Stenehjem, ex rel. v. National Audubon Society, Inc.

2014 ND 71, 844 N.W.2d 892, 2014 WL 1370149, 2014 N.D. LEXIS 73
CourtNorth Dakota Supreme Court
DecidedApril 8, 2014
Docket20130279
StatusPublished
Cited by14 cases

This text of 2014 ND 71 (Stenehjem, ex rel. v. National Audubon Society, Inc.) 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
Stenehjem, ex rel. v. National Audubon Society, Inc., 2014 ND 71, 844 N.W.2d 892, 2014 WL 1370149, 2014 N.D. LEXIS 73 (N.D. 2014).

Opinions

VANDE WALLE, Chief Justice.

[¶ 1] Wayne Stenehjem, as Attorney General on behalf of the State of North Dakota (“State”), appealed, and the National Audubon Society cross-appealed from a district court judgment dismissing the Attorney General’s corporate farming enforcement action against Audubon and upholding the constitutionality of North Dakota’s Corporate Farming Law, N.D.C.C. ch. 10-06.1. We affirm the judgment, concluding the equitable defense of laches bars the State’s divestiture claim. We refrain from addressing the constitutionality of the Corporate Farming Law because the affirmative defense of laches provides an alternative basis upon which the case may be disposed.

I

[¶ 2] The National Audubon Society is a nonprofit conservation organization whose mission is “to conserve and restore natural ecosystems, focusing on birds, other wildlife, and their habitats for the benefit of humanity and the earth’s natural diversity.” In 1988, Audubon acquired a 263-acre parcel of land in Stutsman County pursuant to a deed recorded in the office of the register of deeds for Stuts-man County. The 263-acre parcel is adjacent to a tract of land Audubon previously purchased called the Edward M. Brigham Alkali Lake Sanctuary. According to an affidavit of Genevieve Thompson, Vice President and Executive Director of Audubon Dakota, “[t]he Sanctuary is home to a number of wetland- and grassland-dependent birds including numerous species of waterfowl, herons, terns, yellowlegs, upland sandpiper, multiple sparrow species, and sharp-tailed grouse.” Audubon contends the 263-acre area is essential to its purpose of providing wetland and grassland complexes for avian habitat. Since purchasing the 263-acre parcel in 1988, Audubon has paid an assessment to Stuts-man County each year in an amount equal to the property tax valuation of the property.

[¶ 3] At the time Audubon purchased the 263 acres, and for decades prior to that time, the land was cultivated for farming and ranching purposes. Since Audubon’s purchase, the predominant use of the land has been for conservation purposes and to increase avian habitat value. Audubon leases approximately sixty acres to a neighboring farmer who harvests hay. Approximately fifty acres are enrolled in a United States Department of Agriculture Conservation Reserve Program which provides an annual payment for each acre of land that has been removed from agricultural production and replanted with native grassland.

[¶ 4] In January 2005, the State filed suit against Crosslands, Inc., a non-profit conservation corporation, for land acquisitions Crosslands made in violation of the Corporate Farming Law. During the course of litigation, Crosslands alleged that the State was aware of, and disregarded other alleged violations of the Corporate Farming Law. The State denied the selective enforcement allegations and subsequently conducted a review to determine if other non-profit entities were in violation of the Corporate Farming Law. In September 2005, the Attorney General received a number of deeds from the Stuts-man County Auditor, including Audubon’s [897]*8971988 deed conveying the 263 acres at issue here. The State contends Audubon’s acquisition and ownership of the land did not meet the requirements of North Dakota’s Corporate Farming Law, including the procedure for nonprofit organizations to purchase property.

[¶ 5] In 2007, the State and Audubon entered into a Tolling Agreement providing that the State would not file suit against Audubon until thirty days after a district court judgment in Stenehjem v. Crosslands, Inc., Civ. No. 20-05-C-02. Judgment was entered in that case on June 18, 2009. See Stenehjem ex rel. State v. Crosslands, Inc., 2010 ND 91, 782 N.W.2d 632. On July 20, 2009, the State commenced this enforcement action, over twenty years after Audubon initially purchased the land at issue.

[¶ 6] In 2010, the State filed a motion for summary judgment arguing that Audubon violated N.D.C.C. ch. 10-06.1, requesting judgment on Audubon’s affirmative defenses of laches, statute of limitations, estoppel, and waiver, and contending that Audubon did not qualify for the business purpose or farm lease exceptions of Chapter 10-06.1. Audubon filed its own motion for summary judgment arguing Chapter 10-06.1 violates the Commerce Clause and Equal Protection Clause of the United States Constitution. The court denied the State’s motions for summary judgment on the affirmative defenses of laches and the statute of limitations. The court also denied Audubon’s motion for summary judgment based on the alleged violations of the Commerce Clause and the Equal Protection Clause. The court granted the State’s motion for summary judgment with respect to the affirmative defenses of waiver, estoppel, and the business purpose and farm lease exceptions of Chapter 10-06.1.

[¶ 7] Thereafter, the parties agreed upon a joint litigation plan, approved by the court, whereby the parties would provide additional briefing and the court would make factual findings and conclusions of law based on evidence previously submitted through affidavits. In January 2013, the court issued a memorandum finding that Audubon’s statute of limitations defense did not apply because the State did not have reason to believe Audubon violated N.D.C.C. ch. 10-06.1 until 2005. The court did conclude, however, that the affirmative defense of laches was appropriate given the State’s delay in commencing the action. In July 2013, the court issued its findings of fact, conclusions of law and order for judgment dismissing the State’s action.

II

[¶ 8] Under North Dakota’s Corporate Farming Law, N.D.C.C. ch. 10-06.1, corporations are generally prohibited from owning or leasing farm or ranch land. It provides:

All corporations and limited liability companies, except as otherwise provided in this chapter, are prohibited from owning or leasing land used for farming or ranching and from engaging in the business of farming or ranching. A corporation or a limited liability company may be a partner in a partnership that is in the business of farming or ranching only if that corporation or limited liability company complies with this chapter.

N.D.C.C. § 10-06.1-02. The general restriction against corporate farm ownership dates back to 1932, when North Dakota voters approved an initiated measure restricting corporations from owning farm or ranch land and from engaging in the business of farming or agriculture. State v. J.P. Lamb Land Co., 401 N.W.2d 713, 715 (N.D.1987); see also Ross H. Espeseth, [898]*898North, Dakota’s Corporate Farming Statute: An Analysis of the Recent Change in the Law, 58 N.D. L.Rev. 288, 284. The public policy underlying the restrictions on corporate ownership of farmland is rooted in the desire to preserve rural agricultural land for use by family farmers. Stenehjem ex rel. State v. Crosslands, Inc., 2010 ND 91, ¶ 14, 782 N.W.2d 632.

[¶ 9] The Corporate Farming Law contains certain exceptions allowing nonprofit organizations to acquire farmland for the purpose of conserving natural areas and habitats for biota. The nonprofit exception currently provides:

A nonprofit organization may acquire farmland or ranchland only in accordance with the following:
1.

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Cite This Page — Counsel Stack

Bluebook (online)
2014 ND 71, 844 N.W.2d 892, 2014 WL 1370149, 2014 N.D. LEXIS 73, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stenehjem-ex-rel-v-national-audubon-society-inc-nd-2014.