# Special Masters Report — United States v. Louisiana

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Special Masters Report
- **Published:** January 1, 1979
- **Citation:** 444 U.S. 816

## Text

Supreme Court. U §
FIL f

&.

° Zz 1979

RODAK, JR., CLERK)

a

“i RECEIVED

ed States 19/9

OFFICE OF THE CLERK
SUPREME COURT, U.S.

In the Supreme Court of the Uni

—

OCTOBER TERM, 1978

No. 9, Original

UNITED STATES OF AMERICA,
Plaintiff,

VS.

STATE OF LOUISIANA, ET AL.,
Defendant.

SUPPLEMENTAL REPORT OF
WALTER P. ARMSTRONG, JR., SPECIAL MASTER

August 27, 1979

E. L. MENDENHALL, INc., 926 Cherry Street, Kansas City, Mo. 64106, (816) 421-3030

TABLE OF CONTENTS

I alae

First Issue—Is the United States obligated to account
for and pay to the State of Louisiana either the value
of the use of Louisiana’s share of the impounded
funds or interest upon that portion of those funds?

Second Issue—Does Louisiana have the obligation to
account for revenues received by it from mineral
leases on areas lying within Zone 1? ........................

Third Issue—Does Louisiana have the obligation to ac-
count for as unimpounded funds and to pay to the
United States money collected by it as severance taxes
on minerals removed from areas subsequently deter-
mined to belong to the United States? 0...

I,

REE ES EG EO
Appendix—

Motion of the State of Louisiana to Have the
Special Master Make Additional Findings of
Facts to Be Included in a Supplemental Report
to the United States Supreme Court ...............

Order on Motion of the State of Louisiana to Have
the Special Master Make Additional Findings
of Fact to Be Included in a Supplemental Report
to the United States Supreme Court ..............

Table of Authorities

STATUTES

La. Const. Art. X, Sec. 21
La. Rev. Stat. 47:631-636

15

19
21
22

23

she ote oc go EE MOST OT NAD Sr TERT 16,17
UR TORO once sensidahiininp ieaiishes pin 7, 10, 16, 17, 21
Court DECREES
I I sais ge ct CO iF ee oles} | 15
Sec) cast bs cess NOR MEO eRe 1
wo |e NOLS ie LORRY ALR 1, 5, 14, 15, 16, 17, 20
WE TP ihe ndse ee oh | 2
MISCELLANEOUS
Black’s Law Dictiomary 2.00... ceccecccescccsecmecoeeccoscs-. 6
Bouvier’s Law Dictionary 2.0.0.0... .ccccccecccceccssecseecseeeoses 6
Kohler’s “A Dictionary for Accountants”... 6, 12

Louisiana Legislature’s Concurrent Resolution No. 251,
chiseaptte Boezuncssh ee oe LC 9

In the Supreme Court of the United States

OCTOBER TERM, 1978

No. 9, Original

UNITED STATES OF AMERICA,
Plaintiff,
vs.

STATE OF LOUISIANA, ET AL.,
Defendant.

SUPPLEMENTAL REPORT OF
WALTER P. ARMSTRONG, JR., SPECIAL MASTER

PREFATORY

In the order approving the original report of the Spe-
cial Master (420 U.S. 529) the Court provided as follows:

“The parties are directed to prepare and file a
decree, for entry by this Court, establishing ‘a base
from which the ‘extent of the territorial waters under
the jurisdiction of the State of Louisiana pursuant
to the Submerged Lands Act can be measured’. Report
of the Special Master 53. If the parties cannot agree
upon the form of the decree, then they shall refer
any remaining disputes to the Special Master for his
recommendations. In the event of such a referral,
the Special Master is authorized to hold such hearings,
take such evidence, and conduct such proceedings as
he may deem appropriate and in due course, to report
his recommendations to this Court.”

Such a decree was prepared and entered (422 US.
13) without the necessity for intervention by the Special

2

Master. This decree also provided for the rendering and
filing with the Court of certain accountings as therein
provided. These accountings and objections thereto’ were
duly made and filed, whereupon the Court referred them
to the Special Master (423 U.S. 909). It is upon this
reference that the present supplemental report is made.

Following the reference to the Special Master on Oc-
tober 20, 1975, the parties attempted to reconcile the dif-
ferences which existed between them, primarily through
correspondence and a conference between their respective
technical staffs held on February 26 and 27, 1976. On
May 4, 1976 a pre-trial conference was held at Memphis,
Tennessee, the results of which were embodied in a pre-
trial order entered May 26, 1976, which recites the agree-
ments reached by the parties and states the unresolved
issues as follows:

“(1) Whether the United States is obligated to account
either for the value of the use of the State’s share
of the escrowed? funds or for interest on the funds.

1.

(a) Louisiana Unimpounded Fund Accounting, filed August
15, 1975;

(b) Louisiana Impounded Fund Accounting, filed September
15, 1975;

(c) United States Unimpounded Fund Accounting, filed Au-
gust 25, 1975;

(d) United States Impounded Fund Accounting, filed Sep-
tember 15, 1975;

(e) United States Objections to Louisiana Unimpounded
Fund Accounting, filed October 15, 1975;

(f) Louisiana Objections to United States Unimpounded and
Impounded Fund Accounting, filed October 22, 1975.
(Although filed two days after the order of reference
these are taken as included therein. )

2. Although the term “escrowed” is used in the order, which
was approved by counsel as to form, the reference is obviously
to funds “impounded” under the Interim Agreement of October
12, 1956.

3

(2) Whether Louisiana has the obligation to account
for severance taxes in its unimpounded fund ac-
countings.

(3) Whether Louisiana has the obligation to account
for revenues received from the area formerly con-
stituting Zone 1 established by the interim agree-
ment of October 12, 1956.”

Thereafter on June 6, 1976 a stipulation was entered
into between the parties pursuant to which supplemental
and amended accountings and objections thereto* were
filed by each of the parties.

On July 25, 1977 a further Pre-Trial Conference was
held in Memphis, Tennessee, as a result of which a Supple-
mental Pre-Trial Order was entered on August 12, 1977,
pursuant to which evidentiary hearings on the unresolved
issues were held at Memphis, Tennessee on November
14, 15, and 16, 1977 and on March 28, 1978. Thereafter

3.

(a) United States Supplemental Impounded Fund Accounting
filed June 23, 1976

(b) United States Corrected Unimpounded Fund Accounting
filed May 23, 1976

(c) Louisiana Objections to United States Supplemental Im-
pounded Fund Accounting filed July 21, 1976

(d) Louisiana Objections to United States Corrected Unim-
pounded Fund Accounting filed July 22, 1976

(e) pS States Split Lease Accounting filed August 23,
1976

(f) Louisiana Split Lease Accounting filed August 23, 1976

(g) Louisiana Objections to United States Split Lease Ac-
counting filed October 21, 1976

(h) United States Objections to Louisiana Split Lease Ac-
counting filed October 26, 1976

(i) Amended Split Lease Accounting Exhibits filed by both
parties February 17-18, 1977

(j) Stipulation as to Split Lease Accountings filed July 25,
1977 resolving all technical objections

4

the matter was thoroughly briefed and oral argument pre-
sented before the Special Master in New Orleans on Febru-
ary 20, 1979. It is upon the basis of this evidence and
the arguments based upon it that the following findings
and recommendations are made.

First Issue
Is the United States obligated to account for and pay to
the State of Louisiana either the value of the use of
Louisiana’s share of the impounded funds or interest
upon that portion of those funds?

On October 12, 1956, the parties entered into an In-
terim Agreement under which the submerged lands lying
offshore of the southern boundary of the State of Louisiana
were divided into four zones as therein described, that
contiguous to the coastline being designated as Zone a
the next most seaward as Zone 2, the next as Zone 3,
and the most seaward as Zone 4. Under this agreement
the United States agreed (with certain exclusions not here
material) “to impound in a separate fund in the Treasury
of the United States a sum equal to all bonuses, rentals,
royalties or other payments heretofore or hereafter paid
to it for and on account of each lease, or part thereof,
in Zones 2 and 3, being the disputed area,” at such time
as said leases became subject to the agreement as therein
provided.

The Interim Agreement further provides that “the
impounded funds provided for herein shall be held intact,
in a separate account for each lease or portion thereof
affected, by each party until title to the area affected
is determined. Whereupon, except as otherwise herein
provided: - - -

(b) Any funds derived from an area finally deter-
mined to be owned by the State of Louisiana” (with an

H)

exception not here material) “shall be taken from the sep-
arate and impounded fund in the Treasury of the United
States” and paid to the appropriate officer of the State
of Louisiana.

The ownership of lands in the disputed area (Zones
2 and 3) has now been settled by decree of the Court
(422 U.S. 13), accountings have been filed by each of
the parties, and payment made from the impounded funds
of the principal amounts due each of them pursuant to
the accountings filed as reflected in footnote 3 and to
previous accountings filed in these proceedings. The sole
unresolved issue as to such payments is whether the State
of Louisiana is entitled, as it claims, to interest upon the
amount due it upon that portion of the impounded funds
paid to it or, in lieu thereof, to payment for the use
of those funds while they were held in the Treasury of
the United States. As this issue is raised by the State’s
objection to the accounting of the United States for those
funds, the burden is upon the State to establish its right
to such payment if it is to prevail upon this issue.

Indisputably the Interim Agreement does not specifi-
cally provide for the payment of interest upon any part
of the funds impounded pursuant to it. The funds are
to be impounded in a separate fund in the Treasury of
the United States and, upon the determination of the own-
ership of the lands in the disputed area, taken from the
separate and impounded fund in the Treasury of the United
States and paid to the parties respectively entitled to them.
The State of Louisiana argues, however, that the term
“impounded” necessarily implies an obligation on the part
of the holder of the funds to pay interest thereon. With
this we cannot agree.

Strangely enough, there seems to be no generally ac-
cepted definition of the term “impound” as applied to

6

funds. Aside from its general application to the contain-
ment of cattle or water, standard dictionaries define it
as “to seize and retain in legal custody.” Black’s and
Bouvier’s law dictionaries adopt a similar definition, as
does Kohler’s “A Dictionary for Accountants.” Nowhere
is there any reference to any obligation on the part of
the holder other than to hold the property and deliver
it intact.

The State of Louisiana insists, however, that the term
“impounded in a separate fund” jis equivalent to “hold
in escrow”. In support of this position it cites Act 38
of the 1956 Louisiana Legislature (the authority under
which Louisiana became a party to the Interim Agreement)
which authorizes designated agents of the State to “nego-
tiate and enter into agreements or stipulations for and
on behalf of the State with the United States respecting
the deposit in escrow or impounding” of sums derived
from oil leases in the disputed area. In this statute,
it argues, the terms “deposit in escrow” and “impounding”
are used synonymously. The language, however, is equally
subject to the interpretation that they are alternatives,

The State also relies upon certain language in Exhibit
C to the Interim Agreement (headed “Draft of Agreement
Between State of Louisiana and Operators or Lessees in
Disputed Area”) where reference is made to “an im-
pounded or escrowed fund.” Here, too, the language would
appear to be alternative rather than merely repetitious,

There is, therefore, at least an ambiguity as to the
meaning of the term “impounded” as used in the Interim
Agreement. Under these circumstances, it is proper to
look to the intent and understanding of the parties at
the time the agreement was entered into in order to deter-
mine the meaning of the term as used therein.

7

It is apparent that during the negotiations which led
up to the Interim Agreement, representatives of both par-
ties used the term “escrow” rather freely and loosely.
This makes it all the more significant that in the instrument
finally executed that term nowhere appears. At a meeting
of the negotiators on July 2-3, 1956, the State’s representa-
tives proposed an arrangement under which funds derived
from oil leases in the disputed area would be held by
a third party. This the United States rejected out of
hand, insisting that those funds should be held by it during
the interim period, as was finally agreed. If the funds
were to be handled identically in either case, there would
seem to be little point in this insistence. Actually under
Sec. 7 of the Outer Continental Shelf Lands Act (43 U.S.C.
1336), the negotiators for the United States, unlike those
for Louisiana, had no specific authority to enter into a
third party escrow agreement, but only agreements re-
specting “payment and impounding of rents, royalties, and
other sums” derived from mineral leases on disputed
areas.

The only purpose of the State in arguing that the
Interim Agreement in fact provided for an escrow arrange-
ment is to support its contention that such an arrangement
is a fiduciary relationship and creates a trust, and that
there is an obligation upon a trustee holding such funds
to invest them in income producing property, and that
if he does not do so he is liable for interest thereon.
This proposition is at least dubious, as ordinarily the very
purpose of a trust is to produce income, while that of an
escrow account is merely to assure delivery of the escrowed
property intact. But admitting arguendo that in the ab-
sence of a contrary understanding there is such an obliga-
tion upon an escrow holder, the evidence in this case
clearly negatives any such understanding upon the part

8

of the parties to the Interim Agreement. The single nego-
tiator for the United States who testified stated that the
question of interest was never discussed (Swarth Dep.
pp. 7-8). This was confirmed L y the negotiators for Louisi-
ana who testified, two of whom very candidly stated that
the reason was that they knew that the United States
would not enter into the agreement if a provision for
the payment of interest was incorporated in it (Tr. pp.
70, 95, 98, 99, 102, 103, 163). Under these circumstances,
the deliberate omission of a provision for the payment
of interest from the Interim Agreement amounts to an
understanding that it would not be paid.

In any event, the United States could not pay interest
upon funds held by it without statutory authority, a fact
which the negotiators would be presumed to know. The
State seeks to find such authority in 31 U.S.C. 547 (a),
which provides that “All funds held in trust by the United
States, and the annual interest accruing thereon, when
not otherwise required by treaty, shall be invested in stocks
of the United States, bearing a rate of interest not less
than 5 per centum per annum.” It would be stretching
the meaning and intent of this statute beyond permissible
limits to say that it applies to the present situation. The
funds here involved are not “funds held in trust by the
United States” within the meaning of this statute, nor
does the statute authorize the payment of interest.

Louisiana also argues that the authority granted under
Sec. 7 of the Outer Continental Shelf Lands Act to “im-
pound” funds carries with it the authority to agree to pay
interest upon such impounded funds, and cites the negotia-
tions leading up to an agreement between the State of Cali-
fornia and the United States in support of this position.
Even if this is correct, it necessarily follows that there is no
authority under this act to pay interest in the absence

9

of such an agreement, and Louisiana’s knowledge of the
California negotiations establishes that it was well aware
of this fact.

Further evidence of such awareness is evidenced by
the resolution adopted by the Louisiana legislature on June
6, 1967 (Concurrent Resolution No. 251) which contains
the following provisions:

“. .. WHEREAS, the said revenues and royalties have
for a number of years been impounded by the Federal
Government and are presently being held in an ‘es-
crow’ fund, and

“WHEREAS, the Federal Government has not in-
vested the said revenues and royalties and has refused
to invest the said funds even though the state of
Louisiana has made official request that the funds
be invested, and

a * *

“Be it Further Resolved that the Legislature of
Louisiana does here’ y respectfully request and urge
the above named officials to take such steps as are
necessary to effect a prudent and effective investment
of the funds now and hereafter so impounded, with
a view to increasing the increment deriving both to
the Federal Government and to the State of Louisi-
ana.”

It will be noted that the language of this resolution
is precatory and not demanding. In fact, the State of
Louisiana apparently never took the position that it was
entitled as a matter of right to interest upon or payment
for the use of its share of the impounded funds until
it filed its objections to the accounting of the United
States for those funds.

10

Mr. John Carlock of the Treasury Department replied
to the resolution on behalf of the United States in a letter
directed to the Governor of the State of Louisiana dated
July 14, 1967, in which he said:

“In response to the request that the funds be in-
vested by the United States, I must inform you that
the Treasury Department is not able to make invest-
ments in the absence of a statutory authority.”

Apparently at the time the State of Louisiana accepted
this explanation, as it made no protest. However, it now
takes the position that the United States did have statutory
authority to agree to invest impounded funds under Sec-
tion 7 of the Outer Continental Shelf Lands Act (43
U.S.C. 1336) as interpreted in the California situation.
However, it is clear that the United States never entered
into any*such agreement, nor was it requested to do SO;
and in the absence of such agreement, it had no obligation
to invest the impounded funds held by it. There is there-
fore no factual basis for holding it liable for the payment
of interest upon that portion of the impounded funds held
by it and now adjudged to belong to the State of Loui-
siana.

But aside from the question of interest, the State of
Louisiana claims that the United States had access to
and therefore the use of, and in fact did use, the impounded
funds, including that part ultimately adjudged to belong
to the State, during the period of impoundment, and there-
fore should be liable to the State for the value of the use
of those funds, on the theory of unjust enrichment, con-
structive trust, restitution, or quasi-contract. All of
these are equitable remedies, and there is therefore some
doubt as to whether they would apply as against the sov-
ereign. However, even assuming that they would, they
are inappropriate to the factual situation here presented.

11

There is no dispute as to what was actually done with
funds received by the United States resulting from mineral
leases in the disputed area. This is perhaps best stated
in the United States Response to Louisiana’s First Request
for Admissions filed December 13, 1976:

“The United States admits that the cash repre-
senting revenues from disputed lands, received by the
United States pursuani to the Interim Agreement of
October 12, 1956 (1) was deposited in the Federal
Reserve Bank, New Orleans, a number of other banks
designated as Federal depositories for the United
States Treasury, and the office of the United States
Treasury, Washington, D.C. and (2) became part of
the general account of the Treasury of the United
States.”

“The United States admits that the actual cash rep-
resenting revenues from disputed lands, then deposited
in the general account of the Treasury of the United
States, was immediately available to meet any au-
thorized cash needs of the Government whatsoever.”

“The United States admits that the actual cash
deposited in the general account of the Treasury of
the United States, including cash representing revenues
from disputed lands, is subject to disbursement by
checks crawn on the United States Treasury by Gov-
ernment disbursing officers in order to make payment
of Government obligations as authorized by law.”

It does not follow, however, that the United States
breached the terms of the Interim Agreement. That agree-
ment provides that (with exclusions not here material)
“the United States agrees to impound in a separate fund
in the Treasury of the United States a sum equal to all
bonuses, rentals, royalties and other payments” derived

12

from leases in the disputed area (Emphasis supplied).
There is no requirement that the identity of the actual pay-
ments received be maintained; the agreement requires only
the maintenance of a fund equal to those payments. And
this fund is to remaii. in the custody of the Treasury of
the United States, as was in fact done. The State’s posi-
tion rests entirely therefore on the phrase “impounded
in a special fund,” which the State claims that the United
States did not do, but on the contrary used the funds for
its own purpose, the value of which use the State now
claims that it is entitled to recover,

The United States, on the other hand, insists that it
did all that was required of it under the agreement. This
consisted, as the undisputed proof shows, of establishing
in August, 1956, a special deposit fund account (14X6709)
on the books of the Treasury, which was periodically
audited and reports thereof made to the State of Louisiana.
Although this account was established in accordance with
accepted government procedures prior to the execution of
the Interim Agreement, this appears to be immaterial if it
in fact conformed to the requirements of that agreement.

An “account”, according to Kohler’s “A Dictionary for
Accountants”, is “A formal record of a particular type
of transaction expressed in money or other unit of measure-
ment and kept in a ledger.” A “fund”, according to this
same authority, is, in government accounting, “A self-bal-
ancing group of accounts—asset, liability, revenue, and ex-
pense—relating to specific sources and uses of capital and
revenue.” The special deposit fund account (14X6709)
appears to come within these definitions. The amount of
money on deposit with the Treasury was at all times ade-
quate to pay in full any award to Louisiana out of the im-
pounded fund up to the full amount of that fund. Nor
did the United States have the unrestricted use of this

13

fund, for the full amount of it was always carried as a
potential liability to the State of Louisiana on the deposit
fund liability account (14X6709), and no part of it was
therefore ever available to the United States for appro-
priation for purposes other than disbursement under the
Interim Agreement pursuant to the “anplicable determina-
tion” of the Court. Nor is Louisiana’s “velocity of turn-
over” evidence material upon this issue; there is no require-
ment under the Interim Agreement that the United States
retain the actual revenues paid to it resulting from mineral
leases in the disputed area, but only “a sum equal to” the
amount of those revenues. This it did.

The proof shows that the funds impounded under the
Interim Agreement were handled in exactly the same way
as similar funds had been handled in the past, and that
representatives of Louisiana were fully aware of this fact.
They knew of the manner that similar funds derived from
mineral leases off the California coast had been han-
dled. They knew of the way in which the impounded
funds in which they had an interest were being handled
as they received periodic reports. They made no objec-
tion, and when they made a request that the method of
handling the funds be altered and that request was denied,
they made no protest. It can only be assumed that they
accepted this method of handling those funds as proper
under the Interim Agreement. And they made no request
for modification of the agreement in this respect.

Louisiana also makes the argument that the United
States had an obligation to account for any profits which
it realized from the use of the impounded funds as a joint
venture. Suffice to say on this point that the proof does
not show any profits so derived which require such an
accounting, nor does the relationship between the State
and the United States have any of the characteristics of a
joint venture.

14

From all of the above it appears that the United States
has fulfilled its obligations under the Interim Agreement
and under the Supplemental Decree of June 16, 1975 by
filing the accountings heretofore made pursuant thereto and
paying to the State of Louisiana the amounts called for
thereby, and it has no further obligation under that agree-
ment or that decree, either by way of interest or pay-
ment for the use of Louisiana’s money. It recognized in-
come from leases within the disputed area as its source of
revenue. It acknowledged such payments to the State
of Louisiana as the Court might decree as a liability. This
seems to be all that was required by the language of the
Interim Agreement.

This agreement, however, also requires that this fund
be maintained “intact”, Obviously this does not mean
that the actual dollars received from oil leases in the
disputed area should retain their identity, else why specify
“a sum equal to” the amount of those dollars; it means
that the fund itself should be held intact, in that no liabil-
ities should be charged against it except as provided in
the Interim Agreement. The applicable provision of the
agreement is as follows:

“Payment of impounded funds hereunder shall
be made in full within seventy-five (75) days after
the date of the applicable determination, unless by
agreement of the parties a later date is specified.”

The “applicable determination” is the Court’s decree
of June 16, 1975 (422 USS. 13) and payment has now
been made out of the impounded fund in accordance there-
with and with the Interim Agreement. At no time was
the ability of the United States to perform its obligations
under the Interim Agreement impaired. No other liabil-
ities have ever been charged against the special deposit
fund account (14X6709) and no other payments made out

15

of the fund for which it accounts. No provision for such
payment is contained in the Interim Agreement, nor is
such payment ordered by the Supplemental Decree (422
U.S. 13). Nor is there any Act of Congress authorizing
any such payment. Therefore the United States has no
further obligations beyond those it has performed.

Second Issue
Does Louisiana have the obligation to account for rev-
enues received by it from mineral leases on areas lying
within Zone 1?*

This issue is raised by objection by the United States
to Louisiana’s accounting for unimpounded funds filed pur-
suant to Par. 6(a) of the Decree of June 16, 1975 (422
U.S. 13). The burden of persuasion is therefore upon
the United States. The position of the United States is
that certain areas lying within Zone 1 having now been
adjudicated to belong to the United States, the State of
Louisiana is now obligated to account for and pay over
to the United States all revenues realized by the State
from mineral leases upon any part of those areas from
June 3, 1950 (the date fixed for accounting by Decree
of December 11, 1950 [340 U.S. 899]).

This would certainly be the case in the absence of
any adjudication or agreement between the parties to the
contrary. The State of Louisiana insists, however, that
by the Interim Agreement of October 12, 1956 the United
States waived any claim to revenues derived from mineral
leases upon areas ultimately adjudicated as belonging to
it and lying within Zone 1, and that any such waiver
contained in that agreement was specifically validated by

4. While this is the third issue listed in the Pre-Trial Order
of May 26, 1976, in the interest of orderly procedure it will be
dealt with here as the second issue.

16

Par. 13 of the Decree of June i6, 1975 (422 U.S. 13).
It is with this argument that we must concern ourselves.

The Interim Agreement cites as authority for the
United States’ participation therein Section 7 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1336), which pro-
vides in part that the United States acting through the
Secretary of the Interior with the concurrence of the At-
torney General may “enter into agreements with the State,
its political subdivision or grantee or a lessee thereof re-
specting operations under existing mineral leases and pay-
ment and impounding of rents, royalties, and other sums
payable thereunder.” The Act then goes on to say:

“Payment made pursuant to such agreement, or
pursuant to any stipulation between the United States
and a State, shall be considered as compliance with
section 1335 (a) (4) of this title.”

The subsection of 43 U.S.C. 1335 referred to provides
that “any mineral lease covering submerged lands of the
Outer Continental Shelf issued by any State (including
any extension, renewal or replacement thereof heretofore
granted pursuant to such lease or under the laws of such
State)” shall be subject to validation if “all rents, royalties
and other sums payable” thereunder “are paid to the Secre-
tary” (of the Interior). Thus payments made to a State
pursuant to an agreement between it and the United States
made under authority of Section 7 of the Outer Continental
Shelf Lands Act are equivalent to payments made to the
Secretary of the Interior and thus to the United States.

The only remaining question then is whether payments
made to the State of Louisiana prior to entry of the De-
cree of June 16, 1975 (422 U.S. 13) under mineral leases
covering areas lying in Zone 1 as defined in the Interim
Agreement come within the meaning and operation of

17

this Act. The Interim Agreement contains no specific
language regarding payments derived from mineral leases
on areas lying within Zone 1 and Zone 4, although it
does specifically provide that revenues derived from such
leases on areas lying within Zones 2 and 3 (which are
referred to as the “disputed area”) shall be impounded.
And it contains the following provision (Paragraph 6):

“Notwithstanding any adverse claims by the other
party hereto, the State of Louisiana as to any area
in Zone No. 1, and the United States as to any area
in Zone No. 4, shall have exclusive supervision and
administration, and may issue new leases and authorize
the drilling of new wells and other operations without
notice to or obtaining the consent of the other party.”

Pursuant to this provision, the State of Louisiana did
in fact collect and retain rentals on mineral leases on
areas lying within Zone 1 and the United States did so
on those areas lying within Zone 4. Neither party ques-
tioned the other’s right to do so, and so it is apparent
that both considered that the right to “exclusive super-
vision and administration” included the right to collect
and retain those rentals. Payments to the State pursuant
to the Interim Agreement were therefore authorized un-
der Section 7 of the Outer Continental Shelf Lands Act
of 1953 (43 U.S.C. 1336) and under Section 6 thereof (43
U.S.C. 1335) are equivalent to payments to the United
States and therefore are not now recoverable by it.

The Court recognized the validity of the Interim
Agreement in its decree of June 16, 1975 (422 U.S. 13),
saying in Paragraph 13 thereof:

_ “Nor shall anything in this Decree prejudice or
modify the rights and obligations under any contracts
or agreements, not inconsistent with this Decree, be-

18

tween the parties or between a party and a third
party, especially, but not limited to, the Interim Agree-
ment of October 12, 1956, as amended, which Agree-
ment remains in effect except as explicitly modified
hereby.”

The only other explicit references in the decree to
the Interim Agreement are in Paragraphs 2, 4, 5, and
7, all of which deal with funds “now held impounded”
(or, in Paragraph 7, “heretofore impounded”). While it
is true that Paragraph 7 requires the State to account
for “any and all other sums of money derived by the
State of Louisiana since June 5, 1950, either by sale,
leasing, licensing, exploitation or otherwise from or on
account of any of the lands, minerals or resources described
in Paragraph 1 hereof” (those lying more than three geo-
graphical miles seaward of the base line as established
by the decree) the only payment called for under that
paragraph is that, in the absence of objections, “the party
whose obligation to the other party is shown by such
accounts to be the greater shall forthwith pay to the
other party the net balance so shown to be due”; and
that if there are objections, then any undisputed balance
shall be so paid. This can hardly be considered an explicit
modification of the Interim Agreement.

Louisiana apparently anticipated the possibility that
some portions of the areas in Zone 1 upon which it granted
leases (as it was specifically authorized to do under the
Interim Agreement) might ultimately be adjudged to be-
long to the United States, as it inserted in all of those
leases except two a provision that it was leasing the right
to extract minerals only from those parts of the described
areas “belonging to the State of Louisiana” or such as
were “owned by the State of Louisiana.” Whether this
language gives rise to a claim by the United States against

-

<<

19

the lessees is not now before the Special Master for con-
sideration, but it does tend to negative any claim by the
United States against the State of Louisiana.

The purpose of the Interim Agreement was clearly
to settle the rights of the parties to the extent that this
could be done pending final determination oy the Court.
Under it, Louisiana was given “exclusive supervision and
administration” over all areas lying within Zone 1, and
this was recognized by both parties to include the right
to collect rents from mineral leases in that zone and to
expend the funds so collected without impoundment. This
agreement remained in full force and effect until the entry
of the decree of June 16, 1975,5 under which its terms
were validated except as therein explicitly modified, there-
fore the State is entitled to keep all rentals derived prior
to the entry of that decree from mineral leases upon areas
lying within that zone, and the United States has no right
to recover them.

Third Issue
Does Louisiana have the obligation to account for as
unimpounded funds and to pay to the United States
money collected by it as severance taxes on minerals
removed from areas subsequently determined to be-
long to the United States?

Here again the issue is raised by objection by the
United States to Louisiana’s unimpounded fund accounting,

5. The provision of the Interim Agreement itself as to termi-
nation is as follows:

“This stipulation and agreement shall terminate as to
any area, upon the final settlement or determination of the
aforesaid controversy with respect to such area; and there-
after the successful party shall have exclusive jurisdiction
and control over the area so determined to be owned by it
to the extent fixed by the decision in the final adjudication.”
(Emphasis supplied)

20

and therefore the burden of persuasion is upon the United
States. Ordinarily when a tax is illegally assessed and
coliected, the right of recovery thereof is with the payor,
But the United States insists that the so-called “severance
tax” collected by Louisiana in this case (pursuant to La.
Const. Art. X, Sec. 21; La. Rev. Stat. 47:631-636) was
not in fact a tax but a form of additional royalty. It
bases this position upon the fact that the tax is imme-
diately related to the minerals extracted and is a kind
of substitute for the loss of a public asset. It argues
that where it has been determined that the area from
which the minerals were extracted lies beyond the taxing
jurisdiction of the State, the amount of the tax should
go to the sovereign having a right to impose it.

This argument appears, however, to be without merit.
The Louisiana severance tax is not a substitute for the
loss of a public asset, as it is imposed upon minerals
extracted from privately owned areas within the State
as well as those which are publicly owned. The fact
that it is immediately related to the minerals extracted
is not significant, as many taxes are so measured. The
Louisiana severance tax has all of the characteristics of
a true tax, and if it was wrongfully assessed and collected,
then it is up to those who paid it to seek redress.

Par. 6(a) of the Decree of June 16, 1975 (422 USS.
13) requires the State to account for “any and all other
sums of money derived by the State of Louisiana since
June 5, 1950, either by sale, leasing, licensing, exploitation
or otherwise from or on account of any of the lands,
minerals or resources” adjudged to belong to the United
States. This language was clearly intended to apply to
proprietary revenues, not taxes. If the Louisiana severance
tax is a true tax, as indicated above, and not an additional
royalty, then it does not come within it.

21

The United States argues, however, that as it has under
Sec. 6(a)(9) of the Outer Continental Shelf Lands Act
of 1953 (43 U.S.C. 1336) collected on minerals extracted
from areas within Zones 2 and 3 now adjudged to belong
to the State of Louisiana “a sum of money equal to the
amount of the severance - - - taxes which would have
been payable on such production to the State issuing the
lease under its laws as they existed on the effective date
of this Act,” which sums have now been paid over to
the State, it is only equitable that the State should now
pay to the United States the amount collected by it as
severance tax upon minerals extracted from areas now
adjudged to belong to the United States. This, however,
does not necessarily follow. These collections by the
United States were admittedly not in the form of taxes
but of additional revenues, and as such they were im-
pounded under the Interim Agreement and disbursed as
a part of the impounded funds pursuant thereto. In this
they differ materially from the severance taxes collected
by the State of Louisiana. It may be that the United
States has a claim for additional royalties against the les-
sees of areas adjudged to it on which no previous collec-
tions under Sec. 6(a) (9) of the Outer Continental Shelf
Lands Act of 1953 (43 U.S.C. 1336) have been made, but if
so, it must look to those lessees for that additional payment,
not to the State of Louisiana.

SUPPLEMENTARY

A preliminary draft of this report has been submitted
to counsel for both parties and, without of course concurring
in the conclusion in every case, a number of suggestions
have been made as to the form of specific findings of
fact, some of which have been adopted in this final report.

22

In this respect and in many others counsel have been
most helpful. In addition, the State of Louisiana has re-
quested additional findings of fact, which request along
with the Special Master’s ruling thereon, is attached as
an appendix to this report.

RECOMMENDATIONS

For the foregoing reasons, the Special Master recom-
mends that all objections to the amended and corrected
accountings filed by each of the parties be overruled, and
those accountings be approved as filed.

Respectfully submitted,

WALTER P. ARMSTRONG, JR.
Special Master

August 27, 1979

23

APPENDIX

In the Supreme Court of the United States

OCTOBER TERM, 1978

No. 2, Original

UNITED STATES OF AMERICA,
Plaintiff,
vs.

STATE OF LOUISIANA, ET AL..,
} Defendant.

MOTION OF THE STATE OF LOUISIANA TO HAVE
THE SPECIAL MASTER MAKE ADDITIONAL FIND.
INGS OF FACTS TO BE INCLUDED IN A SUPPLE.
MENTAL REPORT TO THE UNITED STATES
SUPREME COURT

MAY IT PLEASE THE SPECIAL MASTER:

The State of Louisiana, appearing herein through un-
dersigned counsel, respectfully moves that additional find-
ings of facts be included in the supplemental report to
be filed with the United States Supreme Court as
follows:

A

Louisiana’s Claim for the Increment that Should Have
Been Earned on the Share of Louisiana’s Money Held
Under the Interim Agreement of October 12, 1956

1. The agreement between the State of California
and the United States to impound funds referred to by
the United States took place prior to the enactment of

24

the Submerged Lands Act and the Outer Continental Shelf
Lands Act in 1953. (U.S. Exh. 43 and 44; La. Exh. No. 1 -
LPI No. 2)

2. After the passage of the Outer Continental Shelf
Lands Act, Mr. J..Lee Rankin, Assistant Attorney General
of the United States, sent to California a proposed stipu-
lation which contained the following provision:

“The United States may invest and reinvest any of
the funds covered by this paragraph in obligations
of the United States Government, and all interest re-
ceived, as well as any increase or decrease in the
value of the investments, shall accrue to or be charged
against said fund as the case may be.” (La. Exh. No.
9 - LPI #166)

This was followed by a letter referring to the proposed
stipulation in which Mr. Rankin said:

“This draft contained authority for the United States
to invest the funds held by it.” (La. Exh. No. 9 -
LPI #167)

Louisiana was not advised as to Mr. Rankin’s letter at
the time the Interim Agreement was entered into in 1956
and only learned of the letter during the trial of this
phase of the case. (Tr. 800)

3. The United States admitted that Louisiana and
the United States could amend the 1956 Interim Agree-
ment to impose on the United States a requirement to
invest the funds or pay interest on the funds. (p. 3, Post-
Trial Brief of the United States on the “Interest Issue”)

4. Both houses of the Legislature of the State of
Louisiana passed Concurrent Resolution No. 251 on June
6, 1967, containing the following provision:

25

“Be it Further Resolved that the Legislature of
Louisiana does hereby respectfully request and urge
the above named officials to take such steps as are
necessary to effect a prudent and effective investment
of the funds now and hereafter so impounded, with
a view to increasing the increment deriving both to
the Federal Government and to the State of Louisi-
ana.” [Emphasis added] (La. Exh. 12 - LPI #179)

The above Resolution was sent to various Government
officials.

5. Instead of investing the funds, Mr. Carlock wrote
a letter to Louisiana on July 14, 1967, in which he stated,
on behalf of the Treasury Department, Department of
Justice and other Departments of the Government, that:

“In response to the request that the funds be
invested by the United States, I must inform you
that the Treasury Department is not able to make
investments in the absence of Statutory authority.”
(U.S. Exh. #51)

6. Mr. George S. Swarth, an attorney, the only Fed-
eral negotiator to testify, admitted that the holding of
the impounded fund by the Treasury was a fiduciary re-
sponsibility. (Dep. Tr. 9)

7. All new drilling and leasing for oil and gas in
the disputed zone in the Gulf of Mexico off the coast
of Louisiana was enjoined in 1956 by the United States
Supreme Court on the application of the United States,
except by agreement between the United States and the
State of Louisiana. (United States v. Louisiana, 351 U.S.
978)

8. Enjoining the drilling and leasing for oil and gas
off the coast of Louisiana had a severe economic impact

26

on the coastal parishes of Louisiana. Under these circum-
stances, the Interim Agreement of October 12, 1956 was
entered into to permit the United States and Louisiana
to resume the drilling and leasing for oil and gas in the
Gulf of Mexico off the coast of Louisiana. (See preamble
to La. Act 38 of 1956, La. Ex. I - LPI #3; Tr. 62-64; Tr.
108-112; Tr. 158; Tr. 112-117)

9. In June of 1956, before commencement of the nego-
tiations for the Interim Agreement, the United States De-
partment of Justice interpreted the word “impounding”
under Section 7 of the Outer Continental Shelf Lands
Act to mean “hold in escrow” by the filing in the United
States Supreme Court of a Memorandum for the United
States on the Maintenance of Status Quo, which contained
the following representation on behalf of the Federal Gov-
ernment:

“The United States stands ready and willing to enter
into an agreement with Louisiana to hold all proceeds
of leasing in the disputed area in escrow pending
a determination of the case on its merits.” [Emphasis
added] (No. 15 Original, United States v. Louisiana,
June 1956)

10. During the negotiations for WB interim Agree-
ment, the Federal negotiators represented to Louisiana
that the money from the disputed area would be held
in escrow. (La. Exh. No. 1 - LPI Nos. 38, 39 and 40;
Tr. 50-54)

11. Subsequent to the execution of the Interim Agree-
ment, the interpretation that the impoundment provisions
of the Interim Agreement meant escrow was repeatedly
confirmed by Federal officials. (La. Exh. No. 1 - LPI
Nos. 20, 21, 22, 23 and 45; Tr. 206, 208, 210)

27

12. Mr. Arnold Petty, Assistant Director of Adminis-
tration for the Bureau of Land Management, agreed with
the characterization of the Interim Agreement as “in effect
our escrow agreement.” (Tr. 444)

13. Dr. John Haslem, expert witness for the United
States, gave his opinion that the Federal Government
treated the account under the impoundment provisions
of the Interim Agreement in the same manner as a bank
would treat an escrow account. (Tr. 836)

14. The Pre-Trial Order dated May 26, 1976, fixing
the issues to be heard by the Special Master, approved
as to form by the United States and Louisiana and signed
by the Special Master, provided:

“Issue No. 1: Whether the United States is obligated
to account for the value of the use of the state’s

share of the escrow fund or for interest on the fund.”
[Emphasis added]

15. United States’ officials represented to California
that the identical deposit fund account used subsequently
in this case was in the nature of a trust. (La. Exh, No.
1 - LPI Nos. 152, 153, 154 and 155; Dep. Tr. 39; La. Exh.
No. 9 - LPI No. 161/U.S. Exh. No. 47 with attachment)

16. The Dictionary for Accountants by Eric T. Kohler
defines “impound” to mean “to seize and hold in protective
custody .. . cash and other assets.” (Tr. 281 and 311)

17. Mr. Jerry Walker, expert witness for Louisiana,
testified that the requirement in the Interim Agreement
that the revenues from the disputed area be “held intact”
required that the money be invested after a reasonable
length of time. (La. Exh. No. 1 - LPI No. 49; Tr. 260-
266; Tr. 900-901; Tr. 256-257)

28

18. The deposit fund account 14X6709 is a liability
account, which is a bookkeeping tabulation of the potential
liability of the United States and has nothing to do with
the holding or use of the money from the disputed area
required to be impounded under the Interim Agreement.
(Tr. 221-222, 227, 296-297, 311-312, 347-348, 893-894, 890-
892 and 398-399)

19. The negotiators for both parties to the Interim
Agreement contemplated that the Agreement would exist
for only a short period of time of either six months or one
year. (La. Exh. No. 1 - LPI No. 6 at p. 11; Tr. 125-126)

20. Louisiana negotiators were not aware of the man-
ner in which the United States had handled the funds
derived from mineral leases off of the California coast
nor with the details of the negotiations leading up to
the execution of the 1947 and 1951 stipulations between
California and the United States. (U.S. Exh. No. 67; Dep.
Tr. 15; Tr. 27, 92-93, 106-107, 153 and 654)

II.

Louisiana’s Claim that the Federal Government Should
Account for its Unjust Enrichment Resulting from the
Unauthorized Use of Louisiana’s Share of the
Revenues from the Disputed Area

21. The United States used Louisiana’s share of the
money required to be impounded under the Interim Agree-
ment without any compensation to Louisiana. ( Responses
by the United States to Louisiana’s First Request for Ad-
missions, Nos. 1, 2 and 3; La. Exh. No. 1 - LPI Nos.
41 and 42; Tr. 187; Response by United States to Inter-
rogatory No. 8 of Louisiana’s First Set of Interrogatories;
Tr. 200-202; La. Exh. No. 1 - LPI Nos. 19, 20, 21 and .
22; Tr. 198; Tr. 213-216; La. Exh. No. 1 - LPI No. 48;

29

Tr, 217-218; La. Exh. No. II - LPI Nos. 182-183; Tr. 904-
909)

22. The United States benefited from the use of Loui-
siana’s share of the money required to be impounded under
the Interim Agreement to the extent that such use reduced
its borrowing needs. (La. Exh. No. II - LPI No. 184: a.
908-914)

23. The free use by the United States of the money
required to be impounded under the Interim Agreement
was not authorized by the Interim Agreement, and there
was no agreement that the United States need not account
to Louisiana for any share of the value of the benefit
received from the use of the money required to be im-
pounded. (La. Exh. No. 1; LPI No. 1; Tr. 55, 129, 136;
98;99)

24. No one ever advised the Louisiana negotiators
that the United States intended to use for its own purposes,
and without compensation to Louisiana, the money re-
quired to be impounded by the Interim Agreement. (Tr.
163-164; 175)

25. There was no agreement that the United States
need not invest the money. (Swarth Dep. Tr. 7-8; Tr.
57; 77)

26. There was no agreement or understanding that
the United States need not pay interest. (Swarth Dep.
Tr. 7-8; Tr. 70-71; 102-103; 136; 163-164)

27. The amount of the benefit received by the United
States in savings through the use of Louisiana’s share
of the money required to be impounded pursuant to the
Interim Agreement in lieu of borrowing is ascertainable
with reasonable certainty and amounts to approximately
$88 million. (Tr. 306-308)

30

28. The United States admitted that there was ap-
proximately $300 million still being held by the United
States under authority of the 1956 Interim Agreement.
(Tr. 481)

29. Louisiana requested the Special Master to order
the United States to hold such funds to pay Louisiana’s
claim for the use of Louisiana’s money in the event the
Master or the Court made such an award. (Tr. 480-482)

ITI.

The Special Master is a finder of fact. Therefore,
it is extremely important in presenting this matter to
the United States Supreme Court that the Court have
additional findings of facts by the Special Master from
the evidence, to be included in the Master’s Supplemental
Report or in an addendum thereto.

Submitted this 18th day of June, 1979.
For the State of Louisiana
William J. Guste, Jr.
Attorney General

Oliver P. Stockwell
Frederick W. Ellis
Booth Kellough
Special Assistant Attorney Generals

Gary L. Keyser

Assistant Attorney General
Nora K. Duncan

Special Counsel
Cuthbert H. Mandell

Staff Attorney

By: /s/ Oliver P. Stockwell
Oliver P. Stockwell

31

PROOF OF SERVICE

The undersigned certifies that copies of the foregoing
Motion of the State of Louisiana to Have the Special Master
Make Additional Findings of Facts to be Included in a
Supplemental Report to the United States Supreme Court
have been properly served on the 18th day of June,
1979, by mailing copies, sufficient postage prepaid, to the
Solicitor General and the Attorney General of the United
States, Department of Justice, Washington, D. C. 20530.

/s/ Booth Kellough
Booth Kellough

Special Assistant Attorney General

32

In the Supreme Court of the United States

OCTOBER TERM, 1978

No. 9, Original

UNITED STATES OF AMERICA,
Plaintiff,
7 vs.
STATE OF LOUISIANA, ET AL.,
Defendant.

ORDER ON MOTION OF THE STATE OF LOUISIANA

TO HAVE THE SPECIAL MASTER MAKE ADDI-

TIONAL FINDINGS OF FACT TO BE INCLUDED IN

A SUPPLEMENTAL REPORT TO "HE UNITED
STATES SUPREME COURT

Request No. 1 asks the Special Master to find as a
fact that the Interim Agreement of October 12, 1956 be-
tween the United States and Louisiana providing for the
impoundment of certain funds (hereinafter “Interim Agree-
ment”) was executed prior to the enactment of the Sub-
merged Lands Act and the Outer Continental Shelf Lands
Act. The date of execution of the instrument in question is
apparent on its face. The date of enactment of the two
Acts is a matter of which the Court can take judicial
notice. There appears to be no dispute upon either point.
Therefore there is no necessity for such a finding. This
request is therefore denied.

33

Requests Nos. 2, 4, and 5 ask the Special Master to make
findings of fact as to the contents of certain documents
which were introduced in evidence during the hearings.
The quotations from these documents given in the requests
appear to be correct, as well as the statements regarding
their preparation, delivery and receipt; however no finding
to this effect is required, as the documents speak for them-
selves. The inferences to be drawn from these documents
have already been dealt with in the Special Master’s report
to the extent necessary, the omission of any reference
to them indicating that in his opinion they were not con-
trary to his holdings as there set forth. These requests
are therefore denied.

Request No. 3 asks the Special Master to make a
finding of fact based upon a statement contained in the
Post-Trial Brief of the United States. This would not
be proper as such findings must be based upon the evi-
dence either testimonial or documentary, presented during
the course of the hearings, or upon the technical record,
and therefore this request is denied.

Requests Nos. 6, 12, 13, 17, and 28 ask the Special
Master to find that certain testimony was given by particu-
lar witnesses during the course of the hearings before
him. The summary of the testimony as given in the re-
quests appears to be correct. However, it is not the func-
tion of the Special Master to make findings of fact upon
such matters (which are apparent from the record) but
upon the ultimate factual issues in the case. Therefore
these requests are denied.

Request No. 7 asks the Special Master to make a
finding of fact in regard to a decree entered by the U.S.
Supreme Court which is a matter of record (351 U.S.
978). This is unnecessary and therefore this request is
denied.

34

Request No. 8 correctly states the facts, but in the
opinion of the Special Master those facts are immaterial
to the decision of any issue pertinent to the case. The
request is therefore denied.

Request No. 9 apparently asks the Special Master to
make a finding of fact based upon a memorandum filed
in a case not before him. It is therefore denied.

Requests Nos. 10 and 11 ask the Special Master to
find that the term “escrow” was frequently used by repre-
sentatives of the United States both before and after the
execution of the Interim Agreement in referring to the
manner in which the funds required under it to be im-
pounded would be handled. This appears to be correct;
however this fact does not alter the terms of the agreement
itself and is therefore in the opinion of the Special Master
immaterial. (See Report p. 7). These requests are there-
fore denied.

Request No. 14 asks the Special Master to make a
finding of fact as to the wording of a Pre-Trial Order
approved by counsel and entered in the case. As this
order is a part of the record, such finding is unnecessary.
As to its effect, that is dealt with in Note 2 to the Special
Master’s report. This request is therefore denied.

Request No. 15 asks the Special Master to make a
finding of fact as to certain representations alleged to
have been made by representatives of the United States
to the State of California in connection with an account
maintained by the United States in which that state had
an interest. Even if true, this is in the opinion of the
Special Master immaterial, and therefore the request is
denied.

Request No. 16 asks the Special Master to make a
finding of fact as to a definition given in a standard dic-

|

35

tionary of accounting. Although the definition as quoted in
part is correctly given, this is unnecessary as this is a
matter of which the Court can take judicial notice. This
request is therefore denied.

Request No. 18 has to do with deposit fund account
14X6709. This has already been dealt with fully in the
Special Master’s Report (See pp. 12-14). This request
is therefore denied.

Request No. 19 asks the Special Master to find that
both parties contemplated that the Interim Agreement
would be in effect for only a short term. Even if true,
this is in the opinion of the Special Master immaterial.
This request is therefore denied.

Request No. 20 asks the Special Master to find that
the negotiators for the State of Louisiana were not aware
of certain negotiations between the United States and the
State of California. Whether or not the negotiators were
aware of their precedent, the State of Louisiana was
charged with such knowledge. The Special Master’s Re-
port so finds (p. 13), and such a finding is supported
by the evidence. (U.S. Exs. 67, 75, 76, 83) This request
is therefore denied.

Special Requests Nos, 21 and 22 ask the Special Master
to find that the United States used money impounded
under the Interim Agreement ultimately adjudged to be-
long to the State of Louisiana and benefitted thereby.
This has been dealt with adequately in the Special Master’s
Report (pp. 10-13) and in the opinion of the Special Master
no further findings upon this point are necessary. The
requests are therefore denied.

Requests Nos. 23, 24, 25 and 26 ask the Special Master
to make negative findings, that certain matters were not
agreed to by the parties or discussed between their repre-

36

sentatives. While it appears to be true that these matters
were not discussed, the inference to be drawn therefrom
has already been considered in the Special Master’s Report
(pp. 7-8) and nothing further is required. Therefore
these requests are denied.

Request No. 27 asks the Special Master to find that
the amount of the benefit derived by the United States
from the use of funds impounded under the Interim Agree-
ment and ultimately adjudged to belong to the State of
Louisiana is ascertainable with reasonable certainty and
to fix that amount. In view of the Special Master’s finding
that the United States is not accountable for any such
benefits, if in fact there were any, such a finding is imma-
terial and unnecessary, and this request is therefore denied.

Request No, 29 asks the Special Master to find that
he was requested to order the United States to hold certain
funds pending the outcome of this litigation. No formal
motion for such an order appears in the record, and had
there been such, it would have had to be denied as being
beyond the scope of the reference to the Special Master
(423 U.S. 909). This request is therefore denied.

Although all of Louisiana’s requests for additional find-
ings of fact are denied for the reasons given, Louisiana
is entitled to have the benefit of its requests therefor
and the Special Master’s rulings thereon in seeking review
of the Special Master’s Report to the United States Su-
preme Court. Louisiana’s Motion and this Order will
therefore constitute an Appendix to the Special Master’s
Report as filed with that Court.

/s/ Walter P. Armstrong, Jr.
Special Master

ENTERED: 7/18/79

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0002%3A1. Public record. Not legal advice.