Court Set to Hear Oral Arguments on Legal Challenge to State’s $2 Billion Giveaway to Western North Dakota
FARGO, N.D. – March 19, 2018 – Today the Cass County Court held its first case management meeting in the constitutional challenge of the 2017 statute that unlawfully transfers nearly $2 billion of North Dakota state resources. The court scheduled two hearings on preliminary issues, one from each side, to be held in April.
These latest developments are a result of a lawsuit filed in January by a group of North Dakota taxpayers who are challenging N.D.C.C. Sec. 61-33.1. That Act disclaims the State’s interest in mineral rights under Lake Sakakawea and related royalties. The lawsuit’s purpose is to preserve $1.96 billion in resources for the people of the State of North Dakota.
Under the Act, the State would pay out $205 million and release its interest in perpetual mineral rights to approximately 108,000 mineral acres, which is worth about $1.76 billion. This giveaway would go to heirs of the western North Dakota landowners who sold the land to the U.S. Government in the 1950’s and to the U.S. Government.
The taxpayers who filed the lawsuit allege the Act violates the Public Trust Doctrine, which requires all state resources to be held in trust for the benefit of the public in addition to multiple provisions of the North Dakota State Constitution. This includes:
- Article X, Sec. 18, which prohibits the gifting of State resources without receiving return value
- Article I, Sec. 21, which focuses on equal protection
- Article IV, Sec. 13, which prohibits laws benefiting a single group or locality
- Article XI, Sec. 3, which provides that all flowing rivers shall forever remain the property of the State
- Article I, Sec. 18, which prohibits most retroactive laws
Defendants are the State of North Dakota, The Board of University and School Lands, and The State Industrial Commission. The Governor and Attorney General are also named in their official capacities only. The taxpayers named as plaintiffs are Marvin Nelson, Paul Sorum, Charles Tuttle, Lisa Omlid, and Michael Coachman.
Earlier this month, the taxpayer plaintiffs asked the Court for a Preliminary Injunction so the money and land would not be able to be transferred until the Court decided whether or not the Act is constitutional. This motion will be heard on April 30, 2018.
The defendants filed a brief on February 28, to be heard on April 11, 2018, asking the Court to dismiss the case without prejudice and alleging that plaintiffs seek a declaration that the State of North Dakota owns as sovereign lands all mineral rights below Lake Sakakawea. The plaintiffs responded in its opposing brief on March 14 that the Court is not being asked to declare who owns any particular minerals, just that the state is giving away its potential claim to the minerals and $205 million. This is because the claim to these resources, which the state has asserted in other cases, is a state resource that cannot be given away.
The taxpayers also argue that well-settled law states that only the State and its responsible officers and agencies need be named in a constitutional challenge lawsuit. The defendants’ brief does not address the taxpayers equal protection, local law, flowing waters, or retroactivity claims.
The lawsuit is a constitutional challenge, which is a request for a declaration by the court that a statute is unconstitutional. In the original complaint, the lawsuit asks the Court for Judgment as follows:
- Declaring the Court's role as the sole branch of government responsible to decide the nature and extent of the public trust.
- Declaring that N.D.C.C. 61-33.1 is unconstitutional under the North Dakota State Constitution.
- Enjoining the State of North Dakota and all defendant State officials from further implementation or enforcement of N.D.C.C. 61-33.1.
- Awarding plaintiffs' costs and attorney fees pursuant to the common fund doctrine, the private attorney general doctrine, and/or as otherwise allowed by equity.
- Any such other relief as the Court deems just and proper.
More information about the original complaint filed in January is available on the Frequently Asked Questions page.
The plaintiffs are represented by a team led by Terrance W. Moore and J. Robert Keena of the law firm Hellmuth & Johnson and Fintan Dooley of Bismarck. Defendants are represented by Matthew Sagsveen of the Attorney General’s office and Daniel Gaustad of Grand Forks.
Hellmuth & Johnson
Hellmuth & Johnson, a Top 20 Minnesota law firm, represents clients ranging from individuals and emerging start-ups to multinational Fortune 500 companies. Focusing on transactional law, litigation and appeals, Hellmuth & Johnson attorneys are leaders in their fields. Founded in 1994, Hellmuth & Johnson has become one of Minnesota’s fastest growing law firms. Learn more at www.hjlawfirm.com.
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