Full opinion text
MEMORANDUM OPINION AND ORDER OUTLINE I. SUMMARIZATION OF HOLDINGS II. INTRODUCTION AND OVERVIEW A. The Litigation B. Mineral Leasing Act of 1920 III. PRIOR PROCEEDINGS IN THIS AND OTHER OIL SHALE LITIGATION A. The Period of the Mineral Leasing Act in 1920 to Department’s Change of Policy in 1964 1. Prior to 1920 2. Mineral Leasing Act of 1920 3. 1920’s and 1930’s 4. Supreme Court Opinions During the Period and Relevant Administrative Rulings: Wilbur v. U.S. Ex Rel. Krushnie (1930) and Ickes v. Virginia-Colorado Development Corp. (1935) 5. The Oil Shale Company (1935 Interior Decision) 6. Union Oil Company (1964 Interior Decision) B. The Period 1966-1970. Impact Cases: Oil Shale Corp. v. Udall, (D.Colo. 1966); Udall v, Tosco (10th Cir.1969); Hickel v. Oil Shale Corp. (Sup.Ct. 1970) C. The Period 1970-1980. Additional Court Cases and Administrative Proceedings. Oil Shale Corp. v. Morton, (D.Colo.1973); Oil Shale Corp. v. Morton, (10th Cir.1975); Bohme I (Interior Board Decision 1980) D. Further Litigation on the Issue of What Constitutes Valid Discovery (Supreme Court 1980) E. New Requirement for Valid Discovery Enunciated by Interior: Bohme II (1980 Interior Decision) F. Additional Administrative Decisions: United States v. Weber (1980 Interi- or Board Decision); United States v. Energy Resources Technology Land, et ah, (1983 Interior Board Decision) G. Additional Effort by Interior to Invalidate Patents: United States v. Eaton Shale Company (D.Colo.1977) IV. OIL SHALE BACKGROUND V. THE GEOLOGY OF THE GREEN RIVER FORMATION VI. THE OLD CONTEST PROCEEDINGS ARE NO LONGER A PROPER BASIS FOR DENIAL OF PATENTS SINCE THE INTERIOR DECISION IN THE OIL SHALE COMPANY CASE VII. THE DEPARTMENT’S INTERPRETATION, PRONOUNCEMENTS AND RULES FOLLOWING VIRGINIA-COLORADO HAVE THE FORCE OF LAW, THUS PREVENTING LATER ABROGATION BY INTERIOR IN 1964 A. Effect of Pronouncements, Construction of Statutes and Decisional Law and Promulgation of Rules by Interior B. Summary of Effect of Department of Interior Action from 1935-1961 In Granting Patents Where Claims Had Been Declared Null and Void C. Effect of Congressional Inquiry on Mining Issues: Principle of Application of Contemporaneous Construction by Interior D. The Department’s Actions in 1964 were Done in Violation of Claimants’ Entitlement to Due Process VIII. DISCOVERY ISSUES: ANALYSIS OF ANDRUS v. SHELL OIL CO. AND FREEMAN v. SUMMERS A. Discussion of Principal Cases and Effect of Congressional Inquiry IX. PERFORMANCE OF ANNUAL ASSESSMENT WORK: EFFECT OF NONPERFORMANCE A. Nature of Locator’s Interest in an Unpatented Mining Claim B. Requirements of Annual Assessment Work C. Burden of Proof as to Annual Work Performance D. Performance of Annual Work: Proof and Timeliness E. Significant BLM Regulation (1972) Dealing with Performance of Assessment Work F. United States v. Locke — The United States Supreme Court Interprets Hickel v. Oil Shale Corp. and the Concept of Substantial Compliance; Annual Work Requirement; Doctrine of Abandonment and Equitable Estoppel G. Summary — Substantial Compliance X. EFFECT OF INCOMPLETE NOTICE AND OTHER DEFECTS IN PRIOR CONTEST PROCEEDINGS XI. THE UNITED STATES IS ESTOPPED PROM ASSERTING INVALIDITY OF OIL SHALE CLAIMS BECAUSE OF NONPERFORMANCE OF ASSESSMENT WORK: THE APPLICATION OF LACHES A. Estoppel Considerations B. Relevant History of Present Litigation C. Legal Analysis of Equitable Estoppel D. Findings and Conclusions Regarding Estoppel E. Application of the Doctrine of Laches XII. APPLICABILITY OF THE TEN-ACRE RULE XIII. ORDER SHERMAN G. FINESILVER, Chief Judge: These cases are the latest phase in the extensive litigation concerning the validity of mining claims to oil shale deposits located in Garfield and Rio Blanco Counties in Western Colorado. Nearly 100 mining claims are involved covering 15,550 acres. The Department of the Interior (hereinafter “department”, “Interior”, or “government”) seeks to invalidate mining claims and refuses to issue mineral patents to the claim owners, principally asserting that the claims were declared void in departmental contest proceedings some forty years ago. Plaintiffs, who are mining claimants, contend that the department erred in denying patents on this basis, since the contest proceedings themselves were voided and vacated by the Secretary of the Interior in 1935. Plaintiffs assert in this action that the mining claims are valid. These cases were before us previously on issues involving discovery, performance of annual assessment work and other aspects of mining and administrative law. Oil Shale Corp. v. Morton, 370 F.Supp. 108 (D.Colo.1973). On cross motions for summary judgment, we ruled in favor of the plaintiffs on several independent grounds. The defendant appealed, to the Tenth Circuit Court of Appeals which, expressing the desire to avoid piecemeal litigation, declined to rule on the merits. Instead, the court remanded the entire matter to the district court after broadening the factual and legal questions and directing that they be resolved by the trial court. The trial court was also directed to further remand the case to the Department of Interior where necessary and appropriate to conduct evidentiary hearings on any other unadjudicated issues. Oil Shale Corp. v. Morton, Order of Remand, (10th Cir. Sept. 22, 1975), cert. denied, 426 U.S. 949, 96 S.Ct. 3169, 49 L.Ed.2d 1185 (1976). The administrative proceedings are now concluded. The cases are ready for determination on all issues and once again are before us on cross motions for summary judgment. I. SUMMARIZATION OF HOLDINGS This opinion addresses all matters raised in the pleadings and referred to by the appellate court on remand. Due to the length and complexity of the issues raised, the following summary of holdings is set forth. 1. Since passage of the Mineral Leasing Act of 1920, there can be no private ownership of oil shale lands except as provided in the Savings Clause of the Act. The mining claims in these proceedings (except where otherwise noted) were properly located prior to 1920 and have been maintained in compliance with the laws under which initiated. They are also valid under the Savings Clause of the Mineral Leasing Act of 1920. Therefore, no impediment exists to reducing the claims to patent and passing into the ownership of plaintiffs. 2. The Green River Formation, as the geological exposure along the Green River in Wyoming was known in the 1860’s, was publicly recognized along the Colorado River as early as 1874. It was known, for instance, that the oil shale beds were interspersed with non-oil-yielding material (e.g. sandstone), and that the richest oil shale beds were in the middle portion of the Formation. It has been judicially recognized that during the period that the oil shale placer mining claims in question were located (pri- or to enactment of the Mineral Leasing Act of 1920), “the geology of the Green River Formation was obviously well known, uncomplicated, and the beds were conspicuous.” Shell v. Andrus, 591 F.2d 597, 599 (10th Cir.1979), affirmed, 446 U.S. 657, 100 S.Ct. 1932, 64 L.Ed.2d 593 (1980). 3. Section 28 of Title 30 of the United States Code provides that the Secretary of Interior may void an oil shale claim for lack of substantial compliance with the statute requiring annual assessment work. The Supreme Court has ruled that such “substantial compliance” requires only a good faith effort on the part of the locator to develop the claim and facilitate the eventual extraction of the mineral from the earth, and actual and strict compliance is not necessary. Hickel v. Oil Shale Corp., 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193 (1970) (hereinafter cited as Tosco or Hickel). See also United States v. Locke, — U.S. -, -, 105 S.Ct. 1785, 1796, 85 L.Ed.2d 64 (1985). 4. Absent questions of abandonment (not present in claims here), nonperformance of assessment work per se does not automatically terminate valid oil shale claims that were in existence prior to the passage of the Mineral Leasing Act of 1920. 30 U.S.C. § 28. 5. Rules promulgated by Interior with respect to oil shale claims had the force and effect of law and after being in constant existence for an extensive period of time, could not be capriciously and retroactively repudiated by the department. 5 U.S.C. § 551(4). 5a. Legal precedents and a thirty year span of Interior decisions, rules, standards and directives dealing with the Savings Clause and annual assessment work indicate that the departure post-1961 by Interi- or from its pre-1961 policy triggered the start of an uncertain and unpredictable course by Interior. Because of contradictory positions taken by Interior since the 1960’s, the • validity of pre-1920 oil shale claims has been thrown into uncertainty. Furthermore, the recent inconsistent course taken by Interior has clouded mining law jurisprudence and placed it in a state of flux. 6. Public statements by Interior officials to the effect that nonperformance of assessment work would not adversely affect the validity of oil shale claims constitutes a legislative rule having the force and effect of law and continued to have vitality against later actions seeking to cancel claims on the basis of nonperformance. The requirements of this principle are met because the public statements were (a) within the designated powers of the department whose duty it was to administer public lands and applicable mining laws; (b) reasonable; (c) consistent and unequivocal; and (d) emanated from executives of Interi- or within their area of responsibility. 5 U.S.C. § 551(4). 7. Administrative interpretation of an act or law is to be given special weight when (a) the interpretive rule embodies a construction made contemporaneously with enactment of a statute or judicial decision; (b) a judicial decision necessitates administrative interpretation; or (c) the interpretive regulation or policy is of long standing. 5 U.S.C. § 551(4). These factors are present here where the department has maintained a lengthy practice of holding that nonperformance of annual assessment work will not affect the validity of mining claims. Interpretation and pronouncements by the Secretary of Interior and rules promulgated thereby following a Supreme Court decision holding that the government had no authority to cancel mining claims for failure to perform annual assessment work (as prescribed in a mining statute) became an integral part of mining law and in fact had force and effect of law to the same extent as though written into the applicable statute. 30 U.S.C. § 28. 8. Oil shale claim holders and their successors in interest were entitled to rely on uniform and announced policy of the Department of Interior removing nonperformance of annual assessment work as ground for challenge, invalidation or denial of a patent. 9. All contest decisions voiding for nonperformance of annual assessment work the oil shale claims involved in these proceedings and owned by plaintiffs, or their predecessors in interest, were unequivocally and permanently vacated by the Interior Department in The Shale Oil Company, 55 I.D. 287 (1935). 10. Since The Shale Oil Company, 55 I.D. 287 (1935) vacated decisions voiding claims on the basis of nonperformance of assessment work, the Interior Department pursued two consistent and unswerving national policies, namely (a) that pre-1935 contest proceedings had in fact been completely and finally vacated and were of no further effect to invalidate oil shale mining claims or prevent their being patented, and (b) that the performance of $100 of assessment work each year was irrelevant to perfecting or maintaining the validity of a pre-Mineral Leasing Act oil shale placer claims as against the United States (except insofar as necessary to satisfy the requirement that $500 of development work be performed prior to patent). These policies were evidenced by official public statements, agency regulations and departmental actions. The course of conduct on the part of the Interior Department was neither erroneous, unauthorized nor improper, but represented the implementation of the Interior Secretary’s and department’s understanding and construction of Wilbur v. Krushnic, 280 U.S. 306, 50 S.Ct. 103, 74 L.Ed. 445 (1930), and Ickes v. Virginia-Colorado Development Corp., 295 U.S. 639, 55 S.Ct. 888, 79 L.Ed. 1627 (1935). It was also consistent with Interior Department regulations on the effect of nonperformance of annual assessment work which were unchanged until September, 1972. 11. The Interior Department cannot retroactively reverse its official position regarding the ineffectiveness of the old contest decisions and the irrelevance of performing annual assessment work to maintain the validity of oil shale claims. The department cannot now deny patents on these claims for nonperformance of assessment work in years prior to 1972. 12. Assessment work contest decisions, here in question, are nullities and invalid from time of judgment because the contests by the department failed to specifically state a principal claim for relief, namely that there was a lack of substantial compliance with assessment work requirements by the claimants. Such an allegation was critical in affording fair notice to holders of mining claims. 13. Given the regulatory and mining law history of oil shale placer mining claims, the performance of the aggregate amount of $500 of development work by the claim owners constituted substantial compliance with assessment work requirements entitling claim holders to issuance of patents. The long-established doctrine that the United States had no interest in whether assessment work was performed, that being a matter solely to determine priorities under the mining laws between rival private claimants, changed with the Supreme Court’s 1970 decision in Hickel, 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193. In that ease, the Supreme Court construed the Savings Clause of the Mineral Leasing Act as having created some right in the United States with respect to the performance of work on claims for Leasing Act minerals and it introduced the doctrine of “substantial compliance” with the assessment work requirement of 30 U.S.C. § 28. In Hickel v. Oil Shale Corp., 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193 (1970) (“Hickel”), the Supreme Court set forth three principles: (a) annual assessment work had to be more than “token” but something less than full compliance; (b) annual work defaults were not the evidentiary equivalent of abandonment; and (c) compliance with the assessment work requirement should be “substantial”. The Court did not delineate what amount of work was sufficient to “maintain” a claim in circumstances other than those involved in Krushnic, supra and Virginia-Colorado, supra. Rather than overruling Krushnic and Virginia-Colorado, it construed them as instances in which the annual work had been performed sufficiently to “maintain” the claims. 400 U.S. at 52, 91 S.Ct. at 199. In two subsequent cases before the Interior Board of Land Appeals, the Board held that $100 worth of assessment work must be performed each and every year, up to the issuance of Final Certificate, and any default warrants the invalidation of a claim for lack of substantial compliance. United States v. Bohme, 48 I.B.L.A. 267, 87 I.D. 248 (1980) (Bohme); United States v. Weber Oil Co., 68 I.B.L.A. 37 (1982). This view is clearly inconsistent with the Hickel decision, for in Hickel the Court plainly held that something measurably less than full and literal compliance is sufficient. In both Krushnic and Virginia-Colorado, there had been an assessment work default of at least one year (several years in the latter case, including 1932-1935, while the case was being appealed), and yet Hickel construed those as cases in which there had been “substantial compliance” with the assessment work requirement. In short, Hickel necessarily establishes that assessment work need not have been performed in every single year. Both logic and authority support the conclusion that an oil shale claimant who has met the $500 patent work requirement should be held to have substantially complied with the assessment work requirement and thus satisfied the Hickel test for issuance of a patent. First under the mining statutes, assessment work and the $500 worth of work needed to obtain a patent were required for the same purposes, and the same work or the same kind of work satisfied both requirements. The purposes were to demonstrate the mineral character of the land, encourage mineral development and to evidence the good faith of the claimant in seeking mineral development rather than agricultural, timber or residential values. Second, the $500 patent work requirement represents a Congressional determination that when that much work has been done, all else being regular, the United States will convey fee simple title to the land embraced within the claim. In other words, that amount of work will satisfy the interest of the United States, as declared by Congress, as to the good faith efforts of the applicant to develop mineral lands for mineral purposes. Third, compliance with work requirements sufficient to divest the United States of all of its interest in the claim forever should logically be sufficient to successfully maintain a claim for subsequent challenge by the United States. The greatest interest that the United States has, or can grant, is outright ownership; it would be illogical to construe the law to mean that, although the United States recognized that sufficient mineral development work had been done to entitle a claim owner to a patent, the United States still could invalidate a claim if additional assessment work for a given year had not been accomplished at an earlier time. The proposition that satisfaction of the $500 patent work requirement will maintain a claim within the Mineral Leasing Act finds support in Hickel. The Court in Hickel referred to Krushnic and Virginia-Colorado as reflecting “fair treatment for claimants who have substantially completed” the assessment work requirement. 400 U.S. at 52, 91 S.Ct. at 199. This seems clearly to imply that there is a point at which the interest of the United States is satisfied. The Court also stressed that Congress had recognized that discovery alone would not “perfect” a claim within the meaning of the Savings Clause of the Mineral Leasing Act, since a “claimant would not be entitled to a patent unless he had performed $500 worth of work, and in a just sense his claim would not be protected.” Id. at 55, 91 S.Ct. at 200 (quoting Senator Walsh). The Court read this as vesting in the United States an interest in the performance of annual work. It suggests strongly that Congress thought that once $500 worth of work had been performed, a claim “in a just sense ... would ... be protected.” Id. To the same effect, the Court explained that Krushnic was a ease where “labor in the statutory amount had been performed, including the aggregate amount of $500.” Id. at 51, 91 S.Ct. at 198. Clearly, that “aggregate amount” had maintained the oil shale claim at issue in Krushnic. The most reasonable interpretation to be given to the Supreme Court intermingling in Hickel the annual assessment work concept and the requirement of $500 worth of work to qualify for patent is that the substantial compliance requirement is completed when at least $500 worth of work has been performed for a claim. Whatever interest the United States has in substantial compliance is satisfied once sufficient work has been performed to meet the statutory criterion for the passage of full title from the United States to a patent applicant. 14. Applying the substantial performance test approved by the Supreme Court and considering work done on claims in these proceedings, the amount of annual assessment work performed constitutes sufficient compliance with statutory and decisional requirements to entitle claim holders to patents. 15. From a totality of the evidence presented at the contest hearings, the Department of Interior failed to meet its burden of establishing a lack of substantial compliance with the annual assessment work requirement. Thus, its efforts to invalidate claims must fail. The government failed to meet its burden because it relied solely on the absence of recorded affidavits or other recorded evidence of performance of assessment work. There was no legal requirement to file or record affidavits of labor for assessment work prior to 1979 when the relevant provisions of the Federal Land Policy and Management Act of 1976 became effective. 16. The unequivocal holding of the Supreme Court in Andrus v. Shell Oil Co. 446 U.S. 657,100 S.Ct. 1932, 64 L.Ed.2d 593 (1980) restores the ruling of Freeman v. Summers, 521 L.D. 201 (1927) to full force. The following principles evolving from Freeman v. Summers, form an integral part of mining law and are applicable here. First, a finding of lean surface deposits on the Green River Formation warrants the geologic inference that the claim contains rich valuable deposits below the surface. Second, this principle holds true irrespective of whether the Green River Formation is considered as one homogenous mass or whether barren pads exist between the upper geologic formation and the lower formation. Third, a lean surface out-cropping or “thin sliver” on the surface of the claim in the Green River Formation constitutes a valid discovery because of the sound geologic inference that rich, workable oil shale deposits were present at lower depths in the same formation, although divided from the lean surface exposure by other strata containing lean oil shale beds and non-oil yielding sandstone. Fourth, a valid discovery is not dependent on a quantum or minimum oil yield from destructive distillation of the outcroppings. Fifth, oil shale is a valid mineral. Sixth, present profitability is not a requisite to valid discovery and patentability. 17. As articulated in Freeman v. Summers and re-enforced in Andrus v. Shell, a valid discovery of oil shale exists where the claim is known to be underlain by the rich oil shale beds of the Green River Formation and where a surface exposure or outcrop of marlstone (“shale”) appears which yields any oil on destructive distillation. This rule of discovery applied prior to February 25, 1920 and is determinative of the discovery issue in these proceedings. 18. For many years, the official policy of the department was that non-performance of annual assessment work was not a condition for issuing a patent. The department does not now have the express or inherent power to abrogate this 30 year-old policy and replace it with a new and totally conflicting position which so drastically affects the rights of so many claim holders. 19. Upon a valid discovery being made and proper location, a mining claim is real property and, although legal title to the land remains in United States, the mining claimant enjoys a valid, equitable, possessory title, subject to taxation, transferrable by deed or devise and otherwise possessing all incidents of real property. This title cannot be unreasonably or unfairly canceled at the unbridled discretion of the Interior Department. Mineral Lands Leasing Act, 30 U.S.C. § 181 et seq., § 21 et seq. and § 28. While an administrative agency may reverse itself and change its policies where interests in property are involved, it must do so without being arbitrary or unreasonable. 20. It is recognized that estoppel against the federal government is an extraordinary remedy to be applied with greatest care and circumspection. The United States is estopped from asserting the invalidity of oil shale claims based on prior contest adjudications of failure to perform assessment work where (a) the Secretary of Interior, in response to Supreme Court decisions, had specifically overruled all departmental decisions purporting to invalidate oil shale claims for failure to perform assessment work, and (b) had dismissed contest proceedings pending against oil shale claims and systematically issued patents for 27 years to other oil shale claim owners whose claims had purportedly been invalidated for failure to perform assessment work prior to the Supreme Court decision. Mineral Lands Leasing Act, 30 U.S.C. § 28 and § 193. 21. The government may be estopped by the conduct of its agents acting within the scope of their authority. However, the government is immune from estoppel when the conduct of its agents is erroneous, illegal or unauthorized. In this case, the agents responsible for the department’s 30 year-old policy on oil shale claims were acting within the scope of their authority. Consequently, the government is now estopped from asserting the invalidity of mining claims based on old contest proceedings where the invalidation took place over 30 years earlier and where, since that time, the government (a) continuously stated those proceedings were vacated and voided; (b) issued patents to other oil shale claim holders whose claims had purportedly been invalidated for the same reason; and (c) pursued a continuous course of conduct, clearly indicating that it did not recognize the validity of the contest proceedings. In addition, the result is also prompted by a need to lay to rest perpetual piecemeal title challenges of mining claims to oil shale lands that constitute clouds on claims. 22. The principles of discovery embodied in Freeman v. Summers, 52 L.D. 201 (1927) and consistently applied to oil shale claims by the Interior Department until 1961 were neither erroneous, unauthorized nor improper. They involved the formulation, promulgation and maintenance of interpretative and legislative rules that are an integral part of mining law and have the force and effect of law. These rules could not be capriciously and retroactively repudiated by the Interior Department in 1961, and cannot now be retroactively reversed. 23. The Interior Department, acting through its respective Secretaries, cannot retroactively reverse its official pre-1961 discovery requirements for issuance of patents to oil shale claims and now deny patents to these claims on the basis of different, more restrictive standards of discovery. Prior to 1972 the department took no action to cancel claims on the grounds of failure to substantially comply with assessment work requirements. The Interior Department is now barred by the equitable doctrine of laches from asserting the effectiveness of the old assessment work contest decisions on the grounds of failure to substantially comply with assessment work requirements. 24. Under mining law in existence at the time of passage of the 1920 Mineral Leasing Act, failure to perform annual assessment work did not constitute an immediate forfeiture of the claim; nor did it render an immediate cancellation of the claim. 25. The present profile of mining law as it relates to oil shale through its historical background and as interpreted in Hickel v. Oil Shale Corp., supra, requires substantial and not rigid literal adherence to the statutory annual assessment work requirement; further, that to maintain the validity and vitality of the claim, annual assessment work does not have to be performed in every year. 26. As applied to the unique facts in these proceedings, the valid discovery of a mining claim constitutes a condition precedent to a grant by the United States of an interest in real property which bestows upon the locator the right to immediate and exclusive possession. 30 U.S.C. § 26 provides in part that “[t]he locators of all mining locations ... on the public domain ... so long as they comply with the laws of the United States ... shall have the exclusive rights of possession and enjoyment...”. Therefore, this possessory interest in real property is subject to the above-noted condition precedent which involves such questions as discovery of minerals and fulfillment of requisites regarding location procedures for claims. No possessory title passes to the locators until the condition precedent has been performed. Once a valid location has been made and possessory title has passed to the claimant by operation of law, the only way it may become subject to divestiture or forfeiture is through the occurrence of a condition subsequent, the occurrence of which may extinguish the claim. But while the claimant has the burden of proving the occurrence of the condition precedent which must be met before a valid mining claim exists, the party seeking forfeiture or invalidation after the possessory interest has vested has the burden of proving the occurrence of the condition subsequent, that is, the failure to perform the annual assessment work. A charge of non-performance of annual assessment.work by the department must be proved by “clear and convincing” evidence. The department has the burden of producing evidence and the ultimate burden of proving a default in performance. From a totality of the evidence presented at the contest hearings, the Department of Interior failed to meet its burden of establishing a lack of substantial compliance with the annual assessment work requirement. Thus, its efforts to invalidate claims fail. By way of explanation, the government failed to meet its burden of establishing nonperformance of annual work because it relied solely on the absence of recorded affidavits or other recorded evidence of performance of assessment work. There was no legal requirement to file or record affidavits of labor for assessment work prior to 1979 when the relevant provisions of the Federal Land Policy and Management Act of 1976 became effective. 27. It is the general rule and recognized principle in mining law that failure to file an affidavit does not work a forfeiture of the claim or constitute evidence that the work in question was not in fact performed. Federal law in existence during the contest period does not require that an affidavit of annual assessment work be filed or recorded in addition to the performance of annual work. 28. To constitute a valid contest of a mining claim the government must file its allegations of nonperformance of annual work while a default is present and prior to resumption of work by the claimant or locator. Such a requirement existed prior to the holding in Hickel v. Oil Shale Corp., supra, to wit: that a relocation must take place by a relocator during a period of default and before commencement of resumption of work. In the case where a claimant (a) fails to perform assessment work for one or more years and he resumes annual work prior to contest by the government and (b) substantially prosecutes such work until he has performed one or more years work, his claim is protected and insulated from cancellation. The effect is as though a failure had never occurred. 29. Service of notice of contest proceedings in mining claims were commenced during the early 1930’s against virtually all mining claims by the use of registered mail. For the most part, few claim owners or contestees in those contests had an address of record with the department. It is uneontroverted that notice was not sent to the post office nearest the lands in dispute (or to any post office). Since Circular No. — of The Interior Department did not provide for registered mail service where there was no address of record with the department, notice was not appropriately given and no proper service was effectuated. The decisions in the old contests that purported to invalidate interests in the contested claims were a nullity and invalid since they were rendered in the absence of personal jurisdiction and notice as provided by law. ' 30. Each co-owner of an association placer mining claim is an indispensable party to any contest or proceedings to cancel the claim. Therefore failure to properly effectuate service of process and joinder of all co-owners marks a deficiency in any action seeking to invalidate the claim for nonperformance of assessment work. Such proceedings are a nullity when all co-owners of a claim are not joined in the proceedings. All co-owners were not joined and served with notice and process in the cancellation proceedings arising from assessment work contests against mining claims involved in Civil Action No. 8680. The nonjoinder of indispensable parties under the assessment work contests renders the proceeding ineffective and a nullity as to all co-owners of the claims. Contest decisions where nonjoinder exists cannot be used as a basis for invalidating the oil shale claims in question or rejecting patent applications arising therefrom. 31. The Department of Interior in 1916 adopted specific criteria to determine the quantity and quality of oil shale necessary to render land mineral in character. (See Ex. G-98). These criteria addressed such matters as the vertical thickness of oil shale beds, average oil yield content and the depth of the beds below the surface of the land. All of the ten-acre tracts-at issue in these proceedings were classified as mineral in character in 1916. This classification carries over to the lands involved in this action. The 1916 classification and subsequent application in the processing of patent applications was an integral part of the department’s consistent application of the principles of the mining law to the unique geology of the Green River Formation for the 45 year period from 1916 until 1961 when the department determined to deny the patentability of all oil shale mining claims. This change does not find support in law. Thus, by standards existing at the time of passage of the 1920 Mining Act, the claims covering the lands in question were classified as mineral. The Savings Clause of the Mineral Leasing Act (section 37) militates against a change in the classification that would impose a different and more stringent standard. 32. Written statements made by mineral examiners during the department’s campaign in the 1920’s and early 1930’s to contest claims do not establish failure of substantial compliance with the assessment work requirement. 33. Without more, affidavits from locators and claim owners obtained by department personnel years ago do not establish failure of substantial compliance with the assessment work requirement. 34. Another principal element of the department’s case on the assessment work issue has been the purported absence of physical evidence on the earth indicating assessment work had been done. It is pertinent to note, however, that conditions in the oil shale region preclude reliance upon the results of current physical examination of the earth to determine what work was done in the past. 35. Assessment work excavations and road building performed on or for the benefit of the claims in these contests are subject to being eroded, sloughed in and covered by the growth of vegetation. 36. Mining claim holders have fulfilled necessary requirements for patents or have otherwise established entitlement thereto. Therefore, no valid bases are present to preclude issuance of patents. II. INTRODUCTION AND OVERVIEW A. The Litigation In this consolidated proceeding plaintiffs (claimants) seek judicial review and relief with respect to administrative proceedings in the Department of Interior concerning the validity of a number of unpatented oil shale placer mining claims located on the Green River Formation in Colorado. The subject claims were located under the provisions of the Mining Act of 1872 and prior to the enactment of the Mineral Leasing Act of 1920, see 30 U.S.C. § 21, et seq. and 30 U.S.C. § 181. The proceedings came before the court on cross motions for summary judgment. Plaintiffs Umpleby, Napier and Brown, in Civil Action Nos. 8685, 8691 and 9202 seek mandatory orders compelling the department to issue patents on their oil shale claims. Plaintiff Tosco, in Civil Action No. 8680, requests a declaratory judgment regarding the validity of its claims. The three cases which are now administratively final specifically involve patent applications for the Carbon and Elizabeth claims (Civil Action No. 8685), Compass claims (Civil Action No. 8691), and Oyler claims (Civil Action No. 9202). The noted claims were rejected in Union Oil Co. of California, 71 I.D. 169 (1964) {“Union Oil /”). These claims also include three for which no patent application was pending in 1962 (No. 8680, the Atlas, Bute, and Camp Bird claims). In the interest of brevity, the recitation of specific facts respecting plaintiffs’ claims are adopted by reference as they appear in the Appendix to the Supreme Court’s opinion in Hickel v. Oil Shale Corporation, 400 U.S. 48, 59, 91 S.Ct. 196, 202, 27 L.Ed.2d 193 (1970) (hereinafter cited as Hickel or Tosco) and a prior district court opinion in these cases, Oil Shale Corp. v. Udall, 261 F.Supp. 954 (D.Colo.1966). By way of background, in 1962 the Department of Interior rejected the patent applications of plaintiffs Umpleby, Napier and Brown. The basis for the rejection was the existence of decisions entered in contest proceedings initiated against the claims in the 1930’s by the department. The claims were primarily declared void for failure to perform annual assessment work. This action by Interior, acting through its District Manager, reflected a new policy of the department and was a complete departure from the policy of Interior announced in 1935 in The Shale Oil Company, 55 I.D. 287 (1935). The prior policy had been rigidly followed for 30 years. The Manager’s decision was affirmed in Union Oil Co., 71 I.D. 169 (1964). In 1964, the plaintiffs filed these suits in the district court and since that time the litigation has traveled an irregular path in all levels of the district and appellate federal courts. In addition extensive administrative proceedings have taken place. B. Mineral Leasing Act of 1920 These proceedings involve an interpretation of the Mineral Leasing Act of 1920 which expressly prevents location of new oil shale claims after the date of its enactment, February 25,1920. The Act provides that oil shale and other fossil fuels could only be extracted on a lease basis, and the land containing such minerals could not pass into private ownership based on new claims being filed and reduced to patent. Significantly, the Act contains a “Savings Clause”, found in Section 37. This clause provides that claims located prior to the enactment of the Act could be reduced to patent and pass into private ownership if “thereafter maintained in compliance with the law under which initiated.” 30 U.S.C. § 193. It should be noted that the Savings Clause has been the source of varied interpretations and has prompted considerable litigation. Supreme Court opinions discussed here as well as administrative, district court and court of appeals’ decisions are illustrative of the disputes and uncertainties that have prevailed over the interpretation of the Savings Clause and whether specific claims, like the instant ones which predate the 1920 law, were maintained in compliance with the law. Another area of controversy under the Savings Clause relates to the necessity of performing annual assessment work to maintain oil shale claims and the extent that statutes and decisional law recognize exceptions to rigid compliance. It is clear from a reading of legal precedents and a span of thirty years of Interior decisions, rules, standards and directives regarding the Savings Clause of the Mining Act that the 1960’s departure by Interior from that longstanding policy signaled the beginning of an uncertain and unpredictable course of conduct by Interior. Because of varied positions taken by Interior since the 1960’s, the validity of pre-1920 oil shale claims has been thrown into uncertainty. Furthermore, the recent inconsistent course taken by Interior has clouded mining law jurisprudence and placed it in a state of flux. This ambiguous state of mining law prominently appears in the literature. III. PRIOR PROCEEDINGS IN THIS AND OTHER OIL SHALE LITIGATION The chronological framework of this litigation is briefly detailed in this section. An in-depth analysis of the pivotal legal and administrative cases follows later. A. The Period of the Mineral Leasing Act in 1920 to the Department’s Change of Policy in 1964 1. Prior to 1920: Oil shale claims could be located in the same manner as mining claims of other minerals. Unpatented mining claims were recognized as a unique estate in land, entitling the claimant to exclusive possession of his claim for mining purposes. This estate could be enlarged to a fee simple interest if the claim was patented. 2. Mineral Leasing Act of 1920: The Act removed oil shale lands from subsequent private appropriation under the mining laws and provided instead for a policy of leasing of oil shale lands from the government. Under the leasing system, private persons cannot- acquire ownership of mineral lands but merely have the right to extract minerals. They pay royalties to the government for leasing privileges. Section 37 of the Act (the Savings Clause), 30 U.S.C. § 193 provides a mechanism for preservation of previously located claims, if maintained, under the applicable mining laws. 3. 1920’s and 1930’s: All the claims here involved, and other like claims, were declared wholly or partially invalid by the department on the grounds that they had not been properly maintained within the meaning of Sections 28 and 37 of the Mineral Leasing Act. The principal basis of the invalidation was that annual assessment work had not been performed on the claims. The rationale of the department in denying validity of claims and refusing patents succinctly stated is this: that the Mineral Leasing Act placed the government in the position of an adverse or rival claim locator. As an adverse locator and claimant the government could raise numerous objections to issuance of a patent including nonperformance of annual assessment work. It was previously thought that these objections were unavailable to the government and could be raised solely by private non-government adverse or rival locators. During this period, however, the government took the view that a claim automatically terminated and inured to the government’s benefit whenever there was a lapse in assessment work. The government’s position was generally upheld in administrative proceedings in the Department of Interior. 4. Supreme Court Opinions During the Period and Relevant Administrative Rulings: Wilbur v. U.S. Ex. Rel. Krushnic (1930) and Ickes v. Virginia-Colorado Development Corp. (1935). These two Supreme Court decisions held that the department’s purported invalidations of oil shale claims for nonperformance of annual assessment work were improper. The first decision, Wilbur v. U.S. Ex Rel. Krushnic, 280 U.S. 306, 50 S.Ct. 103, 74 L.Ed. 445 (1930), held that the department could not invalidate oil shale claims for nonperformance of assessment work if the work was resumed before contest proceedings were initiated. The second decision, Ickes v. Virginia-Colorado Development Corp., 295 U.S. 639, 55 S.Ct. 888, 79 L.Ed. 1627 (1935), went even further holding that the Secretary of Interior did not have jurisdiction to invalidate claims for nonperformance of assessment work since failure to do assessment work inured only to the benefit of rival claimants, not the government. The case also held that prior to the enactment of the Mineral Leasing Act the government acquired no rights against a claimant by reason of failure of performance of annual assessment work and that the department’s challenge in such a context “went beyond the authority conferred by law.” Id. at 647, 55 S.Ct. at 890. 5. The Shale Oil Company (1935 Interior Decision): Following the decision of the Supreme Court in Virginia-Colorado, supra, the department took the position that its prior adverse decisions against oil shale mining claims for nonperformance of assessment work had been ineffective to invalidate the claims. The Secretary of Interior’s ruling was clearly stated in The Shale Oil Company, 55 I.D. 287 (1935), which expressly overruled, vacated and reversed departmental decisions in conflict with Virginia-Colorado. Thus, in an administrative adjudication, The Shale Oil Company ruling recognized that proceedings seeking to invalidate mining claims (oil shale) went beyond the authority conferred by law. Significantly, the decision stated that “[t]he above-mentioned decision in the cases of Francis D. Weaver and Federal Oil Shale Company and other departmental decisions in conflict with this decision are hereby overruled.” 55 I.D. at 290. Thereafter, until the early 1960’s patents were regularly and consistently issued on claims that had previously been declared invalid in the late 1920’s and early 1930’s in default proceedings for failure to perform assessment work. Significantly, patents were issued for a number of oil shale claims where the claims had been previously invalidated. In the period 1935-1961, Interior issued patents on 106 different applications for total of 768 oil shale claims in Colorado. Five hundred and seven of these claims, covered by seventy-one of the various applications, had been declared null and void prior to Shale Oil for nonperformance of assessment work. 6. Union Oil Company (196) Interior Decision): The Interior Department suddenly departed from its established position, resurrected the old contest proceedings that were previously invalidated, reversed and overruled, and asserted that the prior administrative decisions (contest proceedings in the 1920's and 1930’s) had never been set aside and were still effective to invalidate oil shale claims. In part, in this litigation we are reviewing the denial of patents prompted by the sudden change of policy by Interior. In 1964, the department reversed its position as to the effect of the old assessment work decisions in Union Oil Co. of California, 71 I.D. 169 (1964) (Union Oil), Supplemental Decision, 72 I.D. 313 (1965). The decision held that although the old cancellation decisions were erroneous, nevertheless, they had become administratively final and Union Oil by its terms invalidated certain mining claims. On district court appéal, that holding was reversed in Oil Shale Corp. v. Udall, 261 F.Supp. 954 (D.Colo.1966). The Udall case was a forerunner to this litigation. B. The Period 1966-1970. Impact Cases: Oil Shale Corp. v. Udall, (D.Colo.1966); Udall v. Tosco (10th Cir.1969); Hickel v. Oil Shale Corp. (Sup.Ct.1970) As noted, in the early 1930’s, the department, on behalf of the government, contested a great number of oil shale claims on the ground that annual assessment work had not been performed during certain years and declared claims void because of this noncompliance with 30 U.S.C. § 28. In Oil Shale Corp. v. Udall, 261 F.Supp. 954 (D.Colo.1966), plaintiffs (oil shale claimants) argued that these voidances of their claims in the 1930’s were themselves invalid. They claimed there had been no subject matter jurisdiction for the department to invalidate the claims for failure of assessment work. It was also contended that under established mining law only rival locators could take over mining claims on which assessment work had not been performed. However, nonperformance of annual work did not provide a basis for the voidance of these claims at the instance of the government. Hence, they argued that nonperformance of assessment work was not a requirement for the maintenance of a claim within the meaning of § 37 of the Leasing Act, and the department had no jurisdiction for voiding the plaintiffs’ claims on that basis. The district court upheld the position of the plaintiffs stating that the old contest proceedings voiding the claims were invalid, and the department had exceeded its jurisdiction in voiding the claims for assessment work failure. Oil Shale Corp. v. Udall, 261 F.Supp. 954 (D.Colo.1966). The opinion, in part, was based on a series of Supreme Court opinions including Wilbur v. Krushnic, supra, and Ickes v. Virginia-Colorado Development Corp., supra. These cases were interpreted by the district court to hold that the Secretary did not have jurisdiction to invalidate claims for nonperformance of assessment work. On appeal, the trial court’s ruling was affirmed. Udall v. Oil Shale Corporation, 406 F.2d 759 (10th Cir.1969) (Seth, J.). Appeal to the Supreme Court followed. In Hickel v. Oil Shale Corp., 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193 (1970) (Hickel), the Supreme Court reversed the holding of the district and circuit courts. Justices Harlan, White and Marshall did not take part in the decision. Chief Justice Burger and Justice Stewart dissented. The Supreme Court plurality opinion by Justice Douglas held: that Krushnic and Virginia-Colorado had been erroneously applied by the lower courts; that since further location of mining claims was precluded by the Mineral Leasing Act, failure to perform assessment work could not be the basis of any relocation by a rival locator; therefore the United States was the beneficiary of any claims on which assessment work had not been performed. Id. at 57, 91 S.Ct. at 201. The Supreme Court concluded that the department had subject matter jurisdiction to void claims if the assessment work performed on them did not amount to “substantial compliance” with 30 U.S.C. § 28. Id. The holding of the lower courts was reversed on an extremely limited ground. Significantly, the Court did not overrule Krushnic and Virginia-Colorado, (which fact was the basis for the dissent of Chief Justice Burger and Justice Stewart), but left a “narrow ambit” occupied by those cases in which a claimant who had substantially complied with the assessment work requirement could shelter and preserve his claim. Id. at 58, 91 S.Ct. at 201. The Supreme Court went on to hold in Hickel, that Krushnic and Virginia-Colorado were cases that merely reflected “a judicial attitude of fair treatment for claimants who have substantially completed the assessment work required by 30 U.S.C. § 28”. Id. at 52, 91 S.Ct. at 199. It also held that other pronouncements in those cases were dicta. The court agreed that every default in assessment work should not result in forfeiture and that the department had subject matter jurisdiction over contests involving the assessment work issue. With respect to the effect of Shale Oil Co. (1935) and the departmental policy of patenting claims that had been invalidated under the old decisions, the Court stated: [tjhese contentions present questions not decided below. Therefore, on remand all issues relevant to the current validity of those contest proceedings will be open, including the availability of judicial review at this time. To the extent that they are found void, not controlling, or subject to review, all issues relevant to the invalidity of the claims will be open, including inadequate assessment work, abandonment, fraud, and the like. Likewise, all issues concerning the time, amount, and nature of the assessment work will be open so that the claimants will have an opportunity to bring their claims within the narrow ambit of Krushnic and Virginia-Colorado, as we have construed and limited these opinions. 400 U.S. 58, 91 S.Ct. 196, 27 L.Ed.2d 193. Thus, even though confronted with numerous factual and legal issues, the sole issue decided was whether the Department of Interior has jurisdiction to inquire into the performance of annual assessment work. The most recent interpretation of Hickel is found in United States v. Locke, — U.S. -, -, 105 S.Ct. 1785, 1796, 85 L.Ed.2d 64 (1985). In Locke, the Court rejected the argument that a filing deadline could be substantially complied with by filing documents one day late. The Court concluded that Hickel’s “discussion of substantial compliance [was] inapposite to the statutory scheme at issue [in Locke ]” (43 U.S.C. § 1744). Id. at -, 105 S.Ct. at 1796. The assessment work requirement in Hickel was simply an indicia of a claimant’s specific intent to retain a claim, according to the Court. Thus, full compliance with the assessment work requirement would establish conclusively an intent by the claimant to keep the claim. However, less than full compliance would subject the mine owner to a determination of whether he intended to keep his claim. It would not result in an automatic loss of the claim as occurred in Locke. Id. In contrast, the Court in Locke determined that the intent of the mining claimant was simply not relevant if the necessary filing was not made. Title 43 U.S.C. § 1744 expressly provides that a claim would be lost if the party failed to file, in a timely manner, the documents required by federal law. No such provision is included in the assessment statute under consideration in Hickel. Id. Significantly, the majority in Locke recognized that substantial compliance, as set forth in Hickel, was not a rigid concept. Rather, “less than full compliance would subject the mine owner to a case-by-case determination of whether he nonetheless intended to keep his claim.” Id. Considering Hickel, Krushnic and Virginia-Colorado in-harmony, the current state of the law regarding the jurisdictional bases of departmental voidances of oil shale claims is this: the Secretary may void claims for lack of annual assessment work required by Section § 28, but he cannot void claims for only a literal or insubstantial non-compliance with the requirement. The claims are protected from invalidation where substantial compliance with the annual assessment work requirement exists “so that the ‘possessory title’ of the claimant, granted by 30 U.S.C. § 26 will not be disturbed on flimsy or insubstantial grounds.” Hickel, supra, 400 U.S. at 57, 91 S.Ct. at 201. C. The period 1970-1980. Additional court cases and Administrative proceedings. Oil Shale Corp. v. Morton, (D.Colo.1973); Oil Shale Corp. v. Morton, (10th Cir.1975); Bohme I (Interior Board Decision 1980). As a result of the Supreme Court ruling in Hickel, the case was remanded to the district court where it was designated as Oil Shale Corp. v. Morton. Following briefing of issues tried in 1966 but not previously decided the proceeding culminated in an opinion found at 370 F.Supp. 108 (D.Colo.1973). The district court ruled as follows: (1) the assessment work decisions relied on in Union Oil 71 I.D. 169 (1964) had been rescinded and vacated in The Shale Oil Company decision 55 I.D. 287 (1935); (2) the longstanding and widely publicized position of the department after 1935 to the effect that the old assessment work decisions were nullities and that performance of assessment work was not necessary to maintain the validity of an oil shale claim as against the United States constituted a rule of law which the department could not retroactively repudiate; (3) the department was estopped from asserting the validity of the old assessment work decisions; and (4) the original Union Oil decisions should be set aside for procedural deficiencies. On appeal the Court of Appeals vacated the district court holdings and, while expressing no view as to its merits, remanded the case to the district court so that all legal and factual issues could be ascertained before further appeal and that where necessary other issues be remanded to the Department of Interior for factual hearings at administrative proceedings. Oil Shale Corp. v. Morton, Order of Remand (10th Cir. Sept. 22, 1975), cert. denied, 426 U.S. 949, 96 S.Ct. 3169, 49 L.Ed.2d 1185 (1976). Bohme I (1980) Interior Board Decision Following the Court of Appeals remand, the department initiated contests before an administrative law judge on assessment work issues. Discovery issues were held in abeyance pending the Supreme Court’s decision on the point. The Board also held that in assessment work contests, the department’s burden of proof on assessment work was only to make out a prima facie case, the ultimate burden of establishing performance of annual work shifted to contestees (claimants). On appeal, the Interior Board of Land Appeals in United States v. Bohme, 48 I.B.L.A. 267, 87 I.D. 248 (1980) (Bohme I), completely rejected the ruling of the administrative law judge that with respect to assessment work (a) only a reasonably persistent effort to perform annual assessment work is required under the applicable statute; (b) rigid compliance is not required; and (c) occasional failures of annual work are not fatal to validity of the claim. We note that the interpretation of Hickel v. Oil Shale Corp., 400 U.S. 48, 91 S.Ct. 196, 27 L.Ed.2d 193 (1970) by the Interior Board of Land Appeals is totally at odds with the holding of the administrative law judge on the same legal point based on the same set of facts. Later in 1980, the Supreme Court resolved the matter of discovery in Andrus v. Shell Oil Co., 446 U.S. 657, 100 S.Ct. 1932, 64 L.Ed.2d 593 (1980) {“Shell ”). Bohme I and Bohme II, discussed below, form part of the basis for cross motions for summary judgment pending before us in this litigation. D. Further Litigation on the Issue of What Constitutes Valid Discovery (Supreme Court 1980) Another facet to this litigation is the case of Andrus v. Shell Oil Co., 446 U.S. 657, 100 S.Ct. 1932, 64 L.Ed.2d 593 (1980). That case is analyzed in Article VIII but because it interacts with this case brief comment here is necessary. In 1964, the department also reversed its policy with respect to the important case of Freeman v. Summers, 52 L.D. 201 (1927) and instituted contests against certain claims. The basis of the contests was the allegation that there was no discovery on the claims because oil shale was not presently profitable to mine and that lean exposures of oil shale on the surface of the claims would not suffice to infer the existence of underlying rich deposits. After a long administrative hearing, the Chief Hearing Examiner of the department held that he was bound by Freeman. The Interior Board of Land Appeals upheld the department’s position overruling Freeman. United States v. Winegar, 81 I.D. 370 (1974). On appeal, the U.S. District Court for the District of Colorado reversed the Board and upheld Freeman on several grounds and also held that the department, in any event, was estopped from taking the position that oil shale was not a valuable mineral. Shell Oil Co. v. Kleppe, 426 F.Supp. 894 (D.Colo.1977). The Tenth Circuit Court of Appeals affirmed without deciding the estoppel question. Shell Oil Co. v. Andrus, 591 F.2d 597 (10th Cir.1979) (Seth, J.). The Supreme Court affirmed. Andrus v. Shell Oil Co., 446 U.S. 657, 100 S.Ct. 1932, 64 L.Ed.2d 593 (1980). The Supreme Court interpreted Freeman as having two distinct issues: (1) whether a finding of lean surface deposits warranted the geological inference that the claim contained rich “valuable” deposits below; and (2) whether present profitability was a prerequisite to patent-ability. Both issues were decided in favor of the oil shale claimant: the geological inference was deemed sound and the fact that there was “no possible doubt that [oil shale] constitutes an enormously valuable resource for future use by the American people” was ruled sufficient proof of “value”. 446 U.S. at 667, 100 S.Ct. at 1938. The Court concluded “that the original position of the Department of Interior, enunciated in the 1920 instructions issued by the Department of Interior and in Freeman v. Summers, supra, is the correct view of the Mineral Leasing Act as it applies to the patentability of those claims.” 446 U.S. at 673. The Supreme Court rejected the rationale and holding found in United States v. Winegar, 81 I.D. 370 (1974) and fully endorsed the opinions of the appellate and district courts. E. New Requirement for Valid Discovery Enunciated by Interior: Bohme II (1980) Interior Decision Following Shell, the Interior Board of Land Appe