Geomet Exploration, Ltd. v. Lucky McUranium Corp.

The Lucky McUranium Corporation (Lucky) (plaintiff) found geologic-formation anomalies that indicated the presence of uranium deposits on federal land located in Arizona. Although Lucky did not physically occupy the land, Lucky posted 200 claims that encompassed 4,000 acres of the land, and recorded notices of the claims. Lucky also drilled a hole on each claim. Geomet Exploration, Ltd. (Geomet) (defendant) peaceably entered and began to drill on some of Lucky’s claims. Although Geomet was aware of Lucky’s claims prior to entering the land, Geomet considered the claims to be invalid because Lucky had not discovered minerals on the claims and was not in actual occupancy of the land. Lucky filed a possessory action against Geomet, seeking damages, exclusive possession, and a permanent injunction against trespass. The trial court found that Lucky was entitled to exclusive possession and a permanent injunction, and that Geomet had entered the land in bad faith because Geomet had been aware of Lucky’s claims prior to entry. Geomet appealed, and the court of appeals affirmed. The Supreme Court of Arizona granted Geomet’s petition for review to decide whether to discard the actual-occupancy requirement of the pedis possessio doctrine in favor of constructive possession. Lucky argued that the actual-occupancy requirement should be relaxed because (1) the cost of actually occupying and drilling on each claim prior to discovery was high, (2) the 4,000 acres claimed by Lucky were reasonable in size and similar in geologic formation, and (3) Lucky’s drilling activities on some of the claims were sufficient to protect all contiguous claims. Lucky also claimed that Geomet could not invoke the pedis possessio doctrine because of Geomet’s bad faith.