State of Utah, By and Through Division of State Lands v. Kleppe

• Decision Date: 06 December 1978
• Docket Number: No. 76-1839,76-1839
• Citation: 586 F.2d 756
• Parties: STATE OF UTAH, By and Through its DIVISION OF STATE LANDS, Appellee, v. Thomas S. KLEPPE, Individually and as Secretary of the Interior of the United States, Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 756

586 F.2d 756

STATE OF UTAH, By and Through its DIVISION OF STATE LANDS, Appellee, v. Thomas S. KLEPPE, Individually and as Secretary of the Interior of the United States, Appellant.

No. 76-1839.

United States Court of Appeals Tenth Circuit.

Argued and Submitted April 20, 1978.

Decided Aug. 8, 1978.

Rehearing Denied Dec.6, 1978.

Carl Strass, Atty., App. Section, Justice Dept., Washington, D. C. (Peter R. Taft, Asst. Atty. Gen., Washington, D. C., Ramon M. Child, U. S. Atty., Salt Lake City, Utah, and Raymond N. Zagone, Gerald S. Fish and Dirk D. Snel, Dept. of Justice, Washington, D. C., on brief), for appellant.

Richard L. Dewsnup, Sp. Asst. Atty. Gen., Salt Lake City, Utah, (Vernon B. Romney, Utah Atty. Gen., Robert B. Hansen, Deputy Atty. Gen., Dallin W. Jensen, Asst. Atty. Gen., and Clifford L. Ashton, Sp. Asst. Atty. Gen., Salt Lake City, Utah, on brief), for appellee.

Frank J. Allen of Clyde & Pratt, Salt Lake City, Utah, for amicus Justheim Petroleum Co.

Guy G. Hurlbutt, Deputy Atty. Gen. of Idaho, Boise, Idaho, (Wayne L. Kidwell, Atty. Gen. of Idaho, and Peter E. Heiser, Jr., Chief Deputy Atty. Gen. of Idaho, Boise, Idaho, on brief), for amicus State of Idaho.

Before McWILLIAMS, BARRETT and DOYLE, Circuit Judges.

BARRETT, Circuit Judge.

The United States, by and through the Secretary of the Interior (Secretary) appeals from a summary judgment granted in favor of the appellee, State of Utah (Utah) enjoining the Secretary to approve or disapprove no later than December 15, 1976 (since stayed) Utah's school land grant "indemnity selections" of 194 parcels of public lands embracing approximately 157,255.90 acres situate in Uintah County, State of Utah. The surveyed "indemnity selections" or "lieu lands" are for school land grants-in-place which were denied Utah because of federal pre-emption, private entry prior to survey, or before title could pass to the state.

The historical background leading to Congressional enactment of the state school land grant statutes should aid in lending perspective to the legislative intent.

There were no federal lands within the borders of the original thirteen states when they adopted and ratified the United States Constitution. Thus, virtually all of the lands within their borders were subject to taxation, including taxation necessary for the maintenance of their public school systems. When other states were subsequently admitted into the Union, their territorial confines were "carved" from federal territories. The "public lands" owned and reserved by the United States within those territorial confines were not subject to taxation. This reservation by the United States created a serious impediment to the "public land" states in relation to an adequate property tax base necessary to permit these states to operate and maintain essential governmental services, including the public school systems. It was in recognition thereof, i. e., in order to "equalize" the status of the newly admitted states with that of the original thirteen states, that the Congress enacted the federal land grant statutes. The specific purpose was to create a binding permanent trust which would generate financial aid to support the public school systems of the "public land" states. The nature of the Congressional land grant program was "bilateral" in effect. It constituted a solemn immunity from taxation of federal lands reserved or retained in ownership by the United States within the territorial boundaries of the newly admitted states in return for the acceptance by the states of the lands granted, to be held and administered by the states under trust covenants for the perpetual benefit of the public school systems.

Large quantities of the public domain have been granted by the Congress to the various states either for general or specific purposes. Many of these grants are unrestricted. None, to our knowledge, involve the trust covenants attendant with the state school land grant statutes. A grant by Congress of land to a state for the benefit of the common schools is an absolute grant, vesting title for a specific purpose. Alabama v. Schmidt,232 U.S. 168, 34 S.Ct. 301, 58 L.Ed. 555 (1914). The school land grant and its acceptance by the state constitutes a solemn compact between the United States and the state for the benefit of the state's public school system. State of Nebraska v. Platte Valley Public Power and Irr. Dist., 147 Neb. 289, 23 N.W.2d 300 (1946), 166 A.L.R. 1196. A state accepting the school land grant must abide its duty as trustee for the benefit of the state's public school system. This duty applies with equal force to those specific school lands granted or those lands selected by the state as indemnity or lieu lands. The indemnity or lieu "selections" by a state arise if any of the lands within the specific congressional grant (usually of sections 16 and 36 in each township) are not available by reason of pre-existing rights of others. McCreery v. Haskell, 119 U.S. 327, 7 S.Ct. 176, 30 L.Ed. 408 (1886).

The material facts in the case at bar were stipulated and are not in dispute. Following all pleadings, including the stipulation and pre-trial order, the respective parties moved for summary judgment pursuant to Fed.Rules Civ.Proc., rule 56, 28 U.S.C.A. The trial court entertained oral arguments and considered extensive briefs prior to entry of its Findings of Fact, Conclusions of Law and Decree on June 8, 1976. The trial court held that the discretion to be exercised by the Secretary in acting upon Utah's school land indemnity selection lists is confined to the narrow range set forth in 43 U.S.C.A. §§ 851 and 852. On appeal, the Secretary contends that the trial court erred in not finding that his discretion is very broad pursuant to Section 7 of the Taylor Grazing Act, 43 U.S.C.A. § 315f. A recital of the background leading to the instant dispute should aid our review.

Section 6 of the Enabling Act of Utah, approved July 16, 1894, 28 Stat. 107, grants to Utah sections 2, 16, 32, and 36 in every township in the State for the support of the common schools. It further provides that Utah may select other lands in lieu of those sold or otherwise disposed of.

Congress provided under 43 U.S.C.A. § 851 (R.S. § 2775; Feb. 28, 1891, c. 384, 26 Stat. 796, et seq.) that whenever title to any of the school sections granted to the State of Utah did not pass because of federal pre-emption (reservation) or private entry (homestead settlements), Utah was entitled to ". . . Other lands of equal acreage (which) are hereby appropriated and granted, and may be selected, in accordance with the provisions of section 852 . . . ." (Emphasis supplied.) Confusion reigned as a result of language contained in the Homestead Act of 1862 (Ch. 75, 12 Stat. 392) which limited Land entries thereunder to "non-mineral lands." Subsequent mining legislation provided that federal mineral lands were expressly reserved From sale except as otherwise expressly directed. The Department of the Interior adopted an administrative interpretation that "known mineral lands" were excluded "by implication" in the Utah Enabling Act. This interpretation was upheld by the Supreme Court in the case of United States v. Sweet, 245 U.S. 563, 38 S.Ct. 193, 62 L.Ed. 473 (1918) where the Court held that because the Utah Enabling Act of July 16, 1894, did not make specific mention of mineral lands that the school section grant was not intended to embrace land known to be valuable for "known minerals." This was changed by the Congress under the Act of January 25, 1927, 44 Stat. 1026-1027, as amended, 43 U.S.C. §§ 870, 871 which specifically provided that ". . . the several grants to the States of numbered sections in place for the support or in aid of the common or public schools be, and they are hereby, extended to embrace numbered school sections mineral in character, unless land has been granted to and/or selected by and certified or approved, to any State or States as indemnity or in lieu of any land so granted by numbered sections," and "the grant of numbered mineral sections under this section (§ 870) shall be of the same effect as prior grants for the numbered non-mineral sections, and titles to such numbered mineral sections shall vest in the States at the time and in the manner and be subject to all the rights of adverse parties recognized by existing law in the grants of numbered non-mineral sections." Notwithstanding this legislation, however, Utah was denied title to mineral lands in relation to in-lieu selections resulting from vast withdrawals or other actions taken to make the public lands unavailable for in-lieu selections. The problem appeared to have been resolved in Utah's favor, however, by the passage of 1958 and 1966 amendments to 43 U.S.C. § 852 (Act of August 27, 1958, 72 Stat. 928; Act of June 24, 1966, 80 Stat. 220), following which the statute read 43 U.S.C.A. § 852 Selections to supply deficiencies of school lands

(a) The lands appropriated by section 851 of this title, shall be selected from any unappropriated, surveyed or unsurveyed public lands within the State where such losses or deficiencies occur subject to the following restrictions:

(1) No lands mineral in character may be selected by a State except to the extent that the selection is being made as indemnity for mineral lands lost to the State because of appropriation before title could pass to the State;

(2) No lands on a known geologic structure of a producing oil or gas field may be selected except to the extent that the selection is being made to indemnify for lands on such a structure lost to the State because of appropriation before title could pass to the State; and . . . .

The 194 "In lieu" selection parcels selected by Utah in the instant case were made following the aforesaid Congressional amendments to 43 U.S.C. § 852, Supra. Accordingly, Utah was entitled to select "in lieu" lands mineral in character If the base...