United States v. Little Lake Misere Land Company

PETITIONER:United States
RESPONDENT:Little Lake Misere Land Company
LOCATION:New York State Capitol

DOCKET NO.: 71-1459
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 412 US 580 (1973)
ARGUED: Jan 15, 1973 / Jan 16, 1973
DECIDED: Jun 18, 1973

ADVOCATES:
Austin W. Lewis – for respondents
William Bradford Reynolds – for petitioner

Facts of the case

Question

  • Oral Argument – January 15, 1973
  • Audio Transcription for Oral Argument – January 15, 1973 in United States v. Little Lake Misere Land Company

    Audio Transcription for Oral Argument – January 16, 1973 in United States v. Little Lake Misere Land Company

    Warren E. Burger:

    71-1459.

    Mr. Lewis.

    Austin W. Lewis:

    Mr. Chief Justice and may it please the Court.

    With the Court’s indulgence and although it will require some repetition, I would like to devote my remaining time here today to a step-by-step analysis of the four legal concepts that I consider are applicable in this case.

    Hoping that this will place this unique civil right — civil law problem in proper perspective for the Court.

    Initially thought, I will say in the absence of additional questions from the Court, I will lay aside any further discussion of the point that state law should be applied here over in a federal law.

    I believe this is fully covered in the briefs and consider that the Leiter Minerals’ opinion of this Court as well as the other cases cited in the respondent’s brief removes us as a serious issue in the case and while certainly no concessions have been made by the Solicitor General, I had a feeling from the Government’s reply brief and the argument made yesterday that this does not — will not disturb the Government too seriously.

    Now, the four items to be considered in my opinion are these: First, a brief discussion of the legal status of mineral servitude in the State of Louisiana; second, a consideration of the three types of mineral servitudes that exist in that State; then third, the legal status of a case of contractual prescription, which on question is involved in the present case; and fourth and finally, the precise nature of the so-called reversionary interests of the United States in a case of contractual prescription, and whether any of the constitutional questions raised by the Government are applicable to this case.

    Now, on the first point, I will not devote a great deal of time to the basic mineral servitude.

    Its nature appeared to have been understood by the Court yesterday.

    Except, I would like to stress that in Louisiana, there can be no separate estate in minerals.

    No matter what form, the deed or reservation is placed and what language is used, only a servitude or easement is created which expires in 10 years, if not exercise by drilling.

    I might say that —

    Potter Stewart:

    Is Louisiana unique among the States?

    Is the law of Louisiana unique among the States —

    Austin W. Lewis:

    It is; it is.

    Potter Stewart:

    — in holding that there cannot be any property right and —

    Austin W. Lewis:

    I know of no other States that has —

    Potter Stewart:

    — in minerals as such?

    Austin W. Lewis:

    — has that rule.

    No, sir.

    It was based of course in our civil law concepts and no such —

    Potter Stewart:

    But there is no other — none of the other States that —

    Austin W. Lewis:

    I am satisfied —

    Potter Stewart:

    — have borrowed the civil law —

    Austin W. Lewis:

    We made some rather serious research on that which I am having problem too.

    Potter Stewart:

    Do you think, it should —

    William H. Rehnquist:

    In the consequence of not being a property interest is that it can’t be alienated or transferred?

    One can’t?

    Austin W. Lewis:

    That’s just one evidence that it is not, Your Honor.

    Austin W. Lewis:

    I think the consequence we are dealing with here is that it involves only a remedial right, the prescription of limitation of 10 years, and therefore, can be valid and modified by subsequent act of the legislature.

    That is a precise following the case.

    Warren E. Burger:

    I suppose you will come later to the question whether that can override the local Louisiana law, on this subject can override an explicit contract made between the state and the United States.

    Austin W. Lewis:

    I certainly will, Your Honor.

    I think that’s the key issue in the case.

    Now, I will say that this strict rule of no separate estate and no mineral estate separate from the fee has met the test of many ingenious offers — efforts to overcome it.

    Sales for 20 years, sales in perpetuity, probably the most interesting was to the sale purporting to transfer the fee title and the minerals to the land below a plain 500 feet below the surface.

    Although they were attempting to get — avail both the title and the minerals but of course there are those that are simply servitude in disguise.

    Harry A. Blackmun:

    Mr. Lewis.

    Austin W. Lewis:

    Yes, sir.

    Harry A. Blackmun:

    Is this a characteristic of the civil law generally?

    Well, there isn’t a civilian up here on the bench.

    So, I ask these rather basic questions.

    Austin W. Lewis:

    Yes, sir.

    That is the concept that the fee cannot be divided into separate estates has cause the civil law in our Civil Code to evolve a system of charges and burdens upon the land.

    In other words, the servitude takes the place of a separate mineral estate but the courts firmly hold that such a servitude does not give the owner any title to the minerals in place.

    He simply possesses the right to go on the land and explore for and reduce those minerals to his possession.

    Harry A. Blackmun:

    And this is true in France and other places with the civil law —

    Austin W. Lewis:

    Yes, it is taken from the French law.

    But now while this servitude cannot be expanded or converted into a separate estate, it can be modified by contract in two ways.

    So as a result, we wind up in Louisiana with three types of servitudes and these, I might add, were painstakingly described by the Louisiana Supreme Court in the Leiter advisory opinion.

    Now, the first of these is a servitude for fix term of five, eight, ten years with no provisions whatever for extending that servitude.

    Now currently, this is a vested property right that the United States in this case would have a servitude that been on that category, because Act 315 could not have impaired that right.

    The second is the ordinary statutory servitude previously discussed which expires in 10 years unless exercised by the drilling of a well and obtaining a production.

    The third and the one that’s under consideration here is a servitude subject to contractual prescription.

    Now, there are two and only two requirements to establish such as a servitude: One is that when it is originally established, it must be of uncertain or indefinite duration; and second, it must provide for its conditional extinguishment in some way.

    Now, adjacent to that that is the fact that the servitude in this case mentioned a period of 10 years does not in anyway to track from it being a case of contractual servitude.

    Actually the law of Louisiana does that and had the period not been mentioned.

    We consider, if the Court pleases, that this category squarely fits the servitudes in the present case.

    They provide that if they were not exercised by drilling they would expire in 10 years.

    Austin W. Lewis:

    Of course, whether or not there would be drilling 10 years later, clearly it was uncertain and indefinite event.

    It could not be foreseen at the time.

    And of course as I said, that’s simply a re-expression of Louisiana law, because the servitude could not last for more than 10 years.

    And of course, it also clearly provided for its conditional extinguishment if a well is not drilled on or before the end of the 10-year period.

    Now the only the departure of these servitudes from the statutory type is the effect of the use of the servitude by the drilling of a well.

    A well, not completed as a producer under these servitudes, would not extend the servitude for full period of 10 years as would be the case and statutory interpretation, by the contract it would only extend it for 90 days.

    If they got production of course it would lasts as long as production lasts.

    But we submit, if the Court pleases, this limitation has nothing whatever to do with the designation and the classification of the initial servitude as being one of contractual prescription.

    That depends entirely on the terms relating to the 10-year period and the method by which it could be extended or extinguished at the end of that 10-year period.

    I think if I may refer the Court to Pages 12 and 13 of the respondent’s brief, you will find quotations from the Supreme Court’s advisory opinion on Leiter that say that’s better than I can say it.

    For example, the last paragraph on Page 12 says this, “Most mineral servitudes are not established for a fix time.

    A servitude of indefinite duration is extinguished only when it is not exercised for a period of 10 years, precisely our case.

    Such a servitude, created by mineral reservation and the sale to the Government, would under Act 315 of 1940 be rendered imprescriptible and would never be lost by prescription provided it was in existence at the time the 1940 Act went into effect.”

    Now, the second quote on Page 13, “Nevertheless contracting parties are at liberty to establish a contractual period of prescription for the conditional extinguishment of the servitude through non-use provided that the period is 10 years or less.”

    Again, precisely our case.

    Now, if the Court please, I feel also greatly (Inaudible) in our assertion that this is a case of contractual servitude by the decisions of the two courts below.

    In the District Court, a train Louisiana jurist said this of the servitudes, “Clearly these servitudes present cases of contractual prescription.”

    In the Fifth Circuit with the panel containing one of our most distinguished Louisiana jurists, the Court quoted that language of approval and said, and of course as a result to that Act 315 makes imprescriptible this servitude.

    So, I think when these Louisiana juries reach as a conclusion without any problem whatever, it is for some benefit to our contention that we do have cases of contractual prescription.

    Now, we now turn to what the legal status of the case of contractual prescription is.

    The Louisiana Supreme Court said squarely that it is identical with that of the statutory prescription.

    Therefore, the Court in that connection to Page 30 of our brief where this was said by the Court, speaking of Act 315 of 1940, “The Act grows no distinction between statutory and contractual prescription and as we view the matter from the history of the Act, and the objects, and purposes for which it was adopted, it is manifest that the legislature intended the Act to be applicable to prescription whether established by statute or by contract.

    For prescription had not already accrued at the time that the Act became effective.”

    Now, if the Court please, the repeated argument of the Government, it is over and above Act 315, because it has a contract seems to ask to beg the question entirely.

    The question is, “What did that contract do?”

    And under the Supreme Court resolution to this thing, it clearly established the case of contractual prescription.

    The brief of the Government acknowledges that the law of contractual prescription was in existence when the servitudes were purchased.

    The Government is bound to know the law, it was charged with knowing the law, and certainly it was aware of the rule that if a contractual prescription was established, then it could be modified either lengthened or shortened as prescription applicable to it by subsequent Legislative Act.

    Now, this brings us to the final and decisive issue in the case in our view.

    With a clear case of contractual prescription bringing to vow the legal principles of applying to statutory prescription, what were the legal rights of United States with respect to its so-called reversionary interests when Act 315 of 1940 was adopted?

    Austin W. Lewis:

    Again, the state law is crystal clear on his point.

    Holding that since only a law prescription of limitation is involved.

    This law goes only to matters of remedy and does not form a part of the contract itself.

    And that therefore, the period of prescription maybe shortened or lengthened without impairing the obligations of the contract.

    This, of course, is because no vested rights were involved.

    In fact, we have a specific decision of our Louisiana Supreme Court cited on Page 35 of our brief where Act 315 was applied retrospectively to a reservation of mineral rights and a sale to the United States and was held to be constitutional under State Constitution. Now, the ground on all of this, if Your Honor please, is quite fundamental.

    It simply is based on the recognition that mentioned by Mr. Justice Stewart yesterday that the reversionary interests is not a vested right at all, but it is merely an inchoate hope or expectancy based on the laws of prescription or limitation which could be changed for by legslative Act.

    And I repeat again my statement yesterday, there is no resemblance whatever between this so-called reversionary interests.

    It really should be called a hope or expectancy and the common law state in reversion.

    There is simply no legal resemblance at all.

    Now, this Court has also refute to recognize that for a statute of limitation are involved which exist when a contract is executed, do not form a part of that contract.

    And therefore, they may be modified or even abrogated with respect to a pre-existing contract of Constitution.

    This case is cited on Page 32 of our brief.

    Now, for the first time in this case in its reply brief —

    Warren E. Burger:

    How many of those cases Mr. Lewis engulfed contracts between two sovereigns, are they?

    Austin W. Lewis:

    I don’t think they are, Your Honor.

    Let’s see.

    No, they all seem to be Ogden versus Saunders, Campbell versus Holt, Jeff O’Brien versus Williams.

    No, sir it could not be.

    Now, for the first time in this case, the Government in its reply brief received by me only over the weekend.

    In spite of those in reference to Mr. Reynolds’ part of pace in the ad.

    They apparently recognized a probability with application of Louisiana law and they attempt to analyze their rights under the law of Louisiana, under these contracts.

    That is done on Pages 2, 3, and 4 of their brief.

    Now, I must mention that I am somewhat troubled over the use on Page 3 of the brief of the old Louisiana decision of Federal Land Bank versus Mulhern and a quotation from that case which indicates that some of the principles I just announced here may not be correct.

    I think the Court should know that that concept was retracted by the Supreme Court in this very case on rehearing and it’s never been repeated since.

    It Simply has no place in our law.

    Potter Stewart:

    What was your reference to what page of what brief?

    Austin W. Lewis:

    That’s Page 2 of the reply brief of the Government.

    On Page 3, I am sorry.

    Potter Stewart:

    Of the reply brief of the Government?

    Austin W. Lewis:

    Of the Government, yes sir, about Federal Land Bank versus Mulhern.

    William J. Brennan, Jr.:

    It was Mulhern on the rehearing, Mr. Lewis or this case on rehearing?

    Austin W. Lewis:

    No, I said in Mulhern case on rehearing.

    William J. Brennan, Jr.:

    Retracted that —

    Austin W. Lewis:

    Retracted, it was not this particularly; it was retracted and said we’re going back to the common law concept which, I mean the civil law concept which I just described.

    Now as I said, the Government now is offering to the Court its analysis to the law of Louisiana and that is found in the first complete paragraph on page 4 of the reply brief and it says this, “Consequently, once the conveyance is involved in the present case were consummated, the United States by virtue of its undisputed ownership of the surface rights in the land in question had a paramount interest in the minerals below the surface subject only to the limited servitude stipulated in the reservations.”

    Now if the Court please, I’d like to lay aside beside with that conclusion.

    This quotation from the Supreme Court of Louisiana in the Leiter Minerals advisory opinion and I quote, “In this case, when property is conveyed and the mineral rights are reserved, the party reserving the minerals is vested with a real right, the right to go up on the land and produce the minerals.

    In such a case, the purchase of the land subject to this servitude does not acquire the mineral rights.

    As to the minerals, all the purchaser has acquired is the expectancy or hope that the mineral servitude will be extinguished by the 10-year prescription of non-use, and will not be extended or continued by use beyond this period, for the minerals had been reserved, the purchase of the land pays nothing for them and has no vested right in them.”

    Then quoting from a prior decision of the Supreme Court in Tennant versus Russell, the Court says this, “A right is vested when the right to enjoinment, present or prospective has become the property of some particular person or persons as a present interest.

    The right must be absolute, complete, and unconditional independent of a contingency, and a mere expectancy of future benefit.

    Or a contingent interest in property does not constitute a vested right.”

    So we say, if the Court please, if this concept of the Louisiana law is accepted by this Court and applied.

    We think that all of the constitutional issues raised by the United States contract, property, supremacy are dissolve in thin air because we are not dealing with any vested interest in this so-called reversionary interest of the Government.

    Warren E. Burger:

    Mr. Lewis, to just to take into account your time, the Court will extend your time about five minutes in order to give you time to develop this contract matter.

    Austin W. Lewis:

    Thank you very much.

    Now the reservation, if Your Honor please, is found on Page 180 of the Addendum of our brief.

    There are two of them but they are identical with Mr. Reynolds’ notice yesterday and that starts off by simply making the normal reservation that would be involved in the statutory prescription.

    Reserving the right to drill for and to produce into lay pipe lines and do all the necessary incidental things which rights will remain enforced for a period 10 years from the date of vesting title in United States.

    And as long thereafter as oil, gas, sulfur, or some other minerals produced in the land or so long thereafter as grantor shall conduct drilling or reworking operations thereon with no cessation of more than 60 consecutive days until production results.

    If production results, of course it remains in effect indefinite.

    Now, this language, Your Honor, the paragraph I just read, is identical with the law of statutory prescription with the same exemption that I noted earlier, that the drilling operations must be conducted as 60-day intervals to maintain the servitude, if they do not result in production.

    Otherwise, this is a straight tracking of the Louisiana law.

    And provided further, if in the said ten-year period of reservation, if not extended as here above provided or the termination of any extended period, the operation has not been that carried on the right to provide and so forth, shall terminate and complete fee title so thereby it become vested in United States.

    Then, I think there is an important royalty provision.

    If Your Honor please, this simply is saying that if this conditional extinguishment and it is fairly conditional because it depends on the will of the servitude on as to whether you drill or not drill occurs, then of course the mineral right is terminated.

    That of course would be true in the case of statutory prescription.

    So, we say that it’s a single exception Your Honor, of the limitation just place on the drilling that there’s no difference between this contract reservation and one that would be made under the law of Louisiana.

    William H. Rehnquist:

    Mr. Lewis.

    Austin W. Lewis:

    Yes.

    William H. Rehnquist:

    Why did the Legislature make Act 315 applicable only to the United States?

    Austin W. Lewis:

    Well, Your Honor, if I am not sure you got my time too much that is a question I was dying to get into.

    The history of the saying is that this Act was passed primarily for the benefit of the United States.

    If — I didn’t cite it in my brief but if the Court will refer to the original opinion of the District Court in the United States versus Nebo Oil Co., you will find the complete history of why it was adopted.

    United States was the largest purchaser of lands in Louisiana.

    It was having increase in trouble buying lands because the people did not want to sell and have their mineral rights possibly terminated in 10 years, and as a result of that, in order to facilitate its purchase of the land in Louisiana, this Act was adopted.

    Now, it’s a valid reason too because Louisiana is an oil rich state.

    It’s almost impossible to purchase lands at any price if the minerals are not reserve in tracks of in sizeable size.

    Warren E. Burger:

    Well, why couldn’t that have been accomplished just as well as it had been made effective as to all future transactions?

    Austin W. Lewis:

    Well, I assume it could have, Your Honor, but there we are adverting then to the question of, what was the right, the reversionary right gained by the United States.

    That did not so when they get them as apply retrospectively.

    But again, we are just at the point of that reversionary interest of the United States was such an interest that could be cut across by intervening statute.

    Potter Stewart:

    The summary answer to Mr. Justice Rehnquist’s question is contained I think in the excerpts from the opinion of the Louisiana Supreme Court of the Leiter case which appear on Pages 37 and 38 of your brief.

    Austin W. Lewis:

    Yes, that is right that —

    Potter Stewart:

    Is that correct?

    Austin W. Lewis:

    That is correct.

    I might add too in fact, to answer the question that Louisiana runs in the same problems and not too long after this statute was adopted, they adopted an identical statute making the same imprescriptibility rule with respect to all purchases made by any agency of the State of Louisiana.

    William H. Rehnquist:

    So, Louisiana is in the same boat as the United States?

    Austin W. Lewis:

    That’s right.

    Exactly.

    So we have —

    Byron R. White:

    What about private parties?

    Austin W. Lewis:

    Private parties, no.

    The only rule as to private parties is that prescription does not run against the matter and prescription is extended as the Court made rule thereon.

    Byron R. White:

    Let’s assume, there’s been a general statute in Louisiana not maybe in just the United States but just announcing a general rule of non-prescriptibility to applying to everybody.

    Would it have applied to the United States?

    Austin W. Lewis:

    Well, I assume so the Government would be purchasing this property in proprietor capacity.

    Byron R. White:

    Well, why didn’t it apply to everybody?

    Austin W. Lewis:

    Because the statute is limited to United States.

    Byron R. White:

    Well, I understand that but how — what was the reason for limiting it to the United States?

    Austin W. Lewis:

    Well, I think Your Honor, and this Nebo discussion will bear this out, I believe.

    It was applied because United States was having a serious problem in its land acquisitions in Louisiana, and it was applied for as benefit not as a case of hostile discrimination as the Solicitor General has suggested.

    Byron R. White:

    But it certainly has an impact on the United States?

    Austin W. Lewis:

    It certainly does, but now where that impact —

    Byron R. White:

    But to no other parties, no other parties?

    Austin W. Lewis:

    For that outweighs the benefit the United States gain by its future acquisitions is —

    Byron R. White:

    Well, what is the law?

    Can you just pick out United States to apply this rule to as —

    Austin W. Lewis:

    We think so Your Honor.

    Potter Stewart:

    United States as to Canada, what’s your view?

    Austin W. Lewis:

    Well, first of all we don’t think United States is a person; second and this is the basic concept that I am doing my outmost to get across, whether it was wisely done or equitably done, it did not deprive the United States in this case of contractual prescription of any vested contract right.

    Now, if it had no right to assert, we just don’t think any of the constitutional issues come into play.

    Warren E. Burger:

    Well, if it isn’t an interest in realty as you suggest, then why doesn’t the Contract Clause govern?

    Austin W. Lewis:

    I am not sure, I —

    Warren E. Burger:

    You’ve argued strongly and very cogently that this contract be it no interest in realty.

    Austin W. Lewis:

    That’s correct.

    Warren E. Burger:

    So then, let’s say it’s just a contract, a contract between two parties in this case between United States —

    Austin W. Lewis:

    But the contract whether there’s an interest in realty or just an interest, the Contract Clause in nominal pain only applies if you have some vested right as being impaired. Now Louisiana Court says, “This is not a vested right.”

    Warren E. Burger:

    Not a vested right in terms of realty?

    Byron R. White:

    Not a vested right period, Your Honor.

    William J. Brennan, Jr.:

    Let me —

    Warren E. Burger:

    And of course, I suppose that’s for the Contract Clause ultimately, isn’t it.

    I assume sir; yes, sir.

    Byron R. White:

    Let’s assume at the time of United States acquired whatever interest it did acquire if any.

    The case law in Louisiana was contrary to what you say, it is not and it is clearly so.

    And then has the United States acquire its interest the case law in Louisiana change some typical — they overruled prior decisions?

    Austin W. Lewis:

    I I would have — I would have difficulty with that.

    Byron R. White:

    Now, it is the same as — what?

    Austin W. Lewis:

    I would have difficulty with that one to just give you a candid answer.

    Byron R. White:

    With what it really was?

    Austin W. Lewis:

    Yes.

    Byron R. White:

    So, your case hinges on whether at the time United States required what I meant is that acquired, the law of Louisiana clearly was that whoever acquires that interest would have known that if it was subject — whatever it read like — whatever it read in the contract, it was subject to change?

    Austin W. Lewis:

    Precisely, Your Honor.

    Byron R. White:

    Under the — by the legislature —

    Austin W. Lewis:

    Precisely that — well, question, the second.

    But all I can say is that we talked of that — the question here is the law of limitation.

    Byron R. White:

    It is just like United States in the deed that it took.

    If in that deed it took, it said, here you’ll have me set minerals in 10 years, unless the legislature passes the law that says, you will get them in 30 years.

    That’s a situation you’re putting in the legislature before the 10 years is over passes the law that says you’re interest is suppose to come for 30 years or its terminate.

    Austin W. Lewis:

    Well, that would be true Your Honor, if you would add a qualification to your — I mean a provision to a contract.

    All I’m saying if it last for 10 years unless it is extended by drilling for production.

    That’s what makes the case of contractual prescription.

    Now, I had conceded already an argument and I concede in brief —

    Byron R. White:

    Yes, but doesn’t that have to appear clearly from the Louisiana law that whatever the United States acquired when it took its deed, that interest is subject to modification by a change of the law.

    Austin W. Lewis:

    Well, I wouldn not think so Your Honor.

    The promise involved here is not —

    Byron R. White:

    You do not claim that the Louisiana law at that time made it clear that —

    Austin W. Lewis:

    Well, I thought you said the contract would have to make it clear.

    I misunderstood you.

    Byron R. White:

    Oh! No.

    Austin W. Lewis:

    Oh! Yes.

    Byron R. White:

    But the —

    Austin W. Lewis:

    But the law of Louisiana was clear that there was a legal classification of contractual prescription.

    The Government have missed that in its last brief when they bought that was the law of Louisiana.

    Byron R. White:

    And the law is that — in that case —

    Austin W. Lewis:

    The contractual prescription is the same as statutory prescription.

    In statutory prescription the rule has been clear throughout the years that this is a matter of remedy based on the — the remedy lies in the 10-year prescription, the Limitation Act, and it said that just simply does not form a part of the contract and this Court has said that in some five to six decisions thereon.

    It is the same as cause of action, precisely.

    Warren E. Burger:

    Now for the — under your theory of the case at any future time, can Louisiana go in and begin drilling operations and —

    Austin W. Lewis:

    Well, the respondents in this case can.

    Warren E. Burger:

    Respondents, I must say, yes.

    Austin W. Lewis:

    Yes, sir; yes, certainly.

    Warren E. Burger:

    Then that might have some impairment of the purpose for which the United States Government acquired it under the Migratory Game verdict, cout it not?

    Austin W. Lewis:

    Your Honor, I respectfully but seriously quarrel with that.

    This Migratory Game Act provides specifically for the Secretary of Interior taking title subject to limitations, easements, everything else; provided they found that they did not impair the use of the refuge.

    Now, he found that in this case because —

    Warren E. Burger:

    But he found that it wouldn’t impair it if it were a 10-year limitation.

    Austin W. Lewis:

    Yes, but he had a way knowing that Your Honor.

    There may have been 100 wells drilled on for like minerals and it could have been going on for another 10 years.

    So he faced the situation, where he agreed to an easement of indefinite duration and clearly he must have found because the Act requires into — that would not impair the use of the refuge.

    Warren E. Burger:

    Now, the land company can drill for the next 100 years if they want to go, is that correct?

    Austin W. Lewis:

    yes sir.

    If there are no further questions, I press appreciation for the additional time.

    Warren E. Burger:

    Thank you Mr. Lewis.

    Mr. Reynolds we’ll extend your time five or six minutes if you think you need it.

    William Bradford Reynolds:

    Thank you Mr. Chief Justice.

    Let me state that while we believe the determination here with respect to what the interest was that the United States acquired under these conveyances, it is a matter of federal law.

    I also want to point out that with respect to the —

    Could you stop.

    How do you (Inaudible) United States?

    The interest that you took a deed?

    William Bradford Reynolds:

    We took a deed to acquire property —

    Yes, this is property and you are saying the federal law would govern what is it you acquired under that deed?

    That’s what you have said.

    William Bradford Reynolds:

    That’s our position, Your Honor.

    That’s correct.

    You talked about yesterday.

    William Bradford Reynolds:

    I don’t believe I said it.

    Well, how do you argue that?

    What’s the authority you say when the United States acquires mineral property in a state that the land is actually is the meaning of it as determined by federal law?

    William Bradford Reynolds:

    There are brief — in our brief we’ve explain and the decisions of this Court uphold the proposition that when the United States is a party to the contract that the interest that the United States acquires under that contract as a party is a matter of federal law and not state law.

    And we believe that this is a contract where the United States is a party and entered into and as a matter of federal law to determine what interests the United States did acquire.

    Now, we further —

    As if the general company it’s like the United States was issuing the deed itself?

    William Bradford Reynolds:

    Well, that–

    If the United States have issued a deed, the real property that it owns?

    William Bradford Reynolds:

    That’s right.

    That would be a matter of federal laws to the interest but the — if the United States is a party to a contract and into — with the private party then the interest that the United States obtains under that contract is a matter of federal — for federal law as oppose to state law.

    Well, what do you do with the Yazell case?

    William Bradford Reynolds:

    Well, I think the Yazell case, I think is considerably different.

    It’s a quite a unique situation and there the United States went down into Texas it bargained and negotiated the contract on a basis of the Texas law.

    It was everybody’s understanding that the existing law in Texas at that time were controlled.

    And after the fact, the United States turned around and said Texas law was not going to apply.

    Now, here what we’re talking —

    Potter Stewart:

    But the — the basic point that your making is wholly contradicted by the Yazell case?

    That federal law controls it, that’s your point and this contract was written this — when in reflecting the Louisiana law, was it not?

    William Bradford Reynolds:

    Well, Your Honor let me see if I can state it this way.

    If — when we went into Louisiana, if you look to Louisiana to see what interest were acquired.

    I think that the Louisiana supports law, supports the proposition that the United States when it acquired the property here, acquired a paramount interest to the minerals under the land that the only one who — in Louisiana who can grant a servitude but it only goes to the use of the minerals.

    Only goes to exploration for the minerals.

    The only way Louisiana can do that is the landowner.

    He has the paramount interest in those minerals.

    Those minerals are not a separate estate they are part of the property and while —

    Potter Stewart:

    As a matter of Louisiana law?

    William Bradford Reynolds:

    As a matter of Louisiana law and while the counsel for Lake Misere stated that that the reversionary interest which is again the use that comes to the United States the end.

    Well, that cannot be sold separately.

    That can be sold along with the sale of the land.

    If I sell the land, if the United States sells a land then the reversionary interest is sold.

    Now, we believe that those interests —

    Potter Stewart:

    Well, the new landowner — the new landowner has the same expectancy as to renounce to, isn’t it?

    William Bradford Reynolds:

    Well, he has the — when it terminates, he has — the use reverts to him, the exclusive use to explore for it.

    Potter Stewart:

    Yes, because he is now the landowner.

    William Bradford Reynolds:

    Because he is the landowner.

    Potter Stewart:

    And if he owns a land, he owns the minerals under the land.

    William Bradford Reynolds:

    Now, those — that’s right.

    And the United States here own the land. Now, the bundle of interests or the bundle of rights that the United States got, if you want to look to Louisiana law, are as we — as I stated are the property rights, the inseparable estate in the minerals and the reversionary interest to exclusive use to explore for it.

    Now, whether that bundle of rights is property under Article 4 is a federal law question.

    And whether the Government that the — whether that can be disposed off is a matter for Congress.

    Well, that’s a little different point you just made?

    Potter Stewart:

    Yes.

    William Bradford Reynolds:

    Well, that I still submit that we take it is a matter of federal law as to what interests were acquired.

    But no you didn’t —

    William Bradford Reynolds:

    But what I —

    For whatever the interest.

    William Bradford Reynolds:

    What I’m saying is —

    I just want to know about the authority was for to Justice Stewart.

    What’s the authority for some case would that — what’s the authority for saying that you look the federal law to the service?

    What is that you acquire to that deed?

    William Bradford Reynolds:

    I believe that the Allegheny County has authority for that Your Honor as one decision.

    I also think that Ivanhoe Irrigation District v. McCracken is another authority for that the decisions by this Court.

    [Voice Overlap] Yazell?

    William Bradford Reynolds:

    I think Yazell was a special situation.

    I think that the thing that bothered the Court about Yazell was that the Government was trying to remake on agreement with respect to existing law that they been relying on.

    Here, the Government — even if you want to look to the Louisiana law, the existing Louisiana law, the Government is trying to assert the interest that it acquired under the existing law.

    And in Yazell we had a different situation where the Government had gone in and negotiated the particular rights under the state law and then it tried to say, we’ll now we are not going to look to state law.

    Harry A. Blackmun:

    But I gather Mr. Reynolds, even if we don’t agree with this Act, even if we doubted you.

    William Bradford Reynolds:

    Yes, Your Honor.

    Harry A. Blackmun:

    Your second argument is that under the Property Clause in any event, it say whatever you got —

    William Bradford Reynolds:

    Right and we —

    Harry A. Blackmun:

    — whatever it may be —

    William Bradford Reynolds:

    That’s correct.

    Harry A. Blackmun:

    It’s subject to the Property Clause.

    William Bradford Reynolds:

    It’s subject to the Property Clause.

    Whatever label the state —

    Harry A. Blackmun:

    And to that extent its federal law, whatever it may be.

    William Bradford Reynolds:

    That’s correct, Your Honor.

    Harry A. Blackmun:

    And then I gather.

    Do you have a third argument that — I gather, do you want the Contact Clause or the Due Process Clause at any event the statute limited on Act application of 315 at least in —

    William Bradford Reynolds:

    That the —

    Harry A. Blackmun:

    — United States?

    William Bradford Reynolds:

    That the —

    Harry A. Blackmun:

    With what?

    William Bradford Reynolds:

    The application of — or you mean Contract Clause argument?

    That the application of 315 applied retroactively does abrogate the expressed terms —

    Harry A. Blackmun:

    Right.

    William Bradford Reynolds:

    Of the contract?

    Harry A. Blackmun:

    Now, that is our fourth argument that in any event, the application by 315, only the lands acquired by the United States?

    William Bradford Reynolds:

    We believe that there is a Fourteenth Amendment argument there —

    William J. Brennan, Jr.:

    It is still another argument that you don’t agree with Court of Appeals on the state law?

    William Bradford Reynolds:

    And we also assert that we don’t agree with the Court of Appeals on state laws.

    That’s correct Your Honor.

    William H. Rehnquist:

    On your Contract Clause argument, Mr. Reynolds, doesn’t the Court’s decision in Blaisdell in 290 U.S. upholding the Minnesota Mortgage Moratorium Act back in the 30’s, where the Minnesota had altered the time for exercise the equity of redemption, give you some trouble?

    William Bradford Reynolds:

    I don’t believe so Your Honor.

    I think that the — in fact that supports the proposition that we’re making here.

    There, the Court emphasize that the state was acting in a particular a special emergency with respect to housing shortages.

    That in meeting this emergency, the statute was a limited one addressed to the particular emergency that the extension of the sale’s rights after the foreclosure and the special exemption given under that Missouri’s statute was a very limited one only for a period of time.

    And they went and look at the purposes behind the statute to see whether or not in that particular situation you could impair the obligation of — it was permissible to impair the obligation to contract.

    Now in this case, there are no reasons comparable to what we had in the Blaisdell to want a retroactive application of Louisiana Act 315 to impair the obligation of contracts.

    One of the principle reasons of the statute as we’ve been told this morning was purely perspective to make it easier for the United States to acquire lands in Louisiana in the future and what we’re talking about here is retroactive application to cutoff the interests that are already have been acquired which certainly doesn’t further the prospective purpose.

    William Bradford Reynolds:

    So, I don’t think that we have any of the circumstances that we are involved in Blaisdell which the Court said because of those special unique service that it was permissible in that instance to impair the obligation.

    Harry A. Blackmun:

    Now, what’s your view of the validity of the statute insofar as it is currently applicable and prospectively applicable, than applicable to your contemporaneous acquisitions of land in Louisiana under this Act?

    William Bradford Reynolds:

    Your Honor, we are not challenging the perspective application of the statute.

    And I think that the certainly a good number of the arguments we are making here —

    Harry A. Blackmun:

    Would not —

    William Bradford Reynolds:

    — be inapplicable with respect to perspective applications —

    Harry A. Blackmun:

    Well, its —

    William Bradford Reynolds:

    — that they’re address to the retroactive applications.

    Harry A. Blackmun:

    Unless you’ve, except that your basic argument, I suppose that federal law and its applicable, and I gather from your argument and as a matter of fact I also gather from previous opinions of this Court that that’s just the way of saying that law is anything the Government wants it to be in a particular case.

    William Bradford Reynolds:

    I think that on a perspective law, I think that a federal law controls that we that some of the arguments we make it could be asserted.

    I —

    Harry A. Blackmun:

    Against the contem —

    William Bradford Reynolds:

    Again, I think that the —

    Harry A. Blackmun:

    Against the contemporaneous validity of the statute, right?

    William Bradford Reynolds:

    That’s right but I think there that’s much closer to Yazell and I believe that we would have a much more difficult time in that circumstance.

    Because the State of Louisiana has there declared that these contractual prescriptions are imprescriptible by statute.

    When we’re going down in Louisiana and we would be — we would know that the existing law of the State at that time declared it.

    And I think that that’s a much more comparable situation to what you had in Yazell where the Government would go in and it would enter into the contract on the basis of that law and then, try to get out from under later.

    I don’t think we have that here.

    Warren E. Burger:

    Going back to the Blaisdell case, the equity of redemption under the Mortgage Foreclosure Law was a matter of state statute giving one year for redemption as I recall it and the Mortgage Moratorium Act was in effect an extension of that one year.

    William Bradford Reynolds:

    Of that one year.

    Warren E. Burger:

    So that it wasn’t just a purely a matter of contract.

    It was a matter of statute.

    William Bradford Reynolds:

    Well, that — it was statute but the — there was a question of whether you could — whether the statute, the operation of the statute would.

    Warren E. Burger:

    Well, the contract that had been made of course.

    William Bradford Reynolds:

    Yes, Your Honor.

    Warren E. Burger:

    In the light of that statute but I’m simply suggesting it wasn’t purely a matter of contract.

    William Bradford Reynolds:

    Not purely.

    Warren E. Burger:

    It was contract plus statute.

    William Bradford Reynolds:

    Plus statute.

    Warren E. Burger:

    Just as you have here I presumed, you have contract plus statute?

    William Bradford Reynolds:

    Well, we have a subsequently inactive statute that the — I guess it would be —

    Warren E. Burger:

    No, subsequently inactive in both cases?

    William Bradford Reynolds:

    But the statute there was directed, I think it’s a very definite emergency situations that just aren’t present here.

    Warren E. Burger:

    Well, the difference is that in Blaisdell case, the contract has been made with reference to in a pre-existing statute.

    Here, it was a subsequent statute only.

    William Bradford Reynolds:

    Well —

    Warren E. Burger:

    In the Yazell case, you had before and after.

    William Bradford Reynolds:

    Right.

    Here, that’s correct.

    If there no further questions I —

    Warren E. Burger:

    I think not.

    William Bradford Reynolds:

    I’ve already used more than my allotted time.

    Warren E. Burger:

    Thank you Mr. Reynolds.

    Thank you Mr. Lewis.

    The case is submitted.