G.R. Miller, of McDaniel, Baty, Miller, Agro & Downs, LLC, Durango, Colorado, for the defendants-counter-claimants-appellants.
Elizabeth Ann Peterson, of The Department of Justice, Environment and Natural Resources Division, Washington, D.C. (Thomas L. Sansonetti, Assistant Attorney General; John W. Suthers, United States Attorney; Michael E. Hegarty, Assistant United States Attorney; William B. Lazarus and Ellen J. Durkee, Department of Justice, Environment and Natural Resources Division, Washington, D.C.; and Janet Spaulding, Office of the Regional Solicitor, Albuquerque, New Mexico, with her on the brief), for the plaintiff-counter-defendant-appellee.
Arthur Lazarus, Jr., of Sonosky, Chambers, Sachse, Endreson & Perry, Washington, D.C. (Sam W. Maynes, of Maynes, Bradford, Shipps & Sheftel, LLP, Durango, Colorado, with him on the brief), for the amicus curiae Southern Ute Indian Tribe.
Christopher G. Hayes and Darin B. Scheer, of Bjork, Lindley, Danielson & Little, P.C., Denver, Colorado, on the brief for amici curiae Colorado Rock Products Association and National Stone, Sand & Gravel Association.
Before TACHA, Chief Judge, ANDERSON and BRISCOE, Circuit Judges.
BRISCOE, Circuit Judge.
This appeal requires us to again address whether gravel on property owned by appellants Lulu Mae Hess, Loyd Hess, Alton Hess, and LLH Development Corporation (the Hess family) comes within the United States’ general reservation of ownership of “all minerals” on that property. On remand from our ruling in United States v. Hess, 194 F.3d 1164 (10th Cir. 1999) (Hess I), the district court granted summary judgment in favor of the United States. We exercise jurisdiction under 28 U.S.C. § 1291 and reverse and remand with directions to enter judgment for the Hess family.
In Hess I, this court set forth the historical background of the mineral reservation now at issue:
In 1868, the government set aside almost sixteen million acres as an Indian reservation for the Confederated Bands of Utes. Under the Act of 1880, the Southern Ute Indian Tribe ceded their portion of the reservation to the United States in exchange for cash payments and allotment of land along the La Plata River to individual Tribe members. The purpose of the Act was to dismantle the Ute reservation, and thereby destroy the tribal structure, change the Utes’ nomadic ways, and convert them from a pastoral to an agricultural people. The government in turn sold the ceded reservation land for cash, set portions aside for public purposes, or disposed of it as free homesteads under various public land and homestead acts. One of the last homestead acts Congress passed for the purpose of opening ceded, non-allotted lands to public entry and settlement was the Stock-Raising Homestead Act of 1916. This Act provided for the settlement of homesteads on lands where the surface was deemed “chiefly valuable for grazing and raising forage crops,” and reserved to the United States “all the coal and other minerals” in lands patented under the Act.
In the 1930s, the government initiated a marked shift in Indian policy from allotment and assimilation which deemphasized tribal existence . . . to a revival of tribalism. This self-determination policy culminated in the Indian Reorganization Act of 1934 which authorized the Secretary of the Interior to restore tribal ownership in the remaining surplus lands of any Indian reservation. As a result of this and other acts of Congress, the Southern Ute Tribe’s reservation became a checkerboard of different types of ownership interests. . . . In order to remedy this “checkerboarding” and effectuate land consolidations between Indians and non-Indians within the reservation, Congress included a provision in the Indian Reorganization Act authorizing the Secretary of the Interior to acquire, through purchase, exchange or relinquishment, any interest in lands within the reservation for the benefit of the Indian tribes. The Act’s only relevant condition concerning exchanges involved a requirement that the lands exchanged be of “equal value.” 25 U.S.C. § 463e.
Id. at 1166-67 (internal citations and quotations omitted).
In 1935, pursuant to the Stock-Raising Homestead Act, Arvil Brown, the father of Lulu Mae Hess, received a United States land patent to 640 acres in La Plata County, Colorado. The patent expressly reserved to the United States “coal and other minerals.” Id. at 1167. In 1941, in an effort to consolidate Southern Ute Tribe lands into manageable, contiguous tracts, the Bureau of Indian Affairs (BIA) began several years of negotiations with Brown to exchange his 640-acre tract for a 440-acre tract held by the BIA in trust for the Tribe. In 1945, as part of the negotiations, an appraiser valued both properties at $770 and assigned no value to the properties’ oil, gas, and mineral rights, leaving that portion of the appraisal blank. In 1946, the Ute Tribal Council formally agreed to the exchange. After it was learned that Brown did not own the mineral rights to his homestead, the following reservation was added to the government's offer to convey its 440-acre tract: “That all oil and gas, coal and other minerals are reserved for the Southern Ute Tribe.” Aplt. App. at 397. In July 1946, Brown deeded his 640-acre homestead to the government. On October 6, 1948, the government issued an exchange patent to Brown for its 440-acre tract “subject to the reservation of all minerals in and to the land, including oil and gas, to the United States for the use and benefit of the Southern Ute Tribe.” Hess I, 194 F.3d at 1168.
In 1963, Lulu Hess, and her husband, Loyd Hess, purchased the 440-acre tract from Brown. Nearly all of the Hess family property is underlain with commercial quality “Animas” gravel and noncommercial quality “Florida” gravel. In 1968, the Hess family began extracting Animas gravel from their property. From 1983 to 1996, they “removed approximately 147,619 cubic yards of Animas gravel from the Hess pit for the Hess family’s use, for small individual sales to local ranchers for private road use, and for sale to the Colorado Department of Transportation for use on roads apparently located near the Hess property.” Hess I, 194 F.3d at 1169. In 1993, the La Plata County Board of Commissioners recommended approval of the Hess family’s plan to sell 53 acres of their property as individual residential lots, which acreage was underlain with Animas gravel. However, because the Southern Ute Indian Tribe and the BIA objected to the proposed development based on the Tribe’s mineral interest in the land, the Board has not approved the proposed subdivision.
In 1995, the United States, on behalf of the Tribe, filed suit against the Hess family asking the district court to: (1) declare the gravel located on the Hess property a “mineral” within the terms of the mineral reservation in the exchange patent; (2) quiet title to the gravel in the name of the United States as trustee for the Tribe; (3) enjoin further mining by the Hess family; and (4) award monetary relief for trespass damages caused by the Hess family’s past mining activity. The Hess family counterclaimed to quiet title to the gravel deposits and the parties filed cross-motions for summary judgment. The district court declined to consider evidence of the intent of the parties involved in the exchange patent and denied the Hess family’s motion for summary judgment, holding: (1) federal law, not state law, controlled construction of the exchange patent, and (2) as a matter of law, the mineral reservation contained in the exchange patent reserved gravel to the United States for the benefit of the Tribe. After a trial on the remaining issues, the district court awarded the United States a monetary judgment and the Hess family appealed.
In Hess I, this court disagreed with the district court’s reliance on Watt v. Western Nuclear, Inc., 462 U.S. 36, 59-60 (1983) (holding that “gravel is a mineral reserved to the United States in lands patented under the [Stock-Raising Homestead Act]”). We distinguished Western Nuclear because the land at issue in that case was patented under the Stock-Raising Homestead Act whereas the Hess family property was patented under the Indian Reorganization Act of 1934. Hess I, 194 F.3d at 1171. We noted that “[t]hese Acts are very different with respect to their treatment of mineral reservations.” Id. We further stated that although federal law applied, “the content of federal law should be determined by reference to state law.” Id. at 1173. On remand, the district court was directed to “examine Colorado law and from it identify the governing rules for decision of the case.” Id. Because “the meaning of ‘minerals’ used in the exchange patent [was] not clear,” the district court was to “look at the intent of the parties as to the meaning of the word ‘minerals,’ as used in the exchange patent at issue.” Id. at 1174. In determining the intent of the parties, we stated that the district court could look at extrinsic evidence, including an “examination as to the common occurrence and value of gravel at the time the instrument was executed, as well as the known and intended consequences, if any, in disturbing the land’s surface to extract the gravel.” Id. (internal citation omitted).
In June 2001, following our remand of the case in 1999, the United States disclaimed “any and all right, title and interest [it] may have or may have had in and to the [noncommercial quality] ‘Florida’ alluvial and colluvial gravels” on the Hess property. Aplt. App. at 285. Thus, on remand, the district court only addressed ownership of the commercial quality Animas gravel and again found the gravel was a mineral reserved to the government under the mineral reservation.
We review the district court’s grant of summary judgment de novo, applying the same legal standard used by the district court. Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999). Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). When applying this standard, this court views the evidence and draws all reasonable inferences therefrom in the light most favorable to the nonmoving party. Simms, 165 F.3d at 1326.