Stenehjem v Crosslands

SUPREME COURT OF NORTH DAKOTA, No. 20090199, May 13, 2010

Held that a corporation’s purchase of land violates the ban on corporate ownership of farmland if the predominant use and nature of the entire tract purchased is as farmland or ranchland, rejecting a determination of land use “acre-by-acre”. The purchaser, Crosslands, is a nonprofit corporation with a mission to preserve and protect migratory waterfowl habitat in North Dakota. It bought a 949-acre tract without seeking prior gubernatorial approval under N.D.C.C. § 10-06.1-10(3), which requires such approval to qualify for an exception to the prohibition for “a nonprofit organization for the purpose of conserving natural areas and habitats for biota.” Crosslands submitted a retroactive Acquisition Proposal, which was denied. Crosslands succeeded at the district court level to have the court consider the land on a piecemeal basis and not order divestiture of 267 acres of individual portions of the tract that were wetlands, drained wetlands, and highly erodible lands and therefore should not be considered farmland or ranchland.

The court wrote: “We see nothing in the relevant statutory provisions authorizing [the acre-by-acre approach]. Rather, the enforcement provisions in N.D.C.C. ch. 10-06.1 indicate the land should be considered as a single unit in determining whether divestiture is required. We construe the [statutory] language ‘the land in question’ as referring to the entire tract purchased and requiring the court to view the property as a single tract. This statutory scheme does not indicate the legislature intended to create an unwieldy procedure allowing a nonprofit corporation to purchase large tracts of rural land, much of it admittedly agricultural, and then placing the burden upon the district court to engage in an acre-by-acre, after-the-fact assessment to determine the agricultural status of small portions of the tract.”

“Restrictions on corporation ownership of farmland and ranchland in North Dakota had their genesis in an initiated measure enacted by the citizens of this state in 1932.” “The public policy underlying the restrictions on corporate ownership of farmland or ranchland is rooted in the desire to preserve availability of rural agricultural land for use by family farmers.” Nothing in the opinion says why Crosslands did not submit the purchase proposal prior to making the purchase, but according to The Outside Agitator blog, “Everybody seems to agree that the Crossroad folks made a good-faith error -they simply didn’t know about the law.”

For a coincidental comparison, see the Oregon Court of Appeals May 12, 2010, decision in Wetherell v. Douglas County, http://www.publications.ojd.state.or.us/A144101.htm.

Decision available at http://www.ndcourts.com/court/opinions/20090199.htm.

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