Court Opinion

ID: 6479426
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:51:37.581564+00
Date Added: 2024-06-11T14:59:18.601656
License: Public Domain

MARTONE, Justice,
dissenting.
¶ 29 The majority’s resolution of this case is superficially appealing. After all, what could be wrong with requiring the state land commissioner to consider a higher bid when the bidder would not even use or consume the trust asset? If that is what this case were all about, I would join the majority. But there is more here than meets the eye.
I.
¶ 30 This ease arises under Arizona’s Enabling Act, Act of June 20, 1910, ch. 310, §§ 19-35, 36 Stat. 557, 568-79. It thus presents a federal question. Article X of the Arizona Constitution was adopted to comply with the Enabling Act. But the Enabling Act is “superior to the Constitution of the State
of Arizona.” Gladden Farms, Inc. v. State, 129 Ariz. 516, 518, 633 P.2d 325, 327 (1981). Article X of the Arizona Constitution simply incorporates the Enabling Act. Id. The trust is created by section 28 of the Enabling Act and any disposition contrary to the provisions of the Act “shall be deemed a breach of trust.” Act of June 20,1910, eh. 310 § 28, 36 Stat. 557, 574-75. Whether the trust is breached, and therefore whether the act is violated, is a federal question. See Ervien v. United States, 251 U.S. 41, 40 S.Ct. 75, 64 L.Ed. 128 (1919). The majority is thus in error when it decides “this case solely by application of the state constitution.” Ante, at ¶ 11. Its express refusal to rest its decision on the Enabling Act is both an admission that the Act does not support its position, and an attempt to avoid further federal judicial review.
II.
¶ 31 The majority says “[n]either the. Enabling Act nor our constitution requires classification of property — only that any disposition be made to the highest and best bidder.” Ante, at 1120. Proceeding from this premise, the court concludes that the commissioner must consider whether a bid is best when it is the highest despite the property’s classification.
¶ 32 But the notion of classification derives directly from the Enabling Act. While section 28 of the Enabling Act provides that trust lands shall not be leased “except to the highest and best bidder at a public auction,” it also provides that “[n]othing herein contained shall prevent: ... the leasing of any of the lands referred to in this section, in such manner as the Legislature of the State of Arizona may prescribe, for grazing, agricultural, commercial, and domestic purposes, for a term of ten years or less.” Act of June 20, 1910, ch. 310, § 28, 36 Stat. 557, 574-75. Thus, the Enabling Act itself creates the category of “grazing leases” and specifically authorizes the legislature to determine the manner in which such leases shall be granted.
¶33 Section 20 of the Enabling Act required Arizona to adopt a constitution that incorporated the Enabling Act by reference. Act of June 20, 1910, ch. 310, § 20, 36 Stat. 557, 569-71. Thus, Article X, section 3 of the Arizona Constitution expressly tracks that part of section 28 of the Enabling Act that requires leasing to “the highest and best bidder,” but also empowers the legislature to determine the manner of leasing for ten years or less “for grazing, agricultural, com*265mercial and homesite purposes.” Ariz. Const, art. X, § 3.
¶ 34 Beginning in 1915, the legislature required the classification of land pursuant to the authority granted it by the Enabling Act and the constitution. Act of June 26, 1915, eh. 5, § 15, 1915 Ariz.2d Spec. Sess. 13, 19-20. Thus, A.R.S. section 37-212, from 1915 to this day, has required the commissioner to classify all lands selected under the Enabling Act. A.R.S. § 37-212 (West 1993 & Supp. 2000). The statute incorporates by reference the classifications created by both the Enabling Act and the constitution, including lands suitable for grazing purposes. A.R.S. § 37-212(B)(2).
¶ 35 This organic structure is a simple recognition of the fact that the commissioner, as trustee, must evaluate and classify land in order to know what its best use is. Without consideration of best use, state lands would always go to the highest bidder, the lands would be dissipated and Arizona would have no public lands. The Enabling Act is not a straightjacket. It does not require Arizona to dispose of its lands at all, let alone to the highest bidder.
¶ 36 A tension exists between the preservation of Arizona’s public lands, on the one hand, and their use or disposition to maximize income to the trust for the purpose of public education. See, e.g., Douglas Dunipace, Comment, Arizona’s Enabling Act and the Transfer of State Lands for Public Purposes, 8 Ariz. L.Rev. 133 (1966). Preservation and education are both contemplated by the Enabling Act and the wise administration of the trust will not kill the goose that laid the golden egg. The Enabling Act created the trust and specifically authorized the legislature to create the terms of that trust. Two of those terms directly address the question of nonuse of public lands.
¶ 37 The first is A.R.S. section 37-132(A)(11) which .provides that “[t]he commissioner shall ... [withdraw state land from surface or subsurface sales or lease applications if the commissioner deems it to be in the best interest of the trust.” A.R.S. § 37-132 (West 1993 & Supp.2000) (emphasis added). Contrary to the majority’s suggestion, ante, at ¶25, the commissioner is not only authorized to withdraw land when necessary, but is required to do so. The commissioner thus has an independent obligation to examine land classified for grazing purposes and decide whether the conditions are such that the trust would be benefitted by resting or nonuse. If, as Forest Guardians claims and the majority asserts, the lands here were in need of restoration, the commissioner would have breached his fiduciary duty by failing to withdraw the lands.
¶38 Forest Guardians could have asked the state land commissioner to withdraw the subject land from leasing had it believed the land was being overgrazed. The decision to withdraw it is properly that of the land commissioner as trustee and not that of any individual group or organization. On the other hand, if Forest Guardians were aggrieved by a decision of the state land commissioner not to withdraw the land from leasing, it could have sought judicial review of that decision alleging a breach of the trust terms. Under this approach, the state land commissioner could have determined the highest and best use of the land under the trust responsibility without violating A.R.S. section 37-281(D) which provides that “[n]o lessee shall use lands leased to him except for the purpose for which the lands are leased.” A.R.S. § 37-281 (West 1993 & Supp.2000).
¶39 The second is A.R.S. section 37-285 which contains an elaborate mechanism for the exercise of the trust responsibility over grazing leases. Section 37-285(C) creates a Grazing Land Valuation Commission consisting of five members appointed by the governor. A.R.S. § 37-285 (West 1993 & Supp. 2000). Among them, one must be a professional appraiser. One member must be a faculty member of the College of Agriculture at the University of Arizona. And one member must be a conservationist. The Grazing Land Valuation Commission is charged with gathering information in order to properly appraise all lands classified as grazing lands, using both the market and income approaches. Among the factors the Commission must consider are the condition and carrying capacity of the land. A.R.S. § 37-285(E)(5).
*266¶40 In addition, the state land commissioner may reclassify and reappraise, A.R.S. § 37-285(G), and, even after lands are leased for grazing purposes, the state land department “may authorize nonuse for part or all of the grazing use upon request of the lessee at least sixty days prior to the beginning of the billing date.” A.R.S. § 37-285(H). Requiring the state land commissioner to consider a proposed grazing lease where the proposed lessee, such as Forest Guardians here, elects not to use the land is absolutely inconsistent with the obligations of the Grazing Land Valuation Commission and the commissioner under this statute.
¶41 The statutes define the universe of nonuse of lands classified for grazing purposes. If they are being overgrazed, the commissioner has a trust responsibility to withdraw them from leasing in the first instance. If already leased, the commissioner has the responsibility to allow nonuse. In all instances, the trust responsibility is to be exercised by the state land commissioner on behalf of the state, and not by a group or association seeking a lease. Here, Forest Guardians seeks to do by indirection that which is the responsibility of the state land commissioner under the terms of the trust.
¶ 42 Of course, Forest Guardians is not asking to be granted the lease but only that its application be considered. But how could the state land commissioner consider the application without violating its own duties as a trustee? For if the lands are truly overgrazed, the commissioner must withdraw them from leasing under A.R.S. section 37-132(A)(11). It could not possibly grant such a lease without breaching its fiduciary duty. The best interests of the trust are served when the trustee is required to exercise its responsibilities under the terms of the trust. It is not served by allowing a private group to relieve the trustee of its responsibility by doing for the state that which the state must do for itself.
¶43 While Forest Guardians’ application may appear innocuous enough, the majority’s holding puts a premihm on the highest bid, even to the extent of allowing the state land commissioner to ignore our statutes without any good and sufficient reason to do so.
¶44 Difficult cases sometimes create bad law. I fear this is one of them. It is hard to predict the consequences that might flow from the majority’s ruling that requires the commissioner to consider the highest bid even when the property is not going to be used for the purpose for which the lease is intended. By requiring the land commissioner to consider a fictional grazing lease we do violence to a fairly well structured statutory system without any benefit that cannot already be obtained through that same system. I therefore respectfully dissent.
Justice RUTH V. McGREGOR recused herself and did not participate in the determination of this matter; pursuant to Arizona Constitution article VI, § 3, the Honorable William E. Druke, Judge of the Arizona Court of Appeals, Division Two, was designated to sit in her stead.