HICKEL v. OIL SHALE CORP.

Argument of Peter L. Strauss

Chief Justice Warren E. Burger: Number 221, Hickel against the Oil Shale Corporation.

Mr. Strauss, you may proceed whenever you're ready.

Mr. Peter L. Strauss: Mr. Chief Justice and --

Chief Justice Warren E. Burger: Excuse me Mr. Strauss.

Mr. Peter L. Strauss: Certainly.

Chief Justice Warren E. Burger: Now we have a quorum.

Oh!

You're out of the case.

If you'll standby for a moment until we assemble a quorum.

Mr. Peter L. Strauss: I surely will.[Pause]

Chief Justice Warren E. Burger: Mr. Strauss, you now may proceed whenever you're ready.

Mr. Peter L. Strauss: Mr. Chief Justice and may it please the Court.

As this is a rather complex case, it might be useful at the outset to state a very brief outline form how I expect to proceed.

As the Court knows, the case principally involves Section 37 of the Leasing Act of 1927 which provides for the patenting of certain mining claims to federal land which were valid in 1920 and which in the words of the statute were thereafter maintained in accordance with the prior law.

So after the statement, I mean first to examine the history of the law statements regarding the maintenance of the mining claims in the public domain and I do that in full consciousness of the difficulties which the Solicitor General just spoke of about lawyer's history but nonetheless feeling it is necessary to reexamine that.

Then I mean to cast a critical eye of this Court's decision in Ickes versus Virginia-Colorado Development Corporation which is the other focus of this case not necessarily to procure its overruling although we think and desire that it should be overruled but is a means of making clear at least the reasons --

Unknown Speaker: Do you think you can prevail unless we overrule?

Mr. Peter L. Strauss: I hope we can, yes.

As a means of making clear the reasons at least why we feel it must be limited to its particular facts and that I hope then leads naturally to the questions of review which are also present in the case.

This case is part of a battle over ownership rights to several hundred thousands of acres of land in Colorado and larger amounts in Utah and Wyoming.

All of this land contains a rock called oil shale from which oil can be distilled at a high temperature and no one knows quite how much oil is there or will ever be recovered, but the amounts are huge and I think there will be agreement that it represents at least a century of this nation's present rate of consumption.

The oil shale which is already in private hands represents about a decade of that century or perhaps more at -- and is at present technically the most feasible portion.

The oil shale over which owner should the ownership dispute involve in this case is raging represents a similar period and is also in the technically accessible portion of the shale.

The dispute generally is whether (Inaudible) in the technically assessable portion of the shale that the depth of which the shale is buried under the overburden varies from place to place and private claims tend to be in the area where it’s most accessible.

Unknown Speaker: And this -- what's an issue here involves about 10% of the whole you said in the --

Mr. Peter L. Strauss: Approximately.

Unknown Speaker: Approximately.

Mr. Peter L. Strauss: There are some disputes -- I think it's efficient to say it involves ten years worth of oil consumption.

Unknown Speaker: Out of a hundred?

Mr. Peter L. Strauss: Out of a hundred or more.

Unknown Speaker: Arithmetic makes it 10%.

Mr. Peter L. Strauss: Yes.

Unknown Speaker: And by technically available, you mean here is where it's very clear that it does exist, is that it?

Mr. Peter L. Strauss: No.

That's clear that it exists throughout but it is most accessible to present method of mining.

Unknown Speaker: But the methods of mining are still rather so inefficient that is not -- it's not economically --

Mr. Peter L. Strauss: No one is yet mining although the Oil Shale Corporation certainly has plans in that regard.

The dispute generally is whether persons who made claims to oil shale lands before the lands were withdrawn from the possibility of claim in 1920 had any obligation to develop their claims after that time or could simply hold them in speculation for indefinite periods of time without an obligation of maintenance.

If the federal government has clear title to the lands, then it will be able to sell leases to persons whom on condition really that they develop it and it will be able to collect substantial royalties once they do.

If it must sell or patent the lands to the present claimants of whom respondents here are only representative, it must recognize rights on land which have been left completely undeveloped for 33 years and for which there would be no guarantee of development in the future and it would receive only $2.50 an acre as its total price and there are also obvious differences in the Government's ability to control pollution, water use and other environmental factors and to guide a rational development to the resource.

These particular cases here as a result of the Secretary's refusal in 1964 to issue certain patents to oil shale lands including lands held by three of the respondents here or groups of respondents I should say, those represented by respondents Napier, Umpleby, and Brown.

He refused those patents on the ground that the claims had been cancelled in 1931 and early 1932 an administrative proceedings which were permitted to become final at that time.

It is clear that he probably would also have refused to patent the claims now owned by the Oil Shale Corporation which represents the fourth group of respondents, if those claims had been before him.

Since those claims too had been cancelled in default proceedings in the early 30s, then these cancellations were part of a concerted effort on the Secretary’s part to identify and cancel claims that were not being maintained in the early 30s when evidence was conservatively fresher than it is now.

We said that history out at some length in the brief.

The first three sets of claimants Napier, Umpleby, and Brown sought review of the Secretary's 1964 decision in the United States District Court for the District of Colorado and there, they were joined by the Oil Shale Corporation seeking declaratory judgment.

Although respondents heard a number of reasons below for requiring the Secretary to ignore these old and final administrative decisions from the 30s, the District Court and subsequently the Court of Appeals for the Tenth Circuit considered only one ground which was that the administrative decisions have been beyond the Secretary subject matter jurisdiction and therefore could be given no effect.

And they relied -- excuse me.

Unknown Speaker: May I ask you a preliminary question?

Mr. Peter L. Strauss: Surely.

Unknown Speaker: What is the major argument is there interest directly or indirectly with this case?

Mr. Peter L. Strauss: I think most of them are, Your Honor and to varying degrees.

Interested that the -- interested I think is a -- is a question of degree.

I should say the Oil Shale Company and the Union Oil Company are the only two which have -- which I'm aware that have made a very substantial independent step towards actual development.

In terms of land holdings of the hearings before the Subcommittee on Antitrust and Monopoly of the Committee on the Judiciary which are cited at least in respondents’ brief and I think in ours as well contain a number of statements in that regard.

And I think I have some here in any event varying of the top 27 oil companies in the nation, here we are at page 192 of those hearings that shows holdings of patented lands, the Union Oil company has 50,000 acres --

Unknown Speaker: What page you are now?

Mr. Peter L. Strauss: It's page 192 of the antitrust hearings.

But it's not present in --

Unknown Speaker: You don't (Inaudible) before us?

Mr. Peter L. Strauss: No.

That's right.

Unknown Speaker: Alright.

So then would you go slowly on reading that?

Mr. Peter L. Strauss: Surely.

It shows the Union Oil Company is holding 50,000 acres, Mobil Oil Company 34,000 acres, Tidewater Oil 22,000 acres and so forth.

I think TOSCO in those hearings, the Oil Shale Company in those hearings has stated that it owns at present sufficient land to produce 200,000 barrels of oil daily for 25 years or more.

And most of the oil companies are in a similar kind of position.

Unknown Speaker: Recently, my question is that I may (Inaudible).

I didn't realize until this morning.

Mr. Peter L. Strauss: Is there -- well, I think the information could be obtained that place on page 192 of those hearings gives a complete listing I believe.

Unknown Speaker: Can Union Oil Company stand -- does the Union Oil Company stand to win or lose financially in this case?

Mr. Peter L. Strauss: I couldn't say whether they have rights in any of the disputed lands or not but I would think since they are a major holder, I would think it unlikely that they did not have disputes --

Unknown Speaker: They were parties into that old administrative proceeding, of course?

Mr. Peter L. Strauss: They were parties to the old administrative proceeding, that's right.

Unknown Speaker: What's more effective proceeding here that is adverse to the Government have on that old proceeding?

Mr. Peter L. Strauss: It would be one step along the way towards procuring patents for the Union Oil Company.

It would not require the issue of -- issuance of patents but it certainly would remove an obstacle to that.

Chief Justice Warren E. Burger: Counsel in the circumstances, we will suspend the argument in this case, set it for re-argument at a later date.

We regret the inconvenience to counsel of course but these things do not always appear on the circumstances.

It's one of the difficult problems that arises is the identity of possibly interested party does not automatically appear on the case of every record.

It seems to me then we'll suspend the arguments and reset for argument at a date when we can assemble a quorum and when it’s convenient to counsel.

Mr. Peter L. Strauss: Thank you very much, sir.

Chief Justice Warren E. Burger: Thank you.