Lloyd Schade, Appellant, Cross-appellee, v. Cecil Andrus, Secretary of the Interior, Appellee, Cross-appellant, 638 F.2d 122 (9th Cir. 1981)

This case arose under 43 U.S.C. § 687a which provides that one in possession of public land in Alaska can purchase up to 80 acres for $2.50 an acre if the land is "needed" in the prosecution of productive industry.¹ 

In 1964, Lloyd Schade applied to purchase 80 acres on which he was operating a slaughterhouse. The Anchorage District & Land Office of the Department of Interior originally approved the purchase of 60 acres. After a series of administrative hearings and appeals the final administrative decision, by the U. S. Department of Interior Office of Hearings and Appeals, approved only 30 acres. Strong dissents by two members of the Hearings & Appeals board reflected their view that Schade was entitled to an additional 221/2 acres. That acreage comprised the watershed area for the spring which Schade used as the source of pure water required for the slaughterhouse operation.

Schade sought review in district court under 28 U.S.C. §§ 1331 and 1361. Schade claimed that he was entitled on summary judgment to the full 60 acres originally awarded by the land office or, in the alternative, that he was at least entitled to the 221/2 acre watershed. The district court held that Schade was not entitled to the full 60 acres, but that he was entitled to the 221/2 acres, for a total of 521/2 acres. Both the government and Schade appealed, and this Court has jurisdiction under 28 U.S.C. § 1291.

The issue in the government's appeal as to the 221/2 acres is the proper interpretation of the section 687a requirement that land must be "needed" in the prosecution of productive industry.

The specific 221/2 acre watershed in question supplies water for the slaughterhouse and was sought by Schade in order to prevent inconsistent usages which might cause contamination of the water supply. It is not disputed that the slaughterhouse is a productive industry and that if contamination were to occur, the slaughterhouse operation could not continue.

It would appear that the statute's requirement of necessity was satisfied. The Interior Department's appeals board here held, however, that all of the land was required to be "actively used" and that since no actual construction or activity was planned on the 221/2 acres, Schade could not purchase it.² 

While courts generally defer to agency interpretations of statutory requirements when those interpretations are reasonable, Volkswagenwerk Aktiengesellschaft v. Federal Maritime Comm'n, 390 U.S. 261, 272, 88 S. Ct. 929, 935, 19 L. Ed. 2d 1090 (1968); Baker v. United States, 613 F.2d 224, 226 (9th Cir. 1980), such deference is not automatic and is inappropriate when the agency imposes requirements which are at odds with statutory provisions. See Baker v. United States, supra; Marathon Oil Co. v. Kleppe, 556 F.2d 982 (9th Cir. 1977).³  We conclude in this case that the requirement of "active use" imposed by the agency is not only absent from the statute but far more restrictive than the statutory language would warrant.

The "active use" requirement appears to have come from two previous administrative decisions in which the Board was concerned with claims for land which was not presently needed but which might in the future be needed if other projects were undertaken.⁴  Those decisions are inapposite here because at the time the application was filed, the disputed land was needed for the slaughterhouse operation already in existence. Therefore, we agree with the district court that the Board's interpretation ignores the clear language of the statute which allows the purchase of up to eighty acres of land needed in the prosecution of a productive industry. Schade, having satisfied all the requirements of the statute, is entitled to the 221/2 acres.

On Schade's cross-appeal claiming entitlement to the 60 acres originally awarded by the land office, we are also in agreement with the district court. Schade's position is based on the fact that, when the original land office decision came down, Schade appealed from the approval of only 60 acres rather than his full 80 acre claim, while the government filed no formal appeal. He therefore argues that in the subsequent agency proceedings, he could never receive less than 60 acres. His position is contrary to the now established principle that the Secretary of the Interior has "broad plenary power over the disposition of public lands," and that throughout the appeals process, so long as legal title remains in the government, there is continuing jurisdiction in the Department to consider all issues in land claims. Ideal Basic Indus., Inc. v. Morton, 542 F.2d 1364, 1367 (9th Cir. 1976); see also Best v. Humboldt Placer Mining Co., 371 U.S. 334, 83 S. Ct. 379, 9 L. Ed. 2d 350 (1963); Cameron v. United States, 252 U.S. 450, 40 S. Ct. 410, 64 L. Ed. 659 (1920).

Affirmed.