Cully Corporation, Inc. v. North Slope Borough

CourtDistrict Court, D. Alaska
DecidedFebruary 14, 2024
Docket2:23-cv-00001
StatusUnknown

This text of Cully Corporation, Inc. v. North Slope Borough (Cully Corporation, Inc. v. North Slope Borough) is published on Counsel Stack Legal Research, covering District Court, D. Alaska primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cully Corporation, Inc. v. North Slope Borough, (D. Alaska 2024).

Opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA

CULLY CORPORATION, INC.,

Plaintiff, CORRECTED ORDER GRANTING MOTION FOR PARTIAL vs. SUMMARY JUDGMENT AND REMANDING THE CASE TO NORTH SLOPE BOROUGH and STATE STATE COURT OF ALASKA, DEPARTMENT OF NATURAL RESOURCES,

Defendants. Case No.: 2:23-cv-00001-JMK

This case involves gravel extraction and storage within Sections 29–32 of Township 5 North, Range 44 West, Umiat Meridian (“Sections 29–32”). Central to the parties’ dispute is whether Cully Corporation Inc. (“Cully”), or the State of Alaska (“State”) owns the surface estate of the Kokolik River within Sections 29–32.1 At Docket 9, Cully filed a Motion for Summary Judgment concerning its alleged ownership of the bed of the Kokolik River in Sections 2932. At Dockets 14 and 15, the North Slope Borough (“NSB”), and the State filed Cross-Motions for Summary Judgment against Cully regarding ownership of the bed of the Kokolik River and on Cully’s state law claims. The

1 Docket 11 at 27 (“Plaintiff prays for the following relief: A ruling that Cully, not the State, owns legal title to the area encompassing the submerged lands underlying the Kokolik river where the Borough has dredged for gravel from the 1980s through the present within Township 5 North, Range 44 West, Sections 2933, Umiat Meridian.”). Motions are fully briefed.2 As set forth below, Cully’s Motion for Partial Summary Judgment at Docket 9 is GRANTED. Defendant’s motions at Dockets 14 and 15 are

DENIED. The case and its remaining state law issues is REMANDED back to the Superior Court for the State of Alaska. I. BACKGROUND (A) Ownership History of Sections 29–32 In 1943, the federal government issued Public Land Order 82 (“PLO 82”) withdrawing 48,800,000 acres “from sale, location, selection, and entry,”3 including Sections 29–32.4 When Alaska became a State in 1959, ownership of the beds of navigable

waters withdrawn by PLO 82 did not pass to the State as they normally would have pursuant to the equal footing doctrine.5 However, the Alaska Statehood Act authorized the State to select and have transferred to it roughly 105 million acres of “vacant, unappropriated and unreserved” federal land.6 In 1960, one year after Alaska became a state, the Secretary of the Interior (“Secretary") revoked PLO 82.7

The State, pursuant to the Alaska Statehood Act, began the process of selecting lands for conveyance from the federal government to the State. This process included submitting applications to the Department of Interior (“DOI”). Because the

2 See Dockets 20, 21, 26, & 28. 3 Alaska v. United States, 213 F.3d 1092, 1093 (9th Cir. 2000) (quoting 8 Fed. Reg. 1599 (Feb 4, 1943)).. 4 8 Fed. Reg. 1599-02 (Feb 4, 1943) (withdrawing lands north of the Brooks Range from the U.S. border with Canada to the Arctic Ocean). 5 Alaska v. United States, 213 F.3d 1092, 1098 (9th Cir. 2000). 6 Alaska Statehood Act Pub. L. No. 85-508, 72 Stat. 339, 340 (1958). 7 25 Fed. Reg. 12,599-01 (Dec. 9, 1960). Secretary had revoked PLO 82, some of the State’s applications sought lands formerly reserved by PLO 82, relevant to this case is Application F-033702, which sought transfer of lands including Sections 29–32.8 Several months after the State submitted Application

F-033702, DOI issued a tentative approval for much of the lands selected by the State, including Application F-033702.9 DOI’s tentative approval contemplated that a land patent would be issued to the State before conveyance would become final.10 Sections 29–32 were never patented to the State. In 1971, Congress passed the Alaska Native Claims Settlement Act (“ANCSA”) to settle aboriginal claims over areas

where Alaskan Natives had lived for thousands of years.11 Among other things, ANCSA withdrew some townships which that had been “tentatively approved to, but not yet patented to, the State under the Alaska Statehood Act.”12 In 1977, DOI followed up on its December 1965 tentative approval with a subsequent decision (“1977 Decision”).13 The 1977 Decision explained that Cully had

filed an application, pursuant to ANCSA, seeking lands in and around the Native Village. Because the lands DOI had tentatively approved for conveyance to the State overlapped with lands that ANCSA made proper for conveyance to Native Villages, the 1965 tentative approval was “vacated in part.”14 The 1977 Decision approved for interim conveyance

8 Docket 9-6 at 1 (selecting 5 North 44 and 45 West). 9 Docket 9-6 at 1–2. 10 Docket 9-6 at 2. 11 Sturgeon v. Frost, 139 S. Ct. 1066, 1074 (2019). 12 43 U.S.C. § 1610(a)(2). 13 Docket 9-7. 14 Docket 9-7 at 1–2. Sections 29–32 to Cully, but excluded “the Kokolik River upstream from its mouth to the east line of section 29.”15 Subsequently, in 1977, DOI issued Interim Conveyance No. 56

to Cully for lands in and around Point Lay Village, including Sections 29–32, but excluding the Kokolik River.16 In 1980, Congress passed 43 U.S.C. § 1631(b)(1), which vests ownership to the riverbed of meanderable rivers where the surrounding land has been conveyed pursuant to ANSCA or the Alaska Statehood Act. In 1990, DOI issued Patent Number 50-90-0649, which patented to Cully most of the lands in Sections 29–32, including the lands surrounding the Kokolik River in Sections 29–32.17

(B) Gravel Operations in Sections 2932 In 1981, NSB applied to the State for a Material Sale Contract to extract 500,000 cubic yards of gravel from the bed of the Kokolik River within Sections 29–30.18 In 1984, NSB proceeded to dredge materials from the bed of the Kokolik River without authorization from the State.19

In 1990, NSB again applied to the State for a Material Sale Contract, this time seeking to extract 300,000 cubic yards of gravel from bed of the Kokolik River within Sections 29–30.20 The Army Corps of Engineers and the State of Alaska Division of Governmental Coordination both published notice of NSB’s application.21 In 1991, the

15 Docket 9-7 at 2–3. 16 Docket 9-10 at 1. 17 Docket 9-11. 18 Docket 14-3 at 24; Docket 15-2 at 1–2. 19 Docket 15-5 at 1–2. 20 Docket 14-3 at 33–39. 21 Docket 14-3 at 44–52. State and NSB entered into a Material Sale Contract permitting NSB to extract 300,000 cubic yards of gravel from the bed of the Kokolik River within Sections 29–30 at no cost to NSB.22

In January 1999, NSB applied a third time to the State for a Material Sale Contract seeking to extract 500,000 cubic yards from the Kokolik River within Sections 29–32.23 Notice of NSB’s application was again provided via publication.24 In March 1999, Lily Anniskett wrote to NSB on behalf of Cully, requesting that NSB lease the gravel it was extracting as well as the site where NSB was storing the gravel.25 In turn, NSB

reached out to the State regarding Cully’s proposal.26 The State responded to NSB, indicating that the State owns the riverbed of the Kokolik River within Sections 29–32.27 In October 1999, the State and NSB finalized their second Material Sale Contract, permitting NSB to extract 500,000 cubic yards of gravel from the bed of the Kokolik River within Sections 2932 at $0.50 per cubic yard for a total cost of $250,000.28 NSB has not

extracted gravel from the bed of the Kokolik River since 1999.29

22 Docket 14-3 at 63–76. 23 Docket 14-3 at 80–82. 24 Docket 14-4 at 1–18. 25 Docket 14-4 at 21. 26 Docket 14-4 at 22.

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