Kosanke v. United States Department of the Interior

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 26, 1998 Decide June 5, 1998

No. 97-5145

Steve Kosanke, et al.,

Appellants

v.

United States Department of the Interior, et al.,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 96cv00369)

Francis E. Froelich argued the cause for appellants, with
whom Charles T. Carroll, Jr., was on the briefs.

Sean H. Donahue, Attorney, U.S. Department of Justice,
argued the cause for federal appellees, with whom Lois J.
Schiffer, Assistant Attorney General, and Edward J. Shawak-
er and Caroline M. Zander, Attorneys, were on the brief.

Before: Edwards, Chief Judge, Tatel, Circuit Judge and
Buckley, Senior Circuit Judge.

Opinion for the Court filed by Chief Judge Edwards.

Edwards, Chief Judge: Appellants are two individuals who
allegedly staked mining claims on federal lands and two other
individuals to whom they assigned an interest in these claims.
The Department of the Interior's ("DOI") Bureau of Land
Management ("BLM") declared Appellants' mining claims
void ab initio, on the grounds that the land in question had
been closed to mining entries pursuant to two separate DOI
actions segregating the land from the operation of mining
law, both of which had been duly noted on the appropriate
public land records. The Interior Board of Land Appeals
affirmed this decision. Appellants appealed to the United
States District Court for the District of Columbia, which
granted the DOI's motion for summary judgment. This
appeal followed.

We find that the parcels at issue were segregated from the
operation of mining laws on June 17, 1994 as indicated by a
notation entered on the appropriate public land records in
accordance with the notation rule set forth at 43 C.F.R.
s 2201.1-2(a), which governs the segregation of public lands
pending a proposed land exchange. This notation remained
in effect at the time Appellants attempted to enter their
mining claims in November 1994 and January 1995. Such
notation effectively bars mining claims--even if the underly-
ing segregation was illegally or erroneously entered--until
the notation is corrected or superceded on the public land
records. Thus, we affirm the lower tribunals' decisions find-
ing Appellants' mining claims null and void ab initio on the
basis of the June 1994 notation, without reaching Appellants'
claims that the underlying segregations were unlawful.

I. Background

A.Mining Law

The General Mining Law of 1872 provides that "[e]xcept as
otherwise provided, all valuable mineral deposits in lands

belonging to the United States ... shall be free and open to
exploration and purchase, and the lands on which they are
found to occupation and purchase, by citizens of the United
States ..." in accordance with specified procedures for filing
mining claims. 30 U.S.C. ss 22, 29 (1994); see also Pathfin-
der Mines Corp. v. Hodel, 811 F.2d 1288, 1291 (9th Cir. 1987).
However, any lands withdrawn from mineral entry are no
longer considered to be within the public domain and there-
fore are not subject to the statutory rights enumerated in the
General Mining Law. See Oklahoma v. Texas, 258 U.S. 574,
599-602 (1922); Pathfinder Mines, 811 F.2d at 1291.

The Federal Land Policy and Management Act of 1976
("FLPMA"), as amended, 43 U.S.C. ss 1701-1784 (1994),
specifies conditions under which the Secretary of the Interior
or an authorized delegate ("the Secretary") may withdraw or
segregate lands from the operation of some or all of the
public land laws, including mining laws. As relevant here,
the Secretary may segregate public lands to preserve the
status quo of a parcel of land pending a proposed land
exchange. See id. s 1716. The FLPMA, as amended by the
Federal Lands Exchange Facilitation Act of 1988, authorizes
the Secretary to exchange public lands for other lands where
the Secretary determines that such an exchange would serve
the public interest, see 43 U.S.C. s 1716(a), to "temporarily
segregate the Federal lands under consideration for exchange
from appropriation under the mining laws ... for a period of
not to exceed five years," id. s 1716(i)(1), and to promulgate
regulations governing his implementation of this authority,
see id. s 1716(f)(1). The regulations issued in accordance
with this mandate are codified in C.F.R. Title 43, Part 2200
(1997). See 58 Fed. Reg. 60,904 (1993) (promulgating
C.F.R. Title 43, Part 2200 regulations as final rules following
notice and comment procedure).

These regulations, in pertinent part, detail the procedures
governing the commencement and termination of the segre-
gative effect of a proposed land exchange authorized by 43
U.S.C. s 1716:

(a) If a proposal is made to exchange Federal lands, the
authorized officer may direct the appropriate State Office
of the Bureau of Land Management to segregate the
Federal lands by a notation in the public land records.
Subject to valid existing rights, the Federal lands shall
be segregated from appropriation under the public land
laws and mineral laws for a period not to exceed 5 years
from the date of the record notation.

43 C.F.R. s 2201.1-2(a) (emphasis added).

B.Procedural History

On February 26, 1992, the Secretary, acting under 43
C.F.R. ss 2310.1, 2310.2(a) (providing for segregation of
lands from mining laws pending congressional action with-
drawing the lands for military purposes), signed Public Land
Order No. 6924, segregating approximately 135,000 acres of
land located in the southern portion of the Chocolate Moun-
tain Aerial Gunnery Range in Imperial County, California,
from the operation of federal mining law for a period of five
years or until the segregation was lifted. See 57 Fed. Reg.
6,560 (1992). The purpose of this segregation was to pre-
serve the status quo of the land pending congressional action
on a DOI request to permanently reserve the land for mili-
tary use. Id. This segregation was duly noted in the appro-
priate public land records. See Kosanke, IBLA 95-438 (Dec.
7, 1995) ("IBLA Decision"), reprinted in Joint Appendix
("J.A.") 3.

On June 17, 1994, the California State Office of the BLM,
acting under 43 U.S.C. s 1716(i) (authorizing segregation of
lands pending a proposed land exchange), segregated a por-
tion of the lands included in the February 1992 segregation in
order to maintain the status quo of the land pending a
possible exchange of lands with a private party by noting the
segregation of these lands on the appropriate public land
records pursuant to 43 C.F.R. s 2201.1-2(a). The June 1994
segregation included the north-half section of section 5 and
the north-half section of section 6 of the Township 13 South,
Range 19 East, San Bernandino Meridian, Imperial County,

California. See Memorandum from BLM Area Manager to
BLM State Director for California (June 15, 1994), J.A. 143.

On October 31, 1994, Congress passed the California Mili-
tary Lands Withdrawal and Overflights Act of 1994, Pub. L.
No. 103-433, s 803(b), 108 Stat. 4502 (1994), withdrawing the
lands segregated by the February 1992 order, except for the
parcels included in the June 1994 segregation. See Appellees'
Br. 6 (it is undisputed that the parcels at issue in this case
were not part of the lands withdrawn by the Act).

On November 1, 1994, Appellants Steve and Mary Lou
Kosanke entered onto the same two parcels of land included
in the June 1994 segregation and purportedly located 34 lode
mining claims and 16 placer mining claims. They filed no-
tices of location pertaining to these claims with the California
State Office of the BLM on November 23, 1994 and January
27, 1995. See, Kosanke, CAMC 264550 et al. (Mar. 20, 1995)
("BLM Decision"), J.A. 63. When Appellants filed these
claims, notations pertaining to both the February 1992 and
the June 1994 segregations remained in the relevant public
land records; nothing in the records indicated that they had
been canceled, superceded, or otherwise nullified. See IBLA
Decision, J.A. 3.

Subsequently, on March 20, 1995, the California State
Office of the BLM issued a decision declaring these mining
claims null and void ab initio. See BLM Decision, J.A. 63-65.
The BLM found that the subject lands had been validly
removed from operation of mining law on February 26, 1992
and June 17, 1994 and that these segregations remained in
effect at the time Appellants attempted to locate and file their
mining claims. Therefore, the BLM concluded, Appellants'
claims were without legal effect. Id. at 63-64. In upholding
the validity of the June 1994 segregation, the BLM noted that
the parcels at issue were withdrawn for a proposed land
exchange and that the segregation of the parcels from the
operation of mining law pending the proposed exchange was
duly noted on the relevant land records pursuant to the
notation rule set forth in 43 C.F.R. s 2201.1-2. Id. at 64.

Appellants appealed the BLM's decision to the Interior
Board of Land Appeals ("IBLA"), arguing that both the
February 1992 and June 1994 segregations were invalid and
thus that their respective notations in the land records were
without any legal effect. The IBLA rejected Appellants'
claims and affirmed the BLM's decision. See IBLA Decision,
J.A. 2-4. In its decision, the IBLA stated that it was
immaterial whether the underlying segregations were posted
illegally or in error. See id. at 3. Rather, the IBLA deter-
mined that, "the decisive issue before this Board is whether
BLM's records indicated that the lands were open to the
location of mining claims on the particular day when the
claims were located." Id. (citation omitted). Since the two
segregation notations appeared in the public land records and
these records did not include any notation nullifying the
segregations, the IBLA concluded that, pursuant to the nota-
tion rule, these notations worked to remove the subject lands
from mineral entry. Id. The IBLA held that, "[e]ven if a
withdrawal is effected or perpetuated in error, the notation
rule precludes a mining claimant from locating a claim until
the land office records are corrected." See id. (citations
omitted).

The Kosankes then transferred part of their interests in
the mining claims to the other two Appellants and together
they brought suit in the United States District Court for the
District of Columbia for review under the Administrative
Procedure Act ("APA"), 5 U.S.C. ss 701-706 (1994), seeking a
declaration that the February 1992 and June 1994 segrega-
tions were illegal and that the DOI's application of the
notation rule to their claims violated the APA. The District
Court granted summary judgment in favor of the DOI. See
Kosanke v. United States Dep't of the Interior, Civ. No.
96-369 (D.D.C. Sept. 3, 1997). This appeal followed.

II. Analysis

A. Standard of Review

This court reviews the disputed agency action de novo. See
Dr Pepper/Seven-Up Cos. v. FTC, 991 F.2d 859, 862 (D.C.

Cir. 1993) ("Where the decision under review is the legal
sufficiency of an agency's action in light of the record, ...
[w]e proceed as if the [agency's] decision had been appealed
to this court directly;" the district court's decision is not
entitled to any particular deference.) (internal quotation
marks and citations omitted). Judicial review of the BLM
and IBLA decisions is governed by the APA, which directs
the court to "hold unlawful and set aside" agency action that
is "arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law." 5 U.S.C. s 706(2)(A) (1994).

This court's review of agencies' interpretations of their own
rules is deferential; an agency's interpretation of its own
regulation is "controlling unless plainly erroneous or inconsis-
tent with the regulation." Auer v. Robbins, 117 S. Ct. 905,
911 (1997) (citation and internal quotation marks omitted);
Consolidated Rail Corp. v. ICC, 43 F.3d 1528, 1532 (D.C. Cir.
1995).

B.Merits

Appellants challenge the validity of the February 1992 and
June 1994 segregations on various grounds. We affirm the
IBLA's conclusion that the notation recording the June 1994
segregation in the relevant BLM records served to remove
the subject lands from mineral entry, even if the underlying
withdrawal of the land was effected or perpetuated in error.
Therefore, we need not reach the question of whether the
withdrawal underlying the June 1994 notation was valid.
Furthermore, since we find that Appellants' mining claims
are null and void due to the June 1994 notation, we need not
address the validity or effect of the February 1992 segrega-
tion or the notation pertaining to it.

As explained above, the statutory scheme enacted by the
FLPMA, as amended, and its implementing regulations clear-
ly specify actions which trigger the segregation and reopen-
ing of lands from the operation of mining laws. The regula-
tions applicable to the June 1994 segregation pending a
proposed land exchange specify that segregation commences
with a notation in the land records, see 43 C.F.R.
s 2201.1-2(a), and terminates five years from the notation

date, or when a decision not to proceed with the exchange is
published in the Federal Register, or when the land is
conveyed in accordance with an exchange agreement, see id.
s 2201.1-2(c). Thus, the June 1994 notation, implemented in
accordance with section 2201.1-2, operated to segregate the
lands in question from the operation of mining laws until June
1999 or until the notation was otherwise nullified.

The IBLA looked to administrative and judicial interpreta-
tions of similar notation rules to determine the effect of a
notation made pursuant to section 2201.1-2(a). Although the
IBLA's decision and the cases cited therein make reference to
the DOI's historic reliance on notation rules, it is clear that
the BLM decision which it affirmed in this case actually relied
on the BLM's compliance with the specific notation rule set
forth in 43 C.F.R. s 2201.1-2(a). See BLM Decision, J.A. 64
(citing s 2201.1-2(a)); see also Memorandum from BLM
Area Manager to BLM State Director for California (June 15,
1994), J.A. 143 (ordering segregation of subject lands pending
proposed land exchange pursuant to s 2201.1-2). This rule
was promulgated through an appropriate rulemaking proce-
dure. See 56 Fed. Reg. 49,962, 49,972 (1991) (publication of
proposed rule providing for 60-day comment period); 58 Fed.
Reg. 60,904, 60,921 (1993) (publication of final rule). Thus,
we need not consider whether the DOI relied only on a
generalized notation rule promulgated through adjudication
rather than rulemaking and, if so, whether this would have
affected the efficacy of the June 1994 notation. Appellants
contentions on this point are misplaced.

Appellants argue further that, even if the notation would be
lawful if based on a valid segregation, a notation on land
records should not serve as an effective bar on mining entries
if the underlying segregation is invalid. Thus, Appellants ask
us to reach the question of whether the underlying February
1992 and June 1994 withdrawals were lawful and, if we find
them to be unlawful, to disregard the respective notations in
the land records and recognize Appellants' November 1994
and January 1995 claims as valid.

Even assuming, for the sake of argument, that the with-
drawal underlying the June 1994 notation was unlawful, we

decline to recognize Appellants' mining claims filed prior to
public correction of the June 1994 notation. The courts, as
well as the DOI, have consistently upheld notation rules
similar to that in 43 C.F.R. s 2201.1-2(a) as barring mining
entries until the notation is either corrected or superceded--
even if the underlying segregation was erroneous or other-
wise unlawful--for the sake of fairness to the general public.
See, e.g., Wright v. Paine, 289 F.2d 766, 768 (D.C.Cir.1961);
Shiny Rock Mining Corp. v. United States, 825 F.2d 216, 219
(9th Cir. 1987) (the purpose of such notation rules is to
prevent confusion and conflict of claims) and cases cited
therein; B.J. Toohey, 88 I.B.L.A. 66, 78-82, 92 Interior Dec.
317, 324-26 (1985) (explaining equal protection basis for nota-
tion rules) and cases cited therein. Under this reasoning, the
proper course of action for claimants such as Appellants is to
challenge the underlying segregation in order to have the
alleged error corrected. Once any error has been corrected,
the land will be reopened in accordance with applicable
regulations. Only then can the challenger enter his mining
claims. As this court held in Wright, interpreting notation
rules in this way is "consistent with the policy ... of provid-
ing equal opportunity to all persons interested in obtaining
[interests in the land]." 289 F.2d at 768.

Because we hold that the June 1994 notation effectively
segregated the lands at issue from the operation of the
mining laws at the time Appellants located and filed their
mining claims regardless of the validity of the underlying
withdrawal, we need not reach the question of whether the
withdrawal underlying the June 1994 notation was valid.
Furthermore, since we find that Appellants' mining claims
are null and void due to the June 1994 notation, we need not
address the validity or effect of the February 1992 segrega-
tion or the notation pertaining to it.

III. Conclusion

For the reasons explained above, the District Court's order
granting the DOI's motion for summary judgment is af-
firmed.

So ordered.