Benchmark Resources Corp v. United States: Takings Claim of Mining Rights Not Ripe

Benchmark Resources Corp. v. United States: Takings Claim of Mining Rights Not Ripe

The plaintiffs filed suit in the U.S. Court of Federal Claims alleging a regulatory taking occurred when the Office of Surface Mining Reclamation and Enforcement (OSM) designated a portion of their property as unsuitable for surface mining. The United States sought to dismiss the claims for lack of subject matter jurisdiction arguing that the plaintiffs’ claims were not ripe because they failed to exhaust administrative remedies and arguing that one of the plaintiffs failed to file the complaint within the six-year statute of limitations. Alternatively, the United States moved for summary judgment on the ground that the plaintiffs lacked a compensable property interest.

The plaintiffs were required by statute to file a petition with the OSM before seeking judicial review of actions taken by the OSM. The plaintiffs argued that the OSM waived the permitting requirement by failing to respond to their letter requesting exhaustion of administrative remedies. The court rejected this argument because the OSM did reply and because the plaintiffs’ letter did not constitute a permit application. Next, the plaintiffs argued that filing a petition would have been futile; therefore, the futility exception to the requirement to exhaust administrative remedies should apply. As to the designated portion of the plaintiffs’ property, the court found that filing a petition for surface mining of that portion would have been futile given the OSM’s statement that no permit applications for surface mining within the designated areas would be considered.

Analysis of the ripeness requirement did not stop there, though. To consider whether the finality exception applied, the court concluded that it had to consider the property as a whole as well as alternative means of mining available to the designated portion. For instance, the plaintiffs could have applied for surface mining of their property outside of the designated portion or even for underground mining of the designated portion. Because the plaintiffs did not apply to the OSM for mining of property outside the designated portion or for mining modalities other than surface mining, the plaintiffs did not qualify for the futility exception. Consequently, the court dismissed the plaintiffs’ claims on ripeness grounds.

As to the statute of limitations issue, the court held that the claim of one of the plaintiffs was time-barred because the claim accrued more than six years before the filing of the complaint when the OSM gave notice to the plaintiff of its decision. In particular, the plaintiff failed to rebut the United States’ indirect evidence that the plaintiff received adequate notice, and so the court lacked jurisdiction over that plaintiff’s claim.

Though dismissing the claim on jurisdictional grounds, the court still evaluated the motion for summary judgment and concluded, in dictum, that the motion would have been denied. The court stated that the plaintiffs had shown that a material issue of fact existed regarding the plaintiffs’ right to royalties at the time of the alleged taking.

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