Let’s say you own a ranch and, to make some extra cash, you sell the rights to extract oil, coal and other minerals that might lie under your land. Then you do some digging, and uncover a fossilized dinosaur skeleton.

Are those rare and valuable bones your property, or are they “minerals” that belong to the company that bought the subsurface rights?

That was the question that had to be decided in a recent case taken up by the U.S. Court of Appeals for the Ninth Circuit (Murray v. BEJ Minerals.)

George Severson and his family owned a ranch in Garfield County, Montana. For some years they operated it in partnership with Mary Ann and Lige Murray.

t rex 500In 2005 they divided the surface rights and mineral rights of the property. The Murrays purchased the surface rights. The Severson family retained two-thirds of the mineral rights, which it put into an entity known as BEJ Minerals, LLC. The remaining third of the mineral rights went to the Murrays.

The mineral right agreement required all parties to inform the others of “any material event which may [affect] the mineral interests.”

A few months after the agreement was signed, the Murrays came across some fossils on the property. Initially they didn’t pay much attention to them.

When they excavated that area the following year, however, they made a one-of-a-kind discovery: the fossilized remains of two dinosaurs locked in combat.

Over the next several years the Murrays uncovered a Triceratops foot, then a Triceratops skull, and finally a nearly complete skeleton of a Tyrannosaurus rex, a 40-foot-long apex predator that roamed what is now North America about 66 million years ago.

All sides agree that the fossils are very valuable. The Murrays sold the T. Rex to a Dutch museum for several million dollars. The other finds are worth tens of thousands, according to court documents.

BEJ says the Murrays notified it of the discovery of the fossils in 2008. Five years later,  BEJ claimed ownership of the fossils, arguing that they were “minerals” under Montana law.

The fossils might be very rare and valuable, the company said, but they are  mineralized bones that were found underground, and thus were subject to the mineral rights agreement. Fossils, BEJ said, should be treated no differently than oil, coal, sandstone or other subterranean commodities.

But, as the U.S. District Court for the District of Montana noted when the dispute over the dinosaur bones was presented to it, when it comes to mineral rights the meaning of “minerals” is open to debate.

A 1949 Texas Supreme Court ruling, for example, determined that “substances such as sand, gravel and limestone are not minerals within the ordinary and natural meaning of the word unless they are rare and exceptional in character or possess a peculiar property giving them special value.”

Sand used for making cement would not be regarded as a “mineral,” the Texas court said, but sand used to make glass might be.

The Montana district court said the mineral rights agreement should be interpreted “to give effect to the mutual intention of the parties.” It found no evidence that the Murrays and BEJ intended their contract to include fossils discovered on the ranch.

The district court ruled that the Murrays were the sole owners of the fossils.

BEJ appealed, and a Ninth Circuit panel of judges reversed the district court, awarding the fossils to BEJ.

The Murrays then took the case to the U.S. Court of Appeals for the Ninth Circuit.

As it turns out, disputes about ownership of bones millions of years old have been in the courts for well over a century.

In 1913, a paleontologist with the Carnegie Museum named Earl Douglass tried to get control of dinosaur bones on federal land in Utah by filing a mining claim. Douglass said the fossils should be considered “minerals” under federal mining law.

The U.S. Department of the Interior rejected his claim, saying dinosaur fossils are not “minerals within the meaning of public land laws.” The department cited a ruling from 1900 which said that other “natural curiosities,” such as geodes and stalactites found in caves, are not considered minerals “within the meaning of the mining laws.”

Following similar logic, the U.S. Court of Appeals ruled in favor of the Murrays, reversing the ruling by the Ninth Circuit panel.

“We conclude that, under Montana law, dinosaur fossils do not constitute ‘minerals’ for the purpose of a mineral reservation,” the Court of Appeals said. “We decline to stretch the term ‘mineral’ so far outside its ordinary meaning as to include dinosaur fossils.”

The ruling, while final, was not unanimous. Three members of the court filed a dissent, arguing that a “well-settled precedent” required the fossils to be considered “minerals” under the agreement with BEJ. So it is possible that such disputes may, like dinosaur bones, be around for quite some time.

By Laurie Murphy