McKenzie County, ND v. United States

131 F.4th 877
Court of Appeals for the Eighth Circuit·Decided March 20, 2025·No. 24-1177·Published

Opinion

United States Court of Appeals For the Eighth Circuit

No. 24-1177

McKenzie County, ND

Plaintiff - Appellee

v.

United States of America; Department of Interior

Defendants - Appellants

Appeal from United States District Court for the District of North Dakota - Western

Submitted: October 23, 2024 Filed: March 20, 2025

Before SHEPHERD, KELLY, and STRAS, Circuit Judges.

SHEPHERD, Circuit Judge.

This case concerns mineral royalties under certain lands in McKenzie County, North Dakota. McKenzie County sued the United States, claiming those royalty interests as its own and that previous litigation settled the matter. The United States

asserts that the prior litigation involved different lands and that the County’s 1 claim is untimely. The district court granted judgment for the County, and the United States appeals. Having jurisdiction under 28 U.S.C. § 1291, we reverse.

I.

Before it achieved statehood in 1889, North Dakota was part of the Dakota Territory, an organized incorporated territory of the United States. Much of the land in present-day North Dakota was then part of the public domain: “land owned by the [Federal] Government . . . that was ‘available for sale, entry, and settlement under the homestead laws, or other disposition under the general body of land laws.’” See Hagen v. Utah, 510 U.S. 399, 412 (1994) (citation omitted). These lands were “in the first instance the exclusive property of the United States, to be disposed of to such persons, at such times, . . . in such modes, and by such titles, as the Government may deem most advantageous . . . .” Irvine v. Marshall, 61 U.S. (20 How.) 558, 561-62 (1857).

Beginning in the mid-nineteenth century, Congress exercised that authority “to encourage the settlement of the West.” See Amoco Prod. Co. v. S. Ute Indian Tribe, 526 U.S. 865, 868 (1999). It did so by providing land “in fee simple absolute” to settlers in the Dakota Territory and the newly admitted North Dakota under various land-patent laws. See id. Some of these acts authorized patents with title to both the surface and mineral estates. Id.; see, e.g., 1862 Homestead Act, ch. 75, 12 Stat. 392 (1862). Others authorized the conveyance of title in only the surface estate, reserving the mineral interest as part of the public domain. Amoco Prod. Co., 526 U.S. at 870; Watt v. W. Nuclear, Inc., 462 U.S. 36, 38-39 (1983); see, e.g., Stock-Raising Homestead Act of 1916, ch.9, 39 Stat. 862. In both cases, the lands were “valuable for grazing [livestock] and raising forage crops.” See Watt, 462 U.S. at 38 (citation omitted).

1 For clarity, we refer to the plaintiff-appellee municipal entity as “the County,” while we refer to the geographic location as “McKenzie County.”

In the 1920’s and 1930’s, however, the economic bounty of these lands began to falter. A series of droughts hit North Dakota, causing widespread dust storms and crop failure. Exacerbated by the onset of the Great Depression, property values plummeted as the Dust Bowl ravaged the Great Plains. Many landowners were forced into bankruptcy, unable to afford the property taxes on their once profitable land. Like many other counties, the County foreclosed on a significant acreage of land within McKenzie County and acquired title to the property through tax forfeiture proceedings. Whatever title the previous landowner held passed to the County: only the surface estate if the United States initially reserved the minerals, or both the surface and mineral estates if the original patent included title to both.

But the dire times continued. By 1935, vast swaths of land were in such poor condition “that the operators ha[d] practically no chance of securing a decent living,” and much of the land remained “submarginal” to the point of nearing “retire[ment] from cultivation.” See M.L. Wilson, The Report on Land of the National Resources Board, 17 J. Farm Econ. 39, 44 (1935). Congress responded to the crisis with a series of emergency relief bills authorizing the President to acquire and restore these “submarginal” lands. See National Industrial Recovery Act, Pub. L. No. 73-67, §§ 201-03, 48 Stat. 200 (1933); Federal Emergency Relief Appropriation Acts, Pub. L. No. 74-11, 49 Stat. 115 (1935), and Pub. L. 74-739, § 689, 49 Stat. 1608 (1936). Eventually, Congress enacted the Bankhead-Jones Farm Tenant Act, which, like the earlier acts, codified the authority to “acquire by purchase, gift, or devise, or by transfer from . . . any State, Territory, or political subdivision, submarginal land and land not primarily suited for cultivation.” See Pub. L. 75-210, § 32(a), 50 Stat. 522, 525-26 (1937). The Act also permitted the Secretary of Agriculture2 to acquire these lands “subject to any reservations, outstanding estates,

2 The lands in McKenzie County were initially administered by the Secretary of Agriculture, and that authority was assigned to the United States Forest Service. See 19 Fed. Reg. 74, 75 (Jan. 6, 1954). These lands were later designated as part of the Little Missouri National Grassland, with surface administration again vested in the Forest Service. 36 C.F.R. § 213.1(b), (d), and (e). While the Department of Agriculture continues to manage the surface, see id. § 213.1, the Secretary of the

interests, easements, or other encumbrances which . . . w[ould] not interfere” with the Act’s purposes. Id. § 32(a), 50 Stat. at 526. Moreover, like the earlier relief acts, the Act authorized the sale, lease, or other disposal of land acquired under the Act, but not property acquired through other means. Id. § 32(c), 50 Stat. at 526.

Using this collection of statutes and relevant executive orders, the United States sought to acquire lands from the County. To avoid the possibility of redemption by the previous landowners and to obtain clear title, the United States used the power of eminent domain. So, beginning in 1937, the United States invoked the Condemnation Act, Pub. L. 50-728, 25 Stat. 357 (codified as amended at 40 U.S.C. § 3113), and the Declaration of Taking Act, Pub. L. 71-736, 46 Stat. 1421 (codified as amended at 40 U.S.C. §§ 3114-16, 3118), and filed six declarations of taking in federal district court in North Dakota. The declarations listed the specific tracts the United States wanted—some where the County held both the surface and mineral estates (acquired lands or, when referring to the mineral estate only, acquired minerals) and others where the County held only the surface estate, as the United States had retained the mineral estate in the original patent (public domain lands or public domain minerals). See Wallis v. Pan Am. Petroleum Corp., 384 U.S. 63, 65 & n.2 (1966) (“[I]n general[,] acquired lands are those granted or sold to the United States by a State or citizen and public domain lands were usually never in state or private ownership.”). The lands were listed by tract number and legal description.3

Interior is responsible for managing the subsurface estate. See 30 U.S.C. §§ 181, 189, 226, 352; 43 U.S.C. §§ 1731-32.

3 These legal descriptions followed the Public Land Survey System, which subdivides and describes land in 30 southern and western states—all states except the 13 original colonies, Maine, Vermont, Kentucky, Tennessee, West Virginia, Hawaii, and Texas. Under this system, land is divided into 3840-acre “Townships,” which can be subdivided into 640-acre “Sections,” 160-acre “quarter sections,” and 40-acre “quarter-quarter sections.” Individual parcels can then be labeled according to a standardized system. For example, one of the tracts now in dispute (Tract No. 277) comprises 320 acres of land in the Northeast and Southeast quarters of Section 20 of Township 147 North, Range 104 West and is labeled as: NE¼ and SE¼, Sec. 20, T147N, R104W.

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McKenzie County, ND v. United States, 131 F.4th 877 (8th Cir. 2025).

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