Andrus v. Shell Oil Co., 446 U.S. 657 (1980)

Andrus v. Shell Oil Co.

No. 78-1815

Argued January 15, 1980
Decided June 2, 1980
446 U.S. 657

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

Syllabus

The general mining law of 1872 permits citizens to explore the public domain and search for minerals and, if they discover "valuable mineral deposits," to obtain title to the land on which such deposits are located. The Mineral Leasing Act (Act), enacted in 1920, withdrew oil shale from the general mining law and provided that thereafter oil shale would be subject to disposition only through leases, except that a savings clause preserved valid claims existent at the date of passage of the Act. Upon complaints by the Department of the Interior (Department) alleging that respondents’ claims for oil shale deposits located prior to the Act were invalid, a hearing examiner ruled the claims valid on the ground that the Department’s 1927 decision in Freeman v. Summers, 52 L.D. 201, wherein it was held that "present marketability" is not a prerequisite to the patentability of oil shale deposits as "valuable mineral deposits," compelled the conclusion that oil shale is a valuable mineral subject to appropriation under the mining laws, despite substantial evidence that oil shale operations were commercially infeasible. The Board of Land Appeals reversed, holding that oil shale claims located prior to 1920 failed the test of value because, at the time of location, there did not appear as a present fact a reasonable prospect of success in developing an operating mine that would yield a reasonable profit. It rejected prior departmental precedent, particularly Freeman v. Summers, as being inconsistent with the general mining law, and therefore unsound. On appeal, the District Court reversed and held the claims valid, finding that Congress had implicitly "ratified" the rule of Freeman v. Summers, and that, in any event, the Department was estopped from departing from the longstanding Freeman standard. The Court of Appeals affirmed.

Held: The oil shale deposits in question are "valuable mineral deposits" patentable under the Act’s savings clause. The Act’s history and the developments subsequent to its passage indicate that the Government should not be permitted to invalidate pre-1920 oil shale claims by imposing a present marketability requirement on such claims. The Department’s original position, as set forth in Instructions, issued shortly after the Act became law, authorizing the General Land Office to begin adjudicating applications for patents for pre-1920 oil shale claims, and later enunciated in Freeman v. Summers, is the correct view of the Act as it applies to the patentability of pre-1920 oil shale claims. Pp. 663-673.

591 F.2d 597, affirmed.

BURGER, C.J., delivered the opinion of the Court, in which WHITE, BLACKMUN, POWELL, REHNQUIST, and STEVENS, JJ., joined. STEWART, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 673.