HAYNESVILLE SHALE

Mineral rights squabble leads to waterway ownership argument

By Vickie Welborn

vwelborn@shreveporttimes.com

A dispute over mineral rights ownership in DeSoto Parish has evolved into an ar­gument over waterway own­ership and the final outcome could set precedence for oth­ers to follow in Louisiana.

Pending before the 2nd Circuit Court of Appeal in Shreveport is an appeal by the Louisiana Attorney General’s office of a DeSoto District Court ruling in January re­jecting the state’s attempt to intervene in a still unsettled civil lawsuit involving land­owners and oil and gas com­panies over who owns miner­al rights of more than 1,000 acres on the east side of the parish.

The state inserted itself into the controversy in De­cember six days after one of the defendants lost an argu­ment before District Judge Robert Burgess. The state contends it should be a party to the lawsuit because it claims the bottom of a water­way that once traversed the land in question belongs to Louisiana and not the private landowners.

Those on the other side, however, are questioning why the state is only now asserting ownership of the property.

“This is the first time in 200 years the state has claimed any ownership,” said attorney Amy Burford McCartney, one of many lawyers involved in the original litigation.

At issue could be untold revenue from mineral royal­ties gleaned from oil and gas development, particularly the Haynesville Shale explo­ration that hit the parish in 2008.

DeSoto is not alone with the controversy. Four similar lawsuits have been filed in Red River Parish, involving landowners along the Red River, where the state is now claiming ownership because of acreage flooded when the lock and dam system was put in place.

“There are a number of mineral owners not being paid,” said McCartney, whose office is based in Coushatta. “It’s a problem for a lot of dif­ferent mineral owners in the area.”

Navigability dispute

At the heart of the matter in DeSoto Parish is the differ­ences of opinion as to the navi­gability of Bayou Dolet locat­ed in sections 14, 15, 22 and 23 east of Mansfield at the Red River Parish line. Dolet Bay­ou, for the most part, is a mere depression in the land, long removed from any noticeable waterway activity.

There are areas closer to the connection to Bayou Pierre where it still retains water. However, even there the murky water is only inch­es deep.

But because the bayou was in existence in 1812, when Louisiana became a state, then the state asserts it as­sumed ownership and never relinquished that right. An in­vestigative report by George Castille of Castille Consulting Services in Baton Rouge, pre­pared on behalf of litigants in the companion lawsuit, backs the state’s position.

“Navigability for state ownership purposes can be determined through the analysis of several types of in­formation. Generally speak­ing, the bottoms or sub­merged portions of all man­made waterways and the bot­toms of most small natural waterways are considered to be the property of the ripari­an landowner, that is, property of the person who owns the land along the bank of the waterway,” Castille wrote in his report. “However, if a natural waterway is potentially navigable, ownership of water bottoms is much more difficult to determine. In Louisiana, the bottoms of navigable waterways (i.e., the portions located below either the mean high or mean low water line, depending on the type of water body) are considered the property of the State, and the determination of navigability is the most important factor considered in the identification of State owned water bottoms.”

Castille said Bayou Dolet, a former Red River channel, was a branch of Bayou Pierre, which was utilized as a bypass during the 19th Century Great Raft blockage. Early land grants that quote homesteaders living along the bayou indicate it was being used for travel in the 18th and early 19th centuries, he said.

As the years progress, lakes, bayous and streams in the area shifted, changed size and importance, Castille said. His research indicated the head of Dolet Bayou likely closed in 1870 in connection with navigation improvements of Bayou Pierre.

A field investigation in 2011 revealed a small segment of Bayou Dolet channel still exists south of the former Bayou Pierre connection. The old channel disappears as it enters the former lakebed of Lake Dolet, which is now pasture and pine growth.

“Although the historical and physical evidence indicate that Bayou Dolet was navigable in 1812, the upper portion of the channel obviously no longer would be considered navigable today. The small lake adjoining Sections 14 and 15 is now filled in, the portion of Bayou Dolet in the vicinity of the old lake bed is no longer an obvious channel and one small segment appears to be little more than a ditch,” Castille’s report states.

Still, historical information from the general land office indicates Bayou Dolet was of sufficient size to be considered navigable, he concluded.

But regardless of his findings, a 2005 letter from the state land office affirms 1922 and 1923 Louisiana Supreme Court rulings discounting the state’s ownership of the property once bisected by Bayou Dolet. Then, the state’s high court ruled there was nothing in the record showing that the Red or Dolet bayou was ever a navigable stream.

“In the opinion of the court, defendant has therefore failed to show title ever passed from the United States to the state for the land in controversy, and has also failed to show that title to said land passed to the state as being the bed of a navigable stream at the date of the admission of the state into the Union. In view of the fact that the land in question was claimed by the Dolet heirs at the date of the passage by Congress of the swamp land grant of 1849, and the fact that defendant has alleged that the state acquired said land, either under the swamp land grant of 1849 or as having been the bed of a navigable stream at the date of the admission of the state into the Union,” the court wrote in its June 1923 ruling of Wemple v. Albritton.

“It devolved upon defendant to prove that the title to said land rested in the state by reason of being the bed of a navigable stream at the time of the admission of the state into the Union. In other words, the burden was upon defendant to prove that Red or Dolet bayou was a navigable stream at the date of the admission of the state of Louisiana into the Union, which burden he has failed to sustain,” the court concluded.

Judge Burgess referred to that ruling on Jan. 10 when he decided the state had no right of action in the mineral rights lawsuit filed in 2009 by Furie Petroleum Company and Silver Spur Royalty Company versus SWEPI LP, EnCana Oil & Gas USA, Pride Oil & Gas Properties Inc., Cloyce Clark and Martha Chamberlin Clark. The lawsuit is consolidated with another one titled Cloyce C. Clark Jr. versus Eugene Copeland.

The state has “no interest in the dispute between these plaintiffs and defendants to assert its own claim of navigability,” Burgess wrote. He also refers to the July 25, 2005 letter from the State Land Office where it “publicly acknowledged” that it “lost its ownership of the bed of Bayou Dolet” by virtue of the state Supreme Court rulings.

The state disagrees with the judge’s ruling, and in its petition for intervention Attorney General Buddy Caldwell and staff attorneys Daniel Henry Jr. and Ryan Seidemann wrote that the Wemple lawsuits were litigation between private parties and did not give the state the opportunity to defend or assert its “sovereign claims” to Dolet Bayou.

Attached to the state’s petition are copies of maps and land plats indicating the bayou meandered through the disputed property at statehood in 1812.

“The state has never been adjudged to have lost its sovereign claim to Dolet Bayou and to the extent that Dolet Bayou and the ownership thereof is a matter to be revisited, determined or affected in this case, the state has an immovable property interest in this matter, and it will be impacted by the outcome of this litigation. Therefore, the state has an interest sufficiently connected to the object of the pending action to be allowed to enter as a party- defendant through intervention,” the petition states.

The state’s attorneys also indicated they were prepared to adopt the position of the lawsuit’s defendants and did not plan to seek any additional experts.

The state is involved in the DeSoto land conflict because of a “state claim to some of the land and minerals involved,” said Steven Hartmann, attorney general’s office spokesman, in an email to The Times. Hartmann also confirmed the state is involved in dozens of water bottom and minerals suits.

Local impact

State Rep. Kenny Cox, D-Mansfield, is concerned about the far reaching impact of the state’s involvement in the Furie court action. His fears are that decades of property owners or heirs who once lived or homesteaded the boundaries of long-disappeared creeks and bayous could be subject to the same challenge from the state, opening the door to potential loss of royalty payments riches.

Yes, he said, the state needs all the revenue it can get, but he is not in favor of it coming from unsuspecting citizens. And he wonders about the cost of the lawsuits. “How far back will they go?” he asked of the state’s long arm. “Bayou people have lived on that land and sold it but kept their minerals. They’re talking about this in Coushatta along Coushatta Bayou, too. That’s in my district, too, so I’m real concerned about this. I’m worried some people could lose everything they have. If there is a decision the state owns it, then how far back do you go? How many acres are we talking about?” Until the state intervention issue is settled, no progress can be made on the original lawsuit. Burgess will not set it for trial until the state’s appeal is decided, McCartney said. And Hartmann could not offer a timeline on the appeal before the 2nd Circuit, saying the record had been lodged but it has not been set for briefings.

And while everyone waits, no royalties are being paid to the complaining landowners. And if the bayou is deemed navigable, the families lose mineral rights to over 800 acres, McCartney pointed out.

The initial spat began six years ago and involves more than 1,100 acres owned by Cloyce Clark Jr. He leased the property and minerals to EnCana and Shell. A servitude created by Wemple, the original land owner in 1967, was owned by Annie Laurie Samuels and her brother, the late Gene Copeland. Upon Copeland’s death, his interest went to his sister, Marcia Calhoun, of Mansfield. They leased their minerals to Furie and Silver Spur.

In 2008, as the Haynesville Shale exploded in the region, Annie Samuels sought out someone to drill a well to preserve the mineral rights. On the day before the servitude was to expire, Marcia Calhoun’s husband, Riemer Calhoun Jr., spudded a well.

“They argued it preserved their right to the servitude,” McCartney said.

EnCana has an interest in proving the minerals are owned by Clark, attorney John Kalmbach, the company’s co-counsel, told the court in a previous court hearing. But Furie contends the minerals are owned by the servitude holders. It is the servitude owners’ burden to prove the 10-year production was not interrupted prior to Calhoun drilling the well in 2008.

Kalmbach suggested references to the bed of the bayou that showed up in title searches indicates the servitude was divided to the east and west sides of it. There was production on the east side, but he argued it stopped in 1997, starting the clock ticking on the 10-year period where mineral rights are lost without continuous production.

The original petition filed by Furie states, however, that two Wemple wells were in production through June 30, 1998. There were no operations or production until the A.L. Samuels No. 1 well was spud on June 30, 2008.

“So the purported interruption of the servitude on this side would’ve been too late. We all agree to that in concept. I mean, I don’t think that they dispute that if we show the navigability of the bayou and we show that the state retained its ownership that this case is essentially over. We spent an inordinate amount of time developing these facts and we want to put them on at trial,” Kalmbach told the court. As a trial date approached in December 2012, SWEPI, EnCana and Clark aligned to say Clark owned the minerals and the issue of navigability of Bayou Dolet, not a part of the original court pleadings, arose as an issue. Furie opposed the efforts to claim navigability so the trial date was postponed.

David Taggart, an attorney representing Furie and Silver Spur Royalty, told the court in a hearing last year the issue is whether operations conducted on a part of the servitude preserved the 10year servitude or non-use for the entire acreage. Referring to the state’s desire to intervene, Taggart said, “they don’t have a dog in the fight of whether this servitude is in existence of not. They don’t have a lease. They don’t have a claim. They weren’t parties to the original lease. They haven’t had anything to do with this property for most night a hundred years, I guess, since the Wemple case.” Cox, who grew up hunting and fishing in the same area, believes if the legal quarrel can happen to the Calhouns and Samuels, then it can happen to others who may not have the means to mount a fight. “My question will be do I need to present a law to change this thing? It would be a constitutional change,” Cox said.