Imprescriptible Mineral Servitudes in Louisiana: Problematic from the Start

Hayne Beatrous Caliva, J.D./C.L. 2013, Paul M. Hebert Law Center, Louisiana State University.

I.  INTRODUCTION

Under Louisiana law a landowner’s title and ownership of immovable property necessarily extends to solid minerals, because they are treated as component parts of the property.[1]Whereas, Louisiana Revised Statute §31:6 states that the owner of land does not own the “oil, gas, or other minerals occurring naturally in liquid or gaseous form, or of any elements or compounds in solution, emulsion, or association with such minerals.”[2]  Rather, the landowner owns the right to search his property in an attempt to produce such minerals and reduce them to possession and ownership.[3] The minerals are considered reduced to possession, only once they are under one’s physical control and capable of being relocated.[4] This exclusive right to develop the land in search of fugacious minerals can be conveyed, leased or reserved by the landowner as he sees fit,[5]allowing the owner to create a mineral servitude, lease or royalty, as a separate right from ownership of the land.[6] Louisiana law prohibits a landowner from separating title to land by creating an autonomous mineral estate,[7] which can be held in the absence of use in perpetuity.[8]

Once a landowner creates a mineral servitude on his estate, he grants to the servitude holder the right to develop the property in pursuit of fugacious minerals.[9] If a landowner attempts to sell the actual minerals on his property, such a conveyance is limited to the right to explore and reduce them to possession. This restriction is based on the principle that minerals are not capable of being owned until they are brought under one’s physical control and capable of being relocated.[10] The landowner essentially divides the title to his land granting the servitude owner an independent right from that of his own right of ownership.[11]

Five grounds exist by which a mineral servitude may be extinguished: “(1) prescription resulting from nonuse for ten years; (2) confusion; (3) renunciation of the servitude on part of him to whom it is due, or the express remission of his right; (4) expiration of the time for which the servitude was granted, or the happening of the dissolving condition attached to the servitude; or (5) extinction of the right of him who established the servitude.”[12] So, while a mineral servitude does not force the servitude holder to exercise his right to explore for minerals, his neglect to do so within ten years from the granting of the servitude results in the termination of the servitude.[13] Upon the servitude’s cessation, the formerly granted servitude rights are restored to the title of land.[14] The prescriptibility of mineral servitudes in Louisiana is based on public policy;[15]however, in 1938 the Louisiana legislature embraced the notion of imprescriptibility.

II.  BACKGROUND: IMPRESCRIPTIBLE MINERAL SERVITUDES

As part of a national public project initiative of the 1930s, the United States and various state governments began purchasing large tracts of land.[16] In states that permitted landowners to retain imprescriptible mineral servitudes, landowners were more willing to sell their property for lower prices than similarly situated property in Louisiana. Louisiana landowners were not as inclined to sell their property to the government for these low prices because their mineral servitudes could expire based on ten years prescription of nonuse.[17] In 1935, the Solicitor for the Louisiana Department of the Agriculture ruled that the Louisiana Civil Code articles imputing prescriptive periods on the acquisition of mineral servitudes did not apply to land acquired by the federal government for the intention of establishing national forests.[18]Three years later, the Louisiana legislature enacted Acts 68 and 151.[19] The former act made mineral servitudes imprescriptible upon land sold to the United States or State of Louisiana for spillway or floodway reasons. The latter created the same effect for land sold for the purpose of public works or improvements. In 1940 the legislature repealed the 1938 acts with Act 315 and increased the availability of imprescriptible mineral servitudes to all sales of land to the federal government.[20] Prior to Act 315, many landowners were averse to selling their lands to the federal government because such sales would cause landowners to lose their rights to the minerals via prescription of nonuse of ten years.[21] With Act 315, the legislature was attempting to incentivize Louisiana landowners into selling their lands to the Federal Government. Before the enactment of Act 315, imprescriptibility applied to acquisitions of both the state and Federal Government. However, Act 315 neglected to mention sales to the State of Louisiana. Effectively, Act 315 changed the law. The Act did not burden land sold to the federal government with prescriptible mineral servitudes, while all sales of land to the State of Louisiana were subject to prescription of ten years of nonuse. The only exception to this came about with Act 8 in the 1942 Louisiana Legislature’s extra session, which made mineral servitudes on land attained by the State Parks Commission of Louisiana imprescriptible.[22]

The Louisiana legislature sought to remedy the problem in 1958 by enacting Revised Statute §9:5806 with Act 278 to replace Act 315.[23]While the State of Louisiana or its subdivisions or agencies were not specifically listed, Act 278 applied imprescriptibility to acquisitions of land by the United States or its subdivisions or agencies and the Louisiana State Department of Highways, State Department of Public Works, of any state levee districts, State Department of Wildlife & Fisheries, a police jury, school district or board, or any other board or commission established by the State of Louisiana.[24] Unfortunately, while the Supreme Court ruled that Act 315 could not be applied retroactively to a servitude contracted for a fixed period,[25] the issue still remains as to whether Act 315 of 1940 was constitutional at all. Thus, the debate of whether land sold between 1940 and 1958 to the State of Louisiana is subject to imprescriptible mineral servitudes remains unresolved.

III. SCENARIO

The United States District Court for the Eastern District of Louisiana granted a Judgment Order expropriating 2,500 acres from a Louisiana landowner in Plaquemines Parish on January 24, 1939. The condemned land was intended for use as a Federal Wildlife Refuge aimed at preserving the natural resources, biological integrity, diversity and environmental health of Louisiana.

The first issue this article addresses is who owns mineral rights on the 2,500 acres and why. The second half of the discussion focuses on who should own the mineral rights and whether Louisiana’s requirement of good faith effort to produce every ten years is too burdensome on Louisiana landowners. The article will conclude with an analysis on whether there are any circumstances that would warrant permanent severance of mineral rights from land.

IV. DECONSTRUCTIVE ANALYSIS

The first step in the analysis is to address who acquired the land, the State of Louisiana or the Federal Government. If the latter obtained ownership via the expropriation order, then the issue of prescriptibility would be moot, since Act 315 of 1940 did not change the law in terms of the Federal Government and prescriptibility of mineral servitudes. The Federal Government would own title to the land, while the landowners would own the imprescriptible mineral servitudes. On the other hand, if the state of Louisiana obtained the land, the issue of whether the mineral rights are imprescriptible versus prescriptible would be more complex.

If the State of Louisiana received the property in 1939, the next critical issues are the date and purpose of the acquisition. Here, the expropriation order was signed on January 24, 1939, and the land was intended to be used as a Federal Wildlife Refuge. In 1938 Acts 68 and 151 were in effect in Louisiana. As previously mentioned, these acts made mineral servitudes upon land sold to the State of Louisiana or the Federal Government imprescriptible if the acquisition was for one of two purposes: either (1) to create a spillway or floodway or (2) for the purpose of public works or improvements. The development of a Federal Wildlife Refuge intended to “maintain the biological integrity, diversity and environmental health of the United States,” would fall into the category of public work or improvement as contemplated in Act 151. Therefore, under the law applicable at the time of acquisition in 1939, the original Louisiana landowners would own the mineral rights to the land in perpetuity.

However, the law changed with the passage of Act 315 in 1940, so that mineral servitudes upon land acquired by the State would be subject to prescription of nonuse for ten years. In 1950 the Fifth Circuit held that Act 315 should be applied retroactively to render mineral rights on land acquired by the United State imprescriptible.[26] Applying this logic to the State of Louisiana, the effect of this would mean that although the mineral servitude was imprescriptible in 1939 when the land was transferred to the state, Act 315 retroactively renders such servitudes prescriptible. Therefore, according to controlling Fifth Circuit reasoning, the mineral servitudes that the Louisiana landowners retained in 1939 would be subject to prescription of ten years of nonuse.

The next issue is how to compute the prescriptive period, since the prescriptible servitudes were created when the law gave them imprescriptible status. In Guy E. Wall’s article Imprescriptible Mineral Interests in Louisiana, he delineates three ways in which the issue of prescription under the 1938 Acts could be employed.[27] The first method Wall addresses is that of proportionate prescription, where prescription would be temporarily interrupted between the years of 1938 and 1940 and thus calculated as in the following example:

“[I]f two years have run against a right under a ten year prescriptive statute at a time when the statute is changed to twenty years, prescription is 1/5 accrued under the old statute and the remaining 4/5 are computed under the new statute (16 years) instead of 18 years which would remain if the old statute were ignored entirely.”[28]

Under this doctrine, Wall argues that prescription could be effected in three ways between the years 1938 and 1940: (1) there would be no prescription, (2) prescription would be interrupted, or (3) the passage of Act 315 in 1940 would cause prescription to start over.[29]Under any of these scenarios Wall proposes, prescription against the landowner for nonuse would start afresh in 1940. Applying this to the scenario above, the running of prescription on the mineral servitude granted in 1939 would be interrupted from its inception until the passing of Act 315 in 1940. Under this theory and according to prescription of nonuse, the mineral rights would revert to the state in 1950 if the original landowners failed to utilize the servitude. Thus, the State of Louisiana would own the land free of any outstanding mineral rights.

Wall’s second theory on the prescriptibility of mineral servitudes is that prescription accrued prior to 1938 would be suspended at the time the 1938 Acts were enacted and would then begin to run again in 1940. This theory does not apply to the scenario at hand. Since the District Court granted the Judgment Order in 1939, no prescriptive clock even began to run before Acts 68 and 151 were enacted.

Finally, Wall theorized that the 1938 Acts could be completely ignored in the calculation of the prescriptive period. Under this theory, the mineral servitudes created in 1939 would expire by nonuse and revert back to the owner of the land in 1949.

In summary, under Wall’s first theory the mineral servitudes would have expired in 1950. Under the third theory, the servitudes would have ended by 1949. Under either calculation, if the landowners in the scenario at hand neglected to take any actions to preserve their mineral rights before 1949 or 1950, then the rights would have expired and reverted to the State of Louisiana.

V.  CONSTRUCTIVE ANALYSIS

Is this a just result?  Should the State be able to claim ownership of mineral interests if a careless landowner does not exercise his rights to the minerals within ten years of the State’s acquisition of the land?  Some might argue that this conclusion is inequitable and too burdensome on Louisiana landowners. Other states, such as Texas, grant landowners imprescriptible mineral servitudes if the state acquires their land. Texans are not required to make a good faith effort to utilize a mineral servitude every ten years or consequently lose their right completely.

Public policy and the need for prescriptive periods overrides the burdensome requirements on a Louisiana landowner to use his rights to mineral servitudes every ten years or forfeit them. One reason Louisiana has prescription for use of mineral rights is to encourage exploitation of minerals in the state.[30] In other words, under Louisiana law one individual cannot indefinitely own mineral interest on state-owned land and choose never to exploit the precious natural resource that he alone can access. Prescription helps keep such resources in commerce and accessible to the public. Louisiana also uses prescription to promote clear title to mineral interests.[31] With a ten year prescriptive period of nonuse, a determination of the owner of mineral interest is much more manageable. So, while Louisiana servitude owners must take some form of action every ten years to ensure their rights, such a requirement is founded on public policy and the prosperity of the state of Louisiana and its residents.

VI. CONCLUSION

In conclusion, Louisiana law regarding mineral servitudes and prescriptibility has drastically changed since the 1930s. The result of which has led to serious legal uncertainty and litigation on ownership of mineral rights in Louisiana. The circumstances surrounding the mineral servitude at hand render it prescribed some time between 1949 and 1950 in favor of the State of Louisiana. Whether this is a just result is debatable. One could reason that the policies behind the concept of prescription of nonuse justify the burdens on a mineral servitude owner in Louisiana.