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April 17, 1964
Procedural Requirements of Departmental Regulations, the Administrative Procedure Act, and the Fifth Amendment
As stated above, the appellants have joined in a motion to vacate the Land Manager's decisions and/or to remand the case for full hearing on issues of fact and law. The motion is based, in part, on the assertion that the Manager was required to refer the matter to a hearing examiner for a full hearing and that his failure to do so is tantamount to an attempt to invalidate the claims without a hearing of any kind. However, hearings were in fact held in the contest proceedings involving many of the claims included in this appeal and the then-owners of those claims participated in the hearings and preserved their right of appeal. The reapplication for a patent by a claimant after his claim has been contested successfully or after his patent application has been denied does not require the Department to grant a new hearing. (Gabbs Exploration Co., 67 I.D. 160 (1960). The assertion that a de novo hearing is now required is without merit where such cancellations were made in default proceedings in the manner prescribed by applicable departmental regulations, the owners having been properly served with notice of contest and provided an opportunity to challenge the cancellation of the claim. This same contention was raised and rejected by the Department in Gabbs Exploration Co., supra. The latter case was upheld on review by the United States District Court for the District of Columbia and affirmed on appeal to the United States Court of Appeals for the District of Columbia Circuit. The opinion by the court contains the following pertinent discussion concerning the adequacy of notice:
10, 1932)), and the final Departmental decision was not challenged by subsequent court action. The Oyler Nos. 1-4 claims form the basis for an application filed by Pacific Oil Company which was rejected by the Manager in February 1962, and which is included among the rejections on appeal herein.
The following claims were canceled in contest proceedings in which the owners of the claims participated:
Carbon Nos. 1-4 (Colo. No. 030979), canceled in Contest No. 12029
Elizabeth Nos. 1, 2 and 4-12 (Colo. No. 030979), canceled in Contest No. 12029
Southeast (Colo. No. 028751), canceled in Contest No. 12972
Northwest (Colo. No. 028751), canceled in Contest No. 12972
Oyler 1-4 (Colo. No. 12327), canceled in Contest No. 12039
Jack Pot Nos. 4-11 (Colo. No. 045092), canceled in Contest No. 13038
The applicable Rules of Practice provided as follows:
No person who has failed to answer the contest affidavit, or having answered, has failed to appeal at the hearing, shall be allowed to appeal from the final action or decision of the Manager *** 43 C.F.R., sec. 221.49, 19 F.R. 9056 (1954). Circular No. 460, entitled "Manner of Proceeding in Contests Initiated Upon a Report by a Representative of the General Land Office," is reproduced in full and attached hereto as Appendix B. Sections 4, 5 and 6 thereof set forth the form and manner of issuing the notice of contest to the claimant in this class of cases. This Circular was effective at all times relevant here.
• Gabbs Exploration Co. v. Udall, 315 F. 2d 37 (1963).
The owners of the *** claims were not denied due process in the original contests, for it is clear that they had adequate notice of the contest against them, they were offered a hearing, and they were informed of the cancellation of their claims. In view of what we have previously stated, there was no jurisdictional defect in the 1929 contests.*** 315 F. 2d at 39-40.
As recognized in the Gabbs Exploration Co. decision, supra, the essential elements of due process are notice and an opportunity to defend against the charges asserted. (Simon v. Craft, 182 U.S. 427 (1901); Cameron v. United States, 252 U.S. 450 (1920)). The failure of the owners of these claims to participate in the contest proceedings of which they had adequate notice and in which they had an opportunity to defend the validity of the claims at a hearing does not entitle such owners or their successors in interest to another opportunity for a hearing on the same question. The fact that an opportunity for a hearing was forfeited by the default of the owners of these claims does not furnish the basis for a claim that due process of law has been denied. (See American Surety Co. v. Baldwin, 287 U.S. 156, 169 (1932); Opp Cotton Mills Inc. v. Administrator of the Wage and Hour Division of the Department of Labor, 312 U.S. 126, 152 (1941)). Appellants' assertion that failure to order a new hearing deprived them of due process is, therefore, rejected insofar as notice of contest is found to have been adequate in the original contest proceedings.
In those cases in which the requirements of notice were definitely met prior to the cancellation of the claim, the then owners of the claim having participated in the contest proceedings, the order affirming the decision of the Land Manager will, for reasons set out herein, become effective immediately.
In the remaining cases, the appellants will be granted 60 days within which to submit materials relating solely to their contention that their claims were canceled without compliance with the requirements of notice. Thereupon, a determination regarding the sufficiency of notice will be made. If necessary, hearings will be ordered to resolve any factual questions which remain unresolved on the record. If no such materials are received from these appellants within the 60-day period, they will be considered to have conceded that the Departmental records accurately reflect the facts regarding the issuance of notice in the early contest proceedings and the determination will be made on the basis of the present record.
Effect of the Shale Oil Company Case
Upon the authority of the decision of the Supreme Court in Ickes v. Virginia-Colorado Development Corporation, supra, the decision of the Commissioner declaring oil shale placer claims forfeited in
April 17, 1964
The Shale Oil Company, supra, was reversed by the Department.10 It was stated in the Department's decision that:
The above-mentioned decision of the Department in the Virginia-Colorado Development Corporation case and the instructions of June 17, 1930, are hereby recalled and vacated. The above-mentioned decisions in the cases of Francis D. Weaver and Federal Oil Shale Company and other Departmental decisions in conflict with this decision are hereby overruled. The Commissioner's decision is reversed and the record in the case remanded with instructions to reinstate the application and entry in toto and dispose of the same unaffected by the default in the performance of assessment labor, and if all else is found regular, to clear list the application for patent. (Italics supplied.) 55 I.D. at 290.
The appellants contend that, by overruling all departmental decisions in conflict with The Shale Oil Company, supra, the Secretary exercised his supervisory authority to nullify all conflicting decisions of the Land Commissioner including those involved in the present appeal. In other words, it is argued that while the earlier decisions purported to cancel appellants' claims, The Shale Oil Company, supra, reinstated or corrected them in accordance with the decision of the Supreme Court in Ickes v. Virginia-Colorado Development Corporation. We do not agree. This is not what the decision either said or accomplished.
The language in The Shale Oil Company case distinguishes those cases actually before the Secretary from those which were not. As to the former, the Commissioner's decisions canceling the claims were expressly recalled and vacated. The latter were merely "overruled." "1
The Department of the Interior has often "overruled" former holdings without in any way nullifying the action taken thereunder.12 To nullify action previously taken by giving retroactive effect to a change in administrative practice or legal ruling does violence to the settled principle of finality of administrative action. In this regard, the following statement set forth in Franco Western Oil Company,
10 The Shale Oil Company, 55 I.D. 287 (1935). The Shale Oil Company decision had been held up to await the Ickes v. Virginia-Colorado Development Corporation decision then pending in the Supreme Court.
"See e.g., Francis D. Weaver, 53 I.D. 175 (1930), and The Federal Shale Oil Com pany, 53 I.D. 213 (1930), both of which were cited in The Shale Oil Company and merely "overruled." They have been treated as simply "overruled" ever since. See the cumulative Table of Modified and Overruled Cases in the frontispiece of Interior Department Decisions.
12 See Instructions, 35 L.D. 549 (1907). And see Franco Western Oil Company, 65 I.D. 427 (1958); Anna R. Paul, A-24350 (1947) (upheld by the District Court for the District of Columbia in Anna R. Paul v. Marion Clauson, Civil No. 3309-48 (unreported)); Solicitor's Op., 58 I.D. 319 (1943); Timothy Sullivan, Guardian of Juanita Elsenpeter, 46 L.D. 110 (1917), overruling Heirs of Susan A. Davis, 40 L.D. 573 (1912); Bertha M. Birkland, 45 L.D. 104 (1916); Lillie E. Stirling, 39 L.D. 346 (1910). The rule of prospective operation of administrative rulings has been followed by other Governmental agencies. See generally, Davis, Administrative Law Treatise, secs. 5.09 and 17.07.
65 I.D. 427 (1958), adequately summarizes the Department's longstanding practice:
** the rule applied by the Department on those occasions when it has specifically considered the question as to whether, because of a change in the interpretation of a statute, its holding should have retroactive effect, has been to deny such effect to its decisions. 65 I.D. at 429.
In Safarik v. Udall, 304 F. 2d 944 (D.C. Cir. 1962), the Court of Appeals for the District of Columbia Circuit upheld the long-standing practice of the Department of the Interior to give prospective application to its decisions. The Court therein stated:
the Secretary of the Interior ✦ ✦✦ should have and does have authority, when he promulgates an interpretive regulation, or hands down a decision placing a different construction on a statute or regulation, from that laid down in an earlier decision or regulation, to give prospective operation only to the later regulation or decision. (Italics supplied.) 304 F. 2d at 950.
It is therefore concluded that the departmental decision in The Shale Oil Company, supra, merely recalled and vacated the earlier decision in that particular case "*** thereby depriving the earlier opinion of all authority as as precedent." 18 It is further concluded that the decision in The Shale Oil Company, supra, had no effect on the cases presently before us in this appeal.
Application of the Doctrine of Finality of Administrative Action
The contention made by appellants that the doctrine of res judicata has no application to decisions of administrative agencies is erroneous.1 The contention that the doctrine of res judicata (or its administrative-law counterpart-the doctrine of finality of administrative action) has not been recognized and applied before the Department of the Interior is similarly unsupportable. Since 1883 15 the Department has consistently held that the doctrine of res judicata is applicable to departmental decisions.16 In 1886, Secretary Lamar stated, in Rancho San Rafael De La Zanja, 4 L.D. 482, that:
* Unless the principle of res judicata is recognized administrative action may become involved in chaos; the labors of the Department would become too cumbrous to admit of their intelligent discharge; uncertainty would cloud every inchoate title and, in many instances, vested rights would be endangered. 4 L.D. at 482.
18 Black, Law Dictionary (4th ed. 1951).
14 See generally, 50 C.J.S., Judgments-Public Officers and Boards, sec. 606; 2 Davis, Administrative Law Treatise, sec. 18.10 and authority cited therein.
15 See Meredith v. The Atlantic and Pacific Railroad Company, 2 L.D. 499 (1883). 16 See, e.g., Edward Christman, 62 I.D. 127 (1955); H. W. Rowley, 58 I.D. 550 (1943); Henshaw v. Ellmaker, 56 I.D. 241 (1937); Charles Perkins, 50 L.D. 172 (1923); Lillie M. Kelly, 49 L.D. 659 (1923); Fosdick v. Shackleford, 47 L.D. 558 (1920); Lacey v. Grondorf, 38 L.D. 553 (1910); Gammon v. Weaver, 26 L.D. 383 (1898); Mee v. Hughart, 23 L.D. 455 (1896); Mary C. Stephenson, 11 L.D. 232 (1890); A. T. Lamphere, 8 L.D. 134 (1889); Higgins v. Wells, 3 L.D. 21 (1884).
April 17, 1964
In addition to the numerous departmental decisions recognizing the doctrine of administrative action, it has been implemented in the rules of practice before the Department.1
The doctrine of res judicata, as applied in administrative decisions by this Department, is designed to achieve orderliness in the administration of the public lands as well as finality of decisions which have been closed finally and have not been appealed or otherwise attacked. Every reason of policy which supports the doctrine in the courts is applicable here. There must be an end to administrative litigation also. Public rights as well as private cannot be indefinitely suspended because further litigation may someday be initiated.
In applying the doctrine here, we are aware of the principle, urged so strongly by the appellants, that since the Secretary has a continuing jurisdiction with respect to public lands until a patent issues, he is not estopped by the principles of res judicata and finality of administrative action, from correcting or reversing an erroneous decision by his subordinates or his predecessor in office. However, where, as here, the claim has been declared null and void in regular proceedings and the mining claimant acquiesces in such decision for many years, the decision nullifying the claim will be treated as conclusive and will not be reopened in the absence of a legal or equitable basis warranting reconsideration. (Gabbs Exploration Co., 67 I.D. 160 (1960); Gabbs Exploration Co., A-28213 (May 24, 1960) and A28213 (Supp.) (July 11, 1960); Garfield County Exploration Co., A-28351 (August 30, 1960); Langdon H. Larwill, A-28697 (May 16, 1963). Nor does the fact that the legal basis for the decision has later been held by the court of appeals or the Supreme Court to be erroneous require a reconsideration and reversal of cases finally decided before the change in the interpretation or application of the law. (See e.g., Edward Christman, 62 I.D. 127 (1955); Lillie M. Kelly, 49 L.D. 659 (1923); and Mee v. Hughart, 23 L.D. 455 (1896)).
In Lillie M. Kelly, supra, the Department of the Interior had canceled homestead entries after the issuance of the receiver's receipt. Kelly did not appeal from the decision and acquiesced therein for five years or more. In similar proceedings in another case (Thomas J. Stockley, 44 L.D. 178 (1915)), the decision of the Secretary was
17 Prior to revision in 1956, 43 C.F.R. sec. 221, provided as follows:
No appeal shall be had from action of Director affirming the decision of the manager in any case where the party adversely affected shall have failed to appeal from the decision of said manager. 43 C.F.R. sec. 221.74.
The pertinent portion of the revised regulations provides:
Effect of Failure to Appeal. When any party fails to appeal from an adverse decision of the Directors that decision shall as to such party be final and will not be
disturbed except for fraud or for gross irregularity. 43 C.F.R. sec. 221.10, as revised in Circular 1950, 21 F.R. 1860, March 27, 1956.