United States v. Delta Development Co.

322 F. Supp. 121, 40 Oil & Gas Rep. 191, 1970 U.S. Dist. LEXIS 9514
CourtDistrict Court, E.D. Louisiana
DecidedNovember 16, 1970
DocketCiv. A. No. 69-74
StatusPublished
Cited by3 cases

This text of 322 F. Supp. 121 (United States v. Delta Development Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Delta Development Co., 322 F. Supp. 121, 40 Oil & Gas Rep. 191, 1970 U.S. Dist. LEXIS 9514 (E.D. La. 1970).

Opinion

CASSIBRY, District Judge:

This is an action by the United States to quiet its title to the mineral rights in 1921.62 acres of land in Plaquemines Parish, Louisiana.1 The property is located in the Bastían Bay gas field and is quite valuable for minerals.

The suit involves a determination of the validity of a mineral reservation in favor of the United States that was incorporated in a 1947 land patent granted by the Government to John E. Pottharst. The principal defendants are the heirs of Pottharst and Delta Development Company, Inc., the transferee of Pottharst as to a portion of the property. Named as additional defendants were Getty Oil Company (the successor by merger of Tidewater Oil Company) and Gulf Oil Corporation, the mineral lessees of the property, holding under a mineral lease granted by the United States pursuant to the provisions of the Mineral Leasing Act of February 25, 1920 (30 U.S.C. § 181, et seq.) Also named were The Louisiana Land & Exploration Company and Thomas Connell, the owners of overriding royalty rights under that federal lease.

The mineral lessees, Getty and Gulf, actively joined the United States by adopting in their answers all of the allegations of the Government’s complaint. The two companies then proceeded by cross-claim against the Delta-Pottharst Group and asserted certain special pleas and contentions. These included the assertion of the doctrine of acquiescence, a plea of estoppel, a claim that any attack on the patent granted by the United States is a prohibited collateral attack on that document and, finally, the assertion of their position as bona fide third parties who had purchased on the faith of the public records of Plaquemines Parish.

The matter was originally put at issue by motion and cross-motion for summary judgment, but all of the parties later executed and filed a stipulation which submitted the flatter on the merits as to all issues. While the record is voluminous, the facts are entirely undisputed although questions were raised concerning the relevancy and admissibility of certain documents.

THE STATUTORY SCHEME

The land in question originally comprised a portion of a military reservation, having been set aside for military purposes by an 1844 Executive Order. On September 3, 1886, the reservation was abandoned. This was accomplished by a revocation of the original withdrawal order by a second Presidential order of that date. This second order turned the property over to the Secretary of the Interior for disposition under the Act of July 5, 1884.2

It may make for clarity to consider at this point not only the 1884 statute but all other pertinent Congressional acts in force when this land was patented to Pottharst in 1947.

The Act of July 5, 1884 dealt specifically with the conveyance by the Secretary of the Interior of abandoned military reservation lands. It is important to note that the statute did not purport to be a Congressional or in praesenti grant, but rather it vested in the Secretary the discretionary authority to dispose of the properties. The Act provided for the surveying and appraisal of the lands and for offering for sale at public auction. If this method of disposal was not successful, the Secretary was then authorized to convey the land by private sale. The property in question had twice been unsuccessfully offered for sale at public auction before Pottharst made his [124]*124application to purchase it by private sale.

Section 5 of the 1884 Act is significant. It provided as follows:

“Sec. 5. Whenever any lands containing valuable mineral deposits shall be vacated by the reduction or abandonment of any military reservation under the provisions of this act, the same shall be disposed of exclusively under the mineral land laws of the United States.”

In 1914 Congress adopted the Mineral Reservation Act of July 17, 1914.3 This was the first major step taken by Congress after years of study to protect the valuable mineral resources of the United States. This 1914 statute authorized the sale under any applicable nonmineral land law of public domain lands “withdrawn or classified or reported as valuable * * * ” for minerals, subject to the specific requirement and condition that the mineral rights therein be reserved to the United States.

As the final step in the consummation of its mineral policy, Congress enacted the Mineral Leasing Act of February 25, 1920.4 This statute specified that mineral leasing of the lands and mineral rights of the United States was the exclusive method of disposing of such rights.

Executive Order No. 6964, issued on February 5,1935, withdrew from entry or sale all of the public domain lands located in specifically named states, including Louisiana. In the following year Congress amended the Taylor Grazing Act to insure the maximum utilization of the lands withdrawn under the 1935 Executive Order. To accomplish this, the amendment authorized the Secretary of the Interior, in his discretion, to classify any of these lands as being more valuable for agricultural purposes or “more valuable or suitable for any other use than the use provided for in this Act.” It then authorized the Secretary to open the lands for entry and disposal “under applicable Public Land Laws.”5 It seems clear that any property that originally was subject to the Executive Order was fully restored to public lands status by this amendment and thereafter was available for disposal under any public land law.6

FACTS

This was the statutory scheme in existence when John E. Pottharst made application on July 17, 1946 to purchase these lands. He filed a “petition for classification” in which it was requested that the lands be classified as required by law and that he be permitted to acquire title thereto. He also filed a non-mineral affidavit which stated that to his knowledge the land had no mineral value.

On July 23, 1946 the Chief of the Indian Lands and Grazing Division, Bureau of Land Management, requested a report from the United States Geological Survey concerning whether the lands affected by the Pottharst application were valuable for any mineral deposits. The Geological Survey is the agency within the Interior Department charged with the responsibility of making the mineral determination of all public lands prior to their disposal.

One of the important issues in this ease is whether these properties actually were found or reported to be valuable for minerals before John E. Pottharst acquired any vested rights in them. This justifies the following detailed account of the actions that were taken following the original request to the Geological Survey:

(1) On July 24, 1946, the Director of the Geological Survey replied to the Commissioner of the Bureau [125]*125of Land Management that available information indicated that these lands were prospectively valuable for oil and gas and that said lands were without value for other minerals.
(2) On August 30, 1946, the Acting Director of the Bureau of Land Management directed a memorandum to the Supervisor of the Branch of Field Examination requesting that a report of field examination of the subject lands be made.

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Bluebook (online)
322 F. Supp. 121, 40 Oil & Gas Rep. 191, 1970 U.S. Dist. LEXIS 9514, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-delta-development-co-laed-1970.