Riedel v. Anderson

• Decision Date: 04 June 2003
• Docket Number: No. 02-60, No. 02-61.
• Citation: 70 P.3d 223,2003 WY 70
• Parties: William H. RIEDEL, Appellant (Plaintiff), v. Craig C. ANDERSON and Gail M. Anderson; Office of State Lands and Investments (formerly State Land and Farm Loan Office); Stephen Reynolds in his official capacity as director of the Office of State Lands and Investments; Board of Land Commissioners; and Governor David Freudenthal, Secretary of State Joe Meyer, Auditor Max Maxfield, Treasurer Cynthia Lummis and Superintendent of Public Instruction Trent Blankenship, in their official capacities as members of the Board of Land Commissioners, Appellees (Defendants), and Wyoming Stock Growers Association; Wyoming Wool Growers Association; and Wyoming Farm Bureau Federation, Appellees (Intervenor Defendants). Wyoming Stock Growers Association, and Wyoming Wool Growers Association, Appellants (Intervenor Defendants), v. William H. Riedel, Appellee (Plaintiff), and Office of State Lands and Investments (formerly State Land and Farm Loan Office); Stephen Reynolds in his official capacity as director of the Office of State Lands and Investments; Board of Land Commissioners; and Governor David Freudenthal, Secretary of State Joe Meyer, Auditor Max Maxfield, Treasurer Cynthia Lummis and Superintendent of Public Instruction Trent Blankenship, in their official capacities as members of the Board of Land Commissioners, Appellees (Defendants).
• Court: Wyoming Supreme Court

70 P.3d 223

2003 WY 70

William H. RIEDEL, Appellant (Plaintiff), v. Craig C. ANDERSON and Gail M. Anderson; Office of State Lands and Investments (formerly State Land and Farm Loan Office); Stephen Reynolds in his official capacity as director of the Office of State Lands and Investments; Board of Land Commissioners; and Governor David Freudenthal, Secretary of State Joe Meyer, Auditor Max Maxfield, Treasurer Cynthia Lummis and Superintendent of Public Instruction Trent Blankenship, in their official capacities as members of the Board of Land Commissioners, Appellees (Defendants), and Wyoming Stock Growers Association; Wyoming Wool Growers Association; and Wyoming Farm Bureau Federation, Appellees (Intervenor Defendants).

Wyoming Stock Growers Association, and Wyoming Wool Growers Association, Appellants (Intervenor Defendants), v. William H. Riedel, Appellee (Plaintiff), and Office of State Lands and Investments (formerly State Land and Farm Loan Office); Stephen Reynolds in his official capacity as director of the Office of State Lands and Investments; Board of Land Commissioners; and Governor David Freudenthal, Secretary of State Joe Meyer, Auditor Max Maxfield, Treasurer Cynthia Lummis and Superintendent of Public Instruction Trent Blankenship, in their official capacities as members of the Board of Land Commissioners, Appellees (Defendants).

Nos. 02-60, 02-61.

Supreme Court of Wyoming.

June 4, 2003.

Steven F. Freudenthal of Freudenthal, Salzburg & Bonds, P.C., Cheyenne, Wyoming, Representing William H. Riedel.

Hoke MacMillan, Attorney General; Michael L. Hubbard, Deputy Attorney General; Nancy E. Vehr, Assistant Attorney General; John B. Speight and Amanda Hunkins of Speight, McCue & Associates, P.C., Cheyenne, Wyoming, Representing State of Wyoming. Argument by Ms. Vehr.

Karen Budd-Falen and Brandon L. Jensen of Budd-Falen Law Offices, P.C., Cheyenne, Wyoming, Representing Wyoming Farm Bureau Federation. Argument by Mr. Jensen.

Daniel B. Frank of Frank Law Office, Cheyenne, Wyoming; Kermit C. Brown of Brown & Hiser, LLC, Laramie, Wyoming, Representing Wyoming Stock Growers Association and Wyoming Wool Growers Association. Argument by Mr. Brown.

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

GOLDEN, Justice.

[¶ 1] In this appeal the Court is asked to decide the constitutionality of Wyo. Stat. Ann. § 36-5-105(a) and (e), governing the preferential leasing of school lands, and whether the state's school lands are encumbered by a trust and, if so, the nature of that trust. Before we examine these weighty issues, however, we must first address an issue of standing.

[¶ 2] As explained below, we hold that William H. Riedel has standing to challenge the constitutionality of the statute in question; that the school lands are subject to neither a federal trust nor a state constitutional trust, but rather to a legislatively-created statutory trust; and that William H. Riedel has failed to prove that the preferential-right-to-renew statute violates any constitutional or fiduciary restraints on the State's management of the school lands.

ISSUES

[¶ 3] The parties have filed a total of eight briefs in this matter, in their appellant and appellee capacities, containing approximately twenty-four different formulations of the issues on appeal. Consolidating those various formulations, the appeals raise the following issues for this Court's determination:

1. Whether Riedel has standing to challenge the constitutionality of Wyo. Stat. Ann. § 36-5-105(a) and (e) governing the leasing of school lands.

2. Whether the Wyoming Act of Admission, 26 Stat. 222, Ch. 664 (July 10, 1890), the Wyoming Constitution, or Wyoming statutes establish a trust with respect to the lands which the United States gave to Wyoming for the support of the common schools.

3. If the state school lands are in fact held in trust, whether the statutory right of a previous lessee to renew a lease of state school lands violates the State's management duties with respect to those lands.

FACTS

[¶ 4] Craig C. and Gail M. Anderson held an agricultural lease to approximately 640 acres of state-owned land in Laramie County. The leased land is Section 36 of Township 16 North, Range 63 West of the 6th P.M., and as such is part of the land granted to the State by Congress "for the support of the common schools" upon Wyoming's admission to the Union in 1890. Wyoming Act of Admission, 26 Stat. 664, §§ 4, 5 (Reprinted in Wyo. Stat. Ann. Vol. 1).

[¶ 5] The term of Andersons' lease was to expire at the end of December 1997. As authorized by statute, they submitted a renewal lease application to the Office of State Lands and Investments, the statutory administrator of the land, proposing an annual lease rate of $4,586.40. There were two competing lease offers for the same parcel; one proposed a lower rate than the Andersons but William H. Riedel, the Andersons' neighbor, proposed to pay an annual rate of $6,000 for the same section.

[¶ 6] Wyo. Stat. Ann. § 36-5-105 provides that the holder of an expiring lease shall have a preferential right to renew that lease if the holder meets any competing bid for the subject parcel. Andersons met the Riedel bid of $6,000 per year and, on January 16, 1998, the interim director of the Office of State Lands and Investments awarded the lease to the Andersons for a ten-year term at $6,000 per year.

[¶ 7] Riedel filed an administrative appeal of the interim director's award to the Andersons. The Board of Land Commissioners conducted a hearing and upheld the interim director's decision by letter dated May 6, 1998. Riedel then brought a petition for judicial review of the Board's decision in the district court, challenging the constitutionality of the preference statute. On certification to this Court, the petition was dismissed on the grounds that the Court lacked jurisdiction to review the constitutionality of a statute upon petition for judicial review of an administrative action. In re Conflicting Lease Application for Lease No. 1-7027, 972 P.2d 586 (Wyo.1999).

[¶ 8] Riedel then instituted a declaratory judgment case in June 1999 against the Board of Land Commissioners and its members, challenging the constitutionality of Wyo. Stat. Ann. §§ 36-5-101 and 36-5-105, the preferential right-to-renew statute. On July 10, 2000, the district court granted a motion to intervene filed jointly by the Wyoming Stock Growers Association and the Wyoming Wool Growers Association ("the Associations") and a separate motion to intervene filed by the Wyoming Farm Bureau Federation ("the Federation").

[¶ 9] Before trial, the district court asked the parties to brief the legal issue of whether the conveyance of the school lands to the State of Wyoming by the United States imposed a trust on those lands. After briefing, the district court on October 29, 2001, issued an order concluding that the lands were indeed encumbered by a trust, imposing on the State a fiduciary duty to manage the lands exclusively for the beneficiaries, the State's common schools.

[¶ 10] Following the district court's trust ruling, the matter was tried to the court in November 2001 on the issue of whether the right-to-renew statute conflicts with the State's trust duties and is therefore unconstitutional. Riedel's case consisted of testimony by himself; Jim Whalen, Assistant Director of the Department of State Lands and Investments; and Dr. Mark Sunderman, a professor at the University of Wyoming and author of several publications on the state school lands. After plaintiff rested, the district court granted the intervenor Associations' motion to dismiss on the grounds that Riedel failed to present adequate evidence that the preferential right to renew violates the State's fiduciary responsibilities. Riedel timely appealed the dismissal of his complaint (Case No. 02-60), and the Associations cross-appealed the trial court's order that the school lands are held in trust (Case No. 02-61). For purposes of this consolidated appeal, Riedel was designated the appellant, while the Associations, the Federation and the State were designated appellees.

Historical Background

[¶ 11] Beginning with the admission of Ohio to the United States in 1803, Congress granted to almost all newly admitted states¹ sections of public land for the support of schools. See, e.g., Ohio Enabling Act, 2 Stat. 173, 175 (1802); Wade R. Budge, Changing the Focus: Managing State Trust Lands in the Twenty-First Century, 19 J. Land, Resources, & Envtl. L. 223, 226 (1999). The specific language of the grants varied somewhat among the early states' enabling laws, but generally was "for the use of schools" with no mention of trusts, fiduciary obligations, or restrictions on the sale, lease or other use of the lands. See, Sally K. Fairfax, et al., The School Trust Lands: A Fresh Look at Conventional Wisdom, 22 Envtl. L. 797, 810 (1992). Substantially the same pattern was used for land grants in the admission of Louisiana, Indiana, Mississippi, Illinois, Alabama, Missouri and Arkansas. See, Budge, supra, at 226. Courts have consistently ruled that Congress had not encumbered these early land grants with a common law trust, but had merely entered into a "solemn agreement" with the states that the land would be used as intended. See, e.g., Branson Sch. Dist. Re-82 v. Romer, 161 F.3d 619, 633 (10th Cir.1998)

(citing Alabama v. Schmidt, 232 U.S. 168, 173-74, 34 S.Ct. 301, 58 L.Ed. 555 (1914), and Cooper v. Roberts, 59 U.S. (18 How.) 173, 181-82, 15 L.Ed. 338 (1855)).

[¶ 12] However, beginning with Michigan in 1837, a pattern evolved by which the states through their own constitutions imposed restrictions on the use of the land or its sale proceeds. For example, the Michigan Constitution included a provision requiring that the proceeds from the sale of school lands be put into a permanent fund, a pattern that almost all subsequently-admitted states followed in accepting the terms of their...