[00:00:06] Speaker 04:
Our last case for argument is Saddle Mountain Minerals versus City of Richland.

[00:00:48] Speaker 04:
Mr. Stevens, you can come up when you're ready.

[00:01:00] Speaker 01:
May it please the court.

[00:01:01] Speaker 01:
My name is Richard Stevens.

[00:01:02] Speaker 01:
I'm representing the appellant Saddle Mountain Minerals.

[00:01:05] Speaker 01:
And I'd like to reserve three minutes for rebuttal.

[00:01:08] Speaker 01:
Thank you.

[00:01:09] Speaker 01:
I'd like to address first the due process clause claim.

[00:01:14] Speaker 01:
And our position is that Saddle Mountain Minerals had a property interest at stake when permits are considered.

[00:01:22] Speaker 01:
considered on the property in which their mineral interest exists.

[00:01:26] Speaker 01:
And the basic due process requirement is notice and an opportunity to be heard.

[00:01:32] Speaker 01:
And I think that is true, even if Saddle Mountain doesn't have the ability to force the denial of the permit.

[00:01:41] Speaker 01:
And that is one of the city's arguments, is that the city has to give the permit.

[00:01:47] Speaker 01:
And I think the best case that really shows the importance of that is the Mennonite Board of Missions case.

[00:01:53] Speaker 01:
the tax foreclosure case where the Supreme Court said the mortgage holder has a right to be noticed before the property is foreclosed upon.

[00:02:03] Speaker 01:
Why?

[00:02:03] Speaker 01:
Because they could pay the taxes and avoid the foreclosure.

[00:02:08] Speaker 01:
And similarly here, my clients would have an opportunity perhaps to remove minerals before a shopping center is built.

[00:02:16] Speaker 01:
if they had notice, but the city regularly issues these permits without notice.

[00:02:23] Speaker 02:
Could I just get a factual question?

[00:02:25] Speaker 02:
I was trying to search the record.

[00:02:26] Speaker 02:
So when were the zoning regulations that precluded extraction, when were those enacted first?

[00:02:33] Speaker 01:
So they are at different times.

[00:02:36] Speaker 01:
2013 is different times for different areas, I should say.

[00:02:43] Speaker 01:
What was the earliest?

[00:02:46] Speaker 01:
For one section... That would relate to your client.

[00:02:54] Speaker 01:
There's probably in 1995 for one section.

[00:03:01] Speaker 01:
And these are detailed in the city's expert report of Mike Stevens.

[00:03:07] Speaker 01:
It is important to note that those early like the 1995 restrictions said simply that Mining is not allowed but for instance extracting sand and gravel might be there isn't really an explanation of Of what would be allowed at that time, but I think it is fair to say that in 2013

[00:03:32] Speaker 01:
when particular areas were zoned residential that mining would not be allowed at that time.

[00:03:39] Speaker 02:
And extraction as well?

[00:03:41] Speaker 01:
Yes, yes.

[00:03:43] Speaker 02:
And the property that you're suing over were acquired over what period?

[00:03:51] Speaker 01:
It was all acquired in 1995.

[00:03:55] Speaker 01:
And just to be clear it was by The Mons acquired in 95 it was transferred to their LLC in 2000

[00:04:07] Speaker 01:
And the other part of due process that I think is important is the city has argued, well, we're just authorizing somebody else to do something, and that somebody else is the problem.

[00:04:20] Speaker 01:
And our position is that it's the city's decision which is authorizing the third party to act.

[00:04:26] Speaker 01:
requires due process.

[00:04:28] Speaker 01:
And there are multiple U.S.

[00:04:29] Speaker 01:
Supreme Court cases that would support that.

[00:04:32] Speaker 01:
The Fuentes v. Shevin, Snydack v. Family, Finance Corp.

[00:04:38] Speaker 01:
Ninth Circuit case in Stipman v. San Francisco, which is allowing a private party to impound a vehicle.

[00:04:47] Speaker 01:
The point is, it doesn't matter so much who is actually doing the action.

[00:04:53] Speaker 01:
The question is, who is authorizing it in this case?

[00:04:55] Speaker 01:
There's no question that it is the city.

[00:04:57] Speaker 02:
But if the Washington state cases, like Santiago Homes and Joshi, say that service owners can actually develop and burden these rights, then how does that affect your notice claim?

[00:05:16] Speaker 01:
I think that our clients still are entitled to notice because they have a property interest there.

[00:05:23] Speaker 02:
And so they'd have notice but with no recourse.

[00:05:28] Speaker 01:
Well, well, they might be the city.

[00:05:31] Speaker 01:
They could they could then before the city actually issues the permit, maybe they could remove minerals.

[00:05:43] Speaker 01:
They could remove sand and gravel that's at the surface before that actually happens.

[00:05:48] Speaker 01:
So there is something to benefit them if they had notice.

[00:05:54] Speaker 01:
But I think it is also important to realize that in Santiago Homes and in Joshi, the idea that the owners are entitled to subjacent support and

[00:06:06] Speaker 01:
the owners of the surface.

[00:06:08] Speaker 01:
That is all dicta in that case, Your Honor, because nobody at that time was arguing either about notice or even arguing about whether these developers could, in fact, use these materials.

[00:06:22] Speaker 01:
The only thing at issue in that case is when they took the materials, did they need to pay for them?

[00:06:26] Speaker 01:
And the court said yes.

[00:06:28] Speaker 02:
Well, you could sue the individuals who get these permits, right?

[00:06:33] Speaker 01:
That is true.

[00:06:35] Speaker 01:
That is true.

[00:06:35] Speaker 01:
But I think the analysis is the same if you look at like Fuentes v. Shevin or Malin versus the bank.

[00:06:45] Speaker 01:
If the bank reallocates our interests, we could always sue the bank.

[00:06:51] Speaker 01:
And the court just said, no, the government that is authorizing this activity is required to give notice.

[00:06:57] Speaker 01:
And that is what we're relying on.

[00:07:00] Speaker 01:
I would like to move quickly to our takings claim.

[00:07:07] Speaker 01:
I think it is critical in this case to realize that we, and following up on your question about when these regulations came into existence, there are cases cited in our brief that I think make very clear, like the Palo Zolo case, I mean, starting with Palo Zolo and subsequent cases, that the government does not simply get the ability to deprive someone of all of their use of their property

[00:07:38] Speaker 01:
And unless the suit is brought before the change, that there's no takings claim.

[00:07:46] Speaker 01:
Because otherwise, they could just make the change and essentially let the passage of time take away these rights.

[00:07:55] Speaker 01:
We believe that there is a Lucas-style taking here.

[00:08:00] Speaker 01:
And it's because of the city's prohibition on mining.

[00:08:04] Speaker 01:
It renders that property interest, those mineral interests, practically worthless.

[00:08:11] Speaker 01:
And I realize I'm going to jump around here a little bit, but... They're not worthless because you're selling mineral rights to the...

[00:08:20] Speaker 04:
surface to the surface rights owners.

[00:08:23] Speaker 01:
But not anymore.

[00:08:24] Speaker 01:
Significantly more than you paid for them.

[00:08:25] Speaker 01:
Right.

[00:08:26] Speaker 01:
Significantly in profit.

[00:08:27] Speaker 01:
But not anymore.

[00:08:28] Speaker 01:
I guess that's what I'm saying.

[00:08:29] Speaker 01:
Not anymore.

[00:08:30] Speaker 01:
We now know, and everybody knows, that we cannot do any mining.

[00:08:34] Speaker 01:
Then those mineral interests become worthless.

[00:08:39] Speaker 01:
And we're here on summary judgment, an appeal from a summary judgment, and I do want to refer to the court to two parts of the record, both in volume two of the ER, page 40 and 146.

[00:08:52] Speaker 01:
They're two declarations that are saying these minerals are now valueless or worthless.

[00:08:59] Speaker 01:
When I say jumping around, going to the district court's exclusion of our expert witness said, well, you know, you don't have any evidence of the before.

[00:09:13] Speaker 01:
That is the evidence of before.

[00:09:16] Speaker 01:
It is worthless.

[00:09:17] Speaker 01:
It is valueless at this time.

[00:09:19] Speaker 01:
And the discussion as to how much those things

[00:09:23] Speaker 01:
would be worth if they were usable was where the 2.8 million comes.

[00:09:30] Speaker 01:
But the district court seemed to think, oh, that's the present value after the government's regulation.

[00:09:36] Speaker 01:
And I think that's a misreading of the record below.

[00:09:43] Speaker 01:
I think the other fact is that Saddle Mountain cannot extract.

[00:09:53] Speaker 01:
I mean, that I think is given.

[00:09:55] Speaker 01:
But the other problem is that the city gives others the ability to extract.

[00:10:01] Speaker 01:
They give the developers of the property.

[00:10:03] Speaker 01:
They can use the minerals.

[00:10:04] Speaker 01:
Yes, they're gonna have to pay them to, they're gonna have to pay for them in light of Joshi and Santiago Homes.

[00:10:12] Speaker 01:
But the point is, this is property that my clients own, and they cannot use them.

[00:10:17] Speaker 01:
They have been legislatively prohibited from actually using those.

[00:10:25] Speaker 02:
And they knew that when they acquired it.

[00:10:31] Speaker 01:
Well, not completely, because again, those earlier regulations said, well, sand and gravel is allowed.

[00:10:39] Speaker 01:
Mining is not allowed, but sand and gravel is, as if it was something other than mining.

[00:10:43] Speaker 01:
So sand and gravel extraction was allowed at the time.

[00:10:48] Speaker 01:
And as we know from numerous cases of the US Supreme Court.

[00:10:53] Speaker 02:
So let's just kind of follow that through.

[00:10:55] Speaker 02:
Everything else they knew.

[00:10:58] Speaker 02:
It was a no-go, right?

[00:11:00] Speaker 02:
Right at the outset when they acquired these leases or rights.

[00:11:05] Speaker 01:
Well, unfortunately, no.

[00:11:08] Speaker 02:
Because the US Supreme Court has said- They didn't read the regulations.

[00:11:11] Speaker 02:
I'm just asking what their knowledge was, not whether their knowledge necessarily meant no taking.

[00:11:18] Speaker 02:
But they knew when they bought these that everything except potentially sand and gravel, and then as time went on,

[00:11:28] Speaker 02:
That gets clarified.

[00:11:30] Speaker 01:
Well, the court has said in takings cases that you cannot just assume what the regulations say as prohibiting X, Y, and Z. You really have to get a variant.

[00:11:43] Speaker 01:
You have to request a variance.

[00:11:45] Speaker 01:
We have no idea what the jurisdiction is going to do.

[00:11:49] Speaker 01:
And that is true from numerous cases out of the US Supreme Court, Agans versus Tiburon.

[00:11:55] Speaker 02:
And you requested a variance?

[00:11:56] Speaker 01:
Yes, we did request a variance.

[00:11:58] Speaker 01:
And that was denied.

[00:11:59] Speaker 01:
And that's what's made it absolutely clear, we're not going to be able to mine.

[00:12:06] Speaker 01:
I think we also ought to be able to go to the jury on the question of a Penn Central-style taking.

[00:12:14] Speaker 01:
Penn Central requires consideration of various factors, one of them the economic impact, and the record would indicate it's a $2.8 million impact over an 800-acre area.

[00:12:32] Speaker 01:
That is a real impact, and as I said earlier, that is not just the current value.

[00:12:40] Speaker 01:
That is what the value was until it was clear they could not mine.

[00:12:45] Speaker 01:
I think the distinct Investment Act expectations requirement under Penn Central is really not disputed.

[00:12:51] Speaker 01:
I mean, these were bought for one purpose only.

[00:12:54] Speaker 01:
And then you get to kind of the amorphous part of Penn Central, which is the character of the government action.

[00:13:01] Speaker 01:
And I don't believe that is dealing with good or bad faith or anything like that, because we are not alleging bad faith.

[00:13:12] Speaker 01:
But it's just kind of the catch-all.

[00:13:15] Speaker 01:
What is the character?

[00:13:16] Speaker 01:
What is the nature?

[00:13:17] Speaker 01:
And the nature of this restriction is you can't remove minerals and other people can.

[00:13:23] Speaker 01:
And even though you own the mineral rights, you cannot remove minerals.

[00:13:28] Speaker 01:
And I think a jury ought to be able to decide that.

[00:13:32] Speaker 04:
You wanted to save three minutes for rebuttal.

[00:13:34] Speaker 04:
You're down to 2.30.

[00:13:35] Speaker 04:
Do you want to save the rest of your time?

[00:13:37] Speaker 04:
It's up to you.

[00:13:40] Speaker 01:
Yes, I will save the rest.

[00:13:41] Speaker 01:
Thank you.

[00:13:41] Speaker 01:
All right.

[00:13:42] Speaker 04:
Thank you.

[00:13:47] Speaker 00:
Mr. Harper.

[00:13:50] Speaker 00:
Good morning, Your Honors.

[00:13:50] Speaker 00:
May it please the Court?

[00:13:51] Speaker 00:
Ken Harper for City of Richland.

[00:13:53] Speaker 00:
I first want to answer Judge McKeown's question regarding the record because I think there was a little bit of, I guess, inaccuracy in Council's comments.

[00:14:01] Speaker 00:
Specifically, Judge McKeown, you asked about what was the status of the city's zoning code at the time that the plaintiffs acquired the property.

[00:14:09] Speaker 00:
You also asked

[00:14:10] Speaker 00:
So we're branching off from that.

[00:14:12] Speaker 00:
When did the city's zoning code prohibit what?

[00:14:14] Speaker 00:
And let me answer that with respect to the record.

[00:14:16] Speaker 00:
It's at 2ER310.

[00:14:19] Speaker 00:
Mr. Stevens is correct.

[00:14:21] Speaker 00:
You'll find a fairly detailed discussion of this in

[00:14:25] Speaker 00:
Mike Stevens, no relation, declaration.

[00:14:28] Speaker 00:
But the answer to the question is 1962, Your Honor, at 2ER 310.

[00:14:33] Speaker 00:
Mr. Stevens states in his declaration, the city has regulated the excavation, processing, removal of topsoil, sand, gravel, rock,

[00:14:42] Speaker 00:
and similar natural resources as a conditional use since 1962.

[00:14:46] Speaker 02:
He goes on, Your Honor, and... That sounds more... It comports more with my reading of the record, but... Because 1995 seemed late in the game, but keep going.

[00:14:55] Speaker 00:
Your Honor, he goes on because, as Mr. Stevens points out, his clients own these minerals in various sections.

[00:15:00] Speaker 00:
And the city has developed over time, we've annexed certain land, and consequently the zoning code that

[00:15:06] Speaker 00:
existed in 1962, I don't want to misrepresent the record, may not have been exactly the status of the zoning code when his clients took title in 1995 or 2000, depending on which of his clients you isolate.

[00:15:19] Speaker 00:
And so what Mr. Stevens did is he followed up on that 1962 point of reference by breaking it out on a section by section basis.

[00:15:28] Speaker 00:
And the answer to your question with that in mind is 1995, with the exception of one section,

[00:15:35] Speaker 00:
And that section would have been section 27, in which instance the zoning code prohibited all mining of sand, gravel, rock, and cement resources dating back to 1994.

[00:15:49] Speaker 00:
So if you go through the record, your honors, you'll see this 1995, 1994, the operative dates.

[00:15:54] Speaker 00:
It's significant.

[00:15:56] Speaker 00:
And I'm going to jump to the takings argument, although I still want to talk about procedural due process.

[00:15:59] Speaker 00:
But it's significant because it doesn't cut off the rights.

[00:16:04] Speaker 00:
to bring a claim in the way that Palazzolo does, or the way that Palazzolo discusses.

[00:16:09] Speaker 00:
But it is very much part of the reasonable investment back to expectations.

[00:16:13] Speaker 00:
The regulatory environment at the time that the Mons purchased this property prohibited mining as a matter of the zoning code.

[00:16:25] Speaker 00:
And the record on what they knew, I think was also germane to your question, Judge McEwen, is that they made no investigation of this one way or the other.

[00:16:34] Speaker 00:
Did they know that the city's zoning code prohibited mining?

[00:16:39] Speaker 00:
The testimony from Gary Maughan is that he had the opportunity to buy these minerals because they were offered to him on a take it or leave it basis.

[00:16:47] Speaker 00:
It was so cheap that he couldn't turn it down.

[00:16:50] Speaker 00:
He made no investigation in title.

[00:16:52] Speaker 00:
He made no appraisal of the minerals.

[00:16:55] Speaker 00:
And he didn't ask any governmental official, would we be allowed to do any zoning?

[00:17:00] Speaker 00:
There was no, there I go again with the zoning.

[00:17:02] Speaker 00:
I apologize again, Your Honor.

[00:17:03] Speaker 00:
He made no inquiry of any government official if he could engage in mining.

[00:17:08] Speaker 00:
There was no active mining of any of these minerals.

[00:17:11] Speaker 00:
He didn't purchase a mining operation.

[00:17:15] Speaker 00:
He purchased essentially an inchoate set of mineral interests that really could not be utilized.

[00:17:23] Speaker 00:
And it didn't concern him that they couldn't be utilized for mining.

[00:17:28] Speaker 00:
I want to respond to your questions, Judge McEwen, because it struck me that they really went to some of the heart of the issues on takings.

[00:17:33] Speaker 00:
But I do want to backtrack now to procedural due process.

[00:17:36] Speaker 00:
That was Mr. Stevens' lead argument, and I think that is truly what he's primarily argued below as well.

[00:17:43] Speaker 00:
The issue that the city takes with Mr. Stevens' procedural due process claim is that it is very loose with respect to the identification of a protected property interest.

[00:17:56] Speaker 00:
We really have a very difficult time, I think, understanding from the briefing or even from the arguments that we've heard below, what is the protected property interest?

[00:18:06] Speaker 00:
A few aspects of procedural due process are pretty clear, and they cut in favor of the city, I submit.

[00:18:14] Speaker 00:
It's certainly clear that a mere diminution in value does not implicate a procedural due process right.

[00:18:22] Speaker 00:
It's also clear, and I think it almost is inherently part of the allegations of this case, that the city hasn't deprived Mr. Stevens Klein of anything.

[00:18:32] Speaker 00:
I mean, the whole theory of this case has not been that the city has gone on to any property in which Saddle Mountain may have a mineral interest

[00:18:42] Speaker 00:
and exported.

[00:18:43] Speaker 03:
I think the argument is that by granting the permit, the city is acquiescing or authorizing the use or the access to the mineral rights.

[00:18:56] Speaker 03:
And so the city can't sort of stand here and say, well, that's not really us.

[00:19:00] Speaker 03:
That's whoever purchases the surface rights.

[00:19:03] Speaker 03:
We are just granting the permit when, in fact, but for the action of the city,

[00:19:07] Speaker 03:
that that owner wouldn't have the ability.

[00:19:09] Speaker 00:
Well, I think that's absolutely right, Judge.

[00:19:11] Speaker 00:
I think that is the argument below.

[00:19:12] Speaker 00:
And there's just nothing in procedural due process law that suggests that the city's exposure extends to protecting Mr. Stevens' clients from the actions of these third party surface owners.

[00:19:24] Speaker 03:
With the argument of your friend on the other side that this issue wasn't squarely decided in Josier and Santiago homes.

[00:19:32] Speaker 00:
Squarely decide.

[00:19:33] Speaker 00:
I will tell you that I think Joshi and Santiago are difficult to understand.

[00:19:39] Speaker 00:
I think it is clear as a matter of mineral law that Washington holds to that the surface owner has the right to use and develop the property.

[00:19:48] Speaker 00:
I don't think there's any dispute about that.

[00:19:50] Speaker 00:
I think it gets more subtle when we start talking about whether we're discussing common sand and gravel, the scope of the deed.

[00:19:57] Speaker 00:
And I grant that the deed that Mr. Stevens' clients are pointing to here is very broad, and it contains this language that suggests that they may consume the surface.

[00:20:07] Speaker 00:
But I don't think that's any different.

[00:20:09] Speaker 00:
In fact, it's literally not any different from the deed that was being interpreted by the Washington Supreme Court in Joshi.

[00:20:14] Speaker 00:
And in Joshi, following with Santiago Homes, the surface owner's right includes everything making use of the surface, provided that they don't export or extract minerals.

[00:20:28] Speaker 00:
And so in that sense, I think we really do have a situation very comparable to Shanks v. Dressel, where the question is, did

[00:20:33] Speaker 00:
The city somehow become liable simply because a property owner a surface right owner I should say chooses to obtain a building permit for any number of actions on the surface.

[00:20:49] Speaker 00:
As you see, there's some colloquy between counsel in the written communications during the discovery process.

[00:20:54] Speaker 00:
And I inquired, does that really extend to things like water heaters and utterly benign actions on the surface, erecting a pergola, or even tearing down a barn, I think, was one of the instances.

[00:21:07] Speaker 00:
And the argument is, yes, it does.

[00:21:11] Speaker 00:
And so I think what that highlights, Judge Desai, is that if there is a protected property interest,

[00:21:17] Speaker 00:
And if the city has culpably acted by granting a building permit or a rezone or a conditional use permit or any number of other kinds of development activities, then the liability exposure of the city is absolutely unlimited.

[00:21:34] Speaker 00:
And that is really very difficult to accept.

[00:21:38] Speaker 00:
But I think the answer to get out of that kind of room is to go back to what is the protected property interest here.

[00:21:43] Speaker 00:
The protected property interest has been very much in a state of flux in Mr. Stevens' arguments below.

[00:21:50] Speaker 00:
The old property versus new property distinction has been a main theme of Saddle Mountain's arguments and it just has no bearing on what is a protected property interest.

[00:22:00] Speaker 00:
I fully grant that a mineral right is a property interest and I fully grant that whatever the extent of Washington State mineral law

[00:22:10] Speaker 00:
would connote that it has that full set of rights.

[00:22:15] Speaker 00:
We don't know quite what sand and gravel we're talking about because there's not a clear indication of the title.

[00:22:21] Speaker 00:
But nevertheless, I don't need to debate that.

[00:22:23] Speaker 00:
A mineral interest is a protected property right.

[00:22:26] Speaker 00:
we did not take any of the protected property rights.

[00:22:29] Speaker 00:
That would be different if we had converted or exported or somehow sold.

[00:22:33] Speaker 02:
But what about the argument like, I don't know if you took them or not, but at least give me notice when things are happening?

[00:22:40] Speaker 00:
You're in my outline, Judge McHugh.

[00:22:44] Speaker 00:
So can the mineral right be the protected property?

[00:22:47] Speaker 00:
I submit it can't, because you hit Shanks v. Dressel and the progeny of that.

[00:22:51] Speaker 00:
Can the notice be the protected property right?

[00:22:54] Speaker 00:
And the answer to that is clearly no, because you don't have a protected property right in procedure.

[00:23:00] Speaker 00:
The notice would be merely in shape.

[00:23:03] Speaker 03:
But I think there are, and maybe it's a conflation of the property interest and sort of the thing that they would do, because I think the argument is that had we received notice, then we could have mined it or somehow maybe engaged in an opposition campaign so the permits wouldn't have been

[00:23:18] Speaker 03:
granted or whatever, but there would have at least been an opportunity to protect the property right.

[00:23:22] Speaker 03:
Is that, in fact, just a conflation of a procedural right and a property right?

[00:23:27] Speaker 00:
That's point three.

[00:23:29] Speaker 00:
I suggest it's not the mineral interest.

[00:23:32] Speaker 00:
I think, Judge Sasai, I agree with you, or the implication of your question anyway, that notice itself cannot be the property interest.

[00:23:38] Speaker 00:
I think the third and final way that Mr. Stevens tries to argue a protected property interest

[00:23:43] Speaker 00:
It's just as you hypothesize, Judge Desai, if he's got this protected mineral interest, and we grant that he does, and if somehow he were to be entitled to notice under the code, which the code just doesn't say, but let's say he is entitled to it, what then?

[00:23:58] Speaker 00:
What that argument suggests is that he has a protected property interest in the outcome of the city's decision process.

[00:24:07] Speaker 00:
And that can't be the law either because you don't have a protected property interest when the outcome of a decision is itself subject to discretion.

[00:24:16] Speaker 00:
It's not a protected property interest because it's highly discretionary.

[00:24:20] Speaker 00:
If, in fact, the city gave notice to Mr. Stevens' clients that an individual wants to erect a pergola in his or her backyard, what result?

[00:24:30] Speaker 00:
Well, the answer is that there's absolutely nothing in the Richland Municipal Code

[00:24:34] Speaker 00:
Protective property is derived from source of state or local law.

[00:24:38] Speaker 00:
There's nothing in the city's code that says we would have any standing to do anything relative to that person wanting to erect a pergola because there's a mineral interest.

[00:24:48] Speaker 00:
And again, we run right into Washington state law because the Washington Supreme Court has told us that you can use the surface as you see fit.

[00:24:57] Speaker 00:
And so I just struggle, Your Honors, to meaningfully sort of expand on and then analyze this protected property interest component because I just don't see how it can be.

[00:25:08] Speaker 00:
It also, in an indirect way, it also can be

[00:25:12] Speaker 00:
discredited, I guess, if not analytically disproved because of the very extent of it.

[00:25:20] Speaker 00:
And I'll point out that in Mr. Stevens' reply brief, I don't think you find a very clear articulation of it either.

[00:25:25] Speaker 00:
In his reply brief, he states that the due process clause simply requires notice.

[00:25:30] Speaker 00:
to recorded owners of a property that is subject to a permit request.

[00:25:34] Speaker 00:
And that's exactly our concern.

[00:25:36] Speaker 00:
It doesn't simply require it.

[00:25:38] Speaker 00:
We have to find it somewhere.

[00:25:40] Speaker 00:
It has to be shown in some source.

[00:25:43] Speaker 00:
But I was on the train of thought that indirectly it just seems highly implausible and I want to highlight why.

[00:25:49] Speaker 00:
You've seen in the excerpts of record that the city actually in discovery sought from Mr. Stevens an answer to, what permits are we talking about?

[00:26:00] Speaker 00:
Let's get to brass tacks.

[00:26:02] Speaker 00:
What are the permits that deprive your client of a protected property interest or deprive your client of the ability to access minerals?

[00:26:08] Speaker 00:
However broadly we want to define it.

[00:26:10] Speaker 00:
And and and and he he helped us identify those we've supplied them.

[00:26:16] Speaker 00:
You'll see that they're You know as I've indicated they are they are very benign three er 830 Replace water heater gas piping for new fireplace.

[00:26:25] Speaker 00:
I'm I'm picking and choosing so there are others like a rezone but but the thing that I want to branch off from there your honors is that the theory

[00:26:37] Speaker 00:
The theory falls apart not only because of the breadth of the kinds of permits that Saddle Mountain claims it has a right to notice of and to be able to influence, but it also falls apart because if Saddle Mountain's mineral rights connote this kind of a protected property interest,

[00:26:57] Speaker 00:
then nearly any other kind of property interest that could be articulated does so as well.

[00:27:03] Speaker 00:
And Mr. Stevens recognizes this.

[00:27:05] Speaker 00:
Page 16 of his reply brief, he points out that easements are recognized forms of property.

[00:27:11] Speaker 00:
They certainly are.

[00:27:13] Speaker 00:
Recorded covenants certainly are.

[00:27:15] Speaker 00:
Leans, water rights, all of those are protected property interests if you define protected property interest as anything that Washington state law recognizes as property interest.

[00:27:26] Speaker 00:
So what that leads to is a scenario where the city could have a due process violation every time it issues any kind of building permit to anyone who may have a right to apply for the permit

[00:27:40] Speaker 00:
or may have a subsurface interest of one kind or another, may be a remote lean holder, folks who may not be even perceivable in the public record.

[00:27:50] Speaker 00:
So it just does not fly with really any expected jurisprudence on substantive process, procedural due process, my apologies.

[00:28:01] Speaker 00:
So I want to speak briefly with my last minute on

[00:28:04] Speaker 00:
takings.

[00:28:05] Speaker 00:
I think I've already highlighted our position on the Penn Central test.

[00:28:09] Speaker 00:
Mr. Stevens really did not touch on Loretto.

[00:28:12] Speaker 00:
I want to emphasize that in Loretto, a taking exists where there's a physical occupancy that is compelled by the government to judge the size point.

[00:28:21] Speaker 00:
In this case at most, the city issues a permit and a person goes on the property and does whatever he or she does.

[00:28:28] Speaker 00:
It's very different from Loretto or the Loretto progeny.

[00:28:32] Speaker 00:
where there's a Cedar Point Grove, I guess, versus Hasid is one where the government actually directly compels the entry by a private party.

[00:28:44] Speaker 00:
Finally, on takings is Lucas.

[00:28:46] Speaker 00:
I don't want to speak much to Lucas because I think Judge Saiz already indicated that the panel is well aware that Mr. Stevens' clients have been able to sell these interests for a significant amount of money over the years, and I disagree with Mr. Stevens.

[00:29:00] Speaker 00:
The panel will make up its own mind on this, but I disagree that Mr. Mons

[00:29:05] Speaker 00:
statement of what the minerals are worth was anything other than his opinion of what they are worth now.

[00:29:11] Speaker 00:
That's what it clearly is indicating.

[00:29:14] Speaker 04:
Thank you very much.

[00:29:22] Speaker 04:
You have about two and a half.

[00:29:24] Speaker 01:
Thank you.

[00:29:25] Speaker 01:
I'll try to be quick.

[00:29:26] Speaker 01:
I sat down and thought, how can we work talking below about 1962?

[00:29:31] Speaker 01:
And then I realized the cited page says that in 1962, the city started regulating removal of topsoil and mining as a conditional use.

[00:29:44] Speaker 01:
So it was allowed in 1962.

[00:29:46] Speaker 01:
It was just a different permitting process.

[00:29:49] Speaker 02:
Now, I assume that you could just hire a title company

[00:29:53] Speaker 02:
And with respect to all your parcels, say, alert us when there's any permit or other activity related to this interest.

[00:30:04] Speaker 02:
And that title company could do that.

[00:30:06] Speaker 02:
You just want the city to do it.

[00:30:08] Speaker 01:
Well, I don't know if that's true.

[00:30:09] Speaker 01:
I don't know if a title company is keeping track of permits.

[00:30:12] Speaker 01:
In fact, I don't think it's true.

[00:30:13] Speaker 02:
You could ask a title company.

[00:30:15] Speaker 02:
That's what you employ title companies for.

[00:30:17] Speaker 02:
Say, dear title company, I'm going to employ you

[00:30:21] Speaker 02:
alert me to every time there is a filing on this property.

[00:30:26] Speaker 01:
So your honor, I respectfully disagree.

[00:30:29] Speaker 01:
I don't think a title insurance company is going to keep track of permit decisions at the city.

[00:30:34] Speaker 01:
They will let you know if somebody files a lien or lets you know those kinds of things, but not permit decisions.

[00:30:41] Speaker 03:
Okay, what about a standing records request to the city every time there is an application for a permit with respect to one of the parcels?

[00:30:49] Speaker 01:
That probably exists and works.

[00:30:53] Speaker 01:
But the ultimate question here is whether due process requires that.

[00:30:59] Speaker 01:
And just because there's another way to get the process doesn't mean that there is not a due process problem here.

[00:31:06] Speaker 03:
Can you address, I think, the argument that the city is making that, and maybe I use the word conflate, but I think the argument that the city is making is that there is no way that notice can be a property interest.

[00:31:22] Speaker 03:
because it's a procedural interest.

[00:31:24] Speaker 01:
I agree 100%.

[00:31:26] Speaker 01:
We're not saying the property interest is in any city code or any requirement of notice.

[00:31:33] Speaker 01:
The property interest is in the deed that says you own these minerals and you have the right to control this property.

[00:31:42] Speaker 01:
The notice requirement is a due process requirement.

[00:31:45] Speaker 01:
And it's true with every other kind of due process case the Supreme Court has handled.

[00:31:51] Speaker 01:
People have property interests in property, in cars, in bank accounts, in liens.

[00:32:00] Speaker 01:
We're not saying it comes.

[00:32:02] Speaker 01:
We never have said it comes from the city code.

[00:32:09] Speaker 04:
Why don't you just take a moment and finish up and let either of my colleagues have questions.

[00:32:15] Speaker 01:
Thank you, Your Honor.

[00:32:16] Speaker 01:
Go ahead.

[00:32:19] Speaker 01:
There was also, just maybe bring up two things quickly.

[00:32:24] Speaker 01:
One, there was a comment made that notice should not be given to people not seen in the public record.

[00:32:31] Speaker 01:
Our point is, these are in the public record.

[00:32:34] Speaker 01:
These are recorded.

[00:32:36] Speaker 01:
The city can know whether we have mineral interest.

[00:32:39] Speaker 01:
And they had argued below that, oh, and in the briefing, that title insurance companies won't give the city that information.

[00:32:49] Speaker 01:
That is not true.

[00:32:50] Speaker 01:
They don't insure against mineral interest unless somebody asks them to insure.

[00:32:54] Speaker 01:
But these are in the public record, the grantor grantee index, that's been around forever.

[00:32:59] Speaker 01:
They are available.

[00:33:01] Speaker 01:
And then the other brief response on Loretto is, Loretto did not command the cable company to put the cable in the apartments.

[00:33:11] Speaker 01:
They authorized it.

[00:33:12] Speaker 01:
And that's what we're saying here.

[00:33:14] Speaker 01:
The city has authorized decisions that create a physical invasion of my client's interest.

[00:33:23] Speaker 01:
And with that, we'd ask the court to reverse.

[00:33:25] Speaker 04:
Thank you very much.

[00:33:26] Speaker 04:
We thank both counsel for their arguments this morning.

[00:33:28] Speaker 04:
And this matter is submitted.

[00:33:29] Speaker 04:
We are in recess until tomorrow.

[00:33:31] Speaker 04:
Thank you.