JOHN HERZOG, ET AL.

191 IBLA 26 Decided August 30, 2017

United States Department of the Interior Office of Hearings and Appeals

Interior Board of Land Appeals 801 N. Quincy St., Suite 300

Arlington, VA 22203

703-235-3750 703-235-8349 (fax)

JOHN ETAL.

Decided August 30, 2017

Appeal from decisions of the Arizona State Office, Bureau of Land Management, declaring placer mining claims forfeited for failure to pay annual maintenance fees or submit valid small miner waiver certifications. AMC 432957 through AMC 432988.

Affirmed.

1. Mining Rental or Claim Maintenance Fees; Mining Rental or Claim Maintenance Small Miner Exemption

A mining claimant must either timely pay a maintenance fee or file a qualifying Waiver Certification to retain a mining claim. To qualify for a waiver of the requirement to pay claim maintenance fees, a mining claimant and all related parties must hold no more than 10 mining claims or sites. I f a mining claimant, co-claimant, or related party submits Waiver Certifications for more than 10 claims or sites and fails to pay the maintenance fees due for the claims, the claims are forfeited and the claimant may be subject to criminal penalties.

2. Mining Claims: Rental or Claim Maintenance Mining Claims: Rental or Claim Maintenance Fees: Small Miner Exemption

A related party is a person who controls, is controlled by, or is under common control with the claimant. "Control" is defined as actual control, legal control, or the power to exercise control, through or by common directors, officers, stockholders, a voting trust, or a holding company or investment company, or any other

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means. A person who has the power to exercise control by any means may be considered a related party when BLM finds evidence that i t determines to be adequate to support such a finding.

Mining Claims: Rental or Claim Maintenance Mining Claims: Rental or Claim Maintenance Fees: Small Miner Exemption

Where the totality of the evidence demonstrates that a claimant exercises actual control over 32 mining claims, as evidenced in location of the claims in a checkerboard pattern such that none of the 4 claimants has contiguous claims, and the claims are managed as a single, interconnected group, we wi l l affirm BLM's conclusion that the 4 claimants are related parties.

Mining Claims: Rental or Claim Maintenance Mining Claims: Rental or Claim Maintenance Fees: Small Miner Exemption

I f a mining claimant fails to file the annual maintenance fee or a valid Waiver Certification by September 1, the mining claims are forfeited by operation of law. In a case where timely Waiver Certifications are filed, but those claiming the waiver do not qualify for the waiver, there is no curable defect. BLM is therefore not required to provide claimants with an opportunity to submit revised Waiver Certifications after the September 1 deadline has passed.

Appeals: Jurisdiction

The Board does not adjudicate whether constitutional rights have been violated or afford relief from such violations. Appeal to this Board satisfies due process requirements.

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APPEARANCES: John Herzog, John Evans Woods, Charles 0. Campbell, and Les Antczak, pro John L. Gaudio, Office of the Field Solicitor, U.S. Department of the Interior, Phoenix, Arizona, for the Bureau of Land Management.

OPINION BY DEPUTY CHIEF ADMINISTRATIVE JUDGE ROBERTS

John Herzog, John Evans Woods, Charles Campbell, and Les Antczak (Appellants) appeal four separate but identical decisions of the Arizona State Office, Bureau of Land Management (BLM). In those decisions, BLM declared Appellants' mining claims (AMC 432957 through AMC 432988) forfeited because Appellants did not pay maintenance fees or file valid small miner maintenance fee waiver certifications (Waiver Certifications) by the deadline of September 1, 2015.

Under the Department's regulations, to qualify for a small miner waiver, a party and all related parties must hold no more than 10 mining claims. I f a party submits a Waiver Certification in lieu of paying maintenance fees, and the party does not qualify for the small miner waiver, the party forfeits his or her claims. In this appeal, each of four mining claimants filed a Waiver Certification. However, while each Appellant held only eight claims individually, they were related parties, and therefore none of them qualified for a small miner waiver. BLM properly declared their mining claims forfeited.

BACKGROUND

On November 10, 2015, BLM issued four separate decisions to Appellants, each declaring eight placer mining claims forfeited because Appellants did not pay maintenance fees or file valid Waiver Certifications by the deadline of September 1, While Waiver Certifications were filed by the deadline,2

BLM determined that all 32 mining claims were owned by related parties.3

Because the owners of the mining claims and related parties held more than

BLM Decisions (Nov. 10, 2015) at 1. Id. Id. at 4.

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10 mining claims on September 1, 2015, BLM stated that none of the owners qualified for a small miner waiver.4 The Bureau accordingly declared the claims forfeited and void.5

Herzog, upon receiving the decision regarding his claims, placed phone calls and sent e-mails to BLM on behalf of all Appellants challenging the

He also submitted a "legal demand" to BLM via e-mail, on behalf of all Appellants and concerning all claims, that the Bureau withdraw its decisions.7 In response, BLM advised appellant Herzog of the right to appeal the decisions to this Board.8

Appellants thereafter appealed the decisions to this Board and filed a consolidated statement of reasons (SOR) in support of their appeals. BLM filed an Answer, to which Appellants filed a Consolidated Reply. We granted leave to the American Mining Rights Association to file an amicus curiae brief in support of Appellants.

ANALYSIS

A mining claimant must either timely pay a maintenance fee or file a Waiver Certification to retain a mining claim.9 To qualify for a small miner waiver, a mining claimant and all related parties must hold no more than 10 mining claims or sites.10 I f a mining claimant, co-claimant, or related party submits Waiver Certifications for more than 10 claims or sites and fails to pay the maintenance fees due for the claims, the claims are forfeited and the claimant may be subject to criminal penalties.11

Id. Id. BLM Answer (Apr. 7, 2016) at Exhibits (Exs.) A and B. Id. at Ex. B. Id. at Ex. A. See 30 § 28f(a), (d) (2012); 43 C.F.R. §§ 3834.11(a)(2), 3835.1, and

3835.10. 30 U.S.C. § 28f(d)(l) (2012). Gary 185 IBLA 54, 56 (2014) (citing 43 C.F.R. § 3835.92(d));

see also 185 IBLA 324, 325 (2015) (citing 43 C.F.R. § 3835.92); Nielson Mining Group, 185 IBLA 394, 396-97 (2015); Christopher L . Mulliken, 180 IBLA 60, 75-76 (2010).

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The issue in this appeal is whether BLM was correct in determining that Appellants are related parties. I f they are, then BLM properly found them ineligible for small miner waivers and declared their mining claims forfeited. I f they are not, they were eligible for small miner waivers, in which case BLM should have accepted their Waiver Certifications and not declared their claims forfeited.

A. The Totality of the Evidence Supports BLM's Conclusion that the Claimants Are Related Parties

[2] We begin with the applicable statutory and regulatory definitions. A related party is a "person who controls, is controlled by, or is under common control with the claimant."12 "Control" is defined as "actual control, legal control, or the power to exercise control, through or by common directors, officers, stockholders, a voting trust, or a holding company or Investment Company, or any other means."13 In considering the issue of control, we make our determination based on the "totality of the evidence."14 We have explained that in determining whether control exists, we examine whether one claimant controls the actions of another, such as in a business arrangement,15 and whether one claimant directs or manages the operations of mining claims held by another.16 As we have noted, the "regulations clearly provide flexibility to determine what constitutes control in any particular circumstance."17

[3] In the present appeal, we find that the "totality of the evidence" supports BLM's conclusion that the Appellants are related parties.18 In its decisions, BLM reviewed the factual evidence and concluded that Herzog managed the 32 mining claims as single, interconnected group.

BLM was persuaded that the four claimants are related parties based upon the following facts. A l l claims were filed with La Paz County at the same time on June 11, A l l claims were filed with BLM in person at the

30 U.S.C. § 28f(d)(2) (2012); 43 C.F.R. § 3830.5. Id. Ridge Top Mining Co., 175 IBLA 198, 205-06 (2008). See W. Douglas Sellers, 160 IBLA 377, 385 (2004). See Ridge Top Mining Co., IBLA at 205. Gary 185 IBLA at 56. Ridge Top Mining Co., IBLA at 205-06. Decisions at unpaginated (unp.) 3.

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Arizona State Office on June 12, The location notices for the claims of Antczak, Campbell, and Woods did not list their addresses, but rather the address TCF Enterprises, Inc., John Herzog, at Herzog's mailing address.21 The initial payments for all 32 claims were paid at the same time via one check from TCF Enterprises, Inc. The receipts for the initial payments listed Herzog's address as the address of each of the Appellants.22 Antczak, Campbell, and Woods each executed a power of attorney (POA) granting TCF Enterprises, and its principal, Herzog, the authority to locate placer mining claims for the purpose of forming a placer association.23 The claims cover sec. 5, T. 3 N, R.18 W, Gila and Salt River Meridian, in its entirety. No two claims owned by one Appellant are contiguous. Rather, they are completely checker-boarded within the section.24 Notices of Intent to Hold Mining Claims for all 32 claims were received together on September 9, The Notices for Antczak, Campbell, and Woods all provided Herzog's address. The processing fees for the Notices were paid by a single money order from Herzog, who requested that BLM return the filed copies to him at his address.26

Herzog's control, as demonstrated by the totality of the evidence, supports BLM's conclusion that appellants are related parties. As we have stated, "[u]nder the regulations, a person who has the power to exercise control by any means may be considered a related party when BLM finds evidence that i t determines to be adequate to support such a finding."27 Here, the evidence cited by BLM in its decisions is adequate to support such a finding and demonstrates that appellant Herzog exercises actual control over the other Appellants' claims.28 This is demonstrated by the POAs granted to Herzog by the other Appellants, which provided him control over the location of each of Appellants' claims. The resulting establishment of Appellants' claims as a single, interconnected unit further demonstrates this control. As BLM found, Herzog

Id. Id. Id. Id. Id. Id. Id. Ridge Top Mining Co. at 205 (emphasis added). Gary Kratochvil, 185 IBLA at 57 ("co-ownership of 4 other claims does not

demonstrate that they are in a business relationship, or that they otherwise exercise control over each other or each other's claims").

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located all 32 claims not just in the same general area, as in Ridge Top but completely intermingled them such that none of the Appellants possesses two contiguous claims. Their claims are checker-boarded to the maximum extent possible, providing substantial evidence that they were established as a single, interconnected unit. The checker-boarding of the claims also means, as BLM points out,30 that development of the majority of the claims would necessitate cooperation with other Appellants, further evincing the control exerted by all Appellants over one another's claims. Checker-boarding the claims would make management of eight claims by each of the four claimants impracticable, and is evidence that all 32 claims are under the management and control of Herzog.

The parties cite a number of our prior decisions in arguing for and against BLM's decision that appellants in this case are related parties. Appellants first mention our decision in W. Douglas Sellers, stating that "as in Sellers, in the instant case BLM cannot show any relationship establishing 'control.'"31 In Sellers we reversed a BLM decision that a claimant who held fewer than 10 claims in his individual capacity, but who was a director of a company that held more than 10 claims, was not eligible for a small miner waiver.32 We did so because the only evidence of control provided by BLM was that Sellers was "one of five directors who would vote on matters pertaining to the company . . .

We noted that although the board of directors, as an entity, controlled the company, there was nothing in the record to suggest that Sellers could control the company's actions on his own.34 We accordingly held that in the absence of any evidence other than Sellers' position as one of five directors of the company, we could not reasonably conclude that he possessed actual control, legal control, or the power to exercise control of the company and the claims at issue that were owned by the company.35 The facts in Sellers are distinguishable from those in the present case, where the totality of the evidence shows that Herzog exercised control over the claims and the Appellants.

Ridge Top Mining Co., 175 IBLA at 205. Answer at 5-6. SOR at 12 (citing W. Douglas Sellers, 160 IBLA at 385). W. Douglas Sellers, 160 IBLA at 386. Id. at 385 Id. Id.

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Appellants also mention our decision in a case in which we similarly found that BLM had erroneously determined that two claimants were related parties because put, there [was] no evidence" that either claimant had any control over each other's claims, apart from the four on which they were co-claimants.37 The Board stated that "their co-ownership of four other claims does not demonstrate that they are in a business relationship, or that they otherwise exercise control over each other or each other's claims."38

likewise distinguishable from the case before us.

In the present case, the POAs signed by Antczak, Campbell, and Woods each state that they "hereby make, constitute, and appoint, TCF Enterprises, Inc. and its principal John C. Herzog, as [their] true and lawful attorney in fact . . . [t]o locate placer mining claims in the State of Arizona for the purpose of forming a placer association" and to record and maintain the claims.39 Herzog filed the location notices in a single submission for the purpose of forming a placer association. The 32 claims were located as a single group, and with no two claims owned by a single claimant being located contiguously. The totality of the evidence supports BLM's conclusion that Herzog was "acting in much more than a ministerial capacity for unrelated individual mining claimants," and that "Appellants intended that all 32 mining claims in this case would be under common control and managed as a single interconnected group."40

We find that the facts of this case are more similar to those in Ridge Top Mining where we determined that the "totality of the evidence" supported BLM's conclusion that the appellants were related parties.41 Specifically, we noted that "the close relationship of the individuals and the closely-held nature of the corporation, as well as the fact that the claims and site at issue are all located in the same general area, [could not] be ignored."42 We further noted that "[u]nder the regulations, a person who has the power to exercise control by any may be considered a related party when BLM finds evidence that i t determines to be adequate to support such a finding."43 As discussed above, the

SOR at 13 (citing Gary Rratochvil, 185 IBLA at 54 and 57). Gary Rratochvil, 185 IBLA at 57. Id. Administrative Record, tab 5. Answer at 4. Ridge Top Mining Co., 175 IBLA at 205-06. Id. at 205. Id. (emphasis added).

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totality of the evidence here, including the checker-boarded locations of the claims forming a single, interconnected group and Herzog's management of the claims as such, supports BLM's conclusion that Herzog exerted control over the claims at issue.

In challenging BLM's decisions, Appellants also raise issues regarding the effect that the decisions have on the ability of agents to act on behalf of mining claimants concerning mining claims.44 Appellants correctly note that agents may submit waiver forms and locate claims under the regulations.45 We are not questioning Herzog's authority to locate eight mining claims on behalf of Antczak, Campbell, and Woods. Nor do we question his authority to file Waiver Certifications on their behalf, provided they otherwise qualify as small miners for purposes of the Waiver. But the facts of this case demonstrate that Herzog plays a much more significant role than that of a mere agent. Based on the facts noted, we agree with BLM that Herzog exerts control over the claims at issue, and that he and the other Appellants are related parties under the law rather than mere parties to an agent-client relationship.

B. The Filing of a Small Miner Waiver by One Who Does Not Qualify for a Small Miner Waiver is Not a Curable Defect

argue that BLM should have afforded them the opportunity to correct defects in their Waiver Certifications rather than declaring the claims

In support of this argument, they point to a provision of the Mining Law providing that BLM shall afford a mining claimant 60 days to cure a defect in a small miner waiver application after notifying the claimant of the defect.47

That provision of the Mining Law states, in part, that "[i]f a [Waiver Certification] is determined to be defective for any reason, the claimant shall have a period of 60 days after receipt of written notification of the defect or defects by the Bureau of Land Management (A) cure such defect or defects, or (B) pay the $ 100 claim maintenance fee due for such period."48

[4] We have held that this provision does not operate to provide appellants a chance to cure a Waiver Certification in cases, such as this one,

SOR at 9 (citing 43 C.F.R. §§ 3830.3(d) and 3835.10(a)). at 22-25. Id. (citing 30 U.S.C. 28(f) (d)(3)). 30 U.S.C. 28(f)(d)(3).

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where appellants did not qualify for a small miner waiver.49 We explained that the "opportunity to cure a defective filing afforded by 30 U.S.C. § 28f(d)(3) . . . is only applicable in cases where a party qualified for the waiver and timely filed a Waiver Certification, but made a clerical error . . . In contrast, in a case such as this one, where "timely Waiver Certifications were filed, but those claiming the waiver did not qualify," that defect was not curable "because the requirement that a claimant and all related parties hold not more than 10 mining claims . . . is a statutory requirement . . . Because qualifying as a small miner is a statutory requirement for those seeking such a waiver, Appellants' timely filing of Waiver Certification forms did not satisfy the statutory requirement that they file valid Waiver Certifications or pay maintenance fees for their claims by the deadline.52 BLM was therefore correct in declaring the claims forfeited and declining to provide Appellants an opportunity to submit revised Waiver Certifications or pay the maintenance fees after the deadline.

C. The Board Does Not Adjudicate Allegations of Constitutional Violations

[5] Last, Appellants argue that BLM's decisions violated the United States Constitution in two respects: first, that the manner in which i t reached and issued its decisions violated substantive and due process protections, and second, that it did not afford Appellants procedural due process because the Bureau has a financial interest in the decisions.53 We wil l not consider Appellants' allegation that BLM declared their claims forfeited considering substantive due process issues in violation of the United States Constitution because "it is well established that the Board does not adjudicate constitutional questions of law," including questions concerning substantive due process and the taking of private property arising under the Fifth Amendment.54

Ridge Top Mining Co., 175 IBLA at 206-07. Id. at 206. Id. (citing 30 U.S.C. § Id. (citing 43 C.F.R. § 3830.93(a) ("If there is a defect in your compliance with

a statutory requirement, the defect is incurable.")); see also Nielson Mining Group, 185 IBLA at 396-97; Christopher L . Mulliken, 180 IBLA at 75-76.

SOR at 15-22 and 30-35. John Ready, 190 IBLA 41, 43-44 (2017) (citing Maralex Resources, Inc.,

186 IBLA 34, 50 (2015)).

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Further, Appellants were procedural due process through the adjudication of their appeal by this Board.55

We conclude that BLM correctly determined that the four claimants are related parties under 43 C.F.R. § 3830.5, and that BLM properly declared their 32 mining claims forfeited for failure to file valid Waiver Certifications or pay maintenance fees for the claims by September 1, 2015.

Therefore, pursuant to the authority delegated to the Board of Land Appeals by the Secretary of the Interior,56 we affirm BLM's decisions.

CONCLUSION

I concur:

Christopher L . Mulliken, 180 IBLA at 74. 43 C.F.R. § 4.1.

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