EEE Minerals, LLC v. North Dakota
| Docket Number | 22-2159 |
| Decision Date | 30 August 2023 |
| Parties | EEE Minerals, LLC; Suzanne Vohs, as Trustee for the Vohs Family Revocable Living Trust, Plaintiffs-Appellants, v. State of North Dakota; Board of University and School Lands of the State of North Dakota; Joseph A. Heringer, Commissioner for the Board of University and School Lands of the State of North Dakota, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Submitted: March 16, 2023
Appeal from United States District Court for the District of North Dakota - Western
Before COLLOTON, MELLOY, and GRUENDER, Circuit Judges.
EEE Minerals, LLC, and Suzanne Vohs, as Trustee for The Vohs Family Revocable Living Trust, sued the State of North Dakota, the Board of University and School Lands, and the Board's commissioner in a dispute over mineral interests in McKenzie County, North Dakota. EEE Minerals and Vohs alleged that state law related to mineral ownership was preempted by federal law, and that the defendants had engaged in an unconstitutional taking of the plaintiffs' mineral interests. The plaintiffs sought damages, an injunction, and declaratory relief. The district court[*] dismissed the action, and we affirm.
This dispute revolves around mineral interests reserved by the predecessors of EEE Minerals and Vohs in a warranty deed that conveyed surface land to the United States under the Flood Control Act of 1944. EEE Minerals and Vohs claim that North Dakota and its Lands Board have leased and claimed ownership of certain mineral interests that belong to the company and the Vohs Trust. EEE Minerals and the Vohs Trust are successors-in-interest to members of the Vohs family who entered into the warranty deed with the United States.
The Flood Control Act authorized the acquisition of land by the United States for dam and reservoir projects needed for flood control. Pub. L. No. 78-534, § 3, 58 Stat. 887, 889 (1944); 33 U.S.C. § 701c-1 (1938). This included the Garrison Dam and reservoir in North Dakota. S. Doc. No. 247 78th Cong. 2d Sess., at 3 (1944). Closure of the Garrison Dam resulted in the reservoir now known as Lake Sakakawea. See Sorum v. State, 947 N.W.2d 382, 386 (N.D. 2020).
Before closing the Garrison Dam, the United States Army Corps of Engineers surveyed the area that would be inundated by the resulting reservoir. The Corps sought to determine the upland acreage that the government would need to acquire for the project. The results of this survey were reflected in segment maps. The Corps used those maps to acquire, by purchase or condemnation, land that now makes up the bed of Lake Sakakawea.
On July 24, 1957, the United States acquired 276.8 acres of surface property from members of the Vohs family under a warranty deed. Under the deed, the Vohses reserved their oil and gas interests in the property, subject to the right of the United States to flood and submerge the land in the construction, operation, and maintenance of the Garrison Dam and reservoir. EEE Minerals and the Vohs Trust have since entered into several oil and gas leases for the property.
North Dakota's ownership of mineral interests stems from title that it acquired at the time of statehood in 1889 under the equal-footing doctrine. The State gained title to the bed of the Missouri River up to the river's ordinary high water mark. See Oregon ex rel. State Land Bd. v. Corvallis Sand &Gravel Co., 429 U.S. 363, 370-78, 376 (1977); Shively v. Bowlby, 152 U.S. 1, 57-58 (1894); Sorum, 947 N.W.2d at 39697. After statehood, the ordinary high water mark migrated over time through accretion and avulsion. See Corvallis, 429 U.S. at 376-77; Sorum, 947 N.W.2d at 396-97.
In 2008, the Lands Board commissioned a "Phase 1" survey to determine the current ordinary high water mark of the Missouri River. Another survey, "Phase 2," followed in 2010 to determine the historical ordinary high water mark as it existed before the closing of the Garrison Dam. Sorum, 947 N.W.2d at 387. Based on the results of these surveys, North Dakota leased oil and gas interests that the appellants allege are within the property described in the 1957 warranty deed that conveyed surface lands to the United States and reserved mineral interests to the Vohses.
In 2017, after disputes over the extent of the State's mineral ownership, see Wilkinson v. Board of University &School Lands, 903 N.W.2d 51, 54-58 (N.D. 2017), the North Dakota legislature enacted a law relating to the ownership of mineral rights of land inundated by Pick-Sloan Missouri basin project dams. N.D. Cent. Code §§ 61-33.1-01 to -07. The Act clarified that the State's mineral ownership extends "only to the historical Missouri riverbed channel up to the ordinary high water mark." Id. § 61-33.1-02. The historical Missouri riverbed channel is the channel "as it existed upon the closure of the Pick-Sloan Missouri basin project dams," one of which was the Garrison Dam. Id. § 61-33.1-01; S. Doc. No. 247, 78th Cong. 2d Sess., at 3 (1944).
The North Dakota statute identified the survey used by the Corps to acquire land for Lake Sakakawea as the presumptive historical ordinary high water mark, subject to potential modifications to conform to state law. See N.D. Cent. Code §§ 61-33.1-01, -03. In 2018, a modified version of the Corps' survey was adopted as the State's determination of the historical ordinary high water mark under the North Dakota statute. See Wilkinson v. Bd. of Univ. &Sch. Lands, 947 N.W.2d 910, 919 (N.D. 2020). EEE Minerals and Vohs complain that the North Dakota statute treats as property of the State certain mineral interests that were reserved to the Vohses in 1957.
In December 2020, EEE Minerals and Vohs sued North Dakota, the Lands Board, and the Commissioner of the Board in federal court. They claimed that the North Dakota statute was preempted by the Flood Control Act, and that the defendants had taken property from EEE Minerals and Vohs in violation of the Fifth Amendment. The plaintiffs sought damages, declarations that the North Dakota statute was preempted by federal law and that an unconstitutional taking had occurred, and an injunction prohibiting the defendants from claiming ownership of the mineral interests under state law.
The district court granted the defendants' motion to dismiss. The court concluded that state law was not preempted, that the claims for monetary compensation against the defendants were barred by state sovereign immunity, and that no taking had occurred. EEE Minerals and Vohs appeal. For simplicity, we will refer to Suzanne Vohs in place of both appellants.
Vohs contends that the district court erred in dismissing her claim that federal law preempts the North Dakota statute. Under the Supremacy Clause of the Constitution, art. VI, cl. 2, state law is preempted when it conflicts with or frustrates federal law. CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 663 (1993). Preemption may be express or implied. Mut. Pharm. Co. v. Bartlett, 570 U.S. 472, 480 (2013). Vohs asserts that the Flood Control Act impliedly preempts the North Dakota statute, because the state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." See Hines v. Davidowitz, 312 U.S. 52, 67 (1941).
Vohs argues that the North Dakota statute interferes with the accomplishment of the purposes and objectives of the Flood Control Act. She focuses on the federal government's acquisition of property under the Flood Control Act through the 1957 warranty deed. Under the deed, the United States acquired 276.8 acres of surface land, but allowed the Vohses to reserve their oil and gas interests, subject to the right of the United States to flood and submerge the land in the construction, operation and maintenance of the Garrison Dam and reservoir.
Vohs contends that because the deed effectuated the acquisition of land for a project authorized by the Flood Control Act, it reflected Congress's goals and purpose. She maintains that any action by North Dakota to disturb rights under the deed or to frustrate the land acquisition is preempted by the federal statute.
Congress enacted the Flood Control Act to provide for the orderly management of the Missouri River Basin. South Dakota v. Ubbelohde, 330 F.3d 1014, 1019 (8th Cir. 2003); Pub. L. No. 78-534, 58 Stat. 887 (1944). The principal purposes of the Act were to avoid flooding and maintain downstream navigation. Ubbelohde, 330 F.3d at 1019-20. To accomplish these goals, Congress authorized the construction of dams and reservoirs on the Missouri River. Pub. L. No. 78-534, § 9, 58 Stat. 887, 891 (1944); see ETSIPipeline Project v. Missouri, 484 U.S. 495, 499-505 (1988). The Act entrusted the Corps with constructing and managing the dams and reservoirs, and prescribing regulations related thereto. Ubbelohde, 330 F.3d at 1019; 16 U.S.C. § 460d; 33 U.S.C. § 709.
The Flood Control Act directed the United States to acquire "title to all lands, easements, and rights-of-way necessary for any dam and reservoir project," and appropriated funds for that purpose. Pub. L. No. 78-534, § 3, 58 Stat. 887, 889 (1944); 33 U.S.C. § 701c-1. The Act did not address mineral ownership. But in making land acquisitions under the Act, the United States allowed some landowners, including the Vohses, to reserve their mineral interests. See Sorum, 947 N.W.2d at 397. The North Dakota statute then determined an ordinary high water mark for the riverbed channel that affected property rights in the area.
We are not convinced that the State's determination of a high water mark, and the attendant settling of property rights under state law, stands as an obstacle to accomplishing the objectives of the Flood Control Act. The Act allowed the United...
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