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United States v. 400 Acres of Land

United States District Court, D. Nevada

November 9, 2017

400 ACRES OF LAND, more or less, situate in Lincoln County, State of Nevada; and JESSIE J. COX, et al., Defendants.




         Before the Court is Defendants' motion for reconsideration (“Motion”) (ECF No. 205) of the Court's discovery order dated March 10, 2017 (ECF No. 191). The Court has reviewed the United States' response (ECF No. 212). The Court also heard argument on the Motion on November 6, 2017. (ECF No. 267.) For the reasons discussed below, the Motion is denied.


         The United States filed a Complaint and Declaration of Taking on September 10, 2015, to acquire 400 acres of property located within the Nevada Test and Training Range (“NTTR”), a military test and training facility at Nellis Air Force Base, consisting of a group of patented and unpatented mining claims known as the Groom Mine (“the Property”). (ECF No. 129; see also ECF No. 1 (Complaint); ECF No. 2 (Declaration of Taking).) The United States deposited the estimated compensation to the Court in the amount of $1, 200, 000 (ECF No. 10 at 1), and the funds were released to Landowners on March 9, 2016 (ECF No. 85 at 1-2). On September 16, 2015, the Court granted the United States immediate possession of the Property. (ECF No. 14 at 1.) Landowners filed their Answer on November 6, 2015. (ECF No. 53.) On October 5, 2016, the Court determined that the “taking is for a congressionally authorized public use identified in the United States' Complaint [ECF No. 1-3], and is legally valid.” (ECF No. 111 at 1.) As a result, the amount of just compensation for the United States' condemnation is the sole remaining issue.

         The Property is in the Groom Lake Valley about seven miles from Area 51. (ECF No. 132 at 5.) The Property is the only privately owned property that has an unobstructed view of Area 51. (Id. at 16.) Landowners' family has owned the Property since about 1885, long before the United States began to use the nearby property. (Id. at 4-5.)

         Landowners moved to compel entry onto the Property to conduct testing and drilling of mineral deposits (ECF No. 131), and the United States filed a response (ECF No. 151). Landowners then filed a reply (ECF No. 169), and the United States filed a sur-reply with leave of the Court (ECF No. 186). The Magistrate Judge issued an order denying the Landowners' motion to compel. (ECF No. 191.) Landowners filed an Objection (ECF No. 205) to the Magistrate Judge's order, which this Court now considers as a motion for reconsideration. The United States filed a response to the Landowners' motion for reconsideration (ECF No. 212), and the Landowners filed a reply (ECF No. 215). The Court struck Defendants' reply during the hearing on November 6, 2017. (ECF No. 267.)


         Magistrate judges are authorized to resolve pretrial matters subject to district court review under a “clearly erroneous or contrary to law” standard. 28 U.S.C. § 636(b)(1)(A); see also Fed. R. Civ. P. 72(a); LR IB 3-1(a) (“A district judge may reconsider any pretrial matter referred to a magistrate judge in a civil or criminal case under LR IB 1-3, when it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.”).

         This standard of review is significantly deferential to the initial ruling. “A finding is ‘clearly erroneous' when although there is evidence to support it, the reviewing [body] on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Tr. for S. Cal., 508 U.S. 602, 622 (1993) (alteration in original) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)). The reviewing court “may not simply substitute its judgment for that of the deciding court.” Grimes v. City & Cty. of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991) (citation omitted).


         A. Relevance

         Landowners first argue that the Magistrate Judge erred by concluding that Landowners failed to meaningfully address one of the United States' arguments that drilling results would not be relevant. (ECF No. 205 at 8-9.) Before the Magistrate Judge, the United States argued that there is no market for the mineral deposits, no matter their extent, because their quality is too low to justify the expense of extraction. (ECF No. 151 at 21-22.) Drilling results verifying the amount of mineral deposits would therefore be irrelevant. Landowners responded that the quality of the mineral deposits could be “much higher” than even their own expert concluded, though they did not expressly state that findings of higher quality would attract market interest. (ECF No. 169 at 15 (emphasis omitted).)

         The Court does not find that the Magistrate Judge clearly erred. Landowners suppose that the quality of the mineral deposits is much higher than even their own expert predicted on the basis of tenuous evidence-historical smelter receipts. These receipts ostensibly “show that the ounces of silver per ton historically produced from the Mine were much higher than what [both sides' experts] have estimated.” (ECF No. 169 at 15 n.6.) There are a number of reasons why the historical smelter receipts do not necessarily reflect the overall quality of the deposits, however. First, smelter receipts reflect information about samples that are essentially cherry-picked for their high quality, as explained by the United States at the hearing. (ECF No. 267.) Landowners did not contest this characterization. (Id.) Second, the United States' expert considered the historical smelter receipts and concluded, given all the information available to him, that the quality of the deposits is low relative to the quality shown on the smelter receipts. (ECF No. 180-1 at 17; see ECF No. 169 at 15.) The Landowners' expert reached almost the same conclusion, actually determining that the quality was lower (0.69 troy ounces of silver per ...

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