North Carolina Ex Rel. North Carolina Department of Administration v. Alcoa Power Generating, Inc.
2017 U.S. App. LEXIS 5691
4th Cir.2017Background
- North Carolina sued Alcoa seeking a declaratory judgment that the State owns a 45‑mile stretch of the Yadkin River bed (river miles 233.1–279.7), alleging the segment was navigable at statehood and thus state property held in trust.
- Alcoa acquired riverbed deeds and built four hydroelectric dams (1917–1927; later projects), paid taxes, restricted access, and held FPC/FERC licenses over decades; North Carolina repeatedly did not object to Alcoa’s ownership claims in earlier regulatory proceedings.
- North Carolina filed in state court in 2013 after Alcoa announced closure of its Badin smelter; Alcoa removed to federal court asserting federal‑question jurisdiction tied to navigability/title principles arising under federal law.
- The district court held a bench trial, found the 45‑mile segment was not navigable at North Carolina’s 1789 statehood (applying PPL Montana’s segment‑by‑segment federal navigability test), and granted summary judgment that Alcoa holds title to 99% under North Carolina’s Marketable Title Act and the remaining 1% by adverse possession.
- North Carolina appealed, contesting (1) federal subject‑matter jurisdiction, (2) the navigability/segmentation and factual findings, and (3) the district court’s application of the MTA and adverse possession doctrines.
Issues
| Issue | Plaintiff's Argument (North Carolina) | Defendant's Argument (Alcoa) | Held |
|---|---|---|---|
| Federal jurisdiction | Quiet‑title is a state law claim; PPL’s federal navigability rule shouldn’t apply to an Original State | Navigability for title is federal (constitutional) question under Waddell’s Lessee/PPL and supports §1331 jurisdiction | Court: Federal question exists; navigability for title is governed by federal law and supports jurisdiction (PPL, Waddell’s Lessee line of authority) |
| Navigability at statehood / segmentation | The whole 45‑mile “Relevant Segment” is navigable; district court clearly erred and missegmented | The segment (as tried) is nonnavigable at 1789 due to rapids, falls, shoals, narrows; PPL requires segment analysis and portages defeat navigability | Court: No clear error; substantial evidence supports finding the 45‑mile segment non‑navigable at statehood; segmentation as one administrable unit was supported by record evidence |
| Marketable Title Act (MTA) applicability | MTA cannot extinguish State sovereign/public‑trust title or apply against the State absent explicit exception | MTA applies; Alcoa satisfied statutory requirements and State may not assert special exceptions not in statute | Court: MTA applies; Alcoa established marketable record title to 99% of the riverbed; State’s arguments for categorical exceptions (sovereignty, public trust, sovereign immunity) fail on this record |
| Adverse possession | Public trust lands cannot be lost to adverse possession; State retained trust title | Alcoa openly possessed, improved, taxed and administered the riverbed for decades; statute does not bar adverse possession absent proof State held title during the period | Court: Alcoa proved adverse possession as to remaining 1%; State did not show it held title during the prescriptive period so statutory bar (§1‑45.1) did not apply |
Key Cases Cited
- Martin v. Waddell’s Lessee, 41 U.S. (16 Pet.) 367 (1842) (States’ sovereign title to navigable waters described as arising from principles of sovereignty)
- PPL Montana, LLC v. Montana, 565 U.S. 576 (2012) (navigability for title governed by federal law; segment‑by‑segment analysis; portages can defeat navigability)
- The Daniel Ball, 77 U.S. (10 Wall.) 557 (1870) (classic federal test: navigable in fact when used or susceptible of use as highways for commerce in customary modes)
- United States v. Utah, 283 U.S. 64 (1931) (treats navigability for title as federal question and applies federal standard)
- Pollard’s Lessee v. Hagan, 44 U.S. (3 How.) 212 (1845) (Equal Footing Doctrine principles concerning title to navigable waters upon admission)
- Oregon ex rel. State Land Bd. v. Corvallis Sand & Gravel Co., 429 U.S. 363 (1977) (State title to beds of navigable waters conferred by the Constitution; discusses limits on federal role)
- Shively v. Bowlby, 152 U.S. 1 (1894) (public trust doctrine and State duty to hold navigable waters/beds for public benefit)
- Phillips Petroleum Co. v. Mississippi, 484 U.S. 469 (1988) (recognizes state expectations and flexibility in applying federal navigability principles to tidelands/title questions)