Title: DIRECTOR OF THE OFFICE OF STATE LANDS & INVESTMENTS, BOARD OF LAND COMMISSIONERS v. MERBANCO, INC.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

DIRECTOR OF THE OFFICE OF STATE LANDS & INVESTMENTS, BOARD OF LAND COMMISSIONERS v. MERBANCO, INC.2003 WY 7370 P.3d 241Case Number: 01-261, 02-18Decided: 06/06/2003
APRIL 
TERM, A.D. 2003

 

                                                                                                            

 

DIRECTOR 
OF THE OFFICE OF STATE

LANDS 
& INVESTMENTS, BOARD OF

LAND 
COMMISSIONERS,

 

Petitioners,

 

v.

 

MERBANCO, 
INC., an Ohio Merchant

Banking 
Company; CHRISTOPHER A.

JOHNSTON, 
as a citizen of Wyoming;

CHRISTOPHER 
A. JOHNSTON, as the

natural 
parent and legal guardian of IAN

OLIVER 
JOHNSTON, PAIGE KANARY

JOHNSTON, 
and RYAN CHRISTOPHER

JOHNSTON; 
and WYOMING EDUCATION

ASSOCIATION, 
a nonprofit Wyoming

corporation,

                                                                                                

Respondents.

 

IN 
THE MATTER OF THE TETON

VILLAGE 
SCHOOL SECTION

(Section 
36, T42N, R117W):

 

MERBANCO, 
INC., an Ohio Merchant

Banking 
Company; CHRISTOPHER A.

JOHNSTON, 
as a citizen of Wyoming; and

CHRISTOPHER 
A. JOHNSTON, as the

natural 
parent and legal guardian of IAN

OLIVER 
JOHNSTON, PAIGE KANARY

JOHNSTON, 
and RYAN CHRISTOPHER

JOHNSTON,

 

Appellants(Plaintiffs),

                                                                                                

and

 

WYOMING 
EDUCATION ASSOCIATION,

a 
nonprofit Wyoming corporation,

                                                                                                

Appellant(Intervening 
Plaintiff),

 

v.

 

DIRECTOR 
OF THE OFFICE OF STATE

LANDS 
& INVESTMENTS, BOARD OF

LAND 
COMMISSIONERS, and SNAKE

RIVER 
ASSOCIATES,

 

Appellees(Defendants).

 

 

Case 
No. 01-261

Original 
Proceeding: Writ of Review

 

Case 
No. 02-18

Reserved 
Questions from the District Court of Teton County

The 
Honorable Dan Spangler, Judge

 

Representing 
Office of State Lands & Investments and Board of Land 
Commissioners:

Hoke 
MacMillan, Attorney General; Michael L. Hubbard, Deputy Attorney General; and 
Nancy E. Vehr, Assistant Attorney General

 

Representing 
Merbanco and the Johnstons:

Rosemary 
J. Beless, Douglas B. Cannon, and Robert A. Garda, Jr. of Fabian & 
Clendenin, Salt Lake City, Utah; and Katherine Mead of Mead & Mead, Jackson, 
Wyoming 

 

Representing 
Snake River Associates:

William 
P. Schwartz of Ranck, Schwartz & Day, LLC, Jackson, Wyoming; and William J. 
Thomson, II and Randall B. Reed of Dray, Thomson & Dyekman, P.C., Cheyenne, 
Wyoming

 

Representing 
Wyoming Education Association:

Patrick 
E. Hacker and Gregory P. Hacker of Patrick E. Hacker, P.C., Cheyenne, 
Wyoming

 

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

 

            
KITE, Justice.

 

[¶1]      Merbanco, Inc., 
Christopher Johnston and his children, and the Wyoming Education Association 
(WEA) (referred to hereinafter as "challengers") seek a declaration that the 
Wyoming Constitution prohibits the exchange of state school lands without public 
auction and, consequently, the statutes and administrative rules which authorize 
such exchanges are void as unconstitutional.  Case No. 01-261 came to us on a petition 
for a writ of review, which we granted, and, in Case No. 02-18, the district 
court reserved constitutional questions to this Court pursuant to W.R.C.P. 
52(d).  We hold the constitution 
requires public auctions only for sales of school lands; exchanges are not 
sales; and, in the absence of any other constitutional prohibitions, the 
legislature acted within its authority in adopting the statutes and authorizing 
the rules challenged here. 

 

 

FACTS

 

[¶2]      This case arose 
out of a declaratory judgment action filed by Merbanco, an Ohio Merchant Banking 
Company which sought to purchase certain school lands in Teton County; Mr. 
Johnston, a resident of Teton County and the president of Merbanco; and the 
Johnston children who attend public school in the county.  They filed suit against the Director of 
the Office of State Lands & Investments and the Board of Land Commissioners 
(board), the governmental authorities responsible for the administration of 
school lands.  The dispute arose 
when the state undertook procedures to exchange Section 36, Township 42 North, 
Range 117 West of the 6th Principal Meridian, Teton County, for land 
of equal value without a public auction.  
The land in question was included within those lands granted to the state 
upon statehood for the support of the common schools and is located near Teton 
Village (Teton Village school section).  
Merbanco also sued Snake River Associates, a Wyoming limited partnership 
(SRA) which owns and operates a cattle ranch surrounding the section and has 
historically leased it for grazing purposes.  SRA proposed acquiring ownership of the 
Teton Village school section in exchange for other SRA lands located adjacent to 
Teton Village which could be used for residential and commercial 
development.

 

[¶3]      SRA and other 
interested parties1 initiated discussions with the 
state through the board and its staff concerning the possible exchange.  At the same time, Merbanco urged the 
board to initiate procedures to sell the Teton Village school section at public 
auction and, on June 7, 2001, offered an opening bid of $36.48 million.  On June 14, 2001, the board approved 
pursuing the exchange with SRA consistent with its rules.  Merbanco filed a petition for review on 
July 13, 2001, contending the decision to exchange the Teton Village school 
section violated the board's constitutional, statutory, administrative, and 
fiduciary duties.  The district 
court granted the state's motion to dismiss the petition for review because no 
final agency action had occurred.  
On August 1, 2001, Merbanco filed a complaint for declaratory judgment 
and injunctive relief seeking to have the court declare the board's decision and 
the statutes and regulations upon which it was based unconstitutional for lack 
of a public auction. WEA, a nonprofit organization whose members are educators 
in the Wyoming public schools and parents of students who attend the public 
schools, intervened in support of Merbanco's position.

 

[¶4]      The state moved 
to dismiss Merbanco's complaint claiming the court did not have subject matter 
jurisdiction because none of the challengers had standing and, because no final 
action had occurred, the matter was not ripe for consideration by the court and 
no justiciable controversy existed.  
The district court denied the state's motion, and the state filed a 
petition for review.  While the 
state's petition was pending, the board voted to end the "exclusive" 
negotiations with SRA in favor of continued consideration of an exchange and 
other options, including Merbanco's proposed public auction. As a result of the 
board's action, the state filed a motion to dismiss in this Court contending 
again the matter was not ripe and no justiciable controversy existed.  This Court denied the motion concluding 
that issues of great statewide importance had been raised and should be 
addressed.

 

[¶5]      The district 
court issued an order reserving to this Court the following questions regarding 
the constitutionality of the statutes and regulations authorizing land 
exchanges:

 

1.  Wyoming 
Constitution Article 18, Section 1

 

a.  Do 
the land exchange provisions of Wyoming Statutes §§ 36-1-107, 36-1-110, and 
36-1-111, which permit the Board of Land Commissioners ("Board") to exchange 
state school trust lands for private lands without public auction, violate 
Wyoming Constitution, Article 18, Section 1[?]

 

b.  Do the land exchange provisions of WCWR 
060-060-026 ("Chapter 26") §§ 4(f)(i) and 5 of the Board's Rules and 
Regulations, which provide that exchanges of state school trust lands for 
private lands are processed and consummated without public auction, violate 
Wyoming Constitution, Article 18, Section 1[?]

 

c.  Does the Director of the Office of State 
Lands & Investments' (the "Director") decision and the Board's approval of 
his decision to pursue an exchange of State School Trust Land Section 36, Teton 
County, Wyoming ("Section 36") in accordance with Chapter 26, violate Wyoming 
Constitution, Article 18, Section 1?

 

2.  Wyoming 
Constitution Article 18, Section 3

 

a.  Do the land exchange provisions of 
Wyoming Statutes §§ 36-1-107, 36-1-110, and 36-1-111, which permit the Board to 
exchange state school trust lands for private lands without public auction, 
violate Wyoming Constitution, Article 18, 
Section 3[?]

 

b.  Do the land exchange provisions of 
Chapter 26 §§ 4(f)(i) and 5 of the Board's Rules and Regulations, which provide 
that exchanges of state school trust lands for private lands are processed and 
consummated without public auction, violate Wyoming Constitution, Article 18, 
Section 3[?]

 

c.  Does the Director's decision and the 
Board's approval of his decision to pursue an exchange of Section 36 in 
accordance with Chapter 26 violate Wyoming Constitution, Article 18, Section 
3?

 

[¶6]      The state's 
petition for review of the district court's denial of its motion to dismiss and 
the constitutional questions reserved by the district court were consolidated in 
this Court for purposes of oral argument.  
We address both cases in this opinion.

 

A.        
Denial of Motion to DismissSubject Matter 
Jurisdiction

 

[¶7]      Whether a court 
has subject matter jurisdiction is a question of law to be reviewed de novo.  Ritter v. Ritter, 989 P.2d 109, 
111 (Wyo. 1999).  Subject matter 
jurisdiction refers to "the power to hear and determine cases of the general 
class to which the proceedings in question belong.'"  Lacey v. Lacey, 925 P.2d 237, 238 
(Wyo. 1996) (quoting Fuller v. State, 568 P.2d 900, 903 (Wyo. 
1977)).  The district court's 
subject matter jurisdiction was invoked through the Uniform Declaratory 
Judgments Act (Wyo. Stat. Ann. §§ 1-37-101 to -114 (LexisNexis 2001)), which 
allows any person "whose rights, status or other legal relations are affected by 
the Wyoming constitution or by a statute" to have the construction and validity 
of the particular provision determined and his rights, status, or other legal 
relations declared in a court of law.  
Section 1-37-103.

 

[¶8]      The state 
objected to the district court's consideration of the declaratory judgment 
action primarily because the board had made no final decision on SRA's proposed 
land exchange or Merbanco's proposed public auction of the lands in question. 
Without such final decision, the state insists, no justiciable controversy 
exists.  While conceding the court 
has jurisdiction pursuant to Article 5, Section 10 of the Wyoming Constitution 
and the Uniform Declaratory Judgments Act, the state contends such jurisdiction 
does not extend to advisory opinions "since binding legal determinations made in 
the abstract and decisions rendered without concrete factual background would be 
imprecise, subject to speculation, and would create rather than diminish future 
controversies."  Cranston v. 
Thomson, 530 P.2d 726, 729 (Wyo. 1975).  
The state argues a justiciable controversy requires the parties have 
"existing and genuine, as distinguished from theoretical, rights or 
interests.'"  Brimmer v. 
Thomson, 521 P.2d 574, 578 (Wyo. 1974) (quoting Sorenson v. City of 
Bellingham, 496 P.2d 512, 517 (Wash. 1972)).  The state points out the board's 
decision did not foreclose the possibility of a public auction, leaving the 
court with hypothetical facts and issues.

 

[¶9]      In response, the 
challengers contend they object to the very process the board was pursuing which 
assumed the option of an exchange without a public auction was available.  The record discloses this process 
continued over a period of almost two years before this litigation commenced. 
The state, SRA, and the other interested parties, including the Teton County 
commission, all proceeded as if the option of a land exchange without a public 
auction was available, and, for a time, the state conducted exclusive 
negotiations with the proponents of an exchange.  Merbanco entered the fray in direct 
competition with SRA, urging the state to adopt its position that a public 
auction was constitutionally required.

 

[¶10]   This controversy over the 
constitutionality of exchanges of state lands without a public auction impacts 
many stakeholders, including state school land lessees, the beneficiaries of the 
funds generated by state school lands, the legislature which adopted statutes 
authorizing exchanges, those members of the executive branch of state government 
whose responsibility it is to steward the state school lands, as well as the 
public at large.  As inevitable 
growth and development increase the pressure on Wyoming state lands, the need 
for certainty and clarity regarding this aspect of the management of state lands 
grows.  We conclude this is 
precisely the type of circumstance contemplated by the Uniform Declaratory 
Judgments Act, the purpose of which "is to settle and to afford relief from 
uncertainty and insecurity with respect to legal relations."  Section 1-37-114.  The act instructs that we are to 
liberally construe it to fulfill that purpose.  Barber v. City of Douglas, 931 P.2d 948 (Wyo. 1997); Reiman Corporation v. City of Cheyenne, 838 P.2d 1182 (Wyo. 1992).

 

[¶11]   The state's argument that we must 
let the board's process with regard to the Teton Village school section run its 
course is counter to the entire thrust of the declaratory judgments statute 
which was designed to enable parties to obtain judicial determinations prior to 
an injury rather than requiring them to wait until the damage is done.  The board itself possesses no power to 
resolve questions of constitutionality.  
Riedel v. Anderson (Conflicting Lease Applications for Wyoming 
Agricultural Lease No. 1-7021), 972 P.2d 586, 587 (Wyo. 1999). We have 
rejected the argument that, in the context of administrative agency action, 
parties must exhaust their administrative remedies before challenging the 
authority of the agency to act.  
Rocky Mountain Oil and Gas Association v. State, 645 P.2d 1163 
(Wyo. 1982).  If the relief 
requested "concerns the constitutionality or interpretation of a statute 
upon which the administrative action is, or is to be, based, the [declaratory 
judgment] action should be entertained."  
Id. at 1168. To force the 
parties to expend the time and resources to complete the board's process only to 
subject the final product to possible jeopardy is not sound policy.  In addition, the lack of certainty 
concerning the viability of the exchange option may influence the nature of the 
final decision by the board, an equally problematic result with the potential of 
denying the various stakeholders the benefits they might otherwise 
receive.

 

[¶12]   Nevertheless, the proponent of a 
declaratory judgment must still present a fully justiciable controversy.  As we stated in Brimmer, 521 P.2d  at 578 (quoting 
Sorenson, 496 P.2d at 517), a four-part showing is 
required:

 

"First, 
a justiciable controversy requires parties having existing and genuine, as 
distinguished from theoretical, rights or interests.  Second, 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.  Third, 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[,] be of such great and overriding public moment as to 
constitute the legal equivalent of all of them.  Finally, 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."

 

[¶13]   The state contends the challengers 
cannot meet the first requirement of a justiciable controversythat they have 
existing and genuine rights or interests at stake.  Pursuant to the substantial public 
interest and importance doctrine, we have found

 

standing 
where we ordinarily would not in the following instances:  Washakie County School District 
Number One [v. Herschler], 606 P.2d 310 [(Wyo. 1980)] 
(constitutionality of school financing); Memorial Hospital of Laramie County 
[v. Department of Revenue and Taxation of State of Wyoming], 770 P.2d 223 [(Wyo. 1989)] (tax exempt status of hospital); State ex rel. Wyoming 
Association of Consulting Engineers and Land Surveyors v. Sullivan, 798 P.2d 826 (Wyo. 1990) (constitutionality of the Wyoming Professional Review Panel 
Act); Board of County Commissioners of the County of Laramie v. Laramie 
County School District Number One, 884 P.2d 946 (Wyo. 1994) (entitlement of 
school district to interest on school district funds held by county treasurer); 
and Management Council of the Wyoming Legislature [v. Geringer], 
953 P.2d 839 [(Wyo. 1998)] (constitutional scope of governor's veto 
power).

 

Jolley 
v. State Loan and Investment Board, 
2002 WY 7, ¶9, 38 P.3d 1073, ¶9 (Wyo. 2002).

 

[¶14]   In a similar context, we addressed 
standing in a challenge to the constitutionality of the public school financing 
statutes and stated:

 

Standing 
is a concept used to determine whether a party is sufficiently affected to 
insure that a justiciable controversy is presented to the court.  It is a necessary and useful tool to be 
used by courts in ferreting out those cases which ask the courts to render 
advisory opinions or decide an artificial or academic controversy without there 
being a palpable injury to be remedied.  
However, it is not a rigid or dogmatic rule but one that must be applied 
with some view to realities as well as practicalities.  Standing should not be construed 
narrowly or restrictively.  Further, 
as said in Residents of Beverly Glen, Inc. v. City of Los Angeles, 1973, 
34 Cal. App. 3d 117, 109 Cal. Rptr. 724, 727 [(citations omitted)]:  "In recent years there has been a marked 
accommodation of formerly strict procedural requirements of standing to sue and 
even of capacity to sue where matters relating to the social and economic 
realities of the present-day organization of society' are concerned.  Accordingly, we have seen a retreat 
from . . . formalism and 
rigidity . . . ."

 

Washakie 
County School District Number One v. Herschler, 
606 P.2d 310, 317 (Wyo. 1980) (some citations omitted). 

 

[¶15]   In this case, the state's claim of 
no standing focuses on the lack of final action, and, thus, the state argues no 
injury has occurred. This approach fails to consider the essential nature of the 
challengers' interests and whether those interests are sufficient to provide 
standing for the various parties. 

 

[¶16]   As to the standing of WEA, Mr. 
Johnston, and the Johnston children, they claim a potential injury because the 
state's position authorizing exchanges without public auction will directly 
affect the revenue available to the permanent school fund.  In Washakie, we held school children and 
their parents had a sufficient interest in the funding of public education to 
maintain a challenge to the constitutionality of the statutes providing for the 
same.

 

[¶17]   Educating the youth of our state is 
an important function performed by our state government.  Our constitution, as we shall see, 
plainly expresses the commitment of a free people to the value of a thorough 
education.  The school districts and 
the members of school boards are charged with the responsibility of providing 
education to the children of Wyoming and are tangibly injured if the statutes 
which guide their hands disenable them from so providing.  Parents are keenly concerned and suffer 
tangible injury if their children do not receive a proper education.  The children themselves are, obviously, 
tangibly injured if they do not uniformly receive the best education that tax 
resources can provide.  With these 
considerations in mind, we hold that each of the named appellants has standing 
to sue under the circumstances of this case.  Id.

 

[¶18]   A similar analysis and result are 
appropriate when considering the standing of WEA, an organization of persons 
involved and interested in public education.  Although we have held that the nature of 
the interests of school children and their parents may meet the standing 
requirement in matters relating to equality in funding public schools, we still 
must consider whether the potential impact of less funding on WEA's members and 
the Johnstons is sufficient to create standing. While revenues from school lands 
are constitutionally and statutorily dedicated to support education, those funds 
provide a relatively small portion of the total funds provided for public 
schools. No showing was made that the funding provided by the legislature for 
schools would be inadequate without the interest from the permanent school fund. 
Furthermore, given the statutory requirement that any exchange must be on a 
"value for value basis," Wyo. Stat. Ann. § 36-1-111(a) (LexisNexis 2001), it 
seems unlikely that an exchange of lands would negatively impact the funds 
available for the support of education in any significant amount. However, WEA 
argues the significance of the impact on the permanent fund is obvious because a 
bid of $36.48 million was to be paid upon transfer of the land. We believe 
evaluating the impact on the permanent fund is the appropriate approach and 
concur with the standing analysis employed in Branson School District RE-82 v. Romer, 
958 F. Supp. 1501, 1509-11 (D. Colo. 1997), which concluded similar plaintiffs 
had standing to challenge a constitutional amendment affecting the 
administration of the permanent school fund in Colorado. 

 

[¶19]   With regard to Merbanco's standing, 
a different problem is presented.  
The state had no obligation to either sell or exchange the Teton Village 
school section. Consequently, Merbanco had no legally recognizable right to bid 
on the property.  Furthermore, the 
public auction requirement was intended to protect interests of the permanent 
school fund and those who would benefit from it, not those who may seek to 
purchase school lands. We have consistently held that standing requires a 
legally protectable, tangible interest to be at stake.  Gooden v. State, 711 P.2d 405 
(Wyo. 1985) (defendant had no right to plea bargain and thus no right to claim 
statute imposing mandatory sentence for DUI violated constitutional separation 
of powers); Cremer v. State Board of 
Control, 675 P.2d 250, 254 (Wyo. 1984) (senior water right holder had no 
standing to seek abandonment of junior right); see also Budd v. Bishop, 
543 P.2d 368 (Wyo. 1975); Cuthbertson v. 
Union Pacific Coal Co., 50 Wyo. 
441, 62 P.2d 311 (1936).  
Merbanco had no legally protected interest entitling it to bid on school 
lands and thus had no standing to challenge the statutes allowing the state to 
exchange lands without public auction.

 

[¶20]   The Colorado Supreme Court faced a 
similar situation in Brotman v. East Lake 
Creek Ranch, L.L.P., 31 P.3d 886 (Colo. 2001), where a former lessee of 
school lands challenged a proposed exchange between the state and a third party, 
claiming the exchange constituted a sale and the state had not followed the 
statutory requirements for a sale.  
Colorado's test for standing is similar to ours:  "A plaintiff has standing if he or she 
(1) incurred an injury-in-fact (2) to a legally protected interest, as 
contemplated by statutory or constitutional provisions."  31 P.3d  at 890; see also Wimberly v. 
Ettenberg, 570 P.2d 535, 539 (Colo. 1977).  The lessee claimed he was injured 
because of the potential that, if the school lands were owned privately, the 
lessee would be subject to condemnation for a right of way across his lands to 
the private section.  The Colorado 
court found such "injury" was speculative and, even if it occurred, the lessee 
would not have a legally protected right to prevent a condemnation if just 
compensation were paid.  
Brotman, 31 P.3d  at 891.  
Our conclusion regarding Merbanco's lack of standing is consistent with 
the Colorado court's reasoning.

 

[¶21]   Having found three of the four 
challengers have standing, we must determine whether the controversy at issue is 
one upon which a judgment of the court may effectively operate, as distinguished 
from a debate or argument evoking a purely political, administrative, 
philosophical, or academic conclusion and upon which a judicial determination 
will have the effect of a final judgment.  
The state complains the lack of final action by the state renders the 
argument hypothetical.  As stated 
above, we have consistently refused to require final agency action as a 
condition precedent to a declaratory judgment action concerning the underlying 
authority of the agency to act, especially when matters of constitutionality are 
at issue. Wyoming Community College 
Commission v. Casper Community College District, State of Wyoming, 2001 WY 86, 31 P.3d 1242 (Wyo. 2001); 
Rocky Mountain Oil and Gas Association, 645 P.2d 1163.  Certainly, a judicial determination of 
the constitutional propriety of exchanges of state lands without a public 
auction will provide clear rules for the future administration of state 
lands.

 

[¶22]   Finally, the state steadfastly 
clings to its claim that, without final action, no adversity of interests 
exists.  Even a cursory review of 
this record discloses clear adversity between the partiesthe state claiming it 
has authority to pursue exclusive negotiations for the exchange of lands with 
one party and the challengers demanding the immediate initiation of public 
auction proceedings.  To require the 
parties to wrestle this dispute to the ground and obtain a final state action 
would accomplish little other than the expenditure of additional time and 
resources potentially in vain.

 

[¶23]   Even though we conclude the 
traditional elements of a justiciable controversy exist in this case, we have 
historically relaxed those requirements in matters of great public interest and 
importance.  Management Council 
of Wyoming Legislature v. Geringer, 953 P.2d 839, 841 (Wyo. 1998); 
Memorial Hospital of Laramie County v. Department of Revenue and Taxation of 
State of Wyoming, 770 P.2d 223 (Wyo. 1989); Brimmer, 521 P.2d 574.  In this case, we face 
important questions of great public interest, and they deserve to be 
answered.  We find the district 
court's denial of the state's motion to dismiss was well founded and 
affirm.

 

B.        Does 
the Constitutional Requirement for Public Auctions Apply to 
Exchanges?

 

[¶24]   The reservation lists three 
separate questions, each arising under Article 18, Sections 1 and 3 of the 
Wyoming Constitution.  Although 
presented as a series of discrete parts, the question is really singular:  Whether the exchange of school lands 
without public auction violates Article 18, Sections 1 and 3 of the Wyoming 
Constitution.

 

[¶25]   In 1890, Wyoming adopted a 
constitution which accepted the lands granted to it for "educational purposes," 
"with the conditions and limitations that may be imposed by the act or acts of 
congress," and required that all such lands granted to it could be "disposed of only at public 
auction."  Wyo. Const. art. 18, § 1 
(emphasis added).

 

[¶26]   Article 18, Section 1 of the 
Wyoming Constitution provides in relevant part:

 

            
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 
. . . .

 

In 
addition, Article 7, Section 13 (emphasis added) of the original constitution 
provided  "the sale of all [school] lands shall be 
at public auction . . . at such minimum prices (not less than the 
minimum fixed by congress) as to realize the largest possible proceeds."  That section also established a board to 
manage the lands granted for school purposes.  The original constitution also 
established a different board in Article 18, Section 3 for the "direction, 
control, disposition and care" of all lands granted to the state.  However, that section did not restrict 
the manner of disposal or sale of such lands.  Likewise, Article 18, Section 3 as 
amended in 1921 provides for the establishment of a board of land commissioners 
serving "under direction of the legislature as limited by this constitution" 
which

 

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. 

 

After 
adoption of the Wyoming Constitution, Congress passed the Act of Admission of 
the State of Wyoming, 26 Stat. at Large 222, ch. 664 (1890), admitting the State 
of Wyoming into the Union and granting to it Sections 16 and 36 of every 
township in Wyoming, including the Teton Village school section, for the support 
of the common schools with the condition that these sections "be disposed of 
only at public sale."2  

 

[¶27]   Pursuant to this grant, Wyoming 
received 3,543,820.62 acres of land for the purpose of supporting its public 
schools.  See Office of State 
Lands and Investments Annual 
Report at 25 (2001).  In 1921, the constitution was amended to 
combine the two land boards into a single "board of land commissioners."  With that amendment, the public auction 
requirement of Article 7, Section 13 was imported into a new Article 18, Section 
3 and broadened to apply to "the sale of all lands" rather than just to "school 
lands" as provided in the original constitution.  The amendment resulted in the two 
sections of Article 18 utilizing different language for the imposition of the 
public auctionSection 1 referring to disposal and Section 3 referring to sales. 

 

[¶28]   The challengers' argument rests on 
a simple proposition: The Wyoming Constitution requires a public auction for all 
"sales" and "disposals" of state lands, and an exchange is a form of sale or 
disposition; therefore, exchanges are subject to the public auction 
requirement.  In our view, the issue 
is not so simple. The two constitutional provisions are not identical but rather 
contain different terms of uncertain meaning which are susceptible to 
incongruent interpretation.  Neither 
provision mentions exchanges of school lands.

 

[¶29]   The State of Wyoming, through the 
legislature and the board, the entity constitutionally charged with the 
responsibility of managing school lands, historically has not interpreted the 
constitution as requiring public auctions for the exchange of school lands.  On the contrary, the legislature has 
specifically authorized exchanges of school lands for private lands of equal 
value, and the board has adopted regulations specifying the procedures to be 
followed to assure lands of equal value are obtained by the state in the course 
of these exchanges.  Pursuant to 
these statutes and regulations, the state has accomplished the exchange of 
thousands of acres of school lands over the course of the last century. 

 

[¶30]   The statutes contain detailed and 
thorough procedures and requirements that must be followed before school lands 
can be exchanged, with the obvious purpose of assuring that the state and the 
permanent school fund receive fair value in return for any lands conveyed to a 
private party.  Those statutes 
provide:

 

§ 
36-1-107. Exchange of state-owned and privately owned 
lands

 

The 
state of Wyoming is also authorized to exchange state-owned lands for privately 
owned lands.

 

 

§ 
36-1-110. Authority of director to 
effect and complete exchanges

 

            
The director is hereby authorized and empowered, subject to the approval 
of the state board of land commissioners, to effect and complete such exchange 
of state-owned lands for federal-owned lands; and also to effect and complete 
such exchange of state-owned lands for privately owned lands; and to do any and 
all things necessary or required to be done by the state of Wyoming in order to 
enable said state to comply with the provisions of said Taylor Grazing Act and 
other acts of congress authorizing the exchange of federal-owned lands, and any 
order, rule or regulation passed or promulgated in pursuance thereof; and to 
effect and complete the exchange of state-owned lands for privately-owned 
lands.  The board of land 
commissioners may authorize the purchase of lands only in an amount necessary to 
effect and complete the exchange of state-owned lands for other lands and only 
for those lands identified in the authorization of purchase.  The board shall not use the power of 
eminent domain pursuant to W.S. 1-26-801 et seq. to purchase any lands under 
this section.

 

 

§ 
36-1-111. Orders, rules and regulations relative to exchange of 
lands

 

            
(a) The board of land commissioners is hereby authorized and empowered to 
pass and promulgate all such orders, rules and regulations as may be necessary 
or required relative to the appraisal and valuation of the lands to be exchanged 
as provided in this act, and to provide for the execution of conveyances, 
contracts and other instruments pertaining to the exchange of the lands, and to 
enable the director to effect and complete each exchange of the lands.  The board may authorize the purchase of 
lands only in an amount necessary to effect and complete the exchange of 
state-owned lands for other lands and only for those lands identified in the 
authorization of purchase.  The 
board shall not use the power of eminent domain pursuant to W.S. 1-26-801 et 
seq. to purchase any lands under this section.  The board of land commissioners is 
authorized to promulgate rules and regulations necessary to implement the 
exchange of state lands on a value for value basis.  The exchange program may authorize a 
cash equalization receipt or payment of up to twenty-five percent (25%) of the 
value of the lands exchanged.  Any 
receipt shall be deposited into, and any payment shall be made from, the 
permanent land fund.  State lands 
may be exchanged upon the board's finding the exchange is necessary 
to:

 

            
(i) Make state lands more manageable where the lands are not otherwise 
manageable;

 

            
(ii) Meet a specific need of a school or community for 
land;

 

            
(iii) Better meet the multiple use objectives for the benefit of the 
trust; or

 

            
(iv) Realize a clear long term benefit to the trust which substantially 
exceeds the present and probable future benefit from continued ownership. 

 

 [¶31]  Pursuant to the authority granted by 
these statutes, the board adopted regulations authorizing exchanges of state 
lands pursuant to specific procedures.  
In a similar vein, these regulations provide detailed procedures for the 
exchange of school lands and require that any property acquired by the permanent 
fund be of equal or greater value than the property conveyed to the private 
party.3

 

 

STANDARD 
OF REVIEW

 

[¶32]   Critical to the resolution of this 
case is the fundamental maxim followed consistently by this Court since 
statehood that every statute is presumed constitutional and not to be held in 
conflict with the constitution unless such conclusion is clear, palpable, 
unavoidable, and beyond reasonable doubt.  
Painter v. Abels, 998 P.2d 931 (Wyo. 2000); Wyoming Coalition 
v. Wyoming Game & Fish Commission, 875 P.2d 729 (Wyo. 1994); Thomson 
v. Wyoming In-Stream Flow Committee, 651 P.2d 778 (Wyo. 1982); Uhls v. 
State ex rel. City of Cheyenne, 429 P.2d 74 (Wyo. 1967); Taxpayers' 
League of Carbon County, Wyo. v. McPherson, 49 Wyo. 251, 54 P.2d 897 (1936); 
State v. Sureties of Krohne, 4 Wyo. 
347, 34 P. 3 (1893).  A person 
challenging the constitutionality of a statute bears a heavy burden of proving 
such beyond any reasonable doubt.  
Board of County Commissioners v. Geringer, 941 P.2d 742 (Wyo. 
1997); V-1 Oil Company v. State, 934 P.2d 740 (Wyo. 1997); NJC v. 
State, 913 P.2d 435 (Wyo. 1996).  
In fact, we are duty bound to uphold statutes where possible and 
resolve all doubts in favor of constitutionality.  Campbell v. State, 999 P.2d 649 
(Wyo. 2000); Frantz v. Campbell County Memorial Hospital, 932 P.2d 750 
(Wyo. 1997).  The challengers 
present a facial challenge, which is "the most difficult challenge to mount 
successfully, since the challenger must establish that no set of circumstances 
exists under which the Act would be valid." United States v. Salerno, 481 U.S. 739, 
745 (1987).    

 

[¶33]   In construing our constitution, we 
follow essentially the same rules as those governing the construction of a 
statute.  The fundamental purpose of 
those rules of construction is to ascertain the intent of the framers.  Geringer v. Bebout, 10 P.3d 514, 
521 (Wyo. 2000); Zancanelli 
v. Central Coal & Coke Co., 
25 Wyo. 511, 173 P. 981, 991 (1918).  
"We are charged with discerning the intent of the Constitutional 
Convention, and we look first to the plain and unambiguous language to discern 
that intent."  Geringer, 953 P.2d  at 843.  

 

[¶34]   Looking to the plain language used 
by the framers with regard to the state's authority over lands granted to it for 
educational purposes, we find the language uncertain in meaning.  Although Article 18, Section 1 of the 
Wyoming Constitution states that all such lands shall be "disposed of only at 
public auction," it also contains terms typically applicable to a sale, such as 
a minimum price per acre and a provision for "purchase" by a settler of land on 
which he had settled at the time the constitution was adopted.  Restricting our analysis to that 
section, we might conclude the framers contemplated a sale as the only method of 
authorized "disposal" of school lands and such sale must occur at a public 
auction.  Proceeding to Section 3 of 
that article, however, we see the framers granted very broad authority to the 
board over much more than simple sales of school lands by providing the board 
shall direct, control, lease, and dispose of the lands.  That language connotes an intent to 
allow the board flexibility to manage the school lands while they remain in 
state ownership.  Section 3 goes on 
to provide the board's authority is "subject to the further limitations that the 
sale of all lands shall be at 
public auction" (emphasis added) and "at such minimum prices (not less than the 
minimum fixed by congress) as to realize the largest possible proceeds."  The framers' choice of different 
language in this section, as well as the inference in Section 1 that the 
disposal they contemplated was a sale, creates an unavoidable ambiguity with 
regard to whether the framers intended the board to have the authority to 
exchange school lands without a public auction.  Is a sale the "disposal" contemplated by 
Section 1?  That reading would be 
consistent with Section 3's use of the term "sale" when referring to the action 
that can only occur at public auction.  
Did the framers mean any transaction that resulted in an exchange of 
school lands for other lands of equal value must occur at public auction?  What did the framers intend by giving 
the board authority over direction, control, and leasing in addition to 
"disposal"?  None of these questions 
is answered by the plain language used by the framers.  Consequently, we must resort to the 
rules of construction to glean their intent.

 

[¶35]   As we have 
noted:

 

"In 
interpreting statutes, we primarily determine the legislature's intent.  If the language is sufficiently clear, 
we do not resort to rules of construction.  
We apply our general rule that we look to the ordinary and obvious 
meaning of a statute when the language is unambiguous.'"  Thunderbasin Land, Livestock & Investment 
Co. v. County of Laramie County, 5 P.3d 774, 779 (Wyo. 2000) (quoting 
Kirbens v. Wyoming State Board of Medicine, 992 P.2d 1056, 1060 
(Wyo. 1999) (citations omitted)).  
We construe together all parts of the statutes in pari materia, and, in 
ascertaining the meaning of a given law, we consider and construe in harmony all 
statutes relating to the same subject or having the same general purpose.  Id.  "When the language is not clear or 
is ambiguous, the court must look to the mischief the statute was intended to 
cure, the historical setting surrounding its enactment, the public policy of the 
state, the conclusions of law, and other prior and contemporaneous facts and 
circumstances, making use of the accepted rules of construction to ascertain a 
legislative intent that is reasonable and consistent."  State ex rel. Motor Vehicle Division 
v. Holtz, 674 P.2d 732, 736 (Wyo. 1983).

 

Fosler 
v. Collins, 
13 P.3d 686, 688 (Wyo. 2000).

 

 

DISCUSSION

 

[¶36]   As we apply these rules of 
construction to the constitutional provisions in question to determine whether 
the statutes and regulations authorizing exchanges of school lands without 
public auction are constitutional, we look first to the historical context of 
the two provisions and the "mischief" they were intended to cure.  In doing so, we note Article 18, Section 
1 was contained in the original constitution adopted in 1890, while Article 18, 
Section 3, in its current form, resulted from a 1921 amendment by a different 
group of "framers" which combined the original Section 3 with Article 7, Section 
13.

 

[¶37]   Looking first to the original 
language, we have as guidance the records of the constitutional convention and 
the historical experience of other states as they were admitted into the 
Union.  The federal government's 
policy of granting lands to states for the support of schools is traceable to 
the country's infancy and the adoption of the General Land Ordinance of 1785 and 
the Northwest Ordinance adopted two years later, both of which required certain 
lands to be granted for schools to new states joining the Union.  Sally K. Fairfax et al., School Trust 
Lands: A Fresh Look at Conventional Wisdom, 22 Envtl. L. 797, 805-06 
(1992).  The general motivation for 
the grants was the concern that states in their infancy would not provide 
sufficient financial support of schools without federal assistance.  Id. at 806 n.24.  However, exactly how the states were to 
use the lands to support the schools was not well defined.  From the beginning, debate occurred over 
whether such lands should be sold or retained for future use.  Many of the early states' constitutions 
actually provided for quick sales in order to spur economic development as well 
as provide immediate funds for the support of schools.  Id. at 807.  While much has been made about those 
early states having improperly managed the lands granted, some authorities 
suggest their actions derived from a desire to achieve immediate benefit for the 
citizens rather than preserving the lands for the use of future generations. 
According to these authorities, suggestions by historians of incompetence or 
corruption have been overstated.  
Id.

 

[¶38]   In any event, limitations on 
states' rights regarding the management and sale of school lands evolved over 
time.  States imposed such 
limitations on themselves in their own constitutions, and, in some cases, the 
federal government imposed limitations in the respective enabling statutes.  Subtle, but significant, variations in 
language exist between states as well as within the key documents enacted in a 
single state.  Id. at 
819.  For example, Section 4 of 
Wyoming's Act of Admission granted lands "for the support of common schools" 
whereas Article 18, Section 1 of our constitution accepted the grants "for 
educational purposes," arguably a less restrictive limitation.  Throughout the Nineteenth and early 
Twentieth Centuries, neither the state constitutions nor the federal enabling 
statutes explicitly addressed the states' authority to exchange school lands for 
other lands of equal value.

 

[¶39]   While the general historical 
context is informative, our task is to interpret the Wyoming Constitution and 
the Act of Admission; therefore, we must focus our analysis on the unique 
history of those particular provisions.  
Unlike most states, Wyoming's constitutional convention was called before 
Congress enacted any enabling legislation.  
Robert B. Keiter & Tim Newcomb, The Wyoming State Constitution, A 
Reference Guide at 5 (1993), citing T. A. Larson, History of Wyoming at 244 (2d ed. 
1978). Consequently, the delegates had to assume Congress would grant Wyoming 
federal lands when it authorized statehood.  They did not have the benefit of a 
specific grant with which they could conform their acceptance.  See generally Keiter & 
Newcomb, supra at Foreword.  
Ultimately, Congress passed Wyoming's Act of Admission on July 10, 1890, 
eight months after the constitution was adopted, and, as expected, that act 
granted Wyoming various lands, some of which were dedicated for "support of 
common schools" and to be "disposed of only at public sale."  Act of Admission at §§ 4, 
5.

 

[¶40]   The record of the debates during 
the constitutional convention sheds some light on the concerns of the delegates 
regarding the lands they anticipated would be granted by the federal 
government.  These records "may very 
properly be resorted to as indicating somewhat the intent and object which 
caused the incorporation of disputed clauses into the fundamental law."  Grand Island & N. W. R. Co. v. 
Baker, 6 Wyo. 369, 45 P. 494, 500 (1896); see also Chicago & N. W. Ry. Co. v. Hall, 46 Wyo. 380, 26 P.2d 1071 
(1933).  We learn from these debates 
the delegates used the terms "sale" and "disposal" interchangeably and did not 
address the concept of exchange of lands.  
1889 Journal and Debates of the 
Constitutional Convention of the State of Wyoming at 749-52.  They rejected a proposal to withhold the 
lands from sale to preserve their value for future generations. The discussion 
discloses a belief by some that the lands were not likely to garner the minimum 
$10 per acre price and, if they did, the state should act quickly to sell 
them.  Id. at 752.  We also learn from these records that, 
while the delegates agreed to require a public auction before these lands could 
be sold, some believed auctions could be manipulated and the further protection 
of an appraisal by the land commissioner should be required.  Id. at 755-56.  In what must be interpreted as a desire 
for flexibility and a willingness to rely on the land commissioner to assure a 
fair sales price, the delegates agreed to allow sales to occur so long as at 
least seventy-five percent of the appraised value was obtained.  Id. at 753.  Throughout the debates, the concern of 
the delegates was focused on how and when state lands could be sold.  When those concerns were translated into 
the actual language of the relevant constitutional provisions, the terms "sale" 
and "disposal" seem to be used interchangeably.  Article 18, Section 1, in which the 
State of Wyoming accepted the grant of lands by the federal government for 
"educational purposes," provided that such lands "shall be disposed of only at public auction" 
(emphasis added) at a minimum of $10 per acre, clearly a "sales price," and 
seventy-five percent of the appraised value.  At the same time, delegates also adopted 
Article 7, Section 13, which required an auction before the "sale" of school 
lands. Reading the language of these two provisions together and in light of the 
contemporaneous comments of the delegates, we believe the only method of 
"disposal" contemplated was a sale.  
That conclusion is consistent with the language chosen by Wyoming's first 
legislature immediately following statehood that state lands could be "disposed 
of" at public auction after being "appraised" and "sold" for a minimum price of 
$10 per acre.

 

[¶41]   The convention records, the 
constitutional language itself, and the first statutes are devoid of any mention 
of land exchanges. This situation is not unlike the experience in other states 
admitted into the Union in the same general time frame. In fact, the first 
mention we found of the general concept of exchanges of public lands appears in 
1914 when the federal government amended the statute which created Yosemite 
National Park to specifically authorize land exchanges.  16 U.S.C. § 51 (1914).  Despite this lack of specific authority 
for the exchange of state lands, within eighteen years of statehood, Wyoming's 
land commissioner proposed to relinquish certain school sections which were 
located within Indian reservations in exchange for acquiring equal area of 
indemnity land in lieu thereof.  
Second Biennial Report of 
Robert P. Fuller, Commissioner of Public Lands, Wyoming at 11 (1906-1908).  That practice continued through the 
early 1900s resulting in numerous exchanges with the federal government and the 
overall enhancement of the value of the school lands.  See also Third Biennial Report of the Commissioner of 
Public Lands of Wyoming (1910); Sixth Biennial Report of the Commissioner of 
Public Lands of Wyoming (1916).  
Without question, these exchanges with the federal government could 
not have occurred had a public auction been required before the particular 
parcel of school land could be conveyed.  
The active support of both the federal and state governments was 
necessary to accomplish these exchanges, and no indication exists in the 
historical record that either believed public auctions were a condition 
precedent to the exchanges.

 

[¶42]   The constitution was amended in 
1921 in this environment where exchanges were not specifically addressed in the 
constitution, yet the state and federal government were freely exchanging school 
lands.  The amendment combined 
Article 18, Section 3 and Article 7, Section 13, which both provided for the 
creation of boards to manage lands granted to the state.  Slight differences in the makeup and 
scope of authority of the two boards had led to confusion and duplication.  The amendment created a new Article 18, 
Section 3, which combined the boards into a single "board of land 
commissioners," and applied the public auction requirement to the "sale" of all 
lands instead of only school lands.  
Senate Joint Resolution No. 2, Feb. 21, 1921, 1921 Wyo. Sess. Laws at 
293.  The authors of the 1921 
amendment used the term "sale" and not the arguably broader term "disposal" to 
describe the transaction requiring a public auction.  While it is difficult to make much of 
this subtle difference in language, it is indisputable that the land 
commissioner had exchanged thousands of acres with the federal government by the 
time of this amendment, and yet no attempt was made in the amendment process to 
require a public auction before an exchange could occur.  Further evidence of the legislative 
branch's concurrence in exchanges without public auction was its adoption of 
statutes specifically allowing exchanges of school lands for both federal lands 
and private lands.  See 1929 
Wyo. Sess. Laws ch. 108, § 6 codified at Wyo. Stat. Ann. § 36-1-104 (LexisNexis 
2001); 1935 Wyo. Sess. Laws ch. 76, § 1 codified at Wyo. Stat. Ann. § 36-1-106 
(LexisNexis 2001); 1935 Wyo. Sess. Laws ch. 76, § 2 codified at Wyo. Stat. Ann. 
§ 36-1-107 (LexisNexis 2001); 1935 Wyo. Sess. Laws ch. 76, § 4 codified at Wyo. 
Stat. Ann. § 36-1-111 (LexisNexis 2001).  
The later act allowed exchanges on a "value for value" basis after 
finding an exchange would:

 

(i)  Make 
state lands more manageable where the lands are not otherwise 
manageable;

 

(ii)  Meet 
a specific need of a school or community for land;

 

(iii)  Better 
meet the multiple use objectives for the benefit of the trust; 
or

 

(iv)  Realize 
a clear long term benefit to the trust which substantially exceeds the present 
and probable future benefit from continued ownership.

 

Section 
36-1-111(a).

 

[¶43]   In this same time frame, the 
federal Taylor Grazing Act, Act of June 28, 1934, ch. 865, 48 Stat. 1269 
(codified at 43 U.S.C. §§ 315-316 (1934)), was enacted setting forth an explicit 
process for the exchange of federal lands and demonstrating a similar agreement 
by the federal government to the concept of exchanges of lands with the 
states.  This statute apparently 
prompted the Wyoming legislature to pursue a constitutional amendment 
specifically authorizing the state to accept title to lands owned by the federal 
government in exchange for state lands of equal value.  Senate Joint Resolution No. 5, Feb. 18, 
1935, 1935 Wyo. Sess. Laws at 208.  
The voters failed to approve that amendment by a small margin.  Wyoming Official Directory and Election 
Returns (1931-39).  The challengers argue that failed 
attempt to amend the constitution supports their position that the constitution 
prohibits exchanges without public auction.  While it is an accepted rule of 
statutory construction that rejection of a proposal by a governmental body is an 
indication of its intent, the rule cannot be applied automatically without first 
examining the failed proposal and the context in which it arose.  A careful examination of the failed 1935 
amendment does not support the conclusion urged by the challengers. 

 

[¶44]   The proposed amendment, by its own 
terms, was intended to facilitate exchanges authorized by the Taylor Grazing 
Act.  Rejection of the amendment 
sheds little light on the constitution's preexisting provisions governing the 
"sale" of school lands or exchanges for private lands.  Furthermore, the state's continued 
practice of freely exchanging state lands for both private and federal lands of 
equal value undermines the suggestion that anyone questioned at the time whether 
such exchanges without public auction were constitutional.  The state's position was later supported 
by an attorney general's opinion concluding that the constitutional term 
"disposal" was intended to mean "sale" and a public auction was not required for 
exchanges.  Op. Att'y Gen. No. 110, 
Opinions of the Attorneys General of the State of Wyoming 624 (1953-1956).  

 

[¶45]   Assuming the framers' only intent 
was to restrict the legislature's options with regard to the sale of school 
lands and not other aspects of managing that resource, the state retained its 
inherent police power to maximize the value of the school lands it was 
responsible for managing. This is so because, as has long been recognized, the 
legislature may enact any law not expressly or inferentially prohibited by the 
constitution.  Witzenburger v. 
State ex rel. Wyoming Community Development Authority, 575 P.2d 1100 (Wyo. 
1978).

 

[¶46]   The early history of the state's 
exercise of its authority over school lands is important to our efforts to give 
meaning to the words of the framers because it was contemporaneous with the 
adoption of the constitution and, therefore, likely reflective of the mindset of 
the framers.  Rasmussen v. Baker, 7 Wyo. 117, 50 P. 819 (1897).  It is also significant that the 
state's assumption of authority, by both the legislative and executive branches, 
to exchange lands without public auction remained consistent and unquestioned 
for over a century and resulted in the exchange of thousands of acres of school 
lands with the purpose of enhancing the value of the school lands as a 
whole.  Though the legislature's 
interpretation of the constitution is not binding on this Court, we would "be 
loath to interpret the constitution otherwise."  Geringer, 10 P.3d  at 522; see 
also Coronado Oil Company v. Grieves, 
603 P.2d 406, 411 (Wyo. 1979). Likewise, the executive branch's uniform 
interpretation that the constitution allows for exchanges without public auction 
deserves consideration. People ex rel. 
Emerson v. Shawver, 30 Wyo. 366, 
222 P. 11 (1924).  The 
attorney general's opinion supporting the executive branch's interpretation aids 
us and is entitled to some weight given the fact that state officials acted upon 
the opinion.  State ex rel. Burdick v. Schnitger, 17 Wyo. 65, 96 P. 238 
(1908).

 

[¶47]   The challengers do not directly 
address this historical context and point instead to authorities which in other 
factual situations have interpreted the term "disposal" as meaning "to alienate" 
or "transfer" and the term "exchange" to mean "sale." While these authorities 
are instructive, they fall short of proving beyond a reasonable doubt what the 
framers meant when they selected those terms. For example, Black's Law Dictionary defines "dispose of" as "[t]o alienate 
or direct the ownership of property . . . . To exercise 
finally, in any manner, one's power of control over; to pass into the control of 
someone else; to . . . relinquish, part with, or get rid of; 
. . . to bargain away."  
Black's Law Dictionary 471 (6th ed. 1990).  Yet, as Black's Law Dictionary also points 
out, the term "dispose of" is "[o]ften used in [the] restricted sense of sale' 
only, or [is] so restricted by context."  
Id.  
In contrast to this restricted meaning and like the more general 
definitions contained in Black's Law 
Dictionary, several Wyoming cases have concluded "dispose" is a broad 
term signifying more than "sell."  
However, those cases involved entirely different factual settings and did 
not address the constitutional provisions in question here.  J. M. Carey & Brother v. City of 
Casper, 66 Wyo. 437, 213 P.2d 263 (1950); State ex rel. Cross v. 
Board of Land Commissioners, 50 Wyo. 181, 62 P.2d 516 (1936).  Interestingly, in interpreting the term 
"land" in Cross, this Court suggested the term could 
in some contexts mean everything above and below the surface as the appellant 
argued but would not have that same meaning in other contexts.  "Reason and context play an important 
part in determining [a term's] true significance," this Court said.  State ex rel. Cross v. Board of Land 
Commissioners, 50 Wyo. 181, 58 P.2d 423, 429, reh'g denied, 50 Wyo. 
181, 62 P.2d 516 (1936).

 

[¶48]   The challengers further argue State v. Yellowstone Park Co., 57 Wyo. 502, 121 P.2d 170, 171 
(1942), supports their position that "sale" includes exchanges because this 
Court stated a sale is "a contract between parties to give and to pass rights of 
property."  That conclusion is 
inconsistent, however, with an earlier opinion much closer in time to the 
constitutional convention, Cone v. 
Ivinson, 4 Wyo. 203, 33 P. 31, 33 (1893), aff'd, 35 P. 933 (1894), 
in which this Court stated, "The usual and ordinary definition of the word 
sale' is the transfer of the absolute or general property in a thing for a 
price in money.'  Benj. Sales, § 
1."  Certainly, that definition 
would exclude an exchange. 

 

[¶49]   None of these authorities is very 
helpful in determining the intent of the framers.  Certainly, "disposal" could include a 
sale, and an exchange could fit some definitions of "sale."  However, given the situation facing the 
framers, the lack of any evidence they were even aware of the possibility of 
exchanges, and their desire to allow the land commissioner maximum flexibility 
while protecting the value of the school lands for the support of education, 
isolated definitions utilized by courts or dictionaries in dissimilar contexts 
are not particularly helpful or controlling.

 

[¶50]   More instructive are the opinions 
of the few courts that have considered the issue in the context of lands granted 
to states for school purposes.  
Those courts have reached varying results, and their opinions must be 
examined individually as their respective results are necessarily dependent on 
each state's unique constitutional and statutory framework. The first of these 
cases is Watson v. Caldwell, 35 So. 2d 125 (Fla. 1948), which held the State of Florida could exchange school lands 
with lands from the federal government so the school lands could be included in 
Everglades National Park without violating a statutory requirement that all such 
lands be advertised and sold to the highest bidder.  Florida did not have a constitutional 
requirement for public auction of school lands. However, the court had no 
difficulty differentiating between a sale of school lands and an exchange of 
such lands with the federal government for lands of equal 
value.

 

[¶51]   In Colorado, the state's appellate 
court and the federal courts have addressed the issue and have, likewise, 
distinguished between sales and exchanges.  
The language in the Colorado Enabling Act, 18 Stat. 474, provided that 
school lands were to be "disposed of" only at public sale, created an explicit 
trust for the benefit of public schools, and required that the lands be managed 
in such a manner as would secure the maximum possible amount for the school 
fund.  Branson School District 
RE-82, 958 F. Supp.  at 1506.  Colorado adopted an extensive 
amendment, Amendment 16, to its constitution granting the state substantial 
flexibility in the management of school lands including expanding its management 
authority "in order to produce reasonable and consistent income over time."  Id. at 1520.  Several school districts and school 
children claimed the amendment would result in less money to the school lands 
fund and challenged the amendment in federal court contending it conflicted with 
Colorado's enabling act and the supremacy clause of the United States 
Constitution.  Id. at 
1501.  Section 9(7) of Amendment 16 
authorized the state to undertake "non-simultaneous exchanges of land."  Id. at 1518.  The court had no difficulty concluding 
nothing in that section "violates either the requisites of the Enabling Act or 
general trust principles."  
Id. Although it is not clear from the opinion, apparently the 
challengers were not even arguing that exchanges in general violated the 
enabling act's requirement for public auctions. Instead, they objected to 
exchanges where money from nonsimultaneous land exchanges was held in a separate 
account until the exchange was completed, claiming that violated Section 14 of 
the Colorado Enabling Act which required that such money be placed in the 
permanent school fund.  The court 
characterized this argument as resting on "the premise that non-simultaneous 
land exchanges are really sales."  
Id.  Disagreeing with 
that conclusion, the court held:

 

I 
cannot agree. Deferred exchanges are common and acceptable transactions in real 
estate law and are not, as recognized by the IRS, sales or taxable events. See Internal Revenue Service Code § 
1031; 26 U.S.C. § 1031.  
Accordingly, § 9(7)'s mechanism for allowing non-simultaneous land 
exchanges is not contrary to section 14 to the Enabling 
Act.

 

In 
addition, exchanges of trust assets may be necessary to the prudent and 
effective management of a trust. 76 Am. Jur. 2d Trusts § 433 (1990) (transfer of 
trust assets is common and may be necessary for reinvestment into more 
productive assets). Accordingly, so long as the exchanges are performed to 
benefit the public schools, neither the Enabling Act nor common trust law 
prohibits non-simultaneous exchanges of land within the 
trust.

 

Id. 
at 1518-19.

 

[¶52]   Implicit in the court's reasoning 
is the assumption that simple exchanges likewise are not violative of the 
enabling act's requirement that all "sales" be only at a public auction or 
sale.  The Tenth Circuit Court of 
Appeals affirmed this decision and, while recognizing the Colorado Enabling 
Act's sole and exclusive method for "disposing of the school lands" was a 
"public sale' with a certain minimum price," upheld the amendment's provision 
"to facilitate land exchanges."  Branson School District Re-82 v. 
Romer, 161 F.3d 619, 637-42 
(10th Cir. 1998).  The court concluded that, so long as the 
interest from a nonsimultaneous land exchange was used for acquiring replacement 
lands which were themselves held in trust, the requirements of the enabling act 
were met.  A fair reading of these 
cases discloses no suggestion by either the litigants or the courts that land 
exchanges are subject to the requirement of Colorado's enabling act that school 
lands be "disposed" of through a public auction.

 

[¶53]   Following the Branson cases, 
the Colorado Court of Appeals considered a transaction involving school lands 
and concluded it constituted a sale, not an exchange, and was void for failure 
to comply with a Colorado statute which governed sales.  East Lake Creek Ranch, LLP v. Brotman, 
998 P.2d 46 (Colo. Ct. App. 1999), rev'd on other grounds, 31 P.3d 886 (2001).  The facts of that case 
were clearly determinative of the outcome and suggest that a pure exchange 
transaction would not have been considered by the court to be a "sale." In a 
nonsimultaneous exchange, the state granted the school lands to a private party 
before the corresponding private lands were identified and with no time limit in 
place for when that exchange was to occur.  
In addition, the state and the private party had agreed upon an appraised 
price for the school lands, and, when the private party deposited that amount 
with the state, he received the state patent.  The court held the test for determining 
whether the transaction was an exchange or a sale was whether there was a fixed 
value for the exchange; if there was, the court held, it was a sale.  Id. at 50.  However, the court also 
stated:

 

Admittedly, 
the mere fact that a price is placed on the properties involved in an exchange 
does not render the transaction a sale where the price fixed is evidently for 
the purpose of constituting a basis on which the exchange may be made. However, 
where the price is determined for the purpose of fixing definitely the value of 
the respective properties involved in the purported exchange, that determination 
is conclusive that a sale, not an exchange, has occurred.  33 C.J.S. Exchange of Property 2(b) 
(1998); see Higbie v. Johnson, 
626 P.2d 1147 (Colo. App. 1980); see also Hamburger v. Berman, 203 Mich. 78, 168 N.W. 925 (1918) 
(contract held to be exchange of two properties where values fixed by the 
respective parties upon the properties were mere estimates and were merely for 
the purposes of effecting an exchange).

 

Id.  The 
entire thrust of the East Lake Creek 
Ranch opinion is the court's recognition that, in the context of state 
school lands, sales and exchanges are distinct and mutually exclusive. This 
holding is consistent with the decision in Sorenson v. Regional Transportation 
District, 745 P.2d 1047, 1049 (Colo. Ct. App. 1987), where the Colorado 
Court of Appeals held the transfer of property from the State Board of Land 
Commissioners to RTD in exchange for RTD land of equivalent value was not a 
"sale" of the property.  
Consequently, if true exchanges are involved, it appears the Colorado 
courts would agree that the public sale provisions of the Colorado statutes do 
not apply.

 

[¶54]   The only case involving school 
lands where the court concluded an exchange without the public auction required 
for sales was prohibited is Fain Land 
& Cattle Company v. Hassell, 790 P.2d 242 (Ariz. 1990) (en banc).  The Arizona Supreme Court held that a 
proposed exchange of school lands constituted a sale and, without a public 
auction, violated the state's constitution.  One justice, concurring with the result 
but for different reasons, explicitly concluded sales and exchanges were clearly 
different and the transaction proposed was an exchange. However, the justice 
concluded, because the constitution did not specifically grant the state 
authority to exchange lands, the proposed exchange must fail.  790 P.2d  at 598 (Corcoran, J., 
concurring in part).

 

[¶55]   Arizona's unique constitutional and 
historical context prevents the Fain 
holding from controlling the result in Wyoming.  The Arizona-New Mexico Enabling Act, 
adopted in 1910, twenty years after Wyoming's Act of Admission, imposed vastly 
different and far more restrictive limitations on the state with regard to the 
administration of its school lands.  
Act of June 20, 1910, Pub. L. No. 219 (ch. 310), 36 Stat. 557.  The statute provided the 
state

 

may 
only sell or lease trust land to the highest bidder at public auction after 
public notice.  Enabling Act § 
28.  No sale or other disposal may 
be made unless the land is first appraised for its "true value," and the state 
receives consideration equal to, or greater than, the appraised value.  In addition, the Enabling Act provides 
that any disposition of trust land not in substantial conformity with its 
provisions is "null and void." . . .

 

The 
Enabling Act required that the state and its people consent to all its 
provisions concerning lands granted to the state and that an ordinance be 
included in the state constitution "in such terms as shall positively preclude 
the making of any future constitutional amendment or any change or abrogation of 
the said ordinance in whole or in part without the consent of Congress."  Enabling Act § 20.

 

Fain, 
790 P.2d  at 589 (some citations omitted).  
Pursuant to this more restrictive enabling act, Arizona adopted detailed 
and restrictive constitutional provisions including, by reference, all the terms 
of the enabling act itself.  Later, 
in response to the passage of the Taylor Grazing Act, Congress amended the 
Arizona-New Mexico Enabling Act to specify the state was authorized to exchange 
school lands.  Act of June 5, 1936, 
ch. 517, 49 Stat. 1477; Fain, 790 P.2d  at 590.  However, Arizona rejected a 
constitutional amendment which would have specifically authorized 
exchanges.  Fain, 790 P.2d  at 
590.  On the basis of that history, 
the Arizona Supreme Court held "the Enabling Act provides a minimum level of 
protection for trust land, while our state constitution goes much further" and 
"the express provisions of article 10 prohibit methods of disposal not 
enumerated in our constitution."  
Id. at 591.  In 
reliance, in part, on this authority, the court in Fain applied, in our view, an overly 
restrictive definition of "exchange" as any transaction with a fixed value, 
including an exchange "based on its appraised monetary value."  Id. at 592.  However, the concurring opinion rejected 
this logic and concluded that an appraisal establishing a monetary value did not 
transform the exchange transaction into a sale.  Citing to the Florida case of Watson, 35 So. 2d 125, the concurrence 
concluded the sale/exchange debate was mere semantics and the reason the 
proposed exchange must fail was because exchanges were not explicitly authorized 
by the terms of the Arizona Constitution.  
Id. at 598 (Corcoran, J., concurring in part).  We believe that this conclusion is 
inconsistent with Wyoming law which provides the constitution is a 
limitationnot a grantof authority.  
The omission of specific reference to exchanges in our constitution does 
not prohibit the state from entering into such transactions in the course of 
exercising its general police power.4  The concurring opinion in Fain also rejected the conclusion that 
an exchange is a sale because it would lead to the "absurd result" that a public 
auction is required, an outcome which would be impossible to implement.  Moreover, the concurrence concluded, "An 
exchange by public auction is an oxymoron, certainly not within the intentions 
of the framers of either the 1910 Enabling Act or our constitution."  Id. at 600 (Corcoran, J., 
concurring in part).

 

[¶56]   The dissenting opinion in Fain disagreed with the majority's logic 
that, simply because a value is assigned to one or all the properties, a sale 
occurs.  The dissent carefully 
examined the authorities cited by the majority in support of that proposition 
and concluded they involved different facts and none addressed the exchange of 
public land for private land.  It 
found, "A sale and an exchange are two different concepts with different legal 
significance attached to each; otherwise, the words would be synonyms for each 
other with no legal difference." Id. at 606 (Cameron, J., 
dissenting).  We find the rationale 
of the Fain dissent more persuasive 
than the majority when considering what Wyoming's framers intended when they 
required a public auction for a sale of school lands.

 

[¶57]   The challengers' contention that 
"disposal" must be read so broadly as to include any means of conveying the 
state's interest in school lands does not square with other authorities which 
have approved of grants of rights of way in school lands, condemnation of school 
lands, and use of school lands by other public and nonschool entities, all 
without public auction so long as the respective school lands fund receives full 
value for the interest granted.  For 
example, the United States Supreme Court held public sale provisions of the 
Arizona-New Mexico Enabling Act did not apply to the state highway department's 
acquisition of rights of way and material sites on school lands.  However, the court further held the 
state could not presume the value of the school lands was enhanced by the 
highway department's activities and was required to fully compensate the trust 
fund for the value of the interests acquired.  Lassen v. Arizona ex rel. Arizona Highway 
Department, 385 U.S. 458 (1967).  
After considering the historical context of the enabling act and 
concluding the purpose of the public sale requirement was to prevent school 
lands from being "exploited for private advantage," the court saw "no need to 
read the Act to impose these restrictions on transfers in which the abuses they 
were intended to prevent are not likely to occur, and in which the trust may in 
another and more effective fashion be assured full compensation."  Id. at 464.  The holding in Lassen, which can be applied with equal 
force to exchanges, stated:

 

            
We conclude that it is consonant with the Act's essential purposes to 
exclude from the restrictions in question the transactions at issue here.  The trust will be protected, and its 
purposes entirely satisfied, if the State is required to provide full 
compensation for the land it uses. We hold, therefore, that Arizona need not 
offer public notice or conduct a public sale when it seeks trust lands for its 
highway program.  The State may 
instead employ the procedures established by the Commissioner's rules, or any 
other procedures reasonably calculated to assure the integrity of the trust and 
to prevent misapplication of its lands and funds.

 

Id. 
at 465.

 

[¶58]   The Wyoming Supreme Court approved 
similar logic in Ross v. Trustees of 
University of Wyoming, 30 Wyo. 
433, 222 P. 3 (1924), where we concluded condemnation of a right of way 
across lands owned by the university did not violate the constitutional 
requirement for a public auction for "disposition" of school lands.  Relying on the fact that the rights of 
way for public roads improved the value of the remaining school lands, a concept 
equally applicable to land exchanges, this Court concluded the power to 
establish public highways "is neither dependent upon, nor limited by, the 
provisions with respect to the sale and disposition of said 
lands.  The impracticability of 
creating an easement for a public road by means of a public auction is too 
obvious to require comment."  222 P. 
at 6 (emphasis added); see also United States v. Fuller, 20 F. Supp. 839 
(D. Idaho 1937).

 

[¶59]   Considering all the foregoing, we 
cannot conclude, beyond a reasonable doubt, that the framers of the constitution 
intended a public auction must occur before the state can exchange school lands 
for lands of equal value.  This 
holding is necessarily specific to our constitution and mandated by our 
precedent dating back to territorial days, which requires any finding of 
unconstitutionality to be proven beyond a reasonable doubt.  As this Court said in Wagner v. 
Harris, 1 Wyo. 194, 201-02 (1875):

 

[T]hat 
the passage of the charter was unwise and impolitic we are not called upon to 
decide. The courts will not declare a law or any portion of a law 
unconstitutional unless its opposition to the fundamental law is clear and 
plain. To justify a court in pronouncing an act of the legislature to be 
unconstitutional the incompatibility must not be speculative, argumentative, or 
to be found only in hypothetical cases or in supposed consequences; it must be 
clear, decided and inevitable, such as presents a contradiction at once to the 
mind, without straining either by forced meanings or too remote consequences: 32 U.S. 633, 8 L. Ed. 810, 7 Peters 633; 2 McLane 
195.

 

[¶60]   We recognize the logical appeal of 
the challengers' contention that the terms used in the constitution can be read 
to suggest a public auction is required.  
However, that is not the test.  
We are asked to hold that the statutes specifically authorizing exchanges 
without public auction violate the constitution. We cannot do so if there is any 
reasonable doubt the framers did not intend that result.  Based on the foregoing discussion, we 
conclude such doubt is patent.

 

Exchanges 
as a Violation of the State's Fiduciary Duty

 

 

[¶61]   In addition to arguing that the 
constitution, by its explicit terms, requires treatment of exchanges of school 
lands as sales, the challengers contend the state holds these lands in trust and 
imply exchanges without public auction violate that trust.  Without specific explanation or 
authority, their argument suggests that exchanges without public auction somehow 
violate  a  trustee's fiduciary duties.5  We recently held Wyoming school lands 
are not subject to a constitutionally created trust or one created by the Act of 
Admission.  Riedel v. Anderson, 
2003 WY 70.  However, we 
found the legislature acted within its authority to create a statutory 
trust.  Id. at ¶34; Wyo. 
Stat. Ann. § 36-5-105 (LexisNexis 2001).  
The challengers make no argument that land exchanges violate any aspect 
of the statutory requirements which establish the terms of that statutory 
trust.  We also observe the 
challengers provide no authority to support the proposition that exchanges per 
se would violate a trustee's fiduciary duty to the beneficiaries of a trust, 
should one exist.  Given the 
statutory criteria for exchanges, one could persuasively argue that exchanges 
which meet those criteria are necessarily in the interest of the beneficiaries 
of the school lands fund.  Section 
36-1-111(a).  

 

 

CONCLUSION

 

[¶62]   The constitution prohibits the sale of school lands without a public 
auction.  However, the framers did 
not include a specific prohibition against the exchange of school lands without a 
public auction.  We will not read 
such a requirement into the constitution and, therefore, conclude the statutes 
and regulations authorizing the exchange of school lands do not violate the 
constitution.  In the absence of a 
clear constitutional prohibition of exchanges without auction, the legislature 
properly exercised its power to adopt statutes which specify the circumstances 
in which such exchanges are allowed and authorized the adoption of 
administrative regulations regarding the same.  We affirm the district court's denial of 
the state's motion to dismiss in Case No. 01-261 and answer the reserved 
questions in Case No. 02-18 "no." 

 

FOOTNOTES

1Jackson Hole Mountain Resort was the original proponent of the 
exchange.  In addition, Teton County 
became actively involved in the process because of the potential impact the use 
of the Teton Village school section and the proposed exchange lands adjacent to 
Teton Village could have on the county's land use 
plan.

2In the case of states admitted before Wyoming, the enabling acts were 
passed by Congress first, and then each individual state convened its 
constitutional convention and adopted its 
constitution.

 

3The questions reserved to this Court for resolution in Case No. 02-18 do 
not include issues of fact concerning whether the exchange in question complies 
with the standards for exchanges set forth in the applicable statutes and 
regulations, and, consequently, we make no conclusions in that 
regard.

4The concurring opinion also rejects the argument that "other disposal" 
includes sales relying on provisions of the Arizona 
Constitution.

 

5In their briefs discussing the trust issue, Merbanco and WEA cite to 
cases which hold states must fully compensate the school lands fund for any 
lands taken for rights of way or other general public uses because they hold 
those lands in trust.  However, they 
cite no authority for the proposition that a value for value exchange is somehow 
violative of the fiduciary duty of a trustee.