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United States v. Kornec

United States District Court, D. Montana, Helena Division

February 21, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
GEORGE KORNEC, PHILIP NAPPO, INTERMOUNTAIN MINING AND REFINING, LLC, Defendant.

          OPINION & ORDER

          CHARLES C. LOVELL, SENIOR UNITED STATES DISTRICT JUDGE

         Before the Court are the parties' cross-motions for summary judgment. Having reviewed the briefs and the record and no party having requested oral argument, the Court is prepared to rule.

         BACKGROUND

         Plaintiff United States seeks a declaration that the Defendants in this case are illegally and unlawfully interfering with the property of the United States by their failure to comply with the applicable regulations governing the surface land of certain unpatented mining claims known at the White Hope, Sammy K, and Silver Dollar mining claims (collectively the White Hope mining claims). Absent a Plan of Operation that has been approved by the U.S. Forest Service, the United States further seeks an injunction requiring Defendants to remove an unauthorized structure, remove unauthorized explosives stored at the site, and to cease and desist interfering with public and Forest Service access to the unpatented mining claims on public land, including removing of signage and locks, and to cease threatening members of the public and government employees and contractors with criminal trespass. The United States also asks the Court to award it damages in the amount of its costs incurred for restoring or rehabilitating the surface property of the White Hope mining claims, should Defendants fail to cure their noncompliance by a date certain.

         In their Counterclaim, Defendants seek a declaratory judgment declaring that they have property rights in the White Hope, Sammy K and Silver Dollar mining claims under the Mining Laws of the United States, 30 U.S.C. § 2, the United States Constitution, and the Montana Constitution. Defendants seek an injunction to prevent the Forest Service from interfering with or damaging their property rights.

         FACTUAL STATEMENT

         In 1924, Walt O'Connor located the White Hope Group of unpatented mining claims. His brother-in-law, Sam Kornec, began working with him on the claims in 1928 and the claims were eventually passed to White Hope Mine, Inc. George Kornec was the Secretary Treasurer of White Hope Mine, Inc. (Doc. 59 at ¶ 1). White Hope Mine, Inc. abandoned its mining claims in 1986 by failing to submit the necessary paperwork in an envelope postmarked on or before December 30 of the previous year. (Doc. 59 at ¶¶ 4 - 6). White Hope Mine, Inc., did not appeal the abandonment decision, which was made by the Department of Interior, Bureau of Land Management (BLM), instead refiling on 36 of the claims. (Doc. 59 at ¶¶ 10- 11).

         White Hope Mine Inc. transferred its mining claims to Intermountain Mining & Refining, LLC (Intermountain) on October 8, 2010. (Doc. 59 at ¶ 3). As of August 31, 2015, Intermountain had ten active unpatented mining claims with BLM relevant to this suit: Sammy K, Silver Dollar and White Hope 1 through 8. (Doc. 59 at ¶ 12).

         At the end of February 2012, George Kornec, on behalf of Intermountain, submitted a proposed Plan of Operations for exploration of the White Home/Sammy K and Silver Dollar mining claims. (Doc. 59 at ¶ 60). District Ranger Kamps signed the Plan of Operations on March 12, 2012. (Doc. 59 at ¶ 62).

         The duration of the operation contemplated by the 2012 plan was less than two years, through 2014. (Admin. Rec. at 591). There was nothing included under the "Access" portion of the 2012 plan. (Admin. Rec. at 592 - 593). The project description in the 2012 plan states: "Cutting of bug killed trees around buildings to prevent damage. Will have Forest Service personnel review before we start this removal. Larger trees will be used for retimbering the mine, small trees and material from the prep for the timbers will be purchased with a firewood permit for the crews quarters and office. Sample materials will prossecced [sic] using a wave table as long as water is available." (Admin. Rec. at 594). The only structures described in the 2012 plan were office and crew quarters, compressor house, storage and sample concentrator building and a travel trailer. (Admin. Rec, at 594). The only explosives referenced in the 2012 plan were one box of dynamite, one sack of nitrate and two boxes of blasting caps. (Admin. Rec. at 596).

         In August of 2013, District Ranger Kamps received complaints that members of the public were being told that they could not trespass or hunt on George Kornec's claim. (Admin. Rec. at 1306). Forest Service personnel conducted a site visit on August 13, 2013, and noted that "no trespassing" signs were placed on a post behind the gate, which constituted an unauthorized activity. (Admin. Rec. at 1759). Phil Nappo and George Kornec were both present during the site visit and, after some discussion, agreed to remove the signs. (Admin. Rec. at 1761). In April of 2014, Forest Service personnel conducted two onsite inspections, both of which revealed unauthorized activities. (Doc. 59 at ¶¶ 69 - 70).

         On June 6, 2014, George Kornec submitted a new proposed Plan of Operations. (Doc. 59 at ¶ 71). The type of operation was described as "development and mining" (Admin. Rec. at 637) in addition to lode exploration, which was the type of operation listed on previous proposed plans. (See e.g. Admin. Rec. at 591). The duration of the operation contemplated by the 2014 proposed plan was a minimum of two years. (Admin. Rec. at 637). The 2014 proposed plan included extensive information in the "Access" portion, stating in part:

A Forest Road ends at a currently locked gate at the point where the road intersects the Operator's mining claims. An unnumbered road which is shown in the Helena National Forest's travel plan, but the legal status of which is uncertain, runs from the gate to the mine buildings shown on the map. . . . The road has in the past been gated and locked at a point before entering onto the Operator's claims to prevent vehicle access through this active mining operation, in response to past acts of vandalism and to safeguard the Operator's property interests and personnel safety, to protect the public and protect the Operator from potential liability for injuries to the public, given the use of mechanical equipment in the conduct of the mining operations... . With the road gate closed and locked, members of the public can pass through the Operator's claim on foot, and this has proved to be a workable compromise in terms of providing access through the property. Removing the lock and opening the gate would create an unreasonable burden to the Operator, and on its principal George Kornec, as the Operator exercises its statutory and regulatory rights as a claimant under applicable federal land and mining law, as implemented by the courts and federal agencies. To enhance security while still providing for foot access through the Operation, Operator will post signs instruct [sic] hikers to say [sic] on the road as it passes through the operation, in the following terms: "Active Mining Operation. Stay on Road." Existing road on the mining claims which branch off the Forest Road may be closed with a chain and posts and marked with a sign saying "Active Mining Operation Stay Out." The agency will mark the Forest Road at appropriate locations withing [sic] the mining claims with Forest Road number signs.

(Admin. Rec. at 639). The project description in the 2014 proposed plan states:

The project is an underground mining operation using blasting and mechanical means to mine ore and, as necessary for ore removal, barren rock. Ore will be removed from underground workings, stored on the surface, pending milling, concentration and/or transportation off site. At present the processing operations on site consist of crushing the ore and concentrating it by means of a wave table. Barren rock will not be removed from underground workings or will be replaced in underground workings and not stored on the surface. Dead trees on site will be cut and utilized from time to time for mine timbering. Small trees and material from the prep for the timbers will be used as firewood for the crews quarters and office.

(Admin. Rec. at 640). The "Structures" section of the 2014 proposed plan included a reference to a "12 x 20 single vehicle garage" along with office and crew quarters, compressor house, storage and sample concentrator building listed on the approved 2012 plan. (Admin. Rec. at 640). The "Hazardous Substances" section of the proposed 2014 plan included the following reference to explosives: "Explosives use on site is minimal as blasting is used only to supplement electric rock drills. Blasting powder will be stored in an ATF-approved magazine located as indicated on the attached map." (Admin. Rec. at 642).

         The Court has compared the Plan of Operations submitted in February and approved in March of 2012 (Admin. Rec. at 591 - 598) and the Plan of Operations proposed in June of 2014 (Admin. Rec. at 637 - 644). This comparison reveals that the operation contemplated by the 2014 plan is far more extensive than the operation contemplated by the 2012 plan. The plan approved in 2012, like plans proposed before it, primarily involved exploration with minimal site disturbance. The operation contemplated by the 2014 plan involved underground mining using blasting and mechanical means with ore to be stored on the surface and processed on-site.

         Amberdawn Kamps, who was then the District Ranger for the Lincoln Ranger District of the Helena National Forest, sent Mr. Kornec and Mr. Nappo a letter on July 9, 2014, explaining that her staff needed more than 30 days to review their proposed plan and warning that the proposed plan would likely require a new NEPA analysis. In her letter, District Ranger Kamps also referenced the unauthorized structure erected after the October 2013 inspection and noticed by her staff during their April 7, 2014, site visit. She warned Mr. Kornec and Mr. Nappo that "activities on your unpatented mining claims must remain in compliance with your existing POO and our regulations until the new POO is approved." (Admin. Rec. at 1001).

         On August 19, 2014, the Forest Service issued a Notice of Noncompliance to George Kornec and Phil Nappo and Intermountain. (Doc. 59 at ¶ 80). Intermountain and its members, George Kornec and Phil Nappo, (collectively Intermountain) appealed the first two elements of the Notice of Noncompliance: (1) the construction of the garage building without authorization under an approved plan of operation; and (2) the cutting of trees on the White Hope and Silver Dollar mining claims without authorization under an approved plan of operation. (Admin. Rec. at 1941). lntermountain requested oral presentation. (Admin. Rec. at 1946). The request was granted and the oral presentation was held on November 6, 2014. (Admin. Rec, at 2096).

         Although lntermountain appealed the decision that the firewood was cut without authorization, it agreed to pay for four cords of cut firewood. (Admin. Rec. at 2084). Rather than denying that the garage structure was constructed without authorization, lntermountain argued that the building was not "unreasonably causing injury, loss or damage to surface resources" and "should be allowed to remain on site until the Forest Service ...


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