Oil And Gas Law Alert - High Watermark: State Of North Dakota Wins First Round Of Riverbed Title Dispute

On January 28, 2013, in the consolidated matters of Reep v. State and Brigham Oil v. North Dakota, the Northwest Judicial District Court of North Dakota issued an Order for Partial Summary Judgment, concluding that the "State of North Dakota—as part of its title to the beds of navigable waterways—. . . owns the minerals in the area between the ordinary high and low watermarks on these waterways, and that this public title excludes ownership and any proprietary interest by riparian landowners." Yesterday's decision will likely be appealed directly to the North Dakota Supreme Court (the "Court") after certification under N.D.R.Civ.P. 54(b), a move which many anticipate means oral argument could be heard before the Court term ends this summer.

Both cases involve various mineral title disputes between the State of North Dakota (the "State") and private interest holders in lands lying between the ordinary high and low watermarks of the beds of the Missouri River and other navigable waterways. Through the federal Equal Footing Doctrine, the State is the sovereign owner of the oil, gas, and other minerals lying within the beds of waterways deemed navigable at the time statehood was granted in 1889. The State takes the position under the Public Trust Doctrine that this ownership extends to the ordinary high water mark of these navigable waterways. A class action of private mineral owners with potential riparian interests have challenged the State's claim to these minerals, citing a North Dakota law that "the owner of the upland, when it borders on a navigable lake or stream, takes to the edge of the lake stream at low water mark." N.D.C.C. § 47-01-15.

In State v. Mills (523 N.W.2d 537 [N.D. 1994]), the Court previously acknowledged that the State's interest and the riparian landowners' interest in the lands lying between the ordinary high and low water marks "are coexistent and overlap," but no prior Court ruling has settled the question of mineral ownership therein. Until these consolidated cases reach final resolution, oil and gas companies are suspending much of the revenue payments derived from current production within these disputed lands. As a final note, yesterday's District Court ruling does not directly address ownership of the oil, gas, and other minerals lying within those portions of the Missouri River bed located within the boundaries of the Fort Berthold Indian Reservation.