State, federal government argue in court over California land sales

SACRAMENTO -- Attorneys representing California and the United States faced off in federal court Monday over a law that would give the state the right of first refusal in public land sales.

At issue is SB 50. The state law, signed by Gov. Jerry Brown last year, came in response to calls from the Trump administration to sell federal land to private interests in order to increase mining, oil extraction, grazing and other commercial uses. About 46 percent -- of the land in California belongs to the federal government.

The U.S. Department of Justice is seeking to enjoin enforcement of the law, while the state is seeking to have the case thrown out. U.S. v. California, 18-CV00721 (E.D. Cal., filed April 2, 2018).

The state and federal attorneys fleshed out their arguments in front of a skeptical U.S. District Judge William B. Shubb of Sacramento.

The veteran judge expressed skepticism at state claims that the law did not seek to regulate the federal government. But he also chided federal attorneys over several arguments, in particular an apparent obsession with the rarely litigated California Admission Act of 1850.

U.S. Deputy Assistant Attorney General Eric Grant began by noting the supremacy clause of the U.S. Constitution can be violated if a state law conflicts with federal law or seeks to regulate the federal government.

"SB 50 violates the supremacy clause in both respects," Grant said, later noting the U.S. Constitution gave the right to sell federal land "exclusively to Congress."

He added, "SB 50 treats everyone else better than the federal government," noting no other seller would be subject to the same right of first refusal by the California State Lands Commission over "similarly situated" land.

California Deputy Attorney General John W. Killeen countered that SB 50 had been increasingly narrowed over its legislative history specifically to avoid preemption. For instance, it does not apply to some types of land sales, such as those that qualify for automatic conveyances.

He also repeated arguments from the state's brief earlier this month that it regulates buyers of the land, who must obtain a certificate of compliance from the State Lands Commission before they record their conveyances in their local recorders' offices. It neither prevents sales nor lowers prices, he said.

Killeen conceded it's possible the federal government could successfully file an "as applied" challenge to the refusal of a particular sale. But he said the U.S. needed to reach a higher bar to enjoin the law.

"I agree with Mr. Grant there are potential conflicts here," Killeen said. "But is it impossible for California to ever enforce this right against a purchase?"

The sides agreed at least seven federal land sales have gone forward since SB 50 went into effect Jan. 1. Killeen said at least two were subject to automatic conveyance, while the state did not attempt to enforce the law against the others.

"Nothing has happened yet, so it's not unconstitutional?" Shubb shot back.

Later, Shubb seemed to at least partially endorse Grant's argument that "a fundamental tenet of property law" is that "right of first refusal is owned by the owner of the land." At one point, he challenged Killeen to walk him through a similar a right of first refusal scenario involving a private sale.

Killeen pivoted, arguing that many federal lands were not similarly situated to private lands. For instance, the public enjoys use of them, and some, like national parks, have been judged to be aesthetically more valuable.

Grant later cited the Admission Act, in which California pledged not to interfere with, impede or question the "disposal of federal lands inside state borders.

"It's really impossible to say this statute doesn't do at least one of those things," Grant said.

Killeen replied the point was moot because any claims under the act were already covered by the property clause of the U.S. Constitution, which gives Congress power over federal lands. He also said the U.S. was trying to make a California specific argument when states must be treated equally.

Shubb asked Grant if he could bring up relevant case law citing the act.

"I'm not aware of any litigation around California's Admission Act," Grant replied.

Shubb concluded the hearing by taking the matter under submission.