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Federal Document Clearing House Congressional Testimony

June 15, 1999


LENGTH: 3385 words


Statement of Roger W. Jeppson Shareholder Hale Lane Peek Dennison Howard and Anderson on Issues related to the March 25, 1999 letter from the Department of Interior which vacated the Record Decision and disapproved the Plan of Operations for the Crown Jewel Mine in Okanogan County, Washington before the Subcommittee on Forests and Public Land Management of the Energy and Natural Resources Committee United States Senate June 15, 1999 My name is Roger Jeppson. I am a lawyer. My area of practice is mining law. I practice in Reno, Nevada and have practiced there all of my professional life. I grew up in the small Nevada town of Yerington. Yerington was a center of mining activity around the turn of the century, but with the beginning of World War 11, mining activity ceased there and Yerington became a cattle town. That was true up until the opening of Anaconda's Weed Heights Mine in 1953. TheWeedHeightsMinewasanopenpitcopperminewhichcreatedhighpayingjob sin an area that had very few such jobs. In the summers after I graduated from high school and continuing until I completed law school in 1961, 1 worked at the Anaconda Mine as a summer employee. It was then and is now the custom of mining companies to provide summer employment for local students while they were attending college. My contact with the mining industry began in the summer after my graduation from high school in 1954. 1 have been associated with the mining industry in one form or another since that date. While growing up in Yerington I saw the old mine workings that abounded in the area. I marveled that so much material could come out of such small holes. At the same time while digging holes in my yard I learned that what came out of a hole in the ground wouldn't fit back. No one can put five pounds of beans in a one pound bag. That is particularly true in the mining industry. That, of course, is the problem which brings us here today. Mine workings, whether open pit or underground, generate mined material that takes up much more space after mining than it did while undisturbed in the ground. This was true in 1872 and is true today. In November of 1997, John Leshy, Solicitor for the Department of the Interior, issued a Solicitor's Opinion in which he announced that the general mining law, sometimes called the Mining Law of 1872, allowed only one mill site for each mineral claim. To put this in perspective, the maximum size of a mineral claim is approximately twenty acres. A mill site claim by law may not exceed five acres in size. In substance, Mr. Leshy announced that since 1872 the law of the United States has required that the material which came off of a single twenty-acre mining claim had to be located on a single five-acre mill site, which also had to contain all processing facilities, machine maintenance facilities and all other facilities necessary to operate that mine. That proposition was as absurd in 1872 as it is today. It is patently impossible. The net effect of the Solicitor's Opinion is that from its date in 1997 all mines must do the impossible; they must put the material removed from one twenty-acre mining claim on a five-acre mill site or the mine may not go into production. To be sure, there are other ways of acquiring ancillary land for mining purposes but all of the those methods depend on the discretion of the Department of Interior. The methods for acquiring such lands are slow, cumbersome and at best uncertain. In the meantime, while that land is being acquired if it can be acquired, the validity of the mining claims is subject to question by the Department of Interior and probably others. The reason is that the Department asserts that the test for a valid mineral claim is a determination of whether or not the mineral on that claim can be mined and marketed at profit at the time that the test is applied. Obviously if that material cannot be processed because insufficient space is available for that purpose, then the claim cannot meet the test and the claim is invalid. This position has been asserted in connection with the Montanore Mine in Montana and no doubt will be asserted in the case of all mines. Other witnesses at this hearing will provide more information on that subject, but those persons and groups opposed to mining have been given a tool in the form of a Solicitor's Opinion which has the capability of preventing further mining in the United States. If the mining companies affected are so inclined they can litigate the question, and some years down the road, if those companies are still viable, they will learn what the courts think of the Solicitor's Opinion. In this connection, those who dispute the Solicitor's Opinion in court may well be faced with a presumption that it is correct. It is my fear and the fear of many in the industry that rather than fight that battle, mining companies will continue their mass exodus from the United States to countries with a more friendly mining environment. While this may be the goal of some, it is not, in my opinion, the best policy for the United States. Moreover, that policy should not be set by an incorrect and unsupportable opinion from the Solicitor. Having stated the Solicitor's opinion and its effect, it is appropriate to analyze that opinion. The best that can be said of it is that it is a brief for the proposition for which it stands. That is, that only one mill site claim may be allowed under the mining law for each mineral claim in the mining project. It is not a reasoned opinion but rather an advocate's brief asserting a proposition that is not now and never has been the law. The opinion is based, in part, on misconceptions of both fact and history. Those misconception are that (1) the mining law was written to accommodate the small miner or prospector and (2) that mining was "small" at the time the mining law was adopted by Congress. Accordingly, the assumption is that since the law contemplated only small mining, modem mining has to reinterpret and expand the law to operate in today's climate. Nothing could be further from the truth. The draftsman of the mining law was Senator William Stewart. Stewart was the first Senator from Nevada. He was a mining lawyer who practiced law in Virginia City, Nevada. Stewart was elected immediately after Nevada was admitted to the Union. Nevada was admitted as a state in order to assure that the vast mining wealth that was being generated by the Comstock Lode in Virginia City could be used to finance the Civil War by the Union. This same wealth also created many of the vast fortunes that built San Francisco and financed the western expansion of the cross country railroad. At that time Virginia City was the largest, richest mining area in the world. The mines in the Virginia City area, collectively, made up one of the world's great industrial complexes. The mines were underground, but they were huge and Stewart learned about mining while representing them. The rule of extralateral rights, as it existed then and now, allowed a vein to be pursued throughout its length underground from a single mining claim through access from a small surface entrance (a mine shaft), even though that vein was beneath some other claim. Extralateral rights can best be explained by a diagram. The result of extralateral rights was that one relatively small mining claim often led to miles of underground workings including huge tunnels, caverns and equipment sites. The material removed often came from one small shaft on that claim. The vast dumps created by this removal are visible in Virginia City today. The old mining district has become a tourist area where people come to marvel at the engineering feats which allowed such vast mining operations. This was the world of Senator Stewart and it was his experience in Virginia City that provided the background for the drafting of the mining law. Stewart represented large miners, not small ones. If Stewart were to learn that today it is argued that his mining law had not provided for large operations he would come screaming from his grave. It has been argued that modem mining methods such as heap leaching have created a new and different situation which requires the "expansion" of the original mining law'. This is not true. While mining operations have grown larger in area, the need for more than five acres of ancillary land for each mineral claim has never changed. No one can put five pounds of jelly beans in a one pound bag. THE STATUTE Having placed the origin of the mining law in a proper historical perspective, let us examine 30 U.S.C. 42(a), the statute on which the opinion is based. The Solicitor's Opinion notes that "The plain language of the Mining Law indicates that only one five- acre mill site per mining claim may be patented. This assertion is not true. The plain language of the statute limits the size of a patented mill site claim to five acres. It does not limit the number of five acre claims that can be patented. The limitation is one of need, not number. 42. Patents for non-mineral lands; application, survey, notice, acreage limitation, payment (a) Vein or lode and mill site owners eligible. Where non-mineral land not contiguous to the vein or lode is used or occupied by the proprietor of such vein or lode for mining or milling purposes, such non-adjacent surface-ground may be embraced and included in the application for a patent for such preliminary requirements as to survey and notice as are applicable to veins or lodes; non- adjacent la but no location hereafter made after May 10, 1872 of such nonadjacent land shall exceed five acres, and payment for the same must be made at the same rate as fixed by this chapter for the superficies of the lode. The owner of a quartz-mill or reduction-works, not owning a mine in connection therewith, may also receive a patent for this mill-site, as provided in this section. Note that the language of 30 U.S.C. 42 speaks of the patenting of mill sites, not their use prior to patent. That use is presumed. After 1872 the statute notes that a mill site location shall not exceed five acres. "Location" is a word of art in the mining industry. As used in this context it means "claim." The statute assumes the use of the land for mining or milling purposes prior to the patent application and limits the size of a single mill site claim to five acres after 1872. The statute does not limit the number of mill site claims which may be located or patented. The limitation is on size and use, not on number. A similar statute with a similar statutory scheme is 30 U.S.C. 23 which defines the size of lode claims. That statute reads as follows: 23. Length of claims on veins or lodes Mining-claims upon veins or lodes of quartz or other rock in place bearing gold, silver, cinnabar, lead, tin, copper, or other valuable deposits, heretofore located prior to May 10, 18721, shall be governed as to the length along the vein or lode by the customs, regulations, and laws in force at the date of their location. A mining-claim located after the tenth day of may, eighteen hundred and seventy- two, whether located by one or more persons, may equal, but shall not exceed, one thousand five hundred feet in length along the vein or lode; but no location of a mining-claim shall be made until the discovery of the vein or lode within the limits of the claim located. No claim shall extend more than three hundred feet on each side of the middle of the vein at the surface, nor shall any claim be limited by any mining regulation to less than twenty-five feet on each side of the middle of the vein at the surface, except where adverse rights existing on the tenth day of May, eighteen hundred and seventy-two, render such limitation necessary. The end-lines of each claim shall be parallel to each other. Despite the language of the statute, no argument has ever been made that a locator of mining claims could only locate one such claim. Indeed, the practice was and always has been that multiple mineral claims were located. The same scheme applies to placer claims as set out in 30 U.S.C. 35. 35. Placer claims; entry and proceedings for patent under provisions application to vein or lode claims; conforming entry to legal subdivisions and surveys; limitations or claims; homestead entry of segregated agricultural land Claims usually called "placer," including all forms of deposit, excepting veins of quartz, or other rock in place, shall be subject to entry and patent, under like circumstances and conditions, and upon similar proceedings, as are provided for vein or lode claims; but where the lands have been previously surveyed by the United States, the entry in its exterior limits shall conform to the legal subdivisions of the public lands. Where placer-claims are upon surveyed lands, and conform to legal subdivisions, no further survey or plat shall be required, and all placer-mining claims located after the tenth day of May, eighteen hundred and seventy-two, shall conform as near as practicable with the United States system of public-land surveys, and rectangular sub-divisions of such surveys, and no such location shall include more than twenty acres for each individual claimant; but where placer-claims cannot be conformed to legal subdivisions, survey and plat shall be made as on unsurveyed lands; and where by the segregation of mineral land in any legal subdivision a quantity of agricultural land less than forty acres remains, such fractional portion of agricultural land may be entered by any party qualified by law, for homestead or pre- emption purposes. (Emphasis added.) Indeed, the underlined language appears more restrictive than the language with regard to mill site claims contained in 30 U.S.C. 42, or lode claims as contained in 30 USC 28. No argument has ever been made that a placer locator may locate only twenty acres and not multiple claims of twenty acres each. As a consequence, there are no cases on the question, just as there are no cases on the question of whether the ratio of mill site claims to mineral claims must be one to one. The reason there are no cases is that the question is that the Solicitor's proposition is preposterous so the question never arose. The language with regard to mill site claims is certainly no more restrictive than the language with regard to the location of lode claims and it appears less restrictive than the language with regard to the location of placer claims. With regard to the propriety of multiple locations, the question has been raised only as to mill sites, and that only by the Solicitor's Opinion of November, 1997. The absence of litigation on the question speaks volumes. Given the fact the Solicitor's limitation never could have worked in the mining industry, then or now, the Solicitor's construction of the statute would have forced immediate litigation. The absence of litigation over a period of one hundred and twenty five years demonstrates the invalidity of the Solicitor's Opinion. While discussing statutes, it is appropriate to comment on the Solicitor's assertion that "The legislative history of the 1960 amendment to the Mining Law indicates that no more than five acres of land per mining claim may be patented for mill site purposes."' It appears from this statement that the Solicitor, who taught mining law, has forgotten about association placer claims because those claims are what the Department was addressing in the language quoted in the opinion.' The mining law provides that an association of persons' may locate placer claims jointly, provided that the location does not exceed one hundred and sixty acres.' As originally drafted the amendment would (or might) have allowed the location of ten acres by each individual claimant or in the case of an association of claimants eighty, or perhaps more, acreage for a single mill site. The amendment made it clear that the limitation on mill site claims associated with placer claims was five acres regardless of whether the mill site claim was located by one locator or an association of locators. The amendment did not address the question of whether Congress intended to restrict the locators of placer claims to one mill site per claim. Perhaps the best evidence of the fact that the 1960 amendments to the mining law did not recognize a limit of one mill site per claim is found in the history of the Solicitor's actions subsequent to the adoption of the amendment in 1960. According to the Solicitor multiple mill site patents had been issued as early as 1950.' Even this fact is misleading because it does not tell the whole story. Many, probably most, mines, operated, then and now, without ever applying for patent. The rush to patent is a recent development, brought about by new financing methods and fear of anticipated changes in the law given the present political climate. The question is, " why did the Department wait thirty seven years to clarify the law, given the obvious industry usage?" The answer is that the limitation is of recent origin. PRACTICAL CONSTRUCTION No person can argue case law on the question under discussion. There is no case law. There is, however, a legal principle which is clearly applicable. That principle is the doctrine of practical construction. Simply stated, "practical construction" means that the construction placed on the questioned language by interested parties over time is either persuasive or conclusive as to the meaning of that language.' This is a legal concept which is readily understood because it meets the test of common sense. The question to ask is, " what was the practice prior to the suggested reinterpretation?" The Solicitor's Opinion demonstrates the considerable difficulty encountered by him when dealing with prior practice." The Solicitor's Opinion repeatedly cites cases and regulations that state a proposition to which all parties agree; that is, that each mill site location is limited to not more than five acres." The opinion then seeks to bootstrap itself from this agreed statement to the conclusion that the language means 4 4and besides, only one five acre mill site may be patented in connection with one mineral claim." The problem is that the needed language is not contained in any case, nor is it contained in any regulation. Accordingly, having stated the agreed rule, the Solicitor's Opinion resorts to weak cases on statutory construction." The only clear language which addresses the question is found in the Solicitors Opinion: " a ny number of millsites may be located but each must be used in connection with the mining or milling operation." " The Solicitor's Opinion notes that " t he handbook cites no authority for this interpretation."" This observation should not come as a surprise, given the prior discussion. The Solicitor's Opinion also cites to Terry Maley's Handbook of Mineral Law and notes that Maley, a BLM mineral examiner states " T here is no limitation to the number of mill sites that may be located as long as each mill site is properly used or occupied for "mining or milling purposes." The Solicitor's Opinion then restates the fact that Maley cites no authority. Maley's background and BLM work experience provide the authority that is hard to ignore. The facts are that Maley is a respected authority and that he obtained his knowledge and experience working for the BLM. Certainly, Maley speaks for the practice of the BLM as he both knew and researched it. History and past practice of the Interior Department compel a conclusion contrary to the Solicitor's Opinion. A different Department (Agriculture) also reached the conclusion that the number of permissible mill sites is not tied to the number of mineral claims. USFS Manual 2811.33 (1990) provides: "The number of mill sites that may legally be located is based specifically on the need for mining or milling purposes, irrespective of the types or numbers of mining claims involved." This fact also supports the conclusion that the Solicitor's Opinion is wrong. CONCLUSION In short, the legal position now asserted by the Solicitor first saw life in November of 1997. It reaches an unsupported and erroneous conclusion which devastates the mining industry. This opinion must not stand.

LOAD-DATE: June 17, 1999

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