## Facts

- Indiana enacted the Dormant Mineral Interests Act, under which a severed mineral interest not “used” for 20 years automatically lapses and reverts to the surface owner unless the mineral owner files a statement of claim.
- The statute defined “use” to include activities such as actual or attempted mineral production, payment of rents or royalties, and payment of taxes on the interest.
- For preexisting mineral interests, the Act provided a two-year grace period after its effective date for owners to file a statement of claim to preserve otherwise dormant interests.
- The Act included a limited exception for owners of 10 or more mineral interests in the same county who filed a statement of claim but inadvertently omitted some interests; they could preserve omitted interests by a supplemental filing within 60 days after receiving notice of lapse.
- Texaco and other mineral-interest owners held severed mineral interests that had not been used for at least 20 years and did not file the required statement of claim during the grace period.
- Their mineral interests lapsed by operation of the statute and reverted to the surface owners.
- The mineral owners challenged the Act as violating due process, effecting a taking without just compensation, denying equal protection because of the “10-interest” exception, and impairing contractual obligations.
- An Indiana trial court found the Act unconstitutional; the Indiana Supreme Court reversed and upheld the Act; the U.S. Supreme Court affirmed.

## Issues

1. Whether due process permits automatic lapse of dormant severed mineral interests based on nonuse and failure to file a claim, without individualized notice or a hearing.
2. Whether extinguishment of the mineral interests constitutes a taking requiring just compensation.
3. Whether the Act’s limited exception for owners with 10 or more county interests violates equal protection.
4. Whether the Act impermissibly impairs contractual obligations under the Contract Clause.

## Decision

- The Supreme Court affirmed the judgment upholding the Act.
- The State may condition continued ownership of severed mineral interests on reasonable steps such as use or filing a statement of claim.
- The lapse was attributed to the owners’ prolonged nonuse and failure to file, not to an unconstitutional governmental taking.
- Due process was satisfied by the statute’s objective operation and the two-year grace period, despite the absence of individualized notice.
- The “10-interest” exception survived rational-basis review.
- The Contract Clause claim failed where no existing contract obligations were shown to be impaired at the time of lapse.

## Legal Principles

- A State may impose reasonable conditions on the retention of property interests, including record-preservation or minimal affirmative steps tied to legitimate public objectives.
- When an interest is extinguished by operation of law after long nonuse plus failure to take a simple preservation step, the loss may be treated as abandonment rather than a compensable taking.
- Due process does not invariably require individualized notice before a self-executing statute affects property rights; general notice through enactment, combined with a reasonable opportunity to comply, can be sufficient.
- Economic and property classifications not involving suspect classes or fundamental rights are reviewed for a rational relationship to legitimate governmental purposes.
- A Contract Clause violation requires a showing of substantial impairment of actual contractual obligations; general property regulation within state authority will not, without more, establish unconstitutional impairment.

## Conclusion

The Court sustained Indiana’s scheme for clearing dormant severed mineral interests, holding that automatic lapse after prolonged nonuse and failure to file a claim is a permissible condition on continued ownership, does not require individualized notice or compensation, and does not violate equal protection or the Contract Clause.


Texaco, Inc. v. Short, 454 U.S. 516 (1982)