Hickel v. The Oil Shale Corp. (TOSCO)

The General Mining Act of 1872 (the 1872 Act) governed claims to oil shale. Section 28 of the 1872 Act provided that until a patent is issued, “not less than $100 worth of labor shall be performed, or improvements made during each year.” In 1920, Congress enacted Section 21 of the Mineral Lands Leasing Act (the 1920 Act). Section 21 made oil-shale lands that were open to location and acquisition of title available only by lease. Section 37 of the 1920 Act contained a savings clause that covered valid claims in existence on February 25, 1920, “and thereafter maintained in compliance with the laws under which initiated.” The Oil Shale Corporation and other claimants (TOSCO) (plaintiffs) had claims to oil shale that were not patented and were canceled in the early 1930s on the ground that the minimum amount of labor or improvements required by § 28 had not been made during each year. When TOSCO applied for patents, the applications were rejected because the claims had been canceled. TOSCO appealed, and the secretary of the Interior ruled that the cancelations were effective. TOSCO brought actions in district court to require the secretary to expunge the rulings canceling the claims and to enjoin the secretary from enforcing them. The district court ruled that the cancellations were void because the Department of Interior did not have subject-matter jurisdiction. The Court of Appeals affirmed. The courts relied on the Supreme Court’s decisions in Krushnic and Virginia-Colorado to determine that assessment work that does not fully satisfy the requirements of § 28 of the 1872 Act did not give the government grounds for forfeiture but only made the claims open to relocation. The Supreme Court granted certiorari to consider whether the courts had properly construed and applied Krushnic and Virginia-Colorado to invalidate the secretary’s action.