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Stearns Co., Ltd. v. United States

Citation: 35 ELR 20029
No. No. 04-5031, (Fed. Cir., 01/28/2005)

The Federal Circuit reversed a lower court decision that the Surface Mining Control and Reclamation Act (SMCRA) produced a physical taking of a company's mineral rights. In 1937, the company sold the surface rights of land in the Daniel Boone National Forest to the United States but it retained the mineral rights. In 1977, the U.S. Congress enacted SMCRA, which prohibits surface mining, including surface activity associated with underground mining, in national forests unless the party seeking to mine has "valid existing rights." In 1986, the Office of Surface Mining Reclamation and Enforcement determined that the company did not have valid existing rights. Instead of seeking a compatibility determination, the company decided to file suit claiming that the denial of valid existing rights constituted a taking of their property. The lower court erred when it determined that a physical taking occurred. At no time was the company required to suffer the physical occupation of either the government or a third party on either the mineral estate or the implied appurtenant easement. In addition, the company's claim that SMCRA caused a regulatory taking is not ripe. By refusing to seek a compatibility determination, the court cannot determine whether or to what extent the agency will restrict the use of the property at issue.