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Arizona Lithium Co. Ltd. v. Battery Mineral Resources, Inc.

United States District Court, D. Idaho

February 5, 2018

ARIZONA LITHIUM COMPANY LTD., an Arizona corporation, Plaintiff,



         Pending before the Court is Defendant Battery Mineral Resources Inc.'s Motion to Dismiss for “Failure to Comply with I.C. Section 47-611.” Dkt. 12. After the Motion was fully briefed, the Court held oral arguments and took the Motion under advisement. For the reasons set forth below, the Court DENIES the Motion.


         This lawsuit arises out of claims brought by Arizona Lithium Company LTD (“Arizona Lithium”) concerning the validity of certain mining claims in Lemhi County, Idaho. Between September 25 and September 28, 2016, Arizona Lithium located 58 lode mining claims, referred to as the “BOCO claims.” Pursuant to statute, Arizona Lithium then recorded its Notices of Location in Lemhi County on December 21 and 22, 2016.

         On July 17, 2017, Arizona Lithium filed its Complaint in the State of Idaho, Seventh Judicial District, Lemhi County. On August 28, 2017, Defendant Battery Mineral Resources (United States), Inc. (“Battery Mineral”) removed this matter to the United States District Court for the District of Idaho.

         In its suit, Arizona Lithium seeks a declaratory judgment invalidating Battery Mineral's lode mining claims, referred to as the “BATT claims, ” that cover, in part, the same locations as Arizona Lithium's BOCO claims. The basis of Arizona Lithium's suit is that Battery Mineral failed to properly locate the BATT claims and improperly recorded its Notices of Location without correctly marking the boundaries of the asserted claims. Arizona Lithium also seeks a judgment quieting title to the rights, title, and interest in the BOCO claims clear of any cloud of title caused by the BATT claims to the same property.

         Battery Mineral argues that this lawsuit is meritless and that Arizona Lithium “seeks to exploit what it contends are inadequacies in proper marking of boundaries . . . .” Battery Mineral also maintains that it is in fact the senior locator to these mineral claims and that Arizona Lithium located the claims in bad faith knowing that Battery Mineral had already recorded their BATT claims. Battery Mineral has filed a counterclaim based on these allegations.

         At issue before the Court today, however, is a very limited issue, which by all accounts appears to be one of first impression for the District of Idaho. Battery Mineral alleges that Arizona Lithium failed to comply with a portion of Idaho Code in recording its Notices of Location, namely the affidavit requirement of Idaho Code section 47-611.

         As a result of this deficiency, Battery Mineral contends that Arizona Lithium's Notices of Location are void on their face, and that the Court should immediately dismiss this suit. After briefing for the current Motion was complete, but before oral argument had taken place, Arizona Lithium informed the Court that it had filed amended Notices of Location in Lemhi County that more fully comply with the statutory requirements set forth in Idaho Code section 47-611. Dkt. 24.


         A motion to dismiss for failure to state a claim challenges the legal sufficiency of the claims stated in the complaint. Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir.2011). “A complaint generally must satisfy the notice pleading requirements of Federal Rule of Civil Procedure 8(a)(2) to avoid dismissal under a Rule 12(b)(6) motion.” Id. (citing Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003)). “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests, '” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

         To sufficiently state a claim for relief and survive a 12(b)(6) motion, the pleading “does not need detailed factual allegations, ” however, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. at 555. Mere “labels and conclusions” or a “formulaic recitation of the elements of a cause of action will not do.” Id. Rather, there must be “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. In other words, the complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In light of Twombly and Iqbal, the Ninth Circuit summarized the governing standard as follows: “In sum, for a complaint to survive a motion to dismiss, the nonconclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).

         In deciding whether to grant a motion to dismiss, the court must accept as true all well-pleaded factual allegations in the pleading under attack. Iqbal, 556 U.S. at 663. A court is not, however, “required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

         In cases decided after Iqbal and Twombly, the Ninth Circuit has continued to adhere to the rule that a dismissal of a complaint without leave to amend is inappropriate unless it is beyond doubt that the complaint could not be saved by an amendment. See Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009).


         At the outset, the Court notes that in its simplest form, a motion to dismiss tests the legal sufficiency of a plaintiff's claim(s). As Arizona Lithium correctly notes, a motion to dismiss is not a procedural mechanism for resolving controverted material facts. Nor does the Court reach the substantive merits of the case when considering a motion to dismiss. Rather, the Court only addresses whether or not the complaint is plausible. This is a relatively low standard.

         The Court first addresses whether it should even consider the instant Motion to Dismiss or whether the Court should convert the motion into a motion for summary judgment.

         A. Motion to Dismiss/ Motion for Summary Judgment

         As a general rule, “a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994) (citation omitted). Rule 12(b)(6) expressly provides that when:

matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

         Fed. R. Civ. P. 12(b)(6). “A court may, however, consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Additionally, even if the documents are not physically attached to the complaint, they may still be considered if the documents' “authenticity . . . is not contested” and “the ...

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