In an unpublished opinion, McMillan v. County of Siskiyou (2012) 2012 Cal.App.Unpub. Lexis 3791, the Third District Court of Appeal held a property owner does not have a vested right to mine his property where the previous owner did not assert a vested right to engage in mining activities.
Petitioner acquired property in Siskiyou County in 1967 and transferred it to a corporation, which he established to conduct lawful mining activities without a permit. Subsequently, the county adopted an ordinance in 1974 requiring a permit for mining operations. California later enacted the Surface Mining and Reclamation Act (SMARA), which took effect in 1976 and required, among other things, mines in California to operate under a permit. Because the mine owned by petitioner’s corporation began operations without a permit before one was required, it could have continued operating without one pursuant to its vested right to do so. Despite this, the corporation’s mine began operating under a five-year renewable use permit, which was first issued in 1979 and renewed a total of three times, the last time being in 1993 though the permit was not actually issued until 1998. In 2003, Petitioner established a new corporation to conduct the mining operations, and the mineral rights to the property were transferred to the new corporation. Eventually, the Department of Conservation issued an order to the company requiring compliance with SMARA. Petitioner challenged the order, arguing that the corporation had a vested right to mine that did not require compliance with SMARA.
The court of appeal found no vested right. Relying on a 1976 Attorney General opinion pertaining to SMARA, the court explained the creation of a vested right is a “personal process” rooted in theories of equitable estoppel, and a successor in interest to a property may only claim a vested right where the prior owner established a vested right. Petitioner’s first corporation owned the mine prior to 1976, when any vesting of the right to operate without a permit could have occurred, but instead operated pursuant to a permit. Thus, the corporation did not establish its vested right to operate without a permit. Accordingly, when the property was transferred to a new corporation in 2003, that corporation could not claim a vested right to mine the property without a permit.
Written By: Tina Thomas, Amy Higuera and Grant Taylor (law clerk)
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