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Kerr-McGee Corp. v. Hodel

ELR Citation: 16 ELR 20662
Nos. Nos. 83-0322, 80-1085, 630 F. Supp. 621/(D.D.C., 02/06/1986)

The court holds that the Secretary of the Interior's denial of preference rights leases for phosphate mining in Soceola National Forest in Florida, was proper where the cost of reclaiming mined lands would be prohibitively high. The court initially reviews the laws regulating phosphate mining leases on federal lands and observes that most of the Osceola National Forest consists of acquired lands rather than public domain lands and are regulated under the Mineral Lands Leasing Act for Acquired Lands (MLLAAL) in addition to the Mineral Lands Leasing Act (MLLA). The court holds that the MLLAAL vests in the Secretary the authority to issue or deny a mineral lease, and in the Secretary of Agriculture the authority to impose conditions on the lease. It then holds that plaintiffs here have not complied with the conditions imposed by the Forest Service. The Forest Service conditions included the reestablishment of plant and aquatic communities as they approximately existed prior to the mining. Plaintiffs proposed to reclaim the lands by use of the sand-clay mix process, a process that an interdepartmental team of experts had determined was unlikely to ensure a successful reclamation. The court next holds that the Secretary's decision to deny the leases was supported by substantial evidence. To ensure their entitlement to a phosphate lease, the applicant must show that it has discovered a "valuable deposit of phosphates" pursuant to MLLA §9(b). The Secretary's decision was based on the definition of a valuable deposit as one in which a prudent person would be justified in expending time and money, and where the revenues from the sale of the mineral would exceed all costs. The court rules that the Secretary may consider the cost of compliance with lease terms in determining whether an applicant has satisfied §9(b). Plaintiffs are required, under the valuable deposit definition, to show that the costs of reclamation would not be prohibitively high due to technical infeasibility. The court also holds that the Secretary is not bound by pre-1970 practices of the Department of the Interior in issuing phosphate leases, nor is he bound by earlier determinations by the Geological Survey that one plaintiff had discovered valuable deposits.

Counsel for Plaintiffs
Peter J. Nickles, William P. Skinner
Covington & Burling
1201 Pennsylvania Ave. NW, P.O. Box 7566, Washington DC 20044
(202) 662-6000

Elmo R. Hoffman
Parker, Johnson, Owen & McGuire
108 E. Hillcrest St., P.O. Box 2867, Orlando FL 32801
(305) 425-4910

William C. Cramer
Cramer, Haber & Lukis
Suite 300, 818 Connecticut Ave. NW, Washington DC 20006
(202) 554-1100

Counsel for Defendant
Wells C. Burgress, Gerald Fish
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-3769

Counsel for Defendant Intervenors
Michael Bean, James T.B. Tripp
Environmental Defense Fund, Inc.
1616 P St. NW, Washington DC 20036
(202) 387-3500