IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-31024
CENTRAL PINES LAND CO; TOWER MINERALS COMPANY INC; JACK E LAWTON,
JR; EVELYN GAY LAWTON DUHON; LINDA LEW LAWTON DROST; D S & T INC;
DROST & BRAME INC
Plaintiffs-Appellants-
Cross-Appellees,
versus
UNITED STATES OF AMERICA,
Defendant-Appellee-Cross-
Appellant,
versus
TEXACO EXPLORATION & PRODUCTION INC; SONAT EXPLORATION CO;
CHESAPEAKE OPERATING INC; C H C GERARD; UNION PACIFIC RESOURCES CO,
Defendants-Appellees.
Appeals from the United States District Court
for the Western District of Louisiana
November 28, 2001
Before HIGGINBOTHAM, BARKSDALE, and STEWART, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
The law of mineral rights in Louisiana differs from that of
common law states. In Louisiana, these rights do not exist as a
separate, perpetual estate in land, but can only be held separate
from the surface land in the form of a mineral servitude.1 The
1
Frost-Johnson Lumber Co. v. Salling’s Heirs, 91 So. 207, 245 (La. 1920).
servitude gives its holder the right to enter the property and
extract the minerals.2 Louisiana law has consistently recognized
that a mineral servitude may expire, or prescribe, after 10 years
of non-use.3 While parties cannot contract to extend the
prescriptive period, they may shorten the term of the servitude.4
Louisiana Act 315 of 1940 created a special rule for
prescription of mineral servitudes when the surface property is
owned by the United States:
When land is acquired by conventional deed or contract,
condemnation or expropriation proceedings by the United
States of America, or any of its subdivisions or agencies
from any person, firm, or corporation, and by the act of
acquisition, order, or judgment, oil, gas or other
minerals or royalties are reserved, or the land so
acquired is by the act of acquisition conveyed subject to
a prior sale or reservation of oil, gas, or other
minerals or royalties, still in force and effect, the
rights so reserved or previously sold shall be
imprescriptible.5
The current form of Act 315 extends this treatment of the United
States to the State of Louisiana and its subdivisions.6
2
Id.
3
See Leiter Minerals, Inc. v. California Co., 132 So.2d 845, 851 (La.
1961) (citing provisions of the Louisiana Civil Code and case law recognizing the
10-year prescriptive period). The Mineral Code now governs prescription of
mineral servitudes and retains the 10-year prescriptive period. La. Rev. Stat.
§ 31:21.
4
See Leiter Minerals, 132 So.2d at 852 (“If a servitude is established for
10 years or less, it will remain in force for the time so stipulated regardless
of whether it is used by the servitude owner. In such a case no question of
prescription arises ....”).
5
1940 La. Acts 315.
6
La. Rev. Stat. § 31:149.
2
Today we deal with the applicability of Act 315 to certain
privately-held mineral servitudes on land now owned by the United
States in Vernon Parish, Louisiana. Appellants sought declaratory
relief and to quiet title in the servitudes when the United States
began leasing mineral rights on this land.7 The holders of the
mineral servitudes appeal the district court’s grant of summary
judgment in favor of the United States, holding that Act 315, as a
matter of federal common law, cannot be applied retroactively to
prevent prescription of mineral servitudes when the United States
obtained the surface estate before 1940. The United States cross-
appeals the district court’s grant of summary judgment applying Act
315 prospectively, rendering mineral servitudes imprescriptable if
the United States obtained the surface estate after the adoption of
Act 315. We conclude that summary judgment was appropriately
granted in both instances and affirm.8
7
Jurisdiction in the district court was based on 28 U.S.C. § 1346(f),
which provides exclusive original jurisdiction to federal district courts for
actions under 28 U.S.C. § 2409a to “quiet title to an estate or interest in real
property in which an interest is claimed by the United States.” 28 U.S.C. §
1346(f).
8
Judge Stewart concurs in the judgment only.
3
I
In 1929 Gulf Lumber Company conveyed to S.H. Fullerton mineral
rights in a 100,000 acre tract located in Vernon Parish, Louisiana.
This created a mineral servitude which was eventually transferred
to Wm. T. Burton Industries (Burton). Through a series of later
mesne conveyances, Appellants Central Pines Land Co., Tower
Minerals Company, Inc., Jack E. Lawton, Jr., Evelyn Gay Lawton
Duhon, Linda Lew Lawton Drost, D, S, & T, Inc., and Drost & Brame,
Inc. acquired all of the rights of Burton.
The parties have adopted the designations of three parcels of
the land as Groups A, B, and C. In four transactions between 1933
and 1938, the U.S. Forest Service acquired the Group A and B lands
pursuant to the Weeks Forestry Act.9 The Forest Service, between
1941 and 1952, granted to the U.S. Army all of the Group A and B
lands for use as military training grounds.
Burton acquired complete title to the Group C lands in 1937,
thereby terminating the 1929 servitude with respect to these lands.
Burton sold those lands to the United States in a series of
transactions between 1942 and 1981. In each of these transactions,
Burton reserved mineral rights, creating a new mineral servitude.
Appellants are the successors in interest to these mineral rights
in the Group C lands.
9
16 U.S.C. § 515.
4
Between 1952 and 1970, the United States, through
condemnation, instituted a mineral moratorium which prevented the
owners of the mineral servitude from entering portions of the Group
A and B lands and exercising their rights. This moratorium did not
affect all of the lands burdened by the servitude, although exactly
which lands were affected is disputed. In 1967, in an attempt to
clarify which lands were covered by the moratorium, the Army and
Forest Service divided the land into two areas of “Intensive Use”
and “Limited Use.” All access was prohibited on Intensive Use
land, which was used for artillery practice and as a bombing range.
The Limited Use area was under the control of the Forest Service
between 1967 and 1978.
During the moratorium Burton was paid a small fee in
compensation on a per acre basis for the part of the servitude that
was inaccessible for mineral operations. The moratorium was
terminated on March 31, 1978. The last drilling on the servitude
occurred in 1964 and was performed by Pan American Corporation
pursuant to a lease with Burton. Burton’s last well was drilled in
1956 and was dry.
In 1992, the U.S. Bureau of Land Management began granting
mineral leases allowing exploitation of minerals under Group A and
B lands. Appellees Texaco Exploration & Production, Inc., Sonat
Exploration Co., Chesapeake Operating, Inc., C.H.C. Gerard, and
Union Pacific Resources Co. are the current lessees of these
mineral rights. Appellants filed this suit seeking to quiet title
5
to the mineral servitudes on the entirety of the Group A, B, and C
lands and a declaration that any leases granted by the United
States were invalid. Both parties moved for summary judgment.
The district court granted summary judgment to the Government
holding that Act 315 could not be applied retroactively to render
the 1929 servitude, which still covered the Group A and B lands,
imprescriptible.10 After determining that the pre-1940 Louisiana
law of prescription, with a 10-year prescriptive period, would
apply, the district court held that there was no suspension of
prescription by obstacle after the moratorium ended in 1978. The
district court also held that the moratorium, even when in effect,
was not sufficient to suspend prescription because it did not cover
all the land subject to the servitude. As a result, the 10-year
prescriptive period had run, and the servitude on the Group A and
B lands, had prescribed for non-use. The district court also
granted summary judgment to Appellants, holding that Act 315 could
be applied prospectively to the Group C servitude and that it was
therefore imprescriptible.
II
10
The Louisiana Supreme Court has held that Act 315 should be applied
retroactively. Whitney Nat. Bank v. Little Creek Oil Co., 33 So. 2d 693, 696
(La. 1947).
6
We review the district court’s grant of summary judgement de
novo.11
We address first the issue of the applicability of Act 315 both
retroactively and prospectively. We reach four distinct legal
conclusions: 1) federal common law governs this decision; 2) Act 315
cannot be borrowed as the rule of decision for application to pre-
1940 transactions, because it is hostile to the interests of the
United States in the operation of default legal rules in place at
the time of contract, but it may be applied prospectively; 3) we
will use residual Louisiana law as the federal rule of decision for
pre-1940 transfers; and 4) precisely because it is no longer hostile
to a federal interest in application of default rules in place at
the time of contract, Act 315 can be borrowed as the federal rule
for the Group C servitudes. We will explain each conclusion in
turn.
A
The parties dispute whether the Supreme Court’s decisions in
Clearfield Trust Co. v. United States12 and United States v. Little
Lake Misere Land Co.13 require application of federal common law to
this case. We are persuaded that Little Lake controls and that
11
Starkman v. Evans, 198 F.3d 173, 174 (5th Cir. 1999).
12
318 U.S. 363 (1943).
13
412 U.S. 580 (1973).
7
federal common law must both govern the choice-of-law determination
and supply the rule of decision.
When a federal court sits in diversity, Erie R.R. Co. v.
Tompkins14 requires the application of state substantive law absent
a congressional grant of authority to fashion federal common law.
This principle applies to other statutory grants of jurisdiction,
such as 28 U.S.C. § 1346(f),15 upon which the district court’s
jurisdiction rested in this case, though in actual practice with
less force. Rejecting a narrow view of Erie and the Rules of
Decisions Act,16 the Supreme Court has held that even without an
explicit statutory grant of authority, the fashioning of federal
common law may still be appropriate when duties and rights of the
United States are at issue.17 After all the Rules of Decisions Act
itself ends with the qualifying phrase “in cases where [state laws]
apply.”18 Little Lake recognized that federal common law governed
when a transaction of the United States “aris[es] from and bear[s]
14
304 U.S. 64 (1938).
15
See, e.g., Little Lake, 412 U.S. at 591 (“The federal jurisdictional
grant over suits brought by the United States is not in itself a mandate for
applying federal law in all circumstances.”).
16
28 U.S.C. § 1652 (“The laws of the several states, except where the
Constitution or treaties of the United States or Acts of Congress otherwise
require or provide, shall be regarded as rules of decision in civil actions in
the courts of the United States, in cases where they apply.”).
17
Clearfield Trust, 318 U.S. at 575.
18
28 U.S.C. § 1652.
8
heavily upon a federal regulatory program.”19 Factual similarity
between Little Lake and this case counsels us to pause and explore
Little Lake in detail.
In Little Lake, the United States sued to quiet title in two
adjacent parcels in Cameron Parish, Louisiana that it acquired under
the Migratory Bird Conservation Act.20 Both parcels were obtained
by the United States before Louisiana adopted Act 315. While no
mineral servitude existed before the Government acquired these
parcels, in both the 1937 act of sale and the 1939 judgment of
condemnation, the “seller,” Little Lake Misere, reserved mineral
rights.
In the transactions at issue in Little Lake, the default
prescriptive period of 10 years was shortened by the terms of the
reservation. The mineral servitudes were to continue
... as long [after an initial ten-year period] as oil,
gas, sulphur, or other mineral is produced ... or so long
thereafter as [Little Lake] shall conduct drilling or
reworking operations thereon with no cessation of more
than sixty (60) days consecutively until production
results; and, if production results, so long as such
mineral is produced.21
19
Little Lake, 412 U.S. at 592. See also Texas Indus., Inc. v. Radcliff
Materials, Inc., 451 U.S. 630, 641 (1981) (noting that federal common law governs
when the “rights and obligations of the United States” are at issue).
20
16 U.S.C. § 715 et seq.
21
Little Lake, 412 U.S. at 583.
9
Furthermore, if the initial ten-year period ended and no production
was occurring, or if operations subsequently ceased for more than
60 days, it was provided that
the right to mine, produce and market said oil, gas,
sulphur or other mineral shall terminate ... and the
complete fee title to said lands shall thereby become
vested in the United States.22
The result of this language was that after 10 years had elapsed from
the date of the transfer, any 60 day period of non-production would
terminate the mineral servitude.
Little Lake Misere argued that state law should apply and
therefore that Act 315 rendered the mineral servitudes
imprescriptible. This Court agreed, basing our decision on a prior
case involving Act 315, United States v. Nebo Oil,23 where we held
that retroactive application of Act 315 did not violate, among other
things, the Contract Clause of the U.S. Constitution. The Supreme
Court reversed, holding that federal law governed the choice-of-law
decision and refusing to borrow Act 315 as the federal rule of
decision because the Court found it was “hostile” to the federal
interests at stake.24
The Court held that application of federal common law was
required under Clearfield Trust because “the right of the United
22
Id.
23
190 F.2d 1003, 1007-11 (5th Cir. 1951).
24
Little Lake, 412 U.S. at 597 (finding application of Act 315
retroactively “plainly hostile to the interests of the United States”).
10
States to seek legal redress for duly authorized proprietary
transactions ‘is a federal right.’”25 The Court explicitly noted
that Little Lake involved “the interpretation of a land acquisition
agreement (a) explicitly authorized, though not precisely governed,
by the Migratory Bird Conservation Act and (b) to which the United
States is a party.”26
The parties in this case dispute whether or not there is such
a federal right at issue. Central Pines argues that since the
servitude in this case was not created by the land acquisition
agreement, but rather by the 1929 deed between Gulf Lumber and S.H.
Fullerton, there is no federal right at issue. The Government
points out that Central Pines relies on the presence of the United
States as a party to the acquisition in order to obtain the benefits
of Act 315 but then denies that this participation by the United
States (as opposed to the United States being a party to the
creation of the mineral servitude) is relevant for the Clearfield
Trust determination.
Whether or not the United States bargained over the creation
of the servitude, the acquisition subject to the existing servitude
created a federal interest in the potential prescription of the
mineral servitude conveyed by the 1929 deed via the rule of
25
Id. at 593 (quoting Henry J. Friendly, In Praise of Erie–And of the New
Federal Common Law, 39 N.Y.U. L. Rev. 383, 410 (1964)).
26
Id. at 594.
11
prescription in place at the time of contract.27 This is evidenced
by the bargaining over this “mere expectancy,” apparently invalid,
whereby the vendor attempted to reserve it to himself rather than
let it pass to the United States upon prescription for non-use.28
Appellants misconceive the thrust of Little Lake. While the Court
stated that it was interpreting the land acquisition agreement,29
the parties did not dispute the meaning of the terms of the
agreement, but rather the application of Act 315 and its effect on
the interests of the United States. The same is true here–the
parties do not dispute the meaning of the 1929 deed, but instead
disagree over the application of Act 315.
Turning to the federal interest at stake in Little Lake, we
find fundamental similarities. Appellants insist that the federal
right at issue in Little Lake was a contractual right of the United
States. True, but a contractual right to what? The term at issue
27
This “interest” is not recognized as a vested property interest as a
matter of Louisiana law. See Nebo Oil, 190 F.2d at 1006-08 (rejecting Contract
Clause challenge to Act 315 because such rights are not vested). The Supreme
Court held that this was not relevant to the federal choice-of-law determination.
Little Lake, 412 U.S. at 602 (“It is also of no import that, under Louisiana law
as it might be articulated in 1973, the United States acquired from respondents
only the reversion to a mineral interest of indefinite duration, a ‘hope’ or
‘expectancy’ revocable at any time by after-enacted legislation.”).
28
In the 1936 and 1938 transfers, the following language was used: “This
sale is made subject to the sale of oil, gas .... Subject to the above mineral
sales and rights of any and all persons thereunder [the rights of Burton] there
are specifically reserved to the vendor [Gulf Lumber Company] for a period of
twenty-five (25) years from December 31, 1936, the right to mine ....”
Appellants claim that this attempted reversion of the possibility of prescription
of the servitude belonging to Burton was invalid. See infra note 42.
29
Little Lake, 412 U.S. at 594 (“We deal with the interpretation of a land
acquisition agreement.”).
12
in Little Lake in effect set the prescriptive period for the
reserved mineral servitude. The Government’s contract “right” was
to obtain the mineral rights after the contractual prescriptive
period had elapsed. Similarly, in this case the Government’s right
is to obtain the mineral rights after the default prescriptive
period has elapsed. This right, as in Little Lake, is
federal—though arguably weaker because it arises from a default
rule.
Appellants urge us to find that Little Lake did not overrule
our prior decision in Nebo Oil, and that Nebo Oil held that Act 315
may be retroactively applied to mineral servitudes such as these,
where the United States was not a party to the creation of the
servitude. However, Nebo Oil holds only that the “mere hope” or
“expectancy” in the prescription of mineral rights is not protected
by the Contract Clause of the U.S. Constitution,30 and that the
retroactive application of Act 315 does not violate the Due Process
Clause of the Fourteenth Amendment or dispose of United States
property in violation of Article IV, Section 3, clause 2.31 Nebo
30
U.S. Const. Art. I, § 10, cl. 1.
31
Nebo Oil, 190 F.2d at 1008. This Court has examined the
constitutionality of Act 315 numerous times, in fact. In the saga of Leiter
Minerals, Inc. v. United States, 329 F.2d 85 (5th Cir. 1964) (Leiter Minerals
II), which generated two opinions from this Court, one from the Supreme Court,
and an advisory opinion from the Louisiana Supreme Court, we held that Clearfield
Trust did not require the application of federal common law to a factually
indistinguishable dispute about the retroactive application of Act 315. Id. at
90. However, the Supreme Court vacated our opinion as moot. United States v.
Leiter Minerals, Inc., 381 U.S. 413 (1965). We reaffirmed the holding of Leiter
Minerals II in Little Lake, 453 F.2d at 362, which, of course, was subsequently
13
Oil also does not hold that the rights protected by the Contract
Clause are coextensive with those federal interests that a) require
application of federal common law under Clearfield Trust and b)
preclude the borrowing of state law as the rule of decision. The
Government does not claim that the Contract Clause prohibits Act 315
from being applied retroactively, presumably because our prior
opinion in Nebo Oil would render such an argument meritless, but
instead that Clearfield Trust and Little Lake foreclose application
of Act 315 as a matter of federal common law. Thus, we need not
decide that Nebo Oil has been implicitly overruled by Little Lake
en route to finding that Act 315 cannot be applied retroactively to
the servitudes at issue under Little Lake.
B
Having determined that a federal rule of decision should be
fashioned, we must decide whether to borrow state law. We have
stated that
[b]asic considerations of federalism, as embodied in the
Rules of Decision[s] Act, prompt us to begin with the
premise that state law should supply the federal rule
unless there is an expression of legislative intent to
the contrary, or, failing that, a showing that state law
conflicts significantly with any federal interests or
policies present in this case.32
reversed by the Supreme Court on Clearfield Trust grounds. Little Lake, 412 U.S.
at 590-91 n.8.
32
Georgia Power Co. v. Sanders, 617 F.2d 1112, 1115-16 (5th Cir. 1980)
(internal citation omitted) (citing Wallis v. Pan Am. Petroleum Corp., 384 U.S.
63, 68, 86 (1966)); see also, Atherton v. FDIC, 519 U.S. 213, 218 (1997) (“Such
14
Refusing to apply state law is appropriate when national uniformity
is required,33 as well as when state law conflicts with federal
interests.34 The application of state law may in some instances so
strongly conflict with federal interests that it can be rejected
without further analysis.35 However, if state law only arguably
interferes with federal interests, then the state’s interests in
application of its own rules must be weighed.36 This allocation of
what is “national” to the preemptive federal order and what is
“state” to that domain is the implementing process for maintaining
the symmetry of Clearfield Trust and Erie.
Again Little Lake bears most heavily on this analysis. In
Little Lake, after determining that federal common law should govern
the case, the Court decided that Louisiana law could not be borrowed
as the rule of decision. Noting that “specific aberrant or hostile
a conflict is normally a precondition” to the application of a special federal
rule. (internal quotation marks omitted)); O’Melveny & Myers v. FDIC, 512 U.S.
79, 85-86 (1994) (“Our cases uniformly require the existence of such a conflict
as a precondition for recognition of a federal rule of decision.”).
33
See Clearfield Trust, 318 U.S. at 367 (holding that uniform federal rule
should apply in action by United States on a guaranty made on a federal check);
United States v. Standard Oil Co., 332 U.S. 301, 305-06 (1947) (selecting uniform
federal rule governing recovery of United States for injury to U.S. serviceman
by third-party tortfeasor).
34
See, e.g., United States v. Kimbell Foods, Inc., 440 U.S. 715, 718
(1979) (holding that state law should be adopted as federal rule for establishing
priority between competing federal and private liens since uniform federal rule
was not necessary to protect federal interests).
35
See Georgia Power Co., 617 F.2d at 1118 (citing Little Lake, 412 U.S.
at 580).
36
Id. (citing United States v. Yazell, 382 U.S. 341, 351-53 (1966)
(holding that federal interest in collection of loan must yield to state interest
in family law represented by law of coverture)).
15
state rules do not provide appropriate standards for federal law,”
the Court held that Act 315 “[a]s applied to a consummated land
transaction under a contract which specifically defined conditions
for prolonging the vendor’s mineral reservation ... deprives [the
United States] of bargained-for contractual interests.”37
Appellants focus upon the Court’s repeated reliance on the
contractual terms at issue in Little Lake to distinguish the facts
of this case.38 The 1933 deed in this case contains no specific
mineral reservation and merely states that the United States takes
subject to the 1929 servitude. The 1936 and 1938 transfers were
subject to what Appellants allege are invalid attempts by the vendor
to reserve the interest in possible prescription of a third-party’s
mineral rights.39 Thus, none of the pre-1940 transfers contain
specific contractual terms setting the duration of the servitude.
In fact, they could not have such terms, because the United States
was not contracting with the party that held the servitude.
The Little Lake Court described the explicit contractual terms
in that case in contradistinction to terms that are “less detailed
37
Little Lake, 412 U.S. at 596-97 (citing De Sylva v. Ballentine, 351 U.S.
570, 581 (1956)).
38
Id. at 597 (referring to “specifically defined conditions,” “bargained-
for contractual interests,” and “explicit terms”); see also id. at 602 (“After-
the-fact modification of explicit contractual terms would be adverse to the
United States and contrary to the requirements of the Migratory Bird Conservation
Act.” (emphasis added)).
39
See supra note 27, infra note 42.
16
and specific.”40 The Court noted, in dicta, that without a
contractual term setting out the conditions under which the United
States would obtain the mineral rights, “it might be said that the
Government acknowledged and intended to be bound by unforeseeable
changes in state law.”41 Appellants claim that all three of the
pre-1940 transactions are “less detailed and specific” than the
terms in Little Lake. Since the United States was not contracting
with the party that held the mineral rights in these transactions,
it could not explicitly bargain or contract for the termination of
those rights.42
Nevertheless, there is a conflicting federal interest—that in
obtaining the mineral rights via the default rule of prescription
in place before Act 315. Appellants argue that there is no conflict
because there is no independent federal interest in acquiring
mineral rights by prescription—if there were, then the laws of the
remainder of the states, which allow for a separate perpetual
mineral estate would be in “conflict” with this federal interest.
40
Little Lake, 412 U.S. at 602.
41
Id. at 602-03.
42
Appellants ask us to, at a minimum, distinguish the 1933 deed from the
others because it does not contain specific language about the fate of the
mineral rights after prescription for non-use. The 1936 and 1938 transfers all
contain attempted “reversions” by which the surface land owner attempted to
reserve the mineral rights in the event of prescription. Appellants allege that
this attempt was invalid as a mater of Louisiana law. We do not need to reach
any of these questions, as we find that even the 1933 deed, in its contemplation
of the existence of mineral rights, is sufficiently detailed and specific to
satisfy Little Lake. Since we believe that the federal interest here is
comparable to the contractual interest in Little Lake, we decline to read the
Supreme Court’s dicta in Little Lake so broadly.
17
This misconceives the problem, failing to address it at the proper
level of abstraction: the application of default legal rules in
place at the time of contract. Appellants’ putative parade of
horribles about the invalidation of the property law of the states
in which perpetual mineral estates are allowed is only a parade.
The federal interest here is arguably not as powerful as the
federal right to enforce explicit contractual terms, which was
present in Little Lake, and therefore this case invites balancing
of state and federal interests to determine whether the state rule
should apply.43 An assessment, however, of the state interests in
the retroactive application of Act 315 has already been performed
by the Supreme Court in Little Lake. The main justification offered
for Act 315 is that it was meant to facilitate federal land
acquisitions by allowing vendors to retain their mineral rights
indefinitely, as they could in other states.44 The Court noted that
this justification has no bearing on retroactive application of Act
315, because an acquisition cannot be facilitated by a law not yet
in existence.45 The Court also rejected the other justifications
offered by the Louisiana Supreme Court in its advisory opinion in
43
See Little Lake, 412 U.S. at 599 (“Conceivably, our conclusion might be
influenced if Louisiana’s Act 315 of 1940, as applied retroactively, served
legitimate and important state interests the fulfillment of which Congress might
have contemplated through application of state law.”)
44
Id.
45
Id.
18
Leiter Minerals, Inc. v. California Co.46: subjecting federal
mineral interests to Louisiana mineral conservation laws and
clarification of the taxability of the mineral interests held by
private parties when the United States owned the surface land.47
We believe that any state interest in the retroactive
application of Act 315 does not outweigh the federal interest in
this case. Therefore the borrowing of state law as the federal rule
of decision is here inappropriate. We now turn to the content of
the federal rule of decision and conclude that, while we may not
borrow current Louisiana law in the form of Act 315, residual (pre-
1940) Louisiana law should provide the federal rule of decision for
pre-1940 transactions.
C
The Court in Little Lake concluded that although Act 315 could
not provide the federal rule of decision, a decision of whether or
not to choose pre-1940 Louisiana law (10-year prescriptive period)
or to fashion a new rule of federal common law was unnecessary
because the terms of the land acquisition contract controlled.48
Those express terms limited the length of the servitude.
46
132 So.2d 845 (La. 1961).
47
Little Lake, 412 U.S. at 599-601.
48
Id. at 604 (“Neither rule is the law of Louisiana yet either rule
resolves this dispute in the Government’s favor. The contract itself is
unequivocal....”).
19
In this case there are no express terms governing the
prescription or termination of the 1929 servitude in the 1933, 1936,
or 1938 transfers. As a result, this Court must decide whether to
apply residual (pre-Act 315) Louisiana law or to fashion a different
rule of federal common law. The nature of the federal interest we
have identified requires the selection of residual Louisiana law.
Just as the express terms of the contract determined the outcome of
Little Lake, so should the pre-1940 default rule of prescription
provided by Louisiana law determine the outcome of this case. Thus,
a 10-year prescriptive period is the appropriate federal rule of
decision.
D
The Government cross-appeals the district court’s determination
that Act 315 can be applied prospectively to post-1940 transfers.
The Government’s position is that we should not borrow Act 315 as
the federal rule of decision for the post-1940 transfers under our
Clearfield Trust analysis. Both parties appear to accept that if
the choice-of-law decision for pre-1940 application of Act 315 is
federal, so is the choice-of-law decision for post-1940 transfers.
An interest in the application of the pre-Act 315 legal rule
cannot be in conflict with the prospective application of Act 315.
After its adoption, Act 315 provides the background rule that the
United States bargained under. Without “significant conflict”
20
between the application of state law and the federal interest
asserted, state law should be borrowed as the rule of decision.49
The only other federal interest on which the Government could
rely—the interest in adding funds to the Treasury—has been
recognized by the Court to be insufficient.50 As a result, unless
Act 315 is constitutionally infirm, it renders the servitudes on the
Group C lands, which were created after 1940, imprescriptible.
III
The Government argues that Act 315 unconstitutionally
discriminates against the United States and therefore cannot be
applied retroactively or prospectively. The district court held
that the doctrine of intergovernmental immunity posed no bar to the
application of Act 315. While we are sympathetic to the
Government’s argument, we are foreclosed from considering the
constitutionality of Act 315 as discriminatory against the United
States by our prior decision in United States v. Little Lake Misere
Land Co.51 This decision was reversed by the Supreme Court in
49
See O’Melveny & Myers 512 U.S. at 85-86 (“Our cases uniformly require
the existence of such a conflict as a precondition for recognition of a federal
rule of decision.”).
50
United States v. Burnison, 339 U.S. 87, 91-92 (1950).
51
453 F.2d 360 (5th Cir. 1971) (“As to the contention that Lousiana’s Act
315 is hostile to the United States, we note the same principle applies to
acquisitions by the State of Louisiana ... and that the act really does nothing
more than place citizens of Louisiana in the same position as citizens of other
states whose land has been purchased or condemned by the United States. We hold,
therefore, that Act 315 is not unconstitutional.”).
21
Little Lake, but the Court did not address our holding that Act 315
was not invalid as discriminatory against the United States.52
It is well-established in this circuit that one panel of this
Court may not overrule another.53 While easily confused with
traditional stare decisis, “our rule that one panel cannot overturn
another serves a somewhat different purpose of institutional
orderliness.”54 This Court stated in United States v. Kirk55 that
“[i]t is the practice of this Circuit for three-judge panels to
abide by a prior Fifth Circuit decision until the decision is
overruled, expressly or implicitly, by either the United States
Supreme Court or by the Fifth Circuit sitting en banc.”56 Kirk
itself demonstrates that our panel opinion in Little Lake binds us
on the issue of Act 315's alleged discrimination against the United
States, despite its reversal by the Supreme Court.57 In Kirk, the
52
Cf. Little Lake, 412 U.S. at 606-08 (Rehnquist, J., concurring) (arguing
that Act 315 does impermissibly discriminate against the United States).
53
Barrientes v. Johnson, 221 F.3d 741, 780 n.30 (5th Cir. 2000).
54
Montesano v. Seafirst Commercial Corp., 818 F.2d 423, 425-26 (5th Cir.
1987).
55
528 F.2d 1057 (5th Cir. 1976).
56
Id. at 1063. See also Causeway Med. Suite v. Ieyoub, 109 F.3d 1096,
1103 (5th Cir. 1997) (“Accordingly, for a panel of this court to overrule a prior
decision, we have required a Supreme Court decision that has been fully heard by
the Court and establishes a rule of law inconsistent with our own.”).
57
In order to hold differently on the issue of Act 315's alleged
discrimination against the United States, we would have to overrule Kirk, which
we cannot do, of course.
This case illustrates the important difference between our treatment of a
panel opinion after vacatur by the Supreme Court and our treatment when a
judgment is reversed on other grounds. While our prior opinion in Leiter
22
defendant argued that a jury instruction, which had previously been
approved by this Court in United States v. Rogers,58 was improper.
The decision in Rogers, however, had been reversed by the Supreme
Court on other grounds.59 Nevertheless, this Court in Kirk held
that the decision of the Rogers panel was still binding, because the
Supreme Court had not explicitly or implicitly overruled our panel
opinion.60
IV
Having concluded that Act 315 cannot be applied retroactively
to the transfers of the Group A and B lands, we must decide whether
or not the servitudes affecting those lands have prescribed under
the residual rule of Louisiana law that allows prescription after
10 years of non-use. Appellants argue that various acts of the
Minerals II did not bind the Little Lake panel because it was vacated, the
opinion in Little Lake binds us because only the judgment was reversed on other
grounds. Little Lake, 453 F.2d at 362 (reaffirming principles of Leiter Minerals
II in face of Government’s argument that it had no precedential value); Ridley
v. McCall, 496 F.2d 213, 214 (5th Cir. 1974) (stating that vacated opinions have
no precedential value); Durning v. Citibank, N.A., 950 F.2d 1419, 1424 n.2 (9th
Cir. 1991) (“A decision may be reversed on other grounds, but a decision that has
been vacated has no precedential authority whatsoever.”).
58
488 F.2d 512 (5th Cir. 1974), rev’d on other grounds, 422 U.S. 35, 41
(1975). The Supreme Court held that an improper communication between judge and
jury had occurred, necessitating reversal. 422 U.S. at 40-41.
59
Rogers, 422 U.S. at 36.
60
Kirk, 528 F.2d at 1063. The fact that then Justice Rehnquist agreed
that Act 315 discriminated against the United States does not change our
determination that our opinion in Little Lake is still binding. Two justices in
Rogers concurred and reached the merits of the question, arguing that our
decision should be overruled. Rogers, 422 U.S. at 43-48 (Marshall, J.,
concurring).
23
United States operated to legally suspend prescription, such that
the 10-year period has not run. We are persuaded that no obstacle
existed after the moratorium ended in 1978 and that in any event an
obstacle must cover the entirety of the land subject to the
servitude before it can suspend prescription as a matter of
Louisiana law. We therefore affirm the district court’s holding
that the servitudes on the Group A and B lands have prescribed for
non-use.
A
Appellants first claim that the doctrine of contra non valentum
agere nulla cirrut praescriptio61 should apply to suspend
prescription when the owner of the servient estate “impedes” or
“hinders” the servitude owner’s access to the servitude. The
Government argues that the controlling provisions of the Mineral
Code (formerly of the Civil Code) govern the suspension of
prescription by obstacle.
Under Louisiana law, an obstacle will suspend prescription if
the servitude owner is “prevented from using [the servitude] by an
obstacle that he can neither prevent or remove.”62 This is nearly
identical to the corresponding provision of the Civil Code that
61
“Prescription does not run against one unable to act.” See Cartwright
v. Chrysler Corp., 232 So. 2d 285, 287 (La. 1970).
62
La. Rev. Stat. § 31:59.
24
governed until the adoption of the Mineral Code in 1975.63 The
district court held, and we agree, that since a) the Mineral Code
of 1975 generally applies retroactively and b) the two provisions
are identical, the Mineral Code should be applied as the law of
prescription in this case.64
The Louisiana Supreme Court has stated that statutory
prescription is an “example” of the doctrine of contra non
valentum.65 Nevertheless, Appellants urge that the general
Louisiana law of contra non valentum be applied as an addition to
the statutory and case law on prescription of mineral servitudes.
This extension of contra non valentum is not supported by the case
law cited by the Appellants. In Plaguemines Parish Commission
Council v. Delta Development Co.,66 Plaquemines Parish sued to
regain title to mineral interests, arguing that they had been
wrongfully expropriated by corrupt public officials. The defendants
argued that those interests had prescribed under the 10-year period
applicable to claims of breach of fiduciary duty. The court invoked
contra non valentem because the defendants’ concealment prevented
63
See La. Civ. Code. art 792 (1870) (“If the owner of the estate to whom
the servitude is due, is prevented from using it by any obstacle which he can
neither prevent nor remove, the prescription of non-usage does not run against
him as long as this obstacle remains.”).
64
See La. Rev. State. § 31:214 (stating that Mineral Code is to be applied
retroactively unless it would “divest already vested rights, or [] impair the
obligation of contracts”).
65
McDonald v. Richard, 203 La. 155, 165 (La. 1943).
66
502 So.2d 1034 (La. 1987).
25
67
the plaintiffs from discovering their claim. Similarly, in Nathan
v. Carter68 the defendants’ fraud and misrepresentation prevented
plaintiff from discovering a cause of action for wrongful death.
The Louisiana Supreme Court applied contra non valentem on these
facts.69 The Appellants present no evidence of fraud, concealment,
or bad faith on the part of the Government. Delta Development and
Nathan are therefore inapposite.
B
A look at even an abbreviated chronological account of the use
of the servitude persuades us that it has prescribed. The last
active drilling on the servitude land was in 1964 and was performed
by Pan American as a lessee of the servitude. The 10-year period
of non-use required for prescription of a mineral servitude can be
interrupted when the holder of the mineral servitude, in good faith,
engages in operations on the land.70 These operations, however,
must be more than mere “[p]reparations for the commencement of
actual drilling or mining operations, such as geological or
geophysical exploration, surveying, clearing of a site, and the
hauling and erection of materials and structures necessary to
67
Id. at 1060-61.
68
372 So.2d 560 (La. 1979).
69
Id. at 562-63.
70
Mire v. Hawkins, 186 So. 2d 591, 595-96 (La. 1966); see also La. Rev.
Stat. Ann. § 31:29(1). Interruption differs from suspension. See infra note 74.
26
conduct operations .... ”71 It is undisputed that the Appellants
did not interrupt the prescriptive period by drilling at any time
after 1964.
An obstacle to the use of a servitude will suspend
prescription.72 Since Appellants present no evidence of use of the
servitude since 1964 the only way they can prevail is by
demonstrating that an obstacle created by the Government denied them
access to the servitude lands for a total length of time of
approximately 22 years from March 20, 1964, when Pan American
plugged its well,73 to the filing of this lawsuit in 1996.74
The moratorium on entry to the lands comprising the Fort Polk
artillery range (most of the Group B lands and 40-50% of the Group
A lands) ended on March 31, 1978. In the time since, neither
Appellants nor their predecessor, Burton, engaged in any drilling,
so they must show that there was some other obstacle that suspended
the prescriptive period. Appellants claim that after the moratorium
71
La. Rev. Stat. § 31:30.
72
La. Rev. Stat. § 31:59.
73
A lessee’s use of the servitude suffices to interrupt prescription as
against the servitude owner. Taylor v. Dunn, 97 So. 2d 415, 419 (La. 1957).
74
An obstacle causes the prescriptive period to be suspended, whereas use
of the servitude causes the prescriptive period to be interrupted. The
difference is as follows: suspension merely “stops the clock,” which begins to
run again when the obstacle is removed. Interruption, by contrast, “resets the
clock” so that when operations cease, a full 10 years must elapse until
prescription. See Louviere v. Shell Oil Co., 440 So.2d 93, 97 n.8 (La. 1983);
La. Civ. Code arts. 3466, 3472. This distinction is not very important to this
case, because use (which would constitute an interruption) has not occurred since
1964. Appellants need only to show that obstacles to their (and Burton’s) use
of the servitude existed over an approximately 22 years in aggregate.
27
was lifted the U.S. Army instituted a de facto moratorium that
prevented them from making use of the servitude, but do not offer
sufficient evidence to survive summary judgment on this issue.75
Burton had notice of the end of the moratorium,76 and the Army
allowed others to enter the lands for the purpose of performing
geological surveys, including Shell Oil, which did so on the basis
of a permit granted by Burton.
There is also no evidence that Burton or Appellants drilled or
even attempted to enter the servitude lands after the moratorium
ended. Nor did they request permission to do so from the Army.
Shell Oil shot seismic lines on the servitude lands under a permit
from Burton after the moratorium had ended. The record provides us
with no evidence that, after the moratorium ended, the United States
created an obstacle to use of the servitude lands. Thus, we have
no difficulty concluding that Appellants failed to create a genuine
issue of material fact on the question of obstacle. As a result,
we find that the mineral servitude terminated by prescription at
some time before 1996.
C
75
Appellants’ main evidence on this point is the impression of one John
Camp, an agent of Burton’s, that, despite explicit statements to the contrary
about whether drilling would be allowed, the Army conveyed the message that
“there ain’t going to be no drilling on this reservation.”
76
The moratorium payments that had been made by the Army to Burton ended
as of March 31, 1978. This provided notice to Burton that use of the servitude
would now be allowed.
28
Even assuming that a de facto moratorium prevented the
Appellants from accessing the servitude after 1978, Appellants must
still explain why a partial obstacle is sufficient to suspend
prescription. The moratoriums (both real and alleged) indisputably
did not cover all of the Group A and B lands, but rather most of the
Group B lands and 40-50% of the Group A lands. All that remains is
to determine Louisiana law on partial obstacles and the suspension
of prescription.
In Hanszen v. Cocke,77 the Louisiana Court of Appeals held that
litigation over one portion of land subject to a mineral servitude
did not suspend prescription of the servitude because other portions
of it were still available for exploitation.78 The litigation in
that case is analogous to the alleged de facto moratorium in this
case: each forecloses operations on only a portion of the land
burdened by the servitude. Appellant replies that Hanszen was
incorrectly decided and we may refuse to follow an intermediate
state appellate court when its decision does not represent the
likely result in the state’s highest court.79
This argument relies on a questionable reading of the Louisiana
Supreme Court’s decision in Boddie v. Drewett,80 a case overruled
77
246 So. 2d 200 (La. App. 1st Cir. 1971)
78
Id. at 206.
79
Hulin v. Fibreboard Corp., 178 F.3d 316, 328 (5th Cir. 1999).
80
87 So. 2d 516 (La. 1956).
29
ten years later in Mire v. Hawkins.81 In Boddie the court held that
a drilling order of the Department of Conservation prohibiting
drilling on the entirety of a 12 acre tract of land subject to a
mineral servitude constituted an obstacle that suspended
prescription. The court refused to hold that the drilling of a dry
hole in good faith outside the tract burdened by the servitude but
inside the drilling unit constituted use that would interrupt the
prescriptive period.82 However, this was precisely the theory the
court elected to adopt in Mire, overruling Boddie and declaring that
the Department of Conservation’s drilling orders could not be
obstacles that would suspend the prescriptive period.83 However,
operations anywhere within the drilling unit would be a use of the
servitude (thus interrupting prescription) even if these operations
were not on the tract subject to the servitude.84 Nothing in Boddie
or Mire explicitly addresses whether or not a partial obstacle is
sufficient to suspend prescription.
Appellants, however, argue that one of the holdings of Boddie
is that a partial obstruction is sufficient to suspend prescription.
This can be deduced, they believe, from the fact that the drilling
order in Boddie only affected certain “sands” (geological formations
81
186 So. 2d 591 (La. 1966).
82
Boddie, 87 So. 2d at 518.
83
Mire, 186 So. 2d at 289.
84
Id.
30
at particular depths) rather than all sands.85 Since the Mire Court
reversed on other grounds (that Department of Conservation orders
cannot be obstacles), Appellants argue that this holding of Boddie
remains good law.
We disagree. The Department of Conservation’s order in Boddie
covered the only useful “sand” under the tract in question, meaning
it was not a partial obstacle in any real sense. Moreover, this
partial obstacle argument is not addressed by the Louisiana Supreme
Court in Boddie, and we will not question Hanszen’s interpretation
of Louisiana law on this basis. Thus, following Hanszen, no
obstacle sufficient to suspend prescription has ever existed over
the Group A and B lands.
We AFFIRM.
85
Boddie, 87 So. 2d at 519.
31