Opinion ID: 770800
Heading Depth: 3
Heading Rank: 1

Heading: Creation of Federal Trust Under the Enabling Act

Text: 24 In Branson Sch. Dist. RE-82 v. Romer, 161 F.3d 619 (10th Cir. 1998), this court addressed the issue of whether certain lands granted to the state of Colorado under Colorado's enabling act were held in trust. Although Branson involves a different enabling act and the lands there were granted for the benefit of public schools, Branson nonetheless guides our analysis of whether the Land Grants here are held in trust by Utah. 25 [T]he 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. Id. at 633. This is because Congress' treatment of land grants evolved over time. See id.; Papasan v. Allain, 478 U.S. 265, 289-90 n. 18, 106 S. Ct. 2932, 92 L. Ed. 2d 209 (1986). 26 The Supreme Court initially treated the land grants made to Alabama (in 1819) and Michigan (in 1847) as honorary obligations in the nature of solemn agreements, rather than trusts. See Branson, 161 F.3d at 633 (citing Papasan, 478 U.S. at 289-90 n.18; Alabama v. Schmidt, 232 U.S. 168, 173-74, 34 S.Ct. 301, 58 L. Ed. 555 (1914); Cooper v. Roberts, 59 U.S. (18 How.) 173, 181-82, 15 L. Ed. 338 (1855)). These particular land grants, however, are notable for the sparse language providing for the grants. See id. In the case of Alabama, Congress simply conveyed each Section 16 of every township in the new state to the inhabitants of such township for the use of schools. See Alabama v. Schmidt, 232 U.S. 168, 172, 34 S. Ct. 301, 58 L. Ed. 555 (1914). For Michigan, Congress conveyed each Section 16 in every township to the State for the use of schools. See Cooper v. Roberts, 59 U.S. (18 How.) 173, 179, 15 L. Ed. 338 (1855). 27 At the other end of the spectrum are the land grants to New Mexico (in 1898 and 1910) and Arizona (in 1910). These land grants were more specific in nature, see Branson, 161 F.3d at 633, and the Supreme Court in those cases held that the school lands were granted to the states to be held in trust. See Lassen v. Arizona ex rel. Ariz. Highway Dep't, 385 U.S. 458, 460-61, 87 S. Ct. 584, 17 L. Ed. 2d 515 (1967); Ervien v. United States, 251 U.S. 41, 48, 40 S. Ct. 75, 64 L. Ed. 2d 128 (1919). 28 Branson explained that Colorado was admitted to the Union in 1875 and that its enabling act fell somewhere in between the Michigan/Alabama and New Mexico/Arizona experiences, both in terms of chronology and specificity. See Branson, 161 F.3d at 633. The Utah Enabling Act of 1894 is identical to Colorado's in this respect. The New Mexico-Arizona Enabling Act apparently contained the first express declaration by Congress that all lands granted to the states were to be held in trust. See Wade R. Budge, Comment, Changing the Focus: Managing State Trust Lands in the Twenty-First Century, 19 J. Land Resources & Envtl. L. 223 (1999). Unlike the New Mexico-Arizona Enabling Act, the Utah and Colorado enabling acts do not state that the lands are to be held in trust. 3 Because this court determined in Branson that the Colorado Enabling Act gave the lands in trust to the state, the analysis in Branson is particularly relevant to the present case. 29 A trust is created when a settlor conveys property to a trustee with a manifest intent to impose a fiduciary duty on that person requiring that the property be used for a specific benefit of others. Branson, 161 F.3d at 633. Congress may create a trust through the manifestation of an intent to create a fiduciary relationship. Id.; see also Flint, supra, at 7; Perry, supra, at 30. A settlor is not required to use any particular form of words in expressing its intent to create a trust, and the absence of trust language does not preclude the formation of a trust. See Branson, 161 F.3d at 634; James H. Flint, Trusts and Trustees 34 (1890); Jairus W. Perry, Trusts and Trustees 82 (1899). Instead, the creation of a trust depends on whether the relevant statutory provision contains 'an enumeration of duties' which would justify a conclusion that Congress intended to create a trust relationship. Branson, 161 F.3d at 634. 30 We then went on to apply these principles to the Colorado Enabling Act, concluding that it contained a sufficient enumeration of duties to indicate Congress's intent to create a fiduciary relationship between the state of Colorado and its common schools. See Branson, 161 F.3d at 634-35. Initially, we found that the language in the Colorado Enabling Act that the school lands are hereby granted to the said State for the support of the common schools. Colorado Enabling Act 7, 18 Stat. at 475, was insufficient to create a trust. We reasoned that this language, standing alone, would not be sufficient to establish a federal trust because it is no more specific than the language of the Michigan and Alabama grants, which were found to create only honorary obligations to support the states' common schools. See Branson, 161 F.3d at 634. 31 We then noted, however, that the language of section 7 was supplemented by other language in section 14 of the Colorado Enabling Act. In that clause, for the first time in any of Congress' school-lands legislation, Congress created explicit restrictions on how the school lands could be managed or disposed. Id. at 634. Congress required the following of Colorado: 32 That 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 common schools. 33 Colorado Enabling Act 14, 18 Stat. at 476. We found that these restrictions evidenced Congress' intent to create a trust because they enumerated Colorado's specific duties and were explicitly imposed to serve Congress' ultimate goal of providing permanence and a sound financial basis for the support of the state's common schools in perpetuity. See Branson, 161 F.3d at 634. Based in large part on the enumeration restrictions, we concluded that Congress intended to create a fiduciary obligation for the state of Colorado to manage the school lands in trust for the benefit of the state's common schools. See id., 161 F.3d at 634-35. 34 Like the Colorado Enabling Act, the Utah Enabling Act simply provides that the fifty thousand acres was granted: for the purpose[] indicated, namely: . . . [F]or a miner's hospital for disabled miners . . . . As noted in Branson, this language alone is not sufficient to create a trust. 35 However, unlike the Colorado Enabling Act, the Utah Enabling Act does not go on to place any explicit restrictions on how the . . . lands could be managed or disposed by limiting the manner in which the state may sell the lands. See Sally K. Fairfax, et. al., The School Trust Lands: A Fresh Look at Conventional Wisdom, 22 Envtl. L. 797, 821 (1992) (noting that Utah is the only state that entered the Union after Colorado that was not subject to specific limits on its authority to sell the school allotments contained in its enabling act). 36 The Utah Enabling Act provides that: the lands granted by this section shall be held, appropriated, and disposed of exclusively for the purposes herein mentioned, in such manner as the legislature may provide. The Utah Enabling Act, however, then expressly gives the Utah legislature discretion to dispose of the lands in such manner as the legislature may provide. We agree with the district court that this express latitude given to the State of Utah militates against the creation of a trust. See Mine Workers, 6 F. Supp.2d at 1302-03. 37 Although it is a close case, we believe these distinctions between the Utah Enabling Act and the Colorado Enabling Act are sufficient to lead to a different result here. Thus, we agree with the district court and conclude that the Utah Enabling Act does not create a trust because it does not sufficiently direct and restrict the legislature as to the manner in which it may dispose of the Lands and proceeds therefrom. 38