Case Title: RIEDEL v. ANDERSON

Citation: 

Docket Number: 02-60

State: wyoming

Court: Wyoming Supreme Court

Date: 2003-06-04T00:00:00Z

Document:
RIEDEL v. ANDERSON2003 WY 7070 P.3d 223Case Number: 02-60, 02-61Decided: 06/04/2003
APRIL TERM, A.D. 2003

 

                                                                                                            

 

WILLIAM 
H. RIEDEL,

 

Appellant(Plaintiff),

 

v.

 

CRAIG 
C. ANDERSON and GAIL M.

ANDERSON; 
OFFICE OF STATE LANDS AND

INVESTMENTS 
(formerly State Land and

Farm 
Loan Office); STEPHEN REYNOLDS

in 
his official capacity as director of the

Office 
of State Lands and Investments; BOARD

OF 
LAND COMMISSIONERS; and GOVERNOR

DAVID 
FREUDENTHAL, SECRETARY OF STATE

JOE 
MEYER, AUDITOR MAX MAXFIELD,

TREASURER 
CYNTHIA LUMMIS and

SUPERINTENDENT 
OF PUBLIC

INSTRUCTION 
TRENT BLANKENSHIP, in their

official 
capacities as members of the Board of

Land 
Commissioners,

                                                                                                

Appellees(Defendants),

 

and

 

WYOMING 
STOCK GROWERS

ASSOCIATION; 
WYOMING WOOL

GROWERS 
ASSOCIATION; and WYOMING

FARM 
BUREAU FEDERATION,

 

Appellees(Intervenor 
Defendants).

 

 

WYOMING 
STOCK GROWERS

ASSOCIATION, 
and WYOMING WOOL

GROWERS 
ASSOCIATION,

 

Appellants(Intervenor 
Defendants),

                                                                                                

v.

                                                                                                

WILLIAM 
H. RIEDEL,

 

Appellee(Plaintiff),

 

and

 

OFFICE 
OF STATE LANDS AND

INVESTMENTS 
(formerly State Land and

Farm 
Loan Office); STEPHEN REYNOLDS

in 
his official capacity as director of the

Office 
of State Lands and Investments; BOARD

OF 
LAND COMMISSIONERS; and GOVERNOR

DAVID 
FREUDENTHAL, SECRETARY OF STATE

JOE 
MEYER, AUDITOR MAX MAXFIELD,

TREASURER 
CYNTHIA LUMMIS and

SUPERINTENDENT 
OF PUBLIC

INSTRUCTION 
TRENT BLANKENSHIP, in their

official 
capacities as members of the Board of

Land 
Commissioners,

                                                                                                

Appellees(Defendants).

 

 

Appeal 
from the District Court of Laramie County

 

Representing 
William H. Riedel:

            
Steven F. Freudenthal of Freudenthal, Salzburg & Bonds, P.C., 
Cheyenne, Wyoming

 

Representing 
State of Wyoming:

Hoke 
MacMillan, Attorney General; Michael L. Hubbard, Deputy Attorney General; Nancy 
E. Vehr, Assistant Attorney General; John B. Speight and Amanda Hunkins of 
Speight, McCue & Associates, P.C., Cheyenne, Wyoming.  Argument by Ms. 
Vehr.

 

Representing 
Wyoming Farm Bureau Federation:

Karen 
Budd-Falen and Brandon L. Jensen of Budd-Falen Law Offices, P.C., Cheyenne, 
Wyoming.  Argument by Mr. 
Jensen.

 

Representing 
Wyoming Stock Growers Association and Wyoming Wool Growers 
Association:

Daniel 
B. Frank of Frank Law Office, Cheyenne, Wyoming; Kermit C. Brown of Brown & 
Hiser, LLC, Laramie, Wyoming.  
Argument by Mr. Brown.

 

Before 
HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

GOLDEN, 
Justice.

 

[¶1]           
In 
this appeal the Court is asked to decide the constitutionality of Wyo. Stat. 
Ann. § 36-5-105(a) and (e), governing the preferential leasing of school lands, 
and whether the state's school lands are encumbered by a trust and, if so, the 
nature of that trust.  Before we 
examine these weighty issues, however, we must first address an issue of 
standing.

 

[¶2]           
As 
explained below, we hold that William H. Riedel has standing to challenge the 
constitutionality of the statute in question; that the school lands are subject 
to neither a federal trust nor a state constitutional trust, but rather to a 
legislatively-created statutory trust; and that William H. Riedel has failed to 
prove that the preferential-right-to-renew statute violates any constitutional 
or fiduciary restraints on the State's management of the school 
lands.

 

 

ISSUES

 

[¶3]           
The 
parties have filed a total of eight briefs in this matter, in their appellant 
and appellee capacities, containing approximately twenty-four different 
formulations of the issues on appeal.  
Consolidating those various formulations, the appeals raise the following 
issues for this Court's determination:

 

1. 
Whether Riedel has standing to challenge the constitutionality of Wyo. Stat. 
Ann. § 36-5-105(a) and (e) governing the leasing of school 
lands.

 

2.  Whether the Wyoming Act of Admission, 26 
Stat. 222, Ch. 664 (July 10, 1890), the Wyoming Constitution, or Wyoming 
statutes establish a trust with respect to the lands which the United States 
gave to Wyoming for the support of the common schools.

 

3.  If the state school lands are in fact 
held in trust, whether the statutory right of a previous lessee to renew a lease 
of state school lands violates the State's management duties with respect to 
those lands.

 

 

 

[¶4]           
Craig 
C. and Gail M. Anderson held an agricultural lease to approximately 640 acres of 
state-owned land in Laramie County.  
The leased land is 
Section 36 of Township 16 North, Range 63 West of the 6th P.M., and as such is part of the land granted to 
the State by Congress "for the support of the common schools" upon Wyoming's 
admission to the Union in 1890.  Wyoming Act of Admission, 26 Stat. 664, §§ 4, 
5 (Reprinted in Wyo. Stat. Ann. Vol. 1).

 

[¶5]           
The term of Andersons' lease was to expire at the end of 
December 1997.  
As authorized by statute, they submitted a renewal lease application to 
the Office of State Lands and Investments, the statutory administrator of the 
land, proposing an annual lease rate of $4,586.40.  There were two 
competing lease offers for the same parcel; one proposed a lower rate than the 
Andersons but William H. Riedel, the Andersons' neighbor, proposed to pay an 
annual rate of $6,000 for the same section.

 

[¶6]           
Wyo. Stat. Ann. § 36-5-105 provides that the holder of an 
expiring lease shall have a preferential right to renew that lease if the holder 
meets any competing bid for the subject parcel.  Andersons met the Riedel bid of $6,000 per 
year and, on January 16, 1998, the interim director of the Office of State Lands 
and Investments awarded the lease to the Andersons for a ten-year term at $6,000 
per year.

 

[¶7]           
Riedel filed an administrative appeal of the interim 
director's award to the Andersons.  The Board of Land Commissioners conducted a 
hearing and upheld the interim director's decision by letter dated May 6, 
1998.  Riedel 
then brought a petition for judicial review of the Board's decision in the 
district court, challenging the constitutionality of the preference 
statute.  On 
certification to this Court, the petition was dismissed on the grounds that the 
Court lacked jurisdiction to review the constitutionality of a statute upon 
petition for judicial review of an administrative action.  In re Conflicting Lease 
Application for Lease No. 1-7027, 972 P.2d 586 (Wyo. 
1999).

 

[¶8]           
Riedel then instituted a declaratory judgment case in June 
1999 against the Board of Land Commissioners and its members, challenging the 
constitutionality of Wyo. Stat. Ann. §§ 36-5-101 and 36-5-105, the preferential 
right-to-renew statute.  On July 10, 2000, the district court granted a 
motion to intervene filed jointly by the Wyoming Stock Growers Association and 
the Wyoming Wool Growers Association ("the Associations") and a separate motion 
to intervene filed by the Wyoming Farm Bureau Federation ("the Federation").

 

[¶9]           
Before trial, the district court asked the parties to brief 
the legal issue of whether the conveyance of the school lands to the State of 
Wyoming by the United States imposed a trust on those lands.  After briefing, the 
district court on October 29, 2001, issued an order concluding that the lands 
were indeed encumbered by a trust, imposing on the State a fiduciary duty to 
manage the lands exclusively for the beneficiaries, the State's common 
schools.

 

[¶10]      Following the district court's trust ruling, the matter was 
tried to the court in November 2001 on the issue of whether the right-to-renew 
statute conflicts with the State's trust duties and is therefore 
unconstitutional.  
Riedel's case consisted of testimony by himself; Jim Whalen, Assistant 
Director of the Department of State Lands and Investments; and Dr. Mark 
Sunderman, a professor at the University of Wyoming and author of several 
publications on the state school lands.  After plaintiff rested, the district court 
granted the intervenor Associations' motion to dismiss on the grounds that 
Riedel failed to present adequate evidence that the preferential right to renew 
violates the State's fiduciary responsibilities.  Riedel timely appealed the dismissal of his 
complaint (Case No. 02-60), and the Associations cross-appealed the trial 
court's order that the school lands are held in trust (Case No. 02-61).  For purposes of this 
consolidated appeal, Riedel was designated the appellant, while the 
Associations, the Federation and the State were designated appellees.

 

 

Historical Background

 

[¶11]      Beginning with the admission of Ohio to the United States in 
1803, Congress granted to almost all newly admitted states1 sections of 
public land for the support of schools.  See, e.g., Ohio Enabling Act, 2 Stat. 173, 175 (1802); Wade R. 
Budge, Changing the Focus: Managing State Trust Lands in the 
Twenty-First Century, 19 J. Land, Resources, & Envtl. L. 223, 226 
(1999). The 
specific language of the grants varied somewhat among the early states' enabling 
laws, but generally was "for the use of schools" with no mention of trusts, 
fiduciary obligations, or restrictions on the sale, lease or other use of the 
lands.  See, Sally K. Fairfax, et al., The 
School Trust 
Lands: A Fresh Look at Conventional Wisdom, 22 Envtl. L. 797, 810 
(1992).   
Substantially the same pattern was used for land grants in the admission 
of Louisiana, Indiana, Mississippi, Illinois, Alabama, Missouri and 
Arkansas.  See, Budge, supra, at 226.  Courts have consistently ruled that Congress 
had not encumbered these early land grants with a common law trust, but had 
merely entered into a "solemn agreement" with the states that the land would be 
used as intended.  
See, e.g., 
Branson Sch. Dist. Re-82 v. Romer, 161 F.3d 619, 633 (10th Cir. 1998) (citing  Alabama v. Schmidt, 
232 U.S. 168, 173-74, 34 S. Ct. 301, 58 L. Ed. 555 (1914), and Cooper v. Roberts, 59 U.S. (18 How.) 173, 181-82, 15 L. Ed. 338 (1855)).  

 

[¶12]      However, beginning with Michigan in 1837, a pattern evolved 
by which the states through their own constitutions imposed restrictions on the 
use of the land or its sale proceeds.  For example, the Michigan Constitution 
included a provision requiring that the proceeds from the sale of school lands 
be put into a permanent fund, a pattern that almost all subsequently-admitted 
states followed in accepting the terms of their enabling acts.  Budge, supra, at 227.  

 

[¶13]      With the admission of Colorado in 1876, Congress began to 
include in the states' enabling acts some of the same restrictions on the use of 
the school lands that prior states had constitutionally imposed upon 
themselves.  The 
Colorado Enabling Act, Ch. 139, § 14, 18 Stat. 474, 476 (1875), provided "[t]hat 
the two sections of land in each township herein granted for the support of 
common schools shall be disposed of only at public sale and at a price not less 
than two dollars and fifty cents per acre, the proceeds to constitute a 
permanent school-fund, the interest of which to be expended in the support of 
the common schools."  
See also Branson Sch. Dist., 161 F.3d  at 
634.

 

[¶14]      The Wyoming Act of Admission granted sections 16 and 36 of 
every township to the state "for support of common schools" and further 
provided:

 

All lands herein granted for educational purposes shall be 
disposed of only at public sale, the proceeds to constitute a permanent school 
fund, the interest of which only shall be expended in the support of said 
schools.  But 
said lands may, under such regulations as the legislature shall prescribe, be 
leased for mineral, grazing, agricultural, or other purposes, provided that the 
term of agricultural and grazing leases shall not exceed 10 years;[2] and such land shall not be subject to 
preemption, homestead entry, or any other entry under the land laws of the 
United States, whether surveyed or unsurveyed, but shall be reserved for school 
purposes only.

 

26 Stat. 222, Ch. 664, § 5.  These provisions are nearly identical to those 
of the Colorado Enabling Act, except that the Wyoming Act of Admission states no 
minimum purchase price for the school lands.

 

[¶15]      The most restrictive of the state enabling acts was the 
Arizona-New Mexico Enabling Act at the end of the accession period in 1912.  That act stated 
expressly that the lands granted to the state are held "in trust"; provided that 
the products and proceeds of the lands "shall be subject to the same trusts as 
the lands"; prescribed the manner of advertising, selling and leasing the lands; 
directed the method of maintaining and investing the permanent fund; voided any 
transaction not in conformity with the enabling act; and directed the Attorney 
General of the United States to enforce all provisions related to the trust 
lands.  
Arizona-New Mexico Enabling Act, 36 Stat. 557, 561-568 (June 20, 
1910).  In Ervien v. United States, 
251 U.S. 41, 40 S. Ct. 75, 
64 L. Ed. 128 (1919), and Lassen v. Arizona Highway Department, 385 U.S. 458, 87 S. Ct. 584, 17 L. Ed. 2d 515 (1967), the Supreme Court ruled that the Congress had the 
power to and did in fact convey the school lands in those states subject to an 
express trust, such that trust funds could not be used to advertise the states 
resources nor could the state obtain highway easements over trust lands without 
compensating the trust.

 

[¶16]      It is clear that Wyoming's admission, both chronologically 
and conceptually, falls somewhere between Congress' laissez faire 
approach to the states admitted in the early nineteenth century and the closely 
regulated express trust conveyances to New Mexico and Arizona in 1912.  The Wyoming 
Constitution, adopted before the passage of the Act of Admission, addresses the 
federally granted lands in several of its provisions:

 

Art. 7, § 2.  School revenues:

 

The following are declared to be perpetual funds for school 
purposes, of which the annual income only can be appropriated, to-wit: . . . all 
moneys arising from the sale or lease of sections number sixteen and thirty-six 
in each township in the state, and the land selected or that may be selected in 
lieu thereof; . . . 

 

Art. 7, § 6.  State to keep school funds; investment:

 

All funds belonging to the state for public school purposes, 
the interest and income of which only are to be used, shall be deemed trust 
funds in the care of the state, which shall keep them for the exclusive benefit 
of the public schools, and shall make good any losses that may in any manner 
occur, so that the same shall remain forever inviolate and undiminished. . . . 

 

Art. 7, § 7.  Application of school funds:

 

The income arising from the funds mentioned in the preceding 
section, together with all the rents of the unsold school lands and such other 
means as the legislature may provide, shall be exclusively applied to the 
support of free schools in every county in the state.

 

Art. 18, § 1. Acceptance of lands from United States; sale 
of such lands:

 

The State of Wyoming hereby agrees to accept the grants of 
lands heretofore made, or that may hereafter be made by the United States to the 
state, for educational purposes . . . with the conditions and limitations that 
may be imposed by the act or acts of congress, making such grants or 
donations.  Such 
lands shall be disposed of only at public auction to the highest responsible 
bidder, after having been duly appraised by the land commissioners, at not less 
than three-fourths the appraised value thereof, and for not less than $10 per 
acre; . . .

 

Art. 18, § 2. Application of proceeds of sale or rental:

 

The proceeds from the sale and rental of all lands and other 
property donated, granted or received, or that may hereafter be donated, granted 
or received, from the United States or any other source, shall be inviolably 
appropriated and applied to the specific purposes specified in the original 
grant or gifts.

 

Art. 18, § 3. Board of land commissioners:

 

The governor, secretary of state, state treasurer, state 
auditor and superintendent of public instruction shall constitute a board of 
land commissioners, which under direction of the legislature as limited by this 
constitution, shall have direction, control, leasing and disposal of lands of 
the state granted, or which may be hereafter granted for the support and benefit 
of public schools, subject to the further limitations that the sale of all lands 
shall be at public auction, after such delay (not less than the time fixed by 
congress) in portions at proper intervals of time, and at such minimum prices 
(not less than the minimum fixed by congress) as to realize the largest possible 
proceeds. . . .

 

1891 Wyo. Sess. Laws.

 

[¶17]      After the admission of Colorado in 1876, the next states 
admitted were North Dakota, South Dakota, Montana and Washington in 1889.  The delegates to 
Wyoming's constitutional convention in September 1889 borrowed substantial 
sections of Wyoming's Constitution from these other states, completing the draft 
in less than one month.  Robert B. Keiter & Tim Newcomb, The Wyoming State 
Constitution: A Reference Guide 1, 4 (1993).  The Colorado Constitution at Art. IX, § 10 
(1876), the Washington Constitution at Art. XVI, § 1 (1889), the Idaho 
Constitution at Art. IX, § 8 (1889), and the South Dakota Constitution at Art. 
VIII, § 7 (1889) each expressly provided that the states' school lands were 
"held in trust."  
After Wyoming's admission, the Oklahoma Constitution at Art. XI, § 1 
(1907) likewise declared that the lands and proceeds were "a sacred trust."  Wyoming's 
Constitution is significant by contrast in not following these contemporary 
examples but following other states that declare a trust in the sale proceeds 
but not in the lands themselves.  See, e.g., Mich. Const. Art. X, § 2 (1836).

 

 

DISCUSSION

 

I.  
Plaintiff's Standing

 

[¶18]      The State and the Wyoming Farm Bureau Federation assert that 
Riedel does not have standing to assert the unconstitutionality of the state's 
preferential right of renewal statute. We stated recently that "[s]tanding is a 
legal concept designed to determine whether a party is sufficiently affected to 
insure that the court is presented with a justiciable controversy."  Jolley v. State Loan and 
Inv. Bd., 2002 WY 7, ¶6, 38 P.3d 1073, ¶6 (Wyo. 2002).

 

"The doctrine of standing is a jurisprudential rule of 
jurisdictional magnitude.  At its most elementary level, the standing 
doctrine holds that a decision-making body should refrain from considering 
issues in which the litigants have little or no interest in vigorously 
advocating.  
Accordingly, the doctrine of standing focuses upon whether a litigant is 
properly situated to assert an issue for judicial or quasi-judicial 
determination.  
A litigant is said to have standing when he has a personal stake in the 
outcome of the controversy.'  This personal stake requirement has been 
described in Wyoming as a tangible interest' at stake.  The tangible 
interest requirement guarantees that a litigant is sufficiently interested in a 
case to present a justiciable controversy."

 

Id. (quoting Roe v. Board of County Commissioners, Campbell County, 
997 P.2d 1021, 1022-23 
(Wyo. 2000)).  
Jolley 
involved a newspaper publisher's petition for review under the Wyoming 
Administrative Procedure Act to challenge the sufficiency of public meetings 
conducted by the State Loan and Investment Board.  We concluded that the effect of the Board's 
decision on petitioner, whose interest in the meetings was as a reporter and 
citizen, was speculative and did not render him "an aggrieved or adversely 
affected person" under the Administrative Procedure Act and that he therefore 
had no standing to appeal the Board's scheduling decision.  Id. at ¶8.

 

[¶19]      We generally do not relax the standing requirement in the 
context of an action under the Uniform Declaratory Judgments Act, but 
require:

 

1.  
The parties must have existing and genuine, as distinguished from 
theoretical, rights or interests.

 

2.  
The controversy must be one upon which the judgment of the court may 
effectively operate, as distinguished from a debate or argument evoking a purely 
political, administrative, philosophical or academic conclusion.

 

3.  
It must be a controversy the judicial determination of which will have 
the force and effect of a final judgment in law or decree in equity upon the 
rights, status or other legal relationships of one or more of the real parties 
in interest, or wanting these qualities to be of such great and overriding 
public moment as to constitute the legal equivalent of all of them.

 

4.  
The proceedings must be genuinely adversary in character and not a mere 
disputation, but advanced with sufficient militancy to engender a thorough 
research and analysis of the major issues.

State v. Pacificorp, 872 P.2d 1163, 1168 (Wyo. 1994).

 

[¶20]      The gravamen of Riedel's constitutional challenge is that 
the preferential renewal scheme discourages competitive bidding for school 
lands, limits the funds available to the permanent school fund, and therefore 
violates the State's fiduciary obligation to maximize revenues from the school 
lands for its beneficiaries.  The State and Federation correctly point out 
that under the statute the incumbent lessee must meet the highest competing bid 
in order to exercise the renewal preference.  They further argue that any alleged diminution 
in revenue would constitute injury to the State's common schools and its 
students, not to Riedel personally, so that there is no causal connection 
between the alleged unconstitutionality and any injury to Riedel.  See Branson Sch. 
Dist., 161 F.3d  at 630-31.

 

[¶21]      However, although Riedel may not have clearly articulated a 
concrete and personal injury, it is implicit in the relief he seeks, namely, 
that the Board be enjoined from enforcing the preferential renewal statute and 
that they be ordered to award the lease to him.  The statute has clearly worked to deprive 
Riedel of a lease to the subject school lands, an injury much more direct and 
personal to him than that at stake in Jolley.

 

[¶22]      Moreover, we have recognized a relaxed standing requirement 
in matters of great public interest or importance.  We reviewed in 
detail the development of that doctrine in Jolley, ¶9.  As recited there, we 
have applied the great public interest doctrine when a constitutional question 
is presented or where there is an issue concerning apportionment of state 
revenues among governmental entities.  We have invoked the doctrine in cases 
involving the constitutionality of school financing, Washakie Cty. Sch. Dist. 
No. One v. Herschler, 606 P.2d 310, 317 (Wyo. 1980); the tax exempt status of a public hospital, Memorial Hosp. of 
Laramie Cty. v. Dep't of Revenue and Taxation, 770 P.2d 223 (Wyo. 1989); 
the constitutionality of the Wyoming Professional Review Panel Act, State ex rel. Wyo. 
Ass'n of Consulting Eng'rs and Land Surveyors v. Sullivan, 798 P.2d 826, 828-29 (Wyo. 
1990); the entitlement of a school district to interest on school district funds 
held by the county treasurer, Bd. of Cty. Comm'rs v. Laramie Cty. Sch. Dist. No. One, 
884 P.2d 946, 949-50 (Wyo. 
1994); and the constitutional scope of the governor's veto power, Management Council of 
the Wyo. Legislature v. Geringer, 953 P.2d 839, 841-42 (Wyo. 
1998).

 

[¶23]      We conclude that the constitutional challenge to the statute 
at issue here requires that we decide the status of the state's obligations with 
regard to the large inventory of state school lands.  This is a matter of 
public importance comparable to the significant issues in the above cases that 
will affect not only the preferential right to renew statute but could inform 
all of the Board's management decisions with regard to those lands while 
potentially affecting a major source of school funding.  For these reasons it 
is appropriate that we invoke the great public interest exception to the 
standing requirement in this case.

 

 

II.  The Status of School Lands in Wyoming

 

[¶24]      Turning to the main issue, we must first decide whether the 
Wyoming Act of Admission creates a trust obligation with regard to the State's 
ownership of those lands.  As recited above, each state's admission to 
the Union was a unique situation, negotiated between Congress and the respective 
territories.   
There was an evolution in the various states' enabling acts passed by 
Congress, as well as an evolution in the terms of the states' acceptance of 
admission.

 

[¶25]      At one extreme, the United States Supreme Court has ruled 
that the relatively unrestricted grants to Michigan and Alabama did not create a 
federal trust as to the school lands but merely a "solemn agreement" that the 
lands would be used for the purposes recited.  Papasan v. Allain, 478 U.S. 265, 289-90 n.18, 
106 S. Ct. 2932, 2947 n.18, 92 L. Ed. 2d 209 (1986); see 
also Schmidt, 
232 U.S.  at 173-74, 34 S. Ct.  at 302; Cooper, 59 U.S. (18 How.) at 181-82.  At the other 
extreme, the Supreme Court has ruled that the more restricted land grants to New 
Mexico and Arizona imposed fiduciary obligations, equivalent to a 
federally-imposed trust, to manage the lands for the exclusive benefit of the 
common schools.  
Lassen, 
385 U.S.  at 467-68, 87 S.Ct. at 588-89; Ervien, 251 U.S.  at 48, 40 S. Ct.  at 76.

 

[¶26]      The United States Court of Appeals for the 10th Circuit has noted that "the question of whether a 
statehood statute creates a federal trust requires a case-specific analysis of 
the particular state's enabling statute because the history of each state's 
admission to the Union is unique."   Branson Sch. Dist., 161 F.3d  at 633.  Observing that the 
Colorado Enabling Act falls somewhere in between  in both chronology and 
specificity  the Michigan-Alabama model and the Arizona-New Mexico model, the 
court ruled that the Colorado act contains a sufficient enumeration of duties to 
indicate Congress's intent to create a fiduciary relationship between the state 
and its common schools.  Id. at 633-34.  The court also found 
significant the fact that the Colorado Constitution, adopted immediately after 
the Enabling Act and therefore a contemporaneous expression of the parties' 
intent, clearly indicated that the land grants "shall be . . . held in trust 
subject to disposal, for the use and benefit of the respective objects for which 
said grants of land were made.  Id. at 634-35.

 

[¶27]      Two years later, the 10th 
Circuit Court of Appeals reviewed the 1896 Utah Enabling Act's grant of land for 
a miners' hospital for disabled miners.  Dist. 22 United Mine Workers v. Utah, 229 F.3d 982 (10th Cir. 2000).  Noting Branson's requirement of a case-specific review, the 
court ruled that Utah's enabling act did not create a trust because the Utah 
legislature was authorized to dispose of the lands "in such manner as the 
legislature may provide," and "this express latitude given to the State of Utah 
militates against the creation of a trust."  Id. at 990.   The 10th Circuit's ruling was in accord with Andrus v. Utah, 446 U.S. 500, 507, 100 S. Ct. 1803, 1807, 64 L. Ed. 2d 458 (1980), which held that the Utah Enabling Act 
created a "solemn agreement" by the state to use its school lands as intended by 
the federal government, but did not create a trust.

 

[¶28]      Wyoming's enabling act is similar to Colorado's but differs 
in two significant respects.  The Wyoming act does not specify a minimum 
sales price for its school lands and expressly authorizes the leasing of the 
lands in any manner the state legislature provides.   Colo. Enabling 
Act, § 14, 18 Stat. at 476; Wyo. Act of Admission, § 5, 26 Stat. at 22-23.  Wyoming's enabling 
legislation is therefore more in accord with that of Utah, and we therefore 
conclude that the latitude given the Wyoming legislature likewise militates 
against the creation of an express trust by the Wyoming Act of Admission.

 

[¶29]      Turning to the question of whether the Wyoming Constitution 
creates an express trust of the school lands, we conclude that it does not.  The parties cite 
authority from several states for the proposition that the state constitution, 
either alone or in concert with the states' enabling acts, creates an express 
trust in accepting the land grants from Congress.   Each of those state constitutions is 
distinguishable from Wyoming's, however. The Colorado Constitution, as noted by 
the Branson 
court, directs its legislature to "provide by law that the several grants of 
land . . . shall be . . . carefully preserved and held in trust . . . ."  1876 Colo. Const., 
Art. IX, § 10 (amended 1996); Branson Sch. Dist., 161 F.3d  at 635.  
The South Dakota Constitution likewise provides that "all lands and the 
proceeds" from such lands are considered perpetual funds,  S. Dak. Const., Art. 
VIII, § 7, which the South Dakota Supreme Court interpreted as creating an 
express trust in Kanaly v. State, 368 N.W.2d 819, 823 (S.D. 1985).  The Oklahoma 
Constitution recites that that state accepts all grants of land "as a sacred 
trust."  Okla. 
Const., Art. XI, § 1; see also §§ 2, 5.  The Utah 
Constitution states that the lands "shall be held in trust for the people, . . . 
for the respective purposes for which they have been or may be granted, donated, 
devised or otherwise acquired.  Utah Const., Art. XX, § 1.

 

[¶30]      Although Wyoming's Constitution contains a declaration of 
trust as to the proceeds from the sale of the lands, Wyo. Const. Art. 7, §§ 2, 
6, there is no similar declaration as to the land itself as in the states listed 
above.  The 
delegates would have had available to them the specific trust language of 
constitutions such as Colorado's, Oklahoma's, Idaho's and Washington's.  It is also 
significant to note in this regard that the Wyoming Constitution, drafted in 
September 1889 and adopted by vote of the territorial citizenry in November 
1889, was available for review by Congress when it passed the Wyoming Act of 
Admission in July of 1890.  Just as it was significant to the Branson court that 
Colorado, immediately after passage of the Colorado Enabling Act, declared in 
its constitution that the lands were held in trust, so it is significant that 
Congress passed the Wyoming Enabling Act knowing that the new Wyoming 
Constitution limited the declaration of trust to proceeds from the sale of the 
lands.

 

[¶31]      The State in its brief cites National Parks & 
Cons. Ass'n v. Bd. of State Lands, 869 P.2d 909 (Utah 1993), 
for the proposition that it is irrational to distinguish between the lands and 
the proceeds of those lands as the corpus of a constitutionally declared 
trust.  However, 
although such a distinction is not an uncommon one in state constitutions, Utah 
is the only state to so rule and, in fact, the only state to address the 
issue.  
According to one commentator, "the issue of whether the school lands are 
a part of the same trust that applies to the permanent fund remains an open 
question that a state legislature could answer."  Sean E. O'Day, School 
Trust Lands: The Land Manager's Dilemma Between Educational Funding and 
Environmental Conservation, A Hobson's Choice?, 8 N.Y.U. Envtl. L. J. 163, 
210 (1999); see also, 
Fairfax, supra, at 826.

 

[¶32]      A summary of the Wyoming Constitution's provisions regarding 
the state school lands shows that the lands are accepted for educational 
purposes; that the board of land commissioners is established with authority to 
manage, sell or lease the lands as directed by the legislature; that the 
proceeds from the sale and lease of the lands shall constitute a permanent trust 
fund, with only the income used for educational purposes; that the lands may be 
leased on whatever terms the legislature shall prescribe; and that the lands may 
be sold only at public auction for at least three-quarters of their appraised 
value.  We 
conclude that the express latitude given the legislature, combined with the 
limitation of the express trust language to the proceeds from the 
lands, militate against a constitutionally-created trust in the school lands by 
the terms of the Wyoming Constitution. 

 

[¶33]      Although neither the Wyoming Act of Admission nor the 
Wyoming Constitution encumber the school land grants with a trust, the 
legislature's wide management authority over those lands includes the authority 
to statutorily declare a trust.  Wyo. Stat. Ann. § 36-5-101, et seq. 
(LexisNexis 2001) (regulating leases of school land grants).  In 1996 the 
legislature commissioned a study of the school lands, see, "Final Report 
and Recommendations of the Select Committee on State Trust Lands," (Wyo. Leg. 
Serv. Office, Nov. 15, 1996), which resulted in substantial amendment of the 
leasing statutes during the 1997 session.  While the state land grants may have 
heretofore been informally referred to as "trust lands," the 1997 act included 
the following statement of principles:

 

(a) The legislature endorses the following statements of 
principle and directs that the board of land commissioners and the director of 
state lands abide by these statements in the implementation of these 
statutes:

(i) The state land trust, consisting of trust lands, trust 
minerals and permanent land funds shall be managed under a total asset 
management policy;

(ii) The state land trust is intergenerational.  Therefore, the focus 
is on protecting the corpus for the long term;

(iii) Trust land should remain a substantial, integral 
component of the state land trust portfolio.  There is no mandate to sell any trust asset to 
maximize revenue in the short term;

(iv) All leases of trust land shall assure a return of at 
least fair market value considering the management practices and risk assumed by 
the lessee when determining fair market value;

(v) Investment policies shall ensure that the earning power 
of the permanent land fund is not reduced from the effect of inflation.

 

1997 Wyo. Sess. Laws ch. 200, § 3.  Section § 36-5-105, 
amended in the same 1997 Act, directs that the state school lands shall be 
leased "in such manner and to such parties as shall inure to the greatest 
benefit to the state land trust beneficiaries."  Id., § 1.

 

[¶34]      The use of such explicit trust language in the declaration 
of principles and the statute clearly indicates the legislature's intention that 
the land grant be subject to a trust and administered according to the 
prescribed guidelines.  
The Association correctly points out in its brief that the referenced 
language first appeared in 1997, apparently for the proposition that the right 
to renew takes historical precedence over a later statutory trust.  However, because we 
find it is within the legislature's authority to declare a trust in the school 
lands, that authority could be exercised at any time, and the chronology of that 
exercise is not significant in this case, nor is it necessary for us to decide 
if a statutory trust existed before 1997.  It is sufficient to note that the legislature 
has now declared a trust.  It is also not necessary for us to decide 
whether this Court's use of trust language in Frolander v. Ilsey, 
72 Wyo. 342, 264 P.2d 790 (1953), 
decided the issue or was dicta that merely used a colloquial expression to 
describe the school lands.

 

 

III.  Constitutionality of Lease Preference

 

[¶35]      Given our conclusion that the school lands in Wyoming are 
subject to a statutory trust, we must address the parameters of that fiduciary 
obligation.  
Riedel and the State, citing Lassen and Ervien, argue that there is a fiduciary obligation to 
maximize revenues from the trust lands, and Riedel argues that the 
right-to-renew statute depresses the market for leasing school lands.  Those cases, 
however, were interpreting the 1912 Arizona-New Mexico Enabling Act, which does 
include a express federal trust and is very different from the Wyoming Act of 
Admission.  The 
Branson decision 
informs us that, even if there is a federal trust, it does not necessarily carry 
with it a common law duty to maximize revenue from the trust corpus and the 
state may define the fiduciary duty within the bounds of the federal trust.  Branson Sch. Dist., 
161 F.3d  at 638-39.  
Since we hold that the land trust in Wyoming is a creature of statute, we 
agree with the Association that the statutes incorporate all of the trustee's 
duties, and that such arrangement is authorized by the Act of Admission and the 
Constitution's express authorization to lease the lands "under such regulations 
as the legislature shall prescribe."  It is not necessary, and indeed would be 
inappropriate, to look to other states or common law trust principles to define 
the state's fiduciary obligations with regard to the school land's statutory trust.

 

[¶36]      The current version of the preferential right to renew was 
enacted in 1997 in the same legislative act as the declaration of trust.  We construe statutes 
in accord with the ordinary and obvious meaning of their language to determine 
the legislature's intent.  Thunderbasin Land & Livestock v. Laramie Cty., 5 P.3d 774, 779 (Wyo. 
2000).  If the 
language is sufficiently clear, we need not resort to other rules of 
construction.  
Id.

 

[¶37]      We will discuss each of Riedel's constitutional 
objections.  He 
first claims that the preferential right to renew "violates Wyoming's fiduciary 
trust obligation to receive fair market value for agricultural leases of the 
common school land grants."  He distinguishes the earlier cases in which we 
upheld similar preference laws on the grounds that those cases turned on 
statutory interpretation and refers us instead to Lassen v. Arizona ex 
rel. Arizona Highway Dep't.  As discussed above, however, at issue in Lassen was the 
uniquely specific Arizona-New Mexico Enabling Act.  And since we 
conclude that any trust in Wyoming is a creation of Wyoming statute, that trust 
does not carry with it the duty to maximize revenues found by the Lassen court.  Plaintiff's first 
constitutional challenge therefore fails.

 

[¶38]      Riedel next argues that the preferential right-to-renew is 
tantamount to an absolute right of renewal, violating the enabling act's 
ten-year limit on leasing, and that in depressing lease values it grants 
privileges to incumbent lease holders over the trust beneficiaries.  Riedel's arguments 
in this regard are speculative, as was his statistical evidence at trial in 
which he attempted to show that the vast majority of leases are renewed by the 
incumbent lease holders.  He does not nearly approach his heavy burden 
to "clearly and exactly show the unconstitutionality beyond a reasonable 
doubt."  Reiter v. State, 36 P.3d 586, 589 (Wyo. 
2001).  We have 
ruled that prior preferential right to renew leases are conditional, not 
absolute.  Frolander, 72 Wyo. 
at 364-65, 264 P.2d  at 799; Kerrigan v. Miller, 53 Wyo. 441, 448, 84 P.2d 724, 726 (1938); 
Mercer v. 
Thorley, 48 Wyo. 141, 150, 43 P.2d 692, 695 (1935).  
The current statutory right is even more conditional:  the incumbent must 
re-apply every ten years, must have met prior lease payments, must otherwise 
maintain eligibility, and most importantly must match any higher bid offered for 
the same land.  
The State may still decide to sell the land or not to lease it at all; if 
it does lease, it does so at the highest rate bid by anyone.  We therefore find 
that the conditional right to renew does not violate the enabling act's 
prohibition of leases longer than ten years.

 

[¶39]      Riedel next argues that the preferential right-to-renew 
statute violates the requirement that the school lands be disposed of by public 
auction, as required by Wyo. Const, Art. 18, § 1.  We agree with the Association and the State 
that the relevant constitutional provision, requiring that "disposal" of the 
lands be at public auction, is clear and unambiguous. To "dispose of" means "to alienate, relinquish, part with, 
or get rid of." Black's Law Dictionary 471 (6th ed. 1990).  As with statutes, we 
interpret the Constitution according to its plain and obvious meaning.  Amoco Production Co. v. 
Hakala, 644 P.2d 785, 789 (Wyo. 
1982).  The 
framers clearly did not consider a lease to be a sale when they granted to the 
Board of Land Commissioners the "direction, control, leasing and disposal" of 
the state lands.  
Wyo. Const., Art. 18, § 3.  We held in Ross v. Trustees of 
Univ. of Wyo., 30 Wyo. 433, 443, 222 P. 3, 7 (1924), that the granting of a right-of-way across state lands is not a 
"disposal" as contemplated by the Constitution.  We conclude likewise that a lease of state 
lands as authorized by the Constitution is not a disposal of those lands and 
need not be accomplished by public auction.

 

[¶40]      Riedel contends that the preferential right to renew 
violates the constitutional prohibition on "granting any privileges to persons 
who may have settled upon any of the school lands . . . , by which the amount to 
be derived by the sale or other disposition of such lands, shall be diminished 
directly or indirectly."  Wyo. Const., Art. 18, § 5.  This argument lacks 
cogency:  the 
lessees of today are not the original settlers contemplated by the Constitution 
and, as noted above, the leasing of the lands is not a "sale or other 
disposition" of the school lands.

 

[¶41]      Riedel's final constitutional argument is the one addressed 
by most of his evidence at trial.  Assuming the existence of a trust, and 
assuming the trust to be governed by common law standards rather than the 
legislature, he contends that the right to renew depresses the value of 
agricultural leases and therefore violates the trustees duty to maximize revenue 
from the trust lands.  
However, we have concluded that the land trust in Wyoming is created by 
the legislature and hence the management of that trust and, as specifically 
authorized by the Constitution, the leasing of the trust lands, are governed by 
the statutes and not by common law trust principles.  Huckfeldt v. State Bd. 
of Sch. Land Comm'rs, 20 Wyo. 162, 122 P. 94 (Wyo. 
1912).  The 
legislature will not be presumed to have created the trust and violated it at 
the same time.

 

[¶42]      The trial court granted judgment as a matter of law at the 
close of plaintiff's case.  A review of the record shows that judgment was 
properly granted.   Riedel sought to prove through expert 
testimony that incumbent lease holders in Wyoming almost always prevail when 
there is a competing lease application, that those leases have a positive 
"permit value" when agricultural properties are marketed, and that other states 
realize more for their leases because they have a variable rather than a single 
statewide minimum lease rate.   Much of his evidence was of a historical 
nature, and addressed past management practices of the Board without tie-in to 
the current statute or the lease at issue.  To conclude from that evidence that the state 
is not realizing sufficient income from its trust lands, rising to the level of 
a breach of fiduciary duty, would be sheer speculation and falls far short of 
Riedel's considerable burden to prove the statute's unconstitutionality.  While there may have 
been problems with earlier versions of the preferential right to renew statute, 
the current version requires that the renewing lease holder match any competing 
bid and therefore approximates market value.  Riedel's evidence that many private 
agricultural sales include a premium for the seller's lease permits, in addition 
to being substantially impeached, does not necessarily indicate that the lease 
was undervalued when granted by the Board.  It is just as likely that the lease premium 
recognizes the seller's efforts in obtaining the lease or improvements made to 
the leasehold.

 

 

CONCLUSION

 

[¶43]      The lands granted to the State of Wyoming by Congress upon 
the State's admission were not conveyed subject to a federal trust, nor did the 
people of Wyoming constitutionally impose a trust on those lands.  However, the 
Legislature has appropriately exercised its authority under the Act of Admission 
and Constitution to declare those lands subject to a trust.  The legislature, 
concurrently with the establishment of that trust, provided that incumbent lease 
holders of the state lands would have a preference in renewing their lease.  Riedel failed to 
prove that such preference violates any fiduciary or constitutional constraints 
on the State's management of the trust lands, and the district court's grant of 
defendants' motion to dismiss is therefore affirmed.

 

FOOTNOTES

 

1The exceptions were Maine 
and West Virginia, which were created from pre-existing states rather than 
federal land, and Texas and Hawaii, which formerly were independent nations and 
not created from federal territory.  Budge, supra, at 
226.

2The maximum lease term was 
amended from five to ten years in 1934.  48 Stat. 350-351 (February 15, 1934); 1935 
Wyo. Sess. Laws, ch. 34.