D.C. No. 3:09-cv-00612-ECR-VPC
ORDER CERTIFYING A QUESTION TO THE NEVADA SUPREME COURT
Before: Sidney R. Thomas, M. Margaret McKeown, and William A. Fletcher, Circuit Judges.
We respectfully certify to the Nevada Supreme Court the questions of law set forth in Section III of this order, pursuant to Nevada Rule of Appellate Procedure 5. The answer will be determinative of an issue pending before this court, and there is no clearly controlling precedent in the decisions of the Nevada Supreme Court.
Plaintiff-Appellant Bullion Monarch Mining, Inc. ("Bullion") alleges that Barrick Goldstrike Mines, Inc. ("Barrick") owes Bullion mineral royalty payments pursuant to an area-of-interest provision contained in a 1979 agreement. According to Bullion, its predecessor-in-interest and several other entities entered into the agreement with a mine operator, Barrick's predecessor-in-interest, to develop mining claims in the Carlin Trend in Nevada.
The agreement contains an area-of-interest provision requiring the operator to pay Bullion a royalty on production from mining claims the operator might subsequently acquire within the area of interest. The agreement restricts Bullion's ability to purchase or develop mineral interests in the area of interest. Under the agreement, Bullion is to receive royalty payments on production from after-acquired claims in the area of interest for ninety-nine years.
Bullion filed suit in Nevada federal district court seeking royalty payments on production from after-acquired claims in the area of interest. Barrick contended that the area-of-interest provision is void under the Rule Against Perpetuities. Bullion contended that the Rule does not apply to royalties on production from after-acquired claims within an area of interest. In the alternative, Bullion sought reformation of the agreement under Nevada Revised Statute § 111.1039(2).
The district court granted summary judgment to Barrick based on the Rule Against Perpetuities. Bullion timely appealed.
A. Applicability of the Rule Against Perpetuities
The Nevada Constitution expressly adopts the Rule Against Perpetuities. Nev. Const. art. 15 § 4 ("No perpetuities shall be allowed except for eleemosynary [charitable] purposes."). Nevada courts have interpreted this constitutional provision as applying the common law Rule Against Perpetuities. See Sarrazin v. First Nat'l Bank of Nev., 111 P.2d 49, 51 (Nev. 1941) ("'No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.' " (citing John Chipman Gray, The Rule Against Perpetuities, § 201 (3d ed. 1915))).
The Nevada legislature enacted a Statutory Rule Against Perpetuities in 1987. Nev. Rev. Stat. §§ 111.103-1039. The statute, however, purports to affect only interests created ...