§ 38-08-15 — Acquisition and handling illegal oil and gas prohibited - Seizure of illegal oil and gas and sale thereof

and gas and sale thereof.
1. The sale, purchase, acquisition, transportation, refining, processing, or handling of
illegal oil, illegal gas, or illegal product is hereby prohibited. However, no penalty by
way of fine may be imposed upon a person who sells, purchases, acquires, transports,
refines, processes, or handles illegal oil, illegal gas, or illegal product unless:
a. Such person knows, or is put on notice, of facts indicating that illegal oil, illegal
gas, or illegal product is involved; or
b. Such person fails to obtain a certificate of clearance with respect to such oil, gas,
or product where prescribed by order of the commission, or fails to follow any
other method prescribed by an order of the commission for the identification of
such oil, gas, or product.
2. Illegal oil, illegal gas, and illegal product are declared to be contraband and are subject
to seizure and sale as herein provided; seizure and sale to be in addition to any and all
other remedies and penalties provided in this chapter for violations relating to illegal
oil, illegal gas, or illegal product. Whenever the commission believes that any oil, gas,
or product is illegal, the commission acting by the attorney general, shall bring a civil
action in rem in the district court of the county where such oil, gas, or product is found,
to seize and sell the same, or the commission may include such an action in rem for
the seizure and sale of illegal oil, illegal gas, or illegal product in any suit brought for an
injunction or penalty involving illegal oil, illegal gas, or illegal product. Any person
claiming an interest in oil, gas, or product affected by any such action in rem has the
right to intervene as an interested party in such action.
3. Actions for the seizure and sale of illegal oil, illegal gas, or illegal product must be
strictly in rem and must proceed in the name of the state as plaintiff against the illegal
oil, illegal gas, or illegal products as defendant. No bond or similar undertaking may be
required of the plaintiff. Upon the filing of the petition for seizure and sale, the attorney
general shall issue a summons, with a copy of the complaint attached thereto, which
must be served in the manner provided for service in civil actions, upon any and all
persons having or claiming any interest in the illegal oil, illegal gas, or illegal product
described in the petition. Service must be completed by the filing of an affidavit by the
person making the service, stating the time and manner of making such service. Any
person who fails to appear and answer within the period of thirty days is forever barred
by the judgment based on such service. The posting of copies of the summons and
petition as above provided operates to place the state in constructive possession of
the oil, gas, or product described in the petition. In addition, if the court, on a properly
verified petition, or affidavits, or oral testimony, finds that grounds for seizure and for
sale exist, the court shall issue an immediate order of seizure, describing the oil, gas,
or product to be seized and directing the sheriff of the county to take such oil, gas, or
product into the sheriff's custody, actual or constructive, and to hold the same subject
to the further order of the court. The court, in such order of seizure, may direct the
sheriff to deliver the oil, gas, or product seized by the sheriff under the order to an
agent appointed by the court, as the agent of the court; such agent to give bond in an
amount and with such surety as the court may direct, conditioned upon the agent's

compliance with the orders of the court concerning the custody and disposition of such
oil, gas, or product.
4. Any person having an interest in oil, gas, or product described in an order of seizure
and contesting the right of the state to the seizure and sale thereof may, prior to the
sale thereof as herein provided, obtain the release thereof, upon furnishing bond to the
sheriff approved by the court, in an amount equal to one hundred fifty percent of the
market value of the oil, gas, or product to be released, and conditioned as the court
may direct upon redelivery to the sheriff of such product released or upon payment to
the sheriff of the market value thereof as the court may direct, if and when ordered by
the court, and upon full compliance with the further orders of the court.
5. If the court, after a hearing upon a petition for the seizure and sale of oil, gas, or
product, finds that such oil, gas, or product is contraband, the court shall order the sale
thereof by the sheriff in the same manner and upon the same notice of sale as
provided by law for the sale of personal property on execution of judgment entered in a
civil action, except that the court may order that the illegal oil, illegal gas, or illegal
product be sold in specified lots or portions and at specified intervals. Upon such sale,
title to the oil, gas, or product sold vests in the purchaser free of the claims of any and
all persons having any title thereto or interest therein at or prior to the seizure thereof,
and the same is legal oil, legal gas, or legal product, as the case may be, in the hands
of the purchaser.
6. All proceeds derived from the sale of illegal oil, illegal gas, or illegal product, as above
provided, after payment of costs of suit and expenses incident to the sale must be paid
to the state treasurer and credited to the general fund.