perspective Gavard had coveted the Eddy Gulch

propery for years. When Davies advised Gavard that he was foreclosing on the Mt. Laurel loan
(A-162 pertains to this foreclosure sale), Gavard and Davies made some arangement for Gavard

(through W AZCO) to lease, buy or otherwise control the Mt. Laurel property, which they saw as

the crucial property for purposes of controlling long-term underground development of the Eddy
Gulch property. W AZCO/Gavard approached Aloisi. to lease or purchase all the mining claims.

From this position, forced on plaintiffs by the Forest Servce on the one side and Davies and
W AZCO (Gavard) on the other, plaintiffs worked

put t~e 1993 W AZCO Lease Agreement.
. " J. l~ i.

(2) The principals of W AZCO were alsO the

principals of LCM, although LCM had new,

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additional principals in additiqn.

Plaintiffs understood LCM's motivation to negotiate a

successor lease, when lessor notified W AZCO of its default under the W AZCO lease (A-161), to
be as follows - LCM had taken an assignent of the W AZCO lease, without notifyng lessor or

securing lessor's approval, and was either then selling, or intending to sell, stock in LCM, whose

(;
primary asset was the assigned W AZCO lease bfthe Eddy Gulch propert. This, plaintiffs
.,

understood, was the reason why LCM wanted the LCM LOA, though executed in December
1994, to be effective

a year prior, November 1, i 993, and supersede' the W AZCO Lease

Agreement for that period - a period from in which LCM may have been selling stock on a
company whose primar asset was a Lease at risk of

termination for breach.

b.

(1) Plaintiffs canot re-create when W AZCO contacted plaintiffs, although it was
of the Mt.

shortly after Davies initiated foreclosure a,ction on plaintiffs' default on the mortgage

Laurel private parceL (2) Contact between the principals of LCM and

plaintiffs was periodic

\
,/

and continual from and through the execution of the W AZCO lease. After the six-month time
period provided in Exhibit B of the W AZCO lease for W AZCO to "initiate a mining plan" had

passed without W AZCO doing so, plaint~ffs d w~re in regular contact with W AZCO about
W AZCO's breach of

this material contract obligation.

c

(I) The W AZCO Lease Agreement was in effect from on or about April 1, 1993,

and was superseded on November 1,1993, per the terms of

the LCM LOA. (2) The LCM LOA

was executed by the paries in December 1994, and declared that it was effective November 1,

1993. It was terminated on or about September 9, 1999 (A-156).
Plaintiffs are aware of

no disputes over these dates. (1) To the extent WAZCO disputed

whether its lease was in default due to its breach of the lease terms, that dispute was mooted by

the execution of the LCM lease. (2) The termination of the LCM LOA has, to plaintiffs'

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knowledge, never been disputed in any way or in any forum.
d.

(1) Aloisi believes that he received monthly "minimum production payments" of

$500 for 20 months under the W AZCO lease, for April 1993 through November 1994. (2)
Under the LCM LOA, LCM made the monthly "minimum production payments" through June

1999. LCM's failure to make the July 1999 monthly payment was one of the breaches on the
basis of

which the LCM LOA was terminated.
e.

Under the W AZCO lease, per lease provisions described in paragraph 7.d.,

$10,000.

Under the LCM LOA, $500 of each monthly payment went not to Aloisi and

Goodman, but directly to Melvin Usher to service his lease to Aloisi of three claims Lessor
subleased to LCM in the LCM LOA. With the LCM LOA effective November 1, 1993, the 10

months at the $2,500 monthly payment rate had already passed when the LCM LOA was
executed. In each of those 10 months, LCM owed an additional net to plaintiffs of $1,500, and

LCM owed an additional net sum of$1,715 for the months from September through November
1994.

In connection with executing the LCM LOA, LCM made a payment, with other

adjustments, of about $17,000 to plaintiffs. After the execution of the LCM LOA through June
1999 when it stopped paying, LCM paid about $93,000 under the LCM LOA.
f.

This question was answered in Answer 6, paragraphs (1) and (2) above.

g.

Plaintiffs have reason to believe that W AZCO or LCM, or both, removed

stockpiled ore from various locations on the property during the period of their Lease Agreement

or LOA and had the ore miled at the Bowerman Mil, located outside of Eddy Gulch. Plaintiffs'

belief is grounded in the fact that ore mined by plaintiffs from the Klamath Cut, and hauled to

Usher Flat in 1989 before the Forest Service shut down the mining operation, was no longer
there at some point during these leases, and likewise, ore stockpiled by prior owners of the Mt.

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Laurel private parcel near the mouth of the M J Tunnel on that parcel was also removed from the
property during this period.

Plaintiffs are aware of no other motive for any lessee to remove this volume of ore from

the property other than to have it miled and sell the gold. However, neither lessee ever reported
any production of gold to plaintiffs under either lease, and neither lessee ever paid any royalty,

as

..

required under either lease, on the production and sale of any gold from those ore piles.
h.

Plaintiffs received no "production or royalty payment" under either the W AZCO

Lease or the LCM LOA.

INTERROGATORY NO.8: Please describe in detail all investment amounts or costs incured and/or paid by Plaintiffs with respect to each mining claim at issue that Plaintiffs
contend were lost or diminished in value by the ~iieged tempora~ taking, including:
a.

the amount incured;
whether the incurred amount was paid;
the purpose of

b.
c.

the cost incured;

d.

the date the cost was incurred; and
the alleged temporary taking.

e. an explanation as to how, '~~i: iI1 what amount, each investment or cost
incurred was lost or diminished,in value as a result of

ANSWER No.8:

(1) Plaintiffs detail their investment in equipment to conduct the mining and miling
operations in their Answer to Interrogatory No.1 0, and as reflected in the expenditures itemized
in ledgers and accounting information in A-164 through A-168.
(2) Plaintiffs invested in labor in their 1988 and 1989 operations, as detailed in the

produced ledgers and accounting information A-164 through A-168.
(3) Plaintiffs paid Robert Pincombe and

his Mara Ventures entity, and through him the

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)

REQUEST NO. 23: Please produce all documents that Plaintiffs may rely upon at tral

ANSWER No. 23:
. (1) that expert reports

Plaintiffs have done so, subject to the objections and qualifications:

may be completed and discovered when completed at whatever later date

is set in pre-tral schedule; (2) that neither party is obligated to have created or shared any
demonstrative exhibits they may create and stipulate to use; and (3) that plaintiffs recognize their

ongoing obligation to supplement their production should they identify additional responsive
documents as they proceed.

Dated: September 24,2007

Respectfully submitted,

d~~ A~r-'
Lawrence G. McBride FOLEY & LARDNER LLP 3000 K Street, N.W. - Suite 500 Washington, D.C. 20007 Telephone: (202) 672-5300 Facsimile: (202) 672-5399

E-mail: lmcbride~folev.com

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