Amicus Curiae Brief — Asarco Inc. v. Kadish

No. 87-1661

In the Supreme Court of the Gnited States

OCTOBER TERM, 1988

ASARCO INCORPORATED, ET AL., PETITIONERS

v.

FRANK AND LORAIN KADISH, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE ARIZONA SUPREME COURT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

CHARLES FRIED

Solicitor General

ROGER J. MARZULLA

Assistant Attorney General

LAWRENCE G. WALLACE

Deputy Solicitor General

CHRISTOPHER J. V

Assistant to the itor General

ROBERT L. KLA

J. CAROL WILLIA

Altorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTION PRESENTED —

Whether the Arizona Supreme Court correctly conclud-

ed that Section 28 of the New Mexico-Arizona Enabling

Act prohibits the leasing of mineral lands held in trust for

the benefit of the state’s public schools at less than the ap-

praised true value of the lease.

(1)

TABLE OF CONTENTS

Page

ae Te i ses ele wee ware l

EE RI ecm ape Fe RYN ne ne Oy Ie aE 8

RG A NS Fs OC ly: Se a a 16

TABLE OF AUTHORITIES

Cases:

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

linia eet ale et Rais Re ka a 8 6, 7, 13

Allen v. Wright, 468 U.S. 737 (1984) .................. 4

Barnes v. Kline, 759 F.2d 21 (D.C. Cir. 1984), vacated as

moot, No. 87-781 (Jan. 14, 1987) ................... 11

Deer Valley Unified School District No. 97 v. Superior

Court, No. CV-86-0577-T (Ariz. June 30, 1988) ....... 15

Doremus v. Board of Education, 342 U.S. 429 (1952).... 8, 9,

10, 11

Frothingham v. Mellon, 262 U.S. 447 (1923) ........... 9

Jensen v. Dinehart, 645 P.2d 32 (Utah 1982) .......... 8, 14-15

Lassen v. Arizona ex rel. Arizona Highway Department,

EE 5, 15

Michigan v. Long, 463 U.S. 1032 (1983) ............... 15

Murphy v. State, 65 Ariz. 338, 181 P.2d 336 (1947) ..... 3, 4, 12

Oklahoma Education Ass’n v. Nigh, 642 P.2d 230 (Okla.

iE cht i nehind id c sehen ete inukenabadebeaee.s 5

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) .... 10

Revere v. Massachusetts General Hosp., 463 U.S. 239

CME eee Shas le wnoess 6s¥4eseeobeceoes 10

Schlesinger v. Reservists Committee to Stop the War,

CE. Anas ebb lis iabesene dues y

Secretary of State of Maryland v. J.H. Munson Co.,

i eo voc kd ba cneneseeee ns 10

Simon v. Eastern Kentucky Welfare Rights Organization,

ee eee ee si woe eenece y

Smith v. Graham County Community College, 123

Ariz. 431, 600 P.2d 44 (Ariz. App. 1979) ............. 9

State Land Department v. Tucson Rock & Sand Co.,

12 Ariz. App. 193, 469 P.2d 85 (1970), vacated, 107

Se Is on vonyccccenseeences 5

(IIT)

IV

Cases — Continued: Page

United States v. Richardson, 418 U.S. 166 (1974) ....... 9

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

Valley Forge Christian College v. Americans United for

Separation of Church & State, Inc., 454 U.S. 464

SEE GE dice tACHdeAROASRESGgRRRTORASCOE SEO VE 4.65 9

Constitution and statutes:

ME ss a cedeteseneedseescauunl 8, 9, 10, 11

Ariz. Const.:

ee Oe oe ee eee tee eh ed ee bee ee 3, 8, 14, 15

ME coc eck cb dcuesededendaceaensleuoonnenneanane 3, 14

ED chon dactasncacddabbcenvendedbbneedeeecnates 4

ie < cdecdenGdenvsceconsenneeennaséecdecnesans 3,14

Act of June 5, 1936, ch. 517, 49 Stat. 1477 ............. 13

Jones Act, Act of Jan. 25, 1927, ch. 57, 44 Stat. 1026.... 2, 16

FY SESS TITT TTT LETT TT Ly 2

fF Re PP rrr Terre 2

New Mexico-Arizona Enabling Act of 1910, ch. 310, 36

Stat. 557:

PIED viccctedceccesesecsvosneves . l

Pe EE IED Sh cco eeesccddeccnscocsceces passim

Utah Enabling Act, ch. 138, § 10, 28 Stat. 110.......... 14

Ariz. Rev. Stat. § 27.234(B) (1976 & Supp. 1987)........ 3,4

Miscellaneous:

H.R. Rep. 429, 82d Cong., Ist Sess. (1951) ............. 13

S. Rep. 194, 82d Cong., Ist Sess. (1951) ............... 13

L. Tribe, American Constitutional Law (2d ed. 1988) .... 11

Jn the Supreme Court of the United States

OCTOBER TERM, 1988

No. 87-1661

ASARCO INCORPORATED, ET AL., PETITIONERS

v.

FRANK AND LORAIN KADISH, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE ARIZONA SUPREME COURT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

This brief is filed in response to the Court’s invitation to

the Solicitor General to express the views of the United

States.

STATEMENT

1. In Section 24 of the New Mexico-Arizona Enabling

Act of 1910, ch. 310, 36 Stat. 572-573, Congress provided

that “sections two, sixteen, thirty-two, and thirty-six” “in

every township in said proposed State not otherwise ap-

propriated at the date of the passage of this Act are hereby

granted to the said State for the support of common

schools.” Arizona thereby received more than eight

million acres of “school trust lands” (Pet. App. 4a). Sec-

tion 24 stated that “mineral” lands did not pass to the

state, but provided that Arizona could obtain other lands

in lieu of mineral lands. Under United States v. Sweet, 245

U.S. 563, 572 (1918), and Wyoming v. United States, 255

(1)

2

U.S. 489 (1921), the mineral lands that did not pass to

Arizona were lands known in 1910 to contain minerals;

lands on which minerals were subsequently discovered

passed to the state by the Enabling Act.

The distinction the Court drew between lands known to

contain minerals on the date of the grant and lands on

which minerals were subsequently discovered led to

numerous title disputes in the many western states to

which Congress had granted lands to be held in trust for

the benefit of the public schools. In order to settle such

disputes, Congress, by the Act of January 25, 1927, ch.

57, § 1, 44 Stat. 1026-1027, extended the original grants to

cover mineral lands as well. This Act, known as the Jones

Act, provided that its grants of mineral lands “shall be of

the same effect as prior grants.” Jones Act, subsection (a).

The Act provided that any sale of these lands must contain

a reservation of minerals to the state, but empowered the

states to lease the lands “as the State legislature may

direct,” with the proceeds of the leases “to be utilized for

the support or in the aid of the common or public

schools.” Jones Act, subsection (b).

Section 28 of the New Mexico-Arizona Enabling Act (36

Stat. 574-575) currently provides, as it has always pro-

vided, that the school trust lands “shall not be sold or

leased, in whole or in part, except to the highest and best

bidder at a public auction * * *, notice of which public

auction shall first have been duly given by advertisement,”

and that “faJll lands [and] leaseholds * * * shall be ap-

praised at their true value, and no sale or other disposal

thereof shall be made for a consideration less than the

value so ascertained.” As amended in light of the Jones

Act in 1936 and to establish special rules for oil and gas

leases in 1951, it also provides that “[nJothing herein con-

tained shall prevent” leases of three types. First, the lands

may be leased for non-mineral purposes, “in such manner

as the Legislature of the State of Arizona may prescribe,”

3

for ten years or less. Second, the lands may be leased for

mineral purposes other than the production of oil, gas,

and hydrocarbon substances, “in such manner as the

Legislature of the State of Arizona may prescribe,” for 20 .

years or less. Third, the lands may be leased for the pro-

duction of oil, gas, and other hydrocarbon substances, “in

any manner, with or without advertisement, bidding, or

appraisement, and under such terms and provisions as the

Legislature of the State of Arizona may prescribe,” for 20

years or less.

Article 10 of the Arizona Constitution, which “is ‘prac-

tically a rescript of section 28 of the Enabling Act’ ” (Pet.

App. 5a, quoting Murphy v. State, 65 Ariz. 338, 348, 181

P.2d 336, 342 (1947)), incorporates the appraisal, adver-

tisement, and auction provisions of Section 28 of the

Enabling Act. The Arizona Constitution goes beyond the

Enabling Act by subjecting “all lands otherwise acquired

by the State,” not just the school lands granted to the State

by the Enabling Act, to its restrictions (art. 10, §§ 1, 9).

2. The Arizona statute governing mineral leasing on

public lands provides “for payment to the state by the

lessee of a royalty of five per cent of the net value of the

minerals produced from the claim” (Ariz. Rev. Stat. Ann.

§ 27-234(B) (1976 & Supp. 1987)). “Net value” is further

defined as the gross value of the minerals after processing .

minus production costs, transportation costs, and taxes

(ibid.). The statute does not provide for appraisal or re-

quire that the state receive, at the least, the value ascer-

tained by an appraisal. Since deductible costs may exceed

the gross value of the minerals produced, it is possible that

no royalty will be paid (Pet. App. 26a).

Several individual taxpayers who claim that their taxes

support public education in Arizona and the Arizona

Education Association, which represents approximately

4

20,000 public school teachers throughout the state,

brought this suit in state court against the appropriate

state offices and a mining company seeking a declaration

that Ariz. Rev. Stat. Ann. § 27.234(B) (1976 & Supp.

1987) is void. More specifically, they contended that the

statute is inconsistent with the requirement that state lands

be appraised and leased at the value ascertained by the ap-

praisal. A number of mining companies intervened and

contended that Section 28 of the Enabling Act and Art.

10, § 3 of the Arizona Constitution, which, following the

Jones Act, provide for the leasing of mineral lands “in

such manner as‘the Legislature of the State of Arizona

may prescribe,” authorize the legislature to provide for

leasing without regard to the appraisal requirement. The

plaintiffs, in response, contended that that language

authorizes the legislature to determine “the procedure of

leasing” but does not authorize it to avoid the “prior ap-

praisal requirements” (Pet. App. 38a). The trial court

recognized that “there is strong language in Alamo Land

and Cattle Company Inc. v. Arizona, 424 U.S. 295 (1976)

which indicates that prior appraisement is necessary

before leases shall be given,” but nevertheless granted the

mining companies’ motion for summary judgment (Pet.

Ary. 39a).

3. The Supreme Court of Arizona reversed (Pet. App.

la-36a). It first noted the “sad experience” that led Con-

gress to enact the strict trust terms of the New Mexico-

Arizona Enabling Act (Pet. App. Sa-6a (quoting Murphy,

65 Ariz. at 351, 181 P.2d at 344)). Of the 23 states that had

previously been granted lands, the “ ‘dissipation of the

funds by one device or another, sanctioned or permitted

by the legislatures of the several states, left a scandal in

virtually every state’” by 1910 (ibid.). Through the New

Mexico-Arizona Enabling Act, Congress “intended to

severely circumscribe the power of state government to

5

deal with the assets of the common school trust” (Pet.

App. 6a). The court noted (Pet. App. 20a) that in Lassen

v. Arizona ex rel. Arizona Highway D .. artment, 385 U.S.

458, 463, 466 (1967), this Court observed that “[t}he cen-

tral problem which confronted the [Enabling] Act’s drafts-

men was * * * to devise constraints which would assure

that the trust received in full fair compensation for trust

lands,” and they solved this problem by “unequivocally de-

mand{[ing] * * * that the trust receive the full value of any

lands transferred from it.”

The court concluded that the mining companies’ conten-

tion that the 1936 amendment of Section 28 of the En-

abling Act (which authorizes mineral leasing “in such man-

ner as the Legislature of the State of Arizona may pre-

scribe”) permits the state legislature to avoid the appraisal

requirement “is completely contrary to the objectives

sought by the restrictive wording of other portions of the

Enabling Act” (Pet. App. 14a). As did the courts in State

Land Department v. Tucson Rock & Sand Co., 12 Ariz.

App. 193, 195, 469 P.2d 85, 87 (1970), vacated on other

grounds, 107 Ariz. 74, 481 P.2d 867 (1971), and Okla-

homa Education Ass’n v. Nigh, 642 P.2d 230, 237 (Okla.

1982), the Arizona Supreme Court concluded that that

language “is not an unbridled grant of power that would

allow the legislature to avoid the trust restrictions and

duties imposed by the entirety of the Enabling Act,” but

instead grants authority to set lease terms not in conflict

with the express terms of the Enabling Act (Pet. App.

15a).

The court further stated that the amendment of Section

28 of the Enabling Act in 1951 reinforced its conclusion

that the 1936 amendment of the Enabling Act did not give

the Legislature authority to avoid the appraisal require-

ment. The 1951 amendment added the provision stating

that hydrocarbon leases (but not other mineral leases)

6

could be “made in any manner, with or without advertise-

ment, bidding, or appraisement, and under such terms and

provisions as the Legislature of the State of Arizona may

prescribe.” By that amendment, the court stated, “Con-

gress showed that when it intended to free the state from

the dispositional restrictions, it would do so explicitly”

(Pet. App. 19a). “Moreover,” the court added (id. at 20a),

“if Congress did not regard the dispositional restrictions of

the original Enabling Act as effective against mineral

leases, why did it bother to create specific exemptions in

1951 for oil, gas, and other hydrocarbon leases?” '

The Arizona Supreme Court also noted that this Court’s

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

295 (1976), supported its decision. In that case, the federal

government had condemned school trust lands, and a

company that had leased some of the condemned lands

from Arizona sought an award to compensate it for the

fact that the rent it owed the state was less than the fair

rental value of the property. In remanding the case for fur-

ther determinations, the Court questioned the validity of

the company’s claim, even though Section 28 of the Enabl-

ing Act provides that grazing lands, like mineral lands

(other than lands containing oil and gas), may be leased

' The Arizona Supreme Court also found support for its construc-

tion of Section 28 in Joint Resolution No. 7, a 1928 congressional

resolution relating to New Mexico. The resolution stated that New

Mexico could amend its COfistitution to provide that mineral leases on

school lands “may be made under such provisions relating to the

necessity or requirement for or the mode and manner of appraise-

ment, advertisement, and competitive bidding, and containing such

terms and provisions, as may be provided by act of the legislature.” If

Congress had generally intended through the Jones Act to authorize

the state legislatures to avoid the apprajsal, advertisement, and com-

petitive bidding requirements, then, the court concluded, “it would

have used explicit language to accomplish that result, just as it did for

New Mexico in Joint Resolution No. 7” (Pet. App. 17a).

=

7

“in such manner as the Legislature of the State of Arizona

may prescribe.” The Court relied on the fact that Section

28 “has a protective provision against the initial setting of

lease rentals at less than fair rental value” that “provides

that a leasehold, before being offered, shall be appraised

at ‘true value’ ” (424 U.S. at 305, 306).? That ruling, the

Arizona Supreme Court stated, “seem[s] fully dispositive

of the issue” presented in this case (Pet. App. 22a).

Having concluded that “the Enabling Act and its re-

script in art. 10 of the Arizona Constitution, forbid the

state from making nonhydrocarbon mineral leases without

appraisal or for less than their true value” (Pet. App. 24a),

the court then considered the validity of the state’s mining

statute. Because the statute provides that the royalty due is

five percent of the net value of the minerals produced, and

the deductible costs used to calculate net value may exceed

the gross value of the minerals, the court concluded that

“under § 27-234(B) it is possible for a lessee to extract

minerals from school trust lands and pay no royalty what-

soever” (id. at 26a). After adding that “we have no way of

knowing from this record whether such circumstances

have existed” (ibid.), the court remanded with instructions

that the trial court enter a judgment declaring the statute

? The Court in Alamo Land and Cattle Company further explained

that a difference between the “rental specified in the lease and the fair

rental value” could arise in one of two ways (424 U.S. at 304). First, it

could be that “the lease rentals were set initially at less than fair rental

value” (ibid.), in which case the lease would be void under Section 28

of the Enabling Act. Second, the lease might initially have been set at

the fair rental value, but that value might have increased during the

term of the lease (id. at 305), in which case the company might be en-

titled to an award to compensate it for the loss of the lease. The Court

remanded with instructions that the lower courts determine how the

difference between the rental specified in the lease and the fair rental

value arose and enter judgment accordingly (id. at 311).

,

3”

8

unconstitutional and take further evidence to determine

“what further relief is appropriate” (id. at 29a).

DISCUSSION

As an initial matter, it appears that the plaintiffs do not

satisfy the standing requirements of Article III. In that cir-

cumstance, under Doremus v. Board of Education, 342

U.S. 429, 434 (1952), the decision below is merely an ad-

visory opinion and this Court lacks jurisdiction to review

it. In addition, this case is in an interlocutory posture, and

review by this Court would be premature.

In any event, the decision below is correct. While the

court in Jensen v. Dinehart, 645 P.2d 32 (Utah 1982),

viewed the Jones Act as freeing mineral lands from restric-

tions in enabling acts, which is not how the court below

understood that Act, review is nevertheless not warranted.

The decision below was based specifically on the meaning

of Section 28 of the New Mexico-Arizona Enabling Act,

which the court correctly viewed as not allowing the leas-

ing of mineral lands in Arizona at less than appraised “true

value” regardless of the effect of the Jones Act in other

contexts. The two decisions, therefore, are not squarely in

conflict, and the applicability of a decision by this Court

in this case would accordingly be quite limited. Moreover,

a recent decision by the Arizona Supreme Court, as well as

that court’s opinion in this case (Pet. App. 24a, 27a), in-

dicate that the result it reached in this case is in any event

independently supported by Article 10 of the Arizona

Constitution.

1. Had this suit been brought in federal court, it would

have been required to be dismissed because the plaintiffs

lack standing. The “core component” of standing under

Article III is that the plaintiff “must allege personal injury

fairly traceable to the defendant’s allegedly unlawful con-

9

duct and likely to be redressed by the requested relief.”

Allen v. Wright, 468 U.S. 737, 751 (1984); Valley Forge

Christian College v. Americans United for Separation of

Church & State, Inc., 454 U.S. 464, 472 (1982).

It appears that the individual taxpayers here claimed

standing as citizens or taxpayers, rather than because their

own more specific interests were injured. Compl. para.

III. Under Arizona law, taxpayers have standing to seek to

enjoin pecuniary loss to the public fisc. Smith v. Graham

County Community College, 123 Ariz. 431, 600 P.2d 44

(Ariz. App. 1979). Although the courts of the states are

not barred by the Federal Constitution from recognizing

standing on such a theory, this Court has consistently held

that a person does not satisfy the standing requirement of

Article III based on nothing more than his status as a

citizen or taxpayer who is interested in the conduct of his

government. Schlesinger v. Reservists Committee to Stop

the War, 418 U.S. 208, 215-221 (1974); United States v.

Richardson, 418 U.S. 166, 171-175 (1974); Doremus, 342

U.S. at 433-435; Frothingham v. Mellon, 262 U.S. 447

(1923); cf. Allen v. Wright, 468 U.S. at 754-755, 756 n.21;

Valley Forge, 454 U.S. at 482, 484-485 n.20. Accordingly,

the individual taxpayers lack standing to invoke the juris-

diction of an Article III court.

The Arizona Education Association alleged that “[t]he _

failure of the defendants to collect the true value on leases

of State mineral lands * * * imposes an adverse economic

impact on the Association and its members.” Compl.

para. IV. By that it presumably means that the teachers it

represents will receive more pay if it prevails in this suit. It

is not at all clear, however, that that result would be

“ dikely’ to follow from a favorable decision.” Allen v.

Wright, 468 U.S. at 751 (quoting Simoi: v. Eastern Ken-

tucky Welfare Rights Organization, 426 U.S. 26, 38, 41

(1976)). There has been no showing that if the state ulti-

10

mately receives additional revenues as a result of leasing

mineral lands following an appraisal, the state’s teachers

will receive pay raises they otherwise would not receive.? It

would seem at least as likely that, if additional revenues

are received from mineral leases, taxes will be reduced cor-

respondingly or, if additional funds from mineral leases

are used to benefit the schools, the benefits will not be in

the form of increased teacher compensation.

If the plaintiffs lack standing under Article III, then this

Court presently lacks jurisdiction, even though the mining

companies may well be injured by the relief to be granted

on remand. In Doremus, this Court held that while a state

court may “render an opinion on a federal constitutional

question even under such circumstances that it can be re-

garded only as advisory, * * * [bjJecause our own jurisdic-

tion is cast in terms of ‘case or controversy’, we cannot ac-

cept as the basis for review, nor as the basis for conclusive

disposition of an issue of federal law without review, any

procedure which does not constitute such” (342 U.S. at

434). See also Phillips Petroleum Co. v. Shutts, 472 U.S.

797, 804 (1985); Secretary of State of Maryland v. J. H.

Munson Co., 467 U.S. 947, 954 & n.4 (1984); Revere v.

Massachusetts General Hosp., 463 U.S. 239, 243 (1983).

That holding is controlling here if, as we have suggested,

the decision below constitutes, at this juncture, an ad-

visory opinion for Article III purposes. If the trial court

declares the mining companies’ leases void on remand,

they would then have standing to challenge that decision in

an appropriate action. The prior decision of the Arizona

3 Indeed, as amicus Clinton Campbell Contractor, Inc., suggests

(Br. 9), it is not even clear that Arizona will receive additional

revenues if the appraisal requirements are followed. If the mining

companies’ leases were declared void, as the plaintiffs have requested

(Pet. App. 38a), then state revenues from mineral leases presumably

would decline in the short term.

11

Supreme Court that the state mining statute is contrary to

Section 28 would not bar such an action, since, as this

Court stated in Doremus, an advisory opinion on the

meaning of the Enabling Act cannot be the “basis for con-

clusive disposition of an issue of federal law” (342 U.S. at

434).* See also our discussion of this question in our

amicus brief (at 13-17) in Alaska Miners Ass’n v. Trustees

for Alaska, cert. denied, No. 87-205 (May 31, 1988).°

In addition, this case is in an interlocutory posture and

it is not possible at this time to determine whether the min-

ing companies will in fact suffer injury. While Section 28

provides that leases “not made in substantial conformity

with the provisions of this Act shall be null and void,” it is

not clear at this juncture whether any leases will be held

void on that ground or what criteria will be utilized to de-

termine “substantial conformity.” The Arizona Supreme

* It has been suggested that Doremus could be read to mean that

dismissal of the petition is appropriate only if the state supreme court

rejected the plaintiff's challenge in a proceeding in which the plaintiff

did not satisfy Article III’s standing requirements, and that this Court

properly could vacate a state court decision that sustained the

challenge in such a proceeding. See Barnes v. Kline, 759 F.2d 21, 63

n.16 (D.C. Cir. 1984) (Bork, J., dissenting), vacated as moot, No.

87-781 (Jan. 14, 1987); L. Tribe, American Constitutional Law 114

n.20 (2d ed. 1988). We disagree. Doremus appears to make clear that a.

federal court will not give preclusive effect to the unreviewed state

court decision in a future case, not that this Court could vacate a state

court decision on review in the same case because of the absence of a

case or controversy. The latter would have been inconsistent with the

Court’s explicit disclaimer (342 U.S. at 434) of any suggestion that a

state court is barred from rendering an advisory opinion on a federal

constitutional question where Article III standing is lacking.

’ We have furnished copies of our amicus brief in Alaska Miners

Association to the parties here.

12

Court appeared to view the requirement that the state ob-

tain “true value” for the school trust lands it leases as the

key requirement of Section 28 and, as it noted (Pet. App.

26a), the record does not show whether any mineral lands

have been leased for less than “true value.” That is ap-

parently why the court ordered the trial court to take fur-

ther evidence to determine what relief may be appropriate

(id. at 29a). Accordingly, review by this Court would be

premature.

2. In any event, the Arizona Supreme Court correctly

concluded that the appraisal requirement of Section 28 ap-

plies to mineral leases. As that court stated, the strict re-

quirement in the New Mexico-Arizona Enabling Act that

lands be appraised and then sold or leased “for a con-

sideration [not] less than the value so ascertained” was

Congress’s response to the “sad experience” in other states

(Pet. App. 5a (quoting Murphy, 65 Ariz. at 351, 181 P.2d

at 344)). Accordingly, it would be inappropriate to limit

the reach of that requirement, which was at the heart of

the Enabling Act, without a clear indication that Congress

so intended. The phrase authorizing leasing of mineral

lands “in such manner as the Legislature of the State of

Arizona may prescribe” is not such a clear indication. It

may reasonably be read, as the court below and the other

state courts it cited have concluded (Pet. App. 15a), as

authorizing the legislature to set lease terms not in conflict

with the express terms of the Enabling Act.

The 1951 amendment of Section 28 strongly supports

that conclusion since, as the court below stated (Pet. App.

18a-20a), there would have been no reason to have provid-

ed expressly that hydrocarbon leases were not subject to

the appraisal requirement, in addition to providing that

leases may be granted “as the Legislature of the State of

Arizona may prescribe,” if the latter phrase itself negated

the express appraisal requirements of the Enabling Act.

13

Moreover, since 1936 the Enabling Act had provided for

the leasing of mineral lands, including leases for oil and

gas, “in a manner as the State legislature may direct” (Act

of June 5, 1936, ch. 517, 49 Stat. 1477), but that language

was not understood to free the state from the appraisal,

‘ advertisement, and auction requirements. Indeed, the

legislative history shows that the 1951 amendment was

adopted specifically to remove the requirement of “10

weeks of detailed advertisement” that had “hindered” the

development of oil and gas resources. S. Rep. 194, 82d

Cong., Ist Sess. 2 (1951); see also H.R. Rep. 429, 82d

Cong., Ist Sess. 2 (1951).°

This Court in Alamo Land & Cattle Co. read Section 28

as the Arizona Supreme Court did. It is true, as petitioners

note (Pet. 18), that the Court’s opinion “does not mention

the language in the amended Section 28 that permits

Arizona to make grazing leases [or, here, mineral leases]

‘ii. such manner as the Legislature of the State of Arizona

may prescribe.’” But that simply emphasizes that a

natural reading of Section 28 does not suggest that by that

* Petitioners have no adequate answer to the Arizona Supreme

Court’s conclusion that the 1951 amendment shows that Congress

understood that specific language authorizing leasing without ap-

praisal was required to make the appraisal requirement of the En-

abling Act inapplicable, and that it would have added such language

to the mineral lease proviso had it intended to authorize non-hydro-

carbon mineral leasing without appraisal. They suggest (Pet. 15-16)

that Congress adopted specific language relating to hydrocarbon

leases in the 1951 amendment because it might have thought that the

lengthy oil and gas leases it wanted to authorize could be regarded as

sales. But, while that might explain why Congress expressly provided -

in Section 28 for leasing “for an initial term of twenty years or less and

as long thereafter as oil, gas, or other hydrocarbon substance may be

procured therefrom in paying quantities,” it would not explain why -

Congress specifically authorized hydrocarbon leases “with or without

advertisement, bidding, or appraisement.”

14

phrase Congress intended to free the state from the

specific restrictions of the Enabling Act.’

3. Contrary to petitioners’ further contention (Pet.

8-9), review is not warranted to resolve the tension be-

tween the decision below and the Utah Supreme Court’s

decision in Jensen.* Utah’s Enabling Act, enacted in 1894

(645 P.2d at 33 n.3), provides that all proceeds from the

school trust lands that Congress granted it must be placed

in a permanent fund, “ ‘the interest only of which shall be

expended’ ” (id. at 33 (quoting § 10 of the Utah Enabling

Act, ch. 138, 28 Stat. 110)). In 1939, Utah amended its

Constitution to provide that, while proceeds from sales of

school trust lands had to be placed in the permanent fund,

the proceeds of mineral leases could be placed in another

fund, along with the interest from the permanent fund, to

be used for current expenses of the state’s public schools.

The Utah Supreme Court upheld that provision in Jensen,

stating that the Jones Act “completely free[d]” the school

trust mineral lands “from any restriction or limitation that

’ Nor is there merit to petitioners’ suggestion (Pet. 16) that only the

Jones Act, and not the Enabling Act or the Arizona Constitution, is

relevant to the lands known in 1910 to contain minerals that were

granted to Arizona in 1927. Article 10 of the Arizona Constitution,

the “rescript” of Section 28 of the Enabling Act, differs from it by ex-

pressly providing that “all lands * * * acquired by the state” are sub-

ject to its restrictions (§§ 1, 9).

* There is no merit at all to petitioners’ contention (Pet. 16-17) that

review is warranted because the decision below limits state sovereign-

ty. Petitioners, who are mining companies, plainly have no interest in

upholding state sovereignty, and the parties who might have such an

interest, the Arizona officials and departments that were defendants

below, have chosen not to seek review of the Arizona Supreme Court’s

decision. Moreover, the challenged decision was alternatively based

on Article 10 of the Arizona Constitution (Pet. App. 27a). Accord-

ingly, the federal-state balance plainly was not upset by the decision

below.

15

may have theretofore existed, except as to use for public

schools” (645 P.2d at 35).

Even if the Jones Act did free the states from the restric-

tions in their enabling acts, it is unlikely that the result

here would be affected. In Lassen, 385 U.S. at 464, this

Court, while strictly construing the appraisal requirement

of Section 28 of Arizona’s Enabling Act, declined to apply

its advertisement and auction requirements in a case where

the state wanted to acquire the land at issue by condemna-

tion. The Arizona Supreme Court recently “decline[d] to

follow that case in interpreting the identical language in

the Arizona Constitution.” Deer Valley Unified School

District No. 97 v. Superior Court, No. CV-86-0577-T

(June 30, 1988), slip op. 11. Emphasizing that the En-

abling Act “merely sets out the minimum protection for

our state trust land,” the court concluded that Article 10 of

the Arizona Constitution “does much more” (slip op. 12).

Thus, while the court’s decision here emphasized the

language of Section 28 the Enabling Act, the result it

reached is independently supported by its construction of

Article 10 of the Arizona Constitution, which it also cited

in this case as an alternative basis for its holding (Pet.

App. 27a).° There is no federal impediment to a more re-

strictive state mineral leasing scheme than that required by

the Enabling Act.

® We do not mean to suggest that, under the principles of Michigan

v. Long, 463 U.S. 1032 (1983), this Court lacks jurisdiction to review

the Arizona Supreme Court’s decision. The court relied primarily on

analysis of the federal Enabling Act in reaching its decision in this

case, so its decision “fairly appears to rest primarily on federal law”

(id. at 1040). However, given the court’s recent decision in Deer

Valley, it seems plain that the court would reach the same result it

reached here if it were required to base its decision exclusively on the

Arizona Constitution rather than on the terms of the Enabling Act,

and that practical consideration weighs against reviewing the decision

below.

16

Moreover, the Jones Act was not central to the rationale

of the court below, which relied primarily on the specific

purposes motivating Congress to enact Section 28 and its

. modifications in 1936 and 1951, which indicate that Con-

gress intended Arizona to comply with the restrictions in

its Enabling Act in leasing the mineral lands granted to it

whatever effect the Jones Act might have in other con-

texts. Accordingly, while the court below did not have the

same view of the effect of the Jones Act as did the Utah

Supreme Court, there is no square conflict. Moreover, if

an issue analogous to that presented here or in Jensen

arises in another state, the particular history of the state’s

enabling act will surely be relevant. Accordingly, the ap-

plicability of a decision by this Court in this case would be

limited. For this reason as well, review by this Court is not

warranted.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

CHARLES FRIED

Solicitor General

ROGER J. MARZULLA

Assistant Attorney General

LAWRENCE G. WALLACE

Deputy Solicitor General

CHRISTOPHER J. WRIGHT

Assistant to the Solicitor General

ROBERT L. KLARQUIST

J. CAROL WILLIAMS

Attorneys

SEPTEMBER 1988

ty U.S. GOVERNMENT PRINTING OFFICE: 1988—202-037/60640