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Andrus v. Shell Oil Co.

ELR Citation: 10 ELR 20457
Nos. No. 78-1815, 446 U.S. 657/(U.S., 06/02/1980) Aff'd

Affirming the decision of the Tenth Circuit Court of Appeals, 9 ELR 20530, the Supreme Court upholds the validity of oil shale claims located prior to the passage of the Mineral Leasing Act of 1920. Under the general mining law of 1872, citizens could obtain title to land on which "valuable mineral deposits" were located. The Mineral Leasing Act of 1920 altered the scheme so that oil shale and certain other minerals would be subject to disposition only by leases. A savings clause in the latter Act, however, preserved the validity of claims existing at the date of its passage. In 1964, the Interior Department initiated a proceeding to invalidate the oil shale claims at issue. The hearings examiner, although noting that oil shale deposits had never been exploited profitably, nonetheless concluded that the claims represented "valuable" deposits on the basis of the 1927 departmental decision in Freeman v. Summers which disregarded the need to prove present profitability if the mineral was valuable for future use. The Interior Board of Land Appeals reversed, however, relying on the need to show present profitability and concluding that Freeman v. Summers had been wrongly decided. The federal district court reversed the Board and this decision was upheld by the Tenth Circuit Court of Appeals. Looking first to the legislative history of the 1920 Mineral Leasing Act, the Supreme Court concluded that "present profitability" was not a prerequisite to the patentability of oil shale claims. The Court found that after 1920, departmental practice, particularly Freeman v. Summers and subsequent actions, as well as congressional interpretations in 1930-1931 (investigation of oil shale patents) and 1956 (amending the mining laws) confirmed this standard.

In dissent, three Justices argue that the "present marketability" standard for oil shale claims was established by the 1920 Act and not disturbed by contemporaneous agency construction of the statute or subsequent congressional action.

Counsel for Petitioner
Lawrence G. Wallace, Louis F. Claiborne, Deputy Solicitors General; Wade H. McCree Jr., Solicitor General; Mark I. Levy, Ass't to the Solicitor General
Department of Justice, Washington DC 20530
(202) 633-2201

James W. Moorman, Ass't Attorney General; Dirk D. Snel, Robert L. Klarquist
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2701

Counsel for Respondents
Fowler Hamilton, Richard W. Hurlbert
Cleary, Gottlieb, Steen & Hamilton
One State St. Plaza, New York NY 10004
(212) 344-0600

Donald L. Morgan
Cleary, Gottlieb, Steen & Hamilton
1250 Connecticut Ave. NW, Washington DC 20036
(202) 828-3000

H. Michael Spence
Mosley, Wells & Spence
1120 Colorado State Bank Bldg., 1600 Broadway, Denver CO 80202
(303) 861-8136

Claron C. Spencer
Senior & Senior
10 Exchange Place, Salt Lake City UT 84111
(801) 532-1900

Norma L. Comstock
669 Washington St., Denver CO 80215
(303) 831-0672