Court Opinion

ID: 4558606
Source: CourtListenerOpinion
Date Created: 2020-08-25 18:08:21.919858+00
Date Added: 2024-06-11T10:37:28.690834
License: Public Domain

Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

 Substitute Opinion Page 2, Paragraph 4 and Page 3 filed 08/04/2020
                Filed 07/30/20 by Clerk of Supreme Court

                  IN THE SUPREME COURT
                  STATE OF NORTH DAKOTA

                                2020 ND 175

Paul Sorum, Marvin Nelson, Michael Coachman,
Charles Tuttle and Lisa Marie Omlid, each on
behalf of themselves and all similarly situated
tax payers of the State of North Dakota,                 Plaintiffs, Appellees,
                                                        and Cross-Appellants
      v.

The State of North Dakota, The Board of University
and School Lands of the State of North Dakota,
The North Dakota Industrial Commission,
The Hon. Douglas Burgum, in his official capacity
as Governor of the State of North Dakota, and the
Hon. Wayne Stenehjem, in his official capacity as
Attorney General of North Dakota,                  Defendants, Appellants,
                                                      and Cross-Appellees

                                No. 20190203

Appeal from the District Court of Cass County, East Central Judicial District,
the Honorable John C. Irby, Judge.

AFFIRMED IN PART AND REVERSED IN PART.

Opinion of the Court by Tufte, Justice, in which Chief Justice Jensen, Justice
VandeWalle, and Surrogate Judge Anderson joined. Justice Crothers filed a
specially concurring opinion, in which Chief Justice Jensen joined.

Terrance W. Moore (argued), J. Robert Keena (appeared), and Joseph M.
Barnett (on brief), Edina, Minnesota, for plaintiffs, appellees, and cross-
appellants Marvin Nelson, Michael Coachman, Charles Tuttle, and Lisa Marie
Omlid.
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

Paul J. Sorum (appeared), self-represented, Bismarck, North Dakota, plaintiff,
appellee, and cross-appellant.

Matthew A. Sagsveen (appeared), Solicitor General, Office of Attorney
General, Bismarck, North Dakota, for defendants, appellants, and cross-
appellees the State of North Dakota, the Hon. Douglas Burgum, and the Hon.
Wayne Stenehjem.

Daniel L. Gaustad (argued), Ronald F. Fischer (on brief), and Joseph E. Quinn
(on brief), Special Assistant Attorneys General, Grand Forks, North Dakota,
for defendant, appellant, and cross-appellee North Dakota Industrial
Commission.

Mark R. Hanson (appeared), Special Assistant Attorney General, Fargo, North
Dakota, for defendant, appellant, and cross-appellee Board of University and
School Lands of the State of North Dakota.

Craig C. Smith (on brief) and Paul J. Forster (on brief), Bismarck, North
Dakota, for amicus curiae North Dakota Petroleum Council.
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

                               Sorum v. State
                                No. 20190203

Tufte, Justice.

      The Plaintiffs, in their individual capacities and on behalf of similarly
situated taxpayers, commenced this action for a declaratory judgment that
chapter 61-33.1, N.D.C.C., relating to the ownership of mineral rights in lands
subject to inundation by the Garrison Dam, is unconstitutional. The district
court concluded that N.D.C.C. § 61-33.1-04(1)(b) is on its face unconstitutional
under the “gift clause,” N.D. Const. art. X, § 18, and enjoined the State from
issuing any payments under that statute. The court rejected Plaintiffs’
constitutional challenges to the rest of chapter 61-33.1. The Defendants appeal
and the Plaintiffs cross-appeal from the court’s orders, judgment, and amended
judgment. We reverse that portion of the judgment concluding N.D.C.C. § 61-
33.1-04(1)(b) violates the gift clause and the court’s injunction enjoining those
payments. We also reverse the court’s award of attorney’s fees and costs and
service award to the Plaintiffs because they are no longer prevailing parties.
We affirm the remainder of the orders and judgment, concluding the Plaintiffs
have not established that chapter 61-33.1 on its face violates the constitution.

                                       I

      In 1944, the United States Congress authorized the construction of the
Garrison Dam on the Missouri River. Closure of the Garrison Dam resulted in
the impoundment of water in a reservoir now known as Lake Sakakawea.
Before construction began, the Army Corps of Engineers surveyed the area to
be inundated by the reservoir. The Corps used the survey to determine the
acreage necessary to be taken for the Garrison Dam project. The Corps
acquired through purchase or condemnation land that now makes up the bed
of Lake Sakakawea.

       In 1951, oil was first discovered in the Bakken Formation, some of which
lies under present-day Lake Sakakawea. Some owners of land in the Garrison
Dam take area reserved their mineral interests when they conveyed land title
to the United States. Beginning around 2006, horizontal drilling and hydraulic

                                       1
 Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

fracturing made oil and gas underneath the bed of Lake Sakakawea
economically accessible to producers.

[t4] The Board of University and School Lands ("the Land Board") manages
the state's sovereign lands related oil and gas interests. The State Engineer
manages all other state-owned minerals. In 2008, the Land Board authorized
a "Phase 1" survey to determine the ordinary high water mark ("OHWM") of
the Yellowstone and Missouri Rivers west of the Highway 85 Bridge. In 2010,
the Land Board authorized the "Phase 2" survey of the historical OHWM ofthe
Missouri River from Trenton to the Fort Berthold Reservation as it existed
prior to closure of the Garrison Dam.The Land Board used the Phase 2 survey
results for leasing sovereign minerals east of the Highway 85 Bridge.

[t5] The Phase 2 report contained the caveat that "[t]he work completed
under this contract was to investigate and identify the OHWM using historic
data, and is not a final legal determination as to whether any specific property
is 'sovereign land.'" In anticipation of title disputes, the Land Board also
established escrow accounts for disputed funds.

[t6] In 2017,the Legislative Assembly enacted Senate Bill 2134, which is now
codified as N.D.C.C. ch. 61-33.1 ("the Act"). The Act sought to define and limit
claims of state ownership of the minerals underneath Lake Sakakawea.
Section 61-33.1-02, N.D.C.C., states:

            The state sovereign land mineral ownership of the riverbed
      segments subject to inundation by Pick-Sloan Missouri basin
      project dams extends only to the historical Missouri riverbed
      channel up to the ordinary high water mark. The state holds no
      claim or title to any minerals above the ordinary high water mark
      of the historical Missouri riverbed channel subject to inundation
      by Pick-Sloan Missouri basin project dams, except for original
      grant lands acquired by the state under federal law and any
      minerals acquired by the state through purchase, foreclosure, or
      other written conveyance. Mineral ownership of the riverbed
      segments subject to inundation by Pick-Sloan Missouri basin
      project dams which are located within the exterior boundaries of
      the Fort Berthold reservation and Standing Rock Indian

                                                             Filed by Clerk of Supreme Court 08/04/2020
 Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

        reservation is controlled by other law and is excepted from this
        section.

[t?] Under the Act, the Corps Survey acted as the presumptive historical
OHWM of the Missouri River. N.D.C.C. § 61-33.1-03(1). The Act directed the
department of mineral resources to hire an engineering firm to review the
corps survey. N.D.C.C. § 61-33.1-03(2). Wenck Associates, Inc., completed a
survey, and its results were adopted as the true historical OHWM of the
Missouri River.

[t8] The Act also provided that within six months after the Land Board
adopted the acreage determination, "[a]ny royalty proceeds held by operators
attributable to oil and gas mineral tracts lying entirely above the ordinary high
water mark of the historical Missouri riverbed channel on both the corps
survey and the state phase two survey must be released to the owners of the
tracts, absent a showing of other defects affecting mineral title." N.D.C.C. § 61-
33.1-04(l)(a). The Act is retroactive and applies to oil and gas wells spud after
January 1, 2006, for purposes of oil and gas mineral and royalty ownership.Id]
2017 N.D. Sess. Laws ch. 426,§ 4. The Legislative Assembly appropriated $100
million for these refunds, and authorized an $87 million line of credit with the
Bank of North Dakota if the initial appropriation was insufficient. 2017 N.D.
Sess. Laws ch. 426, § 3.

[^9] In January 2018, the Plaintiffs sued the Defendants, seeking a
declaratory judgment that the Act is unconstitutional, and to enjoin the
Defendants from enforcing it. The Plaintiffs' complaint alleged N.D.C.C. ch.
61-33.1 "unconstitutionally gives away State-owned mineral interests to
108,000 acres underneath the OHWM of the Missouri River/Lake Sakakawea,
and above the Historic OHWM and gives away over $205 million in payments,
in violation of the Constitution of the State of North Dakota." The Plaintiffs
sought "a declaration that 61-33.1 is unconstitutional and an injunction
prohibiting all State officials from further implementing and enforcing the
Act."

                                                               Filed by Clerk of Supreme Court 08/04/2020
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

       The Defendants moved to dismiss under N.D.R.Civ.P. 19(b). The
Defendants argued the Plaintiffs’ failure to join all parties with leaseholds and
other interests in the minerals affected by the lawsuit required dismissal. The
district court denied the Defendants’ motion, concluding the Plaintiffs did not
fail to join any necessary party.

      The Plaintiffs moved to preliminarily enjoin the Defendants from
enforcing the Act. The district court concluded the Plaintiffs were unlikely to
prevail on any of their claims except that payments authorized under N.D.C.C.
§ 61-33.1-04(1)(b) violated the gift clause of the North Dakota Constitution.
The district court granted a partial preliminary injunction preventing the
Defendants from releasing refund payments under N.D.C.C. § 61-33.1-04(1)(b).

      The parties submitted opposing motions for summary judgment
premised on material facts stipulated for purposes of the motions. With one
exception, the district court rejected the constitutional challenges to N.D.C.C.
ch. 61-33.1 and granted summary judgment in favor of the Defendants. The
court concluded the authorization for payment of refunds under N.D.C.C. § 61-
33.1-04(1)(b) on its face violates the gift clause, N.D. Const. art. X, § 18, and
enjoined the Defendants from paying the refunds.

      The Plaintiffs moved for an award of attorney’s fees, costs, and service
awards. The Plaintiffs asked for $62,271,000 in attorney’s fees under the
common fund and private attorney general doctrines. The Plaintiffs’ attorneys
submitted affidavits indicating the number of hours billed and hourly rates of
the attorneys totaling $2,428,111 and $138,914.96. The district court
concluded there was no common fund and the Plaintiffs’ lodestars were
excessive, but it awarded $723,200 and $43,800 in attorney’s fees to the
Plaintiffs under the private attorney general doctrine. It also awarded
$18,145.20 in costs. The court awarded a service award to the named Plaintiffs
in the amount of $5,000 plus $50 per hour dedicated to the case by each
Plaintiff. The court did not cite legal authority for the award, but instead cited
Quaker Oats pitchman Wilford Brimley, stating “it’s the right thing to do.”

                                        4
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

                                        II

       The Defendants argue the district court abused its discretion in denying
their motion to dismiss for failure to join an indispensable party under
N.D.R.Civ.P. 19(b). We review a district court’s decision on a motion to dismiss
for failure to join an indispensable party for an abuse of discretion. Statoil Oil
& Gas LP v. Abaco Energy, LLC, 2017 ND 148, ¶ 6, 897 N.W.2d 1. A court
abuses its discretion only when “it acts in an arbitrary, unreasonable, or
unconscionable manner, its decision is not the product of a rational mental
process leading to a reasoned decision, or if it misinterprets or misapplies the
law.” Id. at ¶ 14 (quoting Datz v. Dosch, 2014 ND 102, ¶ 22, 846 N.W.2d 724).

         Rule 19(a), N.D.R.Civ.P., provides for the joinder of persons needed for
just adjudication. Stonewood Hotel Corp. v. Davis Dev., Inc., 447 N.W.2d 286,
289 (N.D. 1989). Under N.D.R.Civ.P. 19(a), a required party is one who “in that
person’s absence, the court cannot accord complete relief among existing
parties” or one who holds “an interest relating to the subject of the action and
is so situated that disposing of the action in the person’s absence may . . . as a
practical matter impair or impede the person’s ability to protect the interest;
or . . . leave an existing party subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations because of the interest.”

       Rule 19(b), N.D.R.Civ.P., provides for dismissal of an action in which a
required party cannot be made a party and is indispensable. “Dismissal of an
action for non-joinder of a party is an extreme remedy which should only be
granted where a party is truly ‘indispensable.’” Kouba v. Great Plains Pelleting,
Inc., 372 N.W.2d 884, 887 (N.D. 1985).

      “Complete relief” enjoining any enforcement of N.D.C.C. ch. 61-33.1 can
be accorded without joinder of leaseholders or other interest holders in this
action. The Defendants argue the court erred because proceeding in the action
without joining leaseholders and other interest holders would risk incurring
double, multiple, or otherwise inconsistent obligations for those individuals. It
is well-settled that joinder of all affected parties is not required where the
plaintiff seeks to vindicate a public right. See National Licorice Co. v. NLRB,

                                        5
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

309 U.S. 350, 362-63 (1940). Here, the action is a taxpayer challenge to the
constitutionality of a statute. Taxpayer challenges differ from most civil cases
in that a private party seeks to vindicate not only the party’s own individual
rights, but the rights of the public at large. Because the Plaintiffs here are
seeking to enforce public rights, they were not required to join every affected
party. The district court did not act in an arbitrary, unreasonable, or
unconscionable manner, or misinterpret or misapply the law. Therefore, we
hold the district court did not abuse its discretion in denying the Defendants’
Rule 19 motion to dismiss, and affirm the order denying the motion.

                                       III

       In their complaint, the Plaintiffs sought a declaration that N.D.C.C. ch.
61-33.1 is unconstitutional under the North Dakota Constitution’s gift clause,
watercourses clause, privileges or immunities clause, and the local or special
laws prohibition. The Plaintiffs also argued the Act violates the public trust
doctrine and sought declaratory relief and an injunction prohibiting all state
officials from implementing or enforcing the Act. The district court rejected
these challenges to the Act, with the exception of N.D.C.C. § 61-33.1-04(1)(b),
which the court concluded was facially unconstitutional under the gift clause.

      “Whether a statute is unconstitutional is a question of law, which is fully
reviewable on appeal.” Teigen v. State, 2008 ND 88, ¶ 7, 749 N.W.2d 505 (citing
Best Products Co., Inc. v. Spaeth, 461 N.W.2d 91, 96 (N.D. 1990)). When
interpreting constitutional provisions, “we apply general principles of
statutory construction.” State ex rel. Heitkamp v. Hagerty, 1998 ND 122, ¶ 13,
580 N.W.2d 139 (quoting Comm’n on Med. Competency v. Racek, 527 N.W.2d
262, 266 (N.D. 1995). We aim to give effect to the intent and purpose of the
people who adopted the constitutional provision. Id. We determine the intent
and purpose of a constitutional provision, “if possible, from the language itself.”
Kelsh v. Jaeger, 2002 ND 53, ¶ 7, 641 N.W.2d 100. “In interpreting clauses in
a constitution we must presume that words have been employed in their
natural and ordinary meaning.” Cardiff v. Bismarck Pub. Sch. Dist., 263
N.W.2d 105, 107 (N.D. 1978).

                                        6
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

      “A constitution ‘must be construed in the light of contemporaneous
history—of conditions existing at and prior to its adoption. By no other mode
of construction can the intent of its framers be determined and their purpose
given force and effect.’” Hagerty, 1998 ND 122, ¶ 17, 580 N.W.2d 139 (quoting
Ex parte Corliss, 16 N.D. 470, 481, 114 N.W. 962, 967 (1907)). Ultimately, our
duty is to “reconcile statutes with the constitution when that can be done
without doing violence to the language of either.” State ex rel. Rausch v.
Amerada Petroleum Corp., 78 N.D. 247, 256, 49 N.W.2d 14, 20 (1951). Under
N.D. Const. art. VI, § 4, we “shall not declare a legislative enactment
unconstitutional unless at least four of the members of the court so decide.”

      The Plaintiffs’ constitutional challenges are “facial” challenges rather
than “as-applied” challenges. Rather than challenging a particular refund
under a particular lease as a constitutional violation by the state officer
executing the law, the complaint sought “a declaration that [N.D.C.C. ch.] 61-
33.1 is unconstitutional.” A claim that a statute on its face violates the
constitution is a claim that the Legislative Assembly exceeded a constitutional
limitation in enacting it, and the practical result of a judgment declaring a
statute unconstitutional is to treat it “as if it never were enacted.” Hoff v. Berg,
1999 ND 115, ¶ 19, 595 N.W.2d 285. The Plaintiffs’ assertion of standing as
taxpayers underscores this. The Plaintiffs assert no personal interest or
ownership in the minerals at issue—as taxpayers, they claim only financial
harm to the government and seek a declaration that the Act is void and no
payments may be made under its authority. A facial challenge to a statute
presents a higher bar than an as-applied challenge because under N.D. Const.
art. VI, § 4, it requires four votes in this court to declare a legislative enactment
unconstitutional. A facial challenge is purely a question of law because the
violation, if any, occurs at the point of enactment by virtue of the Legislative
Assembly enacting a law prohibited by the constitution. Id. A violation that
occurs at the time of enactment does not depend on any facts or circumstances
arising later.

                                         7
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

                                        A

       The Defendants argue that because the Plaintiffs’ claims are limited to
facial challenges, their burden is to establish there is no set of circumstances
under which chapter 61-33.1 could constitutionally be applied. As presented
here, the Defendants argue the Plaintiffs must establish that the State owns
the entire affected area because the Act could constitutionally be applied to
any lands the State does not own. Likewise, N.D.C.C. § 61-33.1-04(1)(b) applies
to claims for return of royalties within the statute of limitations and to claims
that have lapsed. The Defendants cite to our recent application of a “no set of
circumstances” standard to an individual’s facial equal protection challenge.
Larimore Pub. Sch. Dist. No. 44 v. Aamodt, 2018 ND 71, ¶ 38, 908 N.W.2d 442
(citing U.S. v. Salerno, 481 U.S. 739, 745 (1987)). The Defendants’ assertion
that they can defeat all of these facial challenges at the outset by hypothesizing
a constitutional application is unpersuasive and inconsistent with how we have
analyzed facial challenges brought by taxpayers seeking to invalidate spending
statutes under the constitution’s gift clause and debt limit provisions.

       The Plaintiffs argue the State may not legitimate an unconstitutional
gift by pairing it with transfers that do not violate the gift clause. If the State
owns some of the mineral acres in the affected area, it may not by statute
renounce all interest in all the acres and respond to a gift clause challenge by
asserting the statute is facially constitutional because it has constitutional
application to the renounced acreage the State didn’t own to begin with. We
apply our longstanding standard for taxpayer challenges to statutes under the
gift clause. A taxpayer’s burden in a facial challenge under the gift clause is
satisfied if the statute requires some transfers that would be unconstitutional
donations regardless of whether other transfers under the statute would not
constitute unconstitutional donations. State ex rel. Eckroth v. Borge, 69 N.D. 1,
12, 283 N.W. 521, 526 (1939) (reasoning that if statute removed recipient need
as qualification, it would provide assistance “at least to some who are not in
need” and would thus violate the gift clause).

     In resolving taxpayer challenges to the constitutionality of statutes
authorizing government spending, we have said “where the constitutionality

                                        8
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

of a statute depends upon the power of the legislature to enact it, its validity
must be tested by what might be done under color of the law and not what has
been done.” Herr v. Rudolf, 75 N.D. 91, 103, 25 N.W.2d 916, 922 (1947) (citing
State v. Stark County, 14 N.D. 368, 103 N.W. 913 (1905)). Because the Act
requires the State to release all royalties, under both enforceable claims and
previously-lapsed claims, it necessarily includes transactions that are without
legal obligation and thus we must determine whether those transactions are
prohibited “donations.” Accordingly, despite having constitutional application
to unexpired claims, in the context of a taxpayer challenge under the gift
clause, we conclude the Plaintiffs’ facial challenge does not fail merely because
the statute includes constitutional applications along with potentially
unconstitutional applications.

                                       B

      The gift clause of the North Dakota Constitution provides:

            The state, any county or city may make internal
      improvements and may engage in any industry, enterprise or
      business, not prohibited by Article XX of the Constitution, but
      neither the state nor any political subdivision thereof shall
      otherwise loan or give its credit or make donations to or in aid of
      any individual, association or corporation except for reasonable
      support of the poor, nor subscribe to or become the owner of capital
      stock in any association or corporation.

N.D. Const. art. X, § 18. Section 61-33.1-04(1)(b), N.D.C.C., provides that
within six months after adoption of the acreage determination by the Land
Board:

            Any royalty proceeds held by the board of university and
      school lands attributable to oil and gas mineral tracts lying
      entirely above the ordinary high water mark of the historical
      Missouri riverbed channel on both the corps survey and the state
      phase two survey must be released to the relevant operators to
      distribute to the owners of the tracts, absent a showing of other
      defects affecting mineral title.

                                       9
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

This section applies retroactively to all wells spud after January 1, 2006, for
purposes of oil and gas mineral and royalty ownership. 2017 N.D. Sess. Laws
ch. 426, § 4.

       The Plaintiffs identify four categories of state-owned funds or property
which they claim the Act gives away to private individuals in violation of the
gift clause. The categories are: (1) leases and leased mineral acres; (2) unleased
mineral acres; (3) $187 million in the Strategic Investments and Improvements
Fund (“SIIF”); and (4) $18 million escrowed because of royalty disputes. The
district court’s analysis of section 61-33.1-04(1)(b) implicates only category 3,
the royalty proceeds held in the SIIF. Because the Plaintiffs cross-appeal the
district court’s rejection of their facial challenge to the chapter as a whole, we
must also consider the chapter’s application to the other categories of money
or property. The Defendants argue the State had no protectable interest in the
property that could be given away and that reviving claims against the State
barred by the statute of limitations does not implicate the gift clause.

       The district court interpreted N.D.C.C. § 61-33.1-04(1)(b) to require the
Land Board to transfer State funds from the SIIF to newly adjudicated mineral
owners without consideration to the State because its retroactivity to 2006
effectively extended the statute of limitations, reviving claims against the
State that were barred before the Act became effective. The relevant statute of
limitations is N.D.C.C. § 28-01-22.1, under which any action against the state,
state employees or state officials “must be commenced within three years after
the claim for relief has accrued.” The district court reasoned that any royalty
proceeds subject to claims that had lapsed under the three-year statute of
limitations were indisputably owned by the State because they were no longer
subject to any legally enforceable claim. It concluded that by directing payment
of money to private parties under lapsed and unenforceable claims, section 61-
33.1-04(1)(b) violates on its face the constraints of N.D. Const. art. X, § 18. The
district court also concluded there was no constitutional violation presented by
the other provisions of the Act, either with respect to the funds in the SIIF or
to the other categories of property interests asserted as prohibited gifts.

                                        10
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

      The issue before us is whether refunds under section 61-33.1-04(1)(b) or
other provisions of the Act directing transfer or release of the State’s interest
in these four classes of property constitute “donations” prohibited by the gift
clause.

      We first consider the ordinary meaning of “donation” at the time the
provision was enacted. The phrase “make donations to or in aid of any
individual, association or corporation” appeared in the original 1889
constitution, then numbered Section 185. Haugland v. City of Bismarck, 2012
ND 123, ¶ 26, 818 N.W.2d 660. Dictionaries of the era defined “donation” by
reference to the Latin word donatio, meaning “[t]he act by which the owner of
a thing voluntarily transfers the title and possession of the same from himself
to another person, without any consideration.” Bouvier, A Law Dictionary 559
(15th ed. 1883); Black, A Dictionary of Law 389 (1st ed. 1891) (same); Webster’s
Complete Dictionary 404 (1886 ed.) (quoting Bouvier for definition used in law
and providing common definition as “[t]hat which is given or bestowed; that
which is transferred to another gratuitously, or without a valuable
consideration; a gift; a grant.”). These consistent definitions comport with the
modern usage of “donation” and provide a reliable starting point in
determining how the term would have been used and understood by those who
drafted and adopted the provision. See Wilkens v. Westby, 2019 ND 186, ¶ 8,
931 N.W.2d 239 (“Using dictionaries close in time to the enactment of a statute
is helpful in determining substantive meaning.”).

      When the North Dakota Constitution was adopted, New York had a
provision that was “nearly identical in language with section 185.” Erskine v.
Steele Cty., 87 F. 630, 636 (C.C.D.N.D. 1898), aff'd, 98 F. 215 (8th Cir. 1899).
Authoritative interpretations of gift clauses in other state constitutions that
predated adoption of the North Dakota constitution in 1889 are particularly
persuasive. “Courts in construing constitutional or statutory provisions which
have been taken from another state almost invariably hold that the Legislature
or the Constitution makers are presumed to have adopted it with knowledge of
the construction or interpretation given it by the courts of the state whence it
comes, and therefore to have adopted such construction or interpretation.”

                                       11
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

State ex rel. McCue v. Blaisdell, 18 N.D. 31, 119 N.W. 360, 365 (1909). New
York amended its constitution in 1875 to forbid gift or loan of the money of the
state. Trustees of Exempt Firemen’s Benev. Fund of City of New York v. Roome,
93 N.Y. 313, 316 (1883). Interpreting this clause soon after its adoption, New
York’s high court considered a gift clause challenge to a statute authorizing
payment to firemen “after the service ended, and when there was no legal or
equitable obligation operating upon the State.” Id. at 326. The court concluded
the historical circumstances showed the payment was not a prohibited
donation, but discharge of an honorable obligation, analogizing to payment of
a debt discharged in bankruptcy:

      If a merchant fails in business and compromises with his creditors
      for a part only of their debts, or is discharged in bankruptcy with
      a small dividend, and thereafter being fortunate and becoming
      rich, calls his old creditors together, and gives to each principal
      and interest of the discharged balance, he does what he is not
      obliged to do, what neither law nor equity could compel, but he
      does not make a gift or dispense a charity. A purely moral
      obligation rests upon him, which he may or may not heed, but if he
      does, it characterizes his act, and makes that an honest payment
      of an honest debt which otherwise would have been a charity and
      a gift.

Roome, 93 N.Y. at 326.

       Roome did not characterize the appropriation for the firemen as
supported by only a moral obligation without past consideration supporting it.
As a result of technological and organizational changes in firefighting, many
firemen were discharged from service, although “they stood ready to serve their
full terms.” Id. at 325. The court explained that the payment to the firemen
after their service had ended was “an honorable obligation founded upon their
past services and the injuries and suffering which those had occasioned.” Id.
at 326. The court concluded the payment of public money to the exempt firemen
was not a gift or donation prohibited by the state constitution: “the
constitutional provision was not intended and should not be construed to make
impossible the performance of an honorable obligation founded upon a public
service, invited by the State, adopted as its agency for doing its work, and

                                      12
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

induced by exemptions and rewards which good faith and justice require
should last so long as the occasion demands.” Id. at 327.

      After North Dakota adopted its gift clause, at least two states considered
whether payment of a claim against the state that is no longer legally
enforceable is a donation under a similar constitutional provision. In
Bickerdike v. State, the Supreme Court of California considered legislation
waiving the defense of a statute of limitations for claims that had expired
several years prior to passage of the act. 78 P. 270, 275 (Cal. 1904). The court
concluded waiver of the limitations defense was not a gift within the meaning
of the constitutional provision because the defense did not extinguish the
underlying debt obligation but only barred remedy in court. “The payment of
such a debt by the debtor is not a ‘gift,’ in any proper sense of the word, and
there is nothing in the constitutional provision invoked that can be held to
prohibit the legislature from paying these claims.” Id.

      The Supreme Court of Wyoming has also considered a challenge under
a provision forbidding the state to “make donations to or in aid of any
individual . . . except for necessary support of the poor.” State v. Carter,
30 Wyo. 22, 29, 215 P. 477, 479 (1923). The Wyoming legislature had
appropriated three thousand dollars for relief of the widow of an undersheriff
who had been killed in the line of duty. Considering the claim that this was an
unconstitutional donation, the court explained:

      In a sense, of course, every payment not legally enforceable might
      be said to be a gift. But courts have not, generally, construed that
      term as broadly as that. A claim paid after it is barred by the
      statute of limitation is not considered a gift, but the recognition of
      a moral right, and, when the existence thereof is acknowledged
      after the statute has run, it may even be enforced in an action at
      law. And it is generally held that, to be a claim which a state may
      recognize, it need not be such as is legally enforceable, but may be
      a moral claim, one based on equity and justice.

Id. (emphasis added).

                                       13
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

       This Court has previously said that “a moral or equitable obligation on
the state” may support a transfer lacking any money or other consideration.
Solberg v. State Treasurer, 78 N.D. 806, 814, 53 N.W.2d 49, 53 (1952). In
Solberg, we found no sufficient moral or equitable obligation supported a
finding of consideration for the release of a reservation of mineral rights. Id. at
53-54. In that case, the State conveyed land subject to a 50% mineral
reservation for an agreed price that accounted for the reserved minerals. Id. at
50. The State never had a legal obligation to convey the 50% mineral interest
it reserved, and thus we concluded the legislation gratuitously conveying this
mineral interest to the surface owner was void under the gift clause. Id. at 53-
54. We also considered “moral” consideration, finding none, when interpreting
“donation” in Petters & Co. v. Nelson County, 68 N.D. 471, 480, 281 N.W. 61,
65 (1938). As in Solberg, and unlike the situation here, the State had no prior
legal obligation to pay the plaintiff’s claim. Rather than paying a previously
valid claim to which the State had a statutory defense, the statute at issue in
Petters & Co. created a new obligation, which the Court held would “constitute
a donation, a pure and simple gratuity, unsupported by any consideration,
legal, equitable, or moral.” Id.

       These cases are consistent with the underlying rule of law found in the
field of contracts, which for centuries has recognized the concept of moral
obligations providing legal consideration to support formation of a contract—
but only a contract related to the obligation. One prominent treatise explains
the history of consideration based on a moral obligation as follows:

      Beginning about the middle of the 18th Century, the term “moral
      obligation” as a kind of past consideration that would validate a
      subsequent promise to fulfill the obligation gained currency. This
      theory of moral consideration was applied in various cases during
      the latter half of the 18th Century; thus, a promise by overseers of
      the poor to pay for expenses incurred in curing a pauper was
      upheld, as was a promise by an executor, having assets sufficient
      for the purpose, to pay a pecuniary legacy. Courts also upheld a
      promise to pay the legal portion of a usurious debt on the ground
      that the promisor was morally obliged to do so, and a promise by a
      widow to indemnify one who had advanced money to another at

                                        14
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

      her request during her coverture when she was incapable of
      contracting was upheld on similar grounds.
      However, about the beginning of the 19th Century courts began to
      restrict the doctrine of moral consideration, out of concern for the
      fact that enforcement of such promises would lead to an
      unacceptable breadth of promissory liability. In the words of one
      court, “The enforcement of such promises by law, however
      plausibly reconciled by the desire to effect all conscientious
      engagements, might be attended with mischievous consequences
      to society, one of which would be the frequent preference of
      voluntary undertakings to claims for just debts. Suits would
      thereby be multiplied, and voluntary undertakings would also be
      multiplied, to the prejudice of real creditors. The temptations of
      executors would be much increased by the prevalence of such a
      doctrine, and the faithful discharge of their duty be rendered more
      difficult.” The rule thus developed that an express promise could
      only give rise to liability if there had previously been a
      consideration which would have given rise to an implied promise
      which might have been enforced by an action at law but for some
      technical bar.

4 Williston on Contracts § 8:14 (footnotes omitted).

      These nineteenth-century restrictions on the concept of moral
consideration were included in the 1877 territorial code, and the provision
remains materially unchanged in the century code today. N.D.C.C. § 9-05-02
(“An existing legal obligation resting upon the promisor, or a moral obligation
originating in some benefit conferred upon the promisor or prejudice suffered
by the promisee, also is a good consideration for a promise to an extent
corresponding with the extent of the obligation, but no further or otherwise.”).
Like the law of contract, the holding we announce today is limited to those
obligations that existed at law and would have been enforceable against the
State but for a technical bar such as the statute of limitations.

      The Defendants argue broadly that the State may extend a statute of
limitations without implicating constitutional limits, but cite only cases
addressing constitutional challenges under the due process clause, such as
Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 229 (1995). These cases are

                                      15
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

distinguishable because the constitutional issue was whether the state could
extend a statute of limitations and revive a lapsed claim against a private
party. Id. (explaining “a statute of limitations . . . can be extended, without
violating the Due Process Clause, after the cause of the action arose and even
after the statute itself has expired”). Where vested property interests are
implicated, a defendant may have a due process interest that limits retroactive
extension of a statute of limitation. See Interest of W. M. V., 268 N.W.2d 781,
786 (N.D. 1978) (rejecting due process challenge to statute reviving claims
previously barred because challenger had no vested rights). Here, no due
process issue is presented, because the State has extended the statute of
limitation to claims against itself and it cannot be said to violate its own due
process rights by enacting a statute. See Schoon v. NDDOT, 2018 ND 210, ¶ 23,
917 N.W.2d 199; Ruotolo v. State, 631 N.E.2d 90, 96-97 (N.Y. 1994) (rejecting
argument that the legislature may violate the state’s due process rights by
enacting a law reviving unenforceable claims). But whether the Act is
consistent with due process does not answer whether it may violate the gift
clause by releasing funds the state had no legal obligation to pay.

      We hold that where the State has a legal obligation that becomes
unenforceable by the passage of a statute of limitations, the Legislative
Assembly may waive or extend the limitation period to revive a previously
valid claim against the State without making a prohibited “donation” within
the meaning of the gift clause.

       We now apply this framework to the Plaintiffs’ claims about release of
royalties from the SIIF, which the district court concluded was a prohibited
gift. Claims to the royalty proceeds held by the Land Board may be divided into
two groups: those funds subject to claims that had lapsed prior to the effective
date of the Act, and those funds subject to claims that had not lapsed.

      The money in the SIIF that the State is required to release under § 61-
33.1-04(1)(b) is in the SIIF because the State was paid royalties under leases
of minerals that it once claimed but now by statute no longer claims. This
section requires those funds be released to the operating oil company for
payment to the mineral owners determined under the Act. We reject the

                                      16
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

Plaintiffs’ argument that the gift clause requires the State to rely on the
statute of limitations and keep money it was paid for leasing minerals it now
acknowledges it does not own and should not have leased. Although the State
may have a legal defense under the statute of limitations, it also has a moral
obligation to pay its just debts and deal fairly with the people. These funds
have accrued since 2006 and have been held separately from other funds, so no
new revenue will have to be raised to pay these claims. We conclude the State
may through legislation recognize this obligation and return funds from the
SIIF without making a prohibited “donation” under the gift clause.

      In their cross-appeal, the Plaintiffs argue the district court erred in
concluding there was no gift clause violation by the Act’s disclaimer of interests
in leases, leased mineral acres, unleased mineral acres, and $18 million
escrowed because of royalty disputes. These claims turn on whether the State
ever had a legal interest such that disclaimer of that interest could constitute
a prohibited donation.

      Under the equal-footing doctrine, North Dakota acquired title to the bed
of the Missouri River up to its ordinary high water mark at the time North
Dakota was admitted to the union. Reep v. State, 2013 ND 253, ¶ 14, 841
N.W.2d 664. Citing Oregon ex. rel. State Land Bd. v. Corvallis Sand & Gravel
Co., 429 U.S. 363, 371-72, 376 (1977), the district court concluded that the
equal-footing doctrine vested the State with title to the bed of the Missouri
River as it existed at the time of statehood, but that since statehood, the equal-
footing doctrine does not determine how the changing footprint of the river over
time affects title to the riverbed. Instead, how the changing riverbed affects
the State’s title is controlled by state law, including the public trust doctrine.

      The public trust doctrine was first recognized by this Court in United
Plainsmen v. N.D. State Water Conservation Commission, 247 N.W.2d 457
(N.D. 1976). In United Plainsmen, this Court stated N.D.C.C. § 61-01-01
expresses the public trust doctrine. Id. at 462. Under the public trust doctrine,
the State holds title to the beds of navigable waters in trust for the use and
enjoyment of the public. This Court has said fostering the public’s right of
navigation is traditionally the most important feature of the public trust

                                       17
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

doctrine. J.P. Furlong Enterprises, Inc. v. Sun Exploration and Production Co.,
423 N.W.2d 130, 140 (N.D. 1988). We have also recognized other interests
served by the public trust doctrine, such as bathing, swimming, recreation
and fishing, as well as irrigation, industrial and other water supplies. Id.
(recognizing that legislation may modify this common law doctrine).

      The Submerged Lands Act, 43 U.S.C. § 1301 – 1356b, generally confirms
state ownership of the title to the beds of navigable waters as against any claim
of the United States. 43 U.S.C. § 1311. But from this broad confirmation of
state authority, it excepts “all lands acquired by the United States by eminent
domain proceedings, purchase, cession, gift, or otherwise in a proprietary
capacity.” 43 U.S.C. § 1313(a). The federal government acquired the bed of
Lake Sakakawea above the historical OHWM by purchase or eminent domain
so that it could be inundated by the Garrison Dam. Under § 1313 of the
Submerged Lands Act, the land taken by the federal government for the
Garrison Dam project is owned by the United States.

      Under the Supremacy Clause, U.S. Const. art. VI, cl. 2, the laws of the
United States are the supreme law of the land, and any state law that conflicts
with federal law is without effect. Home of Economy v. Burlington N. Santa Fe
R.R., 2005 ND 74, ¶ 5, 694 N.W.2d 840. The Plaintiffs present several
arguments as to how the State obtained ownership of the disputed minerals,
including by implication of the watercourses clause of the state constitution,
by self-executing transfer under the Sovereign Lands Act, N.D.C.C. § 61-33-03,
and the common law public trust doctrine first recognized in United
Plainsmen. The Flood Control Act of 1944 authorized construction of the
Garrison Dam and acquisition of the land that would be subject to inundation
by the reservoir. Any contrary state law, including the constitution, a statute,
or the common law, which purports to vest in the State the legal ownership of
the bed of Lake Sakakawea is preempted under the Supremacy Clause to that
extent.

      The federal government acquired through purchase or eminent domain
both the surface and mineral estate to much of the affected area, but it allowed
some landowners to reserve their mineral interests during the acquisition

                                       18
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

phase. Since the federal government’s acquisition under authority of the Flood
Control Act of 1944, the prior landowners’ reservation of mineral interests has
remained in the chain of title. The Submerged Lands Act expressly excepts
from an otherwise broad assignment to states of the lands beneath navigable
waters those lands acquired by the United States by eminent domain or
purchase. 43 U.S.C. §§ 1311, 1313. These federal laws preempt operation of
any state law that would otherwise vest ownership in the state, including
chapter 61-33 and the public trust doctrine. As a result, we conclude the
lakebed above the historic OHWM and accompanying mineral estates were
never the State’s to “give away.” The State does not violate the gift clause by
transferring property or renouncing claims to property that it does not own in
the first instance. Because the State cannot give away that which it does not
own, we hold the Act does not violate the gift clause of the North Dakota
Constitution to the extent that it renounces claims to leases, leased mineral
acres and unleased mineral acres in the affected area. The Defendants’ release
of claims to funds held in escrow as a result of royalty disputes is derivative of
its claims to the leases and leased mineral acres and would not be subject to a
statute of limitation defense and so also does not violate the gift clause.

                                         C

      The Plaintiffs argue the district court erred in concluding N.D.C.C. ch.
61-33.1 does not violate N.D. Const. art. XI, § 3 (“the watercourses clause”).

       The watercourses clause provides, “All flowing streams and natural
watercourses shall forever remain the property of the state for mining,
irrigating and manufacturing purposes.” N.D. Const. art. XI, § 3. The word
“remain” in the text of the watercourses clause reinforces the principle that the
State’s ownership of flowing streams and natural watercourses was fixed at
statehood. See Riemers v. Eslinger, 2010 ND 76, ¶ 11, 781 N.W.2d 632
(emphasizing the word “remain” in concluding the scope of the jury trial right
was fixed at statehood by N.D. Const. art. I, § 13, which guarantees “the right
to a jury trial ‘shall . . . remain inviolate’” (quoting City of Bismarck v. Fettig,
1999 ND 193, ¶ 11, 601 N.W.2d 247)); State v. Lohnes, 69 N.W.2d 508, 512-13
(N.D. 1955) (overruled on other grounds) (emphasizing use of “remain” in the

                                        19
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

enabling act and section 203 of the constitution to emphasize that state and
federal jurisdiction over Indian lands was fixed at statehood). We conclude the
watercourses clause operated to vest in the State ownership of watercourses
which existed at statehood, but does not operate to vest in the State
watercourses that become navigable after statehood, such as Lake Sakakawea.

       This is consistent with this Court’s prior interpretation of the
watercourses clause. For example, in Ozark-Mahoning Co. v. State, 76 N.D.
464, 37 N.W.2d 488 (1949), this Court held that the watercourses clause
applies only to watercourses which were navigable upon North Dakota’s
admission to the United States. There, the State appealed from a judgment
quieting title to the bed of Grenora Lake in favor of the riparian owners of the
lots abutting the meander lines around the lake. Id. at 489-90. The State
argued that only it could own the lakebed under the watercourses clause. Id.
at 492-93. Because no evidence showed that Grenora Lake was navigable when
North Dakota was admitted to the United States, the Court affirmed the
judgment in favor of the landowners. Id. at 493. Citing Bigelow v. Draper, 6
N.D. 152, 69 N.W. 570 (1896), the Court explained that under the common law
of Dakota Territory when North Dakota was admitted to the United States,
“the owner of land through which a nonnavigable stream flowed was possessed
of the title to the bed of the stream.” The watercourses clause was interpreted
to apply only to those watercourses that were navigable at statehood because
an interpretation that would divest the rights of riparian owners to the beds of
watercourses that were not navigable in fact at statehood would violate the
Fourteenth Amendment to the U.S. Constitution. Id.

      Here, the stipulated facts reflect that the land from the bank of the
Missouri River up to an elevation of 1854 feet mean sea level was acquired by
the Corps for impounding water by operation of the Garrison Dam. The area
above the banks of the Missouri River was not navigable when North Dakota
was admitted to the United States. Because the affected area was not
navigable at statehood, and became navigable only when inundated by
operation of the Garrison Dam beginning in 1953, we conclude N.D.C.C. ch.
61-33.1 does not violate the watercourses clause.

                                      20
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

                                          D

      The Plaintiffs argue the district court erred in concluding N.D.C.C. ch.
61-33.1 does not violate sections 21 and 22 of the North Dakota Constitution.
Article I, § 21, provides:

             No special privileges or immunities shall ever be granted
      which may not be altered, revoked or repealed by the legislative
      assembly; nor shall any citizen or class of citizens be granted
      privileges or immunities which upon the same terms shall not be
      granted to all citizens.

Article I, § 22, N.D. Const., provides:

            All laws of a general nature shall have a uniform operation.

         The state constitution “does not prohibit legislative classifications or
require identical treatment of different groups of people.” Larimore Pub. Sch.
Dist. No. 44 v. Aamodt, 2018 ND 71, ¶ 34, 908 N.W.2d 442 (citing State v.
Leppert, 2003 ND 15, ¶ 7, 656 N.W.2d 718). In MCI Telecommunications Corp.
v. Heitkamp, 523 N.W.2d 548, 552 (N.D. 1994), this Court distinguished
between general laws and special laws, and stated that “[s]pecial laws are
made for individual cases of less than a class, due to peculiar conditions and
circumstances[,]” while general laws “appl[y] to all things or persons of a class.”
This Court then stated, “Reasonable classification does not violate the special
laws provision of the North Dakota Constitution.” Id. at 553. “A statutory
classification challenged under the special laws provision of our constitution
is . . . to be upheld if it is natural, not arbitrary, and standing upon some reason
having regard to the character of the legislation of which it is a feature.” Id.

      The Plaintiffs cite Solberg v. State Treasurer, 78 N.D. 806, 816-17, 53
N.W.2d 49, 55 (1952), for the proposition that the Act denies equal protection
to the many by distributing state-owned assets to the few. In Solberg, this
Court’s holding was limited to the gift clause. Id. The Plaintiff’s equal
protection argument is simply a repackaging of the Plaintiffs’ gift clause
argument which we rejected in section III-B above.

                                          21
 Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

[^54] The Plaintiffs also argue the Act created an unconstitutionally arbitrary
classification by distinguishing between wells spud before and after January
1, 2006. The record reflects January 2006 was the approximate time oil and
gas production began under Lake Sakakawea via horizontal drilling.
Therefore, the Act's retroactive application to January 1, 2006, reflects a
rational line dividing periods with different economic and industrial
characteristics and is not arbitrary. Because the Act did not create an
unconstitutional classification, we hold that the district court did not err in
concluding it does not violate N.D. Const, art. I, §§ 21 and 22.

                                           E

[t55] The Plaintiffs argue the district court erred in concluding N.D.C.C. ch.
61-33.1 does not violate the public trust doctrine.

[Tf56] In North Dakota, a mineral estate severed from the surface estate
charges the surface estate owner with an implied servitude for the owner or
lessee of the mineral estate to develop the minerals. Krenz v. XTO Energy,Inc.,
2017 ND 19, t 42, 890 N.W.2d 222 (citing Hunt Oil Co. v. Kerbaugh, 238
N.W.2d 131, 135(N.D. 1979)). Because the mineral estate is dominant over the
surface estate, easements implied by private mineral ownership under a
navigable waterway would offend the public trust if the mineral owner's
easement is in conflict with and superior to the State's trust interest. However,
as discussed above, the federal government holds title to the lakebed of Lake
Sakakawea, and its interest supersedes the State's public trust interest under
the Supremacy Clause. Because the federal government, rather than the State,
holds title to the lakebed outside the historical river channel, the public trust
is not implicated by private mineral ownership under Lake Sakakawea.
Because the public trust doctrine is a common law principle, it cannot
invalidate a statute that is not prohibited by the constitution. N.D.C.C. § 1-01-
06; § 1-02-01; Verry v. Trenbeath, 148 N.W.2d 567, 571 (N.D. 1967). We
conclude the district court did not err in concluding N.D.C.C. ch. 61-33.1 does
not violate the public trust doctrine.

              Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

                                           22
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

                                       IV

       The Defendants argue that the district court abused its discretion in
awarding attorney’s fees, costs, and service fees. The Plaintiffs also argue on
cross-appeal that the district court abused its discretion in its calculation of
attorney’s fees, costs, and service fees. A district court’s decision on attorney’s
fees is reviewed under the abuse of discretion standard. Rocky Mountain Steel
Foundations, Inc. v. Brockett Company, LLC, 2019 ND 252, ¶ 7, 934 N.W.2d
531 (citing Lincoln Land Dev., LLP v. City of Lincoln, 2019 ND 81, ¶ 20, 924
N.W.2d 426).

       North Dakota courts generally apply the “American Rule” for attorney’s
fees and assume each party to a lawsuit will bear its own attorney’s fees. Rocky
Mountain Steel Foundations, 2019 ND 252, ¶ 9, 934 N.W.2d 531 (citing
Deacon’s Dev., LLP v. Lamb, 2006 ND 172, ¶ 11, 719 N.W.2d 379). “[S]uccessful
litigants are not allowed to recover attorney fees unless authorized by contract
or by statute.” Id. As an exception to the American Rule, a lawyer who recovers
a common fund for the benefit of persons other than himself or his client may
be entitled to reasonable attorney’s fees from the fund as a whole. Ritter, Laber
& Assocs., Inc. v. Koch Oil, Inc., 2007 ND 163, ¶ 27, 740 N.W.2d 67 (citing Horst
v. Guy, 211 N.W.2d 723, 732 (N.D.1973)).

      The award of attorney’s fees was not authorized by contract or statute.
As a result of our decision, the Plaintiffs did not recover a common fund for the
benefit of others and are therefore not entitled to attorney’s fees under the
common fund doctrine. We reverse the award of attorney’s fees. Under
N.D.C.C. § 28-26-06, costs are taxed in favor of the prevailing party. Because
we reverse the portion of the summary judgment finding application of
N.D.C.C. § 61-33.1-04(1)(b) unconstitutional, the Plaintiffs are no longer
prevailing parties. We reverse the award of costs.

      As a result of our decision here the Plaintiffs are no longer prevailing
parties, and therefore no theory supports a service award. Because we reverse
the portion of the summary judgment on which the Plaintiffs initially

                                        23
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

prevailed, we also reverse the district court’s grant of the requested service
award.

                                        V

       We affirm the district court’s order denying the Defendants’ N.D.R.Civ.P.
19(b) motion to dismiss. We affirm that part of the court’s judgment concluding
the Plaintiffs have not demonstrated N.D.C.C. ch. 61-33.1 is facially
unconstitutional. We reverse the order granting an injunction and reverse the
judgment to the extent it concludes the release of lease and bonus refunds
authorized under N.D.C.C. § 61-33.1-04(1)(b) would result in unconstitutional
gifts under N.D. Const. art. X, § 18, and to the extent it awards to the Plaintiffs
attorney’s fees, costs, and service awards.

      Jerod E. Tufte
      Norman G. Anderson, S.J.
      Gerald W. VandeWalle
      Jon J. Jensen, C.J.

     The Honorable Norman G. Anderson, Surrogate Judge, sitting in place
of McEvers, J., disqualified.

Crothers, Justice, specially concurring.

      I generally agree with the majority opinion. I write separately to make
clear my view that the rationale underpinning Part III (B) is not naked
authority for the State to appropriate funds for any cause describable as a
“moral obligation.” Rather, in the context of our constitutional gift clause,
permissible appropriations are limited to circumstances where a legal
obligation exists, even though the obligation may not be presently enforceable
for reasons such as the statute of limitations.

      The majority opinion seems to acknowledge the limitation about which I
write, including citations to judicial decisions from California and Wyoming.
See majority opinion, at ¶¶ 31-32. In those cases, legal claims against the state
existed but could not be asserted due to the passage of time. Id. The states
essentially waived the statute of limitations and the respective state’s highest

                                        24
Corrected Opinion Filed 8/17/20 by Clerk of the Supreme Court

courts held the waiver was not a violation of their gift clauses restrictions. Id.
However, the majority opinion also cites The Trustees of the Exempt Firemen’s
Benev. Fund of the City of New York v. Roome, 93 N.Y. 313, 316 (1883). There,
New York interpreted its constitutional gift clause as authorizing a statute
directing payment to firemen “after the service ended, and when there was no
legal or equitable obligation operating upon the State.” Id. at 326. In Roome,
the obligation was purely moral. No legal obligation existed before passage of
the law at issue. I therefore would not cite or rely on the Roome decision as
persuasive authority for interpretation of North Dakota’s gift clause.

      Daniel J. Crothers
      Jon J. Jensen, C.J.

                                       25