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United States v. Union Oil Co. of Cal.

Citation: 7 ELR 20214
No. No. 74-1574, 549 F.2d 1271/(9th Cir., 01/31/1977) Rev'd

Reversing the lower court decision, 4 ELR 20559, the Ninth Circuit holds that the mineral reservation in patents issued under the Stock-Raising Homestead Act of 1916 includes the right to produce geothermal steam. Owners and lessees of public lands, beneath which are sources of geothermal steam, sought to develop wells to produce steam for use in generating electricity and brought a quiet title action to determine whether the United States retained the rights to geothermal steam in the mineral reservation. In a detailed review of the legislative history, the Ninth Circuit concludes that the Act was strictly limited to allowing use of the surface land for grazing and agricultural purposes. Notwithstanding that the value of geothermal steam was not recognized when the Act was passed, unrelated subsurface resources, especially energy sources, were specifically set aside for separate disposition and development in the public interest. Geothermal resources are minerals and irrelevant to the capacity of the surface land to sustain livestock. Furthermore, the broad purposes of the Act are best served by including geothermal resources in the statutory reservation of "all the coal and other minerals." Although the Ninth Circuit decides only the legal question of statutory construction, an issue on remand will be whether the United States is estopped from interfering with the rights of private lessees without compensating them for any loss they may sustain.

Counsel for Appellant
David E. Golay, Ass't U.S. Attorney
16th Floor, Federal Building, 450 Golden Gate Ave., San Francisco CA 94102
(415) 556-1126

John E. Lindskold
Department of Justice, Washington DC 20530
(202) 739-2654

Counsel for Appellees
David J. Wynne
Brobeck, Phleger & Harrison
111 Sutter St., San Francisco CA 94104
(415) 434-0900

Vernon W. Humber
646 Van Ness Ave., San Francisco CA 94102
(415) 776-7272

George B. White
White & Puishes
806 Grant Bldg., 1095 Market St., San Francisco CA 94103
(415) 863-3911

Lyman A. Garber
424 S. Beverly Drive, Beverly Hills CA 90212
(213) 553-8533

Counsel for Amicus Curiae State of California
Dennis B. Goldstein, Deputy Attorney General; Dennis M. Eagan
6000 State Bldg., San Francisco CA 94102
(415) 557-2544

Kenneth R. Bjorge
Gonzaga University School of Law
Spokane WA 99202
(509) 326-5310

Joined by Wallace and Turrentine,* JJ.