CASCADIA WILDLANDS, an Oregon nonprofit corporation; Audubon Society of Portland, an Oregon nonprofit corporation; The Center for Biological Diversity, a California corporation; and Joshua Laughlin, Respondents on Review, v. OREGON DEPARTMENT OF STATE LANDS, an administrative agency of the State of Oregon, Petitioner on Review, and SENECA JONES TIMBER COMPANY, LLC, an Oregon limited liability company, Petitioner on Review.
(CC 62-14-07847) (CA A159061) (SC S066223)
In the Supreme Court of the State of Oregon
November 27, 2019
January 16, 2020
365 Or 750 (2019) | 452 P3d 938
NAKAMOTO, J.
Argued and submitted June 4; decision of Court of Appeals affirmed, judgment of circuit court reversed, and case remanded to circuit court for further proceedings November 27, 2019; petition for reconsideration denied January 16, 2020. En Banc.
The State Land Board voted to sell a parcel of the Elliott State Forest to Seneca Jones Timber Company, LLC. Cascadia Wildlands and others challenged the sale on the ground that the land in question was part of common school lands that the federal government had granted to the state and was prohibited from being sold under
The decision of the Court of Appeals is affirmed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.
En Banc
On review from the Court of Appeals.*
Carson L. Whitehead, Assistant Attorney General, Salem, argued the cause and filed the briefs for petitioner on review Oregon Department of State Lands. Also on the briefs were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.
Michael E. Haglund, Haglund Kelley LLP, Portland, argued the cause and filed the briefs for petitioner on review Seneca Jones Timber Company, LLC. Also on the briefs was Dominic M. Carollo, Roseburg.
Daniel Kruse, Kruse & Saint Marie, Attorneys at Law, LLC, Eugene, argued the cause and filed the brief for respondents on review.
NAKAMOTO, J.
The decision of the Court of Appeals is affirmed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.
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* On appeal from Lane County Circuit Court, Karsten H. Rasmussen, Judge. 293 Or App 127, 427 P3d 1091 (2018).
What is now known as the State Land Board was created by
I. BACKGROUND
A. Common School Lands
The facts related to the parcel of the Elliott State Forest subject to sale and its status as “common school lands” are undisputed. Oregon was admitted into the Union in 1859, under the Oregon Admission Act. Act of Feb 14, 1859, ch 33, 11 Stat 383. Under that Act, the United States agreed to provide certain federal land to Oregon “for the use of schools“:
“That the following propositions be, and the same are hereby, offered to the said people of Oregon for their free acceptance or rejection, which, if accepted, shall be obligatory on the United States and upon the said State of Oregon, to wit: First, That sections numbered sixteen and thirty-six in every township of public lands in said State, and where either of said sections, or any part thereof, has
been sold or otherwise been disposed of, other lands equivalent thereto, and as contiguous as may be, shall be granted to said State for the use of schools.”
The foregoing passage recognized that certain parts of the land granted to the state
That selection of other lands happened in Oregon. As pertinent here, in 1853, Congress enacted a statute authorizing the Legislative Assembly of the Territory of Oregon,
“in all cases where the sixteen or thirty-six sections, or any part thereof, shall be taken and occupied under the law making donations of land to actual settlers, * * * to select, in lieu thereof, an equal quantity of any unoccupied land in sections, or fractional sections, as the case may be.”
Act of Jan 7, 1853, ch 6, § 1, 10 Stat 150. Congress further provided that, “when selections are made in pursuance of the provisions of the first section of this act, said lands so
selected, and their proceeds, shall be forever inviolably set apart for the benefit of common schools.”
The
“The proceeds of all the lands which have been, or hereafter may be granted to this state, for educational purposes (excepting the lands heretofore granted to, and in the establishment of a university) all the moneys, and clear proceeds of all property which may accrue to the state by escheat, or forfeiture, all moneys which may be paid as exemption from military duty, the proceeds of all gifts, devises, and bequests, made by any person to the state for common school purposes, the proceeds of all property granted to the state, when the purposes of such grant shall not be stated, all the proceeds of the five hundred thousand acres of land to which this state is entitled by provisions of an act of congress, entitled ‘An act to appropriate the proceeds of the sales of the public lands, and to grant preemption rights, approved the fourth of September, 1841’, and also the five per centum of the net proceeds of the sales of the public lands, to which this state shall become entitled on her admission into the union (if congress shall consent to such appropriation of the two grants last mentioned) shall be set apart as a separate, and irreducible fund to be called the common school fund, the interest of which together with all other revenues derived from the school lands mentioned in this section shall be exclusively applied to the support, and maintenance of common schools in each school district, and the purchase of suitable libraries, and apparatus therefore.”
In addition,
Section 5 also provided that the board’s “powers, and duties, shall
In the years immediately following Oregon’s admission to the Union, the state had a policy of disposing of common school lands, with the result that, by 1913, only a comparatively small part of the land originally transferred to the state “for the use of schools” remained. The Twenty-fifth Annual Report of the State Forester of the State of Oregon to the Governor 49 (1935). Many of the tracts that remained at that time were located within the boundaries of the national forests and were scattered and isolated, and, for that reason, their value to the state was rather small. Id.
In 1913, State Forester Francis Elliott began negotiating an agreement under which the remaining common school lands would be exchanged for a solid block of national forest land, with the ultimate objective of establishing a state forest. Id. Congress dictated that any national forest land granted to the state for school purposes must be withdrawn from sale for a period of 50 years. 32 Op Atty Gen 100 (1964) (quoting The Twenty-fifth Annual Report of the State Forester at 49). In preparation for such an agreement, and in compliance with the federal precondition for any such exchange, the Oregon Legislature enacted a statute that prohibited for 50 years the sale of any national forest lands granted by the federal government to the state for school purposes. Id.; Or Laws 1913, ch 124, § 1. In a preamble to that statute, the legislature stated that “it is the desire that said tract be set aside as a State forest and administered for the permanent good of the State and its educational institutions[.]” Or Laws 1913, ch 124.
In 1927, by presidential proclamation, the federal government transferred to the state approximately 70,000 acres of the Siuslaw National Forest in Coos and Douglas
Counties. Those 70,000 acres were partly in exchange for certain common school lands that had been transferred to the state at the time of admission and partly comprised land granted to the state in lieu of common school lands that were unavailable at the time of statehood. State of Or. v. Bureau of Land Management, 876 F2d 1419, 1423 (9th Cir 1989); Presidential Proclamation of April 28, 1927, 45 Stat 2907.
The 50-year withdrawal from sale of common school lands that was enacted by statute in 1913 would have expired in 1963. In 1957, however, the legislature enacted
B. Litigation Over the Sale of Part of the Elliott State Forest
Over the years, the State Land Board managed the Elliott State Forest and generated revenue for the common school fund through timber sales, among other things. But in 2013, for the first time, the cost of managing the Elliott State Forest exceeded revenue. For that reason, the State Land Board voted to sell a part of the Elliott State Forest, known as the East Hakki Ridge parcel.
The Oregon Department of State Lands (ODSL), the administrative arm of the State Land Board, offered the East Hakki Ridge parcel for sale through an open bidding process.
Cascadia Wildlands, the Audubon Society of Portland, the Center for Biological Diversity, and Joshua Laughlin (collectively, Cascadia Wildlands) petitioned the Lane County Circuit Court for judicial review of ODSL’s purchase and sale agreement selling the East Hakki Ridge parcel to Seneca Jones. Cascadia Wildlands sought a declaration that ODSL was required under
Cascadia Wildlands appealed, and the Court of Appeals reversed the judgment of the circuit court. The Court of Appeals held, as an initial matter, that Cascadia Wildlands had standing to bring its challenges to the sale of the East Hakki Ridge parcel. Cascadia Wildlands, 293 Or App at 138. Turning to the merits, the court explained that
that power with the legislature.” Id. at 147 (emphasis in original).
Ultimately, the Court of Appeals concluded that
II. ANALYSIS
On review, ODSL and Seneca Jones maintain that
A. Article VIII, Section 5
Under the Admission Act, the state is the trustee of the lands granted to it by the federal government, with the obligation to hold the lands granted to it “for the use of schools.” That Act provided that the terms under which the land was granted, “if accepted, shall be obligatory on the United States and upon the said State of Oregon.” And, as we have discussed, upon ratification in 1857, the
“The Governor, Secretary of State, and State Treasurer shall constitute a board of commissioners for the sale of school, and university lands, and for the investment of the funds arising there from, and their powers, and duties, shall be such as may be prescribed by law.”
ODSL and Seneca Jones premise their first argument challenging the constitutionality of
though the provision also states that the State Land Board’s powers and duties “shall be such as may be prescribed by law.” The plain meaning of that provision suggests that ODSL and Seneca Jones overstate their point.
The first clause of section 5 merely creates the board and states its purpose: the three state officials “shall constitute a board of commissioners for the sale of [common school lands] and for the investment of [the proceeds][.]” The wording is not directive. That is, it makes the board the body responsible for selling the lands (and managing any proceeds) if land is to be sold; it gives the board the authority to sell the lands and manage the proceeds. It does not directly give the board the power to decide whether to sell land or what land to sell, nor does it confer any other powers or duties on the board.
Instead, the second clause expressly gives the legislature the authority to prescribe the board’s powers and duties. Over a century ago, this court explained the governing role of the legislature with respect to the State Land Board:
“The board is the State’s instrumentality for the sale and disposition of school lands. Although constituted a part of the administrative department of the government under the constitution, it is nevertheless governed and controlled in the exercise of its functions by the legislature and the laws emanating therefrom[.]”
Robertson v. Low, 44 Or 587, 594, 77 P 744 (1904). In a similar vein, several years later, this court again stated that the legislature could prescribe the powers and duties of the State Land Board:
“By the terms of the Constitution the governor, secretary of state and state treasurer are made a board of commissioners for the sale of school lands and for the investment of the funds arising from such lands; and the powers and duties of the board ‘shall be such as may be prescribed by law.’ The legislature has given the board a name by calling it the State Land Board and, acting on the authority of the Constitution, has prescribed the powers and duties of the board. Every power conferred upon the board and every duty imposed upon it, whether conferred or imposed by the
Constitution or legislative enactment, is for the direct benefit of the state. The state land board exists for the sole purpose of serving the state. Every attribute given to it and every function performed by it is for the benefit of the commonwealth.”
State Land Board v. Lee, 84 Or 431, 439, 165 P 372 (1917) (quoting
Two additional cases lend further support to our understanding of the respective roles of the legislature and the State Land Board under the
This court held that the deeds were void. In so holding, the court rejected the defendant’s argument that, because the State Land Board had jurisdiction over the swamp land under statutes enacted after the land was granted to the state by the federal government,
“Counsel for defendant bases much of his argument upon the assertion that the board had the right to sell swamp land, but, if he means original authority, this is an erroneous assumption, even as to school lands, which, by the constitution, are placed exclusively in the hands of the board. Its powers are limited to such as shall be prescribed by law, and, as to the swamp land, it has no authority other
than such as the legislature has conferred, and for every act of the board in relation thereto statutory authority must exist.”
Id. (emphasis added).
The second case is State ex rel. [Thomas] v. Holman, 142 Or 339, 20 P2d 430 (1933). In Thomas, the court addressed the authority of the State Treasurer, which
“It will thus be seen that the powers and duties of the Treasurer are such as may be prescribed by law and not otherwise. It will also be seen that the [challenged statutory] provision * * * merely defines the powers and duties of the State Treasurer, all of which were within the legislative control and did not in any way infringe upon any constitutional right or power conferred upon such officer.”
As this court stated with respect to the State Land Board in Warner Valley Stock Co. and with respect to the State Treasurer in Thomas, the State Land Board’s particular powers and duties are those conferred by the legislature. That is, the powers and duties of the State Land Board are “such as may be prescribed by law and not otherwise.” Thomas, 142 Or at 342; accord Warner Valley Stock Co., 56 Or at 297.
Indeed, as ODSL acknowledges, from virtually the beginning of statehood, the legislature has enacted legislation effectively dictating how the State Land Board was to carry out its authority to sell common school lands and manage the proceeds therefrom. In one early example, an 1866 statute governing sales of common school lands provided
to whom the lands could be sold and in what amounts, the price per acre, and financing conditions. That statute “authorized and required” the State Land Board to sell common school lands “to actual settlers,” up to 320 acres, for the price of $1.25 per acre if the settler already occupied the land. General Laws of Oregon, Misc Laws, ch XXIX, title II, § 9, p 631 (Deady & Lane 1843-1872). When a settler sought to purchase school lands, the legislature authorized the purchaser to pay a third of the price in advance and to pay the remainder over time, at an annual interest rate of ten percent.
In the only case called to the court’s attention addressing the constitutionality of such legislation directing the State Land Board’s powers and duties, Kubli v. Martin, 5 Or 436 (1875), this court upheld the legislature’s authority to dictate how the State Land Board performed its duties, so long as the legislature did not take over the performance of those duties itself. In Kubli, the court addressed an 1865 statute that “required” county treasurers to lend common school funds under certain conditions aimed at increasing
The appellants challenged the constitutionality of that statute under
“the Legislative Assembly did not intend by the act to take away the control of the ‘separate and irreducible fund’ from the Board of Commissioners. The act, in effect, makes the county treasurers, in their respective counties, mere agents, subject to the control, direction, and authority of the Board.”
The primary authorities and this court’s case law thus confirm that, under the original text of
The same holds true under the current text of
to
“The powers and duties of the Land Board were and are to be prescribed by law. Section 5(2) contains the requirement that such lands be managed with the object of obtaining the greatest benefit for the people of Oregon. Reading this provision according to its most plain and practical
meaning, and consistently with the legislative history, the determination of the proper use of common school funds is a legislative one, subject to the overall requirement that the use have as its goal the greater public benefit.”
Johnson, 292 Or at 382 (emphasis added).
In sum, in enacting
B. Separation of Powers Doctrine
ODSL and Seneca Jones also contend that
“The powers of the Government shall be divided into three separate branches, the Legislative, the Executive, including the administrative, and the Judicial; and no person charged with official duties under one of these branches,
shall exercise any of the functions of another, except as in this Constitution expressly provided.”
The legislative power is vested in the legislature, and the executive power is vested in the Governor.
Specifically, ODSL and Seneca Jones contend that the legislature violated the separation of powers doctrine because
Thus, both ODSL and Seneca Jones assume that the
As an initial matter, we reject Seneca Jones’s argument about the core function of the State Land Board based on the Admission Act. The Admission Act granted the federal lands to the state in trust “for school purposes.” The Admission Act does not have anything to say about the powers or duties of the State Land Board. Moreover, the Admission Act does not require the state to sell all its common school lands, nor does it prohibit the state, through the legislature, from deciding that retaining certain common
school lands as state forest land will provide long-term benefits to education.
We also disagree with the argument advanced by ODSL and Seneca Jones that the State Land Board is constitutionally required—and has a core function—to manage the common school lands so as to derive the “greatest net profit” for the state, regardless of the legislature’s determinations about the best use of common school lands. That obligation does not appear as a core function in
At the time
“a separate, and irreducible fund to be called the common school fund, the interest of which together with all other revenues derived from the school lands mentioned in this section shall be exclusively applied to the support, and maintenance of common schools in each school district, and the purchase of suitable libraries, and apparatus therefore.”
And
Now,
In some circumstances, the “greatest benefit” mandate may require the State Land Board to maximize net profit, for example, by obtaining the best price for the authorized sale of timber on common school lands. But authority to “manage” common school lands for “the greatest benefit for the people of this state” does not mean that the State
Land Board can disregard legislation reflecting the legislature’s determination about the best use of some common school lands in keeping with the state’s trust obligation. In the early years of statehood, the state, through the legislature, determined that the best use of selected common school lands was to sell them “as fast as such selections shall be approved.” General Laws of Oregon, Misc. Laws, ch XXIX, Title II, § 9, p 631 (Deady & Lane 1843-1872). In 1957, the legislature determined that the best use of some other common school lands was to maintain them in perpetuity as the Elliott State Forest, enacting
In addition to rejecting the “generation of greatest net profit as core function” aspect of their argument supporting the sale of the East Hakki Ridge parcel, we also reject ODSL’s and Seneca Jones’s conclusions that
At the same time,
so, the constitution itself subjects the State Land Board’s core function to legislative direction. Cascadia Wildlands, 293 Or App at 146. As a result, we conclude that
The decision of the Court of Appeals is affirmed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.
Notes
Beginning in 1802, the Acts of Congress admitting new states into the Union included grants of designated sections of federal lands for the support of public schools. Andrus v. Utah, 446 US 500, 506, 100 S Ct 1803, 64 L Ed 2d 458 (1980), reh’g den, 448 US 907, 100 S Ct 3051, 65 L Ed 2d 1137 (1980). As Justice Powell explained in his dissent in Andrus, that action addressed an inequity that existed between the original 13 states and the newly admitted states:
“When the first 13 States formed the Union, each State had sovereign authority over the lands within its borders. These lands provided a tax base for the support of education and other governmental functions. When settlers sought to carve the State of Ohio from the Northwest Territory in 1802, they encountered a different situation. Vast tracts within the boundaries of the proposed State belonged to the Federal Government. Thus, the new State’s potential revenue base would be restricted severely unless the Federal Government waived its immunity from taxation. In order to place Ohio on an equal footing with the original States, Congress enacted a compromise drawn from the Land Ordinance of 1785 and the Northwest Ordinance of 1787. The compromise set a pattern followed in the admission of virtually every other State. Specific details varied from State to State, but the basic plan persisted. As consideration for each new State’s pledge not to tax federal lands, Congress granted the State a fixed proportion of the lands within its borders for the support of public education.”
Id. at 522-23 (Powell, J., dissenting; footnotes omitted).
“Any lands in the national forests on February 25, 1913, selected by, and patented to, the State of Oregon, for the purpose of establishing a state forest, hereby are withdrawn from sale except as provided in
For their argument that the current version of