Waterfowl Ltd. Liability Co. v. United States

453 F.3d 291, 2006 U.S. App. LEXIS 15165, 2006 WL 1681095
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 20, 2006
DocketNo. 05-30219
StatusPublished
Cited by3 cases

This text of 453 F.3d 291 (Waterfowl Ltd. Liability Co. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Waterfowl Ltd. Liability Co. v. United States, 453 F.3d 291, 2006 U.S. App. LEXIS 15165, 2006 WL 1681095 (5th Cir. 2006).

Opinions

JERRY E. SMITH, Circuit Judge:

The United States appeals a judgment that its mineral royalty, attached to mineral servitudes on the relevant land, had (except for a forty-one acre tract) prescribed in accordance with Louisiana law because of the lack of qualifying production for a period in excess of ten years. We reverse and remand.

I.

A.

In 1937, acting under the authority of the Migratory Bird Conservation Act, 16 U.S.C. § 715 et seq., the United States purchased approximately 13,000 acres of land in Cameron Parish, Louisiana, from plaintiff Lacassane Co., Inc. (“Lacassane”), to be included in the Lacassine National Wildlife Refuge. A portion of the acreage was subject to a pre-existing mineral servitude (the “Gardiner Servitude”) held by a previous owner of that tract.1 The Gardiner Servitude was a one-half interest in the minerals contained in the relevant parcel.

In its deed of sale, Lacassane reserved for itself all mineral rights in the entire acreage (the “Lacassane Servitude”). Because the Gardiner Servitude was created first, the Lacassane Servitude was subject to the Gardiner Servitude. As a result, after selling the land to the government, Lacassane held all mineral rights in the land not subject to the Gardiner Servitude and a one-half mineral interest in the land subject to the Gardiner Servitude.

[294]*294B.

At the time the United States acquired the land, all mineral servitudes in Louisiana were subject to the rule of “liberative prescription.” A servitude would prescribe if it went unused for ten years, and parties could not contract to extend the ten-year prescription period.2 In 1940, however, Louisiana passed Act 315, which provided as follows:

When land is acquired by conventional deed or contract, condemnation or expropriation proceedings by the United States of America, or any of its subdivisions or agencies from any person, firm or corporation, and by the act of acquisition, order or judgment, oil, gas or other minerals or royalties are reserved, or the land so acquired is by the act of acquisition conveyed subject to a prior sale or reservation of oil, gas, or other minerals or royalties, still in force and effect, the rights so reserved or previously sold shall be imprescriptible.

United States v. Little Lake Misere Land Co., Inc., 412 U.S. 580, 584, 93 S.Ct. 2389, 37 L.Ed.2d 187 (1973) (quoting the statute); see also La.Rev.Stat. § 31:149 (current successor to Act 315). Act 315 was meant to “facilitat[e] federal land acquisitions by removing uncertainty on the part of reluctant vendors over the duration of mineral reservations retained by them.” Little Lake Misere, 412 U.S. at 599, 93 S.Ct. 2389.

Despite the apparently forward-looking purpose of the Act, the Louisiana Supreme Court held that it applied even to federal acquisitions, such as the government’s purchase of land from Lacassane, that had taken place before the Act was passed. See Whitney Nat’l Bank v. Little Creek Oil Co., 212 La. 949, 33 So.2d 693, 696 (1947). In addition, the court held that Act 315 superseded not only the prior default statutory rule of prescription but also preexisting contractual terms of prescription. See Leiter Minerals, Inc. v. Cal. Co., 241 La. 915, 132 So.2d 845, 854-55 (1961). Under the regime set up by the Louisiana Supreme Court, servitudes on land owned by the United States, which were prescriptible by statute or by contract when created, became imprescriptible under Act 315.

In Little Lake Misere, 412 U.S. at 592, 93 S.Ct. 2389, the United States Supreme Court reversed, in part, these decisions of the Louisiana Supreme Court, holding that when a land acquisition by the United States arises from and bears heavily on a federal regulatory program, state law cannot, of its own force, govern the acquisition. Instead, federal law must provide the rule of decision. Although state law often should be “borrowed” as the federal rule of decision, “specific aberrant or hostile state rules do not provide appropriate standards for federal law.” Id. at 596, 93 S.Ct. 2389. The Court held that Act 315 could not be borrowed as the law governing certain pre-1940 federal land acquisitions pursuant to the Migratory Bird Conservation Act, because

[a]s applied to a consummated land transaction under a contract which specifically defined conditions for prolonging the vendor’s mineral reservation, retroactive application of Act 315 to the United States deprives it of bargained-for contractual interests .... To permit state abrogation of the explicit terms of a federal land acquisition would deal a serious blow to the congressional scheme contemplated by the Migratory [295]*295Bird Conservation Act and indeed all other federal land acquisition programs.

Id. at 597, 93 S.Ct. 2389.

Having determined that Act 315 could not govern the federal land acquisitions at issue, the Court did not need to choose between adopting “residual” Louisiana law (Louisiana law excepting Act 315) and “formulating an independent federal ‘common law1 rule” of prescription. The explicit prescription terms of the acquisition contract controlled, rendering the servitudes at issue prescriptible and already prescribed. Id. at 604, 93 S.Ct. 2389.

C.

The instant plaintiffs, intervenors, and their ancestors in title, holders of the Lacassane and Gardiner Servitudes, were in a position similar to that of the Little Lake Misc.e plaintiffs. The United States had acquired the land subject to said servitudes before passage of Act 315, and the acquisition contract contained an express term of prescription for the Lacassane Servitude.3 The holders of the Gardiner and Lacassane Servitudes sued in federal court in 1984, seeking a declaratory judgment that their servitudes, although prescriptible pursuant to Little Lake Misc.e, had not yet prescribed.4

In 1988, the parties entered into a settlement agreement with the United States, which confirmed that the Gardiner and Lacassane Servitudes remained validly in existence. In exchange, the servitude owners agreed to carve a mineral royalty and bonus and rental rights out of the servitudes and to convey them to the United States.

Pursuant to the settlement, the servitude owners executed an act of conveyance, which granted the United States one-half of all royalties received by the servitude owners on oil, gas, or other minerals attributable to the land subject to the Lacassane and Gardiner Servitudes, with certain articulated exceptions. The servitude owners also conveyed to the government “one-half of all rentals and bonuses received by [the servitude owners] under the terms of any oil, gas and mineral lease of the [subject land] ... from and after such time as one-half of the income from such bonuses and rentals shall equal the sum of $750,000.00.”5

Under Louisiana law, a mineral royalty is “the right to participate in production of minerals from land owned by [296]

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453 F.3d 291, 2006 U.S. App. LEXIS 15165, 2006 WL 1681095, Counsel Stack Legal Research, https://law.counselstack.com/opinion/waterfowl-ltd-liability-co-v-united-states-ca5-2006.