454 U.S. 516 (1982)
In 1971 the Indiana Legislature enacted the Dormant Mineral Interests Act.1
The Act provided that any severed mineral interest unused for a period of twenty years would be extinguished and its ownership would revert to the then-current surface owner unless the mineral owner filed a statement of claim in the county recorder's office.2
The statute took effect on September 2, 1971, and included a two-year grace period allowing owners of already unused interests to preserve them by filing claims.3
A mineral interest was deemed used if minerals were produced, rents or royalties were paid, or taxes were paid on the interest.4
Owners could also preserve interests by filing statements of claim, and an exception allowed owners of ten or more interests in the same county who inadvertently omitted some to file a supplemental claim within sixty days of receiving notice.5
The first of the two consolidated cases concerned fractional mineral interests severed in 1942 and 1944 from a 132-acre tract in Gibson County, Indiana.6
Eleven appellants claimed ownership of those interests, and a twelfth appellant held oil and gas leases executed by the others in 1976 and 1977.7
The appellee owned the surface of the tract.8
The parties stipulated that the mineral interests had not been used for twenty years and no statement of claim had been filed within the grace period, so the interests lapsed on September 2, 1973.9
On April 28, 1977, the surface owner published and mailed notice of the lapse.10
The mineral owners then filed statements of claim, and the surface owner commenced an action seeking a declaratory judgment that the interests had been extinguished.11
In the second case the severed mineral estate was created on March 1, 1954, when appellants Pond and Bobe conveyed land to the appellees by warranty deed that reserved the minerals.12
On June 17, 1976, Pond and Bobe executed a coal mining lease with appellant Consolidated Coal Co.13
The parties stipulated that the interest had not been used and no statement of claim had been filed during the twenty years following its creation, resulting in lapse on March 1, 1974.14
Notice of the lapse was given by letter and by publication in the Princeton Daily Clarion on March 4, 1977.15
The parties jointly filed suit on January 12, 1978, to resolve their conflicting claims to the mineral rights.16
In both cases the agreed statements of facts recorded that the mineral owners had neither used their interests nor filed claims within the statutory periods, and the surface owners had given notice after the periods had expired.17
The statements did not indicate whether any appellant had known of the Act or its possible effect before receiving notice.18
The state trial court held the statute unconstitutional.19
The Indiana Supreme Court reversed.20
The United States Supreme Court noted probable jurisdiction and consolidated the appeals.21
Whether the Indiana Dormant Mineral Interests Act deprived owners of severed mineral interests of property without due process of law?22
The Due Process Clause requires that deprivation of property by adjudication be preceded by notice reasonably calculated to apprise interested parties of the pendency of the action and afford them an opportunity to present objections.23 This principle was established in Mullane v. Central Hanover Bank & Trust Co.24 A self-executing statute that conditions retention of a property interest on the performance of reasonable affirmative acts within a defined period satisfies due process because the reasoning in Mullane applies only to adjudication and not to the self-executing feature of the Mineral Lapse Act.25 The legislature must enact and publish the law and afford a reasonable grace period for compliance.26 Owners are charged with knowledge of statutes affecting their property.27 No individualized pre-lapse notice is required before the statutory conditions trigger extinguishment.
No. The Dormant Mineral Interests Act enacted in 1971 took effect on September 2, 1971.28 It included a two-year grace period during which owners of already unused interests could file statements of claim to preserve them.29 In the Gibson County case the parties stipulated that the fractional interests severed in 1942 and 1944 had not been used for twenty years.30 No claim had been filed by September 2, 1973.31
Thus the interests lapsed by operation of law.32 The surface owner then published and mailed notice in 1977 before commencing the declaratory judgment action.33 In the second case the interest created in 1954 lapsed on March 1, 1974 after twenty years of nonuse without a claim.34 Notice was given by letter and publication in 1977 before suit was filed.35
The statute is self-executing upon the defined conditions of nonuse.36 Full procedural protections attach only to the subsequent quiet-title adjudication.37 Owners of property are charged with knowledge of relevant statutory provisions.38 The two-year grace period provided adequate opportunity to comply.39
The distinction drawn in Mullane between adjudication and general rules of law governing abandonment confirms that no advance individualized notice of impending lapse is constitutionally required.40
The Act did not deprive the mineral owners of property without due process of law.41
Related opinions on this issue
Joined by Justice White, Justice Marshall, And Justice Powell
Justice Brennan dissented on the ground that retrospective application of the registration requirement to preexisting incorporeal mineral interests without pre-extinguishment notice violates due process.42 He emphasized that the presumption of knowledge of the law does not justify the statute when the triggering conditions are commonplace and the registration obligation is unusual.43 This leaves owners with no reason to monitor legislative changes.44
Brennan noted that the surface owner must already provide notice by publication and mailing to owners of ten or more interests before their interests lapse.45 This demonstrates that such notice is feasible and consistent with the statute's purposes.46 The absence of equivalent pre-lapse notice for other owners renders the two-year grace period meaningless for those without actual knowledge.47
He concluded that the Due Process Clause requires notice sufficient to make the saving proviso effective before an owner's interest may be extinguished by operation of law.48
Whether the Act effected a taking of private property for public use without just compensation?49
A state may treat a mineral interest that has not been used for twenty years and for which no statement of claim has been filed as abandoned.50 After abandonment the former owner retains no interest for which compensation is due.51 This is because it is the owner's failure to make any use of the property and not the action of the state that causes the lapse.52
No. The Gibson County mineral interests severed in 1942 and 1944 remained unused for the statutory period.53 The 1954 reserved estate also remained unused.54 No taxes were paid.55 No rents were collected.56
No production was undertaken.57 No claims were filed.58 The Act therefore extinguished the interests.59 Ownership reverted to the surface owners.60
The lapse resulted directly from the owners' inaction rather than from any affirmative appropriation by the state.61 The statute merely established conditions under which nonuse constitutes abandonment.62 No compensation is required when the owner himself causes the loss of the property right through failure to satisfy the reasonable conditions the state has imposed.63
The Act did not effect a taking of private property without just compensation.64
Whether the Act unconstitutionally impaired the obligation of contracts?65
A statute does not unconstitutionally impair the obligation of contracts when the contractual rights at issue were created after the statutory lapse had already occurred.66 Any preexisting contractual rights may be protected by the simple act of filing a statement of claim in the county recorder's office.67
No. In the Gibson County case the oil and gas leases were executed in 1976 and 1977.68 This occurred after the interests had already lapsed on September 2, 1973.69 In the second case the coal mining lease was executed on June 17, 1976 after the lapse on March 1, 1974. Because the leases post-dated the statutory extinguishment, the Act could not impair contracts that did not exist at the time of enactment.70
Any contractual rights that existed before lapse could have been preserved by filing a statement of claim.71 This is a minimal burden that remains within the scope of permissible state action.72
The Act did not unconstitutionally impair the obligation of contracts.73
Whether the statutory exception for owners of ten or more mineral interests in the same county violated the Equal Protection Clause?74
A statutory exception that affords additional protection against forfeiture to owners of ten or more mineral interests in the same county does not violate equal protection when the classification is rationally related to the legitimate state interest in encouraging the assembly of multiple interests to facilitate actual production of mineral resources.75 The exception applies only when an owner of ten or more interests in one county makes a diligent effort to preserve all interests and inadvertently omits some.76
No. The exception applies only when an owner of ten or more interests in one county makes a diligent effort to preserve all interests. The owner must have inadvertently omitted some interests.77 The owner must file a supplemental claim within sixty days of notice.78 The Indiana Supreme Court determined that owners of multiple interests are more likely to engage in actual production.79
The legislature could rationally conclude that protecting such assembled holdings advances the central purpose of eliminating dormant interests and promoting development.80 The exception imposes no adverse impact on owners of fewer interests such as the appellants.81 The appellants could not show that removal of the exception would benefit them.82
The statutory exception did not violate the Equal Protection Clause.83
Whether the State possessed power to condition permanent retention of a severed mineral interest on the owner's performance of specified actions within a defined period?84
Just as a state may create a property interest entitled to constitutional protection, the state has the power to condition the permanent retention of that property right on the performance of reasonable conditions that indicate a present intention to retain the interest.85 This includes requirements of actual production, payment of taxes or royalties, and filing a statement of claim within twenty years.86
Yes. The Dormant Mineral Interests Act conditioned retention of severed mineral interests on the performance of one of three specified acts within twenty years.87 These acts were production or attempted production, payment of rents royalties or taxes, and filing a statement of claim.88 The Gibson County interests and the 1954 reserved estate both failed every condition.89
The statute is analogous to recording acts and statutes of limitation upheld in Jackson v. Lamphire and Wilson v. Iseminger.90 Those cases validly condition retention of fee interests on timely affirmative steps.91 Each required act furthers legitimate state goals of encouraging development, collecting taxes, and identifying owners.92 The minimal burden on owners is justified by the clear benefits to the state.93
The State possessed power to condition permanent retention of a severed mineral interest on the owner's performance of specified actions within a defined period.94