Transcript

BEDROC LIMITED, LLC, AND WESTERN ELITE, INC., Petitioners v. UNITED STATES, ET AL.

No. 02-1593

January 20, 2004, Tuesday, Washington, D.C.

The above-entitled matter came on for oral argument before the Supreme Court of the United States at 10:03 a.m.

PROCEEDINGS

(10:03 a.m.)

CHIEF JUSTICE REHNQUIST: We'll hear argument now in No. 02-1593, BedRoc Limited and Western Elite v. the United States.

Mr. McCrum.

ORAL ARGUMENT OF R. TIMOTHY McCRUM ON BEHALF OF THE PETITIONERS

R TIMOTHY MCCRUM: Mr. Chief Justice, and may it please the Court.

This case began in 1993 when the Bureau of Land Management issued notices of trespass for the extraction of common sand and gravel from private land in the Nevada desert about 60 miles from Las Vegas.

The central issue in this case is whether, under the 1919 Pittman Act, the reservation of valuable minerals included common sand and gravel that were... that were widespread and made up the bulk of the land.

Now, the purpose of the Pittman Act was to develop the State of Nevada by granting private land to citizens who made personal sacrifices to discover and develop underground sources of water that was not... that were not previously known.

Unidentified Justice: It applied only in Nevada, did it not?

R TIMOTHY MCCRUM: Yes, Your Honor.

Now, Mabel and Newton Butler in this case explored and found a... a source of underground water and obtained a land patent from the United States Government in 1940.

As we've explained in the briefs, the plain meaning of the words valuable minerals, as used in the 1919 Pittman Act, did not include the sand and gravel at issue here because these common earthen materials in the Nevada desert were not included in the contemporaneous legal understanding of the term mineral when the act was passed in 1919 and these materials did not have intrinsic value at the time of the enactment of the act in 1990... 1919 and at the time of the patent granting in 1940.

Unidentified Justice: Does the gravel excavation take up what?

JUSTICE KENNEDY: About 16 to 20 acres out of some 500, which is the total surface area or?

R TIMOTHY MCCRUM: Yes, Justice Kennedy.

That's... that's the approximate size at the time BLM conducted its report in 1999 or so.

JUSTICE KENNEDY: Do we know, is that the sum total of the gravel that's there?

Could they... does it go on for the... another 100 acres or so?

R TIMOTHY MCCRUM: We have photographs of the site in the joint appendix of the case that show the area of the... of the land in the general vicinity to be essentially the same.

It's common.

Sand and gravel is... is pretty much covering that whole general area.

Now, the Pittman Act's structure reserved valuable minerals to the Government in section 8, and at the same time it did that, it provided that those reserved valuable minerals would be subject to location and development by others.

At that time, the... the expectation of how this... how these materials would be developed, whatever was reserved as valuable minerals, was under the 1872 Mining Law which itself applied to valuable minerals.

So those were--

CHIEF JUSTICE REHNQUIST: Are you now... the time you're referring to is 1919 or 1940?

R TIMOTHY MCCRUM: --1919, Mr. Chief Justice.

At that... in... in the act itself, it provided for location to occur of the reserved valuable mineral estate under the 1872 Mining Law.

So, therefore, it's... it's quite important to look--

JUSTICE GINSBURG: Mr. McCrum, you left out one word in the Mining Law.

It didn't say valuable minerals.

It said, valuable mineral deposits, and there's a significant difference between... a lump of silver might be tremendously valuable, but it wouldn't be a deposit if that's all there was.

R TIMOTHY MCCRUM: --Your Honor is... is correct that valuable mineral deposits is the... is the language referred to in... in 30 U.S.C., section 22 of the 1872 Mining Law.

30 U.S.C., section 21 actually refers to valuable mineral lands.

And those terms were really viewed as quite similar by the Interior Department at the time, and the question was whether a particular type of mineral was... was within the class of minerals that the 1872 Mining Law was subject to.

And in 1919, if an individual sought to establish a mining claim for common sand and gravel, claiming a discovery of valuable minerals in 1919, it is quite clear and certain how the Interior Department would have addressed that in 1919.

Interior would have quickly denied the patent and rejected the application of the 1872 Mining Law to common sand and gravel.

Now, we know that because we can look to the published Interior Department decisions of the day which were published at that time, as they are now, available for citizens, as well as the Congress to... to look at.

And the repeated decisions from 1901, in particular, through 1919 made it very clear that common earthen materials, such as clay, sand and gravel, used for road base, cement-making purposes, things of that nature, were simply not subject to the... the Mining Law.

JUSTICE SOUTER: Now, what would... what would Land Management have done in 1940?

R TIMOTHY MCCRUM: In... by 1940, the... the Interior Department had modified its view in 1929 and there said that... that sand and gravel could be subject to the Mining Law if valuable on a site-specific basis.

And under that modified view, adopted by Interior in 1929 in the Layman v. Ellis decision, it confirmed the importance of assessing the marketability on a site-specific basis.

JUSTICE KENNEDY: At... at the time of the patent?

R TIMOTHY MCCRUM: At... well, the Layman decision involved a... a question of whether it was valuable at the time of the patent in that case, which was a Mining Law patent being considered.

And then in 1956, the Interior Department, looking at the... at the position that Layman v. Ellis took, applied that in the context of a mineral reservation, as we have here, and said in the context of a mineral reservation, if it's to include these... these common materials, it can only include those materials when there is value at the time of the patent.

JUSTICE SCALIA: You say the Interior Department took that position.

How?

Was that a... a solicitor's opinion or what?

R TIMOTHY MCCRUM: Yes.

Yes, Your Honor.

That was in a solicitor's opinion in 1956.

It's a solicitor's opinion which this Court took note of in the Western Nuclear decision in 1983 and... and relied on.

JUSTICE O'CONNOR: Well, Western Nuclear certainly cuts the other way from your argument here today.

I didn't agree with the holding, but that was the holding of the Court.

It was under a different act, not the Pittman Act, but certainly very similar.

R TIMOTHY MCCRUM: Justice O'Connor, the Western Nuclear decision did hold that gravel could be reserved under the Stock-Raising Homestead Act of 1916, but importantly, the issue of whether that sand and gravel had to be valuable at the time of the patent was not addressed in the holding of the Court, as the Government has acknowledged in its brief.

CHIEF JUSTICE REHNQUIST: Well, wasn't that because the word valuable didn't include in the... wasn't included in the reservation of Stock-Raisers Act?

R TIMOTHY MCCRUM: It... it could well have been... that... that could have been part of the Court's thinking.

In... in the Pittman Act, we do have an emphasis on the term, valuable minerals, in the plain language of the statute, and certainly that is a further reason why the element of value is all the more important in this case, both at the time of enactment in 1919, as well as at... at the 1940 patent.

JUSTICE GINSBURG: Why couldn't it be that the... the word valuable doesn't mean at the time of the patent?

It means reserves the mineral rights, and if and when they prove valuable, the Government will assert its right.

I mean, one could imagine a metal that was not considered worth anything.

Let's just suppose that was the view of uranium.

And then years later, one realizes the tremendous value of that metal.

Would one say that, well, because when the patent was granted, no one had any idea how valuable this would be, therefore when it turns out that it is indeed very valuable, the United States hasn't any reserved rights?

R TIMOTHY MCCRUM: Well, Your Honor, that... that could be a possible construction, but in this case the Interior Department in the 1956 solicitor's opinion took note of the common nature of sand and gravel and how widespread it is across the western public domain and recognized that there was a need to look at... at value on a site-specific marketability basis, which was actually consistent with the... the approach the Department took in the Layman v. Ellis decision in... in 1929, looking at the site-specific marketability of sand and gravel, because unlike a precious metal like gold which, once you extract it, it can be sold on an international market without regard to transportation costs and has intrinsic value, sand and gravel and... and similar materials are... are common and widespread across the western public domain and, in fact, across the country.

And it is only where you have a market on a site-specific basis that you can have value established.

JUSTICE BREYER: What would happen, though, if you... what... would any bad thing happen if the words were interpreted to mean any mineral at all that ever becomes valuable in the future so that then a person who bought this land could never take anything off of it?

The Government would have the right to all the dirt.

Anything that he... anything that the individual sold, he couldn't sell.

It would be the Government that would have to sell it.

Now, if you took that interpretation, what would happen?

R TIMOTHY MCCRUM: Justice Breyer, if... if you took that interpretation, you would have western landowners essentially being... having a very, very limited surface... surface estate interest that would essentially be at the discretion of the Government where when local... local demands for these materials arose, the Government at any time could come in and assert that they have ownership of these widespread common materials which would actually destroy... potentially destroy the value of the land and... and further, eliminate any private incentives to develop the private land, which was the intent of Congress in 1919.

JUSTICE KENNEDY: One... one way to... to rule for your client here would be for the Court to hold that it is not a mineral if it can't be removed without disturbing the... the surface, and that certainly would resolve this case.

I'm hesitant to say that, though, because of the placer mining of gold, et cetera.

Could you comment on that?

R TIMOTHY MCCRUM: Yes, Justice Kennedy.

We are not advocating such a rule, although it certainly in this case bears... is certainly a significant factor that this common, widespread material actually would essentially destroy the surface of the land.

JUSTICE KENNEDY: Yes, that's what's bothering me.

What... what are we to do with that factor?

I just don't see how you can get the gravel without completely destroying the... the surface use that... that the owner might want to put to it--

R TIMOTHY MCCRUM: Well--

JUSTICE KENNEDY: --assuming there's a different owner.

This... this happens to be the owner that makes that choice.

R TIMOTHY MCCRUM: --Yes.

Justice Kennedy, it's just that type of factor that have caused the vast majority of State and Federal court decisions that have addressed the question of whether gravel is a reserved mineral in any type of private conveyance in cases involving the Government where they acquire a surface interest that have caused these... the Federal and State torts to rule almost uniformly that gravel is not a... a reserved mineral in the absence of some express intent to indicate that it should be reserved.

JUSTICE SCALIA: Of course, but you're... you're in that boat too.

I mean, you... you acknowledge that if the sand and gravel was valuable at the time the patent was issued, the Government would... would own it under the mineral reservation.

So, I mean, despite the fact that you'd have to chew up the surface land to... to get at it with a commercial value.

Right?

R TIMOTHY MCCRUM: Well, Justice Scalia, we... we... so, I mean, we have two positions here and... and one is that sand and gravel was... was not reasonably within the... the meaning of this phrase as it was... was used in 1919 considering the common legal understanding which had... had been developed by the Interior Department quite clearly between 1901 and 1919 that made it very clear that... that common, widespread sand and gravel was not what the... was not what was considered to be a valuable mineral at that time.

JUSTICE SCALIA: Well, if it wouldn't be considered a valuable... I mean, that... that does bring you into... into contradiction of our prior cases because if that... if that were so, it wouldn't have been considered a mineral either, it seems to me.

R TIMOTHY MCCRUM: That's correct, Justice Scalia, but we... we... in this case we do have the further express language of... of valuable.

JUSTICE O'CONNOR: Yes, the problem is you have Western Nuclear, which said that gravel was a mineral.

Now you've got a statute in the Pittman Act that says valuable minerals, which brings you to your fall-back position which is that if at the time of patenting the land it wasn't valuable commercially, then it isn't covered.

Unidentified Justice: Is that right?

R TIMOTHY MCCRUM: Yes, Justice O'Connor.

If... if the Western Nuclear precedent is followed and applied to the 1919 Pittman Act, then our... our primary position is that the material was not valuable at the time of patent.

JUSTICE O'CONNOR: It's a little odd in this Pittman Act because it... it does in section 8 refer to valuable minerals, but at various other times in the act, it just says minerals.

R TIMOTHY MCCRUM: In... in section 8 of the Pittman Act, it... the statute makes it quite clear that only valuable minerals are reserved.

And then it... in... in later parts of that section, it refers to, and the mineral so reserved shall be disposed in accordance with law.

I don't think that changes the... the meaning of the reservation, and it's further confirmed here by the actual patent issued by the Interior Department in the joint appendix where only valuable minerals are reserved in the patent.

JUSTICE BREYER: Suppose--

JUSTICE O'CONNOR: --Is that term used in any other act that we'd be concerned with the term, valuable minerals, as a reservation?

R TIMOTHY MCCRUM: Not as a reservation that I'm aware of, Your Honor, but it is... is, of course, quite similar to the language used in the 1872 Mining Law which described what... what... how... what would be done with the reserved mineral estate.

JUSTICE KENNEDY: Suppose... and... and it's only a supposition... that we were to reconsider our... our earlier case, Western Nuclear, and... and overrule it.

It... it seems to me that then... then there would be chaotic lawsuits to follow because there would not... not have been intentional trespasses but the wrong people would have been extracting the minerals if there had ever been a... a grant by the Government to... to a person other than the owner of the fee.

Is there any precedent in the Court for how we unwind the... the clock, or whatever the metaphor is?

R TIMOTHY MCCRUM: Well, as we... as we point out in our reply brief, Justice Kennedy, the amount of land that is potentially subject to contract issued by the Government for gravel on reserved mineral estates appears to be on the order of less than two-tenths of 1 percent of the lands patented under the Stock-Raising Homestead Act.

So the vast majority of private lands at stake would... would not be affected by a ruling except to the extent that it would confirm that the landowner has the common sand and gravel that... that was part of the land conveyed.

CHIEF JUSTICE REHNQUIST: But your fall... your fall-back position would extend only to Nevada, I take it, and the fact that it was valuable would be distinguishing from the Western Nuclear case.

R TIMOTHY MCCRUM: Yes, Mr. Chief Justice.

The... the Pittman Act itself applies solely in Nevada and regardless of whether the Court were to reconsider Western Nuclear, we think that Western Nuclear should certainly not be extended to this act which has the term, valuable minerals, express in the statute and where the time of patenting issue was not addressed by Western Nuclear, as the Government acknowledges.

There's no issue of stare decisis if... if the Court is to say the time of patent paramount, as the Interior Department itself has held in the 1956 solicitor's opinion and as the Tenth Circuit ruled in the Hess case only last fall.

JUSTICE SCALIA: Mr. McCrum, I don't understand what your response to Justice Ginsburg's question is under your fall-back position.

That is to say, what do you do with uranium which was not regarded as a valuable mineral when the patent was issued and nowadays is regarded as a very valuable mineral?

What happens to uranium under your fall-back position?

R TIMOTHY MCCRUM: Yes, Justice Scalia.

Uranium is clearly a rare, valuable mineral.

Whether or not it was--

JUSTICE SCALIA: Oh, it is now.

It wasn't then.

R TIMOTHY MCCRUM: --Yes.

JUSTICE SCALIA: I mean, it was rare but not valuable.

R TIMOTHY MCCRUM: Yes, and... and therefore, it is... it is clearly within the class of minerals that the... that the 1872 Mining Law applied.

It has--

JUSTICE SOUTER: Well, why is it if it's not valuable?

I mean, that... that's the problem.

If it wasn't valuable at the time of patenting, what do you do with it?

It seems to me that if... if your argument is going to be consistent, you're going to say the... the Government hasn't reserved the right to uranium.

R TIMOTHY MCCRUM: --Justice Souter, the... uranium is clearly of a... a valuable, rare nature.

JUSTICE SOUTER: No, but you're changing the hypothesis.

Justice Scalia's question was, if it wasn't valuable at the time of the patent, but we have now discovered uses for it so that it is valuable, what do you do with uranium?

And I would have thought that your position would be the Government loses on uranium too.

R TIMOTHY MCCRUM: Of course, the Court may... may view it that way, Justice Souter.

The... the way I would view it is that uranium is a rare, valuable mineral, similar to gold, silver, lead, and zinc, and it's very different--

JUSTICE O'CONNOR: Well, I guess you could take the position that a mineral like uranium has some intrinsic value, very little as of 1919 and more today, but that sand and gravel neither in 1919 nor today has any intrinsic value as a mineral.

It is only when it is located near an urban center and therefore has value as a convenience.

I suppose that would be your argument.

R TIMOTHY MCCRUM: --Yes, Justice O'Connor.

Thank you.

That... that is... that is precisely the distinction.

[Laughter]

That is precisely the distinction.

JUSTICE SCALIA: Well, I mean, you... you could say uranium only has... only... has no intrinsic value.

It only has value if you're splitting atoms.

I mean, you can make the same... the same argument about uranium.

R TIMOTHY MCCRUM: But uranium is... is not dependent upon local transportation costs in the way that sand and gravel was, and that is the fundamental distinction--

JUSTICE BREYER: This must have come up under... under... it has nothing to do with... I don't think, with the word valuable.

It has to do with the word minerals covered in leases all over the country.

So it must have come up in this other context too.

Western Nuclear, putting that aside, that somebody looks at titanium or some... something.

Maybe it's never come up, but I would think it would be true of every mineral lease, that... that you have some kind of a mineral that had no value in 1500 or 1919 and today it's fabulous.

And... and does... are they... do they cover them or don't they cover them?

Maybe you don't know.

I don't know, but I don't see that the word value has much to do with it.

R TIMOTHY MCCRUM: --The... the way that it has come up is... would be in the... the most analogous way that I can think of is in the context of the 1872 Mining Law where, although that language was enacted in 1872, the Interior Department has had no trouble with the administration of that law determining that... that uranium is subject to location as a mining claim under the 1872--

JUSTICE SCALIA: It was a mineral in 1500.

I mean, nobody--

JUSTICE BREYER: --Yes, but everything was.

JUSTICE SCALIA: --nobody disputes that it was a mineral, which is what the... what the mining act says.

The... the issue is whether it's a valuable mineral.

In your fall-back position, you're placing a lot of weight on the adjective valuable, and that... that creates problem with... with uranium.

JUSTICE GINSBURG: Didn't we have a case that involved, was it methane, that was thought not only did it have no value, but it was a positive detriment to have it?

And then years later it turned out to be something very valuable.

R TIMOTHY MCCRUM: --Yes, Justice Ginsburg, that would have been the Amoco v. Southern Ute case in 1999.

There the question is... was whether under the contemporaneous understanding in 1909 and 1910 did coal include coal bed methane.

The Court looked to that common understanding and common meaning and said, no, it didn't.

And that's precisely the same approach we're asking the Court to follow here.

JUSTICE GINSBURG: So who had the reserve?

Didn't somebody have reserved rights in it?

R TIMOTHY MCCRUM: Yes.

The... the Government had initially reserved coal and... and the question was whether that pure coal reservation extended to the coal bed methane within the coal, and the... and the Court concluded no.

So it... it is... it is a case that we rely on to look to the contemporaneous interpretation and understanding at the time.

And here, sand and gravel was well known.

It was widespread, and there were repeated Interior Department decisions that said this is not the type of mineral that is subject to the 1872 Mining Law as a... as a valuable mineral.

JUSTICE SOUTER: May I ask you a question about an... an argument that hasn't specifically come up this morning?

And, first, I just want to tell you what my... my understanding of the argument is and... and you tell me if I've got it wrong.

I thought one of your arguments was that it was important to know whether the mineral was valuable or not at the time of the patent or the deed because the... the grantee, the patentee, ought to know, in effect, the extent to which his... his land grant is... is jeopardized by the Government's right to come in.

He ought to be able make a rough judgment as to whether at some point they're going to come in and start extracting things.

Is... is that a fair statement?

R TIMOTHY MCCRUM: Yes, Justice Souter.

Correct.

JUSTICE SOUTER: My... my question is this.

If... if that is the reason for saying we should look to value at the time of the patent, isn't that an argument that is at odds with your position that if the mineral is valuable at the time, it is reserved?

Because... the reason I say that is this.

There may be gold under the land, but the patentee doesn't know it and the Government doesn't know it.

So that there is no way, at the time the deed passes, that the person taking that deed is going to be able to know whether, at some point in the future, the Government is going to come in and... and start drilling a mining shaft in the land.

So my question is, regardless of what the date at... at which value is established, isn't it the case that these patentees never really know whether at some future time the Government is going to come in and start drilling?

And if that is so, why should the patent date be important?

R TIMOTHY MCCRUM: Justice Souter, you're... you're correct that there is... there's always some level of uncertainty when a party takes land subject to a mineral reservation.

But the distinction that is important that the Interior Department has long recognized and... and that the Federal and State courts have recognized is that in the case of a common, widespread material such as gravel, it is... it is the value at the time of patent which needs to be looked to.

And that's what--

JUSTICE SOUTER: So are you saying basically, look, that's the way we've done it and you ought to defer to the practice?

Is that... I mean--

R TIMOTHY MCCRUM: --We are... we are--

JUSTICE SOUTER: --is that the foundation for your argument?

R TIMOTHY MCCRUM: --We are saying that this is the way the Interior Department itself has done it, and this... and this is the Interior Department that here is asserting a different rule today.

And the Interior Department and the decisions of this Court have recognized a distinction between common material such as sand and gravel and precious metals and other materials that have intrinsic value and recognized a distinction to look to marketability and local, site-specific factors.

JUSTICE GINSBURG: When... when you say today about... and you cite the opinion of the solicitor from 1956, but the position that the Government is arguing today in this Court is not new.

This is hardly the first time the Government has taken the position that sand and gravel can be valuable minerals.

R TIMOTHY MCCRUM: Justice Ginsburg, the... the position... the litigation position which the Government is taking here today that value does not matter at the time of patenting actually has... is not supported by Interior Department decisions.

We are relying on the 1956 solicitor's opinion.

This Court referred approvingly to the opinion in... in Western Nuclear.

That opinion has never been overruled by the Interior Department and the... and the Interior Department offers no other interpretation of... on that issue as... as something that this Court should rely on.

A further reason that we think that... that these issues should be resolved in a... in a fair manner is the application of the Leo Sheep precedent of this Court which recognizes the sacrifice and... and... that have been made by the private individuals in obtaining these patents and the inducement that the Government carried out in encouraging parties to make these sacrifices to obtain these lands.

And the purpose of the act would be defeated to... if... if the Government is able to later reserve common sand and gravel.

JUSTICE STEVENS: But they didn't... they didn't make sacrifices to get the sand and gravel.

R TIMOTHY MCCRUM: Justice Stevens, they made sacrifices to get the land, and the sand and gravel makes up the bulk of the land.

And if the Government can later come back and say, that sand and gravel is ours now that it has acquired some economic worth, it really defeats the purpose of putting the lands into... into private ownership.

JUSTICE SOUTER: You're saying it makes up the bulk of the land?

I mean, I can understand that you would have an argument maybe for... for limiting what the government can take if out of your, whatever it is, 600 acres, you know, 590 are gravel and the Government says, too bad, we're taking it all.

But as I understand it, we... we have not gotten any issue in this case or in other cases about an inequitable enforcement of the... of the extraction condition.

Am I wrong about that?

R TIMOTHY MCCRUM: Justice Souter, the Government's position is that they own all the common sand and gravel that makes up this entire parcel of land.

As... as much as the extraction operations may continue, the Government would continue to take the view that they own every bit of it based upon the decision of the... of the Ninth Circuit below.

JUSTICE SOUTER: Well, you'd have an argument on the first prong of Western Nuclear if they took that position in fact, wouldn't you?

R TIMOTHY MCCRUM: Well--

JUSTICE SOUTER: I mean, that... that would be inconsistent with the... with the purpose of the grant in the first place I suppose.

R TIMOTHY MCCRUM: --We do... we do believe that... that we... that the Government's position is... is contrary to Western Nuclear in the sense that it is not... that it... that it is relying on the value of the sand and gravel today without regard to what the value was in--

JUSTICE SOUTER: No, no, but I'm talking about the extent of it.

Does... does the record indicate that the... that the... that you have claimed that... that one basis for... that you should win this case is that the Government, in effect, will take, as you put it, the bulk of the property if they win?

Is... is that in the record?

R TIMOTHY MCCRUM: --What is in the record is that... is that this sand and gravel deposit is extracted from the surface, that the... that the character of the land is widespread, abundant common sand and gravel.

The... the photographs in the record show that the land is of the same character.

The Government's position in this case is that they own the sand and gravel wherever it may be on that property.

And... and I think there's no question that it comprises the bulk of the land, and... and I wouldn't expect the Government to dispute that here today.

CHIEF JUSTICE REHNQUIST: You wish to reserve the balance of your time, Mr. McCrum?

R TIMOTHY MCCRUM: Yes, Mr. Chief Justice.

CHIEF JUSTICE REHNQUIST: Very well.

We'll hear from you, Mr. Sansonetti.

ORAL ARGUMENT OF THOMAS L. SANSONETTI ON BEHALF OF THE RESPONDENTS

THOMAS L SANSONETTI: Mr. Chief Justice, and may it please the Court.

CHIEF JUSTICE REHNQUIST: Mr. Sansonetti, I looked in the... to get some statistics about what Nevada was like in 1940, and it had a... a total population of 110,000.

It has an area of 100,000 square miles, which is about 1 person per square mile.

Las Vegas had a population of 8,000.

This property is 65 miles away from Las Vegas.

Does the Government say that it... that this was a valuable mineral in 1940 when the patent was issued?

And if not, when did it become valuable?

THOMAS L SANSONETTI: --The United States is saying that the sand and gravel was, indeed, valuable as a matter of a category of minerals.

In other words, the category of sand and gravel was valuable actually, we're saying, as far back as 1919, that the actual passage date of the Pittman Act in 1919 was the exact time that sand and gravel was valuable.

JUSTICE SCALIA: Well, dirt is valuable on that basis.

I mean, people buy topsoil.

And, you know, if you're in an area where... where a lot of people need topsoil, I suppose you'd say dirt is valuable.

THOMAS L SANSONETTI: In that case I wouldn't, though, Your Honor, because topsoil also mixes both organic and inorganic materials.

And the test that the... that the Court set out in Western Nuclear was four-legged, and the four-part test for a mineral was that it be inorganic.

Extractable from the soil was the second leg.

Third one was usable for a commercial purpose, and the fourth one was that the... the mineral was not somehow to be included in the use of the surface estate.

CHIEF JUSTICE REHNQUIST: What if... what if you had only sand, which wasn't covered by Western Nuclear?

THOMAS L SANSONETTI: That would not be a problem in this particular instance, Mr. Chief Justice, because sand and the gravel are really just a matter of size.

In order, they go silt, sand, gravel, cobble, building stone.

CHIEF JUSTICE REHNQUIST: So you say that's no problem for the Government.

The Government gets the sand too?

THOMAS L SANSONETTI: Oh, yes, because sand is a mineral.

CHIEF JUSTICE REHNQUIST: It's a problem for me, even if it's not for you.

THOMAS L SANSONETTI: Yes, yes.

JUSTICE BREYER: Doesn't the Government get... I mean, it gets everything.

I mean, what... what is it... I mean, you... mud is made into adobe bricks.

I mean, and... so it gets absolutely everything except for the 6 inches or so that maybe was mixed up that you could grow corn in.

And I don't even understand why they wouldn't get that too if they wanted it.

THOMAS L SANSONETTI: Now, I think that the first thing we have to do is take a look at the purposes of the passage of both the Stock-Raising Homestead Act and the Pittman Act.

JUSTICE BREYER: Am I right in thinking the Government gets absolutely everything with the possible exception because of the fourth point of Western Nuclear that I'm not sure why it even came in, but that if it's mixed with something you could grow something in, then they don't get it.

But everything else is the Government's.

THOMAS L SANSONETTI: Surface, yes.

Minerals, no.

The... the Justice is... Justice Breyer is... is correct.

The degree that the surface has been given to the patentee, the patentee has total control of the surface--

JUSTICE BREYER: So and then... if it's so, then at this time what this amounted to what seemed to be giving the land away... it amounted to a lease or a right to use a piece of land to grow crops.

And that's all these great giveaways were.

They were simply a right to use land to grow crops and nothing else.

THOMAS L SANSONETTI: --Initially the answer to that... that question is yes because if you look at section 3 of the Pittman Act, it refers to an affidavit that must be signed by the patentee coming onto the land, and that affidavit states that they are applying for this patent for the purposes of reclamation and cultivation and it states that they are not there as an agent for any other corporation, mining company, or anything like that.

They are there for the surface.

Basically--

JUSTICE BREYER: All right.

Then that whole argument would be that's certainly a possible reading of the lease.

That's certainly a possible way to look at it, but it would have come as a great surprise to Senator Pittman and everybody else at the time in the Interior Department and elsewhere.

That's why, to make their argument, they say that Western Nuclear was certainly wrong and therefore what we should do is limit it by turning everything on the word valuable.

All right.

That I think is their whole argument and you don't want to--

THOMAS L SANSONETTI: --And... and let me... if I may shorten our own then, let me say that Congress, in looking at both the Stock-Raising Homestead Act and the Pittman Act, was basically saying to the patentees through the mineral reservation, you could have the surface of the land... initially the thought was, of course, farming.

CHIEF JUSTICE REHNQUIST: --Well, what if... what if the surface had... what if the gravel was on the surface?

THOMAS L SANSONETTI: Okay.

At... the... the gravel on the surface that is usable for commercial purposes belongs to the United States.

CHIEF JUSTICE REHNQUIST: So they didn't even get that part of the surface.

THOMAS L SANSONETTI: If they wanted to use the sand and gravel as part of their surface operation as in the farming where you want to gravel a road, when you turn it into cement, as was done in this case... the farmer Butler that obtained the patent in 1940 used some of the sand and gravel to make concrete to provide patios, et cetera.

As long as it is linked to the purpose of the surface, it belongs to the farmer, but if it's not, it belongs to the United States.

JUSTICE SCALIA: Why is that?

Why is that?

Why is that?

Why is that?

Is it the same with gold?

THOMAS L SANSONETTI: The... the--

JUSTICE SCALIA: So long as he uses the gold in his house, it's okay?

THOMAS L SANSONETTI: --Well, I think that it--

JUSTICE O'CONNOR: Or his teeth.

JUSTICE SCALIA: Or his teeth, yes.

Unidentified Justice: [Laughter]

THOMAS L SANSONETTI: --Or his teeth, yes.

For... the long-term policy of the Department of Interior and the Bureau of Land Management, as is spelled out in great length in footnotes 3 and 14 of Western Nuclear, is that it's always been okay for the owner of a surface estate to go ahead and utilize a mineral so long as it is incident to the purposes--

JUSTICE SCALIA: Can I ask--

THOMAS L SANSONETTI: --ordinary farming.

JUSTICE SCALIA: --what... what are his surface rights?

Can... can the... can the Government do whatever it takes in order to get at these minerals?

THOMAS L SANSONETTI: The--

JUSTICE SCALIA: I mean--

THOMAS L SANSONETTI: --The answer is yes.

JUSTICE SCALIA: --he... he supposedly has surface rights.

Don't... don't they have to preserve his surface rights when they do this?

THOMAS L SANSONETTI: The... the answer is--

JUSTICE SCALIA: But they can just go... go in and rip up the whole... the whole acreage in order to--

THOMAS L SANSONETTI: --The... the mineral estate is indeed dominant, Justice Scalia, and in fact, the Congress already thought ahead about what would happen if the entire surface did need to get destroyed to going to a very valuable mineral.

And that is... and that thought by Congress is included in sentences 3 and 4 of section 8 of the Pittman Act where they make provisions for exactly what to do if you have to come in and locate a mineral or today you actually contract or sale your... your sand and gravel.

Here's what it said.

It said that that person may come on the land provided he shall not injure, damage, or destroy the permanent improvements of the entryman or patentee and shall be liable and shall compensate the entryman or patentee for all damages to the crops by reason of such prospecting.

And that covers those that locate under sentence 3, and under sentence 4 it covers those that acquire a right to obtain the mineral through a contract.

JUSTICE KENNEDY: --Is it... is it true?

I... I suppose there's... there's placer mining even for gold and I... I guess in some instances for coal.

But I... I must tell you my... my assumption is that most mineral easements can be exploited without undue disturbance of the surface.

Do you want to tell me that that's just wrong empirically, factually?

Other than gravel.

Other than gravel.

THOMAS L SANSONETTI: The fact here, though... I mean, the... the answer is, is that some minerals can be extracted without much harm to the surface.

A lot of them do require it, though.

JUSTICE O'CONNOR: How about coal?

How about coal and how about copper--

THOMAS L SANSONETTI: Of course--

JUSTICE O'CONNOR: --where you destroy huge areas of the surface?

Do you know?

THOMAS L SANSONETTI: --You certainly do, Justice O'Connor.

And... and the fact is that that is exactly what was contemplated ahead of time when this particular act was passed.

The minerals belong to the United States.

And if it was copper and you needed a gigantic pit, so be it.

In this case, we have a gigantic pit.

Let's not... you know, if you take a look at the joint appendix picture 15, you actually see what we're talking about there.

This is not just a... a surface operation.

It's a huge pit.

JUSTICE BREYER: Well, that's the whole problem because they say a person who went out to Nevada and invested his time in this knew perfectly well that they weren't going to find copper.

But if you had told him that the Government might come in and take all the dirt out and take all the gravel out and take all the sand out, he would have said this is ridiculous.

I'm not going to go out there and invest my time to... to graze a cow when the Government can come along and build a copper mine not for copper but for dirt.

I mean, really.

So that's... that's why he says they've made this historical distinction between something that has intrinsic value, a precious metal then or now, uranium or gold, and something that's widespread and commonly found, dirt, copper... dirt or gravel or sand.

And when you're in that second category, I'm sorry, you just can't dig these... these great big holes.

THOMAS L SANSONETTI: And that's... that's what we have here.

We have got a gigantic hole.

And you have to keep in mind the difference between the dirt and the topsoil which goes to the farming element of all this and the sand and gravel which may be a humble mineral compared to gold or silver.

Maybe the sand and gravel are the... the poor stepchildren to brother gold and... and sister silver, but they're just as valuable as a member of the mineral family.

Let me note that--

JUSTICE GINSBURG: May... may I just interrupt to ask?

I thought that you... we weren't going to talk about dirt because dirt is part animal, part vegetable, so it's not mineral.

THOMAS L SANSONETTI: --Right, but I brought that up because the question about topsoil.

I wanted to make sure that I was distinguishing what is part of the surface versus sand and gravel which is not part of the--

JUSTICE SCALIA: How about clay?

Is... is clay like dirt or is clay like sand?

THOMAS L SANSONETTI: --Clay can... clay is like sand in there.

But the point is is that sand and gravel, as far back in the 1800's, much less at the point that I want to bring our... the... the Court's attention to, which is 1919 where the Pittman Act is passed--

JUSTICE BREYER: I guess granite--

THOMAS L SANSONETTI: --sand and gravel... I'm sorry.

JUSTICE BREYER: --So granite... I mean, I'm thinking of granite.

On our... we have some granite.

Somebody can come in and dig up all the granite?

THOMAS L SANSONETTI: Yes, because actually this Court in 1903 in the Soderberg case said gravel is a mineral.

Sand and gravel is a mineral.

JUSTICE STEVENS: And the... and the same way with decorative rocks which are a big thing in northern California now?

People are selling decorative rocks off their... off their property.

That's... that's a mineral.

It belongs to the Government under these patents.

THOMAS L SANSONETTI: Actually in that particular case, you would look at quartz.

If it was something that they were using as part of their surface... they may have a greenhouse or whatever... then obviously the Bureau of Land Management is not interested in... in taking the person's cactus or whatever.

JUSTICE SCALIA: The... the holding... the holding in Soderberg was that granite outcroppings were reserved.

That... it didn't talk about... it didn't hold as to gravel, did it?

THOMAS L SANSONETTI: No, not... not as to gravel.

I said granite.

He asked about granite.

Granite.

Soderberg said granite is a mineral.

Now, there was dicta in Soderberg, though, that quoted that... favorably that gravel was also a mineral.

JUSTICE O'CONNOR: At what... at what point did the Department of Interior take the position that you could get a mining claim under the mining act for sand and gravel claims?

THOMAS L SANSONETTI: As of 1872, as I understand it, Justice O'Connor.

And... and now to the 1919 part--

JUSTICE O'CONNOR: You... you think you can show that patented mining claims were allowed for sand and gravel on public lands that early?

THOMAS L SANSONETTI: --In... in fact, with the passage of the 1872 Mining Act, that was the first opportunity under that law for people go after sand and gravel.

It was not until 1947 with the passage of the Mineral Materials Act that you could obtain sand and gravel either by locating it through the 1872 Mining Act or obtaining a contract for lease.

That changed.

That contract for sale.

Excuse me.

And that changed in 1955 with the passage of the Common Varietals Act where the only way you could obtain sand and gravel today... well, ever since 1955... is by sale contract.

You go to the Bureau of Land Management and you say you want 10,000 cubic yards of sand and gravel.

You pay 35 cents or something like that that you bid to take each cubic yard out, and once that is out, of course, the 35 cents goes to the United States Government, Treasury, and the remainder, of course, goes for the sale of the sand and gravel.

But while it is valuable, obviously, in 1993 when the petitioners were so interested in coming into the farmer's shoes... this is a mining operator BedRoc stepping into the shoes of a farmer, those that had gone ahead and stayed on the surface of the land from 1940 to 1993, now wanting to produce sand and gravel.

CHIEF JUSTICE REHNQUIST: Are you... are you suggesting that because the grantee in this case was... was a commercial operation, somehow the... the value of the grant or the terms of the grant had changed?

THOMAS L SANSONETTI: Well, the... the terms of the grant did not change, but I think we have to keep in mind exactly what the purpose of the statute was.

And here it was Congress' intent to concurrently develop the surface of these lands and the mineral estates.

The goal was to get new farmers to farm, new ranchers to ranch, while leaving the mineral estate to those that would be able to exploit that mineral and were after the mineral because they wanted to be mineral operators, not because they came on the land as farmers.

This was the problem with all the fraud that was going on under the old land classification system where people would come onto the land saying this is non-mineral.

I wanted to be an agriculturalist, and then as soon as they'd get the patent to everything, including the surface and... and the minerals, they were selling out to the coal companies.

And that's what brought out the 1906 reservation of the coal, and then you have the 1909 act which says the patentee gets everything but the coal.

And then in 1916 and 1919 we have these two acts that say, nope, we're now going, Congress says, to a split estate system where the surface goes to the surface grantee, the patentee, and a mineral operator must come to the United States to get any type of mineral.

JUSTICE SCALIA: Let me get something clear about the... the Department of Interior's position.

You said that ever since 1872 they had taken the position that sand and gravel was... was mineral.

But isn't it the case that they had taken that position only with respect to sand and gravel that was removable in... in commercial quantities?

THOMAS L SANSONETTI: That is correct.

JUSTICE SCALIA: Not all sand and gravel was minerals.

THOMAS L SANSONETTI: That... that is correct.

And that's where the test of Western Nuclear comes in.

If you want to know whether something is a mineral or not, you apply the test.

CHIEF JUSTICE REHNQUIST: Let's... let's go back before Western... I think Justice Scalia's question... I don't think your answer is consistent with what the Government did in the Zimmerman case, the Department, which was questioned later.

But certainly at the time of Zimmerman, it... it was not a... it was not regarded as a mineral, was it?

THOMAS L SANSONETTI: Well, Zimmerman in... the Zimmerman case was... was the Department of the Interior that counsel has been referring to, Zimmerman, which was in 1910, that said that sand and gravel did not equal mineral lands.

So up until 1910, the question was, yes, it was... it was a mineral.

And the things... things to note about this.

First of all, Zimmerman was specifically part of the Western Nuclear case and is rejected at pages 45 and 46 of that opinion.

The second thing is is that that opinion, issued by the Department of the Interior, was never tested in the courts.

It is certainly--

Unidentified Justice: Well, wait a minute.

Does that mean an opinion... say, an agency opinion... has no value if it's never been tested in the courts?

THOMAS L SANSONETTI: --No, but it does mean that there's a difference between the Department of the Interior's ability to inform the Congress at the time that this act passed in 1919 and their ability to bind the Congress.

The solicitor's opinion is not binding on the Congress that that meant that sand and gravel fell out from the definition of valuable minerals in 1919, particularly since in 1919 sand and gravel was the fifth largest value of minerals produced in the United States that were nonmetallic.

CHIEF JUSTICE REHNQUIST: Yes, and where... where was that sand and gravel value concentrated?

It was concentrated on the east coast because of World War I, wasn't it?

THOMAS L SANSONETTI: No.

Actually as... as you can see in the joint appendix, pages 56 through 118, there are a series of annual mineral reports that were utilized in both of the... the district court case and the appellate court case in... in BedRoc, that spell out that by 1911, there was already a national association of sand and gravel producers, including associations of State sand and gravel producers, in 14 different States.

CHIEF JUSTICE REHNQUIST: Where--

THOMAS L SANSONETTI: And... and Nevada is included.

CHIEF JUSTICE REHNQUIST: --And where... and where else were the 14 States?

If you don't have it handy, don't--

THOMAS L SANSONETTI: Michigan, Texas, California, and I would note, I believe, it is at joint appendix... I believe the page is 56 that shows that sand used for the making of glass had already been discovered in Nevada as of 1918.

So... and--

JUSTICE SCALIA: --Well, that just... that just proves that sand and gravel in certain places is valuable.

That's conceded by the other side.

Right?

The issue was that... is whether sand in the Gobi Desert is... is something that's worth anything.

And the fact is that the Interior Department never took the position that all sand and gravel is... is minerals under the Mineral Act until when?

THOMAS L SANSONETTI: --The... the--

JUSTICE SCALIA: When was the first time it came up with the notion that whether it's commercially extractable or not at... you know, at a profit, it is all minerals under... under the mineral laws?

THOMAS L SANSONETTI: --You could locate sand and gravel from 1872 up to 1910.

JUSTICE SCALIA: You could locate it if it was commercially valuable, yes.

THOMAS L SANSONETTI: That is correct.

JUSTICE SCALIA: That's not the question I asked.

When is it that the Department first came up with the position that all sand and gravel, no matter where it is, is covered by the mining laws?

THOMAS L SANSONETTI: I don't know the exact answer to your question, but I can say in regard to this--

JUSTICE SCALIA: Is it after... is it after 1940?

THOMAS L SANSONETTI: --It's before 1940 because in 1919 the Department of the... as of 1919, the Congress had stated that sand and gravel is a valuable mineral.

JUSTICE GINSBURG: Then how do you explain the 1956 solicitor letter... opinion... the DOI solicitor who said that... that there's a reservation only if the gravel had a definite economic value because of the proximity of a market at the date of the patent?

THOMAS L SANSONETTI: It was that... okay, first of all, the 1956 solicitor's opinion was also reviewed by this Court in Western Nuclear.

And the only portion of the solicitor's opinion that was approved by this Court was the finding that gravel was a mineral.

The... this Court in--

JUSTICE SOUTER: Well, did this Court disapprove of a portion that Justice Ginsburg just referred to?

I don't remember.

THOMAS L SANSONETTI: --It did not adopt it.

In other words, it was considered, but not adopted.

JUSTICE SOUTER: Did it say it was wrong?

Did it say that was wrong?

THOMAS L SANSONETTI: It did not, but then that's because Western Nuclear didn't answer this precise question of site-specific.

JUSTICE SCALIA: We're not talking for the moment about what the Court adopted.

We're talking about what the Interior Department adopted.

What is there in the Interior Department that would have contradicted its solicitor's opinion?

THOMAS L SANSONETTI: Well, for one, it's the practice that has been followed since that time.

Since site-specific is what's being mentioned in the solicitor's opinion... and frankly, it's an issue that related to an Indian reservation... has absolutely no basis with the Stock-Raising Homestead Act grants or the Pittman Act grants.

The statute at issue there related to an Indian reservation.

It continued to grant United States control over all the minerals on that reservation, considered the trust responsibility.

There were other elements being considered there rather than whether or not site specificity should be what the BLM follows all across the board.

Note that we are here--

JUSTICE GINSBURG: There's... there's another... there's another piece from the Department of the Interior that Mr. McCrum emphasized in addition to the 1956 opinion letter, and it was a heading or a sentence in the Western Nuclear brief, in the SG's brief, stating that the reservation embraces only gravel deposits that are economically exploitable and would justify an entry under the 1872 Mining Act.

So in Western Nuclear, according to Mr. McCrum, that issue wasn't before the Court and the Government said, indeed, the issue is it has to be economically exploitable at the time of the patent.

THOMAS L SANSONETTI: --Your Honor, we're mixing up two things.

The 1872 Mining Act is an act that... that tells you how to obtain a mineral.

The reservation we're talking about today is describing what is covered by the mineral.

Once you've got the what, then you can decide the how, whether it's the 1872 act which has these deposit references and... and the like, or whether something is saleable under contract.

That... those are the hows.

Today we're talking about the what, what is covered by the reservation.

And the Pittman Act House report notes that the reservations in both the SRHA, the Stock-Raising Homestead Act, and the Pittman Act are identical.

CHIEF JUSTICE REHNQUIST: Well, but that... that can't be correct, can it, because one uses the term valuable and the other doesn't?

And the House report certainly doesn't prevail over the statute.

THOMAS L SANSONETTI: It does not prevail over the statute except let me come back to the question about the two words being... the two phrases being different because section 8 of the bill... again, Pittman was passed after the Stock-Raising Homestead Act, and the actual quote is that section 8 of the Pittman Act contains the same reservations of minerals which was passed by Congress in the Stock-Raising Homestead Act.

Now--

CHIEF JUSTICE REHNQUIST: Well, that's not a quote from the statute.

That's a quote from the report.

THOMAS L SANSONETTI: --And now as to the quotes from the statute.

CHIEF JUSTICE REHNQUIST: Will you... will you answer my question?

THOMAS L SANSONETTI: The answer is yes.

CHIEF JUSTICE REHNQUIST: Okay.

THOMAS L SANSONETTI: Okay.

Now as to the actual statutes.

In the Stock-Raising Homestead Act, it is all the coal and other minerals.

That's section 9.

In section 8 of the Pittman Act, it is all the coal and other valuable minerals.

JUSTICE BREYER: Right.

So... so can I... can you deal with this--

THOMAS L SANSONETTI: Yes.

JUSTICE BREYER: --problem that's in the back of my mind?

THOMAS L SANSONETTI: Okay?

JUSTICE BREYER: All right.

You wanted to finish what you were saying.

THOMAS L SANSONETTI: If... if I may, the position of the United States is that those two phrases, valuable minerals and minerals, are synonymous.

The word valuable definitely has a meaning.

That meaning was set out in Western Nuclear as being used for commercial purposes.

So used for commercial purposes, the concept of value is definitely part of the Stock-Raising Homestead Act, and consequently, it means the mineral must be valuable.

In Pittman, you've got again the exact same language of section 8 and section 9 with the addition of the word valuable.

It appears eight times in both of... of those sections, and it is our... our position then that they are interchangeable.

Minerals sometimes, valuable mineral other times.

So it's a distinction without a difference and valuable is definitely not a word of surplus.

JUSTICE BREYER: Okay.

What's bothering me in the back of my mind, assuming all the opinion letters and everything are sort of a wash, is that we don't ranch all... as much as we used to and we don't farm as much as we used to.

And therefore, what's really at stake is the ability to transfer title.

And once I begin to think in that way, I think that whoever might want to sell or buy some of this land, which now might be used for a city or a town or who knows what, might think to himself, well, I can deal with the reservation of, let's say, a specific precious mineral right like gold or even tungsten or even uranium.

But if there's a possibility here that the Government can come in and start digging, because the mixture of organic only goes down about 6 inches, and if everything below that 6 inches potentially belongs to the Government, and the Government can come in and tear up even that 6 inches to look for rocks or look for sand or look for gravel or granite or all that stuff, which is undoubtedly there, I just don't know what I'm getting into.

And therefore, I would be pretty reluctant to buy this piece of land, or at least not for much of a price.

Now, it's that kind of uncertainty in land transfer title that is coming on 100 years after the event that's worrying me.

So I would like you to reply and tell me what you think of that.

THOMAS L SANSONETTI: Let... let me try it in... in this fashion because we're talking about expectations here and what the patentee, the surface owner, is obtaining and how it passes that on to successors.

The United States was saying through the Congress through both of these acts that the mineral... through the mineral reservations that you, the patentee, can come onto the surface of this land, use it as you will.

We, the citizens of the United States, keep anything that may be found on or underneath that land that has mineral value.

The patentee gets to use the surface as his benefit of the bargain and should not expect anything else.

If there are windfalls... if there are windfalls of valuable minerals that no one knew were under these lands in Nevada, if any, they should belong to the citizens of the United States and--

JUSTICE KENNEDY: Most of the States that have ruled on this subject... most of the State courts that have ruled on this subject, have come out the other way from Western Nuclear.

Do they have a different perspective or different concerns?

THOMAS L SANSONETTI: --They... they do... they do because there's no congressional mandate in those... in those State court cases.

Those State court cases invariably have situations where the reservations may or may not be applied by the Secretary of the Interior, in reference to the Hess case for instance.

JUSTICE KENNEDY: No, but the practical problems and the... and... and the likely expectations and understanding of the purchasers would be the same.

THOMAS L SANSONETTI: They... they would be the same except in our instance, they're much more clearly laid out because once that affidavit is signed under section 3, then you have the person coming onto the land contemplating cultivation.

They are signing an affidavit saying they want the free land, and it's free land.

For 20 acres of crops, they get up to 640 acres of free land.

And they get the appreciation of that land.

This particular plot happens to be just north of Las Vegas.

If it appreciates--

JUSTICE SCALIA: If they find... if they find water.

They have to come in--

THOMAS L SANSONETTI: --They have to--

JUSTICE SCALIA: --and expend a certain amount of money--

THOMAS L SANSONETTI: --Yes, they did.

JUSTICE SCALIA: --considerable money sometimes, to find water.

And if they find it, then they have the right to... to farm.

And, you know, I don't think that's a... such a terrific deal if they can be just dug out of their... of their homestead by the Government.

THOMAS L SANSONETTI: But the fact is is at the point where they did find water, they applied for the patent.

They get their 640 acres.

In this case it was 560.

They acknowledge that they are getting this free land for crops.

They grew the crops, the 20 acres' worth of crops that had been grown that got them the opportunity to file their final certificate and obtain that patent.

Now, remember, if this land appreciates, they get the benefit of that bargain, the same way as if the United States happens to find that there is a valuable mineral underneath, they happen to benefit from it.

This could be a golf course or a WalMart or anything in a few years north of Las Vegas.

JUSTICE KENNEDY: If... if the--

THOMAS L SANSONETTI: The United States is not asking for that appreciation.

JUSTICE KENNEDY: --If the property owner had exported... transported the water to Las Vegas for a municipal water supply, would that be consistent with reclamation?

THOMAS L SANSONETTI: Any... as I understand it, that under Nevada State law, the water actually that was found by Farmer Butler in this case is... is dealt with by the Nevada State water engineer.

So long as he uses it for beneficial uses, the permission to take it off premises or on premises has nothing to do with this reservation.

It has to do with Farmer Butler and Nevada State law.

But I would like to note a couple quick things in regard to the bad consequences of a site-specific test because it does place the ownership of other minerals into doubt.

It's not just gold or silver that we're dealing with on one hand and sand and gravel or some ubiquitous common gravel over here.

What happens?

What's the test then for things like trona or bentonite or limestone or dolomite or any other thing.

You mentioned uranium.

Uranium was used for watch dials way back in 1919, but of course, we now see it has a much more important purpose today.

JUSTICE SOUTER: The... the test, as I understand it, would be whether it was commercially worthwhile to extract it and transport it to wherever you'd have to take it to use it.

THOMAS L SANSONETTI: Ah, and if it was, it would be a mineral reserved to the United States.

But if the site-specific test is put into place, imagine then the practical difficulties in trying to show that from the Bureau of Land Management's point of view going back in time--

JUSTICE SCALIA: No, no.

I mean, the... the Bureau has always had a... a doctrine of inherently valuable minerals, gold and silver.

You don't have to show that it can be extracted at a commercial profit.

And benthamite or kryptonite, which Superman uses--

Unidentified Justice: [Laughter]

JUSTICE SCALIA: --whatever you want, all you have to do is say that that is an inherently valuable mineral.

THOMAS L SANSONETTI: --Well, to the extent that there's any doubt on... on the Court about whether or not gravel is a mineral reserved to the United States in the Pittman Act reservation, we feel it should be resolved in favor of the Government due to the old canon of construction that says that about the scope of land grants are construed favorably to the Government.

Thank you.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. Sansonetti.

Mr. McCrum, you have 2 minutes remaining.

REBUTTAL ARGUMENT OF R. TIMOTHY McCRUM ON BEHALF OF THE PETITIONERS

R TIMOTHY MCCRUM: Thank you.

One point that I'd like to make as clear as I possibly could is that sand and gravel was not locatable under the Mining Law from 1872 onward.

It... it... the Interior Department was as clear as could be in published decisions that common material like sand and gravel and clay were not subject to the 1872 Mining Law, not within the class of valuable minerals.

The... the first published decision we see on this is in the 1880's and we see a repeated line of cases from 1901 through 1919.

They're all cited in our opening brief.

We really shouldn't have an issue about that.

It was not until 1929--

JUSTICE O'CONNOR: Well, your opponent flatly disagrees with you, doesn't he, on that?

R TIMOTHY MCCRUM: --I have great respect for my opponent, Mr. Sansonetti, but I... I think that this point that I'm making is... is as clear as could be in the record.

And the Zimmerman case is not an isolated case.

It's merely a case in 1910 that is stating this very explicitly in the case of sand and gravel that this was actually the general understanding and that the Department was not even receiving applications for sand and gravel mining claims because this was so well known.

It was not until 1929 in the Layman v. Ellis decision where the Department changed that rule, 10 years after the Pittman Act in this case.

Then it was determined on a site-specific basis.

That's the site-specific base... basis argument that we are putting forward here, which then was adopted in the 1956 solicitor's opinion in the context of mineral reservations.

There was some reference to the Soderberg case of this Court in 1903.

That involved valuable granite building stone of the type that we see here in the Jefferson Memorial and around this city.

Not... it was not a surprising ruling when this Court upheld the position of the Interior Department patent that valuable granite could be subject to the Mining Law within the class of valuable minerals.

By then, in 1897, in the Pacific Coast Marble case, the Interior Department had already ruled that marble was a valuable mineral, which is an eminently sound ruling looking at the marble in this Court building, which is quite different from common sand and gravel.

CHIEF JUSTICE REHNQUIST: Thank you, Mr. McCrum.

The case is submitted.

(Whereupon, at 11:04 a.m., the case in the above-entitled matter was submitted.)