FRANCIS SKAW, ET AL., PETITIONERS V. UNITED STATES OF AMERICA

   No. 88-172

   In The Supreme Court Of The United States

   October Term, 1988

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Federal Circuit

   Memorandum For The United States In Opposition

   Petitioners seek review of the court of appeals' decision affirming
the determination by the Claims Court that petitioners failed to prove
discovery of valuable mineral deposits on their unpatented mining
claims.

   1. Between 1953 and 1964, petitioners (Skaw) located 15 unpatented
mining claims for gold and garnet along the banks of the St. Joe River
on land administered by the United States Forest Service of the
Department of Agriculture (Forest Service) (Pet. App. 23).  In 1978,
Congress designated the St. Joe River as a component of the Wild and
Scenic Rivers System under Section 708(a)(23) of the National Parks
and Recreation Act of 1978 (codified at 16 U.S.C. 1274(a)(23)), and
prohibited dredge mining in the river's bed and banks.  /1/ On March
5, 1979, petitioners filed an action in the Claims Court alleging that
their mining claims were valid as the October 1968 date of withdrawal
of these lands, and that the prohibition on mining in the bed and
banks of the St. Joe River effected a taking of their property rights
secured under the mining laws (Pet. App. 37).  They sought $10 million
as just compensation (ibid.).

   2. The proceedings in this action were stayed to allow the
Department of the Interior (Interior) to determine the validity of the
mining claims (Pet. App. 37).  On November 13, 1981, while the
validity hearing was pending, the Idaho State Office of the Bureau of
Land Management (BLM) declared the claims abandoned and void for
failure to file evidence of annual assessment work or notice of
intention to hold the claims as required by Section 314 of the Federal
Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. 1744, and 43
C.F.R. 3833.1 and 3833.2 (Pet. App. 28).  The Interior Board of Land
Appeals upheld the decision of the BLM and advised the United States
Claims Court that Interior considered the claims to be abandoned and
void (id. at 39).  See United States v. Skaw, 63 I.B.L.A. 235 (1982).

   3. The stay was lifted by the Claims Court on June 30, 1982, and
the United States filed a motion for summary judgment (Pet. App. 38),
which was granted (id. at 21).  See Skaw v. United States, 2 Cl. Ct.
795 (1983).  On petitioners' appeal, the court of appeals vacated the
judgment and remanded the case for trial (Pet. App. 20).  See Skaw v.
United States, 740 F.2d 932, 938 (Fed. Cir. 1984).  Following trial,
the Claims Court found that "plaintiffs' evidence (did) not establish
that a valid discovery had been made on any of the Ruby or Joe claims
prior to the withdrawal on October 2, 1968" and "that plaintiffs had
no property interests that could be the subject of an administrative
or a legislative taking" (Pet. App. 109).

   4. On April 19, 1988, the court of appeals affirmed.  The court of
appeals agreed with the Claims Court that "(petitioners') evidence did
not establish that a valid discovery of minerals had been made on any
of (petitioners') claims" (Pet. App. 111-112).  The appeals court
added that ""(petitioners) have failed to show that the Claims Court's
findings of fact, which are essential to the court's decision, are
clearly erroneous" (id. at 112).

   5. This case presents a fact-bound issue that was correctly decided
by the Claims Court in a determination upheld by the court of appeals.
 The court of appeals' decision affirming the Claims Court's
application of the "prudent man" test for discovery of a valid claim
does not conflict with any decision of this Court or of any other
court of appeals.  Accordingly, review by this Court is not warranted.

   a. In order to establish a valid property right potentially subject
to a taking in violation of the Fifth Amendment, petitioners were
required to show that they had discovered mineral deposit within the
boundaries of each properly located mining claim as of October 2,
1968.  See Cameron v. United States, 252 U.S. 450, 456 (1920) (if a
claim is not valid at the time of withdrawal, it is not excepted from
the effect of the withdrawal).

   A valuable mineral deposit has been discovered if the mineral found
is of such quality and quantity that a person of ordinary prudence
"would be justified in the further expenditure of his labor and means
with a reasonable prospect of success in developing a valuable mine."
Castle v. Womble, 19 L.D. 455 457 (1984).  This is the "prudent man
test" approved by this Court in Chrisman v. Miller, 197 U.S. 313,
322-323 (1905).  The test has been refined to require a showing of
marketability -- i.e., that the mineral can be presently extracted,
removed, and marketed at a profit.  United States v. Coleman, 390 U.S.
599, 602 (1968).  A valuable mineral deposit has not been found,
however, simply because the facts might warrant a search for such a
deposit.  See ibid.; see also Barton v. Morton, 498 F.2d 288, 290 (9th
Cir.), cert. denied, 419 U.S. 1021 (1974).

   In a contest with the government concerning the validity of a
mining claim, the government bears only the burden of going forward
with prima facie evidence of invalidity.  The ultimate burden is on
the claimant seeking the benefits of the mining laws to establish the
discovery of a valuable mining claim by a preponderance of the
evidence.  See Foster v. Seaton, 271 F.2d 836, 837-838 (D.C. Cir.
1959);  United States v. Springer, 491 F.2d 239, 242 (9th Cir.), cert.
denied, 419 U.S. 834 (1974);  United States v. Taylor, 19 I.B.L.A. 9
(1975).

   b. Contrary to petitioners' assertion (Pet. 11), the trial court
did not misapply the prudent man test in determining that petitioner's
mining claims were never supported by a discovery of a valuable
mineral deposit.

   The Claims Court painstakingly reviewed the pre-withdrawal
information submitted by petitioners based on evidence gathered prior
to October 2, 1968.  The court found that the estimates based on these
explorations were either incredible or supported by insufficient
information (Pet. App. 84-86) and concluded that further development
of the mines on the basis of the pre-withdrawal information would be
imprudent.  /2/ The Claims Court also exhaustively reviewed the
results and economic analysis of extensive testing conducted by the
government and petitioners after the date of withdrawal (id. at
63-78).  Based on the pessimistic reports issued by the Interior
Department (id. at 65-66) and the Forest Service (id. at 67-69,
74-78), cost estimates made by petitioners during that period (id. at
71-74), and an economic analysis made for hypothetical mines at
petitioners' claim locations (id. at 77-78), the Claims Court
justifiably concluded that the deposits could not be profitable mined
(id. at 101).  /3/ The decision of the appeals court upholding this
determination does not merit further review by this Court, which
ordinarily does not disturb findings of fact concurred in by two lower
courts.  See, e.g., Tiffany Fine Arts, Inc. v. United States, 469 U.S.
310, 318 n.5 (1985), and cases there cited.

   Petitioners err in asserting (Pet. 10) that the Claims Court
required petitioner's to demonstrate profitability conclusively rather
than to show a reasonable prospect of financial success.  The Claims
Court painstakingly explained why it found unpersuasive and
unrealiable the only evidence offered by petitioners to show that the
claims might be profitable (Pet. App. 66-67, 71, 73, 86-91).  /4/

   It is therefore respectfully submitted that the petition for a writ
of certiorari should be denied.

   CHARLES FRIED

      Solicitor General

   ROGER J. MARZULLA

      Assistant Attorney General

   ROBERT L. KLARQUIST

   JEAN ANNE KINGREY

      Attorneys

   AUGUST 1988

   /1/ Section 9(a)(iii) of the Wild and Scenic Rivers Act of 1968, 16
U.S.C. 1280(a)(iii), provides that minerals in federal lands
constituting the bed or banks of a river designated at that time or by
subsequent amendment as part of the Wild and Scenic Rivers System, and
in federal lands located within one-quarter mile of the banks of such
a river, are withdrawn from "all forms of appropriation under the
mining laws and from operation of the mineral leasing laws," except as
those minerals are subject to valid existing rights.  Section 9(b) of
the Act, 16 U.S.C. (& Supp. IV) 1280(b), temporarily withdrew from
appropriation under the mining laws minerals located within a
quarter-mile of the banks of all rivers listed under Section 5(a) of
the Act pending study for possible inclusion in the Wild and Scenic
Rivers System.

   The St. Joe River was listed by Section 5(a)(22), 16 U.S.C.
1276(a)(22), as a potential addition to the System.  The subject lands
remained in this status continuously up to 1978 when the segment of
the St. Joe River at issue here was added to the System.

   /2/ The Claims Court stated (Pet. App. 86):

         It is clear that as of October 2, 1968, the work that had
      been done on the claims was not sufficient to establish that a
      discovery of valuable deposits had been made.  Additional,
      extensive exploration was needed to determine if the deposits on
      any of the claims were such that it was economically feasible to
      operate a mine.  Substantial amounts of additional testing was
      (sic) required before a determination could be made to develop
      the claims for commerical operations.

   /3/ The Claims Court also correctly viewed the failure to exploit
or develop the mineral deposits during the period after location of
the claims as "giv(ing) rise to a presumption that the market value of
discovered minerals was not sufficient to justify the costs of
extraction" (Pet. App. 92).  See United States v. Zweifel, 508 F.2d
1150, 1156 n.5 (10th Cir.), cert. denied, 423 U.S. 829 (1975).

   /4/ Contrary to their suggestion (Pet. 16), petitioners were not
barred from developing sample data to support their claims.  The
record unambiguously shows that the government accommodated
petitioners' efforts to obtain access to the claims (Pet. App. 94).
Petitioners' allegations that they were prejudiced by the delay
between the date of withdrawal and trial and by denial of access to
retest their prior exposures (Pet. 16) is contrary to the evidence
presented of testing conducted by petitioners in 1969, 1974, and 1975
(Pet. App. 56, 70, 72).  In addition, the government made available to
petitioners results of analysis of samples taken from a number of the
claims sites (id. at 72).