Koniag, Inc. v. Koncor Forest Resource

39 F.3d 991, 1994 WL 601750
CourtCourt of Appeals for the Ninth Circuit
DecidedNovember 4, 1994
DocketNos. 93-36138, 93-36164
StatusPublished
Cited by9 cases

This text of 39 F.3d 991 (Koniag, Inc. v. Koncor Forest Resource) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Koniag, Inc. v. Koncor Forest Resource, 39 F.3d 991, 1994 WL 601750 (9th Cir. 1994).

Opinion

CANBY, Circuit Judge:

In Tyonek Native Corp. v. Cook Inlet Region, Inc., 853 F.2d 727 (9th Cir.1988), we held that rock, sand, and gravel are part of the subsurface estate in dually owned lands conveyed to native regional corporations under the Alaska Native Claims Settlement Act, and that village corporations that own the surface have no right to these materials for the purpose of commercial extraction and sale. We left open, however, the question whether a village corporation has any right to use rock, sand, and gravel on site, incidental to the enjoyment of its surface estate. That question is now before us. We conclude that when there is no other practical source for these materials, the subsurface owner on these dually owned lands may not unreasonably deny the surface owner access to rock, sand, and gravel necessary for surface development.

I

Congress enacted the Alaska Native Claims Settlement Act (ANCSA), 43 U.S.C. § 1601 et seq., to settle, through grants of a combination of land and money, all “claims by Natives of Alaska.” H.R.Rep. No. 92-523, 92d Cong., 1st Sess. 3, reprinted in 1971 U.S.C.C.A.N. 2193 (hereinafter H.R.Rep. 92-523). To administer this land and money, the state was divided into twelve geographic regions, and the Natives within each region became shareholders in a regional corporation organized under Alaska law. 43 U.S.C. § 1606. Additionally, each of approximately 200 Native villages was required to form a village corporation with its villagers as shareholders. 43 U.S.C. § 1607.

The United States patented to the village corporations the surface estate in approximately 22 million acres of land. 43 U.S.C. §§ 1611, 1613 (1978). The underlying subsurface estate was patented to the appropriate regional corporation. Id. Lands divided in this way are referred to as “dually owned lands.” Tyonek, 853 F.2d at 728. The regional corporations also received both the surface and subsurface estate in an additional 16 million acres. 43 U.S.C. § 1611(e). These wholly owned lands are referred to as “fee lands.” Tyonek, 853 F.2d at 728.

Koncor Forest Resource Management Company is a partnership whose general partners are the wholly owned subsidiaries of four Native village corporations. Two of Koncor’s partners hold title to surface estates on Afognak Island, south of Anchorage, Alaska, and have assigned to Koncor their rights to the timber on that land, “and all rights necessary to harvest the timber.”1 Koniag is the regional corporation that holds title to the subsurface — including rock, sand, and gravel — underlying Koncor’s timber. Since it began harvesting timber over ten years ago, Koncor has used Koniag’s rock2 for road building and other construction connected with its logging operations. Despite Koniag’s repeated demands, Koncor consistently has refused to pay for the rock it uses.

In 1988, Koniag brought this action in federal district court, seeking an injunction ordering Koncor to stop using rock except on terms and conditions acceptable to Koniag, and seeking damages for the rock Koncor already had used. Koncor counterclaimed, seeking, inter alia, a declaration that it has a right to use Koniag’s rock to the extent necessary to harvest its timber, without payment to Koniag. The district court denied both parties the primary relief they requested. Although it awarded Koniag damages for Koncor’s past use of rock, it issued a permanent injunction authorizing Koncor to [996]*996use Koniag’s rock at a price set by the court, provided Koniag does not have a competing use. It also authorized Koneor to use rock in “cut-and-fill” operations without payment.

Koneor appeals, arguing that it should be permitted to use Koniag’s rock without payment. In the alternative, it argues that the district court’s definition of “cut-and-fill” is too narrow. Koniag cross-appeals, arguing that Koneor should be enjoined from using rock without Koniag’s consent.

II

Koncor’s position is simply stated. It maintains that Congress intended that it benefit economically from the land it received under ANCSA. It notes, however, that it is faced with a potential barrier to the realization of that goal. Its land is valuable principally as a source of timber, which cannot be harvested without using rock to build roads and other facilities. The only practical source of rock for those purposes is the subsurface estate owned by Koniag. Consequently, if Koniag has absolute control over the disposition of its rock, it can block Kon-eor’s timber harvesting by setting an unreasonably high price, or by refusing to sell rock at all. Koneor contends that such control, with its potential for reducing the value of Koncor’s land to zero, is inconsistent with Congress’s intent that Koneor be able to develop its land. It argues, therefore, that when the United States simultaneously conveyed the surface estate to Koneor and the subsurface to Koniag, it must also have granted Koneor, by implication, the right to use rock from the subsurface to the extent necessary to harvest its timber, thus imposing a servitude on the subsurface estate. In short, Koneor contends that it has, in effect, an easement of necessity to use Koniag’s rock. We agree to a point.

III

In determining whether land patented from the United States is burdened by an implied servitude, we look to several factors, including congressional intent, the degree of necessity for the easement, whether consideration was given for the land, whether the claim is against the United States or against a simultaneous conveyee, and the terms of the patent itself. See Superior Oil Co. v. United States, 353 F.2d 34, 36-37 & n. 5 (9th Cir.1965).3 Analysis of each of these factors indicates that Koniag’s land is subject to a servitude whereby Koniag may not unreasonably deny Koneor access to rock.

A Congressional intent

Congress’s intent in granting Koncor its land is an important factor in determining the existence and extent of Koncor’s rights to use Koniag’s land. See Superior Oil, 353 F.2d at 36 & n. 2; cf. Watt v. Western Nuclear, Inc., 462 U.S. 36, 53-56, 103 S.Ct. 2218, 2228-30, 76 L.Ed.2d 400 (1983) (congressional intent as to surface use paramount in determining extent of mineral reservation). ANCSA’s legislative history makes clear that Congress contemplated that land granted under ANCSA would be put primarily to three uses — village expansion, subsistence, and capital for economic development. See H.R.Rep. 92-523 at 5, 1971 U.S.C.C.A.N. at 2195. Of these potential uses, Congress clearly expected economic development would be the most significant:

The 40,000,000 acres is a generous grant by almost any standard....

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
39 F.3d 991, 1994 WL 601750, Counsel Stack Legal Research, https://law.counselstack.com/opinion/koniag-inc-v-koncor-forest-resource-ca9-1994.