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Utah Marblehead, LLC v. Kempthorne

March 29, 2007

UTAH MARBLEHEAD, LLC, PLAINTIFF,
v.
DIRK KEMPTHORNE, SECRETARY OF THE INTERIOR; UNITED STATES DEPARTMENT OF THE INTERIOR; AND BUREAU OF LAND MANAGEMENT, DEFENDANTS.



The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge

MEMORANDUM OPINION

Utah Marblehead, LLC ("Utah Marblehead"), brings this action against Dirk Kempthorne, in his official capacity as Secretary of the Interior, the Department of the Interior ("DOI"), and DOI's sub-agency, the Bureau of Land Management ("BLM"), pursuant to the Administrative Procedure Act ("APA") and the Declaratory Judgment Act. Utah Marblehead seeks a declaratory judgment and judicial review of decisions by BLM and the Interior Board of Land Appeals ("IBLA"), which declared 96 of Utah Marblehead's mining claims null and void by operation of law because Utah Marblehead failed to timely pay its annual maintenance fees.*fn1 Before the court is the Department's motion for summary judgment [#15] and Utah Marblehead's cross-motion for summary judgment [#18].*fn2 Upon consideration of the motions, the oppositions thereto, and the Administrative Record ("AR"), the court concludes that the Department's motion must be granted.

I. FACTUAL BACKGROUND

In 2002, Utah Marblehead held 96 unpatented mining claims in Utah. That year, federal law required holders of unpatented mining claims to pay a $100 annual maintenance fee for each mining claim to the pertinent BLM State office by September 1, 2002. Pub. L. No. 107-63, 115 Stat. 418, 419 (2001) (codified at 30 U.S.C. § 28f). Due to an intervening holiday and weekend, the required filing date for 2002 was September 3. AR 1-13 at 1.*fn3 BLM regulations permitted receipt of the maintenance fees up to fifteen days after the filing deadline, if the package that contained payment was postmarked "by a bona fide delivery service" prior to that date. 43 C.F.R. § 3833.0-5(m) (2001).*fn4

Utah Marblehead alleges that on August 29, 2002, it sent its annual fees in an envelope postmarked by a Pitney Bowes meter stamping machine and transmitted that envelope to the United States Postal Service ("USPS") for delivery to the BLM office in Utah. Pl.'s Mot. for Summ. J. ("Pl.'s Mot.") at 2; AR 1-32 at 1--13. According to Utah Marblehead, the sealed envelope was then returned to its office for no reason and with no markings to indicate USPS handling. Pl.'s Mot. at 2--3; AR 1-32 at 1; AR 2-19 at 1--4. Utah Marblehead then allegedly re-packaged the payment in an Airborne Express envelope and sent it via overnight delivery to the BLM Office. Pl.'s Mot.at 3; AR 1-32 at 1, 13; AR 2-19 at 1--2.

On September 18, 2002, the BLM received Utah Marblehead's fees in the Airborne Express overnight delivery package. AR 1-16 at 1--2. That package contained two checks amounting to $9600, an opened envelope with a Pitney Bowes meter postage stamp dated August 29, 2002, and three letters. AR 1-32 at 1--13. One letter was from Bernadette Kortze, a receptionist at Carmeuse Lime, Inc. ("Carmeuse"), who wrote that the materials had been mailed on August 29 but had been sent back to Carmeuse on September 17. Id. at 1.*fn5 The other two letters were written by Garth Kuhnhein, Director of Mining Engineering at Carmeuse, and referred to the enclosed maintenance fee payment. Id. at 2, 8.*fn6

BLM declared Utah Marblehead's 96 mining claims null and void by operation of law on September 20, 2002. AR 1-13 at 1. Because the Airborne Express envelope was postmarked September 17, 2002, and the envelope with the meter date of August 29, 2002 was not postmarked by a bona fide delivery service, the agency ruled that the maintenance fees were not timely filed. Id. IBLA affirmed BLM's decision on March 29, 2005. AR 1-16 at 1--4.

Utah Marblehead subsequently commenced this action alleging that the Department abused its discretion in declaring Utah Marblehead's mining claims null and void.

II. ANALYSIS

A. APA Standard of Review

Pursuant to the APA, a "reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Bowman Transp., Inc. v. Ark.-Best Freight Sys., Inc., 419 U.S. 281, 284 (1974) (quoting 5 U.S.C. § 706(2)(A)). A court must ensure that the deciding body has "examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection between the facts found and the choices made." Kennecott Greens Creek Mining Co. v. Mine Safety & Health Maint., 476 F.3d 946, 952 (D.C. Cir. 2007) (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)). An agency's factual findings must be based upon substantial evidence. JSG Trading Corp. v. Dep't of Agric., 235 F.3d 608, 611 (D.C. Cir. 2001) (stating that substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion whentaking into account whatever in the record fairly detracts from its weight" (internal quotation marks omitted)). Furthermore, the AR should support the agency's action, and the reviewing court should base its decision on the record at the time of the agency's decision. Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743--44 (1985); see also Ass'n of Data Processing Serv. Orgs., Inc., v. Bd. of Governors of Fed. Reserve Sys., 745 F.2d 677, 683 (D.C. Cir. 1984) (noting that "in the case of formal proceedings the factual support must be found in the closed record as opposed to elsewhere").

The Department asserts that Utah Marblehead failed to timely pay its annual maintenance fees and BLM and IBLA did not, therefore, act arbitrarily or capriciously when they declared Utah Marblehead's mining claims null and void by operation of law.

B. Federal Law Obligating Mining Claim Holders to Pay Annual Maintenance Fees

In 2001, Congress passed the Department of the Interior and Related Agencies Appropriations Act of 2002 ...


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