CHAPTER 5 THE CHANGING NATURE OF PRIVATE RIGHTS TO FEDERAL RESOURCES

• Jurisdiction: United States

Advanced Public Land Law - The Continuing Challenge of Managing for Multiple Use
(Jan 2017)
CHAPTER 5
THE CHANGING NATURE OF PRIVATE RIGHTS TO FEDERAL RESOURCES
Sandra B. Zellmer ^*
Robert B. Daugherty Professor of Law
University of Nebraska College of Law
Lincoln, NE

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Introduction

In early 2016, a 41 day long armed standoff between armed militants and county, state, and federal law enforcement agencies at the Malheur National Wildlife Refuge ended with one death and the prosecution of over two dozen individuals for abuse of government property, conspiracy, and related charges. It started when the Hammonds, who held federal grazing permits to run their cattle on Bureau of Land Management (BLM) land near the Refuge, were charged with arson for starting fires on federal land. When the Hammonds were convicted for the incident, another notorious ranching family from Nevada, the Bundys, organized the Malheur occupation to protest heavy-handed government interference with their property rights.

The Malheur occupation raises questions concerning the extent of private interests in federal lands and resources, and whether, how, and when such interests can be restricted or terminated by the United States. Permittees, licensees, lessees, and concessionaires have asserted a wide array of claims to timber, water, wildlife, rights-of-way, grazing permits, minerals, and even ski resorts and recreational outfitting activities. A contentious oil and gas lease in the Badger-Two Medicine area near Glacier National Park is a prime example. When the BLM cancelled the lease, citing environmental and cultural concerns, the developer, Solenex, sued, arguing that the BLM's decision is ultra vires and violates its rights.¹ A few months later, the BLM canceled fifteen additional oil and gas leases in the Badger-Two Medicine area, playing into industry advocates' fear that the Solenex decision has set a dangerous precedent for other companies who have waited years--in some cases decades--for access to their leaseholds.

This paper examines the nature of private interests in federal lands and resources, and how these interests are treated under federal law and policy. The first Part describes an array of disputes, from grazing to mineral development to ski resorts. Part II details the law of private interests in federal lands and natural resources. The Property Clause is addressed in Part III. Part IV goes beyond the letter of the law to tease out the subtext underlying the durability of private claims.

I. Cases and Controversies: From Grazing to Mineral Development to Ski Resorts

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To illustrate the nature of private interests in federal land and resources, this section begins with the 2016 standoff at the Malheur National Wildlife Refuge and other disputes over federal grazing permits. It then turns to a controversy over the BLM's cancellation of the Solenex mineral lease. Finally, it takes a look at special use permits for a highly visible use on National Forest lands--ski resorts. Although private interests in other types of resources, such as water, timber, and wildlife, raise equally compelling issues, they are not addressed in this paper.²

A. The Bundys and Their Progeny: Fire and Grass

For over a month in the opening days of 2016, the nation's attention was riveted on the remote snow-covered ground of the Malheur National Wildlife Refuge in eastern Oregon as armed protesters occupied the property, demanding that the federal government surrender the 188,000-acre Refuge to their control.³ They claimed to be acting in support of local ranchers, Dwight and Steven Hammond, whom they believed had been unfairly convicted of arson on federal lands and taken to jail to serve out their sentences.⁴ The Hammonds claimed they had started the fire on their own land to burn off invasive species, but witnesses at trial testified that Steven Hammond had illegally slaughtered several deer on BLM property within the Steens Mountain Cooperative Management Area, and had lit the fire to destroy the evidence.⁵ In late January, just outside of Malheur--French for "misfortune"--the drama took a deadly turn when one occupation leader, LaVoy Finicum, was shot and killed at a police roadblock.⁶

Eleven of the protestors pleaded guilty, but protest leader Amman Bundy and others were tried for weapons charges and conspiracy to prevent BLM and Fish and Wildlife Service employees from doing their jobs. It came as a surprise when Bundy and six of his codefendants were acquitted after a lengthy trial.⁷ Jurors were apparently sympathetic to what defense attorneys described as a "Martin Luther King style sit-in" at the Refuge.⁸ One juror told the press that the prosecutors seemed overzealous, and that they failed to meet the "high standard of proof" that the occupiers conspired to make an agreement with the specific criminal intent to obstruct federal employees.⁹

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The Malheur occupation represents just one incident in a series of ongoing disputes over federal land ownership and management going back to the Sagebrush Rebellion of the 1970s and early 1980s and the County Supremacy Movement of the 1990s.¹⁰ Proponents of these movements argue that federal ownership of western public lands is illegal, in part in response to federal efforts to reform public lands management to prioritize conservation of wildlife habitat and watersheds over economic uses.¹¹

The occupation was supported by a loose affiliation of militia-type groups, including the Patriot Movement and the Oregon Constitutional Guard, that fight a perceived "systematic abuse of land rights, gun rights, freedom of speech and other liberties" by the federal government.¹² According to the BLM, between 2012 and 2015, over two dozen incidents of so-called "sovereign citizen" activity took place on public lands in seven western states.¹³

The modern day permutation of the movement is championed by a number of western counties and the state of Utah,¹⁴ as well as individuals like Ammon Bundy and his father, Cliven. In the spring of 2014, a twenty-year battle over grazing fees on federal allotments near Bunkerville, Nevada, came to a head when a federal court authorized the removal of 400 of Bundy's cattle.¹⁵ Hundreds of Bundy's supporters gathered to prevent the removal, while Cliven Bundy proclaimed that he was "ready to do battle," and "do

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whatever it takes" to protect "his property" and to keep the cattle on the range.¹⁶ To prevent bloodshed, federal agents withdrew, and prosecutors subsequently obtained a sixteen-count indictment against Cliven, Ammon, and seventeen other defendants for charges including unlawful use of firearms, obstruction of justice, assault against federal officers, extortion, and conspiracy.¹⁷ As of this writing, the Bundys and their codefendants are awaiting trial in Nevada.¹⁸

B. Solenex: Minerals and Traditional Cultural Properties

On March 17, 2016, the Secretary of the Interior cancelled a mineral lease held by Solenex in the Badger-Two Medicine area of the Lewis and Clark National Forest, and also disapproved Solenex's Application for a Permit to Drill (APD).¹⁹ Although the area has been withdrawn from mineral leasing since 1997, the Solenex lease was issued before the withdrawal went into effect.²⁰ The Secretary cancelled it on the grounds that the lease was invalid at its inception due to noncompliance with multiple federal laws, in particular, NEPA²¹ and the National Historic Preservation Act.²²

The Badger-Two Medicine area encompasses approximately 130,000 acres of land within the Lewis and Clark National Forest, adjacent to Glacier National Park, the Scapegoat and Bob Marshall Wilderness Areas, and the Blackfeet Indian Reservation.²³ Nationwide, the BLM manages nearly 700 million acres of federal mineral estate. As of 2015, there were 44,213 leases in place, covering 32,193,369 acres.²⁴ Of those, 23,770 (54%) were producing leases.²⁵

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The Badger-Two Medicine area was part of the Blackfeet Tribe's reservation until 1896, when the Tribe ceded it to the United States. The area remains "one of the most cultural and religiously significant areas to the Blackfeet People since time immemorial."²⁶ In 2002, the Keeper of the National Register agreed to establish 89,000 acres of the Badger-Two Medicine area as a traditional cultural district (TCD). The TCD boundaries, which were expanded to 165,588 acres in 2014, encompass the Solenex leasehold.²⁷

For the past twenty years, even before its TCD designation, the area in question had been withdrawn from oil and gas leasing pursuant to the Lewis and Clark National Forest Oil and Gas Leasing EIS and Record of Decision, which denied authorization for further leasing in the Badger-Two Medicine area. Subsequently, in 2001, based on the Forest Service's recommendation, the Secretary of the Interior invoked his statutory authority to withdraw 405,000 acres of land on the Rocky Mountain Front Range, including the Badger-Two Medicine, from location and entry under the General Mining Law to preserve traditional cultural sites and uses, endangered species, and the outstanding scenic values and roadless character of the lands.²⁸ In 2006, Congress permanently withdrew the area from oil and gas leasing and from location and entry under the Mining Law, subject to valid existing rights.²⁹ Nearly two thirds of the original leaseholders took advantage of tax incentives established by Congress in exchange for the voluntary relinquishment of their leases.³⁰

According to the Secretary, Congress's 2006 ban stripped her of discretion to correct the deficiencies in the Solenex lease, but that even if she had discretion she would not exercise it because development would irreparably harm natural and cultural resources.³¹ In particular, according to the Advisory Council on Historic Preservation:

If implemented, the Solenex exploratory well along with the reasonably

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