Legal update for California ( Fri Jun 27 2014 )

By Dave McCracken

I just returned to Happy Camp from 2 days of Mandatory Settlement Discussions in San Bernardino for the several ongoing cases in front of Superior Court Judge Ochoa. Before I get into this, I need to point out that the discussions were confidential, so I can only discuss this in general terms.

As an important part of this, in case you didn’t know, because of scheduling conflicts, oral arguments in Brandon Rinehart’s appeal to the Third Appellate District have been pushed back to September. In that case, we are petitioning the Court to decide that federal law prevents the State of California from prohibiting suction dredging on the public lands. We are arguing that the law is already well-decided on this issue. One of the State’s primary arguments is that they are only prohibiting suction dredging, and we are still allowed to use our gold pans. Our position is that our mining claims are only valid in the first place because we have made viable gold discoveries at the bottom of waterways which can only be reached through suction dredging. Preventing us from extracting the gold deposits we have discovered is basically a prohibition on the use of any effective method of mining that is available to us. As long as we get a fair hearing, and it appears as though we will, we are pretty confident that we will win the federal preemption case in the Third Appellate Court. The case law we are relying upon basically says that while the State has the authority to impose “reasonable regulations” upon us, they cannot prohibit mining altogether.

This brings up the subject of what constitutes “reasonable regulation” of suction dredging in California. While maybe everyone does not agree, I believe the majority of us believe that the regulations we worked so hard for in 1994 were reasonable, except that the Department of Fish & Wildlife (DFW) decided afterward that the Special Permit process was no longer available to us.

Please allow me to put this in perspective: A statewide suction dredge permit scheme is good for our industry. Otherwise, each of us would need to submit separate dredge applications for each different place we want to work. The process of obtaining those permits could be quite lengthy, burdensome and expensive. For example, the previous judge that was presiding over most of this litigation was strongly suggesting that every single suction dredger should be required to do a full Environmental Impact Report (EIR), a requirement which certainly would have been the end of our industry.

Section 5653 of the DFW Code allows the Department to issue dredging permits if there is not going to be “harm” to fish. “Harm” in this respect means a deleterious impact upon an entire species of fish. Rather than require each individual dredger to complete an EIR, the State has developed a statewide EIR with regulations which allow limited suction dredging along numerous waterways at certain times of the year. Since the statewide approach requires DFW to make general assumptions concerning “harm,” the Department believes it must err on the side of caution. This in itself is not unreasonable. But in the exercise of caution, the regulations are sure to restrict or prohibit suction dredging in areas where, if looked at more closely, reasonable people could agree that some suction dredging could take place without endangering a species. This is where the Special Permit process came in during 1994 and before. Said another way, without a Special Permit process in place, suction dredging would be completely prohibited in all areas that are not allowed by the statewide regulations. We believe this would rise to a prohibition in some portions of the state which would likely be preempted by federal law. The recently-adopted 2012 statewide regulations do not allow for a Special Permit Process. This is just one thing (of many) that must be resolved.

You guys probably recall that Brandon Rinehart was cited several years ago for suction dredging without a permit. Our attorney, James Buchal, took Brandon’s case. More or less, our defense is that the state has over-reached its authority by first adopting Section 5653 of the DFW Code which prohibits people from operating suction dredges within California’s waterways without first obtaining a permit, and then passing another law which prohibits the state from issuing any suction dredge permits. If Brandon wins this argument in the Third Appellate, it basically means that we can all resume suction dredging without much worry over being prosecuted for not having a permit. I suspect this would prompt the legislature to cancel its moratorium and order DFW to immediately begin issuing dredging permits in conformance with the recently-adopted 2012 suction dredge regulations.

While permits under the 2012 regulations would be an improvement over our existing situation, I believe everyone within the industry would agree that they are not even close to being “reasonable.” At the same time, anti-mining activists are arguing quite strenuously that the 2012 regulations are not restrictive enough. Therefore a big part of the active litigation in Judge Ochoa’s court is over the disagreement on what constitutes “reasonable regulation” of suction dredging in California.

I have read some of the comments made by others in the last few days which are pushing the notion that Judge Ochoa’s Order for all the parties in the active litigation to participate in mandatory settlement discussions is a bad thing, especially since they will not be continued until early September. That means we will not be dredging this season. The reason for the delay, as I understand it, is the very same scheduling conflicts that delayed Brandon’s case in the Third Appellate. It is basically the same group of attorneys in both cases. People take vacations during the summer months. Yes; I know that does not include suction dredgers. But, since we are not going to resolve this without the attorneys, it is a waste of time to make a big deal over things we cannot change. We are so late in the season already, under the new regulations, there was not going to be much time for anyone to get in the water this summer, anyway. Perhaps it’s better that we dwell on the good side of this.

The good side? This is where others might disagree with my perspective. Civilized disagreement and debate amongst us is a good thing. We do this all the time within the industry. It increases all of our awareness on the issues we face and improves our ability to deal with the obstacles we must overcome. When I look back at how much better we are today at managing legal challenges than we were in the 90’s, I am amazed we actually overcame the very strong push to eliminate suction dredging and came up with a set of regulations that supported our industry for 15 years. We were very divided in our views back in 1994. But we did manage to pull together a united front on the important matters that we had to deal with. I am confident we will do that again this time.

Now to my perspective: Since we expect that the Third Appellate is going to overturn the Legislature’s moratorium on suction dredging perhaps sometime around the end of this year, the next big matter to resolve is what constitutes “reasonable regulation” of suction dredging in California. That matter is in front of Judge Ochoa. I believe this is one of the main reasons he has ordered Mandatory Settlement discussions. The beginning of the process this past week involved all the parties and attorneys communicating our views and concerns to the judge on a personal basis. I believe the judge was trying to discover how far apart we are and assess the likelihood that he can bring us together in a negotiated settlement that everyone can live with. I believe he now has a good understanding of the issues we must resolve. Before we closed on the second day, he asked for a list of issues that each party would like to see changed in the 2012 regulations. After reviewing these with all the attorneys, he still had enough confidence to schedule two more days of settlement discussions in early September.

I know some people don’t like this settlement idea. But we should consider the alternative, which is to litigate each and every one of the issues that we do or don’t like, and that anti-mining activists don’t like – all in front of the very same judge. This would involve tens of thousands of pages of reports and comments, expert witness testimony from all sides, all which could take years of hearings, not to mention the costs. This is because many of the issues are scientific and complex. All of this, only to have Judge Ochoa make the final determination in the end, anyway.

Therefore, I see his offer to try and resolve the issues through settlement discussions as an opportunity to shortcut a very timely and expensive process.

The 1994 regulations were not the result of litigation. They were the result of all the parties coming together in discussions, with a very capable negotiator finding the balance that we could all live with. That was not an easy thing to do! My initial impression of Judge Ochoa is that we are very lucky to have him there. I’m sure he is going to give everyone’s view a fair hearing. That is a lot more than we have received since we were shut down in 2009. It is a lot more that we might expect in today’s world.

Therefore, I am suggesting that we should not be too quick to decide mandatory settlement discussions are a bad thing. Without them, even if Brandon wins, we are likely to be stuck with the 2012 regulations until they are fully litigated, which could end us up in the very same place as a settlement degree before the start of next season.

The New 49’ers Legal Fund
27 Davis Road, Happy Camp, California 96039

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