There’s a lot of backstory in Reoforce, Inc. v. United States, No. 15-5084 (Mar. 17, 2017), involving mining claims, federal patents, and public lands. An interesting read, we won’t go into the details.
But suffice it to say that Reoforce thought it had a pretty decent chance of obtaining a patent for federal land because there was a market for what Reoforce thought was a valuable mineral, pumicite. In the end, Reoforce didn’t get the patent because there wasn’t as much of a market for the pumicite as it believed, but under federal law, Reoforce still had a limited property right to mine the stuff in remote Kern County, California.
Eventually, the BLM entered into an agreement with the California Parks Department to turn that land into Red Rock Canyon State Park. Certain mining claims were allowed to continue, but others were temporarily prohibited. Reoforce’s were among the latter, and it sued in the Court of Federal Claims, alleging a Penn Central temporary taking.
(Very) long story short, the CFC junked the claim, holding that Reoforce didn’t have standing, and even if it did, it had not shown a Penn Central taking. The Federal Circuit affirmed in part, concluding that Reforce did have standing, but that there wasn’t a taking of its property. The court first held that the BLM’s agreement with California didn’t really prohibit Reoforce from mining pumicite on the land, as its mining claims were factually among those allowed to continue under the agreement.
Moreover, on the Penn Central issue, the Federal Circuit held that the BLM/California agreement had little economic impact on Reoforce, because it wasn’t really able at the time to engage in mining operations. Slip op. at 29 (“Reoforce in fact admits that it was at least four to eight years from commercial production in 1995.”). It had only sold 5 tons of the stuff to one company. No reasonable investment-backed expectations, either. Mining on federally-owned land is a highly regulated industry, and even though that alone is not dispositive, Reoforce entered the market well aware of the regulatory environment and even knowing about the BLM agreement with California to create the Park. On Penn Central’s final factor — character of the government action — the court concluded that Reoforce wasn’t singled out for special mistreatment, and the restrictions in the BLM/California agreement were broadly applied to all mining claimants within the new Red Rock Canyon Park.
Balancing these all up, the Federal Circuit agreed with the CFC that Reoforce did not suffer a Penn Central taking, and affirmed.
Reoforce, Inc. v. United States, No. 15-5084 Fed. Cir. Mar. 17, 2017)