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Ellis v. Alaska Dep't. of Natural Resources (9/26/97), 944 P 2d 491
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska, 99501,
telephone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
EDWARD E. ELLIS, )
) Supreme Court No. S-7255
) Superior Court No.
v. ) 3AN-94-9869 CI
STATE OF ALASKA, DEPARTMENT ) O P I N I O N
OF NATURAL RESOURCES, )
) [No. 4888 - September 26, 1997]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Milton M. Souter, Judge.
Appearances: Edward E. Ellis, pro se, Trapper
Creek. Lawrence Z. Ostrovsky, Assistant Attorney General,
Anchorage, and Bruce M. Botelho, Attorney General, Juneau, for
Before: Compton, Chief Justice, Matthews,
Eastaugh, Fabe, and Bryner, Justices.
Edward Ellis, a mineral prospector, challenged the
validity of a Department of Natural Resources (DNR) Mineral Closing
Order (MCO), claiming that the MCO violated the Alaska Constitution
and the statutes governing the closure of state lands to mineral
entry. The superior court granted DNR's motion for summary
judgment. Ellis appeals. Because DNR acted within its
constitutional and statutory authority when it issued the MCO, and
because the MCO has a reasonable basis in the agency record, we
II. FACTS AND PROCEEDINGS
Ellis first began mining for gold and other minerals in
the Yentna basin in 1973. After making some discoveries along Lake
Creek in the Matanuska-Susitna (Mat-Su) Valley, Ellis established
a "fulltime prospecting program"there in 1983. He invested
substantial time and money in furthering his discoveries by doing
such things as constructing trails, camps, and helicopter pads. He
and his wife raised six children on their mining claims.
On August 7, 1985, DNR issued MCO 455, which closed to
new mineral entry approximately 320,000 acres of state land in the
Susitna and Willow subbasins in the Mat-Su Borough, including the
area where Ellis was prospecting near Lake Creek. The land was
closed subject to valid existing rights.
MCO 455 was issued pursuant to AS 38.05.185(a), which
provides that state land may be closed to mining or mineral
location if the commissioner of DNR "makes a finding that mining
would be incompatible with significant surface uses on the state
land." AS 38.05.185(a). Ellis asserted that as a result of MCO
455, he was unable to proceed on many prior discoveries around Lake
Creek that he had staked, but not filed. After 1985 he continued
to develop the claims he had filed.
Between 1986 and 1994 Ellis made numerous requests of DNR
to perform a mineral assessment in the Lake Creek area; he formally
petitioned DNR to reopen to mineral leasing a small portion of the
area covered by MCO 455. DNR denied these requests.
In 1994 Ellis filed a complaint in superior court
challenging MCO 455 and claiming that the State illegally closed
state lands, thereby depriving him of his "constitutionally
protected mining interests, property and rights." The court
granted DNR's motion for summary judgment. Ellis appeals.
A. Standard of Review
The standard of review for an appeal from summary
judgment is de novo. Nielson v. Benton, 903 P.2d 1049, 1052
(Alaska 1995). We "will uphold a summary judgment only if the
record presents no genuine issues of material fact and 'the moving
party was entitled to judgment on the law applicable to the
established facts.'" Newton v. Magill, 872 P.2d 1213, 1215 (Alaska
1994) (citation omitted).
We must determine from the administrative record whether
there was a reasonable basis for MCO 455. Kelly v. Zamarello, 486
P.2d 906, 917 (Alaska 1971). A reviewing court applies the
"reasonable basis"test when reviewing administrative decisions
involving complex issues that require agency expertise. Id.
Under the "reasonable basis"standard of review, we give deference
to the agency's determination "so long as it is reasonable,
supported by the evidence in the record as a whole, and there is no
abuse of discretion." Kodiak W. Alaska Airlines, Inc. v. Bob
Harris Flying Serv., Inc., 592 P.2d 1200, 1203 n.7 (Alaska 1979).
We exercise "independent judgment"when determining whether an
agency complied with procedural requirements. Moore v. State, 553
P.2d 8, 33 (Alaska 1976).
B. Does DNR's Administrative Record Reflect a Reasonable
Basis for MCO 455?
Ellis has not raised any genuine issues of material fact
that would justify reversal of the superior court's summary
judgment for DNR. Instead, he challenges the adequacy and
reasonableness of DNR's decision to close the Lake Creek area to
new mineral entry. Ellis's action is essentially an appeal of an
administrative decision. [Fn. 1] Thus the court's inquiry is
limited to a review of the administrative record which was before
the Board when it made its decision. Interior Paint Co. v.
Rodgers, 522 P.2d 164, 169 n.7 (Alaska 1974). [Fn. 2]
Ellis argues that DNR acted arbitrarily and capriciously
in issuing MCO 455. He is particularly troubled by the finding
that the Lake Creek corridor has a low mineral value. [Fn. 3] He
also challenges the reasonableness of DNR's decision to leave the
area open to oil and gas leasing.
DNR based the closure on the recommendation contained in
a land use plan, the Susitna Area Plan (SAP), which was developed
in accordance with AS 38.04.065. The SAP was the product of a
three-year study by an interagency planning team that worked in
conjunction with the U.S. Department of Agriculture to prepare
"reports describing resource values and identifying existing and
potential land uses throughout the planning area." The planning
team included, among others, representatives from various divisions
of DNR, the Department of Fish and Game, the Department of
Transportation and Public Facilities and the Mat-Su Borough.
In entering MCO 455, the DNR commissioner found that
certain stream systems in the area and their adjacent riparian
uplands were "used extensively by the public for fishing, floating,
boating, transportation to hunting, and public access corridors."
The commissioner also found that the salmon and other fish
populations in these river systems not only supported substantial
sport fishing, but were also major contributors to the Upper Cook
Inlet commercial salmon fishery. [Fn. 4]
The commissioner concluded that these activities
constituted "significant surface uses"of state land under AS
38.05.185(a), [Fn. 5] and that mining was incompatible with these
significant uses and thus threatened an important segment of the
economy of the Susitna basin. [Fn. 6] The commissioner considered
the mineral potential of the area, and found that "existing
information indicates that the areas proposed for closure to
mineral entry have low mineral value."[Fn. 7] The SAP notes,
however, that there is "some potential for future oil and gas
We conclude that the agency's determination was
reasonable and supported by the evidence in the record. See Kodiak
W. Alaska Airlines, 592 P.2d at 1203 n.7.
C. Did DNR Provide Adequate Notice to the Public before
Issuing MCO 455?
DNR gave notice of proposed MCO 455 during June 1985; it
issued the order on August 7, 1985. Ellis asserts that the notice
was not sufficient for prospectors, many of whom spend summers in
the field. [Fn. 8]
Assuming that the actual dates of publication of proposed
agency action may affect whether potentially affected persons see
the notice, the legal adequacy of notice nonetheless depends on
whether statutory requirements are satisfied. DNR fulfilled the
statutory mandate of AS 38.05.945 by providing notice by
publication in a newspaper of statewide circulation and a newspaper
of general circulation in the vicinity at least thirty days before
the proposed action. AS 38.05.945(b). DNR was also required to
provide notice by one or more of the following methods:
(1) publication through public service
announcements on the electronic media serving the area affected by
(2) posting in a conspicuous location in the
vicinity of the action,
(3) notification of parties known or likely
to be affected by the action, or
(4) another method calculated to reach
affected persons . . . .
DNR placed an advertisement in the Mat-Su Valley's
newspaper, the Frontiersman, on June 15 and 19, 1985, announcing
the proposed closing and the affected areas. It also placed an
advertisement in the Anchorage Daily News on June 15 and 16, 1985.
In addition, DNR sent notices in June to the Alaska Miners
Association, the manager of the Mat-Su Borough, and the Talkeetna
Postmaster, among others. The record reflects that DNR provided
sufficient notice by newspaper, and also provided notice according
to, at the very least, subsections (b)(2) and (b)(3).
To the extent that Ellis's argument implies that even
statutory notice did not meet due process standards where MCO 455
affected miners in the field when notice was given, we do not find
that the statutory notice requirements were unreasonable or
inadequate. There was no showing that even miners in the field
would, as a class, not receive notice. There is no indication DNR
selected a publication date with any intention to limit the
efficacy of notice.
D. Did MCO 455 Deprive Ellis of Any Property Rights?
Ellis claims that the minerals contained within his
staked claims, and the improvements he made on state land -- such
as the pack trails he built along Lake Creek -- are interests or
rights in property that are protected by the Alaska and federal
As DNR correctly points out, MCO 455 specifically exempts
valid existing claims. The order states that it is "subject to
valid existing rights." The superior court noted that if Ellis
"truly has valid existing claims, MCO 455 does not bar him from
developing them." We consequently reject his arguments that he was
denied due process and that he is entitled to a trial at which he
may offer evidence of his property rights. The issue whether Ellis
has valid preexisting claims was not before the lower court, and is
not an issue in this appeal.
Ellis's contention that discovery alone gives rise to
compensable property rights is without merit. "A person acquires
the exclusive right to possess and extract minerals on state land
by discovery, location, and recording." Welcome v. Jennings, 780
P.2d 1039, 1042 (Alaska 1989); AS 38.05.195. Absent discovery,
location, and recording, no property rights exist to the minerals
within an unperfected claim. [Fn. 9]
D. Did MCO 455 Violate the Alaska Constitution or the
Statutes Governing Closure of Land to Mineral Entry?
Ellis argues that MCO 455 violates the resource
development policy and public interest provisions contained in
article VIII, sections 1, 11, and 16 of the Alaska Constitution.
[Fn. 10] Ellis also argues that MCO 455 violates AS 38.05.185, AS
38.05.300 and AS 44.99.110. [Fn. 11] The superior court did not
err in holding that the record supported the commissioner's
determination that MCO 455 furthers the public interest, and that
the order was therefore consistent with the Alaska Constitution.
Ellis argues that the commissioner exceeded her statutory
authority in issuing MCO 455. Alaska Statute 38.05.185 authorizes
the commissioner to close state land to mining upon a finding that
"mining would be incompatible with significant surface uses on the
state land." AS 38.05.185(a). In addition, the commissioner must
follow the procedures outlined in AS 38.05.300 before she may
close state land to mining. Id.
When DNR issued MCO 455 in 1985, AS 38.05.300 provided:
(a) The commissioner shall classify for
surface use land in areas considered necessary and proper . . . .
State land, water, or land and water area may not, except by act of
the state legislature, be closed to multiple purpose use if the
area involved contains more than 640 acres.
(Emphasis added.) "Multiple use"is defined in part as:
the management of state land and its various
resource values[,] . . . making the most judicious use of the land
for some or all of these resources . . .; it includes
(A) the use of some land for less than
all of the resources . . . .
AS 38.04.910(4)(emphasis added); see AS 38.05.965(11).
MCO 455 closed more than 640 acres, but only to mineral
entry and not to multiple use. The land covered by MCO 455 could
still be used for its other resources; it therefore remained open
to multiple use.
Ellis incorrectly relies on AS 38.05.300(a) as it read
following amendment in 1993. The 1993 amendments significantly
restrict DNR's authority to preclude mining or mineral entry or to
designate mining or mineral entry to be incompatible uses, when the
area of land to be closed exceeds 640 acres. AS 38.05.300(a), as
amended by Ch. 52, sec.sec. 2, 3, SLA 1993. Unless one of the
applies, an area exceeding 640 acres no longer may be closed to
mineral entry except by act of the legislature. Id. These
amendments were not in effect in 1985, and do not apply
retrospectively. AS 01.10.090.
Because issuance of MCO 455 was within DNR's
constitutional and statutory authority as it existed when the order
was signed in 1985, we AFFIRM the superior court's grant of summary
judgment to DNR.
We have held that "[h]owever denominated, a claim is
functionally an administrative appeal if it requires the court to
consider the propriety of an agency determination." Haynes v.
State, Commercial Fisheries Entry Comm'n, 746 P.2d 892, 893 (Alaska
For this reason, we reject Ellis's arguments that he was
entitled to additional discovery and a trial and that he should be
allowed to supplement the administrative record with expert
testimony at a trial. See Interior Paint Co. v. Rodgers, 522 P.2d
164, 169 n.7 (Alaska 1974) (judicial review of administrative
agency decisions should be limited to the record before the
Basing his assessment on his own sample tests, Ellis concludes
that the mineral value of the land in the Lake Creek drainage
The commissioner, in issuing MCO 455, found that in 1982 more
than 76,000 user days (and almost $11 million dollars) were spent
sport fishing on these river systems. The Upper Cook Inlet
commercial salmon fishery was valued at $21.8 million annually from
AS 38.05.185(a) (1984) provided in part:
State land may not be closed to mining or
mineral location unless the commissioner makes a finding that
mining would be incompatible with significant surface uses on the
This statute has since been amended. Ch. 52, sec. 1, SLA 1993.
AS 38.05.185(a) provides that DNR may not issue an MCO unless
it is in compliance with a land use plan developed under AS
38.05.300. Ellis argues that the commissioner failed to follow the
proper procedures when DNR issued MCO 455. DNR correctly points
out that the SAP "is both consistent with and specifically
referenced and incorporated in MCO 455."
Ellis had ample opportunity to communicate his assessment
of the mineral value of the area to the drafters of the SAP during
more than forty public meetings held throughout the Susitna basin
as the SAP was being developed.
In his articulate and well-presented pro se oral argument,
Ellis explained that he did not learn of the land closure until the
fall of 1985, when he left his prospecting site and went to
DNR informed Ellis that he may have discovery rights protected
by 11 Alaska Administrative Code (AAC) 86.105 and 11 AAC 86.135 in
the mineral deposits he discovered along Lake Creek corridor.
Article VIII, section 1 of the Alaska Constitution states:
It is the policy of the State to encourage the
settlement of its land and the development of its resources by
making them available for maximum use consistent with the public
Article VIII, section 11 of the Alaska Constitution
provides, inter alia, that "[p]rior discovery, location, and
filing, as prescribed by law, shall establish a prior right to
Article VIII, section 16 of the Alaska Constitution
No person shall be involuntarily divested of
his right to the use of waters, his interests in lands, or
improvements affecting either, except for a superior beneficial use
or public purpose and then only with just compensation and by
operation of law.
AS 44.99.110(1) declares state mineral policy and announces
the general principle that the State must promote a sound economy
through appropriate conservation and development of the State's
mineral resources. That statute does not expressly provide for
retrospective application, and was not enacted until 1988, three
years after DNR issued MCO 455. The statute cannot be applied
retroactively. See AS 01.10.090. Even if AS 44.99.110(1) were
applicable, MCO 455 is not inconsistent with the general principle