Petition — Andrus v. Utah

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QIQGED

ABR 15 i979

78-1522

, JR., CLERK

Iu the Supreme Court of the Wuited States

OCTOBER TERM, 1978

CEcIL D. ANDRUS, SECRETARY OF THE INTERIOR,

PETITIONER

UV.

STATE OF UTAH

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

WADE H. MCCREE, JR.

Solicitor General

JAMES W. MOORMAN

Assistant Attorney General

Louis F. CLAIBORNE

Assistant to the Solicitor General

RAYMOND N. ZAGONE

CARL STRASS

Attorneys

Department of Justice

Washington, D.C. 205380

| Page

ER ER ae 1

OER, 5 2

dia nassnetnhenensinahesuoibe 2

Sentutes involved ........................... 1a EAC 2

SRE EE i SOs Oe 3

Reasons for granting the writ -....................... 9

ERLE a 25

SA SSO a la

oa chaiednptarncinns 10a

i coeceeamanminnsoninasi 54a

EELS ESAT et I soe RET ONE 80a

ESR ECR LS ee Se 8la

CITATIONS

Cases:

Andrus v. Charlestone Stone Products

RN setae 11

Board of Governors v. First Lincolnwood

Corp., No. 77-832 (Dec. 11, 1978)........ 20

Boothe v. Hickel, 347 F. Supp. 1278, aff’d

sub nom. Bronken v. Morton, 473 F.2d

790, cert. denied, 414 U.S. 828 —.......... 21

Finch v. United States, 387 F.2d 13,

cert. denied, 390 U.S. 1012 2.000000... 21

Heydenfeldt v. Daney Gold and Silver

Mining Co., 93 U.S. 684 .......................- 13

Layman v. Ellis, 52 Interior Dec. 714...... 11

Il Ill

Cases—Continued Page ;

National Ass’n of Regional Councils v. Statutes and rule—Continued Page

oo ee LE A EF ee 7 Act of August 27, 1958, Pub. L. No. 85-

NLRB v. Bell Aerospace Co., 416 U.S. Reg Pe I I ibechcpaienesiicinsdatneccininie 18

SEATS eR ee OnNe rome eee AOD OT 20 .

.C. 852 (a) (1)........ 4

Payne v. Central Pac. Ry. Co., 255 U.S. yee Se en FANS TT)

SECA REIN eases Ee I te OUR 15 Act of Sept. 4, 1960, Pub. L. No. 86-786,

Pallin v. United States, 496 F.2d 27........ 21 Ce OU II asians aacnnnrsertemeeinpenene 19

Rosado v. Wyman, 397 U.S. 397 ...........--- 20 Federal Land Policy and Management

Saxbe v. Bustos, 419 U.S. 65 .................... 16, 20 Act of 1976, Pub. L. No. 94-579, 90

State of Arizona, 55 Interior Dec. 249... 16 i Nha eck oe en a 16

State of Arizona, 59 Interior Dec. 317.... 16 Section 701(c), 90 Stat. 2786 _....... 16

State of California, 59 Interior Dec. 451.. 16 Section 704(a), 90 Stat. 2792 16

State of California, 67 Interior Dec. 85.... 16 : ;

State of Utah, 71 Interior Dec. 392 ........ 16 Mineral Leasing Act of 1920, 30 U.S.C.

REANALYSIS n eT 7

State of Utah v. Work, 6 F.2d 675, aff’d

on independent grounds, 273 U.S. 649.. 15

Train v. Colorado Pub. Int. Research

I, Ne ei mcccsccccatnrctineenen 20

Udall v. Tallman, 380 U.S. 1 2202-2... 20

United States v. MacCollom, 426 U.S.

yp BREE tee aA ane naa OS eT RR Dee we 7

United States v. Morrison, 240 U.S. 192.. 13

United States v. Sweet, 245 U.S. 563...... 3

United States v. Wyoming, 331 U.S. 440.. 18, 15

Wyoming v. United States, 255 U.S. 489.. 15

Statutes and rule:

Act of May 3, 1902, ch. 688, Section 2,

32 Stat. 189, 48 U.S.C. 858 .................. 4

Act of January 25, 1927, ch. 57, 44 Stat.

I oe eee aL 3

Act of June 26, 1936, ch. 842, Section 2, .

ee ia MP eciingeadeleseclind tcatticate tind 17, 8a

National Environmental Policy Act, Sec-

tion 102(2)(C), 42 U.S.C. 48382(2)

EERE ENN EES Ao AAA RE 7

Pickett Act of June 25, 1910, ch. 421, 43

if tome e.g he. | acer eenenruenen 15

Taylor Grazing Act of June 28, 1934, ch.

865, 48 Stat. 1269, 48 U.S.C. 315 et

I eae iads ic etisalat anata agtlada units 17

Section 1, 43 U.S.C. 315 .....000....2.... 5,17

Section 7, 43 U.S.C. 315f ....2, 3, 6, 8, 9, 17,

19, 20, 21, 22, 8a

Utah Enabling Act of July 16, 1894, ch.

138, 28 Stat. 107 et seq.:

pecuon & 33 Sint. 197 ..................... 2

Section 6, 28 Stat. 109 _.......... 2,3, 4, 14, la

R.S. 2275, 48 U.S.C. 851 ........ 2, 4, 18, 20, 22, 2a

R.S. 2276, 43 U.S.C. 852 ....2, 4, 8, 18, 20, 22, 3a

R.S. 2276, 43 U.S.C. (1952 ed.) 852........ 4

Statutes and rule—Continued Page

R.S. 2276, 43 U.S.C. 862(a) .................... 14, 3a

R.S. 2276, 43 U.S.C. 852(d) (1) .............. 14, 7a

43 C.F.R. 2400-3(a), 2450.1, 2621.2(a).. 18

Miscellaneous:

Executive Order No. 6910, 54 Interior

Dee. 539 (1986) ck 12, 15, 17

8 Fed. Reg. 7284 (1948) .......................... 18

38 Fed. Reg. 33186 (1973) ...................... 5

39 Fed. Reg. 7475 (1974) .................-.....- 5

39 Fed. Reg. 11208 (1974) ...........0002..... 5

P. Gates, History of Public Land Law

Development (WOGBF iuiciacicteeeces 3

Oil Shale Leasing: Hearings on S. 2418

Before the Senate Subcomm. on Min-

erals, Materials and Fuels, 94th Cong.,

2d Seas. (8906). 2c 24

H.R. Rep. No. 2110, 86th Cong., 2d Sess.

C2OGD ) nese 19

H.R. Rep. No. 2347, 85th Cong., 2d Sess.

(1968) —_...sscc 19

42 Op. ATT’y. GEN. 173 (1968) ................ 16

S. Rep. No. 1735, 85th Cong., 2d Sess.

(19GB) a c.nccnssuenn ee 19

Solicitor’s Opinion of February 8, 1935,

55 Interior Dee. BG ccccsccieniee 16

Iu the Supreme Court of the United States

OCTOBER TERM, 1978

No.

CeciIL D. ANDRUS, SECRETARY OF THE INTERIOR,

PETITIONER

Vv.

STATE OF UTAH

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

The Solicitor General, on behalf of the Secretary

of the Interior, petitions for a writ of certiorari to

review the judgment of the United States Court of

Appeals for the Tenth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra)

is reported at 586 F.2d 756. The opinion of the dis-

trict court (App. C, infra) is unreported.

(1)

JURISDICTION

The judgment of the court of appeals (App. D,

infra) was entered on August 8, 1978. A petition

for rehearing was denied on December 6, 1978 (App.

E, infra). On February 27, 1979, Mr. Justice White

extended the time within which to file a petition for

a writ of certiorari to and including April 5, 1979.

The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1).

QUESTIONS PRESENTED

1. Whether public lands withdrawn from all forms

of private appropriation and placed within a federal

grazing district may be selected by a State in lieu of

lost school-grant lands without first being classified

as available for that purpose by the Secretary of the

Interior pursuant to his discretionary authority under

Section 7 of the Taylor Grazing Act.

2. Whether the Secretary, in the exercise of such

discretion, may decline to classify as open to selection

lands which are “grossly disparate” in value to the

lost school lands.

STATUTES INVOLVED

The relevant statutes are:

1. Section 6 of the Utah Enabling Act of July 16,

1894, ch. 138, 28 Stat. 109;

2. Sections 2275 and 2276 of the Revised Statutes,

as amended, 438 U.S.C. 851-852; and

3. Section 7 of the Taylor Grazing Act of June 28,

1934, ch. 865, 48 Stat. 1272, 48 U.S.C. 315f.

These provisions are reproduced in the Appendix,

infra, pages la-9a.

STATEMENT

1. Like most western states, upon admission to

the Union Utah received grants of public lands for

school purposes. See P. Gates, History of Public Land

Law Development 288-318 (1968). Utah was spe-

cially favored, however, in being granted four sec-

tions in every township, instead of the usual two.

Utah Enabling Act of July 16, 1894, ch. 138, Section

6, 28 Stat. 109, imfra, App. 1a.’ Originally, school

grants were valid only if, upon survey, the designated

section was believed to be “non-mineral” in character.

Utah claimed exemption from that rule, but lost.

United States v. Sweet, 245 U.S. 563 (1918). A

decade later, however, Congress changed the law to

validate the earlier grants of sections “in place” not-

withstanding the land was mineral. Act of January

25, 1927, ch. 57, 44 Stat. 1026-1027. In the par-

ticular case of Utah, that was a very significant

change which, indirectly, gives rise to the present

case, in which Utah claims indemnity lands to re-

place some 245 lost sections said to be mineral in

character.

* This no doubt accounts in part for the comparatively large

number of acres still unselected by Utah before 1965. See

note 9, infra.

Long before the school grants to Utah, Congress

had provided for the case where such grants were

lost to the State because the designated sections were

fractional or because, before a survey was approved,

the lands “in place” were appropriated by settlers,

disposed of to others, or set aside as part of a fed-

eral reservation. In all such eventualities, the State

was entitled to select other “unappropriated” public

lands of equal acreage. R.S. 2275-2276. The Utah

Enabling Act itself made a like provision for selec-

tion of lands in lieu of lost school grants. Act of

July 16, 1894, Section 6, 28 Stat. 109.* These “in-

demnity” or “lieu” selections could not, until 1958,

include mineral land. E.g., 438 U.S.C. (1952 ed.)

852. But, in 1958, the ground rules were changed

once more, and henceforth mineral land could be

selected provided the original lost section was also

mineral in character. Pub. L. No. 85-771, Section 2,

72 Stat. 928-929, now 48 U.S.C. 852(a) (1), infra,

App. 3a-4a. The present claim is premised on the

indemnity selection statute, as thus amended.

2. Between September 1965 and November 1971,

the State of Utah selected 194 parcels of public land

of the United States in Uintah County, Utah, com-

prising 157,255.90 acres (Fdg. 4, App. 56a, infra).

The tracts designated are 640-acre survey sections,

2 Notwithstanding the indemnity selection provision of the

Enabling Act, Congress amended the general indemnity

statute for Utah’s benefit by stipulating that references to

sections 16 and 36 should, in the case of Utah, be read to

embrace also sections 2 and 32. Act of May 3, 1902, ch. 683,

section 2, 32 Stat. 189, 43 U.S.C. 853.

except for three large parcels each comprising about

11,000 or 12,000 acres. All the lands selected are

located within federal grazing districts established

pursuant to Section 1 of the Taylor Grazing Act of

1934, 43 U.S.C. 315 (Fdg. 12, App. 68a, infra). In-

cluded within the 194 selected parcels are Tracts

U-a and U-b, each 5,120 acres, which, since April

1974, are the subject of prototype oil-shale leases

issued by the Secretary to third parties (Fdg. 5,

App. 61a, infra).* As of May 1976, total leasing reve-

nues from Tracts U-a and U-b amounted to $48,291,-

840. Jbid. Sums in excess of $72 million have now

accumulated. All the remaining selections are said

to be of mineral lands, chosen in lieu of an equal

acreage of lost school land grants which the State

claims were also mineral in character. The accuracy

of these representations is still to be determined, but

may be assumed for present purposes.

In February 1974, the Secretary of the Interior

made the following announcement in a letter to the

Governor of Utah (R. 70):

As you know, the Department of the Interior

has not as yet acted upon the State’s applications

[for the 194 parcels]. The principal question

presented by the applications is whether pur-

suant to Section 7 of the Taylor Grazing Act,

48 Stat. 1272 (1934), as amended, 43 U.S.C.

§ 315f (1972), the Department may refuse to

* A description of the Interior Department’s prototype oil-

shale leasing program was published. 88 Fed. Reg. 33186

(1973) ; 39 Fed. Reg. 7475 (1974) ; 39 Fed. Reg. 11208 (1974).

convey applied-for lands to a State where the

value of those lands greatly exceeds the value

of the lost school lands for which the State seeks

indemnity. In January 1967, the then Secre-

tary of the Interior adopted the policy that in

the exercise of his discretion under, inter alia,

Section 7 of the Taylor Grazing Act, he would

refuse to approve indemnity applications that

involve grossly disparate values. That policy

remains in effect. |

In the present case, although the land values are

not precisely determined, it appears that the se-

lections involve lands of grossly disparate values,

within the meaning of the Department’s policy.

While the Department is not yet prepared to

adjudicate the State’s applications, I feel it is

appropriate at this time to advise you that we

will apply the above-mentioned policy in that

adjudication.

Two weeks later, the State filed the present suit

against the Secretary.

3. The State’s complaint sought title to the 194

parcels selected or, alternatively, an order directing

the Secretary to approve or disapprove the State’s

selections without reference to any disparate values

between the selected and “base” or lost lands. In due

course, the parties entered into a stipulation iden-

tifying the contested issues of law in the case: (a)

whether the State’s selections could be effective un-

less the identified lands were first classified by the

Secretary, pursuant to Section 7 of the Taylor Graz-

ing Act, as suitable for satisfaction of school in-

demnity selection rights; and, if not, (b) whether,

in making the required classification, the Secretary

may consider the “comparative values” of the se-

lected lands and the lost sections; and (c) whether

such a classification constitutes a “major Federal

action” under Section 102(2)(C) of the National

Environmental Policy Act, 42 U.S.C. 4882(2)(C),

with the possibility that an environmental impact

statement would have to be prepared. Thereafter,

both sides cross-moved for summary judgment.‘

On June 8, 1976, the district court issued its find-

ings of fact, conclusions of law, and judgment (App.

54a-79a, infra). The Secretary was directed to com-

plete a “ministerial, administrative adjudication”

resulting in “a determination as to whether those

selection lists [comprising the 194 selected parcels]

are in factual compliance with the requirements of

* In addition, the State sought an order requiring the Secre-

tary to pay the oil-shale leasing receipts from Tracts U-a

and U-b into the registry of the district court during the

pend. icy of this case. In due course, the court entered orders

to this effect, instructing its clerk to deposit equal portions

of the impounded leasing receipts with four Salt Lake City

banks, by them to be invested in 90-day Treasury bills. On

appeal, those orders were affirmed. In our opinion, this action

of the district court contravenes the provisions of Section 35

of the Mineral Leasing Act of 1920, 30 U.S.C. 191, which

requires the Secretary of the Interior to deposit these receipts

into the Treasury so that regular distributions of them may

be made to particular recipients. We also believe the district

court was without jurisdiction to impound these funds. United

States v. MacCollom, 426 U.S. 317, 321 (1976); National

Ass’n of Regional Councils v. Costle, 564 F.2d 583, 589-590

(D.C. Cir. 1977). Nevertheless, because the question does not

appear to have recurring importance, we do not present it

for review here.

43 U.S.C. 852, and to refrain from applying any

measure of comparative or disparate value between

the base lands and the selected lands * * *” (App.

77a, infra).° The district court further held that clas-

sification under Section 7 of the Taylor Grazing Act

was not required with respect to lands selected by

the State pursuant to Section 852, and that the Sec-

retary’s contrary regulations were “void.” Finally,

the court concluded that the National Environmental

Policy Act was inapplicable (Concl. 9, App. 74a,

infra).

On appeal by the Secretary, the Tenth Circuit af-

firmed the district court’s judgment in its entirety.

The court of appeals took the view that the school

land grant statutes must be treated as “special acts

completely separate and apart from all other public

land grant enactments * * * and given special, inde-

pendent treatment * * *” (App. 40a, infra). The

court went on to stress that the “purpose was to cre-

ate a binding permanent trust which would generate

financial aid to support the public school systems of

the ‘public land’ states” (App. 18a, infra), conclud-

5 The judgment originally provided that this administrative

adjudication be completed no later than December 15, 1976.

However, the district court later stayed this requirement

pending appeal to the court of appeals. To date, neither court

has entered any subsequent order setting any new deadline.

* The impounded oil-shale leasing receipts from Tracts U-a

and U-b would “be paid to the party entitled thereto pursuant

to the further Order of this Court, when this litigation is fully

and finally concluded on the merits” (App. 79a, infra). Until

then, the district court’s management of the impounded leas-

ing receipts was to continue.

ing that this “solemn bilateral agreement between

the United States and the ‘Land Grant’ State of

Utah” conferred upon Utah the “unqualified, un-

ambiguous right * * * to select ‘in lieu’ school in-

demnity lands which are ‘mineral in character’ for

the specific school lands granted which are ‘min-

eral in character’ but lost to the State’ (App. 48a,

infra). The State’s right of selection was held to

override the Secretary’s discretion under Section 7

of the Taylor Grazing Act to classify lands as open

to selection. The primary conclusion was that Sec-

tion 7 is inapplicable to the processing of state in-

demnity selections (App. 39a, infra). Alternatively,

the court held that, in this context, Section 7 classifi-

cation is not discretionary and may not take into

account the comparative values of “base” and se-

lected lands (App. 49a, infra).

REASONS FOR GRANTING THE PETITION

The decision below effectively directs the Secretary

of the Interior to approve the indemnity selections

filed by the State of Utah—all apparently for min-

eral lands, including some 10,000 acres presently

leased under a prototype oil-shale exploration pro-

gram—provided only three conditions are satisfied:

(1) that the “lost” school grant sections (or “base”

lands) were “mineral in character”; (2) that the

“lieu” lands selected have not previously been dis-

posed of to others or reserved for a specific purpose

(such as an Indian or military reservation); and

(3) that the total acreage of the lieu lands does not

exceed that of the lost lands. According to the court

of appeals, once these bare prerequisites are met, the

Secretary must issue a patent to the State, no matter

how gross the disparity between the value of the lost

lands and that of the indemnity lands selected in lieu,

and no matter what other public reasons might argue

against approval of the State’s selections. The court

holds that the Secretary enjoys no discretion to with-

hold approval of a selection because of gross disparity

in value or on any other ground.

The decision affects substantial acreage in several

western States, and, if left undisturbed, will prove

quite costly to the United States. It also threatens to

have a severe disruptive effect on the management

of the public domain. The ruling is without warrant

in the relevant legislation. Moreover, it overturns

half a century of consistent administrative practice,

on which other States have relied. The decision is at

odds with the congressional understanding, only re-

cently expressed in unequivocal terms. And, finally,

the result is wholly inconsistent with the underlying

policy of the indemnity statutes to provide the States

a rough equivalent for lost school sections, not an

opportunity for a hugely profitable trade.

1. The practical consequences of this novel ruling

are difficult to confine. The financial loss to the

United States is very substantial. Lease revenues de-

rived from the two oil-shale tracts selected by Utah

already exceed $72 million. Even larger sums are

presently being collected from lessees under the same

program in Colorado, and that State presumably will

now be free to select those lands.’ There remain, in

addition, more than half a million acres to be selected

in the western States in lieu of lost school sections. If,

in each case, the most valuable mineral or timber land

can be chosen, without regard to the value of the

lost acres, the total predictable disparity must amount

to several hundreds of millions of dollars."

Nor are monetary considerations necessarily the

most important. The Department of the Interior has

critical responsibilities for managing the public do-

main in a consistent and rational way, accommodating

the many aspects of the public interest involved. The

development of new energy sources must be encour-

aged, but without ignoring conservation needs or

overriding recreational, scenic and other environ-

mental values. The oil-shale leasing program, for ex-

ample, is carefully tailored to respect these concerns.

Plainly, the Department’s task cannot successfully

be performed without a substantial degree of control

over alienations from the public domain. That has

been recognized at least since President Roosevelt’s

' The successful bidders on the two Colorado tracts already

leased under the prototype oil-shale leasing program are

committed to pay the United States, in addition to production

royalties, some $328 million. The comparable total for the

Utah tracts is in excess of $120 million.

*The condition already noticed (supra, page 4) that

mineral land can be selected only if the lost sections were

likewise “mineral in character” is a very limited check on

disparity, given the large variation in the value of the many

deposits that qualify as “mineral.” See, e.g., Layman v. Ellis,

52 Interior Dec. 714 (1929) ; cf. Andrus v. Charlestone Stone

Products Co., 486 U.S. 604 (1978).

general withdrawal order of 1934. Exec. Order No.

6910, 54 Interior Dec. 589 (1934). The present deci-

sion, exempting State indemnity selections from the

Secretary’s discretionary classification authority,

threatens the best management of the public domain.

Of course, the right of the States to select indemnity

lands must be respected. But it is entirely possible

to satisfy those claims without depriving the Secre-

tary of all authority to take into account the public

interest for which he is responsible.

2. The present decision, it is true, is not in di-

rect conflict with the ruling of any other court. This

is, we suggest, because it has so long and so generally

been accepted that the relevant statutes afford the

Secretary of the Interior a substantial measure of

discretion in approving State indemnity selections.

But it does not follow that the ruling below is a

“sport” in the law that may be left to be gradually

eroded by contrary decisions. As it happens, all of the

acreage remaining to be selected in lieu of original

school grants lies within the boundaries of only two

circuits. For this reason, and to avoid unequal

treatment, the Secretary may deem himself required

to follow the rule of the present case in both the Ninth

and Tenth Circuits if the judgment below becomes

final. Accordingly, we cannot await the development

of a conflict of decisions. As a practical matter, the

°The States with outstanding school indemnity selection

rights and the approximate acreage involved are: Arizona,

170,000 acres; California, 180,000 acres; Colorado, 17,000

acres; Idaho, 27,000 acres; Montana, 22,900 acres; Utah,

225,000 acres; and Wyoming, 1,100 acres.

eS er a a a

ee ee ee ee ee tenn nner nt am

occasion for asking this Court’s review is now or

never.

3. As we have said, the decision below is wholly

inconsistent with the long-settled administrative prac-

tice, expressly endorsed by the Congress. Nor do the

relevant statutes compel disregard of the established

rule. On the contrary, we read the critical provisions

as confirming the Secretary’s discretion.

(a) The provisions that grant to States the right

to make indemnity selections of land in lieu of lost

school sections are today codified at 43 U.S.C. 851-

852 (infra, App. 2a). The court of appeals thought

those provisions dispositive. But they are, at best, am-

biguous as to whether lands within a Taylor Grazing

Act district (as all Utah’s selections concededly are)

remain available for selection without further action

by the Secretary of the Interior.

Section 851 announces that the right to indemnity

selection arises whenever the school section originally

granted has been lost to the State by private settle-

ment, by other disposition from the United States,

or because “before title could pass to the State” the

lands have been “included within such Indian, mili-

tary, or other reservation” (emphasis added). And,

as one would expect, it is provided that “such selec-

1 Tt has long been settled that the original grants of num-

bered sections do not take effect until approval of a final

survey and that an intervening settlement, disposal or reser-

vation of the lands defeats the grant “in place.” Heydenfeldt

v. Daney Gold and Silver Mining Co., 98 U.S. 634 (1876);

United States v. Morrison, 240 U.S. 192 (1916) ; United States

v. Wyoming, 331 U.S. 440 (1947).

tions may not be made within the boundaries of said

reservation.” The Utah Enabling Act itself contains

comparable provisions. Act of July 16, 1894, ch. 138,

Section 6, 28 Stat. 109, infra, App. la.” Thus, when

Section 852(a) says that indemnity selections may be

made from “any unappropriated * * * public lands

within the State,” we know that lands “reserved” by

the United States are deemed “appropriated” and

therefore unavailable for selection.” And it is plain

that any federal “reservation” that would defeat an

original school grant will likewise prevent indemnity

selection of such withdrawn lands. What is not wholly

clear on the face of these provisions, however, is

whether all “withdrawals” remove lands from the se-

lection pool. Is it only a withdrawal for a specific

purpose, such as creation of a national park, that

renders the lands unavailable for selection? *

11 Indeed, the Enabling Act may be more explicit in apply-

ing the same rule in all cases, including temporary with-

drawals. It first exempts from both the original grant and

indemnity selection “permanent reservations for national

purposes,” and then adds: “nor shall any lands embraced

in Indian, military, or other reservations of any character

be subject to the grants or to the indemnity provisions of this

Act until the reservation shall have been extinguished and

such lands be restored to and become a part of the public

domain” (emphasis added). Infra, App. la.

12 This is now indirectly confirmed in Section 852(d) (1),

which provides that lands as to which only the mineral rights

have been “withdrawn” will be deemed “unappropriated” for

the purposes of the indemnity selection statute. Infra, App.

Ta.

13 Notwithstanding the contrary implications in the opinion

of the court of appeals, it is clear that lands which are law-

cent edmaiiies —

Miata —

(b) The answer to the question just posed was as-

sumed in the negative as early as Wyoming v. United

States, 255 U.S. 489 (1921), the case so much relied

upon by the court below. What was there at issue

was the effectiveness of a “temporary” withdrawal of

lands as potentially mineral under the Pickett Act of

June 25, 1910 (43 U.S.C. (1970 ed.) 141). The

State prevailed, not because such a withdrawal was

insufficient, but only because the indemnity selections

had been filed well before the withdrawal. See 255

U.S. at 495, 508-509. See, also, Payne v. Central

Pac. Ry. Co., 255 U.S. 228, 234, 236, 237-238 (1921).

If any doubt remained, it was put to rest by United

States v. Wyoming, 331 U.S. 440 (1947), where a

Pickett Act withdrawal of lands, without the creation

of any special-purpose reservation, was held to defeat

an original school grant. Jd. at 442 and n.4, 444, 456.

See, also, State of Utah v. Work, 6 F.2d 675, aff’d

on independent grounds, 273 U.S. 649 (1926). That

rule governs here since, as we have seen, any with-

drawal that prevents an Enabling Act grant from

attaching likewise (perhaps a fortiori) removes the

lands from indemnity selection.

This brings us to the general withdrawal of Novem-

ber 1934. By Executive Order No. 6910, the Presi-

fully appropriated or included in a special reservation at any

time before the indemnity selection is made and filed are

thereby removed from the selection pool. See Wyoming v.

United States, 255 U.S. 489 (1921). Accordingly, in this case,

any qualifying withdrawal made before 1965 would render

the affected lands unavailable for selection, absent a release

of such lands by reclassification.

dent, expressly invoking the Pickett Act and following

its terms verbatim, withdrew and “reserved for classi-

fication” under the recently enacted Taylor Grazing

Act all “vacant, unreserved and unappropriated pub-

lic land” in certain States, including Utah. 54 In-

terior Dec. at 540. Although labelled “temporary,”

the order remains in force today.“ The effect of this

action—as the court of appeals itself at one point

seems to agree (Pet. App. 16a)“—would seem to

have been to prevent any further indemnity selec-

tions except as land was “reclassified” for that pur-

pose. That is what has always been understood. See

Solicitor’s Opinion of February 8, 1935, 55 Interior

Dec. 205, 210-211; State of Arizona, 55 Interior Dec.

249, 253 (1935); State of Arizona, 59 Interior Dec.

317, 321-322 (1946) ; State of California, 59 Interior

Dec. 451 (1947) ; State of California, 67 Interior Dec.

85 (1960); State of Utah, 71 Interior Dec. 392

(1964). See, also, 42 Op. ATT’y. GEN. 173, 180-181

(1963). Indeed, the withdrawal was deemed so effec-

tive that, absent remedial legislation, the Secretary

found no authority to release any part of the affected

lands for State indemnity selection. See 59 Interior

Dec. at 321.

14 Although the Pickett Act was repealed by Section 704 (a)

of the Federal Land Policy and Management Act of 1976,

Pub. L. No. 94-579, 90 Stat. 2792, that statute expressly

provides that previous Pickett Act withdrawals shall remain

in “full force and effect until modified.” Section 701(c), 90

Stat. 2786.

18 Later, however, the court holds that “nothing in [this

order] can be construed to apply to state school indemnity

selections.” App. 51a, infra.

865, 48 Stat. 1269 (now 43 U.S.C. 315 et seq.), au-

thorized the Secretary of the Interior to place in

grazing districts “pending its final disposal” any

public land not already dedicated to specified pur-

poses. Section 1, 43 U.S.C. 315. Much of the land

withdrawn by Executive Order 6910 a few months

later was ultimately included in grazing districts,

and this evidently happened in the case of Utah. As

already noted, however, there was no mechanism for

unlocking such withdrawn lands, except for home-

steading. See Section 7, 48 Stat. 1272. That problem

was solved two years later by an amendment to Sec-

tion 7. Act of June 26, 1986, ch. 842, Section 2, 49

Stat. 1976, 43 U.S.C. 315f, infra, App. 8a. This criti-

cal enactment provided, inter alia:

That the Secretary of the Interior is hereby

authorized, in his discretion, to examine and

classify any lands withdrawn or reserved by

Executive order of November 26, 1934 (num-

bered 6910) * * *, or within a grazing district,

which are * * * proper for acquisition in satis-

faction of any outstanding lieu * * * rights or

land grant, and to open such lands to * * *

selection * * * for disposal in accordance with

such classification under applicable public-land

laws, * * *. Such lands shall not be subject to

- disposition * * * until after the same have

been classified and opened to entry: * * * Pro-

vided, that upon the application of any applicant

qualified to make * * * selection * * * under the

public-land laws, filed in the land office of the

proper district, the Secretary of the Interior

shall cause any tract to be classified, and such

application, if allowed by the Secretary of the

Interior, shall entitle the applicant to a prefer-

ence right to * * * select * * * such lands if

opened to entry as herein provided.

On its face this amendment embraces State lieu

selection rights, and that is how it has been admin-

istered. States applying for indemnity lands were re-

quired to file a petition for discretionary classification

under this Section. This is reflected in regulations

published in 1943 “to show the change in procedure,”

8 Fed. Reg. 7284 (1948), and continued to this day.

43 C.F.R. 2400-3(a), 2450.1, 2621.2(a). Indeed, if

Section 7 of the Taylor Grazing Act were inappli-

cable, it is difficult to appreciate under what author-

ity the Secretary can approve a State selection of

lands still withdrawn.

(d) There seems to be some suggestion in the

opinion of the court of appeals that, whatever the

Secretary’s discretionary authority may have been

before, it was removed by recent amendments to the

indemnity selection statutes. App. 16a, infra. Em-

phasis is placed on the retention of the acre-for-acre

formula, with no mention of comparable value, except

only that selection of mineral land is conditioned on

the lost land also being “mineral in character.” See

43 U.S.C. 852(a) (1), as added by the Act of August

27, 1958, Pub. L. No. 85-771, 72 Stat. 928, infra,

App. 4a.

The fact is, however, that nothing in the amend-

ments to Section 852 releases withdrawn land (as

opposed to minerals separately reserved) for indem-

nity selection or affects the Secretary’s classification

discretion with respect to such lands under Section 7

of the Taylor Grazing Act. On the contrary, the legis-

lative history of both the 1958 and the 1960 amend-

ments to the indemnity selection statutes makes it

quite clear that nothing has changed in these respects.

Thus, in 1958, the report of the relevant House Com-

mittee (H.R. Rep. No. 2347, 85th Cong., 2d Sess. 2

(1958) ) stated:

The Department of the Interior noted its as-

sumption “that nothing in this bill is intended

to affect the rights or duties of States under

other laws” and, in particular, “that no change

is intended to be made in section 7 of the Taylor

Grazing Act, as amended (48 U.S.C., sec. 315f).”

The Committee on Interior and Insular Affairs

concurs.”

The reference to Section 7 of the Taylor Grazing

Act in connection with a bill dealing only with State

indemnity selections is not unequivocal. But any am-

biguity was removed in 1960 when, considering a

further amendment of Section 851 (Act of Sept. 4,

1960, Pub. L. No. 86-786, 74 Stat. 1024), the same

Committee unequivocally said (H.R. Rep. No. 2110,

86th Cong., 2d Sess. 2 (1960) ):

* * * [A] selection by a State can be consum-

mated only if the land selected is classified by

the Secretary of the Interior as proper for ac-

quisition in satisfaction of an outstanding lieu

1° See, also, S. Rep. No. 1735, 85th Cong., 2d Sess. 2, 4, 11

(1958), which incorporates Interior Department letters to

the same effect.

right, as provided in section 7 of the Taylor

Grazing Act (43 U.S.C., sec. 315f).

* * * * *

* * * The prohibition against the selection of

producing and producible lands subject to lease

or permit would be continued. So also would the

Taylor Grazing Act provisions referred to above.

(e) We need go no further. A fair reading of the

relevant texts at least permits the construction that

Sections 851 and 852 at all times prevented the selec-

tion by States in lieu of their lost school sections of

lands withdrawn for any purpose, however general,

until and unless the Secretary of the Interior, pur-

suant to his discretionary authority under the Taylor

Grazing Act, agreed to classify them as available for

such selection. That has been the undeviating admin-

istrative practice for almost half a century, and, as

such, entitled to special weight. Udall v. Tallman, 380

U.S. 1, 19 (1965). And, finally, Congress, having “re-

visited the Act * * *[,] left the practice untouched,”

indeed expressly endorsed it. See Saxbe v. Bustos,

419 U.S. 65, 74 (1974); Board of Governors v. First

Lincolnwood Corp., No. 77-832 (Dec. 11, 1978), slip

op. 14. See also Train v. Colorado Pub. Int. Research

Group, 426 U.S. 1, 23-24 (1976); NLRB v. Bell Aero-

space Co., 416 U.S. 267, 275 (1974); Rosado v. Wy-

man, 397 U.S. 397, 415 (1970).

4. The remaining question is whether the Secre-

tary of the Interior has permissibly exercised his

discretion under Section 7 of the Taylor Grazing Act

by declining to classify as available for indemnity

selection lands of grossly disparate value to the lost

school sections.

(a) On the face of the statute, the Secretary would

seem to be wholly free to refuse to classify particular

land in any particular way. Presumably, the words

“in his discretion” at the head of Section 7 qualify

all that follows. Thus, in cases not involving State

indemnity selections, the courts have recognized a

broad discretion in the Secretary. E.g., Finch v.

United States, 387 F.2d 13 (10th Cir. 1967), cert.

denied, 390 U.S. 1012 (1968); Pallin v. United

States, 496 F.2d 27, 34 (9th Cir. 1974). And one

court has expressly held that “the market value of

the lands being classified” properly may be consid-

ered as part of the “broad powers and manifold op-

tions” of Section 7 discretion. Boothe v. Hickel, 347

F. Supp. 1278, 1276 (D. Nev. 1969), aff’d sub nom.

Bronken v. Morton, 473 F.2d 790, 797-798 (9th

Cir.), cert. denied, 414 U.S. 828 (1973).

It is not obvious why that approach is not equally

applicable here. We may assume that the Secretary

would be abusing his discretion if he refused to

classify as available sufficient lands to satisfy out-

standing State indemnity selections. So, also, he

might be faulted if he approved selections only when

the lieu lands were less valuable than the lost sec-

tions. But the Secretary cannot be charged with any

such questionable action. The rule he has adopted is

simply to insist on rough equivalence, permitting the

States to gain a modest advantage but not an un-

conscionable one. Nor is there any suggestion that

the formula prevents the States with outstanding

selection rights from fully satisfying them and en-

joying a meaningful choice in exercising those rights.

Finally, the Secretary is not rewriting the indem-

nity selection statutes in imposing a value criterion.

Of course, the “acre-for-acre” and “mineral-for-

mineral” provisions of Sections 851 and 852 must be

observed, once that statute takes hold. But, before

Sections 851 and 852 can apply at all, withdrawn

land must be unlocked, and, in making that classifi-

cation decision, the Secretary must exercise the dis-

cretion expressly conferred upon him by Section 7

of the Taylor Grazing Act. Plainly, unless classifi-

cation authority is entirely meaningless, the Secre-

tary cannot be bound to approve every selection that

satisfies Sections 851 and 852. He might reasonably

apply public interest criteria other than, or in addi-

tion to, monetary value equivalence. But there can

be no proper complaint about the modest rule against

gross disparity in value at issue here.

(b) Again, the rule applied to Utah is not a novel

deviation from previous practice. At least since 1965,

the Department of the Interior has consistently fol-

lowed a policy of refusing to classify as available for

indemnity selection lands of “grossly disparate value”

to the lost acreage. Nor is this a vague, undefined

standard. The precise formula now employed was

articulated in January 1967 (R. 50):

* * * If the estimated value of the “selected

lands” is more than $100 per acre, then the

values will not be considered grossly disparate

if the value of the “selected lands” exceeds the

.value of the “base lands” by less than $100 per

acre or by 25% of the value of the “base land,”

whichever is greater.”

And, here also, the Department’s practice has won

congressional approval. In January 1974, Senator

Jackson, Chairman of the Senate Committee on In-

terior and Insular Affairs, joined by Senator Metcalf,

the Chairman of the Subcommittee on Minerals, Ma-

terials and Fuels, wrote the Secretary of the Interior

concerning the prototype oil shale leasing program

and its relation to State indemnity selections. On

behalf of the Committee, the Senators expressed con-

cern about the very applications involved in this case

and endorsed the Department’s policy of barring se-

lections of grossly disparate value:

There is one further complicating factor with

respect to the Department’s [oil shale leasing]

program. That is the pending State indemnity

selection applications filed by the State of Utah,

for 157,000 acres of Federal land in Utah. We

understand that these selections include the two

Utah tracts the Department intends to lease as

part of the prototype program.

We are well aware of the longstanding con-

troversy over selection of “mineral-rich” lands

by the States in satisfaction of their statehood

7 It should be noted, however, that the formula does not

exclude the exercise of discretion. The memorandum goes on

to provide:

If such estimate exceeds these limits, the case will be sub-

mitted to Washington for evaluation of all the circum-

stances.

grants. We agree with the policy adopted by the

Department in 1965 that State selections should

not be allowed where there is a “gross disparity”

of value between the lost lands and the selected

lands. If you intend to change that policy, we

request that you notify this Committee before

opening any “mineral-rich” lands to selection.

In any event, it seems to us that the Depart-

ment should decide the state selection question

before going ahead with the prototype program.

It is our understanding that if the State of

Utah takes title to these oil shale lands, that it

intends to offer them for development. Any

large scale development on these lands would

appear totally inconsistent with the objectives of

the Department’s prototype program.”

State selection in 1958, a proper concern for the

national public interest prompted the Department of

the Interior to look to comparable values in consider-

ing State indemnity selections. This is no grudging

implementation of the congressional decision. Rather,

insistence on rough value equivalence in lieu selec-

tions carries out the legislative purpose to offer a

fair replacement for lost grants, not an opportunity

for profiteering. We may surmise that Congress left

it to the Secretary to prevent abuses within the very

wide limits left by the acre-for-acre and mineral-for-

mineral guidelines. Certainly, he was acting well

18 Oil Shale Leasing: Hearings on S. 2413 Before the Senate

Subcomm. on Minerals, Materials and Fuels, 94th Cong., 2d

Sess. 26 (1976).

within the ambit of his statutory discretion. In our

submission, the courts below misread the controlling

provisions and failed to accord the weight due to well-

established administrative practice, known to the

Congress and expressly endorsed.

CONCLUSION

For the foregoing reasons, the petition for a writ

of certiorari should be granted.

Respectfully submitted.

WADE H. MCCREE, JR.

Solicitor General

JAMES W. MOORMAN

Assistant Attorney General

LouIs F. CLAIBORNE

Assistant to the Solicitor General

RAYMOND N. ZAGONE

CARL STRASS

Attorneys

APRIL 1979

APPENDIX A

STATUTES INVOLVED

1. Utah Enabling Act

i Section 6 of the Utah Enabling Act of July 16,

1894, ch. 188, 28 Stat. 109:

That upon the admission of said State [of

Utah] into the Union, sections numbered two,

sixteen, thirty-two, and thirty-six in every town-

ship of said proposed State, and where such sec-

tions or any parts thereof have ben sold or other-

wise disposed of by or under the authority of

any Act of Congress other lands equivalent there-

to, in legal subdivisions of not less than one

quarter section and as contiguous as may be to

the section in lieu of which the same is taken,

are hereby granted to said State for the cupport

of common schools, such indemnity lands to be

selected within said State in such manner as the

legislature may provide, with the approval of the

Secretary of the Interior: Provided, That the

second, sixteenth, thirty-second, and thirty-sixth

sections embraced in permanent reservations for

national purposes shall not, at any time, be sub-

ject to the grants nor to the indemnity provisions

of this Act, nor shall any lands embraced in

Indian, military, or other reservations of any

character be subject to the grants or to the

indemnity provisions of this Act until the reser-

vation shall have been extinguished and such

lands be restored to and become a part of the

public domain.

2. School Indemnity Selection Statutes

Sections 2275 and 2276 of the Revised Statutes, as

restated and revised by Sections 1 and 2 of Act of

August 27, 1958, Pub. L. No. 85-771, 72 Stat. 928-

929, and as thereafter amended, 43 U.S.C. 851-852:

SEC. 2275. Where settlements with a view

to preemption or homestead have been, or shall

hereafter be made, before the survey of the lands

in the field, which are found to have been made

on sections sixteen or thirty-six, those sections

shall be subject to the claims of such settlers;

and if such sections or either of them have been

or shall be granted, resefved, or pledged for the

use of schools or colleges in the State in which

they lie, other lands of equal acreage are here-

by appropriated and granted, and may be se-

lected, in accordance with the provisions of sec-

tion 2276 of the Revised Statutes [43 U.S.C.

852], by said State, in lieu of such as may be

thus taken by preemption or homestead settlers.

And other lands of equal acreage are also here-

by appropriated and granted and may be se-

lected, in accordance with the provisions of sec-

tion 2276 of the Revised Statutes, by said State

where sections sixteen or thirty-six are, before

title could pass to the State, included within any

Indian, military, or other reservation, or are,

before title could pass to the State, otherwise

disposed of by the United States: Provided, That

the selection of any lands under this section in

lieu of sections granted or reserved to a State

shall be a waiver by the State of its right to the

granted or reserved sections. And other lands

of equal acreage are also hereby appropriated

and granted, and may be selected, in accordance

with the provisions of section 2276 of the Re-

vised Statutes, by said State to compensate de-

ficiencies for school purposes, where sections six-

teen or thirty-six are fractional in quantity, or

where one or both are wanting by reason of the

township being fractional, or from any natural

cause whatever. And it shall be the duty of the

Secretary of the Interior, without awaiting the

extension of the public surveys, to ascertain and

determine, by protraction or otherwise, the num-

ber of townships that will be included within

such Indian, military, or other reservations, and

thereupon the State shall be entitled to select

indemnity lands to the extent of section for sec-

tion in lieu of sections therein which have been

or shall be granted, reserved, or pledged; but

such selections may not be made within the

boundaries of said reservation: Provided, how-

ever, That nothing herein contained shall pre-

vent any State from awaiting the extinguish-

ment of any such military, Indian, or other

reservation and the restoration of the lands there-

in embraced to the public domain and then tak-

ing the sections sixteen and thirty-six in place

therein.

SEC. 2276. (a) The lands appropriated by

section 2275 of the Revised Statutes [43 U.S.C.

851], shall be selected from any unappropriated,

surveyed or unsurveyed public lands within the

4a 5a

however, That after approval of the selec-

tion the Secretary of the Interior shall de-

State where such losses or deficiencies occur sub-

ject to the following restrictions:

(1) No lands mineral in character may

be selected by a State except to the extent

that the selection is being made as indemnity

for mineral lands lost to the State because

of appropriation before title could pass to

the State;

(2) No lands on a known geologic struc-

ture of a producing oil or gas field may be

selected except to the extent that the selec-

tion is being made as indemnity for lands

on such a structure lost to the State because

of appropriation before title could pass to

the State; and

(3) Land subject to a mineral lease or

permit may be selected if none of the land

subject to that lease or permit is in a pro-

ducing or producible status, subject, how-

ever, to the restrictions and conditions of

the preceding and following paragraphs of

this subsection.

(4) If a selection is consummated as to

a portion but not all of the lands subject to

any mineral lease or permit, then, as to such

portion and for so long only as such lease or

permit or any lease issued pursuant to such

permit shall remain in effect, there shall be

automatically reserved to the United States

the mineral or minerals for which the lease

or permit was issued, together with such

further rights as may be necessary for the

full and complete enjoyment of all rights,

privileges and benefits under or with re-

spect to the lease or permit: Provided,

termine what portion of any rents and

royalties accruing thereafter which may be

paid under the lease or permit is properly

applicable to that portion of the land sub-

ject to the lease or permit selected by the

State, the portion applicable being deter-

mined by applying to the sum of the rents

and royalties the same ratio as that exist-

ing between the acreage selected by the State

and the total acreage subject to the lease

or permit; of the portion applicable to the

selected land 90 per centum shall be paid

to the State by the United States annually

and 10 per centum shall be deposited in the

Treasury of the United States as miscel-

laneous receipts.

(5) If a selection is consummated as to

all of the lands subject to any mineral lease

or permit or if, where the selecting State

has previously acquired title to a portion of

the lands subject to a mineral lease or per-

mit, a selection is consummated as to all

of the remaining lands subject to that lease

or permit, then and upon condition that the

United States shall retain all rents and

royalties theretofore paid and that the lessee

or permittee shall have and may enjoy under

and with respect to that lease or permit all

the rights, privileges, and benefits which he

would have had or might have enjoyed had

the selection not been made and approved

the State shall succeed to all the rights of

the United States under the lease or permit

as to the mineral or minerals covered there-

by, subject, however, to all obligations of

the United States under and with respect to

that lease or permit.

(b) Where the selections are to compensate

for deficiencies of school lands in fractional

townships, such selections shall be made in ac-

cordance with the following principles of ad-

justment, to wit: For each township, or frac-

tional township, containing a greater quantity of

land than three-quarters of an entire township,

one section; for a fractional township, contain-

ing a greater quantity of land than one-half,

and not more than three-quarters of a township,

three-quarters of a section; for a fractional

township, containing a greater quantity of land

than one-quarter, and not more than one-half of

a township, one-half section; and for a fractional

township containing a greater quantity of land

than one entire section, and not more than one-

quarter of a township, one-quarter section of

land: Provided, That the States which are, or

shall be entitled to both the sixteenth and thirty-

sixth sections in place, shall have the right to

select double the amounts named, to compensate

for deficiencies of school land in fractional town-

ships.

of September 27, 1944 (58 Stat. 748), as

amended (43 U.S.C., sec. 282) on the revoca-

tion not later than 10 years after the date of

approval of this Act, of any order of withdrawal,

in whole or in part, the order or notice taking

such action shall provide for a period of not

less than six months before the date on which

it otherwise becomes effective in which the State

in which the lands are situated shall have a

preferred right of application for selection under

this section, subject to the requirements of exist-

ing law, except as against the prior existing

valid settlement rights and preference rights con-

ferred by existing law other than the said Act of

September 27, 1944, or as against equitable

claims subject to allowance and confirmation, and

except where a revocation of an order of with-

drawal is made in order to assist in a Federal

land program.

(d)(1) The term “unappropriated public

lands” as used in this section shall include, with-

out otherwise affecting the meaning thereof

lands withdrawn for coal, phosphate, nitrate,

potash, oil, gas, asphaltic minerals, oil shale,

sodium, and sulphur, but otherwise subject to

appropriation, location, selection, entry, or pur-

chase under the nonmineral laws of the United

States; lands withdrawn by Executive Order

Numbered 5327, of April 15, 1930, if otherwise

available for selection; and the retained or re-

served interest of the United States in lands

which have been disposed of with a reservation

to the United States of all minerals or any speci-

fied mineral or minerals.

(2) The determination, for the purposes of

this section of the mineral character of lands

lost to a State shall be made as of the date of

application for selection and upon the basis of the

best evidence available at that time.

8a 9a

8. Taylor Grazing Act the Secretary of the Interior to any grazing per-

Section 7 of the Taylor Grazing Act of June 28, mittee of such lands. The applicant, after his

1984, ch. 865, 48 Stat. 1272, as amended by the Act entry, selection, or location is allowed, shall be

; entitled to the possession and use of such lands:

of June 26, 1936, ch. 842, Section 2, 49 Stat. 1976, 43 Provided, That upon the application of any ap-

The Secretary of the Interior is authorized, in

his discretion, to examine and classify any lands

withdrawn or reserved by Executive order of

November 26, 1934 (numbered 6910), and

amendments thereto, and Executive order of Feb-

ruary 5, 1985 (numbered 6964), or within a

grazing district, which are more valuable or suit-

able for the production of agricultural crops than

for the production of native grasses and forage

plants, or more valuable or suitable for any other

use than for the use provided for under this sub-

chapter or proper for acquisition in satisfaction

of any outstanding lien, exchange or script rights

or land grant, and to open such lands to entry,

selection, or location for disposal in accordance

with such classification under applicable public-

land laws, except that homestead entries shall

not be allowed for tracts exceeding three hundred

and twenty acres in area. Such lands shall not

be subject to disposition, settlement, or occupa-

tion until after the same have been classified and

opened to entry: Provided, That locations and

entries under the mining laws including the Act

of February 25, 1920, as amended, may be made

upon such withdrawn and reserved areas without

regard to classification and without restrictions

or limitation by any provision of this subchap-

ter. Where such lands are located within graz-

ing districts reasonable notice shall be given by

U.S.C. 315f: | plicant qualified to make entry, selection, or loca-

tion, under the public-land laws, filed in the land

office of the proper district, the Secretary of the

Interior shall cause any tract to be classified,

and such application, if allowed by the Secretary.

of the Interior, shall entitle the applicant to a

preference right to enter, select, or locate such

lands if opened to entry as herein provided.

10a

APPENDIX B

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

No. 76-1839

[Filed August 8, 1978]

STATE OF UTAH, by and through

its Division of State Lands, APPELLEE

Vv.

THOMAS S. KLEPPE, individually and as Secretary of

the Interior of the United States, APPELLANT

Appeal from the United States District Court for the

District of Utah, Central Division

(D.C. No. C-74-64)

Submitted: April 20, 1978

Carl Strass, Attorney, Appellate Section, Justice De-

partment, Washington, D.C. (Peter R. Taft, Assistant

Attorney General, Ramon M. Child, United States

Attorney, Salt Lake City, Utah, and Raymond N.

lla

Zagone, Gerald S. Fish and Dirk D. Snel, Department

of Justice, Washington, D.C., on the brief) for Ap-

pellant.

Richard L. Dewsnup, Special Assistant Attorney Gen-

eral, Sali Lake City, Utah, (Vernon B. Romney, Utah

Attorney General, Robert B. Hansen, Deputy At-

torney General, Dallin W. Jensen, Assistant Attorney

General, and Clifford L. Ashton, Special Assistant

Attorney General, Salt Lake City, Utah, on the brief)

for Appellee.

Amicus Curiae:

Frank J. Allen of Clyde and Pratt, Salt Lake City,

Utah, for Amicus Justheim Petroleum Company.

Guy G. Hurlbutt, Deputy Attorney General of Idaho,

(Wayne L. Kidwell, Attorney General of Idaho, and

Peter E. Heiser, Jr., Chief Deputy Attorney of Idaho,

on the brief), for Amicus State of Idaho.

Before MCWILLIAMS, BARRETT and DOYLE, Circuit

Judges.

BARRETT, Circuit Judge.

The United States, by and through the Secretary

of the Interior (Secretary) appeals from a summary

judgment granted in favor of the appellee, State of

Utah (Utah) enjoining the Secretary to approve or

disapprove no later than December 15, 1976 (since

stayed) Utah’s school land grant “indemnity selec-

12a

tions” of 194 parcels of public lands embracing ap-

proximately 157,255.90 acres situated in Uintah

County, State of Utah. The surveyed “indemnity se-

lections” or “‘lieu lands” are for school land grants-in-

place which were denied Utah because of federal pre-

emption, private entry prior to survey, or before title

could pass to the state.

The historical background leading to Congressional

enactment of the state school land grant statutes

should aid in lending perspective to the legislative

intent.

There were no federal lands within the borders

of the original thirteen states when they adopted and

ratified the United States Constitution. Thus, vir-

tually all of the lands within their borders were

subject to taxation, including taxation necessary for

the maintenance of their public school systems. When

other states were subsequently admitted into the Un-

ion, their territorial confines were “carved” from

federal territories. The “public lands” owned and

reserved by the United States within those terri-

torial confines were not subject to taxation. This res-

ervation by the United States created a serious im-

pediment to the “public land” states in relation to an

adequate property tax base necessary to permit these

states to operate and maintain essential governmental

services, including the public school systems. Jt was

in recognition thereof, i.e., in order to “equalize”

the status of the newly admitted states with that

of the original thirteen states, that the Congress

enacted the federal land grant statutes. The specific

13a

purpose was to create a binding permanent trust

which would generate financial aid to support the

public school systems of the “public land” states.

The neture of the Congressional land grant program

was “bilateral” in effect. It constituted a solemn

immunity from taxation of federal lands reserved or

retained in ownership by the United States within

the territorial boundaries of the newly admitted states

in return for the acceptance by the states of the

lands granted, to be held and administered by the

states under trust covenants for the perpetual bene-

fit of the public school systems.

Large quantities of the public domain have been

granted by the Congress to the various states either

for general or specific purposes. Many of these grants

are unrestricted. None, to our knowledge, involve

the trust covenants attendant with the state school

land grant statutes. A grant by Congress of land toa

state for the benefit of the common schools is an abso-

lute grant, vesting title for a specific purpose. Ala-

bama v. Schmidt, 232 U.S. 168 (1914). The school

land grant and its acceptance by the state constitutes

a solemn compact between the United States and the

state for the benefit of the state’s public school sys-

tem. State of Nebraska v. Platte Valley Power and

Irr. Dist., 28 N.W.2d 300 (Neb. 1946), 166 A.L.R.

1196. A state accepting the school land grant must

abide its duty as trustee for the benefit of the state’s

public school system. This duty applies with equal

force to those specific school lands granted or those

lands selected by the state as indemnity or lieu lands.

l4a

The indemnity or lieu “selections” by a state arise if

any of the lands within the specific congressional

grant (usually of sections 16 and 36 in each town-

ship) are not available by reason of pre-existing

rights of others. McCreery v. Haskell, 119 U.S. 327

(1886).

The material facts in the case at bar were stipu-

lated and are not in dispute. Following all pleadings,

including the stipulation and pre-trial order, the re-

spective parties moved for summary judgment pur-

suant to Fed. Rules Civ. Proc., rule 56, 28 U.S.C.A.

The trial court entertained oral arguments and con-

sidered extensive briefs prior to entry of its Find-

ings of Fact, Conclusions of Law and Decree on June

8, 1976. The trial court held that the discretion to be

exercised by the Secretary in acting upon Utah’s

school land indemnity selection lists is confined to the

narrow range set forth in 43 U.S.C.A. §§ 851 and

852. On appeal, the Secretary contends that the trial

court erred in not finding that his discretion is very

broad pursuant to Section 7 of the Taylor Grazing

Act, 43 U.S.C.A. § 315f. A recital of the background

leading to the instant dispute should aid our review.

Section 6 of the Enabling Act of Utah, approved

July 16, 1894, 28 Stat. 107, grants to Utah sections

2, 16, 32, and 36 in every township in the State

for the support of the common schools. It further

provides that Utah may select other lands in lieu of

those sold or otherwise disposed of.

Congress provided under 43 U.S.C.A. § 851 (R.S.

§ 2775; Feb. 28, 1891, c. 384, 26 Stat. 796, et seq.)

15a

that whenever title to any of the school sections

granted to the State of Utah did not pass because of

federal pre-emption (reservation) or private entry

(homestead settlements), Utah was entitled to “.. .

other lands of equal acreage [which] are hereby

appropriated and granted, and may be selected, in

accordance with the provisions of section 852... .”

(Emphasis supplied.) Confusion reigned as a result

of language contained in the Homestead Act of 1862

[Ch. 75, 12 Stat. 392] which limited land entries

thereunder to “non-mineral lands.” Subsequent min-

ing legislation provided that federal mineral lands

were expressly reserved from sale except as other-

wise expressly directed. The Department of the In-

terior adopted an administrative interpretation that

“known mineral lands” were excluded “by implica-

tion” in the Utah Enabling Act. This interpretation

was upheld by the Supreme Court in the case of

United States v. Sweet, 245 U.S. 563 (1918) where

the Court held that because the Utah Enabling Act

of July 16, 1894, did not make specific mention of

mineral lands that the school section grant was not

intended to embrace land known to be valuable for

“known minerals.” This was changed by the Congress

under the Act of January 25, 1927, 44 Stat. 1026-

1027, as amended, 43 U.S.C. §§ 870, 871 which spe-

cifically provided that “. . . the several grants to the

States of numbered sections in place for the support

or in aid of the common or public schools be, and

they are hereby, extended to embrace numbered school

sections mineral in character, unless land has been

GES te AS Gey

léa

granted to and/or selected by and certified or ap-

proved, to any State or States as indemnity or in

lieu of any land so granted by numbered sections,”

and “the grant of numbered mineral sections under

this section (§ 870) shall be of the same effect as

prior grants for the numbered non-mineral sections,

and titles to such numbered mineral sections shall

vest in the States at the time and in the manner and

be subject to all the rights of adverse parties recog-

nized by existing law in the grants of numbered non-

mineral sections.” Notwithstanding this legislation,

however, Utah was denied title to mineral lands in

relation to in-lieu selections resulting from vast with-

drawals or other actions taken to make the public

lands unavailable for in-lieu selections. The problem

appeared to have been resolved in Utah’s favor, how-

ever, by the passage of 1958 and 1966 amendments to

43 U.S.C. § 852 (Act of August 27, 1958, 72 Stat.

928; Act of June 24, 1966, 80 Stat. 220), following

which the statute read:

43 U.S.C.A. § 852 Selections to supply deficien-

cies of school lands

(a) The lands appropriated by section 851 of

this title, shall be selected from any unappropri-

ated, surveyed or unsurveyed public lands with-

in the State where such losses or deficiencies oc-

cur subject to the following restrictions:

(1) No lands mineral in character may be

selected by a State except to the extent that the

selection is being made as indemnity for mineral

lands lost to the State because of appropriation

before title could pass to the State;

17a

(2) No lands on a known geologic structure of

a producing oil or gas field may be selected except

to the extent that the selection is being made to

indemnify for lands on such a structure lost to

the State because of appropriation before title

could pass to the State; and....

The 194 “in lieu” selection parcels selected by Utah

in the instant case were made following the afore-

said Congressional amendments to 43 U.S.C. § 852,

supra. Accordingly, Utah was entitled to select “in

lieu” lands mineral in character if the base lands lost

to the state were also mineral in character. At oral

argument, it was agreed that the 194 “‘in lieu” selec-

tions by Utah were made following Utah’s determina-

tion, through use of its expertise, that the base lands

lost were “mineral in character” and that the selected

“in lieu” lands were likewise “mineral in character.”

We deem it important here to observe that apparently

at the time of the selections by Utah none of the

“base lands” lost and none of the “in lieu” lands

selected were productive of oil, gas or other minerals.

Thus, no contention is presented that any of the lands

were “in areas of known geologic structures,” or, if

so, that any of Utah’s in-lieu selections would preju-

dice pre-existing rights of the United States. It is

Utah’s contention, then, that the sole and exclusive de-

termination to be made by the Secretary is confined

to the ministerial matter of determining whether the

base lands lost and the “in lieu” lands selected are

“mineral in character” and equal in average. Utah

argues, accordingly, that the Secretary is confined to

a ministerial review of Utah’s selection lists based

18a

upon the “mineral in character” criteria and the at-

tendant acre-for-acre measurement, pursuant to the

Utah Enabling Act and the provisions of 43 U.S.C.

$§ 851, 852. The Secretary contends that pursuant to

Section 7 of the Taylor Grazing Act (43 U.S.C.

§ 315f) he has much broader discretion, 7.e., he may

“classify” the 194 “in lieu” parcels on the basis of

“value-for-value” against the base lands lost to Utah,

apparently predicated primarily on the “mineral in

character” criteria.

In answer to Utah’s allegation in its Complaint

filed in the district court that the base lands lost

were “mineral in character” the Secretary averred

that he lacked sufficient information with which to

form a belief; he alleged that he had not made any

determination that “lieu lands” were mineral in char-

acter. To our knowledge, no such determination has

yet been made, even though Utah commenced sub-

mitting its selection lists in 1965, the last of which

were submitted November 10, 1971.

At oral argument, counsel for the Secretary con-

tended that the Secretary may determine, within the

broad spectrum of the right to “classify” the “in lieu”

lands pursuant to Section 7 of the Taylor Grazing

Act, supra, to conduct extensive investigations to de-

termine the nature, value, and extent of the non-

produced “mineral in character” aspects of both the

lost “base lands” and the “in lieu” lands selected

in order to ascertain that the “base lands” are of

equal value to the “in lieu” lands selected. At no

time or in anywise has the Secretary seen fit to in-

19a

form the State of Utah, the district court or this court

just how this determination is to be undertaken.

Thus, at this time, it seems that we can safely relate

—based upon the arguments presented and the record

before us—that the criteria, processes and methods

for determination of the “equal value” urged by the

Secretary are non-existent, or otherwise so vague as

to presently fall within the realm of guesswork or

speculation. We believe that it is most unlikely that

Congress intended to vest such discretion in the Secre-

tary in light of the historical background leading

to the enactment of the “in lieu” statutes heretofore

referred to. The procedure prior to the Secretary’s

interpretation of the applicability of Section 7, supra, —

was that once a state submitted the indemnity selec-

tion list identifying the character and description

of both the base lands for which indemnity is sought

and the identity of the selected lands that the Secre-

tary proceeds to publish notice providing any adverse

claimant of the right to challenge the selections prior

to execution of a “Clear List” document by which the

Secretary certifies that (a) the lands designated as

base lands in a selection list were properly categor-

ized and described by the state and (b) the selected

lands were in fact unappropriated federal publie do-

main on the date the selection list was filed.

The Act of May 3, 1902, 32 Stat. 188, 43 U.S.C.A.

§ 853 provides that all of the provisions of §§ 851

and 852, relating to the selection of lands for edu-

cational purposes and indemnity therefor are made

applicable to the State of Utah.

20a

Whereas land grants generally are to be construed

favorably to the Government and nothing is held to

pass except that conveyed in clear language, (United

States v. Union Pacific Railroad Company, 353 U.S.

112 (1957) ), legislation enacted by the Congress de-

signed to aid the common schools of the states is to

be construed liberally rather than restrictively. State

of Wyoming v. United States, 255 U.S. 489 (1921).

We deem this to be particularly significant in recog-

nition that the sole specific Congressional reference in

§ 852(a) (1), supra, relates to lands “. . . mineral in

character may be selected by a State [if] .. . the

selection is being made for mineral lands lost to the

State because of appropriation before title could pass

to the State; ....” No reference whatsoever is made

to the value of the “minerals in character.” This

becomes the more significant, we believe, when we

consider that the legislative history to P.L. 89-470,

89th Congress, 2nd Session, reflects, as do other re-

ports, that the Department of the Interior withdrew

its proposed amendment which would have included

an equal value concept with respect to lands valuable

for leaseable minerals in the place of the existing

“acre for acre” selection basis. U.S. Code, Cong. &

Ad. News, 2nd Session, Volume II, p. 2324 (1966).

The Utah Enabling Act provides that all lands

granted for educational purposes (except as other-

wise provided therein) shall constitute a permanent

school fund. Section 10, 28 Stat. 107, Act of July 16,

1894. The federal grant in trust to Utah for the

support of its public school system was accepted by

21a

Utah subject to constitutional guaranties that the

proceeds of sales of all lands granted for the sup-

port of the common schools shall -be-and remain a

permanent fund, the interest of which only shall be

expended for the support of the common schools, and

any loss or diversion of all public school funds shall

be restored. §§3 and 7, Article X, Constitution of

Utah.

To reiterate, commencing September 10, 1965

through November 19, 1971, Utah filed 194 lieu land

selection lists with the Bureau of Land Management,

Department of the Interior, covering 157,255.90

acres of land in Uintah County, Utah, to serve as

indemnification for school lands in place, mineral in

character, which were denied Utah because of federal

reservation and preemption or private entry prior to

survey. The selection process involved Utah’s de-

termination of the “mineral in character” of the lands

it had lost and the “mineral in character” of the “in

lieu” lands it had selected. We are told and as-

sume that this process required much study and ex-

pertise. It is undisputed that Utah’s 194 selections

were in compliance with the statutory criteria set

forth in 43 U.S.C.A. § 852, supra. Even so, the Secre-

tary has taken no action with respect to any of them,

notwithstanding that many have been pending for a

period in excess of ten years.

While the aforesaid 194 selection lists were pend-

ing, an agreement was entered into between Utah

and the Secretary concerning two prototype oil shale

leases issued by the Secretary embracing some 10,240

22a

acres within the lands selected by Utah. In the course

of this litigation, the District Court ordered that all

bonus funds and rental proceeds derived from the

two leases during the pendency of this action be paid

into the registry of the court to be invested as directed

by the court; as of May 25, 1976, some $48,291,840.00

had been paid into the district court registry and

duly invested.

The District Court summarized Utah’s position to

be: that the Congress had expressly granted and ap-

propriated lands to Utah to be selected as indemnifi-

cation for original school lands that Utah did not

receive because of federal pre-emption or private en-

try prior to survey; that the right of selection is in

the discretion of Utah and not the Secretary of the

Interior; that upon filing school indemnity selection

lists in accordance with 43 U.S.C.A. § 852, equitable

title to the selected lands vested in Utah; that the

Secretary has a narrow range of discretion in review-

ing and acting on such selection lists, limited to a

ministerial adjudication to determine only whether

such lists are in compliance with the criteria of § 852,

supra; and, if so, the Secretary is obligated to ap-

prove said selections and to issue a clear list to the

lands selected, thus vesting legal title in Utah. [R.,

Vol. III, pp. 103, 104.]

The District Court summarized the Secretary’s

position to be: that he is authorized and obligated

by Section 7 of the Taylor Grazing Act, 43 U.S.C.

§ 315(f), to classify lands located within grazing

districts to determine whether such disposition is ap-

23a

propriate under applicable public-land laws; that in

making such classification, the Secretary is author-

ized in his discretion to utilize public interest cri-

teria, including a comparison of the value of the

base school lands lost with that of the lands selected

as indemnification; and, further, that classification in

favor of disposition for school indemnity selection is a

condition precedent to the vesting of any right, title

or interest in any state which makes any such school

indemnity selection.

Some of the pleadings relied upon by the trial court

in granting summary judgment in favor of Utah

which we deem significant are:

(1) Appendix B attached to Utah’s motion for

summary judgment, which is a copy of a Memo dated

September 14, 1962, from the Associate Solicitor,

Division of Public Lands, to the Director, Bureau

of Land Management, stating, inter alia: “In consid-

ering an application by a state for indemnity selection

under 43 U.S.C. 851, 852, the disparity in values

between the lands offered as base and the lands se-

lected cannot be considered . . . . When the state

lieu selection statutes were last amended in 1958, it

was clear Congress recognized the practice by the

states of offering as base for indemnity selection lands

of little value for lands of greater value because of

the equal acreage (rather than equal value) provi-

sions of that law....” [R., Vol. III, p. 42.]

(2) Appendix P attached to Utah’s motion for

summary judgment, which is a copy of a letter dated

February 14, 1974, from then Secretary of the In-

24a

terior Roger Morton, to then Governor Calvin L.

Rampton of Utah, stating, in part: “As you know, the

[Department] has not as yet acted upon the [Utah]

applications. The principal question presented .. .

is whether pursuant to Section 7 of the Taylor Graz-

ing Act, 48 Stat. 1272 (1934), as amended, 43 U.S.C.

315f (1972), the Department may refuse to convey

applied-for lands to a State where the value of those

lands greatly exceeds the value of the lost school lands

for which the State seeks indemnity. In January

1967, the then Secretary of the Interior adopted the

policy that in the exercise of his discretion under,

inter alia, Section 7 of the Taylor Grazing Act, he

would refuse to approve indemnity applications that

involve grossly disparate values. That policy remains

in effect. In the present case, although the land values

are not precisely determined, it appears that the se-

lections involve lands of grossly disparate values, —

...” [R., Vol. III, p. 70.] |

(3) Appendix Q attached to Utah’s motion for

summary judgment constituting a letter dated Feb-

ruary 15, 1974, from Kent Frizzell, Solicitor, De-

partment of the Interior, to Utah Attorney General

Vernon B. Romney wherein Mr. Frizzell stated, in

part: “We believe that the ‘comparative value’ cri-

terion is a valid one with respect to classifying lands

for State lieu selection; such classification being au-

thorized by Section 7 of the Taylor Grazing Act, 48

Stat. 1272, 43 U.S.C. §315f (1972). Accordingly,

we intend to apply that criterion when we adjudicate

the pending State applications.” [R., Vol. III, p. 72.]

25a

(4) Affidavit of Donald G. Prince, Assistant Di-

rector of State Lands, State of Utah, with attached

copy of Memorandum of February 11, 1943, from the

Commissioner of the General Land Office, Department

of the Interior to the Secretary which notes, inter

alia: “Following the 1936 amendment to the Taylor

Grazing Act (Section 7 relied upon by Secretary in

this action), and the promulgation of Circular 1398

which provides that the States ‘should state whether

the proposed exchanges are to be based upon equal

values or equal areas’ that all exchanges for the sub-

sequent five year period were, on the States’ elec-

tion, made on the basis of equal area; that state in-

demnity school land selections have always been based

on equal areas, regardless of the value of the lease

or selected lands, citing to California v. Deseret Water

Etc. Company, 243 U.S. 415 and Wyoming v. United

States, 255 U.S. 489.” (Emphasis supplied.) [R.,

Vol. III, pp. 91-94. ]

The Secretary vigorously challenges those findings

of the District Court limiting the Secretary’s au-

thority to classify lands. They include:

Finding No. 11: The Taylor Grazing Act was

enacted as Public Law No. 482, 73rd Congress,

Second Session, identified as the Act of June 28,

1934, 48 Stat. 1269, entitled:

An act to stop injury to the public grazing

lands by preventing overgrazing and soil

deterioration, to provide for their orderly

use, improvement, and development, to sta-

bilize the livestock industry dependent upon

the public range, and for other purposes.

PROS =

26a

The pertinent part of Section 7 of the 1934

Act provided, with respect to the classification

authority of the Secretary of Interior, that:

. . . the Secretary is hereby authorized, in

his discretion, to examine and classify any

lands within such grazing districts which

are more valuable and suitable for the pro-

duction of agricultural crops than native

grasses and forage plants, and to open such

lands to homestead entry in tracts not ex-

ceeding three hundred and twenty acres in

area.

There is no language in the 1934 Act which

purports to give the Secretary of Interior au-

thority to classify lands that are selected by

States for indemnification of lost school lands,

nor is there anything in the legislative history

of the 1934 Act that suggests that Congress in-

tended to require classification as a condition to

school indemnity selections.

Further, the trial court found that the Secretary had

no authority to compare value of lost lands with

value of indemnity lands:

Finding No. 12: The Taylor Grazing Act was

amended in 1936 by Public Law No. 827, Act

of June 26, 1936, 49 Stat. 1976 et seg. Section 7

of the 1986 Amendment, now codified as 43

U.S.C. 315(f), describes the Secretary’s classi-

fication authority in the following language:

. . . the Secretary of the Interior is hereby

authorized, in his discretion, to examine and

classify any lands . . . within a grazing dis-

trict, which are more valuable or suitable

27a

for the production of agricultural crops than

for the production of native grasses and

forage plants, or more valuable or suitable

for any other use than for the use provided

for under this Act, or proper for acquisition

in satisfaction of any outstanding lieu, ex-

change or script rights or land grant, and

to open such lands to entry, selection, or

location for disposal in accordance with

such classification under applicable public-

land laws, except that homestead entries

shall not be allowed for tracts exceeding

three hundred and twenty acres in area.

Such lands shall not be subject to disposi-

tion, settlement, or occupation until after

the same have been classified and opened to

entry....

The lands selected by Utah, as identified in

Finding No. 4, above, are located within grazing

districts. But there is nothing in the legislative

history of the 19836 Amendment to Section 7 of

the Taylor Grazing Act to suggest that classi-

fication by the Secretary is a prerequisite to the

exercise of school indemnity selection rights by

the States. If, however, such classification should

be deemed to be a prerequisite to school in-

demnity selection, there are no statutory criteria

for classification of school indemnity selections

beyond a required determination as to whether

the selected lands are proper for acquisition in

satisfaction of indemnity selection rights. In

particular, there is nothing in Section 7 or the

underlying legislative history to suggest that the

Secretary is authorized or empowered to utilize

public interest criteria, or to compare the value

28a

of lost base lands with the value of indemnity

selections, as part of any classification procedure.

[R., Vol. III, pp. 104-106. ]

Significant “Conclusions of Law” on the disputed

central issue include:

Conclusion No. 8: Federal land grants in aid

of the common schools of the State of Utah

create a solemn and permanent public trust for

the use, benefit and support of the public school

system in Utah. This public trust was created

by the United States, as settlor, granting to the

State of Utah, as trustee, sections 2, 16, 32 and

36 within each township within the State of

Utah for the permanent benefit of the Utah

public school system, as beneficiary of the trust.

The instruments which created this trust con-

sisted of the Utah Enabling Act, 28 Stat. 107,

as passed by the Congress of the United States,

and the Constitution of the State of Utah, which

accepted the terms of the trust, as ratified and

adopted by the people of the State of Utah.

Conclusion No. 4: When original school land

grants in place are denied to the State of Utah

as a result of federal pre-exemption or private

entry prior to survey, the State is entitled to se-

lect lands of equal acreage from otherwise un-

appropriated federal lands within the State, in

lieu of and as indemnification for such lost base

lands, pursuant to and in accordance with the

criteria and limitations set forth in Section 852,

Title 48, United States Code. This selection is

to be made by the State in accordance with the

congressional offer contained in said Section 852;

29a

and, when such selections are duly filed, it is the

duty of the Secretary of Interior to make a

ministerial adjudication of such selection lists to

determine whether they are in accordance with

the requirements of said Section 852. If so, the

Secretary must honor the state’s acceptance of

the congressional offer, and thus fulfill the pur-

pose of the public school land trust, by approv-

ing said selections; but, if such selections are

found not to be in compliance with the congres-

sional criteria contained in said Section 852, the

Secretary must deny and reject such selection

lists.

Conclusion No. 5: If the ministerial adjudi-

cation of the school indemnity selection lists, as

conducted by the Secretary under said Section

852, reveals that said selection lists were in

fact in compliance with said Section 852, then

Utah would have acquired equitable title to the

lands so selected as of the dates the respective

selection lists were filed, and from and after that

date Utah would have been entitled to all reve-

nues, rentals, emoluments and benefits arising or

accruing from said lands from and after the

respective dates when such selection lists were

filed.

Conclusion No. 6: The language of Section 7

of the Taylor Grazing Act, as amended in 1936

(codified as 43 U.S.C. 315(f), cannot reasonably

be construed to require classification of lands

within grazing districts as proper for disposition

in satisfaction of school indemnity selection lists

filed under Section 852 of Title 48, U.S.C.; and

there is nothing in the legislative history of the

Taylor Grazing Act which indicates or suggests

30a

that Congress intended to subject school in-

demnity selections to the classification procedures

of Section 7 of the Taylor Grazing Act.

Conclusion No. 7: Even if it should be as-

sumed that Section 7 of the Taylor Grazing Act

could be construed so as to require classification

prior to disposition of land within a grazing dis-

trict in satisfaction of school indemnity rights,

such a classification would not be a condition

precedent to the vesting of equitable title in the

State of Utah as of the respective dates that the

selection lists were filed; and, further, the cri-

teria which would govern the Secretary in mak-

ing such classification would be exactly the same

as those which he is obligated to utilize in mak-

ing his ministerial adjudication under Section

852 of Title 43, U.S.C. This result necessarily

follows from the fact that Section 7 (43 U.S.C.

315(f£)) requires the Secretary, in making any

such classification for lieu selections, to deter-

mine whether the selected lands are “proper for

acquisition in satisfaction of any outstanding

lieu . . . rights or land grant, and to open such

lands to . . . selection . . . for disposal in accord-

ance with such classification under applicable

public-land laws ... .” The Secretary is ac-

corded no other or greater range of discretion,

and no other criteria are provided by the statute.

The Secretary’s determination as to whether se-

lected lands are “proper for acquisition” by the

State in satisfaction of its indemnity rights

would have to be measured by the requirements

for such acquisition as set forth in the “ap-

plicable public-land law.” The applicable public-

land law for school indemnity selections is 43

U.S.C. 852, and any classification of lands made

3la

by the Secretary under Section 7 for disposition

in satisfaction of school indemnity selections

would, of necessity, be the same in nature, sub-

stance and range of discretion as the ministerial

adjudication performed under Section 852. It is

for this reason that the result would be exactly

the same whether the Secretary merely conducts

the ministerial adjudication of school indemnity

lists required under Section 852, or whether he

conducts both the adjudication under Section 852

and the hypothetical classification under Section

7 (48 U.S.C. 315(f)). Since the law does not

require the Secretary to do a useless act, and

since there would be no point, purpose or benefit

in a separate “classification” under Section 7,

the Secretary is not required to “classify” the

school indemnity selection lands in this action,

but should proceed merely to conduct the minis-

terial adjudication required by 43 U.S.C. 852.

Nothing in this Conclusion of Law No. 7 shall

be construed as an indication that school in-

demnity selections are within the scope of the

Taylor Grazing Act; and it is expressly con-

cluded that school indemnity selections are not

within the scope of, or subject to, that Act.

Conclusion No. 8: Any and all regulations

promulgated by the Secretary of the Interior in-

consistent with these Conclusions of Law, and,

in particular, any provisions within Part 2620

or Part 2400, 43 C.F.R., that purport to require

classification under the Taylor Grazing Act of

school indemnity selections filed under 43 U.S.C.

852, are without authority of law, are contrary .

to law, and are void and of no force or effect.

Conclusion No. 9: In view of the narrow,

confined, ministerial range of discretion con-

82a

ferred on the Secretary under Section 852 of

Title 48, U.S.C., and by Section 315f of Title

43, U.S.C. (if, indeed, the latter section could

be construed to apply at all), the National En-

vironmental Policy Act, 42 U.S.C. 4821 et seq.,

does not apply to secretarial review and action on

school indemnity selection lists. The Secretary

must approve those selections if they are in ac-

cordance with the congressional grant, appropria-

tion and offer contained in the Utah Enabling

Act, 28 Stat. 107, and Sections 851 and 852 of

Title 48, U.S.C.

Conclusion No. 10: While federal land grants

ordinarily are to be narrowly construed in favor

of the United States and against the grantee, the

reverse rule holds true with respect to school

land grants and indemnity selections, the courts

will adopt a liberal interpretation of the appli-

cable statutes in order to honor and fulfill the

public trust in aid and support of the common

schools, and thus achieve the purpose intended

by Congress in granting school trust lands.

Conclusion No. 11: The Secretary’s failure to

take any final action any of Utah’s school in-

demnity selection lists which are the subject of

this litigation, even though many of such selec-

tions have been pending before the Secretary for

more than ten years, is “agency action unlaw-

fully withheld or unreasonably delayed” within

the meaning of Section 706(1), Title 28, U.S.C.

[R., Vol. III, pp. 107-111.]

On appeal, the Secretary contends that the Dis-

trict Court erred in: (1) finding and concluding

that the Secretary does not have administrative dis-

cretion to classify school indemnity lieu lands based

38a

upon comparative market values between selected and

base lands by virtue of the 1936 amendment to Sec-

tion 7 of the Taylor Grazing Act, now codified as

43 U.S.C. §315(f), and (2) assuming jurisdiction

under the Tucker Act, 28 U.S.C. 1846(a) (2), to im-

pound the oil-shale leasing receipts for the two tracts

on the selection lists leased per agreement of the

parties, in that the Mineral Leasing Act, 30 U.S.C.

§ 191 dictates and controls the manner of distribu-

tion contrary to the order of the court.

We first consider the Secretary’s challenge to the

district court’s finding and conclusion that the Sec-

retary does not have administrative discretion to

classify school indemnity lieu lands based upon com-

parative market values between selected and base

lands by virtue of the 1936 amendment to the Taylor

Grazing Act, now codified as 43 U.S.C. § 315(f).

The historical background we have heretofore re-

ferred to makes it clear that the school land grant

statutes were enacted for a specific purpose. The

strict “trust” conditions apply exclusively to the

school lands granted the states or those selected “in

lieu.” No identical trust consequences or compact re-

lationships exist with respect to other “lieu land” selec-

tions. See, e.g., Cosmos Exploration Co. v. Gray Eagle

Oil Co., 190 U.S. 301 (1908), involving lands owned in

fee simple covered by a patent located in a national

forest reservation; Wisconsin Central R.R. Co. v.

Price County, 183 U.S. 496 (1890), involving selec-

34a

tion of indemnity lands by a railroad land-grant com-

pany; and Hall v. Hickel, 305 F. Supp. 723 (D.C.

Nev. 1969), rev. and remanded on other grounds,

473 F.2d 790 (9th Cir. 1973), cert. denied, 414 U.S.

828 (1973), involving “Valentine Scrip” lands. For

other “lieu” selection statutes, see, 25 U.S.C.A. § 334

(selection rights of Indians residing off of an Indian

Reservation) and 43 U.S.C.A. § 274 (selection rights

to be exercised by veterans). The distinction was re-

ferred to in the case of Wilcoxson v. United States,

313 F.2d 884 (D.C. Cir. 1963). The court was in-

volved in a construction of the Isloated Tracts Act.

The court held that § 7, supra, authorized the Secre-

tary to employ his discretion relative to disposal of

the subject lands. The court recognized that such

discretion does not apply to the state in-lieu grants

for the benefit of the public schools. Other decisions

have recognized the classification powers under § 7,

supra, under specific statutes.

The Section 7 amendment relied upon by the Sec-

retary for authority to “classify” in the instant case

does not specifically refer to “in lieu” selections as

indemnity for school land grants; rather, reference

is there made to the Secretary’s authorization to

classify lands within a grazing district to determine

if those lands are proper for acquisition in satisfac-

tion of “any outstanding lieu . . . rights or land

grants ....” Thus, we are asked by the Secretary

to substitute the general language above cited for the

unambiguous, clear and unqualified language in 43

U.S.C. § 851, supra, which speaks directly to the sub-

ject of lieu selections as indemnity for school land

85a

grants lost to the states by use of the specific, un-

abridged language directing that the states may select

“. . other lands of equal acreage . . . in accordance

with the provisions of section 852 of this Title, by

said State to compensate deficiencies for school pur-

poses ....” The distinction between the legal rights

attendant upon private “in lieu” exchanges of lands

and state “in lieu” exchanges as indemnity for lost

school land grants was specially recognized in Lewis

v. Hickel, 427 F.2d 673 (9th Cir. 1970), cert. denied,

400 U.S. 992 (1971). There, the private exchange

provisions of the Taylor Grazing Act were at issue.

In their efforts to overturn the decision of the Sec-

retary rejecting their application for a private ex-

change of lands under the Taylor Grazing Act, the

appellants placed “strong reliance’ upon Payne v.

New Mexico, 255 U.S. 367 (1921). The Court stated

in this regard:

Appellants place strong reliance upon Payne

v. New Mexico. . ., a case involving the Secre-

tary’s denial of an exchange under an Act grant-

ing New Mexico the right to select certain lands

for the support of the common schools. How-

ever, that case and others like it are inapposite

since they arose under statutes granting inter-

ests in lands once certain conditions had been

complied with. Hence, the power conferred upon

the Secretary was merely ‘judicial in its nature’

(255 U.S., at 371, 41 S.Ct. 333) in the sense that

his only function was to ascertain whether the

specific conditions had been met.

Under the exchange provisions of the Taylor

Grazing Act, the power conferred on the Sec-

86a

retary is much broader than that of determining

if the applicant has met the conditions prescribed

by Congress. (Emphasis supplied.)

427 F.2d, at p. 676.

We agree with the finding of the trial court and

the rationale in Lewis v. Hickel, supra, i.e., that

nothing in the language of the Taylor Grazing Act,

as amended, or its legislative history, empowers the

Secretary to invoke the Section 7 (43 U.S.C. § 315

(f)) “classification” criteria to “in lieu” selections by

a state of lands within a grazing district pursuant to

the school indemnity selection statutes. We deem it

significant that the Secretary has failed to point out

that the §7 classification authority, in any event,

relates only to surface entry rights. The Act spe-

cifically provides that the lands withdrawn for clas-

sification remain open to mineral location. 43

U.S.C.A. §§ 315f, 315g(d). The classification power

does not extend to the mineral estate.

We reiterate that land grant legislation enacted

by the Congress designed to aid the common schovis

of the states is to be construed liberally (in favor of

the states) rather than restrictively. State of Wyo-

ming v. United States, swpra. In Beecher v. Wether-

by, 95 U.S. 517 (1877), the Supreme Court held that

when a state is admitted to the Union and is granted

sections 16 in the state upon certain conditions to be

ratified by the constitution of the state, and the rati-

fication was made, then the condition became un-

alterable and obligatory on the United States. This

rule is explicit. See also: 81A C.J.S., States, § 4b.

This court cannot engraft an exception thereon favor-

37a

ing the Secretary’s administrative discretion claimed

here. We thus hold that the district court did not err

in its findings and conclusions that the exchange of

school lands lost for “in lieu” lands to be selected by

Utah is to be undertaken on the equal acreage basis

once it is determined that the respective lands are

“mineral in character” without regard to valuation.

The value-for-value exchange criteria set forth in

Section 7, supra, does not apply. The legislative his-

tory relating to 43 U.S.C. §§ 851 and 852, supra,

together with that of the 1936 amendment to Section

7 of the Taylor Grazing Act show complete silence

on the part of the Congress of any intent to au-

thorize broadening of the Secretary’s classification

authority respecting the indemnity selection rights

of Utah. However, when we review the provisions of

43 U.S.C. §§ 851 and 852, supra, it is strikingly

clear that Congress did grant the states broad rights

in effecting indemnity selections. There is no ques-

tion that the “equal acreage” language originally set

forth in § 851, swpra, has been retained throughout

its amendatory history. At no time has the Con-

gress used the “equal value” reference.

The trust aspect of the obligation imposed upon and

assumed by the respective “public land” states in

relation to lands granted for the benefit of the public

school system was recently recognized by the United

States Supreme Court in Lassen v. Arizona, ex rel

Arizona Highway Dept., 385 U.S. 458 (1967). There,

the Arizona Supreme Court was reversed in its hold-

ing that the Arizona Highway Department could

moe

88a

condemn trust lands acquired by Arizona under § 28

of its Enabling Act for highway construction on the

ground that it could be presumed that highways con-

structed across such trust lands always enhanced the

value of the areas taken and that, accordingly, the

Highway Department was not required to compensate

the trust. The United States Supreme Court em-

phasized that § 28 of the Enabling Act required that

trust lands be sold or leased only to “the highest and

best bidder”; that no lands be sold for less than their

appraised value; that disposal of trust lands be “only

in manner as herein provided”; and that disposition

in any other way shall be a breach of trust. The Court

held that only sales and leases were intended and

that the grant was plainly expected to produce a

fund, accumulated by sale and use of the trust lands,

with which the state could support the public in-

stitutions designated by the Act. The Lassen court

reaffirmed the rule applied in Ervien v. United States,

251 U.S. 41 (1919) recognizing strict concern for the

integrity of the trust conditions imposed by the var-

ious “public land” state enabling acts. In Ervien,

supra, the Court held that actual compensation “in

money” must be paid the trust equaling the ap-

praised value. The same stringent trust conditions

were again reaffirmed by the holding that a lease by

Arizona of lands acquired for the common schools

under its Enabling Act can only be executed in con-

sideration of a rental representing its “true value.”

Alamo Land & Cattle Co. v. Arizona, 424 U.S. 295

(1976).

39a

The trial court specifically found that there is

nothing in the legislative history of the 1986 amend-

ment to Section 7 of the Taylor Grazing Act to sug-

gest that the classification by the Secretary is a

prerequisite to the exercise of Utah’s school indemnity

selection rights. [R., Vol. III, p. 105.] We agree.

There are established rules of statutory construc-

tion supporting the trial court’s conclusion that Sec-

tion 7 does not control here: A statute must be con-

strued as it was intended to be understood when en-

acted in the light of the conditions as they existed

when the act was passed. United States v. Stewart,

311 U.S. 60 (1940). Words of a statute are to be

interpreted in their ordinary definitions and the

meanings commonly attributed to them. Jones v.

Liberty Glass Company, 332 U.S. 524 (1978). Where

there are two statutes upon the same subject, the

earlier being special (as is the case with regard to

43 U.S.C. §§ 851 and 852, supra) and the later be-

ing general (as is the case with regard to the 1936

amendment to the Taylor Grazing Act, 48 U.S.C.

§ 315(f), supra) it is settled law that the special

act remains in effect as an exception to the general

act unless absolute incompatibility exists between the

two, and all matters coming within the scope of the

special statute are governed by its provisions. Preiser

v. Rodriguez, 411 U.S. 475 (1978); Missouri K & T

Ry. Co. v. Jackson, 174 F.2d 297 (10th Cir. 1949) ;

United States v. Fixico, 115 F.2d 389 (10th Cir.

1940); Sutherland Statutory Construction, 4th Ed.,

Vol. 2A § 51.05. The latter authority summarized

the general-special acts rule:

40a

General and special acts may be in pari

materia. If so, they should be construed together.

Where one statute deals with a subject in gen-

eral terms, and another deals with a part of the

same subject in a more detailed way, the two

should be harmonized if possible, but if there is

conilict, the latter will prevail, regardless of

whether it was passed prior to the general stat-

ute, unless it appears that the legislature in-

tended to make the general act controlling.

Sutherland Statutory Construction, 4th Ed., Vol.

2A, § 51.05, p. 315.

We submit that the strict, continuing “trust” ob-

ligations imposed by the Congress upon the “public

land” states (and willingly accepted by them) in the

school land grant statutes clearly set these enact-

ments aside as special acts completely separate and

apart from all other public land grant enactments.

In that sense, then, these enactments are set apart

and given special, independent treatment, much akin

to the special preference and treatment of Indians

recognized in Morton v. Mancari, 417 U.S. 535

(1974).

This court has held that a statutory exception

should be strictly construed so that the exception

does not devour the general policy which the law

embodies. Edward B. Marks Music Corp. v. Colorado

Mag., Inc., 497 F.2d 285 (10th Cir. 1974), cert.

denied, 419 U.S. 1120 (1975). Statutes are, in all

instances, to be construed in a manner so as to ef-

fectuate the intent of the enacting body, and an

unambiguous statute must be given its plain and

4la

obvious meaning. United States v. Ray, 488 F.2d

15 (10th Cir. 1973) ; United States v. Western Pacific

Railroad Company, 385 F.2d 161 (10th Cir. 1967),

cert. denied, 391 U.S. 919 (1968). The case of

Bronken v. Morton, 473 F.2d 790 (9th Cir. 1973) is

in point. It involved the issue of the Secretary’s

power to apply the “comparative value” test of § 7,

supra, upon denial by the Secretary of the issuance

of land patents to holders of “in lieu’ selection rights

involving “Valentine scrip certificates” issued to com-

pensate lands lost by reason of the Mexican land

grant. The “scrip” statute authorized the holder

to select an “equal quantity” of certain public lands.

The Secretary opted for selection based on “equal

value.” The court rejected the Secretary’s position

because the “Valentine” scrip act did not provide

“that monetary value of the selected lands” was the

criteria.

Applying these rules of statutory construction, we

hold that the District Court did not err. Further-

more, we believe, just as did the trial court, that the

United States Supreme Court has, in two opinions,

clearly and succinctly settled the statutory construc-

tion conflict presented here in favor of Utah. A de-

tailed recital of these two opinions follows.

Payne v. New Mexico, supra, involved a suit by

New Mexico to enjoin the Secretary of the Interior

and the Commissioner of the General Section of the

Land Office from canceling or annulling a “lieu land

selection of that state under a mistaken conception

of their power and duty.” New Mexico did all that

was needed to perfect the selection (just as here).

42a

The list was approved by the local land office and

sent to the general land office. The list was accepted

and approved. One year later the Commissioner di-

rected that the selection be canceled “‘solely on the

ground that in the meantime .. . the base tract...

had been eliminated from the reservation by a change

in its boundaries.” The Secretary affirmed the Com-

missioner. The state appealed. Both offices proceeded

on the basis that the validity of the selection was

to be tested by conditions existing when they came

to examine it and not by those existing when the

state made the selection. The Supreme Court held

that the conditions existing when the selection was

made control. In so holding the Court said that the

provision under which the selection was made (the

“lost” lands and the “in lieu” lands were non-mineral

in character) was one inviting and proposing an

exchange of lands whereby the Congress said, in sub-

stance, to the state:

If you will waive or surrender your titled tract

in the reservation, you may select and take in

lieu of it a tract of like area from the unap-

propriated non-mineral public lands outside the

reservation. Acceptance of such a proposal and

compliance with its terms confer a vested right

in the selected land which the land offices can-

not lawfully cancel or disregard. In this re-

spect the provision under which the state pro-

ceeded does not differ from other land laws which

offer a conveyance of the title to those who ac-

cept and fully comply with their terms.

255 U.S., at p. 370.

48a

Again, in relation to the language “under the di-

rection and subject to the approval of the Secretary

of Interior” appearing in the statutes relating to lieu

land selection, the Court in Payne, supra, noted its

prior decision that a claimant to public land who

has done all that is required under the law to perfect

his claim acquires equitable title to the land which

the Government then holds in trust for him. The

Court said:

The words relied upon (subject to the approva!

of the Secretary of the Interior) are not peculiar

to this land grant, but are found in many others.

Their purpose is to cast upon the Secretary the

duty of ascertaining whether the selector is act-

ing within the law, in respect to both the land

relinquished and the land selected, and of ap-

proving or rejecting the selection accordingly.

255 U.S., at p. 371.

State of Wyoming v. United States, swpra, in-

volved a suit by the United States to establish title

to 80 acres of land and to the proceeds of oil pro-

duced therefrom. One of the defendants, the State

of Wyoming, claimed under a lieu selection made in

1912. It was against that selection and lease that

the United States sought to establish title’ Under

the Act of July 10, 1890, Congress granted to Wyo-

ming for the support of its common schools Sections

16 and 36 in each township as lands in place, with

certain exceptions. “he act of February 28, 1891,

granted the state, in the event any of the designated

lands in place should be included within a public

reservation, the privilege to “waive its right thereto

44a

and select in lieu thereof other lands of equal acreage

from unappropriated non-mineral public lands out-

side the reservation and within the state. See: Cali-

fornia v. Deseret Water, Etc., Co. 248 U.S. 415

(1917) ; Payne v. New Mexico, ante, 367. Other laws

of general application, §§ 441, 453, 2478, Rev. Stats.,

require that the selections be made under the direc-

tion of the Secretary of the Interior.” (Emphasis

supplied.) 255 U.S., at 494.

The State of Wyoming selected the 80 acres in

lieu of a tract which had passed to the State under

the school grant which was included in a public

reservation known as the Big Horn National Forest.

The selected in lieu acreage “was vacant, unap-

propriated, and neither known nor believed to be

mineral .... “The State did everything necessary

to show a perfect title to the land relinquished and

perfect relinquishment thereof to the Government, and

everything that was required either by statute or

regulation of the Land Department... .” 255 U.S.

at 494. The list remained in the General Land Office

awaiting the consideration of the Commissioner for

about three years. In the meantime, the selected

land, and other lands, were included in a temporary

exclusive withdrawal as possible oil land and there-

after the Commissioner declined to accept the selec-

tion made by the State of Wyoming and called on

the State to either accept a limited surface right-

certification or to show that the 80 acres was still

not known or believed to be mineral. Wyoming

claimed that it had been vested with equitable title

45a

when the selection was made. Accordingly, Wyoming

refused the tender. The Commissioner then canceled

the selection on the theory that he was justified in

rejecting it by reason of the subsequent withdrawal

and oil discoveries in the vicinity. The Secretary of

Interior affirmed the Commissioner. In the mean-

time, Wyoming had issued an oil lease on the selected

tract. The oil company (lessee) drilled and obtained

successful production of oil some four years after the

selection. The Supreme Court posed the issue pre-

sented as:

The question presented is whether, consider-

ing that the selection was lawfully made in lieu

of the state-owned tract contemporaneously re-

linquished, and that nothing remained to be done

by the State to perfect the selection, it was ad-

missible for the Commissioner and the Secretary

to disapprove and reject it on the ground that

the selected land was withdrawn two years later

under the Act of June 25, 1910, or still later

was discovered to be mineral land, that is, to be

valuable for oil. (Emphasis supplied. )

255 U.S., at p. 496.

The Court held that once Wyoming had complied

with lawful “in lieu” selection procedures, there was

no power conferred in the Commissioner or the Sec-

retary to withhold the approval in the sense of grant-

ing or denying a privilege to the state, but rather:

... of determining whether an existing privilege

conferred by Congress had been lawfully exer-

cised ;—in other words, their action was to be

judicial in its nature and directed to an ascer-

46a

tainment and declaration of the effect of the

waiver and selection by the State in 1912. If

these were valid then—if they met all the re-

quirements of the congressional proposal, includ-

ing the directions given by the Secretary—they

remained valid notwithstanding the subsequent

change in conditions. Acceptance of such a pro-

posal and full compliance therewith confer vested

rights which all must respect. Equity then re-

gards the State as the owner of the selected tract

and the United States as owning the other; and

this equitable ownership carries with it whatever

advantage or disadvantage may arise from a

subsequent change in conditions whether one

tract or the other be affected. (Emphasis

supplied. )

255 U.S., at pp. 496, 497.

The Court equated the “in lieu” selection to a cash

entry, citing to Benson Mining Co. v. Alta Mining

Co., 945 U.S. 428 (1892), for the proposition that

when the price is paid the right to the patent im-

mediately arises and the delay in the Land Depart-

ment relative to administrative processing does not

diminish the rights flowing from the purchase. Fur-

ther, the Court made special reference to its decision

in Daniels v. Wagner, 287 U.S. 547 (1915). There

the Secretary rejected a lieu selection and ruled that

no right attached under the selection unless and until

it was approved by him and that he possessed a dis-

cretion to reject it and give effect to an intervening

change in conditions. The Court did not accept the

Secretary’s position. The Court held that when selec-

tions were made in accord with statutes it was the

47a

plain duty of the Secretary to approve them and that

the Secretary’s power to approve the lists of selection

was judicial in its nature. 255 U.S., at pp. 502, 503.

The most telling, significant and pertinent language

of the Supreme Court opinion in State of Wyoming

v. United States, supra, directly applicable to the

contention raised by the Secretary here that the

“value for value” criteria is to be employed in ap-

proving the “‘in lieu” selection at issue is:

... If these (selections of “in lieu” lands) were

valid then (when the selection lists were sub-

mitted) . .. they remained valid notwithstand-

ing the subsequent change in conditions (i.e., dis-

covery of oil and production thereof). Accept-

ance of such a proposal and full compliance

therewith confer vested rights which all must

respect. Equity then regards the State as the

owner of the selected tract and the United States

as owning the other; and this equitable owner-

ship carries with it whatever advantage or dis-

advantage may arise from a subsequent change

in conditions whether one tract or the other be

affected.

255 U.S., at p. 497.

We believe that until and unless there is commer-

cial production of minerals there is really no defini-

tive means or method of ascertaining comparative

value of tracts which are “mineral in character.”

The Supreme Court obliquely recognized this, swpra,

by reference to ‘whatever advantage or disadvantage

may arise from a subsequent change in condition

whether one tract or the other be affected.”

48a

Thus, we conclude that the solemn bilateral agree-

ment between the United States and the “Land

Grant” State of Utah included the unqualified, un-

ambiguous right of Utah, upon incorporation in its

Enabling Act of the waiver heretofore referred to,

coupled with Utah’s acceptance of the trust condi-

tions and obligations set forth under Sections 3 and

7, Art. X of its Constitution, to select “in lieu” school

indemnity lands which are “mineral in character”

for the specific school lands granted which are

“mineral in character” but lost to the State. There

is no legislative criteria limiting or defining the term

“mineral in character.” Thus all that is required is

that both the “lost” lands and the “in lieu” lands

have some identifiable “mineral in character.” The

Secretary argues, it seems, that the affected “Land

Grant” states are to be bound without exception to the

stringent trust obligations they have assumed in their

administration of the “school lands” granted—or those

selected “in lieu”—while the United States Govern-

ment is not bound to the performance of those cove-

nants it agreed to in consideration for Utah’s waiver.

We reject this contention. It is unreasonable and

contrary to the solemn covenant of the United States

Government; it is also in derogation of the plain

language employed by the Supreme Court in State

of Wyoming v. United States, supra.

The trial court found yet another reason for re-

jecting the Secretary’s position on the application of

Section 7 in concluding that:

49a

. .. If, however, such classification (as set forth

under Section 7, now codified as 43 U.S.C. § 315

(f), supra), should be deemed to be a prerequisite

to school indemnity selection, there are no statu-

tory criteria for classification beyond a required

determination as to whether the selected lands

are proper for acquisition in satisfaction of in-

demnity selection rights. In particular, there is

nothing in Section 7 or the underlying legisla-

tive history to suggest that the Secretary is au-

thorized or empowered to utilize public interest

criteria, or to compare the value of lost base

lands with the value of indemnity selections as

part of any classification procedure.

We agree. In our view Section 7 was not directed

to school indemnity selection rights because its thrust

is to “uses.” Section 7 authorizes the Secretary to

employ a classification process to determine whether

lands within a (Taylor Grazing) grazing district may

be adaptable to “uses” having a higher value than

grazing. The Secretary was empowered to:

. . . to examine and classify any lands...

within a grazing district, which are more valu-

able or suitable for the production of crops for

the production of native grasses and forage

plants, or more valuable or suitable for any other

use than for the use provided for under this

Ast...

43 U.S.C.A. § 315(f).

School indemnity selections are not proposed “uses”

of land. They are selections for the transfer of title

and subsequent administration by the states under

50a

the solemn trust conditions. Accordingly, the afore-

said “classification” procedures or Section 7 cannot

apply to school indemnity selections. Under 43

U.S.C. § 851, supra, the Taylor Grazing lands are

appropriated to the states for indemnity selections.

The Secretary is confined to unappropriated lands

under Section 1 of the Taylor Grazing Act. 43 U.S.C.

§ 315. School indemnity selections are not “entries”

in the traditional sense. All federal lands in Utah

are situate within grazing districts. Thus, we must

conclude that if the Secretary’s power to “classify”

school indemnity lands applies, there are no legislative

guidelines or criteria spelling out the scope of such

power. The Secretary argues that he has authority

under Section 7 to cancel the “in lieu” selections based

upon his discretionary power to “classify,” but he has

not deemed it necessary to spell out the scope or

extent of the “classification” power in the case at bar.

In fact, he contends that Section 7 “puts no restric-

tions on the substance of secretarial discretion.”

[Brief of Appellant, p. 31.] The Secretary’s conten-

tion is erroneous. The “classification” criteria were

spelled out by the Congress for other types of public

land dispositions under the 1936 amendment, i.e.,

homestead entries and exchange of private land. We

agree with Utah that, “It makes no sense to suppose

that Congress would spell out conditions and criteria

for the exchange of private land for federal land, but

would at the same time grant to the Secretary un-

limited discretion, with no criteria or guidance, to

deny school indemnity selections by classifying the

5la

land for retention in federal ownership.” [Brief of

Appellee, p. 60.] The breadth and scope of the right

of “classification” claimed by the Secretary creates

the very vagueness condemned in Connally v. Gen-

eral Construction Co., 269 U.S. 385 (1926). There

the Court held that a statute which is so vague that

men of common intelligence must necessarily guess at

its meaning and differ as to its application violates

due process. See also: Boyce Motor Lines, Ine. v.

United States, 342 U.S. 337 (1952); Sutherland

Statutory Construction, 4th Ed., Vol. 1A, § 21.16.

Finally, we reach the Secretary’s contention that

classification is likely required under Executive Order

5327 issued by President Hoover on April 15, 1930,

and Executive Order 6910 issued by President Roose-

velt on November 26, 1934. Both constituted with-

drawals of all of the vacant, unreserved and unap-

propriated lands of the public domain subject to cer-

tain classification and examination. We have care-

fully reviewed these orders. We hold that nothing in

these orders can be construed to apply to state

school indemnity selections.

Il.

The Secretary contends that the district court

lacked jurisdiction under the Tucker Act, 28 U.S.C.

§ 1346(a) (2), to impound the moneys realized repre-

senting oil-shale leasing receipts which Congress, in

Section 35 of the Mineral Leasing Act of 1920, 30

U.S.C. § 191, had previously appropriated for distri-

bution in a way contrary to the trial court’s orders.

52a

We disagree. We hold that the District Court did not

err by reason of its impoundment and investment

orders.

The Secretary, following Utah’s indemnity selec-

tions, issued two federal mineral leases to third par-

ties on some 5,000 acres out of the lands included in

the 194 parcels Utah had selected. Millions of dollars

of rentals had been paid to the Secretary by the lessees

relating to the oil-shale leases.

Section 35 of the Mineral Leasing Act directs that

the Secretary pay all oil-shale leasing receipts into the

‘. United States Treasury for later redistribution twice

a year in varying percentages to Utah, the federal

reclamation fund, and to miscellaneous depositories in

the Treasury. Thus, the Secretary contends that noth-

ing in the statutes permits the federal courts from

impounding these funds to satisfy some anticipated —

future judgment not yet rendered. Judicial seizure,

contends the Secretary, is a suit against the United

States, in this case without its consent. This argu-

ment was not raised in the District Court and need

not be entertained for the first time on appeal. How-

ever, the procedure employed by the District Court

appears from the record to have been tacitly con-

sented to by the United States which at no time ob-

jected to the orders of the court relative to impound-

ment or despit. [See, R., Vol. I, p. 69.] In addition,

the record reflects that Utah and the Secretary recog-

nized Utah’s potential ownership of the leased tracts,

together with the lease rentals received, in light of

the request by the United States, acceded to by Utah,

53a

that Utah consent to the lease transactions pending

the outcome of this litigation initiated to resolve the

ownership of the lands and thé funds. [R., Vol. III,

pp. 73, 74.] In our judgment, Wyoming v. United

States, supra, firmly supports the trial court’s action.

Utah has not pursued an action for damages. In

addition, the Tucker Act cannot apply in view of the

limit of $10,000.00 in any civil action or claim there-

under against the United States. 28 U.S.C.A. § 1346

(a) (2). We deem the action of the District Court

entirely consistent with Fed. Rules Civ. Proc. rule 67,

28 U.S.C.A., relative to deposit of the funds with the

court and the provisions of 28 U.S.C.A. §§ 2041 and

2042 relating to money deposited and withdrawn.

WE AFFIRM.

54a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH

CENTRAL DIVISION

Civil No. C-74-64

[Filed June 8, 1976]

THE STATE OF UTAH, by and through

its Division of State Lands, PLAINTIFF

Vv.

THoMAS S. KLEPPE, individually and as Secretary of

the United States Department of Interior, DEFENDANT

FINDINGS OF FACT, CONCLUSIONS OF LAW

AND DECREE

The above-entitled matter came on regularly for

hearing pursuant to a special setting on Wednesday,

February 25, 1976, at 10:00 a.m., and for further oral

argument on Tuesday, May 25, 1976, at 10:00 a.m.,

all in accordance with the Stipulation of the parties

dated June 10, 1975, and the Pre-Trial Order of the

Court signed and entered on the 16th day of June,

1975, and further in accordance with the respective

motions for summary judgment filed by the parties on

August 18, 1975; plaintiff was represented at both

hearings by Richard L. Dewsnup and Clifford L.

Ashton, Special Assistants to the Utah Attorney Gen-

eral, and by Dallin W. Jensen, Assistant Utah At-

55a

torney General, and defendant was represented by

Ramon M. Child, United States District Attorney, and

by Gerald S. Fish, Attorney with the United States

Department of Justice; and the matter having been

fully briefed by the parties through primary and

answering briefs filed September 15, 1975, and Octo-

ber 15, 1975, respectively, and by plaintiffs’ supple-

mental brief filed March 12, 1976, and defendant’s

supplemental brief dated April 16, 1976; and the

Court now having read and considered the briefs and

memoranda on file, and having heard and considered

the oral arguments by the parties, and now being fully

advised in the premises, makes the following Findings

of Fact and Conclusions of Law:

FINDINGS OF FACT

Finding No. 1: Plaintiff Division of State Lands of

the State of Utah is an agency of state government

having statutory responsibility, acting for and in be-

half of the State of Utah, to manage and administer

all lands received by the State of Utah under school

land grants from the United States, and is authorized

and empowered under state law to exercise Utah’s

rights to select federal lands in lieu of and as in-

demnification for original school land grants in place

that were denied to the State of Utah as a result of

federal reservation and pre-emption, or private entry,

prior to survey; and defendant Thomas S. Kleppe is

the duly appointed, confirmed and acting Secretary of

the United States Department of the Interior.

56a

Finding No. 2: Plaintiff invoked the jurisdiction of

this Court under 28 U.S.C. 1331 (federal question)

and 28 U.S.C. 13861 (mandamus); and seeks to com-

pel the defendant to take administrative action that

has been “unlawfully withheld or unreasonably de-

layed” under Section 706(1) of the Administrative

Procedures Act, 5 U.S.C. 701 et seqg., and to obtain a

declaratory judgment under the Declaratory Judg-

ment Act, 28 U.S.C. 2201 et seq., as to the nature and

extent of plaintiff’s school indemnity selection rights

under selection lists heretofore filed with the Bureau

of Land Management of the United States Department

of Interior; and venue is laid under 28 U.S.C. 1391

(e) (3), since the lands subject to this litigation are

located within Uintah County, State of Utah, and

thus within the geographic jurisdiction of the Central

Division of this Court.

Finding No. 3: The amount in controversy, exclu-

sive of interest, attorneys’ fees and costs, exceeds

$10,000.00.

Finding No. 4: Between the dates of September

10, 1965, and November 19, 1971, plaintiff filed 194

selection lists with the Bureau of Land Management

of the United States Department of Interior, covering

157,255.90 acres of land in Uintah County, State of

Utah, as lieu lands to serve as indemnification for

school land grants in place which were denied to Utah

because of federal reservation and pre-emption, or

private entry, prior to survey. These selection lists

may be summarized as follows:

57a

September 10, 1966 ................................ 17,589.44 acres

I I 1,760.00 acres

RES ae eee 21,103.32 acres

I a 8,232.35 acres

ee OD 14,689.83 acres

BPOOO DD, TODD cvcciccccicncicsccdescacecccecse- 25,583.20 acres

ee 38,058.81 acres

ee 11,044.87 acres

ES: Ea nee eee 11,977,49 acres

OUI Ts OPO cccncscccccscesecicoccesimoecoase 12,216.59 acres

ety y ) RRM 157,255.90 acres ;

and said selection lists are more particularly identified

and described below:

Utah U.S. Township

Serial Serial Date & Range

No. No. Filed S.L.B.& M. Acres

1. 3842 UO0147222 09/10/65 12/24E 640.00

2. 3843 U0147223 ~ - 640.00

3. 3844 U0147224 ” a 640.00

4. 3845 U0147225 ° - 640.00

5. 3846 U0147226 . . 623.52

6. 3847 U0147227 - ms 624.48

7. 3848 U0147228 7 ” 640.00

8. 3849 U0147229 “ ° 640.00

9. 3850 U0147230 " ? 640.00

10. 3851 U0147231 . _ 640.00

11. 3852 U0147232 . ° 640.00

12. 3853 U0147233 " 640.00

13. 38854 U0147234 ° Xs 640.00

14. 3855 U0147235 * . 640.00

15. 3856 U0147236 es 3 640.00

16. 38857 U0147237 . ” 640.00

17. 3858 U0147238 ° - 640.00

18. 3859 U0147239 * - 640.00

19. 3860 U0147240 . " 625.48

20. 3861 U0147241 wi = 626.56

21. 3862 U0147242 - 640.00

22. 3863 U0147243 7 13S/24E 700.40

23. 3864 U0147244 - . 693.72

24. 3865 U0147245 ” - 690.40

25. 3866 U0147246 _ » 688.37

58a

Utah US. Township

Serial Serial Date & Range

No. No. Filed S.L.B.& M. Acres

26. 3867 U0O147247 ” = 680.75

27. 3868 U0147248 r ” 635.76

28. 3869 U0147249 sg ” 120.00

29. 3892 U0O148864 02/08/66 ° 640.00

30. 3893 U0148865 : * 640.00

31. 3894 U0148866 = " 480.00

82. 4018 U3059 05/17/65 9-10S/25E 641.72

33. 4019 U3060 10S/25E 677.65

34. 4020 U3061 " ° 655.11

35. 4021 U3062 * _ 644.53

36. 4022 U3063 wi = 640.00

87. 4023 U3064 = - 640.00

38. 4024 U3065 . " 640.00

39. 4025 U3066 7 “ 640.00

40. 4026 U3067 * " 653.37

41. 4027 U9068 7 " 640.00

42. 4028 U3069 ™ - 640.00

43. 4029 U3070 * 640.00

44. 4030 U3071 m 7 640.00

45. 4031 U3072 _ og 640.00

46. 4032 U3073 ” ? 640.00

47. 4033 U3074 05/17/67 10S/25E 640.00

48. 4034 U3075 “2 - 640.00

49. 4035 U3076 = 11S/25E 640.00

50. 4036 U3077 a: a 637.59

51. 4037 U3078 “ os 640.00

52. 4038 U3079 _ a 649.62

53. 4039 U3080 - 640.00

54. 4040 U3081 7 647.98

55. 4041 U3082 = ” 640.00

56. 4042 U3083 7 gs 640.00

57. 4043 U3084 = = 640.00

58. 4044 U3085 bis a) 640.00

59. 4045 U3086 " “ 640.00

60. 4046 U3087 4 ~ 640.00

61. 4047 U3088 _ 11-12S/25E 640.00

62. 4048 U3090 - 12S/25E 663.64

63. 4049 U3089 7 “ 542.11

64. 4075 U4176 10/20/67 18S/25E 640.00

65. 4076 U4177 " 7” 655.92

66. 4077 U4178 = “a 640.00

67. 4078 U4179 . as 648.92

68. 4079 U4180 e ss 647.51

69. 4080 U4266 11/02/67 a 632.80

70. 4081 U4267 ° - 640.00

71. 4082 U4268 - 12S/25E 640.00

59a

Utah U.S. Township

Serial Serial Date & Range

No. No. Filed S.L.B.& M. Acres

72. 4083 U4269 = . 640.00

73. 4084 U4270 sg - 640.00

74. 4085 U4271 ’ se 640.00

75. 4086 U4272 " . 640.00

76. 4087 U4273 ” 640.00

77. 4088 U4274 7 ” 640.00

78. 4089 U4275 “ S 640.00

79. 4090 U4276 - . 640.00

80. 4091 U4277 ng . 640.00

81. 4092 U4278 ” = 638.44

82. 40938 U4279 ' " 639.38

83. 4094 U4280 ™ . 639.59

84. 4095 U4281 - “ 640.00

85. 4096 U4282 " sy 632.46

86. 4097 U4283 ” ¥ 640.00

87. 4098 U4284 1 - 640.00

88. 4099 U4285 - os 640.24

89. 4100 U4286 5 . 640.00

90. 4101 U4287 ” " 639.65

91. 4102 U4288 5 ° 627.27

92. 4147-A U10449 12/19/69 10S/22E 640.00

98. 4148 U10450 = * 640.00

94. 4149 U10451 10S/22-23E 640.00

95. 4150 U10452 ” 10S/23E 646.40

96. 4151 U10453 . 640.00

97. 4152 U10454 “ * 640.00

98. 4158 U10456 a - 640.00

99. 4154 U10457 “4 es 640.00

100. 4155 U10455 o " 640.00

101. 4156 U10458 . " 640.00

102. 4157 U10459 - * 640.00

103. 4158 U10460 ° ” 639.20

104. 4159 U10461 - ” 639.84

105. 4160 U10462 “s . 640.00

106. 4161 U10463 - “ 640.00

107. 4162 U10464 2 10S/23-24E 640.00

108. 4163 U10465 - 10S/24E 640.00

109. 4164 U10466 96 7 640.00

110. 4165 U10467 = ~ 640.00

111. 4166 U10468 12/19/69 10S/24E 640.00

112. 4167 U10469 ua 5 640.00

113. 4168 U10470 ™ . 640.00

114. 4169 U10471 - ” 640.00

115. 4170 U10472 ” " 640.00

116. 4171 U10478 ™ ™ 640.00

60a

Utah US. Township

Serial Serial Date & Range

No. No. Filed S.L.B.& M. Acres

117. 4172 U10474 e : —

118. 4173 U10475 “ te

119. 4174 U10476 . ; —

120. 4175 U10477 “ . —

121. 4176 U10478 " =

122. 4177 U10479 vie

128. 4178 U10480 “ . _—

124. 4179 U10481 es —

125. 4180 U10482 « : yr

126. 4181 U10483 « . ooo

127. 4182 U10484 : ae

128. 4183 U10485 tee oom

129. 4184 U10486 « 118/22E —

130. 4185 U10487 “ . 6 oe

131. 4186 U10488 a " 64 rs

132. 4187 U10895 02/17/70 —

10894 e “

“7 ais 110886 “ 118/22-23E 645.79

135. 4190 U10897 118/23E =

136. 4191 U10873 ;

137. 4192- U10874 118/24E 00.84

ae cme ‘ , 689.31

9. 4198

a 4199 U10878 118/23E eis.

141. 4200 U10879 sd 640.0

142. 4201 U10884 e a 630.77

143. 4202 U10885 “ “ 631.73

144. 4203 U10886 e a 640.00

145. 4204 U10887 ee 640.00

146. 4205 U10888 ‘ 640.00

147. 4206 U10889 “ 640.00

148. 4207 U10890 “ a 627.88

149. 4208 U10891 « e 640.00

150. 4209 U10892 “ a 640.00

151. 4210 U10893 “ a 640.00

152. 4211 U10898 as a 525.02

153. 4212 U10899 “ e 605.00

154. 4213 U10900 e a 640.00

155. 4214 U10901 “ « 640.00

156. 4215 U10902 “ 640.00

157. 4216 U10903 e 640.00

158. 4217 U10904 zZ 602.09

159. 4218 U10905 . a —

160. 4219 U10906 _ 640.

6la

Utah U.S. Township

Serial Serial Date & Range

No. No. Filed S.L.B.& M. Acres

161. 4220 U10907 . . 640.00

162. 4221 U10908 “ . 640.00

163. 4222 U10909 " 640.00

164. 4228 U10910 ” se 640.00

165. 4224 U10911 ma . 605.68

166. 4225 U10912 . 606.92

167. 4226 U10913 = “ 640.00

168. 4227 U10880 . . 640.00

169. 4228 U10881 _ ‘ 640.00

170. 4229 U10882 % 11S/24E 641.76

171. 4230 U10883 ” - 642.22

172. 4231 U10914 7 10 643.58

173. 4232 U10915 sa "a 636.81

174. 4233 U10916 “ 7 640.00

175. 4234 U10917 02/17/70 11S/24E 640.00

176. 4235 U10918 7 s 640.00

177. 4236 U10919 ” : 640.00

178. 4237 U10920 ” “ 632.92

179. 4238 U10921 ” - 649.11

180. 4239 U10922 ” ” 634.85

181. 4240 U10923 ¥ “ 644.79

182. 4241 U10924 " “ 640.00

183. 4242 U10925 “ = 640.00

184. 4243 U10926 . - 640.00

185. 4244 U10927 - - 641.67

186. 4245 U10928 - % 634.22

187. 4246 U10919 ” “ 640.00

188. 4247 U10930 _ ss 640.00

189. 4248 U10931 “ - 640.00

190. 4249 U109382 ” <7 640.00

191. 4250 U10933 11 “¢ 620.52

192. 4256 U16905 11/08/71 11S/24E&

12S/22-23E 11,044.87

198. 4257 U16942 11/15/71 12S/23-24-

25E 11,977.49

194. 4258 U16956 11/19/71 10S/25E,

11S/24-25E,

12S/24-25E &

18S8/238E 12,216.59

Finding No. 5: Pursuant to an Agreement entered

into between the State of Utah and the Secretary of

Interior, the United States issued two proto-type oil

62a

shale leases, pursuant to public bidding, embracing

10,240 acres within the lands selected by the State of

Utah as above-described in Finding No. 4. Said

Agreement was made and dated the 22nd day of

February, 1974, before the present action was filed,

but the actual leases were awarded and executed

after this action was filed. The first lease is identified

as Tract U-a, and aggregates 5,120 acres located in

T.10S., R. 24 E., S.L.B. & M.; and the second lease

is identified as Tract U-b, and aggregates 5,120 acres

located partly in T. 10 S., R. 24 E., S.L.B. & M., and

partly in T. 10 S, R. 25 E. SLB. & M. Pur-

suant to an Order to Show Cause duly requested by

plaintiff State of Utah and issued by the Court, and

after a hearing thereon, the Court ordered that all

bonus funds and rental proceeds derived from those

leases during the pendency of this action be paid into

Court through the registry of the Court, and invested

pursuant to appropriate procedures and safeguards,

as set forth in the Orders issued by the Court govern-

ing such investments, until such time as the rightful

owner of the lands and proceeds is ultimately and

finally determined. As of May 25, 1976, the total

principal sum of $48,291,840.00 had been paid into

Court and invested pursuant to such Orders, and an

independent audit by the certified public accounting

firm of Coopers & Lybrand submitted to the Court

under date of September 8, 1975, reported that said

funds were being duly invested pursuant to appro-

priate procedures and safeguards.

Finding No. 5: The defendant has taken no final,

official action with respect to any of the selection lists

68a

identified in Finding No. 4, above, despite the fact

many of those selections have been pending for more

than ten years; nor has the defendant offered any

satisfactory explanation as to why he has failed to

take action on such selection lists.

Finding No. 6: The selection lists filed by plaintiff,

as identified in Finding No. 4, above, were for the

purpose of exercising part of Utah’s indemnity selec-

tion rights arising from the Utah Enabling Act, 28

Stat. 107, Act of July 16, 1894, and Sections 851 and

852, Title 43, United States Code. Section 6 of the

Utah Enabling Act granted to Utah sections 2, 16, 32

and 36 within each township in Utah as a land grant

for the support of Utah’s public schools, and expressly

provided that where:

. . . Such sections, or any parts thereof have

been sold or otherwise disposed of by or under

the authority of any Act of Congress, other lands

equivalent thereto... are hereby granted to said

State for the support of common schools, such

indemnity lands to be selected within said State

in such manner as the legislature may provide,

with the approval of the Secretary of the In-

terior .... (Section 6, 28 Stat. 107, Act of July

16, 1894).

Section 10 of the Utah Enabling Act further im-

posed trust restrictions on the school land grant by

providing that:

. . the lands herein granted for educational

purposes, except as hereinafter otherwise pro-

vided, shall constitute a permanent school fund.

64a

.. . (Section 10, 28 Stat. 107, Act of July 16,

1894).

Finding No. 7: The federal grant in trust to the

State of Utah for the support of the public school sys-

tem was accepted by the State by virtue of protective

provisions and guarantees in the Utah Constitution.

Section 3, Article X, Constitution of Utah, provides

that:

The proceeds of the sales of all lands that have

been or may hereafter be granted by the United

States to this state, for the support of the com-

mon schools .. . shall be and remain a permanent

fund, to be called the State School Fund, the

interest of which only, shall be expended for the

support of the common schools.

Further, Section 7, Article X, Constitution of Utah,

provides that:

All public school funds shall be guaranteed by

the State against loss or diversion. _

Finding No. 8: Section 851, Title 43, United States

Code, further grants and appropriates federal lands

for lieu selection to indemnify States for original

school land grants in place that are denied to the

States by virtue of federal pre-emption or private

entry, by providing that:

. . . other lands of equal acreage are hereby

appropriated and granted, and may be selected,

in accordance with the provisions of section 852

of this title, by said State or Territory, in lieu

of such as may be thus taken by preemption or

homestead settlers.

65a

Finding No. 9: Section 852, Title 43, United States

Code, sets forth the specific criteria and limitations

that are applicable to school indemnity selections in

exercise of the lieu land grants contained within state

enabling acts and in Section 851 of Title 43, United

States Code, the pertinent part of which is quoted

in Finding No. 8, above. There is no present dispute

between the parties as to whether Utah’s school in-

demnity selection lists, as identified in Finding No. 4,

above, are in accordance with the statutory criteria

contained within Section 852. The Secretary of In-

terior has made no final determination with respect to

‘such compliance. The parties have stipulated and

agreed, in their Stipulation filed with the Court and

dated June 10, 1975, that there are no material facts

in controversy at this stage of the proceedings, and

that the differences which separate the parties are

purely questions of law.

Finding No. 10: The basic position of the State of

Utah is that Congress has expressly granted and ap-

propriated lands to Utah to be selected as indemnifi-

cation for original school land grants that the State

never received because of federal pre-emption or pri-

vate entry prior to survey; that the right of selection

is in the discretion of the State and not the Secretary

of Interior; that upon filing school indemnity selection

lists in accordance and compliance with Section 852,

Title 43, United States Code, equitable title to the

selected lands vests in the State; that the Secretary

of Interior has a very narrow range of discretion in

reviewing and acting on such selection lists, limited to

66a

a ministerial adjudication to determine only whether

such selection lists are in compliance with the statu-

tory criteria of said Section 852; and, if so, the Secre-

tary is obligated by law to approve said selections and

to issue a clear list to the lands selected, thus vesting

legal title in the State of Utah.

The Secretary of Interior, on the other hand, takes

the position that he is authorized and obligated by

Section 7 of the Taylor Grazing Act, codified as Sec-

tion 315(f), Title 43, United States Code, to classify

lands located within grazing districts to determine

whether they are suitable for school indemnity selec-

tion and whether such disposition is appropriate under

applicable public-land laws; and that, in making such

classification, the Secretary is authorized in his dis-

cretion to utilize public interest criteria, including a

comparison of the value of the base school lands for

which selection is made and the value of the lands

selected as indemnification; and, further, that classifi-

cation in favor of disposition for school indemnity

selection is a condition precedent to the vesting of any

right, title or interest in any State which makes any

such school indemnity selection.

Finding No. 11: The Taylor Grazing Act was en-

acted as Public Law No. 482, 73rd Congress, Second

Session, identified as the Act of June 28, 1934, 48

Stat. 1269, entitled:

An Act to stop injury to the public grazing lands

by preventing overgrazing and soil deterioration,

to provide for their orderly use, improvement,

and development, to stabilize the livestock in-

67a

dustry dependent upon the public range, and for

other purposes.

The pertinent part of Section 7 of the 1934 Act

provided, with respect to the classification authority

of the Secretary of Interior, that:

. . . the Secretary is hereby authorized, in his

discretion, to examine and classify any lands

within such grazing districts which are more

valuable and suitable for the production of agri-

cultural crops than native grasses and forage

plants, and to open such lands to homestead entry

in tracts not exceeding three hundred and twenty

acres in area.

There is no language in the 1934 Act which purports

to give the Secretary of Interior authority to classify

lands that are selected by States for indemnification

of lost school lands, nor is there anything in the legis-

lative history of the 1934 Act that suggests that Con-

gress intended to require classification as a condition

to school indemnity selections.

Finding No. 12: The Taylor Grazing Act was amend-

ed in 1936 by Public Law No. 827, Act of June 26,

1936, 49 Stat. 1976 et seg. Section 7 of the 1936

Amendment, now codified as 43 U.S.C. 315(f), de-

scribes the Secretary’s classification authority in the

following languages:

. . . the Secretary of the Interior is hereby au-

thorized, in his discretion, to examine and clas-

sify any lands . . . within a grazing district,

which are more valuable or suitable for the pro-

duction of agricultural crops than for the pro-

duction of native grasses and forage plants, or

more valuable or suitable for any other use than

68a

for the use provided for under this Act, or

proper for acquisition in satisfaction of any out-

standing lieu, exchange or script rights or land

grant, and to open such lands to entry, selection,

or location for disposal in accordance with such

classification under applicable public-land laws,

except that homestead entries shall not be al-

lowed for tracts exceeding three hundred and

twenty acres in area. Such lands shall not be

subject to disposition, settlement, or occupation

until after the same have been classified and

opened to entry ....

The lands selected by Utah, as identified in Finding

No. 4, above, are located within grazing districts. But

there is nothing in the legislative history of the 1936

Amendment to Section 7 of the Taylor Grazing Act to

suggest that classification by the Secretary is a pre-

requisite to the exercise of school indemnity selection

rights by the States. If, however, such classification

should be deemed to be a prerequisite to school in-

demnity selection, there are no statutory criteria for

classification of school indemnity selections beyond a

required determination as to whether the selected

lands are proper for acquisition in satisfaction of

indemnity selection rights. In particular, there is

nothing in Section 7 or the underlying legislative his-

tory to suggest that the Secretary is authorized or

empowered to utilize public interest criteria, or to

compare the value of lost base lands with the value

of indemnity selections, as part of any classification

procedure.

69a

Finding No. 13: Plaintiff State of Utah contends

that compliance by the Secretary with the National

Environmental Policy Act, 42 U.S.C. 4321 et seq., is

not necessary in connection with the Secretary’s action

on the school indemnity selection lists, because such

Act is inapplicable to such selections. Defendant Sec-

retary of Interior contends that compliance with

NEPA is necessary prior to such action because the

Secretary has a broad range of discretion in classify-

ing land under Section 7 of the Taylor Grazing Act.

Finding No. 14: Plaintiff State of Utah seeks (a)

a declaratory judgment to the effect that equitable

title to the selected lands vested in Utah at the dates

of the respective filings of the selection lists, if such

selection lists were in accordance and compliance with

the applicable statutory requirements as set forth in

Section 852, Title 43, United States Code; (b) a man-

datory injunction requiring the Secretary to proceed

forthwith and complete by a date certain his minis-

terial adjudication to determine whether the selection

lists complied with the criteria contained in said Sec-

tion 852, and to report that determination directly to

the Court; and, (c) an order retaining custody,

through the registry of the Court, of all funds now on

deposit with and invested through the registry of the

Court, and requiring all further proceeds from the

proto-type oil shale leases to be paid into Court and

invested in accordance with the present provisions and

conditions governing such investments, as set forth in

the applicable orders of the Court; and providing that

such deposited and invested funds, together with all

70a

interest earned thereon, be paid to the party entitled

thereto when this litigation is fully concluded. De-

fendant Secretary of Interior opposes all relief sought

by the State of Utah.

From the foregoing Findings of Fact, the Court

now makes the following:

CONCLUSIONS OF LAW

Conclusion No. 1: The jurisdiction of this Court

is properly invoked under 28 U.S.C. 1331; venue 1s

properly laid under 28 U.S.C. 1391 (e) (3); and the

relief sought by plaintiff, if otherwise appropriate, 1s

available under 28 U.S.C. 1361, 5 U.S.C. 706(1) and

28 U.S.C. 2201 et seq.

Conclusion No. 2: The issues presently in dispute

are purely questions of law, no material facts are in

controversy, and the matters before the Court may

properly be adjudicated and determined in summary

judgment proceedings under Rule 56 of the Federal

Rules of Civil Procedure.

Conclusion No. 3: Federal land grants in aid of

the common schools of the State of Utah create a

solemn and permanent public trust for the use, benefit

and support of the public school system in Utah.

This public trust was created by the United States, as

settlor, granting to the State of Utah, as trustee,

sections 2, 16, 32 and 36 within each township within

the State of Utah for the permanent benefit of the

Utah public school system, as beneficiary of the trust.

The instruments which created this trust consisted

of the Utah Enabling Act, 28 Stat. 107, as passed by

Tla

the Congress of the United States, and the Constitu-

tion of the State of Utah, which accepted the terms of

the trust, as ratified and adopted by the people of the

State of Utah.

Conclusion No. 4: When original school land grants

in place are denied to the State of Utah as a result of

federal pre-emption or private entry prior to survey,

the State is entitled to select lands of equal acreage

from otherwise unappropriated federal lands within

the State, in lieu of and as indemnification for such

lost base lands, pursuant to and in accordance with

the criteria and limitations set forth in Section 852,

Title 43, United States Code. This selection is to be

made by the State in accordance with the congres-

sional offer contained in said Section 852; and, when

such selections are duly filed, it is the duty of the

Secretary of Interior to make a ministerial adjudi-

cation of such selection lists to determine whether they

are in accordance with the requirements of said Sec-

tion 852. If so, the Secretary must honor the state’s

acceptance of the congressional offer, and thus fulfill

the purpose of the public school land trust, by approv-

ing said selections; but, if such selections are found

not to be in compliance with the congressional criteria

contained in said Section 852, the Secretary must

deny and reject such selection lists.

Conclusion No. 5: If the ministerial adjudication

of the school indemnity selection lists, as conducted

by the Secretary under said Section 852, reveals that

said selection lists were in fact in compliance with

said Section 852, then Utah would have acquired equit-

12a

able title to the lands so selected as of the dates the

respective selection lists were filed, and from and

after that date Utah would have been entitled to all

revenues, rentals, emoluments and benefits arising or

accruing from said lands from and after the respec-

tive dates when such selection lists were filed.

Conclusion No. 6: The language of Section 7 of the

Taylor Grazing Act, as amended in 1936 (codified as

43 U.S.C. 315(f)), cannot reasonably be construed

to require classification of lands within grazing dis-

tricts as proper for disposition in satisfaction of school

indemnity selection lists filed under Section 852 of

Title 43, U.S.C.; and there is nothing in the legislative

history of the Taylor Grazing Act which indicates or

suggests that Congress intended to subject school in-

demnity selections to the classification procedures of

Section 7 of the Taylor Grazing Act.

Conclusion No. 7: Even if it should be assumed

that Section 7 of the Taylor Grazing Act could be

construed so as to require classification prior to dis-

position of land within a grazing district in satisfac-

tion of school indemnity rights, such a classification

would not be a condition precedent to the vesting of

equitable title in the State of Utah as of the respective

dates that the selection lists were filed; and, further,

the criteria which would govern the Secretary in mak-

ing such classification would be exactly the same as

those which he is obligated to utilize in making his

ministerial adjudication under Section 852 of Title 43,

U.S.C. This result necessarily follows from the fact

that Section 7 (43 U.S.C. 315(f)) requires the Secre-

73a

tary, in making any such classification for lieu selec-

me to determine whether the selected lands are

proper for acquisition in satisfaction of any out-

standing lieu .. . rights or land grant, and to open

such lands to... selection . . . for disposal in accord-

ance with such classification under applicable public-

land laws ....” The Secretary is accorded no other

or greater range of discretion, and no other criteria

are provided by the statute. The Secretary’s determi-

nation as to whether selected lands are “proper for

acquisition” by the State in satisfaction of its in-

demnity rights would have to be measured by the

requirements for such acquisition as set forth in the

“applicable public-land law.” The applicable public-

land law for school indemnity selections is 43 U.S.C

852, and any classification of lands made by the eae:

tary under Section 7 for disposition in satisfaction of

school indemnity selections would, of necessity, be

the same in nature, substance and range of Biveretion

as the ministerial adjudication performed under Sec-

tion 852. It is for this reason that the result would be

exactly the same whether the Secretary merely con-

ducts the ministerial adjudication of school indemnity

lists required under Section 852, or whether he con-

ducts both the adjudication under Section 852 and

the hypothetical classification under Section 7 (43

U.S.C. 315(f)). Since the law does not require the

Secretary to do a useless act, and since there would be

no Point, purpose or benefit in a separate “classifica-

tion” under Section 7, the Secretary is not required

to “classify” the school indemnity selection lands in

74a

this action, but should proceed merely to conduct the

ministerial adjudication required by 43 U.S.C. 852.

Nothing in this Conclusion of Law No. 7 shall be con-

strued as an indication that school indemnity selec-

tions are within the scope of the Taylor Grazing Act;

and it is expressly concluded that school indemnity

selections are not within the scope of, or subject to,

that Act.

Conclusion No. 8: Any and all regulations promul-

gated by the Secretary of the Interior inconsistent

with these Conclusions of Law, and, in particular, any

provisions within Part 2620 or Part 2400, 43 C.F.R.,

that purport to require classification under the Taylor

Grazing Act of school indemnity selections filed under

43 U.S.C. 852, are without authority of law, are con-

trary to law, and are void and of no force or effect.

Conclusion No. 9: In view of the narrow, confined,

ministerial range of discretion conferred on the Secre-

tary under Section 852 of Title 43, U.S.C., and by

Section 315f of Title 43, U.S.C. (if, indeed, the latter

section could be construed to apply at all), the Na-

tional Environmental Policy Act, 42 U.S.C. 4321 et

seq., does not apply to secretarial review and action

on school indemnity selection lists. The Secretary

must approve those selections if they are in accord-

ance with the congressional grant, appropriation and

offer contained in the Utah Enabling Act, 28 Stat.

107, and Sections 851 and 852 of Title 43, U.S.C.

Conclusion No. 10: While federal land grants érdi-

narily are to be narrowly construed in favor of the

United States and against the grantee, the reverse

75a

rule holds true with respect to school land grants and

indemnity selections. With respect to public school

land grants and indemnity selections, the courts will

adopt a liberal interpretation of the applicable stat-

utes in order to honor and fulfill the public trust in

aid support of the common schools, and thus achieve

the purpose intended by Congress in granting school

trust lands.

Conclusion No. 11: The Secretary’s failure to take

any final action on any of Utah’s school indemnity

selection lists which are the subject of this litigation,

even though many of such selections have been pend-

ing before the Secretary for more than ten years, is

“agency action unlawfully withheld or unreasonably

delayed” within the meaning of Section 706(1), Title

28, U.S.C.

Conclusion No. 12: Plaintiff State of Utah is en-

titled to judgment in this proceeding, as follows:

a. A declaratory judgment to the effect that equit-

able title to the selected school indemnity lands vested

in the State of Utah at the dates of respective filings

of the selection lists, as set forth in Finding of Fact

No. 4, if it is determined by the Secretary that such

selection lists were in accordance and compliance with

the applicable statutory requirements as set forth in

Section 852, Title 43, U.S.C.; and that, if such selec-

tion lists so complied with the statutory criteria of

said Section 852, Utah is and has been entitled to all

revenues, rentals, emoluments and benefits derived

from said selected lands from and after the respective

dates when such selection lists were filed.

76a

b. A mandatory injunction requiring the Secretary

to proceed forthwith and complete a ministerial ad-

judication by a date certain of Utah’s school indemnity

selection lists; and requiring the Secretary to conduct

such administrative adjudication by confining his

discretion to a determination as to whether the con-

gressionally mandated criteria of Section 852, Title

43, U.S.C., have been complied with and satisfied by

such selection lists.

ce. An order retaining custody by the Court,

through the registry of the Court, of all funds now on

deposit and invested through the registry of the

Court, as derived from the proto-type oil shale leases

now in effect on part of the selected lands; and re-

quiring all further proceeds from said oil shale leases

to be paid into Court and invested in accordance with

the present provisions and conditions governing such

investments, as set forth in the applicable orders of

the Court as previously made and entered; and pro-

viding that all such funds, together with all interest

earned thereon, be paid to the party entitled thereto,

pursuant to further order of the Court when this

litigation is fully concluded on the merits.

From the foregoing Findings of Fact and Conclu-

sions of Law, and in accordance therewith, the Court

now makes the following:

JUDGMENT AND DECREE

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