Judge to hear federal challenge to state law limiting land sales

SACRAMENTO -- The U.S. Department of Justice's challenge to a law passed last year giving the state the right of first refusal in sales of federal land in California will be considered by a judge next week.

State Attorney General Xavier Becerra filed a reply brief last week detailing his arguments that the law, SB 50, was carefully crafted to avoid federal preemption. U.S. v. California, 18-CV00721 (E.D. Cal., filed April 2, 2018).

U.S. District Judge William B. Shubb of the Eastern District of California will hear the case.

Many legal observers, including some Trump administration critics, said at the time of the filing the state was likely to lose.

But California's best bet in turning back a wholesale sell-off of the 46 percent of the state owned by the federal government could turn out to be bureaucracy, next month's election and, ironically, interest groups more often associated with supporting Republicans.

The stated intent of SB 50 was to "discourage conveyances of federal public lands in California to third parties." It came in response to calls from the Trump administration to sell off large amounts of land in the West to mining and development interests.

The state law's mechanism was to attempt to regulate buyers. SB 50 gives the state the right to buy the land or have it sold to a third party at the same price agreed to by the federal government. Private buyers must gain permission from the State Lands Commission if they want to record a deed -- a recognized state-level function.

U.S. Attorney General Jeff Sessions sued to block the law, citing, "The supremacy and property clauses of the Constitution." The latter gives the federal government broad legal authorities over land it owns.

Becerra released a statement saying he was "not looking to pick a fight with the Trump Administration" but was ready for one.

In a press release, Sessions repeated a version of a line he's used before, claiming California's 1850 admission into the Union was conditional, though some say this is more of a political than legal argument.

"The Supreme Court has held that acts admitting states to the Union cannot expand the constitutional power of the federal government vis-à-vis the states," wrote Eric Biber, director of the Environmental and Energy Law Programs at the UC Berkeley School of Law, in an April blog post.

"I'm not sure there is a real conflict between what the federal government wants to do and what the state wants to do," said Michael Blumm, who teaches environmental law at Lewis & Clark Law School in Portland, Oregon. "I'm assuming that what the federal government wants to do with the sale is to raise money."

The law has no direct power to drive down the sales price of land, Blumm explained, and it could bid up prices by putting another buyer in play. This could turn one federal argument on its head, he said, adding an effort by the federal government to direct a sale to a particular buyer is "legally questionable."

Sessions' side fleshed out its legal arguments in an August motion for summary judgment, detailing the many ways it claims SB 50 directly regulates the disposal of federal land.

"SB 50 violates the doctrine of intergovernmental immunity, under which states may neither directly regulate the United States nor discriminate against it or against those with whom it deals," stated the brief filed by Acting Assistant Attorney General Jeffrey H. Wood.

Becerra filed his own motion for summary judgment last month.

He followed up with last week's reply brief, arguing SB 50 does not seek to occupy the federal government's regulatory space and has "only secondary effects on the United States." Federal claims that only the owner of the property has a right of refusal "is not true even in the private context," Becerra's office argued, noting exceptions in bankruptcy law and elsewhere.

"The United States has yet to explain why the California Legislature could not construct a mechanism that primarily regulates the purchasers of federal public lands within the context of recording their deeds," the attorney general's office wrote.

But even if California loses the case, an immediate fire sale is likely not on the horizon, Blumm added, because there is political resistance to large-scale sales.

The government regularly sells small amounts of land, he said, but these sales are subjected to highly regulated land plans and are difficult to arrange quickly. Congress can also sell land with few restraints, as Rep. Jason Chaffetz, R-Utah, tried to do with a bill last year that would have put 3 million western acres on the market.

But he withdrew the proposal under pressure from hunting and fishing groups -- not traditional Democratic constituencies.

"I think there's some real political downsides to a wholesale effort to sell public lands," Blumm said.