IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
November 16, 2010
UNITED STATES OF AMERICA, PLAINTIFF,
BRIAN GANOE, DONALD MCKAY, AND MAC MCFARLIN, DEFENDANTS.
The opinion of the court was delivered by: Craig M. Kellison United States Magistrate Judge
PROPOSED MEMORANDUM OF OPINION AND JUDGMENT
This case came on regularly for trial on July 20, 2010, at the United States District Court in Redding, California, the Honorable Craig M. Kellison, United States Magistrate Judge, presiding; the United States appeared by and through Matthew C. Stegman, Assistant United States Attorney; Joseph Cook, Certified Law Clerk, and Robert D. Sweetin, Certified Law Clerk; and the defendants, Brian Ganoe, Donald McKay and Mac McFarlin, appeared by and through retained counsel, David Young.
By way of an Information filed on August 3, 2009, the defendants are charged with violating § 261.9(a)*fn1 in Count I, "damaging any natural feature or other property of the United States;" § 261.12(c)*fn2 in Count II, "damaging and leaving in a damaged condition any such road, trail, or segment thereof;" § 261.12(d) in Count III, "blocking, restricting, or otherwise interfering with the use of a road, trail, or gate;" § 261.6(a)*fn3 in Count IV, "cutting or otherwise damaging any timber, tree, or other forest product. . .;" § 261.10(a)*fn4 in Counts V through VIII, "constructing, placing, or maintaining any kind of road . . . or other improvement on National Forest System lands or facilities without a special-use authorization, contract, or approved operating plan when such authorization is required," relating to the construction of water pipelines (Count V), access road (Count VI), settling pond (Count VII) and the installation of a gate (Count VII).
Each of these offenses is punishable by a fine of not more than $5,000, imprisonment for not more than six months, or both.*fn5
I. THE TRIAL
The charges stem from property damage and the unauthorized construction of improvements on National Forest System lands during 2007 and 2008 allegedly done by the defendants during the course of their mining activities in Siskiyou County, California, within the boundaries of the Klamath National Forest. Much of the focus at trial related to a landslide that occurred on a portion of a Forest Service road lying directly above the defendants' mine site. The terms, landslide, slide, slump, slumping and failure were used interchangeably during trial to describe the condition of the damaged forest road. The court shall simply refer to the event as the "slide."
On July 10, 2008, Defendant Donald McKay [McKay] wrote a letter (Gov. Ex. 3) to the District Ranger of the Klamath National Forest informing him that a portion of Forest Service Road 48N08 [N08] had "slumped" and was rendered "unstable and not safe." McKay authored said letter apparently on behalf of himself, Defendant Brian W. Ganoe [Ganoe] and Defendant Mac McFarlin [McFarlin] collectively as owners of the Pay Streak Mine [Paystreak] which lies downhill and adjacent to the slide. The District Ranger, Kenneth Harris [Harris], did not act or respond to the letter immediately because of extreme forest fire activity on other portions of the Klamath National Forest. Harris, along with Forest Service representatives, John Hendricks, Jim Main, Curt Hughes, Jim Davis and Ed Rose visited the site on September 8, 2008. Harris recalls meeting with Ganoe and viewing the slide and adjacent areas including the Paystreak. Harris recalls Ganoe telling him that "they had done some mining there" and had constructed a pond for "wildlife enhancement." Harris observed that the slide had rendered the N08 unusable, and that a number of trees between the slide and the Paystreak were down, damaged and scarred.
Curtis Hughes [Hughes], the Land and Minerals Officer for the Klamath National Forest testified that he had accompanied Harris and others to the site on September 8th. Hughes recalled inspecting the slide, also noting the downed and damaged trees. He testified that there was considerable new surface disturbance to the area. Hughes had last been in the area in 2005. Hughes testified that he believed an access road [New Road] had recently been constructed leading from the N08 downhill to the base of the Paystreak. Upon closer inspection, Hughes observed that several trees had been pushed out of the way to build the New Road. Hughes further testified that he had conversed earlier in the summer with McKay who volunteered that "they were prospecting with a mini excavator." During the site inspection on the 8th, Hughes testified that he also observed that a gate had been constructed along another access road leading to the mine. Hughes also recalls meeting Ganoe during the site meeting on the 8th wherein Ganoe had introduced himself as a "retired geologists with the Department of Agriculture." Hughes testified that Ganoe informed him that they had not done anything wrong because the site had been previously mined in past years and was a disturbed area. Hughes testified that he reminded Ganoe that he was familiar with the site and that it had been reclaimed prior to the new ownership.
Hughes testified that he had visited the area of the Paystreak on at least five occasions between the early 1990's and his inspection on September 8, 2008. He was aware that the mine had been operated in the past by other individuals, but does not recall any mining activity on the site between 1993 and 2007.
Law Enforcement Officer Edward Hendricks [Hendricks] also visited the site on September 8, 2008. Hendricks testified that Ganoe had informed him that "they" had brought in heavy equipment two months earlier "looking for ore." Ganoe also volunteered that they had constructed the pond for "wildlife." When questioned about the existing gate, Ganoe told Hendricks that "they" had installed it and had it locked. Hendricks testified that McKay admitted to cutting into the hill to release water.
James Davis [Davis], an engineer with the Forest Service, testified that he also was present during the on site inspection on September 8th. Davis recalls conversing with Ganoe regarding the repair necessary to rebuild the damaged road. Davis informed Ganoe that any repair would require an environmental assessment and be subject to Environmental Impact Statement requirements.
Two days following the on- site meeting at the slide and Paystreak, McKay sent three separate letters to the Forest Service. [Exs. 4 and 5]. Exhibit 5 is a cover letter enclosing a proposed Plan of Operations [POO] which was backdated to July 29, 2008. This July 2008 POO was submitted on behalf of McKay and Ganoe as owners of the Paystreak Mine. The POO described the construction of a settling pond for "wildlife enhancement," collection of water through pipes from the hillside and the "infrequent use of a 450 Cat dozer and a small Takahici mini excavator." A third letter apologizes for the late filing of the parties' Notice of Intent [NOI] to mine indicating that the defendants "did not know it was needed." Since McKay also requested that the POO be considered retroactively, it is also assumed that much of the work contemplated in the POO had already been commenced, i.e. construction of the settling pond, use of mechanical equipment, etc.
On September 30, 2008, Forest Service representatives Ken Stagg, Jim Davis, Ed Rose, Angie Bell and Juan de la Fuente again visited the site to assess the slide. [Ex. D p. 164]
On December 11, 2008, McKay and Ganoe submitted a revised POO with an amended date of November 11, 2008. [Ex. 6]. In this revised POO, McKay and Ganoe indicate that they "[i]nstalled a gate on lower entrance for safety and security." Again the revised POO describes collecting water through a pipe and "a small pond (approximately 8 feet across) that we built for any possible erosion and wildlife enhancement." The use of a "450 John Deere dozer" and "a small Takehici mini excavator" are also indicated.
In a letter to the Forest Service dated January 16, 2009 (Ex. 7) Ganoe, again describing himself as a certified professional geologist, opines that "[d]ewatering and pulling the toe material from the base at the mine entrance may have contributed to the stability problem."*fn6
Although Ganoe does not describe who initiated the excavation work in the "late summer and the fall of 2007," and to what extent, McKay concedes that the discovery date of the Paystreak as it related to the defendants, herein, was June 29, 2007. [Ex. 5]. In this regard, Exhibit 7 proves more helpful. In a letter dated January 16, 2009 from Ganoe to Harris, he admits that he began excavating in late summer of 2007.
On February 19, 2009, Ganoe and McKay again met with Forest Service personnel. When discussing the cause and origin of the slide, Ganoe and McKay apparently conceded that the slide was probably caused by their earth moving activities under the road. Ganoe and McKay acknowledged that they had released water that had been backed up which when released weakened the upper road. [Ex. D, p 167]. During this meeting Ganoe represented himself as a retired geologist.
Juan de la Fuente [de la Fuente],*fn7 a forest service geologist for the Klamath National Forest, visited the site and observed the slide on September 30, 2008. At trial, de la Fuente opined that the landslide was caused by the removal of material at the base and toe of the slope lying below the roadway. During cross examination, de la Fuente conceded that his opinion was based on the analysis performed by fellow employee Ed Rose.
Edward K. Rose [Rose],*fn8 is currently the regional geotechnical and dams engineer for the northern region of the forest service encompassing the national forests in Montana and northern Idaho. At the time of the slide and subsequent investigation into its cause, Rose was the geotechnical engineer for the northern California province which includes the Klamath National Forest. Rose testified that he visited the site on four occasions. Rose opined that the removal of material at the base or toe of the slope was the cause of the slide.
The defendants called Donald Olsen [Olsen],*fn9 as their expert who opined that the slide was most likely caused by high water content in the soil which accumulated during the winter of 2007-2008. Olsen surmises that as a result of the wet winter, the ground above and supporting the N08 became saturated ultimately resulting in the collapse. [Ex. G].*fn10
The defendants did not testify.
II. APPLICABLE LAW
It is clear from the evidence that defendants Ganoe and McKay were involved in mining operations at the Paystreak Mine prior to the slide. As set forth above, Ganoe admitted to mining, dewatering, use of heavy equipment, construction of the pond, and installation of the gate. McKay admitted to prospecting, dewatering, use of a mini excavator and the installation of the lower gate. Olsen testified that the defendants told him that they had recently graded the access road. The defendants failed to submit a NOI (§ 228.4(a)), or obtain a POO (§ 228.4(c)), relating to their work or mining operations at the Paystreak prior to the failure of the N08, despite the fact that these activities clearly envisioned the use of heavy equipment (§§ 228.4 (a)(vi) and 228.12),*fn11 and involved operations likely to cause "significant disturbance of surface resources." § 228.4(a).
An act or omission listed in Part 261 not authorized by a permit issued under § 261.1a, or otherwise authorized, is punishable as provided in 16 U.S.C. § 551. Permits are generally in the form of special use permits issued under Part 251. Section 251.50(a) provides that "[a]ll use of National Forest System land, . . . except those provided for in the regulations governing . . . minerals and mineral materials (Part 252), . . . are 'special uses' and must be authorized. . . ." A system other than use permits has been established for minerals and mineral materials. That system of regulation is found in Part 252. When the statute and the regulations give miners a statutory right to go upon and use the open public domain for purposes of mineral exploration and development, forest service officials may not unreasonably restrict that right by applying general forest service regulations and a permit system.
The forest service may properly regulate the surface use of forest lands. While the regulation of mining per se is not within forest service jurisdiction, where mining activity disturbs National Forest System lands, forest service regulation is proper. United States v. Weiss, 642 F.2d 296, 298 (9th Cir. 1981) (Secretary of Agriculture has "power to adopt reasonable rules and regulations regarding mining operations within the national forests"); United States v. Richardson, 599 F.2d 290 (9th Cir.1979), cert. denied, 444 U.S. 1014 (1980) (recognizing the conflict between mining and forest land policies and holding that the district court may properly enjoin unreasonable destruction of surface resources). United States v. Goldfield Deep Mines Co., 644 F.2d 1307, 1309 (9th Cir. 1981), cert. denied, 455 U.S. 907 (1982); United States v. Doremus, 888 F.2d 630, 632 (9th Cir.1989), cert. denied, 498 U.S. 1046 (1991). In reaffirming the Forest Service's authority to regulate mining, the court in Doremus, supra at 632, rejected a miner's contention that conduct "reasonably incident[al]" to mining could not be so regulated, and left no doubt that the Department of Agriculture possesses statutory authority to regulate activities related to mining in order to preserve the national forests.
16 U.S.C. § 551. Doremus clearly supports the use of § 261 prohibitions against miners so long as the mining operations are not "unreasonably circumscribed as to amount to a prohibition." See also, United States v. Weiss, supra at 299. The court in Doremus also found that the § 261 prohibitions do not conflict with 30 U.S.C. § 612 because the regulatory right of the Forest Service does not "endanger or materially interfere with mining operations." Id. at 632.
Mining operations are defined in part by 30 U.S.C. § 612(a) and more specifically in § 228.3. The regulation defines "operations" as follows:
All functions, work, and activities in connection with prospecting, exploration, development, mining or processing of mineral resources and all uses reasonably incident thereto, including roads and other means of access on lands subject to the regulations in this part, regardless of whether said operations take place on or off mining claims.
The national forests are to be open for entry "for all proper and lawful purposes, including that of prospecting, locating, and developing the mineral resources thereof." 16 U.S.C. § 478. However, "(s)uch persons must comply with the rules and regulations covering such national forests." Id. Thus it is clear that persons entering the national forests to prospect, locate, and develop mineral resources therein are subject to and must comply with the rules and regulations covering the national forests.
When the potential for "significant disturbance" of Forest Service lands arises, the mining operator is required to submit a NOI to the District Ranger who will assess the operator's proposed mining operations. § 228.4(a). If the Forest Service determines that the proposed operations "will likely cause a significant disturbance of surface resources," the operator is required to submit a proposed POO to address the impact upon Forest Service lands. §228.4(a)(2) and (3). Not surprisingly, once a POO is required, the operator's costs rise exponentially. An "environmental assessment" may then become necessary (§§ 228.4(f) and 228.8), and possibly the need to post a reclamation bond. §§ 228.8(g) and 228.13.
Section § 551, of Title 16 also grants authority to the Secretary to make "rules and regulations and (to) establish such service as will insure the objects of such reservations, namely, to regulate their occupancy and use and to preserve the forests thereon from destruction . . ." The section specifically states that the Secretary shall make provision for the protection of the national forests against destruction by fire and depredation. Thus, the Secretary has been given the authority to promulgate reasonable rules and regulations which will protect the national forests and which will help to carry out the purposes for which the national forests were created. The regulations in question, Part 252, were designed to minimize adverse environmental impacts on the surface resources of the national forests.
Much of the trial was devoted to expert opinion regarding the slide's causation. From the outset, it must be stressed that the evidence amply supports the finding that defendants McKay and Ganoe were involved in mining operations at the Paystreak and particularly at the base of the N08 at periodic times preceding its failure. This involved the removal of material at the base or "toe" of the slide, dewatering, the use of mechanical equipment and the construction of various improvements. The defendants' mining activities at the Paystreak were done or performed without a POO or special use authorization. The opinion testimony of de la Fuente and Rose, coupled with the admissions of Ganoe and McKay support the finding that defendants' mining activities, which included dewatering and material removal from the base of the slope, were the cause of the slide. Ganoe opined that "dewatering and pulling the toe material from the base at the mine entrance may have contributed to the stability problem," (Ex.7) and McKay concedes the slide probably occurred because of defendants' earthmoving activities under the road. [Ex. D].
The court is also guided by common sense. The evidence that the defendants excavated and removed material and water at the base or "toe" of the slope below the N08 during a period of time prior to its failure cannot be ignored or glossed over by unsupported conjecture. The court does not arrive at this finding based simply on preconceived notions of gravity and simple physics. Both de la Fuente and Rose testified that the type of rock and material found in the slope when disturbed increases the chance of slope failure. Ganoe was also concerned and aware of the inferior quality of rock and soil lying below the N08. [Ex. 7]. De la Fuente testified that these concerns should have been addressed in a POO. Other witnesses for the forest service testified that a POO would never have been approved given the concerns with the soil make-up and the danger of its potential removal. In a detailed analysis, the forest service concluded that the "[r]emoval of material at the toe of the slope (below the road at the raw rock face) where mining and excavation has occurred is the most probable cause for the failure of this entire slope from above the road cut to the existing excavation below the road." [Exs. 33 and 36].
The court also received expert testimony outlined in detailed reports from both Rose and Olsen concerning slope stability which measures the possibility of slope failure or non failure, and also the degree of failure or non-failure. Simply stated, if the forces available to resist movement are greater than the forces driving movement, the slope is considered stable. Both experts used the "Safety Factor" [SF] as an established numerical value in slope stability analysis which measures the possibility of failure or non-failure. The SF has a value greater than "1" when the resisting forces are greater than the driving force, and a SF value less than "1" when the driving forces overcome the resisting forces. Adding to the complexity of these tests were the assumptions employed by both experts including the material properties of the soil, cohesion of materials, saturation of the soil and the angle of friction. [Exs. G and 36].
In Olsen's slope stability analysis, he opines that the failure was predicated on a high water table or complete saturation of the road prism. Olsen speculates "that percolation of rain water collected in the old existing prospect pit during the entire winter rainy season saturated the soil and rock material underlying the slope [and] [t]he significant decrease in shear strength of these soil and rock materials triggered the slope failure." [Ex. G. p.8]. In Olsen's report he claims that the prospect pit above the road was full of water at the time of his visit on July 17, 2009, yet photograph # 3 to his report which (apparently taken on June 30, 2009) would appear to belie this claim. At trial, Olsen testified that this prospect pit "could have filled with water," which contradicts the observations in his report that it was filled with water during the time of his initial visit.
At the end of the day, however, the court is still left with the fact that the slide took place within a short period of time following defendants removal of material and water from the base of the N08. Ganoe best describes this cause and effect sequence in his letter of January 16, 2009 to Harris. [Ex. 7].*fn12
Olsen opined that the slide was the result of saturated soil resulting from the wet winter of 2007-2008. Olsen testified that the heavy spring rains in 2008 more than likely caused or increased the soil saturation. On cross examination, however, Olsen conceded that he merely assumed that the area was subjected to a wet winter and rainy spring, admitting that he had not done any background investigation or research to support such a conclusion. Olsen testified that he did not live near the area of the Paystreak, and had not visited the area during the winter of 2007-2008. Olsen did not rely on any documented weather history of the area relating to the periods in question. When pressed further on this issue, Olsen conceded that he simply assumed that it had rained more than usual. Olsen did not explain why the winter of 2007-2008 would have had such a remarkable effect on a road that had been in existence almost 70 years.
More troubling, however, was Olsen's apparent resistance to explore the possibility that the removal of material by the defendants was the cause or contributed to the slide. The court acknowledges his role as an expert for defendants and the direction this must necessarily take. Unfortunately, Olsen bases his opinion that the slide was the result of excessive soil saturation merely upon his assumption that winters are wet and that the defendants had engaged in little or no mining activity.*fn13
When first meeting with the defendants on-site to inspect the slide, Olsen chose to take no notes and was told by the defendants that they had removed only a few tons or cubic yards of material. Of course, this estimate differs dramatically with the estimate of material removed as set forth in Exhibit 36 and the testimony of de la Fuente, which suggests that as much as 2,000 cubic yards may have been removed. [Ex. G. p 4]. Choosing not to accept either estimate, the court is still satisfied that whatever amount of material was removed by the defendants, such removal was the contributing cause of the slide. Olsen also testified that the defendants had assured him that no material had been removed from the site. Unexplained, however, is what defendants did with the tons of soil and debris admittedly removed by them during the summer and fall of 2007. [Ex. 7]. Although, Olsen was not bound by de la Fuente's estimate, the court was unimpressed with Olsen's lack of background investigation and deliberate ease in arriving at assumptions unsupported by facts.
Not to be ignored are the inculpatory admissions by defendant Ganoe. As set forth above, Ganoe on several occasions conceded that the removal of material by defendants may have caused the slide. An issue at trial involved whether these admissions would be considered lay, or treated in the context of expert testimony since Ganoe was a licensed "professional geologist." Since Ganoe did not elect to testify, however, his qualifications did not become an issue and the court agreed to consider the admissions, if any, only as lay opinion.
Despite the court's ruling to consider Ganoe's admissions as only lay opinion, however, the defendants chose to introduce Exhibit D into evidence which included Ganoe's professional certifications. In his letter of January 16, 2009 (Ex. 7) to the Forest Service, Ganoe introduces himself as a certified professional geologist and opines that "[d]ewatering and pulling the toe material from the base at the mine entrance may have contributed to the stability problem . . . [r]emoving water and water laden debris from the old shafts and adits removed further internal support."
Despite the contradiction in having Exhibit D admitted into evidence, the court will simply treat Ganoe's admission that he believed his mining operations were either the cause or a contributing factor to the slide, as just that. The court will not ignore his educational background degree and professional licenses in geology, since they simply reinforce the other evidence received by the court including Ganoe's assessment of the poor quality of the soil and rock underlying the N08. [Ex. 7]. Since sufficient expert testimony was received to address causation, it makes little difference whether Ganoe's opinion is treated as lay or expert.*fn14
In Count 1, defendants are charged with "damaging any natural feature or property of the United States." § 261.9(a). The government has established beyond a reasonable doubt that the mining activity of defendants Ganoe and McKay caused the slide of forest service road N08.
Hughes, Hendricks and Davis all recalled conversations with Ganoe involving his mining operations before the slide. These admissions were reinforced by Ganoe in a meeting with forest service personnel on February 19, 2009. [Ex. D p. 167]. Similarly, Ganoe's letter of January 16, 2009 (Ex. 7) not only confirms his involvement in the mining activity, but includes his opinion as to the slide's causation. Ganoe also appeared to co-author the two proposed POOs which both describe the proposed excavation at the mine. [Exs. 5 and 6]. These POOs are backdated and incorporate language in the past tense when referring to contemplated mining operations. Additional evidence at trial also reinforces the fact that mining activity began as early as June 2007. [Ex. 5].*fn15
McKay also co-authored the same POOs. The July 2008 POO described the construction of a settling pond and the use of a 450 Cat dozer and a small Takahici mini excavator. As set forth above, the court is convinced that these POOs were backdated and reference contemplated activities that had already occurred or were in place at the time of the slide. In a letter dated September 10, 2008, to the forest service (Ex. 5), McKay apologizes for his tardy submission of his NOI to mine the Paystreak mine. Hughes testified that on September 8, 2008, he met with McKay at the mine site. During this conversation McKay indicated the he was prospecting and admitted to using a mini excavator. Finally, McKay was also in attendance at the February 19, 2009 meeting with the forest service personnel, wherein McKay admitted to the release of accumulated water and conceded "that it was probably their earth moving activities under the road that caused it to slip." [Ex. D. P 167]. During this same meeting, Hendricks recalled McKay stating that after cutting into the hill, water began to flow.
The damage to road N08 was significant, which included the loss of timber and vegetation. The evidence supports the finding that the defendants' removal of material at the base or "toe" of the slope caused the road to fail. Although, the defendants suggest other possible or potential theories of road failure, the expert testimony to support said theories was either wanting or unconvincing.
For these reasons, defendants Ganoe and McKay are guilty of damaging forest service property in violation of § 261.9(a). As to defendant McFarlin, the government has not satisfied its burden of proof.*fn16
In Count II, defendants are charged with "[d]amaging and leaving in a damaged condition any such road, trail, or segment thereof." For the reasons set forth above, the court finds defendants Ganoe and McKay guilty of causing the damage to forest service road N08 in violation of § 261.12(c). As to defendant McFarlin, the government has not satisfied its burden of proof.
In Count III, defendants are charged with "[b]locking, restricting, or otherwise interfering with the use of a road, trail, or gate."
This Count pertains to the fact that the N08 suffered significant damage and was rendered unusable as a result of the slide.For the reasons set forth above, the court finds defendants Ganoe and McKay guilty of violating of § 261.12(d). As to defendant McFarlin, the government has not satisfied its burden of proof.
In Count IV, the defendants are charged with "cutting or otherwise damaging any timber, tree, or other forest product" between June 2007 and September 2008. The court assumes that these charges relate to both the damage to trees that were destroyed as an unintended consequence of the slide, and also to the trees and vegetation that were allegedly removed or cleared in the construction or grading of the New Road leading from the N08 to the base of the Paystreak. The government contends that the defendants constructed the New Road in furtherance of their mining operations.
Unclear to the court is the origin and history of the New Road. Some of the evidence suggests that this road either existed, or was constructed during a prior occupancy. During the 1980's and 1990's the mine was owned and occupied by Irvin and Don Uptegrave [Uptegraves]. In the POOs submitted by the Uptegraves, the evidence suggests either the anticipated construction or the existence of a road or spur leading from the N08 to the base of the mine. [Ex. D]. Although Hughes testified that it appeared evident that grading work had recently been done on a road leading from the N08 to the staging area, he did not know if the road was in existence prior to defendants' occupancy. Davis also testified that he was unsure whether this road existed prior to 2007.
Hughes testified that when observing the road in question, it appeared recently graded with several small trees being pushed out of the way. Although the photographs introduced at trial confirm that the roadway had been recently graded, the court is not convinced that the timber adjacent to the roadway appearing in Exhibits 21, 22, 29, 31 and 32 was the result of defendants' road clearing or grading activity, as opposed to the slide. The evidence certainly lends support to the former conclusion, but the court is not convinced beyond a reasonable doubt. The court is unable to conclude that timber (other than the small trees alluded to by Hughes) was damaged in the grading of the new road. [Ex. 15-18]. Although the testimony and photographs indicate the scarring or debarking of one or more trees, the court is not willing to treat this damage as a violation of § 261.6(a). It makes little difference, however, since the court finds that the defendants did violate § 261.6(a) with respect to the unintended damage done to the timber as a result of the slide.
Section 261.6(a) impose strict liability on anyone, "cutting or otherwise damaging any timber, tree, or other forest product." In United States v. Wilson, 438 F.2d 525 (9th Cir.1971), the court held that violations of § 261.6(a), an offense made punishable as a misdemeanor by 16 U.S.C. § 551, does not require a criminal intent. Section 261.2 defines "damaging" as "to injure, mutilate, deface, destroy, cut, chop, girdle, dig, excavate, kill or in any way harm or disturb." Hughes testified that he observed numerous trees leaning down the road and new surface disturbance as a result of the slide. The photographs received into evidence and the testimony of Hughes and Hendricks adequately support a finding that "log timber sized trees had fallen into the pit" at the base of the road as a result of the slide. Since damaging includes activities such as destroying, digging, excavating, killing, harming or disturbing, the court finds that defendants Ganoe and McKay are guilty of violating § 261.9(a) because their mining activity causing the slide resulted in damage to trees and vegetation caught in its path. As to defendant McFarlin, the government has again not satisfied its burden of proof.
In Counts V through VIII, the defendants are charged with "[c]onstructing, placing, or maintaining any kind of road, trail, structure, fence, enclosure, communication equipment, significant surface disturbance, or other improvementon National Forest System lands or facilities without a special-use authorization, contract, or approved operating plan when such authorization is required." It is clear from the evidence that the defendants conducted their mining operations and the construction of the improvements set forth in Counts V through VIII without an approved POO. Hendricks testified that Ganoe indicated that he did not have a POO or "permits," during his visit on September 8, 2008. In letters to the forest service following the slide, McKay submitted backdated POOs while apologizing for defendants' tardy compliance. Since defendants activities involved mining, the special use requirements of § 251.50 are inapplicable.
Counts V and VII relate to the unauthorized maintenance or construction of a PVC pipeline and settling pond at the mine site. Olsen testified that he was told by the defendants that they installed pipe in an existing underground pipe that fed the pond. Both of the proposed POOs (Exs. 5 & 6) authored by Ganoe and McKay discuss the collection of water into pipes. On page 3 of both POOs, defendants Ganoe and McKay concede that the water is being "collected and flows into a small pond (approximately 8 feet across) that we built for any possible erosion and wildlife enhancement." Hendricks testified that Ganoe admitted to constructing the pond for wildlife purposes. In the meeting with forest service personnel on February 19, 2009, both McKay and Ganoe stated that they believed that their dewatering efforts contributed to the failure of the N08. [Ex. D p. 167]. In his letter of January 16, 2009 to the forest service, Ganoe also describes these dewatering efforts. [Ex. 7]. The court finds the evidence sufficient to find that both McKay and Ganoe were involved in the construction and maintenance of the PVC piping and the settling pond.
Hughes could not rule out that previous owners of the mine may have also utilized the same pipes and settling pond for their operations. In fact, the Uptegrave POOs (Ex. D) indicate that pipes and a settling pond were contemplated in the 1980s. It is clear to the court, however, that the Uptegraves' mining operations ended many years earlier (as early as 1993), and that the efforts of defendants Ganoe and McKay in utilizing pipes or the pond, (whether remedial or the result of new construction) is still tantamount to "maintaining" these improvements on forest service land without special use authorization or an approved POO. The court finds the defendants Ganoe and McKay guilty of violating § 261.10(a) as to Counts V and VII. As to defendant McFarlin, the government has again not satisfied its burden of proof.
Count VI relates to the construction or maintenance of a road on forest service lands.
As mentioned above, the government established that the defendants were utilizing an access road between N08 and the base of the Paystreak referred to as the New Road. Although, the government failed to establish beyond a reasonable doubt that its use and maintenance resulted to damage to trees and timber under § 261.9(a), the government did establish beyond a reasonable doubt that the defendant were using and maintaining said road for their operations. Fresh equipment tracks were present on the roadway during the visit by the forest service on September 8, 2008. [Ex. 15 & 16]. Hughes testified that the road appeared to have been recently bladed with smaller trees pushed to the side. [Ex. 21]. Hendricks testified that during this September 8th visit, Ganoe admitted to having heavy equipment on the site prior to the slide. Davis testified that the road in question had fresh scars where equipment had been, and that it appeared that material from the hillside had been removed and placed on the road. In the proposed POOs (Ex. 5 & 6) defendants Ganoe and McKay describe this road as the upper old entrance road noting that it "is still open, but little used." This claim would appear to contradict the testimony of Hughes, Hendricks and Davis who all claimed that the road in question was recently graded and improved. When Olsen met with the defendants on-site, they admitted to its grading.
As with the piping and settling pond, there is evidence to suggest that this New Road may have been in existence or constructed during Uptegraves' occupancy. [Ex. D]. Hughes and Davis could not rule out this possibility. The court does find, however, that the defendants undertook new efforts to either construct the New Road or perform considerable repair work to an existing road which involved widening and grading with mechanical equipment.
With few exceptions, any type of road construction or road maintenance on forest service lands requires either special use authorization or approval by way of a POO. §§ 251.50*fn17 ; 228.4*fn18 ; 228.12*fn19.
Again, there is insufficient evidence to find that McFarlin was involved in either the maintenance or improvement of the road in question. The court does find that McKay and Ganoe were involved in such activity and finds them guilty of violating § 261.10(a).
In Count VIII the defendants are charged with installing or maintaining a gate on forest service property.
The Paystreak is also served by another access road that connects to forest service road 48N31. This access road is not a maintained forest service road, but still is located on federal land. Olsen mistakenly argues that the gate and road are private because they are part of the Paystreak mine. [Ex. G p. 14]. Since ownership of unpatented mining claims does not equate to fee ownership, the gate and access road are not located on private property, and the right to maintain said improvements is subject to regulation by the forest service.
Hughes testified that he first observed the installed gate on September 8, 2008 at the time of his site visit. Hendricks testified that during the September 8th visit that Ganoe admitted to installing the gate. In the revised POO (Ex. 5), both Ganoe and McKay indicate that they "[i]nstalled a gate on lower entrance for safety and security." On cross examination, Olsen testified that during his first meeting with defendants that they admitted to installing the gate to keep the public out and for safety reasons. Olsen was told by the defendants that the uninstalled gate was already on site when defendants became the owners of the Paystreak, and that it was simply rehung at its former location. Assuming this is true, however, the rehanging or reinstallation of the gate is tantamount to "constructing" or "maintaining" under § 261.10(a). The court finds defendants Ganoe and McKay guilty of violating § 261.10(a), and as to defendant McFarlin, the government has not satisfied its burden of proof. Although, Olsen testified that the defendants admitted to installing the gate, no evidence was received attributing any such admission from McFarlin directly.
For these reasons, the Court concludes that:
(1) The evidence supports beyond a reasonable doubt that defendants Ganoe and McKay were involved in mining operations (including excavation and dewatering) on forest service lands which caused forest service road N08 to fail resulting in damage to property of the United States in violation of § 261.9(a), and the court finds said defendants guilty thereof. The court finds defendant McFarlin not guilty.
(2) The evidence supports beyond a reasonable doubt that defendants Ganoe and McKay were involved in mining operations (including excavation and dewatering) on forest service lands which caused forest service road N08 to fail resulting in damage to said forest service road in violation of § 261.12(c), and the court finds said defendants guilty thereof. The court finds defendant McFarlin not guilty.
(3) The evidence supports beyond a reasonable doubt that defendants Ganoe and McKay were involved in mining operations (including excavation and dewatering) on forest service lands which caused forest service road N08 to fail resulting in the blockage of forest service road N08 in violation of § 261.12(d), and the court finds said defendants guilty thereof. The court finds defendant McFarlin not guilty.
(4) The evidence supports beyond a reasonable doubt that defendants Ganoe and McKay were involved in mining operations (including excavation and dewatering) on forest service lands which caused forest serve road N08 to fail resulting in damage to timber, trees and other forest products in violation of § 261.6(a) and the court finds said defendants guilty thereof. The court finds defendant McFarlin not guilty.
(5) The evidence supports beyond a reasonable doubt that defendants Ganoe and McKay were involved in mining operations which included constructing, repairing, reconstructing and "maintaining" improvements upon forest service lands without special use authorization or approval by way of a POO in violation of § 261.10(a), and the court finds said defendants guilty thereof in Counts V through VIII. The court finds defendant McFarlin not guilty.
The government seeks restitution in this matter.
While it is true that federal courts do not have the inherent power to award restitution, and may do so only pursuant to statutory authority, United States v. Hicks, 997 F.2d 594, 600 (9th
Cir. 1993), the court is authorized by statute to impose certain conditions of probation under 18 U.S.C. § 3563(b).*fn20
The authority to impose restitution derives from § 3556, which provides that a court may order restitution in accordance with §§ 3663A or 3663. Section 3663A defines the criteria for mandatory restitution under the Mandatory Victims Restitution Act of 1996 [MVRA], which orders restitution for offenses that fall within titles 18 and 21 of the United States Code. Section 3663 defines the criteria for permissive restitution, which authorizes restitution of offenses described within Titles 18, 21, and 49 of the United States Code. These two sections provide that a federal court generally may order restitution as part of a sentence itself when the defendant is convicted of a specified collection of statutes under the specified Titles. This collection of statutes, however, does not include the statutes defendants violated here, which fall under offenses within Title 36, Code of Federal Regulations and Title 16, United States Code.
The court may require the defendants to make restitution to a victim of the offense under § 3556 "but not subject to the limitation of § 3663(a) or 3663A(c)(1)(A)." The Ninth Circuit has interpreted that language to mean that when a court sentences a convicted defendant to a term of probation, it may include a condition that he pay restitution to a victim, regardless of whether the offense of conviction is listed in §§ 3663 or 3663A. See United States v. Gamma Tech.Indus., Inc., 265 F.3d 917, 924 n.7 (9th Cir. 2001)("Although Gamma Tech was not convicted of an offense specified in § 3663(a)(1), which refers only to offenses in Titles 18, 21 and 49 of the United States Code, the district court properly imposed restitution as a discretionary condition of Gamma Tech's probation under § 3563(b)(3)"); see also United States v. Butler, 297 F.3d 505, 518-20 (6th Cir. 2002) interpreting §§ 3563(b) and 3583(b) as permitting restitution as a condition of supervised release in a Title 26 tax evasion case); United States v. Bok, 156 F.3d 157, 166 (2d Cir. 1998)(same); United States v. Dahlstrom, 180 F.3d 677, 686 (5th Cir. 1999)(same in securities fraud case). This provision of § 3563(b)(2) has been interpreted to except restitution from the limitations described in section 3663(a) when said restitution is ordered as a condition of probation. See Gall v. United States, 21 F.3d 107, 109-10 (interpreting § 3563(b)(2) as "expressly negat[ing]" the limitations under § 3663(a) "where restitution is ordered as a condition of probation . . ."); see also United States v. Lexington Wholesale Co., Inc., 71 Fed.Appx. 507, 508 (6th Cir.2003) ("[W]here restitution is imposed as a condition of probation, the provisions of § 3563(b), the Probation Statute, override the limitations of § 3663.") (citing Gall, 21 F.3d at 110).
Since, imposing restitution as a term of probation under § 3653(b)(2) is discretionary, reference to the statutory factors a court should consider in declining to impose restitution is relevant. § 3663(a)(1)(B)(I)*fn21 . Such factors include the amount of loss, financial resources of the defendants and more importantly whether the complexity in determining restitution outweighs the need to provide restitution.
1. Amount of Loss
The court received dramatically conflicting estimates to repair, or reconstruct the road. The government's estimates range between $175,000 and $400,000 (Exs. 30 and 36); and the defendants' estimates range between $3,000 and $5,000. [Ex. F].*fn22 At trial, the court indicated that the issue of restitution would be addressed post-trial, and that the amount, if any, would be arrived at in accordance with the procedures set forth in § 3664*fn23 .
These procedures begin by referring the matter to a probation officer to determine the amount of restitution. The probation officer has the initial responsibility for providing a report containing information sufficient for the court to fashion a restitution order, including an accounting of losses to each victim, any restitution owed pursuant to a plea agreement, and the economic circumstances of a defendant. § 3664(a). Due to the complexity of issues involved in the repair or reconstruction of the N08, the court concludes that reference of these issues to a probation officer would not prove efficient and not be in the best interest of the parties or the court.
Here, the parties' cost of repair estimates differ drastically. The government's estimate is more than 130 times greater than that of the defendants. Certainly, the defendants' estimate appears overly optimistic, (even bordering on fantasy) while the government's estimates are laden with endless layers of bureaucratic fluff.
The court also recognizes the possibility that reconstruction or repair of N08 may not occur for a variety of reasons, including the forest service's reassessment of cost and need.
If abandonment of the N08 was to be an alternative to repair, then the cost of repair may not be an appropriate consideration in determining restitution. In other words, the fact that the government has not chosen to repair the N08 since the slide, may point to a number of conclusions which may include abandonment. If so, the argument could be made that the value of the N08 may be less than the cost of repair.
The evidence also suggests that considerable mining activity may have occurred on-site prior to the defendants' ownership. Both the government and the defense recognize that large amounts of rock and soil may have been removed over time from the base of the slope. [Exs. 36, figure 2; and G, figure 3]. It is possible that defendants' damages could be reduced or mitigated if permitted to argue comparative fault or negligence.
2. Financial Resources of the Defendants
Here, the court cannot link defendants' ability to pay restitution to any type of rehabilitative goal. See, United States v. Day, 418 F.3d 746, 757 (7th Cir. 2005). A goal in ordering restitution is not necessarily to provide full compensation of damages to the victims of the crime, but as a way of correcting defendant's behavior and as a deterrence to impress upon the defendant the seriousness and cost of his offense. United States v. Peterson, 98 F.3d. 502, 510 (9th Cir. 1996). § 3614(b)(2). Here, the court is wary to impose restitution for what it considers non-rehabilitative purposes. Since one of the goals of restitution is rehabilitation, its imposition forces an offender to recognize the specific consequences of his criminal activity and accept responsibility for those consequences. A restitution award in a criminal case should not represent compensation for harm resulting from an act that might only be considered negligence in a civil setting.
The court is also concerned that any order of restitution imposed upon Ganoe or McKay would necessarily result in a windfall to McFarlin. Although, the court did not find McFarlin guilty of any of the charges in the Information, it does appear that McFarlin may have been culpable in the slide's causation. [Proposed Ex. A]. .
3. Complexity in Determining Restitution
Here, the court finds that restitution is a poor substitute for civil litigation. A party sued civilly has important due process rights, including appropriate pleadings, discovery, and a right to a trial by jury on the specific issues of liability of damages.
Neither party has had the opportunity to conduct discovery including taking the depositions of the opposing party experts. Although the procedure outlined in § 3664(d)(4) allows for a hearing, it does not envision the protections generally afforded in civil litigation which would include the right to a jury trial.*fn24 Defendants would be allowed to properly explore the possible comparative negligence or fault, if any, of the former owners of the mine, conduct discovery, and investigate their claim of spoilation of evidence, etc. This would include the ability to testify at time of trial, since the defendants know better than anyone else what occurred at the Paystreak. Each side would also be afforded opportunities to retool their estimates of damages since both appear highly unrealistic under the circumstances.
There are other reasons to not impose restitution in the present case. Although the court finds that the slide was the result of defendants' mining activity, it is clear that the defendants did not intend for the slide to occur. The court recognizes that all of the charges against defendants are general intent crimes and require no mens rea. Imposing a large amount of restitution for an unintentional consequence would not be appropriate under the circumstances. This is coupled with the fact that the site had been previously mined, and it is relatively easy to surmise that the slope may have been weakened by this activity.
The court is also reluctant to impose such a large monetary obligation upon defendants in the form of restitution by way of conviction of Class B misdemeanors. These cases do not require juries and rarely necessitate the appointment of counsel. Although, the defendants in this case are represented by retained counsel, the court recognizes that defending a client in Class B misdemeanor prosecution, poses significant differences than defending a client in a property damage case involving complex issues of causation and damages.
The court is also concerned that the restitution sought by the government is 80 times greater than the maximum fine as to each count. For unrelated reasons, the MVRA limits an award of restitution to the amount of fine. § 3663(c)(2)(B). Seeking restitution in an amount significantly larger than the potential fine also raises concerns in situations where the defendant is not fully apprised of the implications of restitution. See generally, United States v. Pomazi, 851 F.2d 244, 247 (9th Cir.1988), abrogated on other ground sub nom. Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990); United States v. Rogers, 984 F.2d 314, 318 n. 5 (9th Cir.1993). See also United States v. Kamer, 781 F.2d 1380 (9thCir.1986) (failure to expressly state restitution request of over one million dollars in plea agreement amounted to a breach of the agreement).
For these reasons, the court declines to impose an award of restitution as a condition of probation.
The court believes that Ganoe's sentence should be harsher than that of McKay.
The defendants' activities at the Paystreak were conducted without either special use authorization, or approval by way of a POO. The parties never submitted a NOI, yet performed mining operations with the use of heavy equipment which resulted in "significant disturbance of surface resources." See, § 228.4 et seq.
Ganoe possessed a state certification as a professional geologist and apparently was a retired government employee of the Department of Agriculture. [Ex. D]. He chose to flaunt these attributes when convenient to his cause. In his letter to the forest service dated January 16, 2009, he interjects his knowledge and assessment of the physical conditions and infirmities of the soil and rock conditions at the Paystreak, and latter opines to the slide's causation.*fn25 He also suggests that the forest service should bear part of the blame or responsibility for the N08's failure, by its consent in allowing the road to be originally built at its location above the mine. [Ex. 7].
During the course of a meeting between the defendants and forest service personnel held on February 19, 2009, Ganoe introduced himself as a retired geologist with the Soil Conservation Service, and thereafter engaged Rose and de la Fuente in a conversation concerning the slide's causation. Although, defense counsel successfully prevented the government from introducing evidence of Ganoe's professional background, Exhibit D was latter received into evidence without objection or qualification.
The court finds it difficult to believe that Ganoe was not aware of his obligation to comply with existing forest service mining regulations, but should this conclusion be incorrect, then the court finds that based on his educational, employment and professional background, that he should have been aware of these requirements.
This Court intends to impose the following judgment: As to Defendant McFarlin:
The court finds Defendant McFarlin not guilty of all Counts in the Information. As to Defendant Ganoe:
(1) That defendant Ganoe be placed on informal probation for a period of three years.
(2) That during the term of probation, he shall comply with the standard conditions of probation as follows:
(a) shall not commit another federal, state or local crime; and
(b) shall notify the court within seventy-two hours of any change in residence or employment.
(3) That as a special term of probation, defendant Ganoe shall not enter any federal lands, including the Paystreak Mine, for any type of mining, prospecting or mineral exploration until such time that all financial obligations imposed under this judgment have been satisfied.
(4) Defendant Ganoe shall comply with provisions of 36 C.F.R. § 228, et seq., with respect to any type of future mining, prospecting or mineral exploration at the Paystreak mine including the filing of a NOI and obtaining a POO, when required.
(5) As to Count I, defendant Ganoe is ordered to pay a fine in the sum of $5,000.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $5,010.00 ;
(6) As to Count II, defendant Ganoe is ordered to pay a fine in the sum of $5,000.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $5,010.00 ;
(7) As to Count III, defendant Ganoe is ordered to pay a fine in the sum of $5,000.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $5,010.00 ;
(8) As to Count IV, defendant Ganoe is ordered to pay a fine in the sum of $5,000.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $5,010.00 ;
(9) As to Counts V through VIII, defendant Ganoe is ordered to pay a fine in the sum of $250.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, as to each count, for a total fine of $1040.00;
(10) The total combined fines as to defendant Ganoe are $21,080.00. As to Defendant McKay:
(1) That defendant McKay be placed on informal probation for a period of three years.
(2) That during the term of probation, he shall comply with the standard conditions of probation as follows:
(a) shall not commit another federal, state or local crime; and
(b) shall notify the court within seventy-two hours of any change in residence or employment.
(3) That as a special term of probation, defendant McKay shall not enter any federal lands, including the Paystreak Mine, for any type of mining, prospecting or mineral exploration until such time that all financial obligations imposed under this judgment have been satisfied.
(4) Defendant McKay shall comply with provisions of 36 C.F.R. § 228, et seq., with respect to any type of future mining, prospecting or mineral exploration at the Paystreak mine, including the filing of a NOI and obtaining a POO, when required.
(5) As to Count I, defendant McKay is ordered to pay a fine in the sum of $2,500.00, plus $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $2,510.00;
(6) As to Count II, defendant McKay is ordered to pay a fine in the sum of $2,500.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $2,510.00;
(7) As to Count III, defendant McKay is ordered to pay a fine in the sum of $2,500.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $2,510.00 ;
(8) As to Count IV, defendant McKay is ordered to pay a fine in the sum of $2,500.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, for a total fine of $2,5010.00 ;
(9) As to Counts V through VIII, defendant McKay is ordered to pay a fine in the sum of $250.00, plus a $10.00 special assessment pursuant to 18 U.S.C. § 3013, as to each count, for a total fine of $1,040.00.
(10) The total combined fines as to defendant McKay are $11,080.00.
Pursuant to Rule 58(c)(3) of the F.R.Crim.P., you may appear on December 17, 2010, at 11:00 a.m. to be heard in mitigation of the proposed sentence to be imposed by this Court. In the event that you desire to waive said right to be heard, or by choosing not to appear on the date and time given, the conditions of this proposed judgment, as set forth above shall be adopted and become the judgment of the Court.
Pursuant to Rule 58(g)(2)(13) and Rule 32(j) of the Federal Rules of Criminal Procedure, you have the right to appeal the judgment of conviction and/or sentence to the United States District Court within ten (10) days of the entry of this Judgment. You must file your Notice of Appeal with the Clerk of the United States District Court, Eastern District of California, 501 "I" Street, Sacramento, California 95814. You are further advised that if you are unable to pay the costs of appeal, you may seek permission to appeal in forma pauperis.