McKenzie County v. Hodel

467 N.W.2d 701, 116 Oil & Gas Rep. 308, 1991 N.D. LEXIS 54, 1991 WL 35757
CourtNorth Dakota Supreme Court
DecidedMarch 19, 1991
DocketCiv. 900286
StatusPublished
Cited by14 cases

This text of 467 N.W.2d 701 (McKenzie County v. Hodel) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McKenzie County v. Hodel, 467 N.W.2d 701, 116 Oil & Gas Rep. 308, 1991 N.D. LEXIS 54, 1991 WL 35757 (N.D. 1991).

Opinions

ERICKSTAD, Chief Justice.

This case comes to us on certified questions of law from the United States District Court for the District of North Dakota pursuant to Rule 47, N.D.R.App.P. At issue is a dispute between McKenzie County and various federal agencies and officials [hereinafter collectively referred to as the United States] over a 6V4% royalty interest in oil and gas production from land in McKenzie County.

As required by subdivision (c)(2) of Rule 47, the federal district court has provided the following statement of the relevant facts:

“McKenzie County is located in western North Dakota, in what is now referred to as the ‘oil patch’. The agricultural usage of the land in the area is primarily for cattle ranching, generally used as grazing lands.
“During the depression and drought years of the ‘thirties’ the county acquired title to thousands of acres through the failure of the owners to pay the real estate taxes levied and due. The procedures created by the North Dakota Legislature required the county to sell the entire estate it had acquired upon the sale of any properties acquired for taxes. Any interests remaining in the county were subject to redemption by the former owner upon compliance with the procedures established.
“It appears that the legislature wanted the properties owned in total by the buyer from the county, or totally owned by the former owner upon redemption.
“The statutory directions to the county required the county to ‘execute and deliver to the purchaser a deed conveying all right title and interest, in and to such property.’
“Congress authorized the Department of the Interior to acquire parcels of land in the late 1930’s for conservation and public use purposes. After extensive negotiations, the county and the federal government agreed upon a price and a procedure which left the county ‘owning’ a 6.25% royalty interest in oil and gas production. The lands were conveyed by the County, by deed to the government, and in addition were the subject of a friendly condemnation action done by the Federal Government to cut off any claims by any of the former owners of the property, the judgment in which also recognized the retention by the county of the royalty interest.
“Oil and gas were discovered in the area and extensive development occurred.
“The department of the interior caused royalty payments to be made to the county as set out in the condemnation judgments. An imaginative former owner, following the statutory redemption procedure, applied to the county to redeem back the royalty interest being paid from the well or wells now located on his former pasture. The County refused to allow ‘redemption’ and the former landowner sued.
“The State District Court found in favor of the plaintiff, and ordered that the retained royalty interest be conveyed back to the redemptioner. The North Dakota Supreme Court proceeded to rule that the county was without authority to reserve the royalties when it conveyed to the federal government, and the reservation was therefore void. DeShaw v. McKenzie County, 114 N.W.2d 263, 265-66 (N.D.1962). As the reservation was void, the county owned nothing of the [703]*703former land owner’s pasture, and therefore could not allow a redemption. Id.
“The North Dakota court left open a possible escape route for the county by stating: ‘Because the County has ceased to be the owner of any part of the tax title by the giving of such deed, we need not determine the effect of the judgment in subsequent condemnation proceedings (which recognizes the royalty interests.)’ Id. at 266.
“Following the decision in DeShaw, the Department of the Interior, moving with the rapidity characteristic of land owning government agencies, stopped paying the royalty payment to McKenzie County in June of 1985, some 23 years after the court had indicated that the reservation of a royalty interest was void.
“This action followed.
“It would appear to be settled that the county conveyed its entire interest to the federal government in the tax deeds issued prior to the condemnation judgment. If the county had retained any ownership interest, Mr. DeShaw could have redeemed it.
“The only remaining question would appear to be whether or not the condemnation proceedings and subsequent judgment are in effect a reconveyance to the county of the 6.25% royalty interest, or whether the department of the interior is now in some way estopped from relying upon DeShaw, no matter how strange a result ensues. (You cannot get it back Mr. DeShaw, because I don’t have it, but I get to keep it, just because.)
“Plaintiff has now moved for a certification of the applicable questions of law presented to the North Dakota Supreme Court, pursuant to Rule 47 of the North Dakota Rules of Appellate Procedure. This rule requires a certification order to set out the question of law to be answered, and a ‘statement’ of all facts necessary to the resolution of the issue so presented.
“Plaintiff’s proposal recognizes the effect of DeShaw, namely that the county deed did deliver to the defendant all of the counties [sic] interest in the property, and that the reservation of minerals was void. The proposal than [sic] seeks to have the North Dakota Supreme Court determine if the later stipulation in the condemnation actions brought to ‘quiet title’ in the Federal Government had the effect of a conveyance back to the county of the minerals covered by the stipulation. The County’s position is that its title is not therefor the result of a tax title acquisition, but instead is based upon the ‘conveyance’ of the condemnation judgments, and the North Dakota statutory provisions are not applicable.”

The federal district court certified the following questions of law:

“The question of law can have a different appearance from the ‘spin’ put on in its presentation.
“ ‘Does a condemnation judgment, pursuant to a stipulation between the parties, recognizing an otherwise invalid reservation of a mineral interest, operate as a conveyance, so as to give validity to the conveyance as between the parties to the stipulation?’
“ ‘Does a condemnation judgment, brought for the purpose of quieting title in the Federal Government to lands acquired from the County, insulating the federal government from any claims of former owners who lost the land to the County through tax title proceedings, which recognizes an invalid mineral interest reservation, operate as a conveyance back to the county of the mineral interest covered so as to make no longer applicable the North Dakota statutory provisions declaring the reservation invalid?’
“The issue remains the same, regardless of its phrasing, which could include references to mistakes of law, etc.”

We are initially faced with the dilemma of determining precisely what the federal district court has asked us to decide. The federal district court has posed two questions which could be taken as asking us to construe a federal court judgment and determine its legal effect.

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McKenzie County v. Hodel
467 N.W.2d 701 (North Dakota Supreme Court, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
467 N.W.2d 701, 116 Oil & Gas Rep. 308, 1991 N.D. LEXIS 54, 1991 WL 35757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mckenzie-county-v-hodel-nd-1991.