The Law Q&A | Digging into the law on 'mineral rights'

The Law Q&A | Digging into the law on 'mineral rights'

A couple of weeks ago, a federal court ruled that dinosaur fossils found beneath the surface of a Montana ranch were a mineral right belonging to the ranch seller who reserved to seller "all minerals rights" in a deed given to the ranch buyers.

What the heck are mineral rights? How deep does one own land, anyway?

In owning real estate, not only can one own the surface area with its two-dimensional perimeter, but a principle in all American property law is that ownership generally extends "(A)ll the way to heaven and all the way to hell." Presuming hell is intended to be in a downward direction, this suggests ownership at least to the center of the earth after which we begin intruding on owners from the opposite side of the planet.

But within this subsurface there is ownership of valuable things that lurk there — minerals. Yummy minerals like oil, gas, gold or silver.

An owner that has full ownership in all aspects of a parcel of land could thus sell that parcel to another but reserve for the seller "all mineral rights."

Conversely, the owner could sell (or lease) his ownership rights to all the minerals on or beneath the seller's surface property while keeping ownership in all the rest of the parcel. Or maybe just sell or lease the rights in certain minerals.

This is how the oil industry has principally operated since its inception in the 19th century — owning the rights to seizing and selling oil taken from lands otherwise owned by another party by virtue of buying the oil in such properties.

Fossil fuels — oil, coal, gas — have been universally recognized in all real estate law as minerals subject to deeds and leases. Rare metals mined around the world are likewise recognized as "minerals" subject to selling or leasing.

But are 66 million-year-old animal fossils a "mineral" under real estate law? A federal trial judge in Montana mined this novel question in a 21-page opinion and concluded that, no, the dinos were not a mineral under Montana real estate law. The judge thought "mineral" is intended to carry the meaning that the commercial world has long recognized — fossil fuels and the stuff with which we build bullets and wedding bands.

The appellate court disagreed and overturned the trial judge. In in its own 22-page ruling which excavated Montana mineral law, two justices thought the dinos in question were scientifically minerals and can have great value in their composition. Having the scientific properties of minerals, and a marketplace value thereof, the fossils could be recognized as a "mineral" under Montana law.

The court was certainly right in declaring these fossils had value. The slab of rock, in which a meat eater and a horned herbivore were locked in a mutual death struggle, garnered a bid of $5.5 million at auction.

The land buyers who claim they became the owners despite the deed's "mineral" reservation language could ask the appellate court to reconsider its ruling.

Ownership in land may indeed go downward to hell. But court disputes over ownership rights are often a hellish Jurassic Park unto themselves.

Brett Kepley is a lawyer with Land of Lincoln Legal Assistance Foundation. You can send your questions to The Law Q&A, 302 N. First St., Champaign, IL 61820. Questions may be edited for space.

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