Leisnoi, Inc. v. U.S.

• Citation: 170 F.3d 1188
• Decision Date: 19 March 1999
• Docket Number: No. 97-36006,97-36006
• Parties: 29 Envtl. L. Rep. 21,056, 99 Cal. Daily Op. Serv. 1980, 1999 Daily Journal D.A.R. 2597 LEISNOI, INC., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1188

170 F.3d 1188

29 Envtl. L. Rep. 21,056, 99 Cal. Daily Op.

Serv. 1980,

1999 Daily Journal D.A.R. 2597

LEISNOI, INC., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 97-36006.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 8, 1999.

Decided March 19, 1999.

Edgar Paul Boyko and Robert L. Breckberg, Edgar Paul Boyko & Associates, Anchorage, Alaska, for plaintiff-appellant.

Sean H. Donahue, United States Department of Justice, Environmental & Natural Resources Division, Washington, DC, for defendant-appellee.

Appeal from the United States District Court for the District of Alaska; John W. Sedwick, District Judge, Presiding. D.C. No. CV-97-00261-JWS.

Before: CANBY and GRABER, Circuit Judges, and MARSHALL, ¹ District Judge.

Opinion by Judge CANBY; Concurrence by Judge GRABER.

CANBY, Circuit Judge:

Plaintiff, Leisnoi, Inc., brought this action under the Quiet Title Act, 28 U.S.C. § 2409a, to quiet title against the United States in property conveyed to Leisnoi as a Native village corporation pursuant to the Alaska Native Claims Settlement Act (ANCSA), 43 U.S.C. § 1601 et seq. The peculiar circumstances of this case present us with only one

                issue, which may be stated in the alternative:  Did the district court acquire no jurisdiction at all, or did it acquire jurisdiction to enable it to confirm the United States' disclaimer of title and then to dismiss for lack of jurisdiction?   We conclude that, at the time it acted, the district court correctly held that it had acquired no jurisdiction at all
                

BACKGROUND

As a certified Native village corporation, Leisnoi is eligible to receive conveyances of the surface estate in lands from the federal government from areas withdrawn for Native selection pursuant to ANCSA. Leisnoi received such lands from the United States. Its procedural difficulties in this case arise from the fact that its title to those lands is challenged, not by the United States itself, but by a third party on behalf of the United States.

In 1976, a private party, Stratman, and several other Kodiak Island residents filed an action, known as the "decertification" litigation, in federal district court. The Stratman plaintiffs claimed that Leisnoi did not qualify as a Native village under ANCSA, and that Leisnoi consequently must return to the federal government the lands that it had received under ANCSA. The United States conveyed Termination Point to Leisnoi by patents and interim conveyances in 1985. While the decertification action was pending in federal court, Stratman recorded in the Kodiak Island land records a notice of lis pendens, on behalf of the United States, covering Leisnoi's lands, including Termination Point. ²

Leisnoi now wishes to sell Termination Point to the Exxon Valdez Oil Spill Trustees ("Trustees"). A sale has not been consummated, however, apparently because the Trustees seek assurance that title to Termination Point will never revert to the United States. To that end, Leisnoi has moved in two directions.

First, Leisnoi filed a quiet title action against Stratman in the Alaska Superior Court. On April 1, 1997, that court entered judgment quieting title to Termination Point in Leisnoi, "removing any clouds Omar Stratman has placed upon the title thereto," forever barring Stratman from asserting title for himself or others, and denying him standing to challenge the conveyance to Leisnoi by the United States. Final Judgment, No. 3AN 96-00502 cf (Superior Court, 3d Jud. Dist. April 1, 1997). ³ The Trustees, however, maintained that quieting the title against Stratman did nothing to guarantee that the United States would not reacquire Termination Point if the pending decertification proceedings turned out adversely to Leisnoi.

Leisnoi accordingly brought this action against the United States under the Quiet Title Act, which authorizes suit against the United States "to adjudicate a disputed title to real estate in which the United States claims an interest." 28 U.S.C. § 2409a(a). In its complaint, Leisnoi alleged that the United States had no interest in Termination Point. Leisnoi sought

[a]n order quieting [Leisnoi's] title to the surface estate of [Termination Point] as against the United States, declaring that [Leisnoi] owns the surface estate of the property in fee simple, free and clear of any property interest, claim, or constructive trust of the United States except for those property interests retained or reserved on the face of the patents and/or interim conveyances or statutorily reserved, and that the United States, its agencies, and persons acting on its behalf cannot now sue to nullify, cancel, or rescind the patents and interim conveyances or to impose a constructive trust thereupon.

In its answer, the government admitted that it had issued patents conveying Termination Point to Leisnoi. The government then argued that, because it claimed no interest in the property, except for the interests (such as easements) expressly reserved in the patents and except for statutory restrictions The district court refused to confirm the government's disclaimer of interest, concluding instead that the court lacked initial subject matter jurisdiction. Leisnoi sought reconsideration of this ruling because it viewed the government's disclaimer as the goal of its litigation; Leisnoi believed that such a disclaimer, confirmed by the court, would clear the cloud on Leisnoi's title. With the court's permission, Leisnoi then introduced an affidavit describing the situation surrounding the lis pendens and Leisnoi's inability to sell Termination Point to the Trustees with that "cloud" on the title. The district court again denied Leisnoi's motion for confirmation of the disclaimer on the ground that the court lacked initial subject matter jurisdiction.

that the parties agree are not at issue here, the court lacked initial subject matter jurisdiction over Leisnoi's claim under the Quiet Title Act. Nonetheless, as a precautionary measure, in the event that the district court had subject matter jurisdiction, the government filed a formal "Disclaimer of Interest" with its answer. The Quiet Title Act provides that, upon filing of such a disclaimer by the United States, the district court, after confirming the disclaimer, must dismiss for lack of jurisdiction. 28 U.S.C. § 2409a(e).

Accordingly, the district court ordered that the action be dismissed. This timely appeal ensued and we now affirm.

ANALYSIS

The Quiet Title Act, 28 U.S.C. § 2409a

The Quiet Title Act is the "exclusive means by which adverse claimants [can] challenge the United States' title to real property." Id. at 286. Thus, "when the United States has an interest in ... disputed property, the waiver of sovereign immunity must be found, if at all, within the [Quiet Title Act]." Alaska v. Babbitt, 38 F.3d 1068, 1073 (9th Cir.1994). Thus, if the Quiet Title Act does not apply, the district court does not have jurisdiction over Leisnoi's claim. ⁴

Section § 2409a of the Act provides in pertinent part:

(a) The United States may be named as a party defendant in a civil action under this section to adjudicate a disputed title to real property in which the United States claims an interest, other than a security interest or water rights.

....

(d) The complaint shall set forth with particularity the nature of the right, title, or interest which the plaintiff claims in the real property, the circumstances under which it was acquired, and the right, title, or interest claimed by the United States.

28 U.S.C. § 2409a(a), (d) (emphasis added). These subsections make it clear that two conditions must exist before a district court can exercise jurisdiction over an action under the Quiet Title Act:

(1) the United States must claim an interest in the property at issue, and

(2) there must be a disputed title to real property.

If either condition is absent, the Act in terms does not apply and the district court lacks jurisdiction to entertain the action.

A. The Government Claims an Interest in Termination Point.

The patents by which the government conveyed Termination Point to Leisnoi expressly reserved to the United States several easements. ⁵ It is well settled that an easement is an interest in real property. See Cortese v. United States, 782 F.2d 845, 850 (9th Cir.1986). Literally construed, then, the first requirement of § 409a is met because the government claims an interest in Termination Point.

The United States, however, interprets this requirement more broadly. It

contends that the Act requires that the United States claim an interest that is adverse to that of the plaintiff. Because Leisnoi does not dispute the government's entitlement to the reserved easements, the United States argues that the requirement is not satisfied. We understand the government's point; the purposes of the Quiet Title Act are served only when there is a degree of adversity between the United States and the plaintiff. This consideration, however, we view as better encompassed by the second requirement-that the title be disputed. § 2409a(a) does not state that the interest claimed by the United States must be adverse to the plaintiff's interest, and we decline to impose that condition. ⁶

B. No Dispute Existed Between the United States and Leisnoi as to the Title to Termination Point at the Time the Complaint was Filed.

Under the Quiet Title Act, a district court has jurisdiction only "to adjudicate a disputed title to real property." We agree that the dispute must be between asserted interests of Leisnoi and the United States; a dispute between Leisnoi and some third party claiming an interest for itself will not satisfy the requirement. ⁷ The structure of the Quiet Title Act requires this conclusion. Subsection (e) of § 2409a provides:

If the United States disclaims all interest in the real property or interest therein adverse to the plaintiff at any time prior to the actual...