A lawsuit against Alabama’s Department of Conservation and Natural Resources (DCNR) and its Commissioner Gunter Guy has moved from state to federal court in a case that’s pitting oil and timber companies against a state that typically supports their endeavors.
Though the case was filed in Conecuh County in November, attorneys for ADCNR filed a request last month to move the suit to U.S. District Court in Mobile.
The complaint was filed by Cedar Creek Land and Timber, Inc. and Pruet Production Co., who dispute the state’s claim to land underneath navigable waterways within Alabama. Mobile Mayor Sandy Stimpson owns a stake in Pruet Production Co.
In October, the state announced it would be receiving bids for the purchase of oil and gas leases on four tracks of riverbed located in Conecuh County — two beneath the Sepulga River and two beneath Pigeon and Bottle creeks. However, a portion of the four tracks includes land that is owned by Cedar Creek, and the company says this is not the first time it’s happened.
“Your office has previously issued oil and gas leases purporting to cover alleged navigable beds and bottoms in other lands that, in fact, are owned by Cedar Creek, some portion or all of which have been leased to Midroc Operating Company, in which Pruet is the owner of an undivided interest in such leases,” the company wrote in correspondence with the state prior to initiating the lawsuit.
The complaint suggests Commissioner Guy and the DCNR’s attempt to the lease the property for oil and gas exploration “disputes” Cedar Creek and Pruet’s ownership of the oil, gas and minerals which lie underneath the streams, beds and bottoms of the waterways.
The DCNR and Guy are tasked with overseeing the leasing of land owned by the state, and the DCNR currently disputes Cedar Creek’s claim to ownership of the properties in Conecuh County based on the assumption that, as navigable waterways, the state has a claim to ownership of the land, oil, gas, minerals and other valuables beneath the rivers and creeks.
The state asserts that claim under the equal footing clause of the U.S. Constitution, which gives states the right to the title of “navigable” waterways upon entering the union.
Navigable waters, as defined by the U.S. Army Corps of Engineers, “are those waters subject to the ebb and flow of the tide and those inland waters that are presently used, have been used in the past or may be susceptible for use to transport interstate or foreign commerce.”
According to the complaints, Cedar Creek has owned and paid the proper ad valorem taxes on the property for more than a decade. Cedar Creek also claims the bottoms and beds of the bodies of water weren’t excluded when the previous title holders purchased or leased the lands.
The plaintiffs were asking a circuit judge to declare any land underneath the bodies of water as “not navigable” and to establish that the state “has no right, and no claim to ownership of the oil, gas and minerals” lying underneath them.
A large part of that strategy seems to be based on the fact that bottoms of the creeks and rivers in question were not navigable when Alabama entered the union in 1819.
However, less than a month after the original paperwork was filed, the case was moved to the U.S. District Court in Mobile at the request of the state.
The DCNR has since abandoned the bids, and isn’t likely to proceed with the oil gas leases until the matter is resolved in court or it could face financial penalties for “slander of title” if the court ruled in favor of Cedar Creek.
Attempts to reach Guy for comment on this report were unsuccessful, and Will Gunter, general counsel for the DCNR, declined to comment because the matter is still pending in court.
However, in the final circuit court filings Guy claimed federal court would have original jurisdiction in the action because it arises under the equal footing doctrine of the U.S. Constitution.
“Questions of navigability for determining state riverbed title are governed by federal law … ” the filing reads.
The U.S. Supreme Court handled a similar case in 2011 known as PPL Montana V. Montana, which was cited in the state’s defense. The litigation dealt with a company using parcels of land under three rivers it also used for hydro-electrification.
Montana’s Supreme Court ruled in favor of the government and ordered PPL Montana to pay $41 million to the state in back rent for its use of the properties. However, that decision was later reversed by the U.S. Supreme Court in an opinion that states, “to determine riverbed title under the equal-footing doctrine, this Court considers the river on a segment-by-segment basis.”
The case affirmed that the use of waterways when an area was granted statehood must be considered when determining navigability as it relates to title ownership, which means the federal court will have to analyze each of the three sections of waterway in Conecuh County as they were used when Alabama became a state in 1819.
According to the state Department of Forestry, logging commerce has been present in Alabama since 1773, which used the river system to move products at the time. Native Americans in Alabama also used creeks and rivers to trade beaver pelts and other animal products, which would be included as commerce in the definition of navigability.
However, it will have to be proven that the exact segments of land disputed in Conecuh County were used in such a way in order to declare them navigable, and to validate the state’s claim to ownership. But proving such a fact could prove difficult and will likely require heavy historical research.
In the PPL Montana case, the court was actually required to go back and review the journals of Lewis and Clark in order to evaluate the traversability of the rivers in question.