Etalook v. Exxon Pipeline Co.

• Decision Date: 05 November 1987
• Docket Number: Nos. 86-4071,86-4294,s. 86-4071
• Citation: 831 F.2d 1440
• Parties: Esther John ETALOOK, Plaintiff-Appellant, v. EXXON PIPELINE COMPANY; Sohio Pipeline Co.; Mobil Alaska Pipeline Company; BP Pipelines, Inc.; Arco Pipeline Co.; Phillips Petroleum Company; Phillips Alaska Pipeline Company; Union Alaska Pipeline Company; Amerada Hess Corporation; Amerada Hess Pipeline Corporation; Alyeska Pipeline Service Company; State of Alaska, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1440

831 F.2d 1440

Esther John ETALOOK, Plaintiff-Appellant, v. EXXON PIPELINE COMPANY; Sohio Pipeline Co.; Mobil Alaska Pipeline Company; BP Pipelines, Inc.; Arco Pipeline Co. Phillips Petroleum Company; Phillips Alaska Pipeline Company; Union Alaska Pipeline Company; Amerada Hess Corporation; Amerada Hess Pipeline Corporation; Alyeska Pipeline Service Company; State of Alaska, Defendants-Appellees.

Nos. 86-4071, 86-4294.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 6, 1987.

Decided Nov. 5, 1987.

Clem H. Stephenson, Tulsa, Okl., for plaintiff-appellant.

Thomas E. Meacham, Anchorage, Alaska, for defendants-appellees.

Appeal from the United States District Court for the District of alaska.

Before GOODWIN, ANDERSON and BRUNETTI, Circuit Judges.

GOODWIN, Circuit Judge:

A possessor of an Alaska Native Allotment tract appeals a judgment granting some but not all money damages claimed from an alleged trespass during the construction of the Trans-Alaska oil pipeline and its associated haul road. A portion of the pipeline and highway cross land granted to the late Arctic John Etalook, and now owned by his widow, Esther John Etalook.

The issues are whether Alyeska Pipeline Service Company (Alyeska) can condemn a right of way across the allotment and, if so, how much compensation Etalook should receive for the condemned property.

John Etalook first occupied the land in July 1946. On July 20, 1971, Etalook applied for a native allotment pursuant to the Alaska Native Allotment Act of 1906, Act of May 17, 1906, ch. 2469, Sec. 1, 34 Stat. 197 (formerly codified at 43 U.S.C. Sec. 270-1) (repealed 1971). The allotment was recorded on the Bureau of Land Management's (BLM) Master Title Plats on or before April 13, 1973. The patent to the allotment was issued on August 22, 1975.

Meanwhile, Alyeska--acting as an agent for the state of Alaska and pipeline owner companies Exxon Pipeline Company, et al. --attempted to secure rights of way across the lands occupied by Etalook for the Trans-Alaska oil pipeline. Alyeska first filed applications for the pipeline right of way with the BLM in 1969. The Trans-Alaska Pipeline Authorization Act, 43 U.S.C. Secs. 1651-1655 (1982), authorizing construction of the pipeline, was enacted in 1973. Alyeska's right-of-way application was granted on January 23, 1974. A haul road was built across Etalook's allotment in 1974, and the pipeline was built in 1975.

Alyeska first became aware of the conflict between the right of way and Etalook's allotment application late in 1974. On April 8, 1975, Alyeska, BIA representatives, and Etalook met to discuss the conflict. At a second meeting on May 27, 1975, Etalook accepted $25,000 in return for a road right of way covering 13.9 acres and a pipeline right of way covering 11.1 acres. ¹ On the same day, BIA sent a letter to Alyeska's attorney, Harris Saxon, stating:

These [Etalook's] lands are segregated from public domain by applications filed pursuant to the Act of May 17, 1906, (34 Stat. 197), as amended August 2, 1956 (70 Stat. 954; 48 U.S.C. 357). When title to the lands passes to the individual native applicant, jurisdiction of the land will be under the Bureau of Indian Affairs. At that time, all easements for right of way and construction permits across individual restricted native lands must be processed and approved by Secretary of the Interior in accordance with Code of Federal Regulations Title 25-Part 161.

We have no objection at this time to the agreements you submitted. However, this non-objection does not imply approval now and is not to be construed as any intent for approval in the future.

After the first agreement was signed, Alyeska decided to construct a valve site on Etalook's property. In February 1977, Etalook accepted $3,500 in return for signing an additional grant of 0.25 acres for the pipeline right of way. The BIA approved the agreement. At some time after Alyeska began construction, Etalook withdrew his consent for the easements.

After a complex series of agency and court proceedings, the district court held that certain highway right-of-way agreements were invalid. The district court also held that Alyeska's condemnation was improper unless pursued by an official delegation of authority to condemn under an authorization from the Commissioner of the Alaska Department of Natural Resources. On February 8, 1984, Alyeska filed an amended complaint in condemnation after receiving a delegation of authority from the Alaska Commissioner of Natural Resources.

Meanwhile, on September 29, 1983, Etalook had filed a new suit against the state of Alaska, Alyeska, and Exxon. Etalook sought: 1) ejectment; 2) quiet title to the improvements built on the allotment; 3) an order requiring Alyeska to account for and to pay to Etalook its profits resulting from transporting three billion barrels of oil over Etalook's allotment; and 4) an injunction barring continued trespass on the allotment. The district court consolidated this suit with the earlier, amended condemnation actions.

After obtaining an appraisal of the condemned property, the district court ordered Alyeska to file the required deposit of funds ($16,400) with the clerk of the court. The court then ordered disbursement of the deposited funds to Etalook. On January 14, 1985, the court condemned the easements across Etalook's allotment, and title vested in Alyeska.

The district court dismissed Etalook's claim of title to improvements built on the easement. It held that Alyeska properly obtained delegation of condemnation authority under Alaska law and that Alyeska thus owned the improvements. However, the court also determined that Etalook was entitled to fair payment for pre-condemnation occupancy and just compensation for the land condemned at its 1985 value. This award was to be offset by the $28,500 that Alyeska had already paid Etalook.

The district court also held that the profitability of improvements placed in trespass was an improper measure of damages because a state statute of limitations barred any forfeiture claim based upon a "bad faith" characterization of Alyeska's initial entry. It dismissed Etalook's claim for punitive damages. 625 F.Supp. 1315.

Etalook now appeals: 1) the court's condemnation decision; 2) the award to Alyeska of title to improvements; 3) the denial of punitive damages; and 4) the court's grant of summary judgment in favor of Alyeska on the damages and condemnation issues, thereby denying her a jury trial on those issues. Etalook also challenges the district court's rulings as violations of her civil rights.

I. Condemnation

Etalook attacks the district court's judgment that the appellees owned the rights of way over her restricted trust allotment as an effective exercise of inverse condemnation prohibited by United States v. Clarke, 445 U.S. 253, 100 S.Ct. 1127, 63 L.Ed.2d 373 (1980). We reject this contention. Appellees obtained title through a formal condemnation action rather than through the informal proceedings required by definition for inverse condemnation. See id. at 257, 100 S.Ct. at 1130; First English Evangelical Lutheran Church v. County of Los Angeles, --- U.S. ----, 107 S.Ct. 2378, 2386-87, 96 L.Ed.2d 250 (1987).

The district court's rulings demonstrate that the appellees acquired their title to rights of way across Etalook's allotment by formal condemnation through a declaration of taking, as authorized by 25 U.S.C. Sec. 357. See 25 U.S.C. Sec. 357 (1982) (providing that "[l]ands allotted in severalty to Indians may be condemned for any public purpose ... in the same manner as land owned in fee may be condemned"). The district court awarded condemnation compensation based on the value of the allotment in 1985, when formal condemnation proceedings made final Exxon's title to the right of way. Had the court intended to award damages for inverse condemnation, it would have valued the allotment as of 1974, when the physical intrusion began. See Clarke, 445 U.S. at 256-57, 100 S.Ct. at 1129-30. Nor did the appellees ever claim that the initial entry gave them a public right of way across the allotment.

There thus is no merit to Etalook's claim that the district court's holding violated Clarke. Clarke, following the "plain meaning" of Sec. 357, held that a condemning authority must institute formal condemnation proceedings to gain title to Indian trust lands and may not gain title through inverse condemnation arising by way of physical invasion. See Clarke, 455 U.S. at 254-59, 100 S.Ct. at 1128-31. Because the district court held properly that appellees obtained title through formal condemnation proceedings rather than through their initial physical invasion, we must reject Etalook's argument that the prior physical invasion somehow converted the formal proceedings into an action for inverse condemnation.

We also reject Etalook's contention that the district court effectively issued inverse condemnation damages by awarding fair rental value up until the time of the formal condemnation rather than punitive damages for trespass and by allowing Alyeska to retain title to the improvements it built on the land. In a case like this, where the trespasser did not act in bad faith, but had paid for an easement, the proper measure of damages is the reasonable rental value of the property for the duration of the trespass. See infra at 1445-46, (affirming the district court's finding that Alyeska did not act in bad faith). Nor did the court err in awarding title of improvements to Alyeska. See infra at 1444-45. Thus, we reject Etalook's argument that the type of damages awarded indicate that appellees obtained the rights of way through inverse condemnation.

We find no merit in Etalook's argument that Alyeska had no power of eminent domain and thus had no right to condemn the rights of way. The Alaska Commissioner of Natural Resources, following the legislature's statutory mandate, has delegated...