The opinion
No. 06-828L
June 30, 2014
* * * * * * * * * * * * * *
KINGMAN REEF ATOLL *
DEVELOPMENT, L.L.C., *
* RCFC 56 Motions for Summary
Plaintiff, * Judgment; Takings; Equitable
v. * Estoppel; Lost Grant; Adverse
* Possession; Statute of Limitations.
UNITED STATES, *
*
Defendant. *
*
* * * * * * * * * * * * * *
Therese Y. Cannata, Cannata, Ching & O’Toole, LLP, San Francisco, California,
for plaintiff. With her was Christian P. Porter, Porter, Tom, Quitiquit, Chee & Watts,
LLP, Honolulu, Hawaii, of counsel.
Kristine S. Tardiff, Trial Attorney, Environment and Natural Resources Division,
United States Department of Justice, Washington, D.C., for defendant. With her were
John P. Tustin, Trial Attorney, Environment and Natural Resources Division, Sam
Hirsch, Acting Assistant Attorney General, Environment and Natural Resources
Division, United States Department of Justice; Robert J. Smith, Assistant Chief, Office
of General Counsel, Navy Litigation Office; Mariel J. Combs, Office of the Solicitor,
United States Department of the Interior; Elena Onaga, Deputy Section Chief, Pacific
Islands Section, NOAA Office of the General Counsel, United States Department of
Commerce; and Kevin A. Baumert, Attorney-Advisory, Office of the Legal Advisor,
United States Department of State, of counsel.
OPINION
HORN, J.
PROCEDURAL HISTORY
This case addresses the amended complaint filed by plaintiff, Kingman Reef Atoll
Development, L.L.C. (KRAD) in 2012. Originally, Kingman Reef Atoll Investments,
L.L.C. (KRAI) and KRAD brought a takings claim before this court alleging that KRAI
held fee simple absolute title to Kingman Reef, an atoll in the Pacific Ocean, that KRAD
held a leasehold interest, and that the United States government took their real property
interest without payment of just compensation. KRAI and KRAD alleged that this taking
occurred on January 18, 2001, when the Secretary of the Interior issued Secretarial
Order No. 3223, establishing the Kingman Reef National Wildlife Refuge (Kingman Reef
NWR). KRAI and KRAD sought the payment of just compensation, in the amount of
$54,500,000.00, pursuant to the Fifth Amendment to the United States Constitution for
the alleged taking of their private property for public use.
KRAI and KRAD alleged by prohibiting public access to Kingman Reef the
Kingman Reef NWR prohibited fishing in over 450 square miles in what plaintiff alleged
to be “some of the most productive open ocean fishing grounds in the world,” and took
all rights to access, use, enjoy, conserve, and economically develop Kingman Reef and
its surrounding waters from KRAI and KRAD. KRAI and KRAD claimed that Kingman
Reef’s economic value and/or commercial use includes ecotourism, recreational fishing
tourism, commercial fishing operations, and a transfer station for fishing operations.
KRAI is a Hawaii limited liability company that claimed to hold both legal and
equitable title to the Kingman Reef atoll, as well as its lagoon, submergent and
emergent coral reefs, and surrounding waters. According to KRAI and KRAD, members
of the Fullard-Leo family claimed ownership of Kingman Reef in 1922, and KRAI
acquired title to Kingman Reef on November 17, 2000. Dudley and Ainsley Fullard-Leo,
collectively (and sometimes together with Leslie and Ellen Fullard-Leo, both deceased,
and/or the Fullard-Leo family1) were or are managers of KRAI.
Plaintiff KRAD is a Hawaii limited liability company that is managed by Peter B.
Savio, the Fullard-Leo family’s real estate agent and representative. On November 17,
2000, KRAD entered into a real property lease agreement with KRAI concerning the
use, economic development, and protection of Kingman Reef.
In accordance with the alleged private property rights vested by the real property
lease, on November 17, 2000, KRAD also entered into a real property license
agreement with Kingman Reef Enterprises, L.L.C. (KRE), a Washington limited liability
company. KRAD licensed KRE to operate a commercial fishing base camp at Kingman
Reef and conduct commercial fishing in and around the waters of Kingman Reef for a
term of thirty years.
Defendant United States is a governmental entity whose valid exercise of
sovereignty over Kingman Reef is undisputed by the parties. Kingman Reef is currently
classified by the United States as an unincorporated United States Territory without an
Organic Act. The United States claims fee title absolute ownership to Kingman Reef,
while plaintiff KRAD claims that KRAI is the holder of fee title absolute.
1
The Fullard-Leo family is also the former owner of Palmyra Atoll (or Island), located
near Kingman Reef, which the family conveyed to The Nature Conservancy (TNC) in
the late 1990s. Because it is a useful barometer for comparison, the history of Palmyra
Island, and litigation related to its ownership is referenced below.
2
On March 4, 2005, and prior to filing suit in this court, KRAI brought an action to
quiet title to Kingman Reef, pursuant to the Federal Quiet Title Act, 28 U.S.C. § 2409a
(2012), in the United States District Court for the District of Hawaii. See Kingman Reef
Atoll Investments, L.L.C. v. United States, 545 F. Supp. 2d 1103 (D. Haw. 2007), aff’d,
541 F.3d 1189 (9th Cir. 2008). The defendant filed a motion to dismiss, which the
District Court denied, without prejudice, and the court permitted limited discovery on the
issue of abandonment by the United States. See id. at 1109. Subsequently, defendant
filed another motion to dismiss for lack of subject matter jurisdiction in the Hawaii case,
arguing that plaintiff’s claim accrued outside of the Quiet Title Act’s twelve-year statute
of limitations. The District Court indicated that a plaintiff’s quiet title claim against the
United States “is barred if it or its predecessor failed to commence the action within 12
years of the date they knew or should have known of the claim of the United States,” id.
at 1110 (citing United States v. Beggerly, 524 U.S. 38, 48 (1998)), and that the Quiet
Title Act is “retroactive,” such that “if the passage of 12 years from the date of accrual
occurred before October 25, 1972, when Congress passed the QTA [Federal Quiet Title
Act], the action is foreclosed.” Id. at 1111 (citing Donnelly v. United States, 850 F.2d
1313, 1318 (9th Cir. 1988), cert. denied, 488 U.S. 1046 (1989); Stubbs v. United States,
620 F.2d 775 (10th Cir. 1980)). The court found that the Fullard-Leo family, plaintiff’s
predecessors-in-interest, “knew or should have known of the United States’ claim”
regarding Kingman Reef in the 1930s and, therefore, the statute of limitations had run
“at the latest—by 1949 or 1950.” Id. at 1112. The District Court also found no evidence
that the United States had abandoned its claim to Kingman Reef, so as to create a new
QTA claim for the purposes of the statute of limitations. The District Court granted
defendant’s motion to dismiss for lack of subject matter jurisdiction. Id. at 1116. The
United States Court of Appeals for the Ninth Circuit affirmed the District Court's decision
in Kingman Reef Atoll Investments, L.L.C. v. United States, 541 F.3d 1189, 1202 (9th
Cir. 2008).
When KRAI and KRAD filed the above captioned case in this court, defendant
filed an earlier motion to dismiss KRAI’s and KRAD’s claims for lack of jurisdiction on
the grounds that the claims were time-barred under the applicable six-year statute of
limitations, 28 U.S.C. § 2501 (2012). After the Ninth Circuit’s decision ruled in KRAI's
quiet title action, Kingman Reef Atoll Investments, L.L.C. v. United States, 541 F.3d
1189, defendant renewed its motion to dismiss arguing that KRAI’s action to quiet title in
Kingman Reef was related to the above captioned case, the findings of the District
Court and the Ninth Circuit should be given preclusive effect, and those findings
supported defendant’s position that plaintiff’s claim accrued in 1938. This court issued
an opinion on June 17, 2010 which found that KRAI’s and KRAD’s takings action was
not precluded.
Following the decision by the United States Supreme Court in United States v.
Tohono O’Odham Nation, 131 S. Ct. 1723 (2011), defendant asked to revisit the issue
of jurisdiction in this court, particularly regarding the application of 28 U.S.C. § 1500
(2012) to this case in this court. This court subsequently held that it did not have
jurisdiction over KRAI because KRAI had a suit pending at the United States District
Court for the District of Hawaii at the time it filed suit in this court, based on substantially
3
the same operative facts, meaning that Section 1500 deprived this court of jurisdiction
over KRAI. KRAD, however, did not have a suit pending in another court when it filed
its complaint in this court. The court, therefore, granted defendant’s motion to dismiss
KRAI, but denied the motion to dismiss plaintiff KRAD. See Kingman Reef Atoll
Investments, L.L.C. v. United States, 103 Fed. Cl. 660, 704-05 (2012). KRAI
subsequently notified the court that it did not intend to appeal the court’s order
dismissing KRAI.
Plaintiff KRAD filed an amended complaint on May 9, 2012. In its amended
complaint, KRAD alleges that KRAI holds fee simple title to Kingman Reef, and that
KRAD holds a leasehold interest in Kingman Reef from KRAI, as well as a valid real
property license agreement with KRE. KRAD alleges that defendant’s establishment of
the Kingman Reef NWR has “resulted in the taking of plaintiff’s private leasehold and
licensing property rights for a public purpose without just compensation.” KRAD alleges
a categorical, or in the alternative, a regulatory taking, for which it seeks just
compensation “in an amount equal to the fair market value of plaintiff’s leasehold and
licensing rights and interests,” plaintiff’s attorneys’ costs and fees, and any additional
relief the court deems proper. Thereafter, the parties fully briefed cross-motions for
summary judgment. Two issues are raised by the current motions: 1) whether KRAD
holds a vested property interest in Kingman Reef, and 2) whether KRAD’s takings claim
is time-barred by the six-year statute of limitation codified at 28 U.S.C. § 2501.
FINDINGS OF FACT
This court previously made extensive findings of fact in the above captioned case
which bear some repeating here. Subsequent to the court’s earlier decision in this case,
defendant submitted a Statement of Uncontroverted Facts with attached exhibits, and
plaintiff responded. Taking the parties’ submissions into account, the revised facts are
included below.
Fullard-Leo Family Successors Allege They Have Acted as the Owner of Kingman
Reef
In addition to annexing Kingman Reef, paying real property taxes on the land,
and granting access to third parties, plaintiff alleges that, from 1922 to the present,
KRAI and its predecessors-in-interest have acted consistent with their ownership of
Kingman Reef. For example, plaintiff alleges that when unauthorized uses of Kingman
Reef were discovered, the Fullard-Leo family took appropriate action to stop those uses.
Additionally, the Fullard-Leo family and its agent allegedly stopped the unauthorized use
by a person from Hilo, Hawaii, who was fishing commercially in and around Kingman
Reef without permission.
Mr. Savio, on behalf of the Fullard-Leo family and KRAI, alleges to have made
voyages to Kingman Reef at the Fullard-Leo family’s expense in order to survey the
property. Leslie Fullard-Leo and Mr. Savio allegedly accessed Kingman Reef numerous
times since the 1940s. Dudley Fullard-Leo also alleges that his brother, Leslie Fullard-
4
Leo, accessed Kingman Reef in the 1940s on a ship called Joyita and again by ship in
the mid-to-late 1950s. Moreover, Mr. Savio, in a sworn declaration, stated that, during
the late 1980s, he traveled to and inspected Kingman Reef in a United States Air Force
aircraft with representatives of the Bikini Islands as part of a proposed government
project, to purchase Palmyra Atoll and Kingman Reef, and to determine if those areas
were suitable for displaced residents of the Bikini Islands. Ainsley Fullard-Leo, in a
sworn declaration, stated that, in or about 1986, he “accompanied the U.S. Coast Guard
during one of its laws enforcement air patrols to Palmyra and Kingman Reef.”
Additionally, in a sworn declaration, Ainsley Fullard-Leo stated that he “over flew
Kingman Reef on several occasions since the 1980's [sic].” Dudley Fullard-Leo testified
at his April 11, 2007 deposition in Kingman Reef Atoll Investments, L.L.C. v. United
States, 545 F. Supp. 2d 1103, that he has not accessed Kingman Reef, but only flown
over it, correcting a former declaration that he had actually accessed Kingman Reef
numerous times since the 1940s.
From the 1960s to 1980s, Martin Vitousek, a professor at the University of
Hawaii, requested permission to visit and was granted access to Kingman Reef,
planting coconut trees on Kingman Reef at the Fullard-Leo family’s request.
Additionally, over about a twenty-year period, and as recently as 2002, Ainsley Fullard-
Leo gave permission to Bill Austin, captain of the ship Machais to visit Kingman Reef,
although there also is an indication in the record of a Navy grant of permission. In a
declaration, executed on July 19, 2007, Bill Austin stated that “I have obtained
permission from the Fullard-Leo family to call at Kingman Reef Atoll for about seven
voyages over the years. I know that no other authorization was required because on
my first voyage in about 1966, the United States Customs and someone else (I do not
recall who) told me that Kingman Reef and Palmyra were privately owned and to
contact the family.”
In October 1995, Bryant Fullard-Leo, Dudley Fullard-Leo’s son, stated he
accompanied Mark Collins, a private fisherman, to survey in and around Kingman Reef
over a two week period. Additionally, on August 1, 1997, Mr. Savio, in his capacity as
president of Palmyra Development Co., Inc., wrote a letter to Joe Dettling of Kailua-
Kona, Hawaii. Mr. Dettling was allegedly fishing in and around Palmyra Island and
Kingman Reef, as well as planning to use the lagoons of both islands for a seaplane
and fishing operation. Threatening legal action to enforce the Fullard-Leo family’s right
to exclude, Mr. Savio informed Mr. Dettling that both Palmyra Island and Kingman Reef
and their “lagoons, reefs and territorial waters are private property” and advised Mr.
Dettling that he “cannot enter into these areas without permission.” Subsequently, in a
follow-up letter dated March 19, 1998, which Mr. Savio carbon copied to Scot
Yamashita, Assistant Special Agent In Charge at the United States Department of
Commerce, National Oceanic and Atmospheric Administration’s (NOAA) National
Marine Fisheries Service, Mr. Savio wrote to Mr. Dettling:
In earlier discussions and letters, you stated that Scot Yamashita of the
National Marine Fisheries service had given you permission to fish in and
around the waters at Palmyra Island. I checked with Mr. Yamashita, and
5
in a letter dated August 2, 1997, he advised you that no permission was
given to fish within the existing three (3) mile limit around Palmyra and
Kingman Reef as established by the owners.
Later, in 1997 or 1998, Ainsley and Dudley Fullard-Leo indicated they traveled to
Palmyra and, on the way, had the pilot circle Kingman Reef to inspect and ensure that
no unauthorized uses were evident. In 1998 or 1999, Ainsley Fullard-Leo and his wife
allegedly inspected Kingman Reef by air.
Moreover, Charles Cook of TNC stated in his March 26, 2007 deposition in
Kingman Reef Atoll Investments, L.L.C. v. United States, 545 F. Supp. 2d 1103,2 that
National Aeronautics and Space Administration (NASA) Astronaut Charles “Chuck” F.
Brady, Captain, United States Navy, who was both providing support services for TNC
in its acquisition of Palmyra in 1991 and “[t]esting communications equipment for NASA”
on his first trip to Palmyra Atoll in 1997, requested that Ainsley Fullard-Leo give him
permission to access Kingman Reef to test HAM amateur radio. Mr. Savio stated in a
sworn declaration that Captain Brady “visited Kingman Reef twice in the late 1990's and
on each visit requested permission to go to Kingman Reef” from the Fullard-Leo family.
Plaintiff alleges that “[t]here is no evidence that the government used the
property for any purpose prior to January 18, 2001, except when it visited the property,
after obtaining permission from the Fullard-Leo family.” Plaintiff also alleges that the
United States Navy has repeatedly acknowledged the Fullard-Leo family’s ownership of
Kingman Reef and has asked for permission to have access to Kingman Reef. Plaintiff
alleges that on numerous occasions since the issuance of Executive Order No. 6935 in
1934 and Executive Order Nos. 8682 and 8729 in 1941, regarding the Navy’s
jurisdiction over and administration of Kingman Reef and its surrounding waters, the
Navy has directed requests for authorization to visit or access Kingman Reef to the
Fullard-Leo family for review and approval. Specifically, over the past thirty years,
plaintiff alleges that the Fullard-Leo family, KRAI and their agent Mr. Savio, received
referrals from the United States Navy, United States Coast Guard and/or United States
National Marine Fisheries Service from persons and/or entities interested in entering
upon and traversing across Kingman Reef. KRAI was asked, and did give permission,
to third parties from the private and public sectors, including HAM radio operators,
scuba divers, and photographers, to access Kingman Reef. In a sworn declaration,
Ainsley Fullard-Leo indicated that Petty Officer Miller of the Pearl Harbor Naval Base
2
In his March 26, 2007 deposition, Mr. Cook claimed that TNC never had an interest in
purchasing Kingman Reef and that it was Mr. Savio, and not TNC, who initially
proposed that the acquisition of Kingman Reef be considered as a part of TNC’s
ongoing acquisition plan for Palmyra Atoll. Mr. Cook did not recall the details regarding
possible sale and/or acquisition of Kingman Reef, stating “my business was to try to
successfully acquire Palmyra Atoll. The Nature Conservancy did not have a dog on
Kingman Reef. To me that was background noise. That was not part of my focus
objectives, and so I wasn’t concerned with it. From a Nature Conservancy’s perspective
we had one concern, and that was the successful acquisition of the Palmyra Atoll.”
6
telephoned him “inquiring about the status of Kingman Reef and whether [he] was the
owner because an inquiry was received from a photographer wanting” to visit and
photograph Kingman Reef.
Mr. Savio, in his sworn declaration, stated that over the past thirty years, “I
received at least ten (10) referrals from the Navy, possibly more. That is, a person
would call me requesting permission to go to Kingman Reef, I would ask how he got my
name, and he told me that a representative of the U.S. Navy (at Pearl Harbor) referred
him.” Mr. Savio further stated that the Navy and United States Coast Guard both
referred HAM amateur radio operators seeking permission to broadcast from Kingman
Reef to him. Mr. Savio claimed that, “[i]n order for [HAM radio operators’] broadcasts
from a particular location to be considered legitimate, however, they must obtain
permission to broadcast from the legal owner of the property,” which they did by first
contacting the Navy or the Coast Guard to ascertain the identity of the legal owner of
Kingman Reef. Mr. Savio, in a sworn declaration, stated that, “[o]ver the years, the
Fullard-Leo family, as the legal owners of Kingman Reef, have received inquiries from
both the U.S. Department of the Interior, FWS [Fish and Wildlife Service], the City &
County of Honolulu, and the State of Hawaii to purchase Kingman Reef. I represented
the Fullard-Leo family in those negotiations and discussions.” On instructions from the
Fullard-Leo family, Mr. Savio required that any visitor to Kingman Reef obtain written
permission and execute a release form. Navy personnel who contacted Mr. Savio
allegedly acknowledged that the Fullard-Leo family owned Kingman Reef and that third
party requests to access Kingman Reef were to be directed to the Fullard-Leo family.
Accordingly, plaintiff alleges that KRAI's predecessors-in-interest owned Kingman Reef,
that the government repeatedly acknowledged such ownership in its own documents in
the 1990s and 2000, that the government was preparing to pay the Fullard-Leo family
for a fee interest, and that KRAI leased out the fishing rights around Kingman Reef in
2000.
Defendant specifically denies that KRAI, the Fullard-Leo family or any of their
agents, associates, or representatives were authorized at any time to grant permission
to access Kingman Reef, stop commercial fishing in and around Kingman Reef, survey
and/or inspect Kingman Reef. Defendant further denies that KRAI, the Fullard-Leo
family and any of their agents, associates, or representatives were authorized to visit
Kingman Reef themselves without first obtaining permission from the United States
Navy or the United States Department of the Interior, Fish and Wildlife Service (FWS or
USFWS), because defendant alleges Kingman Reef is federal property. The record,
however, contains no evidence that the federal government actually interfered with the
Fullard-Leo family’s access to and use of Kingman Reef between 1934 and 2001.
Physical Description of Kingman Reef
Kingman Reef is a low-lying coral reef atoll located in the Pacific Ocean. It is
situated approximately 900 nautical miles south of Hawaii and 33 nautical miles north of
the Palmyra Atoll, at Latitude 6° 24' 37" North and Longitude 162° 22' West. It is
comprised of two small “spits” of emergent land/coral reefs, a central lagoon, and
7
surrounding submergent coral reefs and waters. Kingman Reef has been described as
“one of the most pristine coral reef ecosystems in the Pacific . . . and supports a
diversity of marine invertebrates, algae, fishes, marine mammals, and sea turtles and
[is] an important foraging ground for Pacific migratory seabirds.” The reef, however, “is
unsuitable for human habitation, due to the small size of emergent land spits and lack of
fresh water.” Moreover, Kingman Reef “is awash most of the time,” has been described
as “a maritime hazard and the atoll is unusable for practical purposes.”
Initial Acquisition and History of Kingman Reef
Kingman Reef was first discovered in 1798 by Captain Edmund Fanning. The
island was visited in 1853 by Captain W.E. Kingman, for whom it was named, while
aboard the American ship, Shooting Star. Subsequently, Captain W.W. Taylor, in his
affidavit of February 12, 1858, listed islands in the position of Kingman Reef and
Palmyra Atoll as guano islands and, along with other alleged guano islands in the
Pacific, passed these islands by assignments to the United States Guano Company. In
1860, the United States Guano Company claimed Kingman Reef, also known as
“Dangers Rock,” and Palmyra Atoll, also known as “Palmyros,” as United States
Territories under the Guano Islands Act of 1856, codified at 48 U.S.C. §§ 1411-1419
(2012).3
In 1933, the Office of the Legal Advisor, United States Department of State,
wrote that Kingman Reef, under the alias Dangers Rock, “appears on the lists of Guano
Islands appertaining to the United States compiled by the Treasury Department” on
August 23, 1867. Further, as of September 16, 1893, the United States Department of
the Treasury listed both “Dangers Rock” and “Palmyros” as guano islands that were
“bonded” by the Guano Company of New York, under Bond No. 9, on February 8,
1860.4
3
Pursuant to the Guano Islands Act of 1856, if a citizen of the United States discovered
guano on an unclaimed and uninhabited island and occupied the island, “such island,
rock, or key may, at the discretion of the President, be considered as appertaining to the
United States.” 48 U.S.C. § 1411. As a prerequisite, the discoverer had to notify the
Department of State of their discovery and provide evidence that the island was not “in
the possession or occupation of any other government or of the citizens of any other
government.” Id. at § 1412. Assuming the discoverer could meet those requirements,
they would gain “the exclusive right of occupying such island, rocks, or keys, for the
purpose of obtaining guano.” Id. at § 1414. The Guano Islands Act specified, “[n]othing
in this chapter contained shall be construed as obliging the United States to retain
possession of the islands, rocks, or keys, after the guano shall have been removed from
the same.” Id. at § 1419. The Guano Islands Act, therefore, apparently was intended to
extend the jurisdiction of the United States over an island only temporarily while its
citizens were actively engaged in obtaining guano from the island.
4
1 Moore’s Digest of International Law 567-68 (Washington, D.C.: Government Printing
Office 1906). Moore’s Digest of International Law lists 41 guano islands of actual guano
8
The United States government was clearly aware of the existence and location of
Kingman Reef by at least the early twentieth century. The Pacific Islands Pilot, Volume
II, published in 1916 by the U.S. Hydrographic Office, included an entry for Kingman
Reef, which listed the location of the atoll, described its shape and size, and indicated
that Kingman Reef had been struck by the British ship Tartar in June 1874, and
surveyed by the British ship Penguin in 1897. A similar entry was included in the
Second Edition of the Pacific Islands Pilot, Volume II, published in 1920. Furthermore,
in September 1921, the Navy sent an expeditionary force on board the U.S.S. Eagle
from Pearl Harbor to Kingman Reef and Palmyra Island group with the mission,
regarding Kingman Reef specifically, of “ascertain[ing] extent and condition of
Kingman’s Reef, which has been reported by ship masters as supporting vegetation
[sic].” The Navy reported that the expedition was “entirely successful,” and provided the
following description of Kingman Reef:
Kingmans Reef at low tide shows a small rock, not more than two feet
above water and at times awash, and a larger object, which seems to be a
sand island about fifty yards long and three feet high. There is no
vegatation [sic] of any kind on the reef. At high tide the whole is probably
submerged or awash. It is probable that the reef is slightly larger than
shown on the chart.
In 1922, Lorrin A. Thurston, agent of the Fullard-Leo family, KRAI’s predecessor-
in-interest, claimed to have annexed Kingman Reef to the sovereignty of the United
States and claimed legal ownership of Kingman Reef for the Island of Palmyra Copra
Company (Copra Co.), a corporation under the laws of the then Territory of Hawaii, of
which Leslie Fullard-Leo was President and Ellen-Fullard Leo was Secretary. At an
April 28, 1922 board meeting for the Copra Co., “[i]t was reported that a plan was on
foot to claim Kingman’s Reef, [as it was] still believed that this Reef could be of
inestimable value to [the] Company and should be claimed for the Company either on
the out or homeward voyage of the Palmyra5 during her next trip.” On May 3, 1922, the
Copra Co.’s Board instructed and commissioned Mr. Thurston, as its agent, to “take
deposits, including brief histories and data regarding their respective discoverers. See
id. at 569. The data was compiled from information collected at the Department of State
and elsewhere. See id. It included “islands that have not been, as well as those that
have been, considered as appertaining to the United States.” Notably, the data neither
references Kingman Reef nor its alias Dangers Rock and, therefore, does not provide
information regarding the alleged discoverer of the supposed guano deposits said to be
found on the island. See id. at 569-80.
5
By 1922, Leslie and Ellen Fullard-Leo had purchased all but two of the approximately
fifty islets comprising Palmyra Island. Leslie and Ellen Fullard-Leo formed the Island of
Palmyra Copra Company to harvest copra on the island, but, when copra prices
dropped after World War I, the company shifted its focus to commercial fishing.
9
formal possession” of Kingman Reef “on behalf of the United States of America, and
claim the same for this Company [Copra Co.].” In that commission, the Copra Co.
asserted that Kingman Reef had hitherto not “been claimed by any other government or
people.”
On May 10, 1922, Mr. Thurston landed on Kingman Reef, allegedly annexing the
atoll, its reefs and lagoon to the United States and claiming ownership of the property
for the Copra Co. Mr. Thurston and five companions read aloud and signed a formal
certificate of possession/annexation, which states:
BE IT KNOWN TO ALL PEOPLE – that on the Tenth day of May A.D.
1922, the undersigned, agent of the ISLAND OF PALMYRA COPRA CO.,
LTD. (an Hawaiian Corporation), landed from the motor-ship “Palmyra”
doth . . . take formal possession of this Island called “Kingman’s Reef” . . .
on behalf of the United States of America, and claim the same for said
Company.
The party built a cairn of coral slabs about four feet high and flew an American
flag from a pole supported by the cairn. The formal certificate of possession, the flag,
and a copy of two Hawaiian newspapers, The Honolulu Advertiser and The Honolulu
Star-Bulletin, dated May 3, 1922, were placed in a glass jar that was deposited in the
base of the coral cairn. Plaintiff alleges that the annexation procedure was intended to,
and did, vest fee title ownership to Kingman Reef in the Copra Co., which annexed
Kingman Reef to the United States solely for the purpose of extending United States
sovereignty over the island. Plaintiff alleges that the annexation was neither intended
to, nor actually vested, title in the defendant. In support of this argument, plaintiff points
to the certificate of annexation/possession signed by Mr. Thurston, which expressly
stated that he claimed Kingman Reef as property of the Copra Co. One month after Mr.
Thurston’s alleged annexation, in June 1922, the United States Navy Hydrographic
Office acknowledged receiving a copy of an article from The Honolulu Advertiser “giving
an account of the party taking possession of Kingman’s Reef on May 10, 1922, in the
name of the United States.”
A few days later, on May 13, 1922, Mr. Thurston wrote a letter to Ellen Fullard-
Leo, in which he confirmed that he had claimed fee title ownership to Kingman Reef for
the Copra Co. Further, in accordance with alleged instructions from Mr. Huber, whom
Mr. Thurston identified as the “United States Attorney General” for the Territory of
Hawaii,6 Mr. Thurston instructed Ellen Fullard-Leo to file the title claim with the
Department of State in Washington, D.C. Subsequently, on July 15, 1922, Ellen
Fullard-Leo, in her capacity as Secretary-Treasurer of the Copra Co., sent a letter to the
6
In a 1936 Letter to the Editor of The Honolulu Advertiser, Leslie and Ellen Fullard-Leo
indicated that the Copra Co. consulted Mr. Huber “as to the formalities required to
annex land for the United States” prior to commissioning Mr. Thurston to travel to
Kingman Reef.
10
Secretary of State, Charles E. Hughes, in which she advised him that the Copra Co.
had annexed on May 10, 1922,
in the name of the United States of America, and for [the Copra Co.’s] own
use, an atoll island charted as “Kingman’s Reef” but never before
claimed. . . . According to the United States Attorney here, this notification
is all that is necessary in addition to listing the same in our local tax
returns, as the Palmyra Islands are a part of the county of Honolulu.
Hoping that this is sufficient evidence that the same will be recorded and
due credit given this Company and Territory. . . .
Ellen Fullard-Leo also enclosed a copy of the certificate of possession/annexation, a
report by Mr. Thurston, and newspaper reports covering the annexation and acquisition
of Kingman Reef. Moreover, from 1922 until 1959, as per Mr. Huber’s alleged
instructions, the Fullard-Leo family paid real property taxes to the Territory of Hawaii for
both Palmyra Atoll and Kingman Reef on the same tax key. After Hawaii received
statehood in 1959, Hawaii state taxes were not levied because Palmyra Atoll and
Kingman Reef were not incorporated as a part of the lands of the State of Hawaii. In an
April 30, 1998 memorandum on Palmyra Ownership Tidelands, Suzanne Case of TNC,
included Section G, titled, “Does Kingman Reef belong to the Fullard-Leos?” and stated
that “[t]he Fullard-Leos paid Hawai’i [sic] property taxes on Kingman Reef until 1959.”
On August 14, 1922, the Copra Co.’s Board, by unanimous resolution, conveyed
its interest in Kingman Reef to Ellen Fullard-Leo for the nominal consideration of one
dollar and sundry unsecured loans.7 Subsequently, on August 24, 1922, Ellen Fullard-
Leo sent a follow-up letter to the Secretary of State, inquiring as to whether her July 15,
1922 letter had been received. On September 28, 1922, the Department of State
acknowledged receipt of July 15 and August 24, 1922 letters and enclosures regarding
the Copra Co.’s alleged annexation and ownership of Kingman Reef. In its response,
although the Department of State neither disputed the Copra Co.’s claim to ownership
of Kingman Reef, nor asserted that the United States owned the atoll, the letter did not
explicitly recognize fee title ownership in the Fullard-Leo family. Defendant currently
alleges that the Department of State did not dispute the Copra Co.’s 1922 “claim” to fee
title ownership of Kingman Reef because it was not legally obligated to do so. Internal
documents show that the Department of State initially assumed that Ellen Fullard-Leo’s
letter was “intended as a notice of discovery under the Guano Acts.” The Department of
State’s Solicitor concluded that the letter “was not a guano island or a new discovery.”
7
By mesne conveyances from Ellen Fullard-Leo, title to Kingman Reef was allegedly
held collectively in trust by brothers Leslie Vincent, Ainsley, and Dudley Fullard-Leo,
children of Leslie and Ellen Fullard-Leo. Plaintiff alleges that the Fullard-Leo family
owned and held title to Kingman Reef from 1922 to November 17, 2000, when the
trustee-brothers transferred title to KRAI, the family’s limited liability company. On
November 17, 2000, title to Kingman Reef was conveyed by the Fullard-Leo family to
KRAI by way of a quitclaim deed filed and recorded in the United States District Court
for the District of Hawaii.
11
The Department’s Division of Political and Economic Information communicated to the
Solicitor:
Although it [Kingman Reef] is shown on various charts, and its existence is
thus known, its unimportance is evidenced by the fact that no reference is
made to it in the gazetteers or in various books dealing with the Pacific
Islands.
I understand that most of the rocks are covered with water at high tide. It
is, of course, uninhabited, and is not believed to have resources of
material value. I further find no reference as to its political status. It may
be assumed that it has not sufficient value ever to have been claimed by
any of the powers.
Seeking more information about Kingman Reef, in November 1922, the Chief of Naval
Operations directed in an internal memo that any crafts or vessels in the vicinity of
Palmyra Island and Kingman Reef “conduct investigation with a view to determining the
potentialities of these places.”
In November 1924, W.G. Anderson and others visited Kingman Reef, where they
inspected the bottle deposited by Mr. Thurston in 1922 and left their own record in the
cairn. On June 22, 1925, Mr. Thurston wrote a letter to Admiral R.E. Coontz, U.S.N., in
which he suggested that the United States Navy secure both Palmyra and Kingman
Reef for “refreshment and supply stations both for naval ships and flying boats” and
noted that Kingman Reef together with Palmyra “passed, by purchase, into the
ownership of Mrs. E. Fullard-Leo, an American citizen, of Honolulu.” In that letter, Mr.
Thurston wrote that he had “sailed direct from Honoluly [sic] to Kingman’s [sic] landed
and annexed the Island, in the name of the Palmyra Co., an American Company, in
accordance with the terms of American law.” Mr. Thurston further wrote: “Upon my
return to Honolulu in 1922, seven weeks after the annexation incident above-referred to,
I found that the existence of the Island which I had reported, was questioned at
Washington. . . .” Following his assertion that he did, in fact, discover an island called
Kingman Reef, Mr. Thurston suggested that the Navy should “secure for its files,
definite data concerning both the Palmyras and Kingman’s [sic], both as to present
conditions and a rough estimate of the cost for making both places available as
refreshment and supply stations, both for naval ships and flying boats.”
Defendant, on the other hand, points to a statement of John L. Padgett, First
Mate on the 1922 voyage to Kingman Reef, that the United States holds title to
Kingman Reef under the Guano Acts. In a May 1937 article, Seaman Padgett indicated
that it was the position of the United States government in general, and the Navy in
particular, that Kingman Reef did not exist. In the article, Seaman Padgett stated:
In 1921, the Sailing Directions for the North Pacific Islands gave the
correct position [for Kingman Reef] but then noted – “Existence Doubtful.”
This Federal Government printed book in one breadth warned all ships to
12
avoid the spot and in the next told the wandering seamen not to be
surprised if they did not find it. Since no one was sure it was there no one
claimed it. . . . On my return to Honolulu I was called before Rear-Admiral
Edward Simpson8 and staff. They still seemed to believe the Sailing
Directions “Existence Doubtful” but after a morning of questions let me go
back to my drawing board. Shortly after this the U.S. Navy sent a Mine
Sweeper down which found Kingman Reef and that made it official.
A July 29, 1926 Memorandum, in response to a request for further information on
Kingman Reef, the Navy’s Hydrographic Office relayed to the Chief of Naval Operations
“the complete information on file in this Office concerning Kingman’s Reef.” The last
paragraph of the July 29, 1926 Memorandum states: “Hydrographic Office Chart No.
1262a, which shows the various island possessions and mandates in the Pacific and
which was constructed after receiving advice from the State Department, clearly shows
that this island or reef is United States territory.”
A year later, in June 1926, Mr. Thurston revisited Kingman Reef as a guest on
the Navy’s U.S.S. Whippoorwill, under the command of Lieutenant Poland, U.S.N. Lt.
Poland's report provided a detailed description of Kingman Reef, finding that it had
potential value as a military base and recommending additional surveying. During this
visit, Mr. Thurston examined the record, jar and flag that he had left on Kingman Reef in
1922. In order to protect the flags and records from disintegration, as the bottle top was
rusted and cork partially rotted, Mr. Thurston removed both the 1922 and 1924 records.
By way of a July 9, 1926 letter, Mr. Thurston deposited these items with the Archives
Commission of the Territory of Hawaii, located in Honolulu. Captain Poland signed a
certificate evidencing Mr. Thurston’s removal of the 1922 and 1924 reports, which had
been enclosed in a bottle and left in the cairn on Kingman Reef. A copy of Captain
Poland’s certificate also was deposited with the Archives Commission. Further, Mr.
Thurston stated in his July 9, 1926 letter that he “understand[s] the present owner of
said Kingman Island to the Mrs. E. Fullard[-]Leo of Honolulu, the successor of said
Palmyra Company, Limited.”
In response, on July 24, 1926, the Archives Commission acknowledged receipt
of “two glass containers – a fruit jar and beer bottle – received from” Mr. Thurston. The
response further stated that “both containers are deposited with the Archives of Hawaii
commission, as objects of record, relative to the formal annexation of Kingman’s Reef
(Island) [sic] to the United States of America.” Moreover, the commission stated that
the jars and their contents “form an official part of our Archives of Hawaii[, but are]
‘subject to the order of the owner of said Kingman Island, or of the United States
Government.’” Referencing Mr. Thurston’s letter, the Archives Commission also
acknowledged Mrs. Ellen Fullard-Leo as the owner of Kingman Reef.
8
Admiral Simpson served as the Hydrographer for the United States Navy
Hydrographic Office from March 1919 to December 1919.
13
The Navy conducted further surveying of Kingman Reef in April 1927. The
commanding officer’s report indicated: “[i]t is felt that Kingman Reef affords an ideal
base of great strategical [sic] importance and it should be further developed.”
On August 5, 1931, Leslie Fullard-Leo requested that the commanding officer of
the United States Geodetic Survey ship Pioneer make detailed surveys of Palmyra
Island and Kingman Reef. The United States Department of Commerce, Coast Guard
and Geodetic Survey, on September 30, 1931, responded that the request would be
given “careful consideration” when its then current “program in Hawaii has reached an
advanced stage of completion.”
1933-1934 Department of State Reports
On January 9, 1933, the Office of the Legal Advisor, Department of State, issued
a publication titled The Sovereignty of Guano Islands in Pacific Ocean. The purpose of
this publication was to “set forth the various claims of limited jurisdiction, or of full
sovereignty which have been made to the islands, with a view to determining the
present status of the United States claims to territorial sovereignty over them.” Office of
the Legal Advisor, The Sovereignty of Guano Islands in Pacific Ocean 580
(Washington, D.C.: Department of State 1933). Regarding the list of guano islands
found in Moore’s Digest of International Law, the Legal Advisor specifically noted that,
by way of information gathered from archival papers not consulted by Moore, “some of
the islands described apparently do not exist, and that most of them do not now, and
never did contain guano.” The Sovereignty of Guano Islands in Pacific Ocean at 579.
In the report, “Kingmans Reef” was listed under islands “not claimed by any other
Government.” Id. at 571. Although Kingman Reef was listed as appertaining to the
United States in 1867, the Legal Advisor, with specific regard to the United States’ claim
to Kingman Reef under the Guano Act, stated:
There is no other mention of Dangers Rock on file in the State
Department. It is not by any means certain that there is or was any guano
on this island, or even that there is such an island. It is, however,
practically certain that no guano was ever removed from it, at least by
claimants under the Guano Act. Moreover, Taylor’s “discovery” may well
have been fictitious, and he probably did not even land there.
Id. at 624-25.
Next, the Legal Advisor discussed the United States’ claim to Kingman Reef
“through [a]ppropriation by an American [c]itizen.” Id. at 625. The Legal Advisor
recounted Mr. Thurston’s May 10, 1922 voyage to Kingman Reef and acknowledged the
Copra Co.’s July 15, 1922 notification to “the State Department that it had annexed
Kingmans Reef in the name of the United States and for its own use. . . .” Id. Then, in
reference to the information sent by the Copra Co. to the Secretary of State in 1922, the
Legal Advisor stated:
14
[I]t appears that the [Copra Co.] . . . had now turned to fishing and was
interested in acquiring whatever island there might be on Kingmans Reef
for a fishing base. . . . It appears also that an island said to be dry at high
tide, and to bear no signes [sic] of any submergence by the sea, and
composed of broken coral and sand, actually was found, landed upon, and
formally annexed.
Id. at 626.
Later, in the “CONCLUSIONS” section of that same report, the Legal Advisor
listed Kingman Reef under “ISLANDS TO WHICH THE UNITED STATES ONLY HAS A
CLAIM.” Id. at 875 (capitalization in original). Specifically regarding Kingman Reef, the
Legal Advisor wrote:
It is difficult to reach definite conclusions on the legal status of Kingmans
Reef because of lack of information. It is not known whether or not there
has been any occupation or use of the Reef by American citizens; and it is
not even certain that there is an island there which is dry at high tide.
However, it may be said: first, the United States has no valid claim to
Kingmans Reef arising under the Guano Act; and second, the United
States has an inchoate right to the Reef, possibly because of its discovery
by Captain Kingman, if he was an American, as seems probable, and
because of the formal possession taken by the Island of Palmyra Copra
Company, and its use by that company, if there has been any such use.
As yet there has been no formal sanction of the company’s act by the
United States. However, no other Government appears to claim
Kingmans Reef, and it would seem that the United States Government
could extend its jurisdiction over the island (always supposing that an
actual island exists) and that it could then be considered as a part of the
territory of the United States. Before any such action is taken, it might be
adviseable [sic] to find out if Kingmans Reef is of any possible use to
American citizens, or to the Government.
Id. at 875-76.
President Roosevelt’s 1934 Executive Order and its History
On December 29, 1934, President Franklin D. Roosevelt issued Executive Order
No. 6935. Executive Order No. 6935 was issued pursuant to authority vested in the
President by the act of “June 25, 1910, ch. 421, 36 Stat. 847, as amended by the act of
August 24, 1912, ch. 369, 37 Stat. 497,” known at the Pickett Act, which provides in
relevant part:
That the President may, at any time in his discretion, temporarily withdraw
from settlement, location, sale, or entry any of the public lands of the
15
United States . . . and reserve the same for water-power sites, irrigation,
classification of lands, or other public purposes to be specified in the
orders of withdrawals, and such withdrawals or reservations shall remain
in force until revoked by him or by an Act of Congress.
Pickett Act of June 25, 1910, Chapter 421, 36 Stat. 847. Executive Order No. 6935
ordered that “Kingman Reef, Wake Island, and Johnston and Sand Islands, together
with their surrounding reefs, in the Pacific Ocean” be
reserved, set aside, and placed under the control and jurisdiction of the
Secretary of the Navy for administrative purposes, subject, however, to
the use of the said Johnston and Sand Islands by the Department of
Agriculture as a refuge and breeding ground for native birds as provided
by Executive Order No. 4467 of June 29, 1926.
Exec. Order No. 6935 (Dec. 29, 1934).9 The Executive Order further states that it “shall
continue in full force and effect until revoked by the President or by an act of Congress.”
Executive Order No. 6935, while amended in 1962 with regard to Wake Island, has
never been revoked. See 32 C.F.R. § 761.3(a)(2)(v), (b)(2) (2013).
The Franklin D. Roosevelt presidential papers include an October 16, 1934 letter
from Secretary of the Navy, Claude Swanson, to President Roosevelt with a
memorandum and enclosures concerning the ownership or sovereignty of certain
Pacific Islands. The memorandum listed twelve Pacific islands and also “indicated the
country exercising ownership or sovereignty in each case.” Both Palmyra and Kingman
Reef were listed as under the United States, but the memorandum did not mention
specifically whether the United States exercised ownership and/or sovereignty. In
Enclosure (B), Kingman Reef was listed as under the “Jurisdiction” of the United States
and was described as having a military strategic importance for patrolling maritime
steamer routes “between Honolulu . . . and Australia” and “from Panama to the Orient.”
Secretary of the Navy letter, Oct. 16, 1934, encl. (B) at 6. Kingman Reef also was listed
as having “possibilities for use as a fleet rendezvous, as a fueling place or as a
temporary anchorage.” Franklin D. Roosevelt Papers as President; President’s Official
File 18-V: Department of the Navy: Wake, Johnston, Sand Islands and Midway, etc.,
1933-1945 (Box 32) (Roosevelt Papers (Box 32)). The memorandum continued to
describe the physical geography, climatology, and hydrography of Kingman Reef, based
on data gathered from the U.S.S. Whippoorwill’s earlier survey of the area. Secretary of
9
In their various deeds and licensing agreements, the Fullard-Leo family, KRAI, KRAD,
and KRE recognize that the December 29, 1934 Executive Order No. 6935 placed
Kingman Reef “under the jurisdiction of the Secretary of the Navy,” but in this court
KRAD does not regard the Executive Order as asserting or placing title ownership with
the Navy or any entity of the United States.
16
the Navy letter, Oct. 16, 1934, encl. (B) at 8-12.10 In closing, the memorandum noted:
“Seaplanes can land anywhere in the lagoon when wind is from east quadrant. . . .
There is plenty of room for take-off in any direction. Water is rather deep for seaplane
anchorages but mooring buoys can be planted.” Id. at 12.
On November 9, 1934, nearly two months prior to the issuance of Executive
Order No. 6935, R.W.S. Hill of the Office of the Legal Advisor, Department of State,
wrote a letter and memorandum in which he discussed the status of the islands in the
Pacific Ocean mentioned in the October 16, 1934 letter and memorandum sent by the
Secretary of the Navy to President Roosevelt. Specifically regarding the status of the
guano islands, the Legal Advisor at the Department of State wrote:
This Department as well as the courts and the Attorney General have
taken the position that the United States did not acquire sovereignty of, or
title to, the guano islands under the Guano Islands Act of 1856. . . . This
Department has in the past stated that it has been the course of the
Department to recognize such islands only while occupied for the purpose
of procuring guano, and therefore upon the cessation of such occupancy
they may become open again to discovery, possession, et cetera.
Attached to Mr. Hill’s November 9, 1934 letter was the memorandum, dated
November 7, 1934, titled “Status of Certain Guano and Other Islands in the Pacific.”
This memorandum was issued in response to the Department of the Navy letter of
October 16, 1934. Regarding issues of sovereignty, the State Department Legal
Advisor stated:
The Department has consistently taken the position with regard to these
guano islands that, as stated in its letter of July 13, 1914, to Mr. H. Melville
Walker (811.0141/13), “the Government of the United States claims no
sovereignty or territorial rights over such island, but merely protects
citizens of the United States who discover guano thereon, in the
prosecution of their enterprise, which extends only to the appropriation
and disposal of guano.” Somewhat similar statements were contained in
the Department’s letter of September 2, 1882, to Mr. Brown, and
numerous other communications since that date, up to and including its
letter of July 1, 1934, to Mr. Vernon Le Young Ardiff (811.014/295).
In the opinion of the Attorney General of May 8, 1873 (14 Ops. Atty. Gen.
608), which relates to guano islands, he states: “Upon application to the
office of the Secretary of State, I am told that it has been the course of that
Department to recognize such islands only while occupied for the purpose
of procuring guano, and therefore upon the cessation of such occupancy
10
As noted above, according to the record, Mr. Thurston accompanied the U.S.S.
Whippoorwill on its survey trip to Kingman Reef.
17
they may become open again to discovery, possession, et cetera.”
...
The implication in the above statement, made by the Department in 1873
when the question of guano islands was a fairly fresh subject with it, would
appear to be that after an American citizen had ceased to occupy an
island for the purpose of obtaining guano it was no longer regarded by the
Department as appertaining to the United States.
These guano islands were referred to by Chief Justice Fuller in his
dissenting opinion in Downes v. Bidwell (182 U.S. 244, 372[-73]) as “terra
nullius.”
Specifically regarding issues of title ownership to guano islands, the State
Department Legal Advisor continued:
In a letter dated July 1, 1911, addressed to the Secretary of Commerce,
the Attorney General stated in part:
“There is nothing in the act of Congress of August 18, 1856 [Guano
Islands Act], from which it can be said that it was intended by said act to
recognize title in the discoverer” (of the guano) “or to assume on behalf of
the Government complete title, but on the contrary, it is clear that the act
meant only to protect the discoverer for the purpose of obtaining and
shipping guano and that the Guano Islands ‘were in no sense to become
part of the territorial domain of the United States.’”
Toward the end of the memorandum and in specific reference to Kingman Reef, Mr. Hill
reiterated that “it seems almost certain that no guano was ever removed from the
Island.” In the immediately preceding paragraphs, the State Department Legal Advisor
continued:
On July 15, 1922, the Island of Palmyra Copra Company, a Hawaiian
Corporation, notified the State Department that it had annexed Kingman’s
Reef in the name of the United States and for its own use on May 10,
1922.
No other action appears to have been taken with respect to the
incorporation of the Island into the territory of Hawaii or the United States.
While it does not appear that any other country has claimed Kingman’s
Reef, it might be well for this Government to take some affirmative action
to show definitively that it is a part of the territory of the United States.
The mere mention of it in an Act of Congress as American territory would
be sufficient.
On December 13, 1934, just two weeks prior to the issuance of Executive Order
18
No. 6935, the Secretary of the Navy transmitted to President Roosevelt a “draft of [the]
executive order placing Wake Island, Kingman Reef and Johnston and Sand Islands
under the control and jurisdiction of the Secretary of the Navy.” Secretary of the Navy
letter, Dec. 12, 1934, at 1. As to the underlying purpose of the proposed Executive
Order, the Secretary of the Navy wrote:
There are at present on hand a number of requests from airline systems
for the use of portions of the above named islands. . . for the
establishment and operation of commercial trans-ocean airline facilities. It
is felt that greater progress will be made by the airline systems and
greater satisfaction will be obtained by the Government if all of the areas
involved are placed under one and the same department. . . . [I]t is
considered that the interests of the Government would be best served by
also placing under the control and jurisdiction of the Navy Department the
[ ] areas that are desired to be occupied by trans-ocean airline facilities,
viz: Wake Island, Kingman Reef and Johnston and Sand Islands.
With regard to Kingman Reef, the Secretary of the Navy wrote that Kingman
Reef was “first seen and reported by Captain Kingman on the American ship
SHOOTING STAR. It was claimed for the United States by L. A. Thurston of Honolulu
in 1922 and it is recognized by the Department of State as being under the sovereignty
of the United States.” Id. In closing, the Secretary wrote, regarding the President’s
authority to issue the Executive Order, that the “sovereignty of the United States over
said islands is well recognized and further inquiry respecting the questions of title and
jurisdiction need not be made.” Id. at 2-3. It appears, however, that the Secretary did
not provide any additional information as to the history of Kingman Reef and did not
make any reference to Kingman Reef as a guano island. Instead, through a preceding
reference, he apparently based the claim of the United States for sovereignty on the
actions taken in 1922 by KRAI’s predecessors-in-interest. See id. at 2. The Secretary
did not assert that the United States held fee title ownership to Kingman Reef.
As noted above, on December 29, 1934, President Franklin D. Roosevelt issued
Executive Order No. 6935, which “reserved, set aside, and placed [Kingman Reef]
under the control and jurisdiction of the Secretary of the Navy for administrative
purposes,” subject also to the use of the Department of Agriculture as a refuge and
breeding ground for nature birds. Subsequently, on December 31, 1934, President
Roosevelt sent a memorandum to the Secretary of the Navy in which he stated:
In relation to Navy jurisdiction over these Pacific Islands, I think it is highly
adviseable [sic] that the Navy exercise that jurisdiction in some tangible
form at the earliest possible moment. You might consult with the State
Department and ask them if the establishment of a small supply base or
the fixing up of a landing place would be adequate to sustain sovereignty.
Roosevelt Papers (Box 32): Memorandum of December 31, 1934.
19
Pan American Airways 1937-1938 Flights to Kingman Reef
An apparent reason for issuance of Executive Order No. 6935 was to place
Kingman Reef under United States sovereignty and naval jurisdiction, so that the island
could be used for seaplane travel. To that end, in the mid-1930s, Pan American
Airways (Pan Am) began to “look aggressively to the Pacific for its further expansion”
and was granted permission to fly its sea planes to New Zealand if it could do so no
later than the end of 1936. While planning the initial test flights, Pan Am chose
Kingman Reef as the overnight stopover point between Honolulu, [Hawaii] and Pago
Pago, [American Samoa], because it formed a mid-ocean lagoon suitable for a
seaplane to land. In 1935, Pan Am’s representative, Harold Gatty, visited Kingman
Reef, where he “built a small monument on the speck of dry land” and stationed a
supply boat there to service the Pan Am Clipper seaplane.
In December 1935, the Navy granted Pan Am a “Revocable Permit” “to operate
its commercial trans-Pacific airplane service into and over and to land on the waters of
Kingman Reef and Pago Pago Harbor, American Samoa; to use certain areas at
Kingman Reef and to moor a company barge and station ship of American Registry at
Kingman Reef.” Pan Am’s first survey, round-trip flight to Kingman Reef left Honolulu
on March 23, 1937 and, after an “overnight stay at Kingman Reef, the Clipper flew on to
Pago Pago.” The Clipper returned to Kingman Reef on April 8, 1937 and continued its
flight to Honolulu on April 9, 1937.
The Clipper made a second round-trip flight in late 1937. Outbound, it landed at
Kingman Reef on December 23, 1937 and flew onto Pago Pago on December 24, 1937.
Inbound, the Clipper returned to Kingman Reef on January 2, 1938 and flew onto
Honolulu on January 3, 1938. Pan Am’s third and final Pacific flight via Kingman Reef
was in early 1938. The Clipper flew from Honolulu to Kingman Reef on January 9, 1938
and, after an overnight stay, it flew on to Pago Pago on January 10, 1938. After an
early morning take off from Pago Pago bound for New Zealand on January 11, 1938,
the Clipper exploded and was lost at sea. “After the loss of the Samoan Clipper, the
dangerous route through Kingman Reef and American Samoa was abandoned.”
On April 20, 1937, in correspondence, Leslie and Ellen Fullard-Leo wrote to the
Hawaii congressional delegate in Washington, D.C., Samuel Wilder King, regarding the
Pan Am landings at Kingman Reef. The Fullard-Leo family wrote that Kingman Reef’s
“ownership presumably rests with the State or Navy Department, since by one of these,
use of it has been given to Pan-American Airways, and has on two occasions been
used during their trial flight this month to Auckland, N.Z.” The Fullard-Leo family also
requested that Mr. King “interest[] the Government in the purchase of the Palmyra
group” for the then materializing air “route to the South Pacific.”
Moreover, specifically regarding Kingman Reef, the Fullard-Leo family stated:
“Not only did we secure this wonderful harbor for the United States but really prevented
the same being annexed for a foreign power. Meanwhile we are still paying taxes on
Kingman’s which is included in the Palmyra nominal assessment.” In closing, the
20
Fullard-Leo family presented a claim for $40,000.00, including accrued interest, to cover
the costs incurred in “annexing Kingman’s Reef” by sending their boat to Kingman Reef
three times, as well as to cover the tax payments that the Fullard-Leo family made
during the 15-year period from 1922 to 1937. Although the Fullard-Leo family sought
first to pursue their claim through their congressional delegate, they did not rule out the
possibility of making a “formal claim through legal channels,” for which the award of
anticipated legal fees would be requested.
Delegate King forwarded the Fullard-Leo family’s letter to the Secretary of the
Navy on May 19, 1937, and requested the Navy’s comment on their claim. The
Secretary of the Navy responded on May 29, 1937, recounting some of the history of
Kingman Reef and indicating that “[t]he records of the Navy Department do not indicate
that there were any vested rights on Kingman Reef in favor of private interests on the
date of the issuance of” President Roosevelt’s December 29, 1934 Executive Order.
On October 15, 1937, The Judge Advocate General of the Navy (Navy TJAG)
wrote to the Commandant, Fourteenth Naval District, United States Navy. In his letter,
the Navy TJAG requested “information as to the private ownership of or interest in
Kingman Reef and Palmyra Island as disclosed by the records of the Fourteenth Naval
District,” along with “documents bearing thereon.” In response, on December 6, 1937,
the Commandant wrote to the Navy TJAG on the subject of “Kingman Reef and
Palmyra Island in the Pacific Ocean – Private Ownership.” The Commandant recited
the history of Kingman Reef, starting first with the 1922 annexation by Mr. Thurston and
the Copra Co. Notably, he made no reference to any events regarding Kingman Reef
prior to 1922. The Commandant then wrote that receipt of the 1922 letters sent by Ellen
Fullard-Leo to the Secretary of State regarding the Copra Co.’s annexation of Kingman
Reef was “acknowledged by the Secretary of State but no mention was made of the
claim to Kingman Reef for its own use.”
In the same December 6, 1937 letter, however, the Commandant further noted
that the “Territory of Hawaii has continued to collect taxes on Kingman Reef from Ellen
and Leslie Fullard-Leo as the alleged owners of Palmyra Island and Kingman Reef
since 1923, although Kingman Reef is not accepted as a part of the Territory of Hawaii.”
In closing, the Commandant stated: “It is understood that Mr. L. Fullard-Leo is preparing
to submit a claim for ownership to Kingman Reef in the near future, based upon the
original claim of the [Copra Co.], which was financed largely by himself and his wife.”
Subsequently, on February 11, 1938, the Navy TJAG acknowledged receipt of the
Commandant’s letter of December 6, 1937, stating, “[t]he information contained therein
will be placed on file for future reference in the event a claim is made for ownership by
private parties. No such claim has been filed with the Navy Department to date.”
A few months later, on January 25, 1938, Mr. Townsend and Mr. Lewis,
attorneys for the Fullard-Leo family, sent a letter to the Secretary of State regarding
Ellen Fullard-Leo’s “interest . . . in the island known as Kingman’s Reef. . . .” On
February 12, 1938, the Department of State responded, informing Mr. Townsend and
Mr. Lewis that the letter was “transmitted to the Secretary of the Navy for his information
21
in the matter.” Subsequently, on March 29, 1938, Mr. Townsend and Mr. Lewis wrote
directly to the Secretary of the Navy to discuss the Fullard-Leo family’s claim of fee title
ownership in Kingman Reef. In that letter, Mr. Townsend and Mr. Lewis wrote:
As indicated in our letter of January 25th to the Secretary of State, it would
seem that, as a result of the Executive Order of December 29, 1934, the
Secretary of the Navy apparently concluded that the Department of State
had denied the existence of the private property interests in Kingman’s
Reef claimed by Mrs. Ellen Fullard-Leo. We trust that the letters now in
your possession will clarify the position and remove any question as to
Mrs. Fullard-Leo’s legal rights, which we propose to protect, so far as
possible, by appropriate legal proceedings. It seems unnecessary to
restate the costs incurred by Mrs. Fullard-Leo in connection with the
annexation of Kingman’s Reef for and in behalf of the United States, or to
recount the steps taken by her to establish her presently existing legal
rights to the private property interests in the atoll.
On April 26, 1938, the Navy TJAG, by direction of the Secretary of Navy,
responded to Mr. Townsend and Mr. Lewis’ letter of March 29, 1938. In that letter, the
Navy TJAG acknowledged that the Fullard-Leo family’s previous correspondence with
the Department of State “indicates that the claim of title of Mrs. Fullard-Leo is based” on
Mr. Thurston’s alleged 1922 annexation of Kingman Reef to the United States and the
Copra Co. The Navy TJAG, however, went on to dispute, and expressly reject, the
Fullard-Leo family’s claim of ownership, stating:
The records show that Kingman Reef, otherwise known as ‘Dangers
Rock,’ is a bonded guano island, it having been listed by affidavit of
Captain W.W. Taylor on February 12, 1858, and his right through several
assignments, were transferred to the United States Guano Company, and
the island was bonded on February 8, 1860 (Moore’s Digest of
International Law, Vol. 1, pp. 667-668). It will be noted that the island,
including its reefs and tide and submerged lands, was under the control
and jurisdiction of the United States long before the claim of Mrs. Fullard-
Leo arose, and by Executive Order No. 6935, dated December 29, 1934, it
was placed under the control and jurisdiction of the Navy Department.
Under the circumstances, the showing made is not sufficient to uphold the
claim of Mrs. Fullard-Leo.
Following this year long series of correspondence between the Fullard-Leo
family, and then correspondence on their behalf, and the federal government, contact
between the Fullard-Leo family and the federal government regarding Kingman Reef
appears to have ceased for several decades. The record does not appear to offer
evidence of correspondence or other contact between the Fullard-Leo family and the
federal government regarding Kingman Reef from 1938 to 1991.
22
President Roosevelt’s 1941 Executive Orders
On February 14, 1941, President Roosevelt issued Executive Order No. 8682, as
amended by Executive Order No. 8729, dated April 2, 1941, which “established and
reserved as naval defensive sea areas for the purposes of national defense,” the
“Kingman Reef Naval Defensive Sea Area” and the “Kingman Reef Naval Airspace
Reservation” by which the airspace over said territorial waters and islands were
reserved as “naval airspace . . . for the purpose of national defense.” Exec. Order No.
8682, 6 Fed. Reg. 1015 (Feb. 14, 1941). Executive Order No. 8682 established Naval
Defensive Sea Areas over the “territorial waters between the extreme high-water marks
in the three-mile marine boundaries” surrounding Kingman Reef and Palmyra,
Johnston, Midway, and Wake Islands in the Pacific Ocean, as well as Naval Airspace
Reservations of the “airspaces over the said territorial waters and islands. . . for
purposes of national defense. . . .” Executive Order No. 8682 further stated:
At no time shall any person, other than persons on public vessels of the
United States, enter any of the naval defensive sea areas herein set apart
and reserved, nor shall any vessel or other craft, other than public vessels
of the United States, be navigated into any of said areas, unless
authorized by the Secretary of the Navy. At no time shall any aircraft,
other than public aircraft of the United States, be navigated into any of the
naval airspace reservations herein set apart and reserved, unless
authorized by the Secretary of the Navy.
Executive Order No. 8729 amended the phrase the “territorial waters between
the extreme high-water marks in the three-mile marine boundaries,” in a number of
Executive Orders, including Executive Order No. 8682. Executive Order No. 8729
stated the phrase “is hereby corrected to read 'the territorial waters between the
extreme high-water marks and the three-mile marine boundaries.’” Exec. Order No.
8729, 6 Fed. Reg. 1791 (Apr. 2, 1941). Neither Executive Order No. 8682 nor
Executive Order No. 8729 addressed issues of title or ownership of Kingman Reef.
A February 7, 1941 letter from the Bureau of the Budget, Executive Office of the
President, to the Secretary of the Navy, regarding the proposed Executive Order No.
8682, stated that the Secretary of the Interior, “assumes that proper provision will be
made under the authority given the Secretary of the Navy so as to permit bona fide
residents of the areas reasonable means of transportation and communication to and
from the islands.”
Subsequently, on March 15, 1941, the Chief of Naval Operations, United States
Navy (CNO), wrote to the Navy TJAG. The CNO stated that, in preparing administrative
regulations for their respective Naval Defensive Sea Areas, “commandant[s] will be
invited to the necessity for the minimum of interference with vital industries and vested
interests.” Moreover, in an April 18, 1941 letter to the Commandant, Thirteenth Naval
District, regarding the “Administration of Naval Defensive Sea Areas and Air Space
23
Reservations,” the CNO stated:
In the administration of these areas, it is not the intention of the Chief of
Naval Operations to hamper the commandant by unnecessary regulation.
The object of the executive order was to give the commandant necessary
authority to control subversive activities and safeguard the national
defense. The amount of control necessary can best be judged by the
commandant or his representative in command locally.
Decades later, on July 14, 1976, the CNO suspended the Naval Airspace
Reservation over Kingman Reef. See 32 C.F.R. § 761.4(d) (2013). Additionally, the
CNO suspended the Naval Defensive Sea Area around Kingman Reef, except for the
entry of foreign flag ships and nationals. 41 Fed. Reg. 28,957 (Jul. 14, 1976). These
areas, however, were made “subject to reinstatement without notice at any time when
the purposes of national defense may require.” 32 C.F.R. § 761.4(d).
Despite the issuance of the Executive Orders in 1934 and 1941, plaintiff alleges
that no restrictions regarding Kingman Reef were ever implemented. To that end, Mr.
Savio, in a sworn declaration, stated:
At no time has the government ever restricted me from entering Kingman
Reef itself, its airspace or surrounding waters, nor has the government
ever indicated to me that I, acting as the Fullard-Leo family’s agent, was
not authorized or able to sell, convey or transfer any of its interest in
Kingman Reef.
Similarly, brothers Ainsley and Dudley Fullard-Leo, in sworn declarations, each stated:
At no time have I ever been physically restricted from entering Kingman
Reef, nor has the government demonstrated to me, until the taking in
January 2001, that the Fullard-Leo family and/or Kingman Reef Atoll
Investments, L.L.C. were unable to sell, convey or transfer any of its
interest in Kingman Reef.11
As noted above, the record does not offer much information on actions or contact
between the Fullard-Leo family and the federal government regarding Kingman Reef
from 1938 to 1991. The record does reflect that on November 10, 1952, the
Commander in Chief, United States Pacific Fleet, Pearl Harbor, Hawaii issued
CINCPACFLT Instruction 5521.1A, which “set[] forth detailed procedures for obtaining
and [sic] information on travel clearances required for” over fifteen islands and other
land masses, including Kingman Reef, Japan, Philippine Islands, Hong Kong, and
11
In his deposition of April 11, 2007 before the United States District Court for the
District of Hawaii, Dudley Fullard-Leo stated that he had never physically been on
Kingman Reef and had never visited it by ship, but had flown over it twice.
24
Countries and Territories in or bordering the Pacific Area. Instruction 5521.1A set forth
procedures and applications by which both United States citizens and foreign nationals,
who were not United States military personnel, could receive permission to access such
islands and land masses. With regard to Kingman Reef in particular, Instruction
5521.1A first referred to Executive Order No. 8682 of February 14, 1941 and explained
its contents. Second, Instruction 5521.1A stated that it is necessary to “obtain security
clearance” to access Kingman Reef through an established procedure,12 but further
noted that “Kingman Reef is not regularly inhabited.”
Subsequently, on November 12, 1963, the Office of the Chief of Naval
Operations issued “Regulations Governing Issuance of Entry Authorizations,” OPNAV
Instruction 5500.11C.13 These regulations reiterated that the Kingman Reef Naval
Defensive Sea Area and Naval Airspace Reservation were established by Executive
Order No. 8682 of February 14, 1941. The Navy regulation also stated that Executive
Order No. 6935 of December 19, 1934 placed Kingman Reef and its appurtenant reefs
and territorial waters under the control and jurisdiction of the Secretary of the Navy for
administrative purposes. Regarding entry authorizations, The Navy regulation stated:
Entry authorizations may be issued only after an Entry Control
Commander . . . has determined that the presence of the person, ship, or
aircraft will not, under existing or reasonably foreseeable future conditions,
jeopardize the efficiency, capability or effectiveness of any military
installation located within or contiguous to a defense area.
...
Requests for entry authorizations will be evaluated and adjudged as to
12
Instruction 5521.1A stated that the requirements to gain permission to access Guam
and the Trust Territory of the Pacific apply also to gain access to Kingman Reef. In
order to access Guam and the Trust Territory, security clearance is necessary for all
entrants, except for military and civilian personnel of the United States Armed Forces
and their dependents, civilians under contract with the armed forces, travelers in transit
without stop-over, permanent residents of the trust territories traveling within the
Territory or to Guam, and permanent residents of Guam. To receive a security
clearance and permission to enter such areas, the Navy required the party seeking
entry to submit to a background check and provide relevant background information,
including name, address, date and place of birth, alien registration number or proof of
citizenship, and employment information, as well as the duration and purpose of the
proposed visit.
13
Defendant, in the Hawaii quiet title action, Kingman Reef Atoll Investments, L.L.C. v.
United States, 545 F. Supp. 2d 1103, included updated copies of OPNAV 5500.11C,
listed as OPNAVINST 5500.11D of January 31, 1975 and OPNAVINST 5500.11E of
September 18, 1990. All versions of OPNAV Instruction 5500.11 presented to the court
contain substantially the same information regarding entry authorization to the Navy
defensive zones, including Kingman Reef.
25
whether the entry at the time and for the purpose stated will or will not be
inimical to the purposes of national defense.
On June 21, 1973, A.W. McKelvey wrote a letter to the Honorable Hiram Fong,
United States Senator, in which he stated that it has come to his “attention that the
Kingman Reef is under the control of the United States Navy.” In order to establish a
commercial fishing operation in the Line Islands, Mr. McKelvey sought information
regarding “who to contact in the Navy Department in order to obtain permission to fish
on and about Kingman Reef.” In response, Senator Fong directed Mr. McKelvey to
Joseph Samartino, Director, Real Estate Division, Commander Naval Facilities
Engineering Command, Headquarters, Commander in Chief. The parties have neither
made reference to, nor presented further documentation to the court, regarding contact
between Mr. McKelvey and the Navy concerning Kingman Reef.
On August 2, 1973, the Navy issued a memorandum in which it stated that if
permission to enter Kingman Reef is to be granted, then it suggests specifying that
there be “[p]ole and/or net fishing only. No permanent structures on atoll. Effect
necessary [Coast Guard] + Navy notification.”
The Status of Kingman Reef During the 1990s
On January 23, 1991, the Commander in Chief, United States Pacific Fleet, Pearl
Harbor, Hawaii issued CINCPACFLTINST 5450.74C, which instructed the Commander
of the Naval Base at Pearl Harbor to “[s]erve as Entry Control Commander with
authority to approve or disapprove . . . authorization for all persons, ships, and aircraft to
enter Kingman Reef.”
On July 26, 1991, TNC, a private nature preservation organization, and the FWS
met with Peter Savio, agent for the Fullard-Leo family and member/manager of KRAD,
to discuss the sale and development of Palmyra Atoll and Kingman Reef. In an August
19, 1991 memorandum discussing the minutes from the July 26, 1991 meeting, James
E. Maragos, Director, Conservation Science, of TNC’s Pacific Regional Office, wrote
that the buy-out option of the Fullard-Leo family’s ownership interest in Kingman Reef
proposed by Mr. Savio, who also informed the TNC of the Fullard-Leo family’s
ownership claim, should be seriously considered. Mr. Maragos further noted: “Transfer
of Kingman Reef by the owners to the USFWS could also serve as compensation or
mitigation for other impacts, and the USFWS is keenly interested in Kingman.”
Although defendant asserts that TNC was not acting as the government’s agent
in any dealings it had or may have had with Mr. Savio or others, representatives from
the FWS were present at the July 26, 1991 meeting and were included on the August
19, 1991 memorandum. Additionally, in a sworn declaration, Mr. Savio stated:
I specifically recall that during that meeting the U.S. Fish and Wildlife
Service (“FWS”) stated that it was keenly interested in Kingman Reef, and
that we discussed whether the Fullard-Leo family would be interested in
26
selling both Palmyra Atoll and Kingman Reef to TNC or the government.
No one at the meeting questioned the Fullard-Leo family’s legal title to
Kingman Reef or suggested that the government owned Kingman Reef.
Additionally, in the August 19, 1991 memorandum, TNC reiterated Mr. Savio’s
position regarding the relationship between the Fullard-Leo family and the federal
government:
The owners are nervous about collaborating with the federal government
due to previous misfortunes. . . . If Savio pulls out of the project, then the
owners would not want USFWS/TNC as partner for further attempts at
development and conservation. The owners are concerned that the
federal government may try to condemn [Palmyra Atoll] once the feds
have a foothold. . . .
Additional evidence of subsequent discussions specifically regarding Kingman
Reef in the years immediately following the 1991 meeting between Mr. Savio, TNC and
FWS, was not presented to the court. It appears from the record that discussions
regarding the conservation of Kingman Reef actively resumed in 1997.
On December 15, 1992, Lieutenant Commander Rick Russell, United States
Navy, Pearl Harbor, contacted P. Ha and Andy Yuen at the FWS regarding the granting
of access to Kingman Reef. The record of the telephone conversation stated:
Lt. Commander Russell called to let us know that he is the person to talk
to regarding permission to go to Kingman Reef.
He called with respect to the Ham Radio expedition to Kingman that is
being planned. There seems to have been a mix-up with the information
about who has jurisdiction over Kingman Reef. It is not Peter Savio. The
Navy (COMNAVBASE Pearl Harbor) has administrative jurisdiction over
Kingman Reef by delegated authority under [Executive Order] 6935[,] 29
December 1934. (Kingman is “reserved reefs”). Lt. Commander Russell
just wanted to clarify the issue. He will call Peter Savio to inform him.
The parties neither referenced, nor provided the court with, documentation of
further contact between Commander Russell, Mr. Savio, Mr. Ha or Mr. Yuen regarding
this particular issue. Specifically, the parties have neither alleged nor presented
evidence to the court that Commander Russell actually contacted Mr. Savio to restrict
Mr. Savio from granting access to Kingman Reef to third parties.
On March 7, 1994, John D. Clouse contacted the Commander of the Pearl
Harbor Naval Base, seeking entry and transportation to Kingman Reef. In response, on
March 18, 1994, Commander Russell informed Mr. Clouse that the Navy could not
provide transportation to Kingman Reef. Mr. Clouse was informed, however, that he
could enter Kingman Reef, by his own boat charter, after Commander Russell
27
processed the attached form application (i.e., permit) for entry of ships into areas within
the jurisdiction of the Navy at Pearl Harbor. The parties neither referenced, nor
provided the court with, documentation of further contact between Mr. Clouse and the
Navy.
On May 28 and 30, 1996, Michal Mickelwait of the Honolulu Sailing Company
wrote the Commander of the Pearl Harbor Naval Base, on behalf of a group of travelers
seeking to literally set foot on every territory and island group in the Pacific. Mr.
Mickelwait specifically sought permission for the group to enter Kingman Reef. On May
18, 1996, G.D. Jensen, Captain, United States Navy responded to Mr. Mickelwait’s
request in a letter which granted permission for the group to enter Kingman Reef, during
daylight hours, for a maximum duration of four hours. The parties did not present the
court with evidence that Mr. Mickelwait’s group ever actually entered Kingman Reef.
Similarly, on October 6, 2000, P. Borkowski, Lieutenant Commander, United
States Navy wrote a letter to David Johnson, granting permission for the ship, M/V
Machias, to enter Kingman Reef from October 20, 2000 until November 1, 2000 to
“conduct natural history surveys and to engage in amateur radio activities.” The record
does not contain evidence that the M/V Machias actually entered Kingman Reef.
It also appears that between 1991 and 1997 the Fullard-Leo family attempted to
sell to, or jointly develop, Kingman Reef with the State of Hawaii or City of Honolulu. To
that end, on August 4, 1994, Leigh-Wai Doo, Councilmember, City Council of the City
and County of Honolulu, wrote to Ainsley and Dudley Fullard-Leo, as well as to Peter
Savio, thanking them for
sharing with me your time and openness of Hawaii government acquisition
of Palmyra Atoll and Kingman Reef. I continue in my strong belief, desire
and effort to see Hawaii State or Honolulu City and County acquisition, or
at least jointly plan with you[,] Palmyra Atoll and the Kingman Reef. In the
coming five months remaining in my City Council term I hope we achieve
success to these ends.
Plaintiff alleges that this letter is evidence that the Hawaii state government recognized
the validity of the Fullard-Leo family’s claim of fee title ownership in Kingman Reef.
The Establishment of the Kingman Reef NWR
In the late 1990s, the federal government appears to have renewed its interest in
Kingman Reef. Beginning in October 1997, the FWS began to develop and issue
proposals regarding the proposed establishment of the Kingman Reef NWR. On
October 2, 1997, Jamie Rappaport Clark, then Director of the FWS granted approval to
the Regional Director, Region 1, FWS to “proceed with detailed planning” on the
establishment of the Palmyra Atoll and Kingman Reef NWRs. Attached to that
memorandum was an August 1997 Preliminary Project Proposal, which noted:
28
[a] Explorers wishing to visit Kingman Reef must secure permission from
the Fullard-Leo family and the U.S. Coast Guard.
[b] Kingman Reef was annexed on behalf of the United States in 1922, by
the Palmyra Copra Company (Fullard-Leo family), and the family claims
ownership. It is an unincorporated U.S. possession administered by the
U.S. Department of the Navy. The Service [FWS] is proposing to study
fee title acquisition of Kingman Reef from the center of the atoll to the 3-
nautical mile limit.
[c] The Landowners are reportedly willing to sell their lands to prevent
heirs from acquiring a large inheritance tax debt.
[d] [T]he price for fee title to Kingman Reef is unknown. Due to the
negligible commercial real estate value, it might be possible to include it in
the purchase price negotiated for Palmyra.
Next, on October 3, 1997, Robert P. Smith, Pacific Islands Manager for the FWS
sent a handwritten facsimile to Mr. Savio in which he stated:
Peter, the attached represents approval from our director in Washington,
Jamie Clark, to proceed with detailed planning necessary for our
acquisition. Note that we desire to acquire both Palmyra and Kingman, if
that is the sellers’ desire. I will transmit this to Col. Ralph Graves of the
Corps with a cover letter emphasizing the need to do clean-up work [at
Palmyra Atoll].
Concurrently, on October 3, 1997, Mr. Smith also wrote a letter to Lieutenant
Colonel Ralph H. Graves, Honolulu District Engineer, United States Army Corps of
Engineers, Fort Shafter, Hawaii. Mr. Smith noted that the enclosed memorandum from
Mr. Clark gave approval for the FWS to “begin detailed planning toward (hopefully)
acquisition of Palmyra Atoll and Kingman Reef as units of the National Wildlife Refuge
System.” Mr. Smith continued to write that the FWS is working closely with Mr. Savio,
“a local realtor who represents the interests of the majority owners[,]” as well as TNC,
and he “at this point foresee[s] TNC actually tendering an offer to buy the property. If
that is successful, the Service will repay TNC in the future with dollars appropriated by
Congress through the Land and Water Conservation Fund.”
Regarding the defendant’s alleged recognition of fee title ownership in the
Fullard-Leo family, Mr. Smith stated, in an April 2, 2007 deposition in the District Court
for the District of Hawaii case, Kingman Reef Atoll Investments, L.L.C. v. United States,
that “[f]rom ‘91 until certainly ’97 . . . certainly [he] believed that the Fullard-Leo family
owned Kingman Reef,” and that no one in his presence stated that the Fullard-Leo
family did not own Kingman Reef. Mr. Smith, however, indicated that on a second
expedition to Palmyra Atoll, in 1998, he had changed his position regarding the claim of
fee title ownership by the Fullard-Leo family in Kingman Reef. Mr. Smith stated that
29
between 1997 and 1998:
The Nature Conservancy’s attorney, Suzanne Case, had done extensive
research on the ownership of Kingman; because [Mr. Smith] was then and
probably continued to be . . . a cheerleader for getting both properties and
both nearby marine environments. . . . [Ms. Case’s] research revealed that
the Fullard-Leo family, at least in her view, did not own Kingman Reef.
Although without offering any additional foundation for his conclusions, Mr. Smith further
stated that following the 1998 expedition, the Realty Division of the FWS decided that,
“in the view of the government,” Ms. Case’s research was correct and that the Fullard-
Leo family did not hold title to Kingman Reef.
An October 17, 1997 report issued by NOAA, however, acknowledged the
ownership by the Fullard-Leo family of Kingman Reef:
The Fullard-Leo family owns Palmyra Island and Kingman Reef, and may
claim ownership or jurisdiction over ocean resources and/or submerged
lands seaward of the low-water mark.
The exact extent of the Fullard-Leo claims is not clear, probably extending
to the lagoons and reefs surrounding the islands, and perhaps extending
to the “territorial” waters. Federal submerged lands around these areas
were not conveyed to the Fullard-Leo family. It is the position of the
Federal Government that the EEZ [Exclusive Economic Zone] around
Palmyra and Kingman extends to the low-water mark.14
Further, in his November 1997 “Report to the Chairman, Committee on
Resources, House of Representatives, United States Insular Areas, Application of the
United States Constitution,” the Associate General Counsel of the United States
14
Defendant admits that the August 1997, October 2, 1997 and October 3, 1997
documents, produced by FWS, referenced above, are accurately quoted. Defendant,
however, argues that any “preliminary” reports, documents or letters, including a 1997
proposal to study fee title acquisition of Kingman Reef that FWS issued in connection
with the process for determining whether to designate Kingman Reef as a National
Wildlife Refuge must be interpreted in light of subsequent investigations undertaken in
connection with that determination and the issuance of any final reports and decisions
regarding Kingman Reef. Defendant further asserts that subsequent investigations
confirmed that the United States was the owner of Kingman Reef and that the claims of
private ownership asserted by the Fullard-Leo family and related entities were invalid.
Defendant also has stated that the author of the October 17, 1997 NOAA report was not
charged with investigating or otherwise assessing title to Kingman Reef and had no
authority to claim or disclaim title to federal property. Finally, defendant states that the
NOAA statement that the Fullard-Leo family owns Kingman Reef is incorrect.
30
General Accounting Office (GAO), the investigative arm of Congress, specifically noted
that Kingman Reef had been claimed by the Fullard-Leo family. Id. at 9.15 First, the
GAO noted that seven of the nine United States insular areas,16 including Kingman
Reef, were initially claimed for the United States under the Guano Islands Act of 1856,
codified at 48 U.S.C. §§ 1411-1419. Report to the Chairman, Committee on Resources,
House of Representatives, United States Insular Areas, Application of the United States
Constitution, at 10. The GAO stated, however, that, “[a]lthough claims were made to
Palmyra Atoll and Kingman Reef under the act, the presence of guano in either area is
doubtful.” Id. at 39 (citing Legal Advisor’s Office, U.S. Department of State, The
Sovereignty of Islands Claimed Under the Guano Act and of the Northwest and
Hawaiian Islands, Midway, and Wake at 612-15, 624-25 (1933)). In fact, the GAO
reiterated that “Palmyra previously had been claimed in 1860 under the Guano Islands
Act. The claim, however, does not appear to have been accepted as valid. It is unlikely
that the claimant landed on the island or that there was even any guano on it.” Report
to the Chairman, Committee on Resources, House of Representatives, United States
Insular Areas, Application of the United States Constitution at 41 n.9 (citing The
Sovereignty of Islands Claimed Under the Guano Act and of the Northwest and
Hawaiian Islands, Midway, and Wake at 612-15, 875).
With specific regard to Kingman Reef, the GAO report concluded:
First discovered in 1798 by an American whaler, Kingman Reef was
claimed in 1860 by the U.S. Guano Company, although there is no
evidence that guano existed or was ever mined there. The atoll was
claimed again in 1922 by Lorrin Thurston on behalf of the Palmyra Copra
Company for use as a fishing base. The State Department concluded in
1933, in a study of islands claimed under the Guano Islands Act, that
claims made under the act to Kingman Reef were not valid. However, an
American had initially discovered Kingman and no other nation claimed it.
In 1934, President Franklin Roosevelt placed the reef under the control of
the Navy, formally asserting American rights to it. During World War II,
Kingman was included in a naval defensive area established by President
15
The draft of the GAO report was submitted to the Department of Interior, Department
of Justice, and Department of State for comment. “Each of these agencies and offices
generally agreed with the information and issues discussed in [the] draft report and
offered technical comments, which [were] incorporated in the report as appropriate.”
Specifically, on July 3, 1997, the Department of Interior “commend[ed the GAO] on the
report’s content and accuracy.” The GAO “modified the report to reflect the Department
of the Interior’s comments,” including those from the Office of Insular Affairs and the
FWS.
16
The nine small insular areas are Palmyra Atoll, Navassa Island, Johnston Atoll, Baker
Island, Howland Island, Jarvis Island, Kingman Reef, Midway Atoll, and Wake Atoll. All
islands except for Midway Atoll and Wake Atoll were claimed under the Guano Islands
Act.
31
Roosevelt. In 1950, the Congress enacted a law making Kingman Reef,
along with several other insular areas, subject to the jurisdiction of the
U.S. District Court in Honolulu for purposes of any criminal or civil cases
that might arise there.
Id. at 57-58.
Regarding the Fullard-Leo family’s claim of fee title ownership to Kingman Reef,
the GAO noted that although Mr. Savio informed the GAO that the Copra Co. ceded all
rights to Kingman Reef to the Fullard-Leo family in 1922, “Navy personnel searching
Hawaiian land records in 1986 were unable to locate a formal record of a conveyance of
Kingman Reef to the Fullard-Leos,” although recording may not have been required.
In an August 12, 1997 letter regarding the 1997 GAO report, however, T.E.
Manase Mansur, Advisor on Insular and International Affairs to the United States House
of Representatives, Committee on Resources, thanked Mr. Savio for “sending the
information clarifying the rightful title of the Fullard-Leo’s to Palmyra and Kingman Reef.
The brief is well documented regarding the basis for clear title to the entire area of
Palmyra and Kingman, including surrounding reefs.” Mr. Mansur continued:
The House of Representatives has designated the Committee with
primary jurisdiction for all territories. There is considerable interest in
Congress in insuring that private property rights of U.S. citizens are
protected. That certainly includes the Fullard-Leo’s rights to Palmyra and
Kingman currently and under any future legislation which would affect the
formal jurisdiction of these islands.
Subsequently, on October 26, 2000, the United States Senate Committee on
Appropriations sent letters to the Secretary of the Department of the Interior, Bruce
Babbitt, and the Secretary of the Department of Agriculture, Daniel Glickman, informing
them that Congress provided an “additional $179 million for high priority land
acquisitions,” $130 million of which was provided to the Department of the Interior (DOI)
pursuant to the “Department of the Interior and Related Agencies Appropriations Act,
2001.” Pub. L. No. 106-291, 114 Stat. 922 (2000). Apparently, DOI had requested
$8.25 million for the purchase of “Palmyra Atoll/Kingman Reef (HI).”
Earlier, on October 6, 1999, Michael Killian, United States Navy, sent an email to
Steven M. Dong, United States Navy, regarding information requested on Kingman
Reef by the Deputy Assistant Secretary of the Navy, W.J. Cassidy. In his response, Mr.
Killian wrote that:
Navy was designated the responsible federal agency to “own” Kingman
Reef for lack of any other appropriate interested agencies. We are stuck
with it. If now, we have another interested agency such as USFWS, then
Navy should have no problem transferring custodial responsibility to DOI.
As long as it is in federal ownership, Navy can deal with national security
32
concerns involving the island. I am unaware of any Navy usage in recent
history. It may have been occupied during WWII.
Subsequently, a March 30, 2000 Briefing Statement prepared for the Director of
FWS, titled “Kingman Reef Ownership Status and Federal Jurisdictions,” stated:
Kingman Reef is an unorganized and unincorporated U.S. possession.
The U.S. acquired sovereignty over Kingman Reef pursuant to the Guano
Act of 1856. Fee title interest rests with the Federal Sovereign. It is
currently under the jurisdiction of the U.S. Navy.
The Fullard-Leo family is claiming private ownership. In 1922, the
American flag was hoisted over Kingman Reef at the request of the
Fullard-Leo family for the purpose of taking formal possession. This is the
same family that owns Palmyra Atoll, and whose ownership was
confirmed by the Supreme Court decision, United States v. Fullard-Leo,
331 U.S. 256 (1947) - the case did not address Kingman Reef. Recently,
The Nature Conservancy obtained a purchase agreement for Palmyra
Atoll.
People wishing to visit Kingman Reef must secure permission from the
Fullard-Leo family. However, the U.S. government does not recognize the
family’s imputed right to act in this manner.
In closing, the Briefing Statement observed, as an ongoing concern, “the private
ownership claims made by the Fullard-Leo family, though unsubstantiated, may need to
be resolved. . . .”
Subsequently, on August 25, 2000, the Department of the Navy transferred
“[c]ontrol over and administrative jurisdiction of Kingman Reef, together with all reefs
surrounding such island” to the DOI. At the time, the Navy determined that Kingman
Reef was “excess” to Department of Defense requirements and that the property was
“suitable for transfer to another Federal agency.” On September 1, 2000, the DOI
acknowledged the acceptance of transfer, subject to President Roosevelt’s Executive
Orders of 1934 and 1941.
Next, on December 11, 2000, FWS issued a Draft Environmental Assessment
(Draft EA) and draft Conceptual Management Plan for the proposed Kingman Reef
NWR. FWS also sought public comments on the proposal for a 30 day public comment
period, ending January 11, 2001, following the release of the Draft EA. In the Draft EA,
the FWS wrote that it “will acquire land and water interests including, but not limited to,
fee title, easements, leases, and other interests. Donations of desired lands or interests
are encouraged. At Kingman Reef, the interest necessary to ensure the ability to
properly manage the resources is Service [FWS] ownership of the reef and associated
submerged lands and waters within the proposed Refuge boundary.”
33
In section 2.1 of the Draft EA, titled “Overview of Kingman Reef,” FWS recounted
the history of Kingman Reef, stating that Captain Fanning first discovered the island in
1798 and that Captain Kingman, for whom it was named, visited in 1853. Id. at 2-1. The
FWS continued: “The U.S. annexed the reef in 1922, and in 1934 delegated jurisdiction
to the Navy.” Id. The report neither references the Guano Islands Act nor the United
States’ claim of ownership under the Guano Islands Act. Further, the report does not
describe the manner by which the United States annexed Kingman Reef in 1922 and
there is no discussion of Mr. Thurston’s voyage to Kingman Reef.
In section 2.3.1 of the Draft EA, “Affected Social and Economic Environment:
Ownership,” the FWS wrote:
Kingman Reef is not part of any state (U.S. GAO 1997). The atoll is a
United States unincorporated territory without an organic act, which is
currently subject to control by the U.S. Navy. For the past 59 years, the
reefs and waters of the territorial sea (within 12 nautical miles of the
extreme high tide mark) have been reserved as a Naval Defensive Sea
Area for the purpose of national defense (E.O. 8682 dated February 14,
1941). At such time as Kingman Reef is no longer needed for military
purposes and the Navy terminates its military use, the Department of the
Interior would regain full jurisdiction. The Service [FWS] would
subsequently establish the Refuge through a Secretarial Order
transferring jurisdiction and control from the Office of Insular Affairs to the
Service [FWS].
Id. at 2-2.
In section 4.2.1 of the Draft EA, “Effects of the Alternatives on the Social and
Economic Environment: Effects of the alternatives on ownership,” regarding the
alternatives of taking no action or establishing a NWR at Kingman Reef, the FWS wrote:
Both alternatives would continue the Federal ownership at Kingman Reef,
and waters of the territorial seas. If the Navy extinguishes its use
reservation, under [the No-Action Alternative], jurisdiction and control
would revert to the Office of Insular Affairs. If the Navy extinguishes its
use reservation, under [the Refuge Alternative], Kingman Reef and the
waters of the territorial sea would be transferred to the Service [FWS] for
use as a National Wildlife Refuge.
Id. at 4-1. In Table 4-1 of the Draft EA, the FWS wrote that if the No-Action Alternative
were taken, “Kingman Reef would remain under the control of the U.S. Navy,” but that, if
the Navy extinguished its use reservation, the Office of Insular Affairs would acquire
jurisdiction. Id. at 4-4. But, if the NWR were established, “Kingman Reef would remain
under Federal jurisdiction. If the Navy extinguished its use reservation, the Service
[FWS] would acquire jurisdiction.” Id.
34
In section 2.3.4 of the Draft EA, “Public use and visitation,” the FWS wrote: “No
permits have been recently issued by the Navy for members of the public to visit
Kingman Reef.” Id. at 2-3. The FWS also stated, at section 4.2.2, “Effects of the
alternatives on land use and the local economy,” that “[u]nder the No-Action
[A]lternative, access to and use of Kingman Reef and its surrounding waters would
continue to be regulated by the Navy and reserved for military use.” Id. at 4-1. At
section 4.2.3, FWS wrote, “at present, there is no commercial fishing authorized by the
Navy.” Id. at 4-2. At 4.2.4, FWS wrote that “[u]nder the No-Action alternative, access to
Kingman Reef would continue to be restricted by the Navy within the territorial sea.” Id.
Further, in section 3.5 of the Draft EA, the FWS stated that the establishment of
the NWR with a boundary of 12 nautical miles from reefs awash at mean low tide, rather
than taking no action, “would allow the Service [FWS] to provide long-term conservation
and management of coral reef and other marine and terrestrial resources at Kingman
Reef in perpetuity.” Id. at 3-2, 3-4.
Following the release of the Draft EA, the FWS issued a news release, on
December 12, 2000, titled “Public Comments Sought on Kingman Reef National Wildlife
Refuge Proposal.” The release specifically stated:
Kingman Reef is an unincorporated United States territory currently
administered by the U.S. Navy. For the past 59 years, its reefs and
waters have been reserved as a Naval Defensive Sea Area. The Navy is
considering relinquishing its administration and returning it to the U.S.
Department of the Interior.
Additionally, FWS wrote that the “Navy has not authorized fishing within its naval
defensive seas, though a low level of commercial fishing for sharks and big-eye and
yellow-fin tuna occurs within the 200-nautical mile Exclusive Economic Zone outside the
Navy’s jurisdiction.”
Concurrent with the news release, a newspaper article by Harold Morse
regarding the proposed Kingman Reef NWR appeared in the Honolulu Star-Bulletin on
December 13, 2000 regarding the proposed Kingman Reef NWR, which quoted FWS
officials stating that Kingman Reef was “[f]ormally annexed by the United States in
1922, it became a U.S. Naval Reservation in 1934. Pan American World Airways used
it in 1937-38 as a station for seaplanes flying between Hawaii and New Zealand.”
Harold Morse, Plan would turn Navy’s isolated Kingman atoll into refuge, Honolulu Star-
Bulletin, Dec. 13, 2000. The article neither made mention of the Fullard-Leo family or
their claim to Kingman Reef, nor stated who or which entity held ownership to Kingman
Reef. Id.
On November 17, 2000, the Fullard-Leo family quitclaimed “[a]ll of Grantor’s
rights, title and interest in” Kingman Reef to KRAI. The same day, KRAI leased
Kingman Reef to KRAD for a period of seventy years. In addition, with KRAI’s consent,
KRAD entered into a license agreement with KRE. The license agreement stated:
35
The intent of the parties is that Licensee [KRE] shall have the exclusive
right to use Kingman Reef for commercial fishing and related transport
and support operations, as set forth in this Agreement, and that Licensor
[KRAD] shall not allow Kingman Reef to be used for such operations by
any others.
The license agreement indicated that Kingman Reef “is a possession of the United
States and subject to federal laws, but it is not subject to the laws of any state (including
the State of Hawaii) or county (including the City and County of Honolulu).” Section
1.08 of the license agreement, however, addressed the fact that ownership of Kingman
Reef either was or might become contested, stating:
Section 1.08 Agreement Subject to Rights and Reservations of
Others.
(1) Licensor [KRAD] hereby discloses, and Licensee [KRE]
acknowledges, that the federal government may have
asserted or may assert claims regarding the ownership of
Kingman Reef and its lagoons and territorial waters,
which claims the Master Lessor [KRAI] disputes.
Licensee acknowledges and agrees that Licensor has not
made and does not hereby make any representations or
warranties, express or implied, regarding the nature or
extent of Licensor’s or Master Lessor’s interest in
Kingman Reef or in the lagoons or territorial waters
thereof. Without limiting the generality of the foregoing,
Licensor hereby discloses and Licensee hereby
acknowledges, that while the Master Lessor believes that
the Master Lessor has rights to Kingman Reef, the nature
of the Master Lessor’s interest in Kingman Reef has not
been determined. All of Licensee’s rights under this
Agreement shall be solely as specified in this Agreement,
and Licensee acknowledges and agrees that this
Agreement is subject to the extent of Master Lessor’s
interest in Kingman Reef. . . .
The parties agreed that, if KRE’s permitted activities under the license agreement were
materially disrupted by “any person or governmental authority,” KRE could terminate the
license agreement, provided that they made all outstanding payments.
Following issuance by the FWS of the Draft EA and Conceptual Management
Plan in December 2000, KRAI and KRAD, as well as other interested parties, requested
that the time for public comment be extended by thirty days. DOI denied those
36
requests.17
In their January 11, 2001 joint letter to the FWS, the Fullard-Leo family, KRAI,
KRAD, KRE and Palmyra Pacific Seafoods stated:
Creation of the NWR will result in a direct taking and confiscation of
private property in violation of the Fifth Amendment to the United States
Constitution. . . . The EA, allegedly supporting the creation of the NWR,
contains numerous errors, inconsistencies, omissions and
misrepresentations. The EA is fatally flawed and cannot form the
foundation for any final agency action. In particular, the EA conceals from
the public the fact that Kingman Reef is privately owned by [the] Fullard-
Leo Family and that the Fullard-Leo Family is the undisputed owner of
Kingman Reef. The omission of this key fact, on its face, appears to be a
bad faith effort by FWS to confiscate extremely valuable private property
and push this proposed matter through on an accelerated track prior to the
new Bush administration taking office.
On January 11, 2001, Carolyn Bohan, Regional Chief, National Wildlife Refuge
System at FWS responded to the Fullard-Leo family and KRAI’s letters of December 22,
2000 and January 4, 2001. The FWS wrote:
We made the decision not to extend the comment period because it is not
the means to resolve a title issue. The end result of our planning process,
if the decision is made to proceed with a refuge, is an approved refuge
17
Parties that requested a thirty day extension to the public comment period for the
proposed Kingman Reef NWR included the Fullard-Leo family, KRE, Palmyra Pacific
Seafoods, L.L.C. (PPS), and the Western Pacific Regional Fishery Management
Council (WPRFMC). KRE’s December 19, 2000 letter to the National Wildlife Refuge
System notified the organization of a potential direct and regulatory taking because
“KRE holds inchoate contractual fishing rights” within the 12 mile area extending from
the low water mark at Kingman Reef, which is to be included in the NWR, and that
“[e]stablishment of the refuge would also eliminate KRE’s contractual rights to establish
a base camp operation at the atoll.” PPS, in a December 19, 2000 letter to the National
Wildlife Refuge System stated that, “PPS has made a significant investment in
obtaining, developing and operating its commercial fishing operation from the Palmyra
Atoll and within the ocean waters around Kingman Reef. It is PPS’ understanding that
both Palmyra and Kingman are privately owned by the Fullard-Leo family of Hawaii.
PPS is operating under rights granted to it by the Fullard-Leo family.” The WPRFMC,
on December 29, 2000, wrote to the FWS regarding Kingman Reef, stating that
“ownership of the island may be vigorously contested in court, and in connection with
this there are other legal issues concerning rights to commercial fishing around the
island.” Despite the denial of the extension, KRAI and the Fullard-Leo family timely
submitted their comments to FWS in letters dated December 22, 2000, January 4, 2001,
and January 11, 2001.
37
boundary within which we will have authority to acquire lands and waters.
After a boundary is approved, title to lands can and often does change.
Title issues can continue to be raised and resolved. . . .
Your letters assert that the Fullard-Leo family are [sic] the owner of
Kingman Reef. After reviewing the matter, we have found no
substantiation to this claim. In 1934 and again in 1941, Kingman Reef
was reserved, set aside, and placed under the control and jurisdiction of
the Department of the Navy by Executive Orders. . . .
We are aware of no evidence that the claim the Fullard-Leo family is
asserting was ever recognized by the United States. In addition, we are
aware of no evidence that the Fullard-Leos have, subsequent to the 1934
Executive Order, challenged the claim of the United States to Kingman
Reef.
We need adequate, documented proof of ownership. . . . We will
acknowledge [the Fullard-Leo and KRAI] claim in the final revisions to our
environmental assessment; but unless we receive acceptable, written
proof of ownership, our position will continue to be that Kingman Reef is
Federally owned.
On January 17, 2001, the FWS issued a Finding of No Significant Impact
(FONSI), which concluded that the establishment of the Kingman Reef NWR was “not a
major Federal action that will significantly affect the quality of the human environment
within the meaning of section 102(2)(C) of the National Environmental Policy Act of
1969 [(NEPA)], as amended.” National Environmental Policy Act of 1969, 42 U.S.C. §
4321 et seq. (2012). The FONSI stated:
A private entity claimed to own title at Kingman Reef. The Service [FWS]
requested that the Office of Solicitor, Department of the Interior, review the
documents provided by the legal firm representing the claimants. The
Solicitor believes the claim is not legally valid. Therefore, the proposed
Refuge would not result in a significant adverse economic or regulatory
taking on the private entity.
The FONSI continued: “The first recorded western contact at Kingman Reef was
by an American seaman, Captain Fanning, in 1798. The Reef was named after Captain
Kingman, who visited in 1853. The U.S. annexed the reef in 1922, and in 1934
delegated jurisdiction to the Navy.” (citations omitted). The FONSI further stated:
A private entity challenged the government’s claim to title at Kingman
Reef. Although the Service [FWS] is aware of previous claims of
ownership by a private entity, the Navy’s title research in the past
(reported in GAO 1997) and our own title research did not find evidence
to substantiate the claim. During the public comment period, the private
38
party provided documentation regarding their ownership claim. The
documents were reviewed by the Department of the Interior’s Office of
the Solicitor. The Solicitor believes that the legal title holder of record is
the Department of the Interior, with a reservation in favor of the U.S.
Navy.
On January 18, 2001, one day after the issuance of the FONSI, Secretary of the
Interior Bruce Babbitt signed Secretarial Order No. 3223, which established the
Kingman Reef National Wildlife Refuge, consisting of emergent areas of Kingman Reef
and also of its surrounding submerged lands and waters out to the twelve (12) nautical
mile Territorial Sea Boundary,” to be administered by the Director of the FWS in a
manner consistent with Executive Order No. 6935 of 1934 and Executive Order Nos.
8682 and 8729 of 1941.18 The Kingman Reef NWR consists of “the emergent areas of
Kingman Reef and also its surrounding submerged lands and waters out to the twelve
(12) nautical mile Territorial Sea Boundary.”
On January 6, 2009, by Presidential Proclamation, the Pacific Remote Islands
Marine National Monument was created, which included Kingman Reef. Proclamation
No. 8336, 74 Fed. Reg. 1565 (Jan. 6, 2009). The Presidential Proclamation noted that
Palmyra Atoll is a classic Darwinian atoll that formed atop a sinking
Cretaceous-era volcano. Kingman Reef formed in the same manner but is
considered an atoll reef because it lacks permanent fast land areas or
islands. Kingman Reef contains a sheltered lagoon that served as a way
station for flying boats on Hawaii-to-American Samoa flights during the
late 1930s. There are no terrestrial plants on the reef, which is frequently
awash, but it does support abundant and diverse marine fauna and flora.
Palmyra Atoll is managed by the United States Fish and Wildlife Service
as a wildlife refuge.
In 2001, the Secretary of the Interior established National Wildlife Refuges
at Palmyra Atoll and Kingman Reef. Palmyra Atoll and Kingman Reef are
known to be among the most pristine coral reefs in the world, with a fully
structured inverted food web. Kingman Reef is the most pristine of any
reef under U.S. jurisdiction. They are ideal laboratories for assessing
effects of climate change without the difficulty of filtering anthropogenic
impacts. Both Palmyra Atoll and Kingman Reef support higher levels of
coral and other cnidarian species diversity (180-190 species) than any
other atoll or reef island in the central Pacific, twice as many as are found
in Hawaii or Florida.
18
As an example of the implementation of the Kingman Reef NWR, FWS issued a
“Special Use Permit” to Rusty Brainard, Ph.D., on December 29, 2005, which permitted
Dr. Brainard to “conduct quantitative assessments and monitoring of shallow reef fish
assemblages at . . . Kingman Reef NWR[]” from January 1 to April 30, 2006.
39
Id. at 166-67.
Palmyra Island
Ownership of Palmyra Island, another atoll which lies approximately 33 nautical
miles from Kingman Reef, also was litigated by the Fullard-Leo family and the United
States. Palmyra Island is comprised of more than fifty islets, “many of which are
covered with trees and tropical vegetation, surrounding three deep-water lagoons.” See
United States v. Fullard-Leo, 66 F. Supp. 774, 775 (D. Haw. 1940), rev’d, 133 F.2d 743
(9th Cir.), cert. denied, 319 U.S. 748 (1943). In 1862, Johnson Wilkinson and Zenas
Bent, citizens of the Kingdom of Hawaii, “made a ‘representation’ concerning Palmyra
Island to the King,” of Hawaii at a meeting of the Cabinet Council, the full substance of
which is unknown, but a transcript of the meeting indicates requested that the island
“should be considered a Hawaiian possession & be placed under the Hawaiian Flag.”
Id. The Minister of the Interior wrote to Messrs. Wilkinson and Bent, stating that that
King’s government “consent[ed] to the taking of possession of the island of Palmyra,”
and forwarding an “Authority under Royal Sign” to Mr. Bent to take possession of the
island. See id. Mr. Bent wrote to the King and the Minister of Interior on June 16, 1862,
saying, “I took possession of Palmyra Island, in the name of His Majesty; and according
to my instructions, I erected on the island a pole, with the Hawaiian flag wrapped round
it; and I interred at the foot of it a bottle well corked, containing a paper signed by
me. . . .” Id. at 776. The Minister of Interior issued a proclamation stating that Palmyra
Island “was taken possession of, with the usual formalities, by Captain Zenas Bent, he
being duly authorized to do so, in the name of” the King. Id.
Mr. Bent and Mr. Wilkerson evidently believed that, by taking possession of
Palmyra Island, albeit in the name of the King, they had acquired title to the island. In a
deed, which was recorded in 1885, Mr. Bent conveyed all of his interest in Palmyra to
Mr. Wilkerson. Between 1885 and 1912, title purportedly passed among a number of
parties, but in 1912, Henry E. Cooper filed a petition in the Land Court of the Territory of
Hawaii, claiming ownership of Palmyra Island in fee simple and requesting registration
of his title. See id. at 777-78. The Territory of Hawaii was summoned as a party
respondent in the proceedings, but disclaimed any interest in Palmyra Island. On
October 4, 1912, the Land Court filed a decree declaring Henry Cooper to be the owner
of Palmyra Island in fee simple. See id. In August 1922, Leslie and Ellen Fullard-Leo
purchased “a major portion of the island” from Mr. Cooper. See id. Tax records showed
that no taxes were paid on Palmyra Island until 1885, but were then paid by the owner
of record for three consecutive years, that Mr. Cooper again paid taxes starting in 1911,
and that the Fullard-Leo family had paid taxes for about ninety percent of the island
starting in 1922. See id. at 778.
The United States filed suit against the Fullard-Leos in the United States District
Court for the Territory of Hawaii to quiet title to Palmyra Island. See United States v.
Fullard-Leo, 66 F. Supp. at 775. The United States argued that, when land is
discovered and taken under the authority of an existing government, title vests in the
sovereign. In the case of Palmyra Island, the United States asserted, when the island
40
was annexed by Mr. Wilkerson and Mr. Bent in 1862, it had become the fee simple
property of the King of Hawaii, and it remained so until it passed to the Republic of
Hawaii in 1894, and then to the United States under a cession treaty in 1898. See id. at
788. The United States maintained that Messrs. Wilkerson and Bent never obtained
title to Palmyra Island. The Fullard-Leos maintained that the King intended to extend
the Kingdom's sovereignty over Palmyra Island, but granted Messrs. Wilkerson and
Bent title to the island. The District Court stated: “There is nothing inherent in the Law
of Nations that requires the vesting of title to lands in the government or King when
sovereignty is extended over new domain. Such a thing would often be impossible.” Id.
at 780. Instead, the court reasoned, the King had the power to take absolute title of
newly-discovered land, but also had the power to grant title to the discoverer. With
regard to Palmyra Island, the court stated that, “[n]o cogent proof is shown on either
side of the question of prior occupation or possession,” but evidence in the record,
including that after 1862 Mr. Wilkerson and Mr. Bent improved the island with their own
money and without seeking or obtaining permission from the King, suggested that the
King recognized title in Mr. Wilkerson and Mr. Bent. See id. The court also noted that
neither the King, the Provisional Government of Hawaii, the Republic of Hawaii, nor the
Territory of Hawaii had ever made a claim of title to the island, and that both the King
and the United States had treated the island as privately owned. See id. at 781-82.
Because the burden of proof rested with the United States, and the court determined
that the burden was not met, the Hawaii District Court held that “the sovereignty of the
United States was extended over Palmyra Island by Annexation, but the Republic of
Hawaii did not in fact or in form assert fee simple title to this land at the time of
annexation, or at any other time,” and the United States “does not exhibit a title which
can be sustained in the Courts of the United States. . . .” Id. at 782.
The United States appealed the District Court’s ruling and in 1943, the United
States Court of Appeals for the Ninth Circuit reversed. See United States v. Fullard-Leo,
133 F.2d 743 (9th Cir.), cert. denied, 319 U.S. 748 (1943). The Ninth Circuit reasoned
that
[w]hile it is possible, under principles of international law for two
individuals to obtain title to such territory as they discover (see Johnson v.
McIntosh, 8 Wheat. 543, 595, 21 U.S. 543, 595, 5 L. Ed. 681), such an
occurrence is rare because title can also be obtained by conquest. 1
Hyde, International Law, 176 Sec. 106. If the discovered land is important,
many countries could and probably would acquire it by conquest, and the
knowledge that such event might happen would deter most explorers. On
the other hand, if the explorers take possession in behalf of a sovereignty,
they are ordinarily able to salvage something of value from their effort with
much less chance of losing it, depending, of course, on the strength of the
sovereignty.
Id. at 746-47. The Ninth Circuit found that Mr. Bent and Mr. Wilkerson were acting as
agents of the King of Hawaii when they annexed Palmyra Island, thus, “the taking of
possession by Bent perfected the title of the King.” Id. at 747. Title “passed to the
United States by cession, unless it had been alienated by one of the Hawaiian
41
governments,” and the court found “no proof of such alienation.” Id. Because the
Fullard-Leos had raised affirmative defenses which were not addressed by the trial
court, however, the Ninth Circuit reversed and remanded the case. See id.
On remand, the Fullard-Leos asserted three defenses: 1) that the doctrine of lost
19
grant applied, 2) that the 1912 decree of the Land Court declaring that Henry Cooper
was the fee simple owner of Palmyra Island was binding against the United States, and
3) that the Fullard-Leos were bona fide purchasers of Palmyra Island without any notice
or knowledge of the United States’ claim, thus the claim was barred by laches. See
United States v. Fullard-Leo, 66 F. Supp. 782, 784 (D. Haw. 1944), aff'd, 156 F.2d 756
(9th Cir. 1946) (en banc), aff'd, 331 U.S. 256 (1947). The District Court for the Territory
of Hawaii once again emphasized that
[t]here is not a scintilla of evidence that the Hawaiian monarchy, the
Provisional Government or the Republic of Hawaii at any time claimed that
Palmyra was public land. There is no record evidence of any kind that
either of those governments ever regarded Palmyra as public property.
Uncontradicted evidence shows that the claim of private ownership of the
island had been continuously maintained through the years to the
knowledge of the Department of State, the Department of the Interior and
officers of the United States navy as well as of the prior governments of
Hawaii.
Id. at 786. The District Court found: 1) that the record demonstrated “a presumption
that a grant issued to Bent and Wilkinson by which the Hawaiian government parted
with its title,” 2) that the disclaimer filed by the Territory in the Land Court was a “legal
and valid act done pursuant to the power expressly conferred on the Territory by the
Organic Act” and, thus, was binding on the United States, and 3) that the United States
was “estopped by its laches from asserting its claim of title against the respondents who
19
As more fully discussed below, the doctrine of lost grant is one way for a petitioner to
quiet title to land that has been held adversely to the sovereign for a long period of time.
See United States v. Fullard-Leo, 331 U.S. 256, 270 (1947) (citing United States v.
Chavez, 159 U.S. 452 (1895)). The Supreme Court has held,
it is the general rule of American law that a grant will be presumed upon
proof of an adverse, exclusive, and uninterrupted possession for twenty
years, and that such rule will be applied as a presumptio juris et de jure,
wherever, by possibility, a right may be acquired in any manner known to
the law.
United States v. Pendell, 185 U.S. 189, 199-200 (1902) (citations omitted). In other
words, if a party can demonstrate adverse, exclusive, and uninterrupted possession for
twenty years against the sovereign, a conclusive presumption applies that the party has
title to the property.
42
purchased from Mr. Cooper and paid a valuable consideration without notice of any
adverse claim.” Id. at 787-88.
The United States, once again, appealed to the Ninth Circuit, which heard the
appeal en banc. See United States v. Fullard-Leo, 156 F.2d 756 (9th Cir. 1946) (en
banc), aff'd, 331 U.S. 256 (1947). The Ninth Circuit indicated that, because the purpose
of Congress when Hawaii was annexed was “to leave the ceded public lands in the
control of the Territory to be administered by it for the benefit of its people . . . the
occupant is entitled to the benefit of every presumption and to have all doubts resolved
in his favor.” Id. at 758. The Ninth Circuit agreed with the District Court that a lost grant
should be presumed, and that the decree of the Land Court registering title in Henry
Cooper was binding against the United States. The Ninth Circuit, therefore, affirmed.
See id. at 750-60.
The United States appealed the Ninth Circuit’s ruling and the Supreme Court
granted certiorari, and affirmed the Ninth Circuit’s holding and decided that title to
Palmyra Island should be quieted in the Fullard-Leos. See United States v. Fullard-Leo,
331 U.S. 256. The Supreme Court recounted the state of Hawaiian land law at the time
that Mr. Wilkerson and Mr. Bent took possession of Palmyra Island, noting that the
Minister of Interior held the power to supervise and grant title to public lands. See id. at
266. The Court “assume[d] . . . that the formal claim to Palmyra for the Hawaiian
Kingdom made by Bent, pursuant to his commission, gave Hawaii not only sovereignty
over Palmyra but also the power to grant the lands of the newly annexed islets as part
of its public lands to private owners.” Id. at 268-69. The Supreme Court held that the
lost grant doctrine applied to the circumstances at hand and that a lost grant should be
presumed in favor of the Fullard-Leos’ predecessors-in-interest. See id. at 271-74. The
Supreme Court then traced the chain of claimed title, finding that the chain of title was
unbroken between 1862, when Mr. Bent conveyed his interest in the island to Mr.
Wilkerson, and 1922, when the Fullard-Leos purchased all but two islets from Henry
Cooper, and that “claim of right was manifested not only by transfers of paper title but
also by actual user of the property.” Id. at 279. The Supreme Court acknowledged that
presumption of a lost grant requires “proof of an adverse, exclusive, and uninterrupted
possession for 20 years,” id. at 271, and that the possession of Palmyra Island was not
“uninterrupted,” but rather various owners of the island had visited periodically over
time. See id. at 280. The Supreme Court held, however, that “uninterrupted and long
continued possession does not require a constant, actual occupancy where the
character of the property does not lend itself to such use.” Id. at 281. Given that “[n]o
other private owner claims any rights in Palmyra,” the Supreme Court concluded that
“the evidence of title and possession shown in this record” supported the District Court's
and Ninth Circuit’s holdings that the Fullard-Leos were the rightful owners of Palmyra
Island, and the Supreme Court affirmed the Ninth Circuit’s ruling to quiet title to Palmyra
Island in the Fullard-Leos. See id.
43
DISCUSSION
Summary Judgment
The parties have filed cross-motions for summary judgment. In its motion for
summary judgment, plaintiff argues that, “as a matter of law, plaintiff’s predecessor-in-
interests in interest claimed private property rights to Kingman Reef on May 10, 1922,”
or twelve years before the United States “formally asserted its claim to territorial
sovereignty.” Defendant, in its cross-motion for summary judgment, argues that, “as a
matter of law, Plaintiff does not have any private property rights in Kingman Reef that
are protected by the Fifth Amendment.” Rule 56 of the Rules of the United States Court
of Federal Claims (RCFC) (2013) is similar to Rule 56 of the Federal Rules of Civil
Procedure (Fed. R. Civ. P.) (2014) in language and effect. Both rules provide that “[t]he
court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” RCFC 56(a); Fed. R. Civ. P. 56(a); see also Alabama v. North Carolina, 560 U.S.
330, 344 (2010); Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247–48 (1986); Adickes v. S. H. Kress & Co., 398 U.S. 144,
157 (1970); Ladd v. United States, 648 F.3d 648, 651 (Fed. Cir. 2013) Consol. Coal
Co. v. United States, 615 F.3d 1378, 1380 (Fed. Cir.), reh’g and reh’g en banc denied
(Fed. Cir. 2010), cert. denied, 131 S. Ct. 2990 (2011); 1st Home Liquidating Trust v.
United States, 581 F.3d 1350, 1355 (Fed. Cir. 2009); Arko Exec. Servs., Inc. v. United
States, 553 F.3d 1375, 1378 (Fed. Cir. 2009); Casitas Mun. Water Dist. v. United
States, 543 F.3d 1276, 1283 (Fed. Cir. 2008), reh’g and reh’g en banc denied, 556 F.3d
1329 (Fed. Cir. 2009); Moden v. United States, 404 F.3d 1335, 1342 (Fed. Cir.), reh’g
and reh’g en banc denied (Fed. Cir. 2005); Am. Pelagic Fishing Co., L.P. v. United
States, 379 F.3d 1363, 1370–71 (Fed. Cir.), reh’g en banc denied (Fed. Cir. 2004), cert.
denied, 545 U.S. 1139 (2005); Hitkansut LLC v. United States, 115 Fed. Cl. 719, 722
(2014); Textainer Equip. Mgmt. Ltd. v. United States, 115 Fed. Cl. 708, 712 (2014);
AEY, Inc. v. United States, 114 Fed. Cl. 619, 626 (2014); Leggitte v. United States, 104
Fed. Cl. 315, 317 (2012).
A fact is material if it will make a difference in the result of a case under the
governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 248; see also Cebe
Farms, Inc. v. United States, No. 5-965C, 2014 WL 2211432, at *6 (Fed. Cl. May 28,
2014); Kandel v. United States, 115 Fed. Cl. 752, 755 (2014); Arrañaga v. United
States, 103 Fed. Cl. at 467. Irrelevant or unnecessary factual disputes do not preclude
the entry of summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 247–
48; see also Scott v. Harris, 550 U.S. 372, 380 (2007); Monon Corp. v. Stoughton
Trailers, Inc., 239 F.3d 1253, 1257 (Fed. Cir. 2001); Curtis v. United States, 144 Ct. Cl.
194, 199, 168 F. Supp. 213, 216 (1958), cert. denied, 361 U.S. 843 (1959), reh’g
denied, 361 U.S. 941 (1960); P & K Contracting, Inc. v. United States, 108 Fed. Cl. 380,
389 (2012), aff’d, 534 F. App’x 1000 (Fed. Cir. 2013); Gorski v. United States, 104 Fed.
Cl. 605, 609 (2012).
44
When reaching a summary judgment determination, the judge’s function is not to
weigh the evidence and determine the truth of the case presented, but to determine
whether there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S.
at 249; Schlup v. Delo, 513 U.S. 298, 332 (1995); Ford Motor Co. v. United States, 157
F.3d 849, 854 (Fed. Cir. 1998) (“Due to the nature of the proceeding, courts do not
make findings of fact on summary judgment.”); Cebe Farms, Inc. v. United States, 2014
WL 2211432, at *6; K-Con Bldg Sys., Inc. v. United States, 115 Fed. Cl. 558, 570
(2014); Cohen v. United States, 100 Fed. Cl. at 469–70; Boensel v. United States, 99
Fed. Cl. 607, 611 (2011); Macy Elevator, Inc. v. United States, 97 Fed. Cl. 708, 717
(2011). The judge must determine whether the evidence presents a disagreement
sufficient to require submission to fact finding, or whether the issues presented are so
one-sided that one party must prevail as a matter of law. See Anderson v. Liberty
Lobby, Inc., 477 U.S. at 250–52; Jay v. Sec’y of Dep’t of Health & Human Servs., 998
F.2d 979, 982 (Fed. Cir.), reh’g denied and en banc suggestion declined (Fed. Cir.
1993); Leggitte v. United States, 104 Fed. Cl. at 317–18. When the record could not
lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for
trial, and the motion must be granted. See, e.g., Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986); Rothe Dev. Corp. v. U.S. Dep’t of Def., 262
F.3d 1306, 1316 (Fed. Cir. 2001); Hall v. Aqua Queen Mfg., Inc., 93 F.3d 1548, 1553
n.3 (Fed. Cir. 1996). In such a case, there is no need for the parties to undertake the
time and expense of a trial, and the moving party should prevail without further
proceedings.
In appropriate cases, summary judgment
saves the expense and time of a full trial when it is unnecessary. When
the material facts are adequately developed in the motion papers, a full
trial is useless. “Useless” in this context means that more evidence than
is already available in connection with the motion for summary judgment
could not reasonably be expected to change the result.
Dehne v. United States, 23 Cl. Ct. 606, 614–15 (1991) (quoting Pure Gold, Inc. v.
Syntex, (U.S.A.) Inc., 739 F.2d 624, 626 (Fed. Cir. 1984)), vacated on other grounds,
970 F.2d 890 (Fed. Cir. 1992) (citation omitted); see also Metric Constr. Co. v. United
States, 73 Fed. Cl. 611, 612 (2006).
Summary judgment, however, will not be granted if “the dispute about a material
fact is ‘genuine,’ that is, if the evidence is such that a reasonable [trier of fact] could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. at
248; see also Biery v. United States, No. 2013–5082, 2014 WL 2491779, at *5 (Fed.
Cir. June 4, 2014); Long Island Sav. Bank, FSB v. United States, 503 F.3d 1234, 1244
(Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir. 2007), cert. denied, 555 U.S. 812
(2008); Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 971 (Fed. Cir.), reh’g and reh’g
en banc denied (Fed. Cir. 2001), cert. denied, 534 U.S. 1109 (2002); Principal Life Ins.
Co. v. United States, Nos. 7–06T, 7–706T, 8–135T & 8–605T, 2014 WL 1873398, at *5
(Fed. Cl. May 9, 2014); Gonzales-McCaulley Inv. Grp., Inc. v. United States, 101 Fed.
45
Cl. 623, 629 (2011). In other words, if the nonmoving party produces sufficient
evidence to raise a question as to the outcome of the case, then the motion for
summary judgment should be denied. Any doubt over factual issues must be resolved
in favor of the party opposing summary judgment, to whom the benefit of all
presumptions and inferences runs. See Ricci v. DeStefano, 557 U.S. 557, 586 (2009);
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. at 587–88; Yant v. United
States, 588 F.3d 1369, 1371 (Fed. Cir. 2009), cert. denied, 131 S. Ct. 69 (2010);
Dethmers Mfg. Co. v. Automatic Equip. Mfg. Co., 272 F.3d 1365, 1369 (Fed. Cir. 2001),
reh’g and reh’g en banc denied, 293 F.3d 1364 (Fed. Cir. 2002), cert. denied, 539 U.S.
957 (2003); Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d at 1257; Wanlass v.
Fedders Corp., 145 F.3d 1461, 1463 (Fed. Cir.), reh’g denied and en banc suggestion
declined (Fed. Cir. 1998); see also Am. Pelagic Co. v. United States, 379 F.3d at 1371
(citing Helifix Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339, 1345–46 (Fed. Cir. 2000)); Boensel
v. United States, 99 Fed. Cl. at 611 (“‘The evidence of the nonmovant is to be believed,
and all justifiable inferences are to be drawn in his favor.’” (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. at 255) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. at 587–88; Casitas Mun. Water Dist. v. United States, 543 F.3d at 1283;
Lathan Co. v. United States, 20 Cl. Ct. 122, 125 (1990))). “However, once a moving
party satisfies its initial burden, mere allegations of a genuine issue of material fact
without supporting evidence will not prevent entry of summary judgment.” Republic
Sav. Bank, F.S.B. v. United States, 584 F.3d 1369, 1374 (Fed. Cir. 2009); see also
Anderson v. Liberty Lobby, Inc., 477 U.S. at 247–48.
The initial burden on the party moving for summary judgment to produce
evidence showing the absence of a genuine issue of material fact may be discharged if
the moving party can demonstrate that there is an absence of evidence to support the
nonmoving party’s case. See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see
also Riley & Ephriam Constr. Co. v. United States, 408 F.3d 1369, 1371 (Fed. Cir.
2005); Crown Operations Int’l, Ltd. v. Solutia Inc., 289 F.3d 1367, 1377 (Fed. Cir.), reh’g
denied (Fed. Cir. 2002); Trilogy Commc’ns, Inc. v. Times Fiber Commc’ns, Inc., 109
F.3d 739, 741 (Fed. Cir.) (quoting Conroy v. Reebok Int’l, Ltd., 14 F.3d 1570, 1575
(Fed. Cir. 1994), reh’g denied and en banc suggestion declined (Fed. Cir. 1995)), reh’g
denied and en banc suggestion declined (Fed. Cir. 1997); Lockwood v. Am. Airlines,
Inc., 107 F.3d 1565, 1569 (Fed. Cir. 1997); Dana R. Hodges Trust v. United States, 101
Fed. Cl. 549, 553 (2011). If the moving party makes such a showing, the burden shifts
to the nonmoving party to demonstrate that a genuine dispute regarding a material fact
exists by presenting evidence which establishes the existence of an element essential
to its case upon which it bears the burden of proof. See Celotex Corp. v. Catrett, 477
U.S. at 322; see also Wavetronix LLC v. EIS Elec. Integrated Sys., 573 F.3d 1343, 1354
(Fed. Cir. 2009); Long Island Sav. Bank, FSB v. United States, 503 F.3d at 1244; Fla.
Power & Light Co. v. United States, 375 F.3d 1119, 1124 (Fed. Cir. 2004); Schoell v.
Regal Marine Indus., Inc., 247 F.3d 1202, 1207 (Fed. Cir. 2001); Am. Airlines, Inc. v.
United States, 204 F.3d 1103, 1108 (Fed. Cir. 2000). However, “a non-movant is
required to provide opposing evidence under Rule 56(e) only if the moving party has
provided evidence sufficient, if unopposed, to prevail as a matter of law.” Saab Cars
USA, Inc. v. United States, 434 F.3d 1359, 1369 (Fed. Cir. 2006).
46
Even if both parties argue in favor of summary judgment and allege an absence
of genuine issues of material fact, the court is not relieved of its responsibility to
determine the appropriateness of summary disposition in a particular case, and it does
not follow that summary judgment should be granted to one side or the other. See
Prineville Sawmill Co. v. United States, 859 F.2d 905, 911 (Fed. Cir. 1988) (citing
Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987)); see
also Marriott Int’l Resorts, L.P. v. United States, 586 F.3d 962, 968–69 (Fed. Cir. 2009);
B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587, 593 (6th Cir. 2001); Atl. Richfield
Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000); Chevron
USA, Inc. v. Cayetano, 224 F.3d 1030, 1037 n.5 (9th Cir. 2000), cert. denied, 532 U.S.
942 (2001); Bubble Room, Inc. v. United States, 159 F.3d 553, 561 (Fed. Cir. 1998)
(“The fact that both the parties have moved for summary judgment does not mean that
the court must grant summary judgment to one party or the other.”), reh’g denied and en
banc suggestion declined (Fed. Cir. 1999); Allstate Ins. Co. v. Occidental Int’l, Inc., 140
F.3d 1, 2 (1st Cir. 1998); Massey v. Del Labs., Inc., 118 F.3d 1568, 1573 (Fed. Cir.
1997); LewRon Television, Inc. v. D.H. Overmyer Leasing Co., 401 F.2d 689, 692 (4th
Cir. 1968), cert. denied, 393 U.S. 1083 (1969); Rogers v. United States, 90 Fed. Cl.
418, 427 (2009), subsequent determination, 93 Fed. Cl. 607 (2010); Consol. Coal Co. v.
United States, 86 Fed. Cl. 384, 387 (2009), aff’d, 615 F.3d 1378, (Fed. Cir.), and reh’g
and reh’g en banc denied (Fed. Cir. 2010), cert. denied, 131 S. Ct. 2990 (2011); St.
Christopher Assocs., L.P. v. United States, 75 Fed. Cl. 1, 8 (2006), aff’d, 511 F.3d 1376
(Fed. Cir. 2008); Reading & Bates Corp. v. United States, 40 Fed. Cl. 737, 748 (1998).
The court must evaluate each party’s motion on its own merits, taking care to draw all
reasonable inferences against the party whose motion is under consideration, or,
otherwise stated, in favor of the non-moving party. See First Commerce Corp. v. United
States, 335 F.3d 1373, 1379 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir.
2003); see also DeMarini Sports, Inc. v. Worth, Inc., 239 F.3d 1314, 1322 (Fed. Cir.
2001); Gart v. Logitech, Inc., 254 F.3d 1334, 1338–39 (Fed. Cir.), reh’g and reh’g en
banc denied (Fed. Cir. 2001), cert. denied, 534 U.S. 1114 (2002); Oswalt v. United
States, 85 Fed. Cl. 153, 158 (2008); Telenor Satellite Servs., Inc. v. United States, 71
Fed. Cl. 114, 119 (2006).
Cross-motions are no more than a claim by each party that it alone is entitled to
summary judgment. The making of such inherently contradictory claims, however, does
not establish that if one is rejected the other necessarily is justified. See B.F. Goodrich
Co. v. United States Filter Corp., 245 F.3d at 593; Atl. Richfield Co. v. Farm Credit Bank
of Wichita, 226 F.3d at 1148; Allstate Ins. Co. v. Occidental Int’l, Inc., 140 F.3d at 2;
Rogers v. United States, 90 Fed. Cl. at 427; Reading & Bates Corp. v. United States, 40
Fed. Cl. at 748.
“Questions of law are particularly appropriate for summary judgment.” Oenga v.
United States, 91 Fed. Cl. 629, 634 (2010) (citing Dana Corp. v. United States, 174 F.3d
1344, 1347 (Fed. Cir. 1999) (“Summary judgment was appropriate here [in Dana Corp.]
because no material facts were disputed, many being stipulated, and the only disputed
issues were issues of law. Moreover, on each issue one party or the other is entitled to
47
judgment as a matter of law.”)); see also Santa Fe Pac. R.R. v. United States, 294 F.3d
1336, 1340 (Fed. Cir. 2002) (“Issues of statutory interpretation and other matters of law
may be decided on motion for summary judgment.”).
Takings
The Takings Clause of the Fifth Amendment to the United States Constitution
provides in pertinent part: “nor shall private property be taken for public use without just
compensation.” U.S. Const. amend. V. The purpose of this Fifth Amendment provision
is to prevent the government from “‘forcing some people alone to bear public burdens
which, in all fairness and justice, should be borne by the public as a whole.’” Palazzolo
v. Rhode Island, 533 U.S. 606, 618 (2001) (quoting Armstrong v. United States, 364
U.S. 40, 49 (1960)), abrogated on other grounds by Lingle v. Chevron U.S.A. Inc., 544
U.S. 528 (2005), recognized by Hageland Aviation Servs., Inc. v. Harms, 210 P.3d 444
(Alaska 2009); see also Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 123-
24, reh’g denied, 439 U.S. 883 (1978); Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 536
(2005); E. Enters. v. Apfel, 524 U.S. 498, 522 (1998); Rose Acre Farm, Inc. v. United
States, 559 F.3d 1260, 1266 (Fed. Cir.), reh’g en banc denied (Fed. Cir. 2009), cert.
denied, 130 S. Ct. 1501 (2010); Janowsky v. United States, 133 F.3d 888, 892 (Fed.
Cir. 1998); Res. Invs., Inc. v. United States, 85 Fed. Cl. 447, 469-70 (2009); Pumpelly v.
Green Bay & Miss. Canal Co., 80 U.S. (13 Wall.) 166, 179 (1871) (citing to principles
which establish that “private property may be taken for public uses when public
necessity or utility requires” and that there is a “clear principle of natural equity that the
individual whose property is thus sacrificed must be indemnified”).
Therefore, “a claim for just compensation under the Takings Clause must be
brought to the Court of Federal Claims in the first instance, unless Congress has
withdrawn the Tucker Act grant of jurisdiction in the relevant statute.” E. Enters. v. Apfel,
524 U.S. at 520 (citing Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016-19 (1984));
see also Acceptance Ins. Cos. v. United States, 503 F.3d 1328, 1336 (Fed. Cir. 2007);
Morris v. United States, 392 F.3d 1372, 1375 (Fed. Cir. 2004) (“Absent an express
statutory grant of jurisdiction to the contrary, the Tucker Act provides the Court of
Federal Claims exclusive jurisdiction over takings claims for amounts greater than
$10,000.”). The United States Supreme Court has declared: “If there is a taking, the
claim is ‘founded upon the Constitution’ and within the jurisdiction of the [United States
Court of Federal Claims] to hear and determine.” Preseault v. Interstate Commerce
Comm’n, 494 U.S. 1, 12 (1990) (quoting United States v. Causby, 328 U.S. 256, 267
(1946)); see also Lion Raisins, Inc. v. United States, 416 F.3d 1356, 1368 (Fed. Cir.
2005); Narramore v. United States, 960 F.2d 1048, 1052 (Fed. Cir. 1992); Perry v.
United States, 28 Fed. Cl. 82, 84 (1993).
To succeed under the Fifth Amendment Takings Clause, a plaintiff must show
that the government took a private property interest for public use without just
compensation. See Adams v. United States, 391 F.3d 1212, 1218 (Fed. Cir. 2004),
cert. denied, 546 U.S. 811 (2005); Arbelaez v. United States, 94 Fed. Cl. 753, 762
(2010); Gahagan v. United States, 72 Fed. Cl. 157, 162 (2006). “The issue of whether a
48
taking has occurred is a question of law based on factual underpinnings.” Huntleigh
USA Corp. v. United States, 525 F.3d 1370, 1377-78 (Fed. Cir.), cert. denied, 555 U.S.
1045 (2008). The government must be operating in its sovereign rather than in its
proprietary capacity when it initiates a taking. See St. Christopher Assocs., L.P. v.
United States, 511 F.3d 1376, 1385 (Fed. Cir. 2008).
The United States Court of Appeals for the Federal Circuit has established a two-
part test to determine whether government actions amount to a taking of private
property under the Fifth Amendment. See Klamath Irr. Dist. v. United States, 635 F.3d
505, 511 (Fed. Cir. 2011); Am. Pelagic Fishing Co. v. United States, 379 F.3d 1363,
1372 (Fed. Cir.) (citing M & J Coal Co. v. United States, 47 F.3d 1148, 1153-54 (Fed.
Cir.), cert. denied, 516 U.S. 808 (1995)), reh’g denied (Fed. Cir. 2004), cert. denied, 545
U.S. 1139 (2005). A court first determines whether a plaintiff possesses a cognizable
property interest in the subject of the alleged takings. Then, the court must determine
whether the government action is a “‘compensable taking of that property interest.’”
Huntleigh USA Corp v. United States, 525 F.3d at 1377 (quoting Am. Pelagic Fishing
Co., L.P. v. United States, 379 F.3d at 1372).
To establish a taking, a plaintiff must have a legally cognizable property interest,
such as the right of possession, use, or disposal of the property. See Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982) (citing United States v.
Gen. Motors Corp., 323 U.S. 373 (1945)); CRV Enters., Inc. v. United States, 626 F.3d
1241, 1249 (Fed. Cir. 2010), cert. denied, 131 S. Ct. 2459 (2011); Karuk Tribe of Cal. v.
Ammon, 209 F.3d 1366, 1374-75 (Fed. Cir.), reh’g denied and en banc suggestion
denied (Fed. Cir. 2000), cert. denied, 532 U.S. 941 (2001). “‘It is axiomatic that only
persons with a valid property interest at the time of the taking are entitled to
compensation.’” Am. Pelagic Fishing Co. v. United States, 379 F.3d at 1372 (quoting
Wyatt v. United States, 271 F.3d 1090, 1096 (Fed. Cir. 2001), cert. denied, 353 U.S.
1077 (2002) and citing Cavin v. United States, 956 F.2d 1131, 1134 (Fed. Cir. 1992)).
Therefore, “[i]f the claimant fails to demonstrate the existence of a legally cognizable
property interest, the courts [sic] task is at an end.” Am. Pelagic Fishing Co. v. United
States, 379 F.3d at 1372 (citing Maritrans Inc. v. United States, 342 F.3d 1344, 1352
(Fed. Cir. 2003) and M & J Coal Co. v. United States, 47 F.3d at 1154). The court does
not address the second step “without first identifying a cognizable property interest.” Air
Pegasus of D.C., Inc. v. United States, 424 F.3d 1206, 1213 (Fed. Cir.) (citing Am.
Pelagic Fishing Co. v. United States, 379 F.3d at 1381 and Conti v. United States, 291
F.3d 1334, 1340 (Fed. Cir.), reh’g en banc denied (Fed. Cir. 2002), cert. denied, 537
U.S. 1112 (2003)), reh’g denied and reh’g en banc denied (Fed. Cir. 2005). Only if
there is to be a next step, “‘after having identified a valid property interest, the court
must determine whether the governmental action at issue amounted to a compensable
taking of that property interest.’” Huntleigh USA Corp. v. United States, 525 F.3d at
1378 (quoting Am. Pelagic Fishing Co. v. United States, 379 F.3d at 1372).
With regard to its property interest in Kingman Reef, plaintiff KRAD argues that it
has a vested property interest under its leasehold agreement with KRAI for the
exclusive use of Kingman Reef which defendant took when it took Kingman Reef from
49
KRAI in 2001. Plaintiff contends that, at the core of this case lies a fundamental
distinction between territorial sovereignty, or a nation’s “right to exercise governmental
authority within its territory to the exclusion of any other state,” and private property
rights, the ability to own and transfer a piece of land. Plaintiff asserts that, before
Executive Order No. 6935 was issued in 1934, Kingman Reef was terra nullius, or a
land without a sovereign. According to plaintiff, in 1922, Mr. Thurston validly claimed
private property rights in Kingman Reef on behalf of KRAI’s predecessor-in-interest, the
Copra Co., but that Mr. Thurston’s actions did not establish the United States’
sovereignty over Kingman Reef. Instead, plaintiff maintains that the United States did
not formally extend sovereignty over Kingman Reef until the issuance of Executive
Order No. 6935 in 1934. Because the Copra Co.’s private property rights were
established before United States sovereignty, plaintiff argues, defendant was required
to recognize those rights when it claimed territorial sovereignty in 1934.
Plaintiff relies on international law principles, namely the natural right theory, to
establish that defendant was required to recognize the preexisting property rights of
KRAI’s predecessors-in-interest in 1934. Plaintiff, citing to The Paquette Habana, 175
U.S. 677, 700 (1900) and Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), argues that it
is appropriate to rely on international law in this case because “there was no treaty or
executive, legislative or judicial act or decision controlling Kingman Reef prior to 1934.”
According to plaintiff, the natural right theory holds that, where private property rights
exist prior to a nation’s acquisition of sovereignty, those private rights are to be
preserved and protected by the acquiring nation state. Plaintiff argues that the United
States has long recognized the natural right theory and has previously found that a
private party “who discovered property may obtain title to said property when it has not
been claimed previously by any country or its nationals.” Plaintiff lists several examples
of what it claims to be similar instances in which the United States has recognized
preexisting private property rights upon exercising sovereignty over land that was
previously terra nullius, specifically: the Swan Islands, Swains Island, the Spitsbergen
Archipelago, Jan Mayen Island, Los Monges Islands, and Aves Islands.
Plaintiff asserts that Mr. Thurston’s actions in 1922 were sufficient to establish
ownership of Kingman Reef on behalf of the Copra Co. because they established both
discovery and possession. Plaintiff, citing to Jones v. United States, 137 U.S. 202, 212
(1890), contends that sovereignty over land may only be established by discovery plus
occupation, cession, or conquest. In this instance, plaintiff states, the United States can
only claim sovereignty over Kingman Reef through occupation, which it did not establish
until President Roosevelt signed Executive Order No. 6935 on December 29, 1934.
Plaintiff points to the Office of the Legal Advisor, Department of State’s, November 9,
1934 letter and memorandum regarding the status of certain guano islands, which
stated:
No other action appears to have been taken with respect to the
incorporation of the Island [Kingman Reef] into the territory of Hawaii or
the United States. While it does not appear that any other country has
claimed Kingman’s Reef, it might be well for this Government to take
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some affirmative action to show definitively that it is a part of the
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