As a real estate attorney, it is common to see reservations of mineral rights in legal descriptions. Never did I wonder whether dinosaur bones were minerals that could be so reserved. That question, however, has come up and made its way to the Ninth Circuit Court of Appeals for a decision. The case involves a piece of real property in Montana. In 2005, Jerry and Robert Severson sold their surface and one-third of the mineral estate of the property to Lige and Mary Ann Murray (Plaintiffs). The purchase agreement required the parties to inform each other of any material event which may affect the mineral interests. A few months after their acquisition, the Murrays discovered several rare dinosaur fossils on the property. The fossils included two dueling dinosaurs found in 2006, a triceratops foot and skull found in 2007 and 2011 respectively, and a nearly complete tyrannosaurus skeleton in 2013, which collectively are known as “the Montana Fossils”.

Experts have described these fossils as a “one-of-a-kind find” with “huge scientific value”. The dueling dinosaurs have been appraised at between seven and nine million dollars, the Triceratops foot was sold for $20,000, and the rest of the collection was sold with the proceeds being held in escrow pending litigation.

The Murrays first informed the Seversons about the Montana Fossils in 2008. The Seversons argued that the fossils were mineral in which they retained an interest in them accordingly. The Murrays filled an action seeking declaratory judgement to the contrary, arguing that, as owners of the surface estate, they are the sole owners of the Montana Fossils. The Seversons removed the action to federal court and asserted a counterclaim seeking a declaratory judgement that the Montana Fossils were part of the mineral estate.

During discovery both parties produced experts who testified regarding the composition of the Montana Fossils. Following discovery, the parties filed cross-motions for summary judgement. On May 20, 2016, the district court found that the Montana Fossils are not included in the ordinary and natural meaning of “mineral” under Montana law and therefore not part of the mineral estate. The court granted summary judgement for the Murrays and the Seversons appealed.

The trial court looked to the interpretation of Montana law, in which words in a contract are interpreted “in their ordinary and popular sense unless the parties use the words in a technical sense”. In this case, the parties agree that the Montana Fossils fit within the scientific definition of minerals, however, they disagree about whether the fossils fit within the narrower use-related definition of minerals in the mineral estate reservation. Relying on dictionary definitions and Montana mining statues, the district court agreed with the Murrays. The court determined that the fossils properties are not what made them valuable, instead the fossils are valuable because of their very existence. The fossils cannot be processed into fuel or materials to become more valuable.

The Seversons appealed the district courts judgement to the Ninth Circuit Court of Appeals. A three-judge panel affirmed the district court’s ruling at which time the Seversons requested that the case be reheard en banc (by the entire court). The Ninth Circuit agreed to rehear the case en banc and sent a certification request to the Montana Supreme Court. The Montana Supreme Court concluded that dinosaur fossils are not within the “ordinary and natural meaning” of “mineral” and thus belong to the surface estate. Since Mary Ann and Lige Murray are the undisputed owners of the surface estate, the Ninth Circuit declared the Murrays sole owners of the Montana Fossils.