                                             AL
         Jfn tbe Wniteb ~tates <!Court of jfeberal <!Claims
                                      No. 13-1014L
                                                                         FILED
                                (Filed: August 15, 2014)
                                                                        AUG 15 2014
                                     UNREPORTED
                                                                      U.S. COURT OF
                                 )                                   FEDERAL CLAIMS
 JON SALTZMAN,                   )
                                 )
               Pro Se Plaintiff, )
                                 )               Motion to dismiss; Unpatented mining
V.                               )               claim; Kunkes v. United States, 78
                                 )               F.3d 1549 (Fed. Cir. 1996)
THE UNITED STATES,               )
                                 )
              Defendant.         )
~~~~~~~~~~~~~)

      Jon Saltzman, Wickenburg, AZ, pro se plaintiff.

        Charlotte M Youngblood, National Resources Section, United States Department
of Justice, Washington, DC, with whom was Sam Hirsch, Acting Assistant Attorney
General.

                           ORDER DENYING DISMISSAL

      Pending before the court is the motion to dismiss filed pursuant to Rule l 2(b )( 6)

for failure to state a claim, by defendant the United States ("the government"). This case

arises under the Takings clause of the Fifth Amendment to the Constitution. Pro se

plaintiff Jon Saltzman ("Mr. Saltzman") claims that he has been "a placer mining claim

owner" of 103 individual 160-acre, unpatented mining claims for several years. He

further claims that the 2012 Consolidated Appropriations Act, Pub. L. 112-74 § 430, 125

Stat. 786 (codified as amended at 30 U.S.C. § 28(f)(a)(2)) ("FY2012 Appropriations

Act"), affected a taking of his property because it requires unpatented mining claimants
to pay an annual maintenance fee of $140 for every 20-acre placer mining claim. Prior to

the FY2012 Appropriations Act, mining claimants with claims up to 160-acres were able

to pay a single annual maintenance fee of $140 for the entire 160-acre claim. Mr.

Saltzman contends that the statutory change amounted to an "800% increase" in the

annual fees he needed to make in order for him to keep all 103 160-acre unpatented

placer mining claims. Plaintiff alleges that he could not afford the payment on each 20-

acres parcel and was thus forced to relinquish all but 4% of his claims. When plaintiff

failed to pay the required annual maintenance fees on some of his unpatented mining

claims, the United States Department of the Interior's Bureau of Land Management

("BLM") "declared Plaintiffs mining claims forfeited." Compl. ~ 27 & Ex. 7. Plaintiff

appealed that determination to the United States Department of the Interior's Board of

Land Appeals ("IBLA"), and requested a stay of the decision. Id. The IBLA

subsequently affirmed BLM's interpretation that plaintiffs failure to pay the requisite

maintenance fees conclusively constituted automatic forfeiture of his mining claims, and

denied plaintiffs request for a stay as moot. Id. at Ex. 1. Plaintiff alleges that the 2012

statutory change constituted a taking of his property and seeks $13,333.33 for each

forfeited acre or $219,733,270 as just compensation.

       The United States argues in its motion to dismiss that plaintiff cannot state a claim

because he does not have "property interest in possession of unpatented placer mining

claims on public lands in perpetuity at unchanged annual maintenance fees." Plaintiff

argues in response that he does not claim a property interest in having an unchanged

maintenance fee. Instead, he argues that he has a property interest in his unpatented


                                              2
mining claims and that the government cannot impose an unreasonable and extremely

burdensome maintenance fee. Pl.'s Resp. to Mot. to Dismiss 2, 5. The question

presented is whether plaintiff has identified a valid property interest to state a claim. For

the reasons discussed below, the court finds that plaintiff has alleged a valid property

interest, and thus, the motion to dismiss is DENIED.

I.     STATUTORY AND REGULATORY BACKGROUND

       Before turning to the government's motion, a brief review of the subject statutes

and regulations at issue is needed. Federal law permits private parties to discover,

explore, and claim mineral deposits on federal lands. 30 U.S.C. § 22. Specifically, under

the Mining Law of 1872 ("the Mining Law"), 30 U.S.C. §§ 22-54, citizens may stake or

locate a valid lode or placer mining claim upon discovery of a valuable mineral deposit.

Title to the land remains with the United States, and the unpatented mining claim holder

may use the land for mining purposes. Kunkes v. United States, 78 F.3d 1549, 1554

(Fed. Cir. 1996). As the Supreme Court has explained, "[a]lthough owners of unpatented

mining claims hold fully recognized possessory interests in their claims, ... we have

recognized that these interests are a 'unique form of property."' United States v. Locke,

471 U.S. 84, 104 (1985) (citing Best v. Humbolt Placer Min. Co., 371 U.S. 334, 335

(1963)). "The United States, as owner of the underlying fee title to the public domain,

maintains broad powers over the terms and conditions upon which the public lands can be

used, leased, and acquired." Locke, 471 U.S. at 104 (citing Kleppe v. New Mexico, 426

U.S. 529, 539 (1976)).




                                              3
      Placer claims are generally limited in size to 20 acres. 30 U.S.C. § 35; see also 43

C.F.R. § 3832.22(b). Under the Mining Law, however, "associations of persons" may

make "joint entry" of their mining claims and aggregate their 20-acre parcels into one

oversized placer claim, up to a maximum of 160 acres. 30 U.S.C. § 36; see also 43

C.F .R. § 3 832.22(b ). These "association placer claims" may then be transferred to a

smaller number of mining claimants, provided that there is a discovery of a valuable

mineral deposit at the time of the transfer. 43 C.F.R. § 3833.33(a).

       The Mining Law contained a requirement that mining claimants perform $100 of

assessment work on their mining claims each year to maintain their claims. 30 U.S.C. §

28. The annual assessment work requirement was intended to ensure continuing

development of mineral resources on federal lands in the West and to discourage holding

undeveloped mining claims purely for speculative purposes. See H.R. Rep. No. 103-111

(1993), reprinted in 1993 U.S.C.C.A.N. 378, 1993 WL 181528. If a mining claimant

failed to comply with the assessment work requirement, the mining claim would be "open

to relocation in the same manner as if no location of the same had ever been made." 30

U.S.C. § 28. Since 1993, mining claimants have been required to pay an annual fee to

hold their mining claims in lieu of the assessment work requirement of the Mining Law

and the annual filing requirements of section 314 of the Federal Land Policy and

Management Act, 43 U.S.C. § 1744. See Omnibus Budget Reconciliation Act of 1993,

Pub. L. No. 103-66 §§ 10101-10106, 107 Stat. 312, 405-07 (1993) ("maintenance fee

statute") (codified as amended at 30 U.S.C. §§ 28f-28k); Interior and Related Agencies

Appropriations Act for Fiscal Year 1993, Pub. L. No. 102-381, 106 Stat. 1374, 1378-79


                                             4
(1992) (predecessor "rental fee" statute). This annual fee is now called a "maintenance

fee." Pub. L. No. 103-66 § 10101, 107 Stat. 312, 405 (codified at 30 U.S.C. § 28f). The

maintenance fee statute also provides for automatic forfeiture of claims for failing to

timely pay the fee. 30 U.S.C. § 28i.

         Since 1993, Congress has amended the maintenance fee statute multiple times.

See, e.g., Omnibus Appropriations Act, 2009, Pub. L. No. 111-8, 123 Stat. 524, 704

(2009) (creating 30 U.S.C. § 281); Consolidated Appropriations Act, 2008, Pub. L. No.

110-161, 121 Stat. 1844, 2101 (2007) (making the fee "permanent"); Department of the

Interior and Related Agencies Appropriations Act, 2004, Pub. L. No. 108-108, 117 Stat.

1241, 1245 (2003) (reauthorizing the fee); Department of the Interior and Related

Agencies Appropriations Act, 2002, Pub. L. No. 107-63, 115 Stat. 414, 418-19 (2001)

(reauthorizing the fee and changing the deadline to September l); Omnibus Consolidated

Appropriations Act, 1999, Pub. L. No. 105-277, 112 Stat. 2681-235 (1998) (reauthorizing

the fee and adding a cure period). The amount of the mining claim fees has been

periodically increased by regulation, as authorized by the maintenance fee statute. See 69

Fed. Reg. 40, 294 (July 1, 2004) (raising the maintenance fee to $125 per claim or site);

74 Fed. Reg. 30, 959 (June 29, 2009) (raising the maintenance fee to $140 per claim or

site).

         On December 23, 2011, as part of the FY2012 Appropriations Act, Congress again

amended the maintenance fee statute. See Consolidated Appropriations Act, 2012, Pub.

L. 112-74 § 430, 125 Stat. 786 (codified as amended at 30 U.S.C. § 28f (a)(2)). As noted

above, the FY2012 Appropriations Act changed the maintenance fee for placer mining


                                             5
•


    claims from a "per claim" fee to a "per 20-acre" fee. Placer mining claimants now must

    pay an annual maintenance fee of $140 for every 20-acres of placer mining claim. 30

    U.S.C. § 28f(a)(2); 43 C.F.R. § 3830.21 (2014).

    II.    STANDARD OF REVIEW

           To avoid dismissal for failure to state a claim upon which relief may be granted

    under RCFC 12(b)(6), the complaint must contain facts sufficient to "'state a claim to

    reliefthat is plausible on its face."' Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Bell

    Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To determine whether a complaint

    states a plausible claim for relief, a court must engage in a context-specific analysis and

    "draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. In

    considering a motion under RCFC 12(b)(6), "the court must accept as true the

    complaint's undisputed factual allegations and should construe them in a light most

    favorable to the plaintiff." Cambridge v. United States, 558 F.3d 1331, 1335 (Fed. Cir.

    2009) (citing Papasan v. Allain, 4 78 U.S. 265, 283 (1986); Gould, Inc. v. United States,

    935 F.2d 1271, 1274 (Fed. Cir. 1991)). In addition, when considering a motion to

    dismiss a pro se complaint, the court holds "the pleading 'to less stringent standards than

    formal pleadings drafted by lawyers."' Johnson v. United States, 411 F. App'x. 303, 305

    (Fed. Cir. 2010) (quoting Haines v. Kerner, 404 U.S. 519, 520 (1972)).

    III.   DISCUSSION

           The government's motion to dismiss is based on the government's definition of

    plaintiffs property interest. The government claims that plaintiff is asserting a property

    interest in "an unchanged maintenance fee." The government contends that it has an


                                                  6
•


    absolute right to change the annual maintenance fee on unpatented mining claims, and

    thus that plaintiff cannot claim a taking based on any change to the annual maintenance

    fee.

           Plaintiff argues in response that the government's power over unpatented mining

    claims is not absolute, but must be reasonably exercised. He argues that he has a

    property interest in his unpatented mining claims that is subject to reasonable government

    regulation, and that unreasonable or irrational maintenance fees can give rise to a taking

    claim. Plaintiff argues, for example, that a "trillion dollar" fee would not be rational and

    could give rise to a taking. Pl.'s Resp. to Mot. to Dismiss 2.

           The Federal Circuit addressed a very similar issue to the one raised by plaintiff in

    Kunkes v. United States, 78 F.3d 1549 (Fed. Cir. 1996). In Kunkes, unpatented mining

    claim holders sued the government for a taking without just compensation when the $100

    annual mining maintenance fee-replacing a prior requirement of $100 of assessment

    work or improvements-was first established in 1993. Id. at 1551-52. The plaintiffs

    argued that they could not afford to pay the $100 fee on all of their claims. The circuit

    examined the case using a regulatory taking analysis. Id. at 1552. To begin, the circuit

    accepted without question that plaintiffs had a property interest in their unpatented

    mining claims. Id. at 1551 ("Even though title to the fee estate remains in the United

    States, these unpatented mining claims are themselves property protected by the Fifth

    Amendment against uncompensated takings.") (citing Best v. Humboldt Placer Mining

    Co., 371 U.S. 334 (1963); Forbes v. Gracey, 94 U.S. 762, 766 (1876)). Then, after

    establishing that a property interest existed, the circuit acknowledged that the government


                                                 7
has "especially broad" power to condition the retention of unpatented mining claims, but

refused to find that the government's power over unpatented mining claims was

unlimited. Id. at 1553. The circuit then engaged in a two-part analysis to determine

whether the maintenance fee gave rise to a taking of the plaintiffs' unpatented mining

claims, examining ( 1) whether the maintenance fee imposed by Congress furthered a

legitimate legislative objective and (2) whether the maintenance fee was reasonable." Id.

at 1554-55. In the first step, the circuit determined that the fee at issue "serve[d] the

legitimate governmental purpose of ridding federal lands of stale mining claims and

providing for centralized collection by federal land managers of comprehensive and up-

to-date information on the status and worth of these claims. Id. (citing Locke, 471 U.S. at

105-06). In the second step, the circuit determined that the fee was "objectively

reasonable." Kunkes, 78 F.3d at 1556. The circuit held that the increased fee did not

place an unreasonable burden on the property when measured against the value of the

property remaining, and thus, rejected the Kunkes' taking claim. 1 Id. at 1552. In its

conclusion, the circuit stated, "We conclude ... that the fee was imposed for a legitimate

public purpose and the fee is objectively reasonable .... Under the applicable standards

appellants have not suffered an unconstitutional taking without just compensation." Id. at

1556.

        Given the Federal Circuit decision in Kunkes, the court is compelled to deny the

government's motion to dismiss in this case. Contrary to the government's contentions,

1
 Specifically, the circuit held that the $100 fee was objectively reasonable given the alleged $80
million value of plaintiffs' mining claims. Id. at 1552.



                                                8
plaintiff does not claim a property interest in a set maintenance fee. Rather, he claims a

property interest in his unpatented mining claims subject to the constraints identified in

Kunkes. In its motion to dismiss, the government has conflated plaintiffs property

interest with the merits of his claim. The Kunkes decision establishes that plaintiff has a

property interest in unpatented mining claims that is subject to "objectively reasonable"

fees, imposed to further a "legitimate public purpose." Id. There is no question, given

the ultimate holding in Kunkes, that it will be difficult for plaintiff to succeed on the

merits of his claim. See id. at 1552. Nonetheless, Kunkes mandates that plaintiff be

given the opportunity to make his case. See id. This court is bound by circuit precedent.

Coltec Industries, Inc. v. United States, 454 F.3d 1340, 1353 (Fed. Cir. 2006), cert.

denied, 549 U.S. 1206 (2007). Accordingly, the government's motion to dismiss for

failure to state a claim is DENIED. The parties shall file a joint status report by

September 8, 2014 setting forth a proposed schedule for resolving the case.

       IT IS SO ORDERED.




                                                     /
                                                           NA CYB. FIRESTO
                                                           Judge




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