With the long weekend, there hasn't been much from the Ninth Circuit or California Court of Appeal lately. But this morning, I read this opinion, which struck me as a fairly good example of "balls and strikes" jurisprudence.
The case involves uranium mining in the Grand Canyon, and whether it should continue. Now, personally, I'm not exactly thrilled that we're puking out radioactive material alongside one of the natural wonders of the world. So if you asked me whether it was worth it (as a society to do so), I don't have a definite sense one way or the other (without knowing more), but would lean towards a "Nah, let's leave the place pristine" vote.
But, as a judge, that's not what one does. You gotta follow the law. And the law here is admittedly disputed and unclear, but what we gotta do is simply try to figure out what it says the best way we can -- regardless of where it leads.
Legally, the limited question here is whether, under a particular statute, it's okay to ignore sunk costs when deciding whether particular mineral deposits are valuable. The relevant law withdrew certain public lands from mineral exploitation (including those here), but also says that companies that own existing claims there get to continue to exploit them if there are "valuable mining deposits" there. So one thing you've got to do to figure out if the deposits are (in fact) "valuable" is to figure out if it'll cost more to dig 'em out of the ground than the deposits are worth. 'Cause if not, then the deposits aren't (practically) valuable.
Easy enough, at least in theory. But here, some of the expenses that'd be involved in mining the stuff have already been expended -- roads, the first fifty feet of the mine, etc. We call those "sunk" costs -- a term that's somewhat ironic (but particularly appropriate) given that we're talking in part about a mine shaft. Do you count those costs as part of the relevant costs? Or do you ignore them since they were already spent?
That's the legal issue in the appeal.
On that point, I have a definite sense of what's right. You ignore them. The money has already been spent. You can't get it back. If it only costs, say, $10 million more of drilling to get $50 million worth of gold, it doesn't matter that you previously spent $45 million to get where you are. It's worth it to spend the $10 million. So the minerals are valuable. (Even though, in retrospect, you shouldn't have started the project in the first place. That ship has already sailed.)
Here, that fact's dispositive. Since it means that the uranium is, in fact, valuable. Which means it gets mined. Even though I'd probably prefer that it not be. The law's the law. (And I say that even without the Chevron deference that the panel applies here; in my view, even wholly on the merits, it's a basic and sound economic principle that you ignore sunk costs, so that's the right way to resolve things even if the relevant agency hadn't already spoken on the point.)
I'm not saying that every case gets resolved purely on the meaning of words, without consideration at all of the underlying result. That's not, in fact, the case.
But this is a good example, to me, of one that properly does.
P.S. - Unexplored in the opinion is how you resolve this issue for materials the value of which can (and does) wildly fluctuate. For example, here, the company started the mining process when uranium was expensive, but stopped once it became cheap. Then, when that commodity became expensive again (at the time, $56/pound), wanted to restart, and that's the price at which the cost/benefit ratio was assessed in this opinion.
But for what it's worth, up until about six months ago, uranium prices had fallen again, and were back down to $30/pound. Which may well mean that the mineral isn't "valuable" any longer. So does that mean the lands were withdrawn at that point? And what about now, when the price (in September) spiked up to $50/pound, and has now settled at around $45/pound. Still "valuable"? Or no longer valuable? How do these things work out when commodity prices fluctuate, as they invariably do? No clue, but interesting.
