State of N.D. ex rel. Bd. of University and School Lands v. Block

• Citation: 789 F.2d 1308
• Decision Date: 05 May 1986
• Docket Number: No. 84-2664,84-2664
• Parties: The STATE OF NORTH DAKOTA, ex rel. BOARD OF UNIVERSITY AND SCHOOL LANDS, Appellee, v. John R. BLOCK, Secretary of Agriculture; James G. Watt, Secretary of the Interior; Robert F. Burford, Director of the United States Bureau of Land Management; and R. Max Peterson, Chief of the United States Forest Service, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1308

789 F.2d 1308

The STATE OF NORTH DAKOTA, ex rel. BOARD OF UNIVERSITY AND SCHOOL LANDS, Appellee, v. John R. BLOCK, Secretary of Agriculture; James G. Watt Secretary of the Interior; Robert F. Burford, Director of the United States Bureau of Land Management; and R. Max Peterson, Chief of the United States Forest Service, Appellants.

No. 84-2664.

United States Court of Appeals Eighth Circuit.

Submitted Sept. 9, 1985.

Decided May 5, 1986.

Marcy A. Toney, Washington, D.C., for appellants.

Nicholas J. Spaeth, Bismarck, N.D., for appellee.

Before LAY, Chief Judge, HENLEY, Senior Circuit Judge, and WOLLMAN, Circuit Judge.

WOLLMAN, Circuit Judge.

This case comes before us a second time on appeal. We reverse and remand with directions to dismiss the complaint.

FACTS

On October 31, 1978, the State of North Dakota brought this action seeking to enjoin the United States from issuing mineral leases on lands constituting the riverbed of the Little Missouri River or otherwise exercising ownership over the riverbed. On March 11, 1980, the state amended its complaint to include as a basis of jurisdiction the Quiet Title Act (QTA), 28 U.S.C. Sec. 2409a (1982). The district court held that the Little Missouri River was navigable in 1889, the year that North Dakota entered the Union, and that North Dakota had thus acquired title to the riverbed under the equal footing doctrine and the Submerged Lands Act of 1953. 43 U.S.C. Sec. 1311(a) (1982). The district court further held that the twelve-year statute of limitations contained in the QTA did not apply to the states. North Dakota ex rel. Board of University and School Lands v. Andrus, 506 F.Supp. 619 (D.N.D.1981). This court affirmed the district court on both issues. North Dakota ex rel. Board of University and School Lands v. Andrus, 671 F.2d 271 (8th Cir.1982). On certiorari, the United States Supreme Court reversed, holding that the QTA provides the exclusive means by which a party can challenge the United States' title to real property and that the twelve-year statute of limitations set forth in the QTA applies to the states. The Court remanded the case for a determination regarding the date on which North Dakota's action accrued. The Court did not reach the issue of the navigability vel non of the Little Missouri River. Block v. North Dakota, 461 U.S. 273, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983).

On remand, the district court took additional evidence and held that the QTA's statute of limitations barred North Dakota's suit only with respect to those specific tracts as to which North Dakota was found to have had actual or constructive notice of the United States' claims. The United States appeals, contending that the QTA bars North Dakota's suit with respect to all portions of the riverbed.

The factual background was adequately set forth in our first decision. 671 F.2d at 271-72. In summary, the United States claims the riverbed by virtue of its status as a riparian landowner. North Dakota claims the riverbed under the equal footing doctrine and the Submerged Lands Act of 1953, which provide that the states are the presumptive title owners of all the submerged lands that underlie waters determined navigable at the time of statehood. See United States v. Louisiana, --- U.S. ----, 105 S.Ct. 1074, 1076, 84 L.Ed.2d 73 (1985); Montana v. United States, 450 U.S. 544, 551-52, 101 S.Ct. 1245, 1251, 67 L.Ed.2d 493 (1981); Oregon ex rel. State Land Board v. Corvallis Sand & Gravel Co., 429 U.S. 363, 374-75, 97 S.Ct. 582, 588-89, 50 L.Ed.2d 550 (1977).

The QTA makes the United States amenable to suit in any action "to adjudicate a disputed title to real property in which the United States claims an interest, other than a security interest or water rights." 28 U.S.C. Sec. 2409a(a). The QTA further provides, however, that:

Any civil action under this section shall be barred unless it is commenced within twelve years of the date upon which it accrued. Such action shall be deemed to have accrued on the date the plaintiff or his predecessor in interest knew or should have known of the claim of the United States.

28 U.S.C. Sec. 2409a(f). This statute of limitations is jurisdictional. "If North Dakota's suit is barred by Sec. 2409a(f), the courts below had no jurisdiction to inquire into the merits." Block v. North Dakota, 461 U.S. at 292, 103 S.Ct. at 1823. North Dakota's action is thus barred if it "knew or should have known of the claim of the United States" prior to October 31, 1966.

The district court approached the notice issue on a "tract-by-tract" basis, holding that notice of the United States' claim to several tracts of the riverbed was not tantamount to notice of the United States' claim to all of the riverbed with respect to which it was a riparian owner.

The trial court made the following findings with respect to the assertion by the United States of its claims to title to portions of the riverbed: In March 1955, an official of the Bureau of Land Management (BLM) wrote to the North Dakota Attorney General, inquiring "whether or not the Little Missouri River was navigable or non-navigable at the time of the admission of the State of North Dakota to the Union." An assistant attorney general responded to this inquiry by stating that he had been informed by the State Land Commissioner and the Water Conservation Commission that the river "is not now and has not been considered navigable."

The Bank of North Dakota (Bank) began issuing mineral leases on riverbed tracts in 1955. ¹ The district court found that the Bank was not one of the agencies consulted by the assistant attorney general who had responded to the inquiry from the BLM.

In June of 1955, the BLM began issuing mineral leases with respect to certain portions of the riverbed. The earliest recorded BLM lease was filed for record on June 9, 1958. On June 7, 1962, the Bowman County Pioneer printed a public notice that the BLM was accepting bids for oil and gas leases on certain North Dakota lands, including five specific segments of the riverbed. From 1963 to 1965, the BLM recorded various documents relating to mineral leases on nine separate tracts of the riverbed.

On May 1, 1964, the manager of the Bank executed a communitization agreement on behalf of the Bank that recognized that both the United States and North Dakota claimed ownership of a certain described portion of the riverbed.

On January 27, 1966, an attorney for Shell Oil Company, which held certain mineral leases executed by the Bank, informed the Bank and the State Board of University and School Lands by letter that the United States was claiming to own sections of the riverbed that were covered by Shell's leases.

In 1963 and again in early 1966, the North Dakota Industrial Commission issued spacing orders for certain lands, including land lying within the riverbed. Certain of the exhibits introduced in the proceedings before the Commission show federal ownership of riparian lands and federal claims to the riverbed. The copies of these spacing orders that appear in the record bear the typed names, but not the signatures, of the then Governor, Attorney General, and Commissioner of Agriculture and Labor of the State of North Dakota.

From the foregoing factual record, the court concluded that "it is clear some state employees had some notice that a contest was developing between North Dakota and United States as to who claimed what portions of the river and on what basis."

The district court held that with respect to the present controversy the "circumstances" contemplated by the North Dakota constructive notice statute ² consisted of the "execution, disclosure, occasional filings, and publication of potential bid lettings, of oil and gas lands, and correspondence relating to those lands in each case specifically described by government survey." The court held that the North Dakota recording statutes had no application with respect to the beds of navigable bodies of water held by the state inasmuch as the North Dakota Marketable Record Title Act, N.D.Cent.Code Sec. 47-19.1-11, specifically excludes from its operation the state of North Dakota. In view of this exclusion and in the light of the rule that the recordation of instruments affecting title to real property is constructive notice only to purchasers and encumbrancers subsequent to such recording, Hanson v. Zoller, 187 N.W.2d 47 (N.D.1971); First National Bank of Dickinson v. Big Bend Land Co., 38 N.D. 33, 164 N.W. 322 (1917), the court found that North Dakota was not put on constructive notice by the recording of the BLM documents relating to mineral leases on nine separate tracts of the riverbed.

The court further held that the public notice soliciting bids for oil and gas leases that was published in the June 7, 1962, issue of the Bowman County Pioneer did not constitute constructive notice to the state.

The court held that BLM's actions regarding the riverbed tracts were based on the premise that the Little Missouri River was not navigable and that therefore the United States had ownership interests in those tracts pursuant to N.D.Cent.Code Sec. 47-01-15, which provides: "In all cases where the opposite banks of any stream not navigable belong to different persons, the stream and the bed thereof shall become common to both." The court concluded, however, that the leases and notices regarding the tracts in which the United States asserted an ownership interest could not be interpreted to represent a claim by the United States to those portions of the riverbed that were not riparian to the lands specifically described in the leases and notices.

The court held that the communitization agreement signed by the Bank and the letter from counsel for Shell Oil Company to the Bank were sufficient to put the Bank, as agent for North Dakota, on notice of the claims of the United States with respect to those tracts described in the letter and the communitization agreement. Lik...