NOW IS IT A MINERAL? THE SUPREME COURT TAKES ANOTHER LOOK AT SAND AND GRAVEL
| Jurisdiction | United States |
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The United States Supreme Court has considered the question of whether sand and gravel are "minerals" twice in the last twenty years. In the more recent case, BedRoc Ltd. LLC v. United States,2 the court considered the meaning of the word "mineral" as used in a reservation of "oil and gas and other valuable minerals" in favor of the United States from a patent issued under the Pittman Act of 1919. In the earlier case, Watt v. Western Nuclear,3 the court pondered the meaning of the same word, used in a reservation of "coal and other minerals." In Western Nuclear, the court found that the reservation of "minerals" included sand and gravel. In BedRoc Ltd., the court found that sand and gravel were not included in the reservation of "valuable minerals." What's going on here? Why is it so hard to figure out whether or not sand and gravel are minerals?
I. The Significance of Ambiguity in Federal Patents
One reason is that the term "mineral" is inherently ambiguous, since the word is used in many ways. The strictest definition of a "mineral" is as a naturally-occurring inorganic substance having a definite chemical composition and physical structure.4 Considered this way, things like quartz, feldspar and gold fit the definition readily, while things like coal (organic substance) and oil and gas (no fixed chemical composition) do not, nor do sand and gravel (indefinite chemical composition and structure). Under this most restrictive definition, a reservation of "minerals" would not include oil or gas, let alone sand and gravel. It probably would not include coal. That is one reason why reservations of minerals usually name
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coal, oil and gas specifically. However, minerals have an economic definition as well as a physical one.
When we add the concept of the economic mineral, that is "things that have value and can be severed from the ground," finding the meaning of the mineral reservation becomes more complicated. The concept of "value" is inextricably linked to the question of whether or not certain substances are "mineral" for legal purposes. The General Mining Act of 1872,5 for example, provides that "valuable mineral deposits" in lands belonging to the United States shall be open to location. The Common Varieties Act of 19556 removed sand and gravel from the operation of the General Mining Act and provided that common sand and gravel were no longer to be locatable as "valuable minerals," unless they had some quality giving them distinct and special value. There is a substantial body of case law that concerns itself with the question of the economic definition of a "valuable mineral." (See, for example, Andrus v. Charlestone Stone Products;7 United States v. Coleman;8 Associated General Contractors v. [Utah] Board of Oil, Gas & Mining).9 In addition, the question of whether a substance is a "valuable mineral" in the general sense, the way gold, metallic ores, coal, and oil and gas are, is distinct from the question of whether a particular deposit of a particular substance has economic value. Deposits of sand and gravel may have great economic value in certain places, but their value depends on location and proximity to market; they are not considered intrinsically valuable unless they have distinct and special qualities. Economic value in place can change over time, and what was once worthless can become valuable as a result of changes in development patterns, markets, and transportation technology. It is this shifting question of value, as opposed to the physical nature of a substance, that causes the difficulty in construing the reservation of minerals from a federal patent.
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In Watt v. Western Nuclear, the Supreme Court was required to interpret the extent of the reservation of "coal and other minerals" to the United States from patents granted under a statute that had the purpose of encouraging settlers to populate and cultivate the rangelands of the West. The Court found the word "minerals" to be ambiguous, and held that the term must be interpreted in "light of the use of the surface estate that Congress contemplated." 462 U.S. at 52. There was little doubt that ordinary gravel was not considered to be an economic mineral at the time the statute was enacted.10
The Court first had to deal with the dictionary definition, finding that
In the broad sense of the word, there is no doubt that gravel is a mineral, for it is plainly not animal or vegetable. But, the scientific division of all matter into the animal, vegetable or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom.' ... If all lands were considered 'minerals' under the SRHA, the owner of the surface estate would be left with nothing. 462 U.S. at 43.
But the Court also had to deal with the problem of the dual economic and physical definitions:
"For a substance to be a mineral reserved under the SRHA, it must be not only a mineral within one or more familiar definitions of that term, as is gravel, but also the type of mineral that Congress intended to reserve to the United States under the SRHA." Id. at 44. (Emphasis added).
Then, the Court engaged in a bit of sleight of hand, defining the reservation negatively in terms of Congress's intent as applied to the grant. The Court, mindful of the statutory goal of settlement, defined the term "mineral" to mean "substances that are mineral in character (i.e., that are inorganic), that can be removed from the soil, that can be used for commercial purposes, and that there is no reason to suppose were intended to be included in the surface estate." 462 U.S. at 53 (emphasis added). The Court relied on its interpretation of Congressional intent to find that Congress meant to encourage the
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concurrent development of the surface and the subsurface, and did not mean to entrust the development of mineral resources to persons "whose interests were known to lie elsewhere,"11 and used that inference of intent to hold that gravel was a mineral for purposes of the Stock Raising Homestead Act (SRHA).12 Justices Powell, Rehnquist, Stevens and O'Connor strenuously dissented from that holding and its logic. Commenters since have pointed out that the standard articulated in Western Nuclear is circular and likely to lead to more, not less, uncertainty over the meaning of the term13 Over the years, the Western Nuclear standard has been applied to reservations of minerals from patents issued under the Taylor Grazing Act,14 the Indian Reorganization Act15 and the Pittman Act;16 it has been applied under the SRHA to "minerals" such as scoria,17 geothermal heat,18 caliche,19 and, of course...
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