Lyon et al v. Gila River Indian Community

Filing 407

ORDER that the Stipulation to File Select Summary Judgment Exhibits and Accompanying References Under Seal 394 is denied. The lodged sealed filing (Doc. 395) is stricken but shall remain under seal. The Court has not considered the sealed filing (Doc. 395) in making its determination. Gila River Indian Community's Motion to Dismiss 396 is denied. Gila River Indian Community's Motion for Summary Judgment 396 is denied. IT IS FURTHER ORDERED that the Trustee's Motion for Summary Judgment Regarding Scope of Implied Easement 392 is granted in part and denied in part. Signed by Senior Judge James A Teilborg on 5/15/2014. (ALS)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9
10
11

In re:

No. CV-05-02045-PHX-JAT

Michael Keith Schugg, dba Schuburg
Holsteins,

ORDER

Debtor,

12
13
14

In re:
Debra Schugg,
Debtor,

15
16
17

G. Grant Lyon in his capacity as Chapter 11
Trustee of the bankruptcy estate of Michael
Keith Schugg and Debra Schugg; Wells
Fargo Bank,

18
19
20

Plaintiffs,
v.
Gila River Indian Community,

21

Defendant.

22
Pending before the Court are the Trustee’s Motion for Summary Judgment

23
24
25
26
27
28

Regarding Scope of Implied Easement (Doc. 392) and Gila River Indian Community’s
Motion to Dismiss or, in the Alternative, for Summary Judgment and Memorandum in
Support (Doc. 396). Also pending is the parties’ stipulation to permit Gila River Indian
Community to file select documents and portions of its briefing under seal (Doc. 394).
I.

BACKGROUND
This case was filed by G. Grant Lyon acting solely in his capacity as Chapter 11

1

Trustee of the bankruptcy estate of Michael Keith Schugg and Debra Schugg (the

2

“Trustee”). The Defendant/Counter-Plaintiff Gila River Indian Community (“GRIC”) is a

3

federally-recognized Indian Community organized under Section 16 of the Indian

4

Reorganization Act, 25 U.S.C. § 461, et seq. GRIC is based on the Gila River Indian

5

Reservation (the “Reservation”), which consists of approximately 372,000 acres in south-

6

central Arizona, and includes members of the federally-recognized Akmil O’odham

7

(“Pima”) and Peeposh (“Maricopa”) Tribes.

8

Between 2001 and 2003, S&T Dairy (the “Dairy”) was constructed on land known

9

as Section 16 of Township 4 South, Range 4 East in Pinal County, Arizona, comprising

10

approximately 657 acres (“Section 16”). In or about September 2003, Michael Schugg

11

and Debra Schugg (the “Schuggs”) acquired title to Section 16. Section 16 is located

12

wholly within the Reservation and is physically accessible by Smith-Enke Road and

13

Murphy Road. In 2004, the Schuggs made a request to amend the Pinal County land use

14

designation from “Rural” to “Transitional” (allowing a higher-density housing

15

development). The GRIC objected to the amendment to the land use designation and

16

Pinal County ultimately rejected the application.

17

In 2004, the Schuggs declared bankruptcy and listed Section 16 as their largest

18

asset. During the bankruptcy proceedings, the GRIC filed a proof of claim asserting that

19

it had an exclusive right to use and occupy Section 16, authority to impose zoning and

20

water use restrictions on Section 16, and a right to injunctive and other relief for trespass

21

on reservation land and lands to which it held aboriginal title. The Trustee then initiated

22

an adversary proceeding seeking a declaratory judgment that the Schuggs’ estate had

23

legal title and access to Section 16. In 2005, Plaintiffs and Defendants stipulated that the

24

reference should be withdrawn to this Court. (Docs. 29, 30).

25

In 2007, this Court presided over a bench trial, where the issues to be resolved by

26

the Court were generally as follows: (1) whether there was an easement or right-of-way

27

via Smith-Enke Road or Murphy Road for access and utilities to Section 16; (2) whether

28

Murphy Road was an Indian Reservation Road that must remain open for public use; (3)

-2-

1

whether Smith-Enke Road and/or Murphy Road were public rights-of-way under Revised

2

Statute 2477 that must remain open for public use; (4) whether the easement and/or right-

3

of-way access (if any) to Section 16 included the right to improve the easements or install

4

additional utilities thereon; (5) whether GRIC had the power to regulate zoning on

5

Section 16; and (6) whether the Trustee, the Debtors, representatives of the S & T Dairy

6

and/or their respective invitees, employees, assignees, agents, or representatives

7

trespassed on tribal or allotted lands within the Gila River Indian Community’s

8

reservation.

9

At the conclusion of the trial, the Court determined that Plaintiffs were entitled to

10

legal access to Section 16 due to an implied easement over Smith-Enke Road and a right

11

of access over Murphy Road, either because of an implied easement or because the

12

relevant portion of the road was Indian Reservation Road that must remain open for

13

public use, that Defendant is not entitled to exercise zoning authority over Section 16,

14

and that no trespass occurred. The Court also determined that the GRIC’s assertion of

15

authority to control the zoning of Section 16 was not ripe for adjudication.

16

The GRIC then appealed to the Ninth Circuit Court of Appeals (“Court of

17

Appeals”). The GRIC appealed the Court’s judgment that the United States was not an

18

indispensable party to the action, the Trustee’s rights of access to Section 16, and the

19

rejection of the Community’s assertions of aboriginal title and zoning authority over

20

Section 16. The Trustee cross-appealed the District Court’s finding that Smith-Enke Road

21

and Murphy Road were not public roads under Revised Statute 2477. The Court of

22

Appeals affirmed in part, but remanded for further consideration of whether Murphy

23

Road was a public Road in light of ongoing proceedings before the Bureau of Indian

24

Affairs regarding the issue of whether Murphy Road was an Indian Reservation Road

25

open to the public.

26

After remand, the Parties filed a Joint Status Report (Doc. 314) informing the

27

Court that the Trustee had withdrawn his appeal to the Bureau of Indian Affairs regarding

28

the status of Murphy Road as a public road. The Parties agreed that, in light of this

-3-

1

dismissal, the question of whether Murphy Road was an Indian Reservation Road open to

2

the public was no longer subject to dispute in this case. In the Joint Status Report, the

3

Parties represented, “the parties agree that there are no longer any issues to be decided by

4

this Court on remand.” (Doc. 314 at 2).

5

The Court then directed the Parties to jointly submit a proposed form of judgment

6

that “will close this case.” (Doc. 315). When the Parties represented to the Court that they

7

were unable to agree on a proposed form of judgment, the Court ordered that each party

8

should separately file a proposed form of judgment or “motions as to why judgment

9

should not be entered at this time.” (Doc. 319). Thereafter, the GRIC filed its Motion for

10

Entry of Final Judgment with a proposed form of judgment (Doc. 321) and the Trustee

11

filed a Motion to Set Rule 16 Hearing and Postpone Entry of Judgment (Doc. 320).

12

In the Motion to Set Rule 16 Hearing, the Trustee argued that entry of final

13

judgment was no longer appropriate in this case because the issue regarding the scope of

14

the easements, which this Court and the Court of Appeals previously ruled was not ripe

15

for adjudication, had recently become ripe for adjudication. (Doc. 320). The Court

16

determined that the issue regarding the scope of the easements was now ripe because the

17

Trustee intended to improve the easements pursuant to a specific development plan and

18

the GRIC had denied the Trustee permission to make those improvements. (Doc. 332).

19

Accordingly, the Court postponed the entry of judgment and set a Rule 16 hearing on the

20

issue of easement scope. The parties have now fully briefed the issue for the Court’s

21

determination.

22

II.

STIPULATION TO SEAL

23

Before reaching the merits, the Court first addresses the GRIC’s stipulation to file

24

certain documents under seal. See (Doc. 394). In the course of this lawsuit, the Schuggs

25

disclosed documents to the GRIC that contained the Schuggs’ personal financial

26

relationships, namely an agreement between MARAZ-2006, LLC and Michael K.

27

Schugg. The parties have stipulated to seal the terms of this agreement and all derivative

28

documents in support of the GRIC’s dispositive motion referencing those terms,

-4-

1

including the motion itself. (Doc. 394 at 1).

2

“[T]he courts of this country recognize a general right to inspect and copy public

3

records and documents, including judicial records and documents.” Nixon v. Warner

4

Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record is one

5

‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.”

6

Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). A party

7

“seeking to seal a judicial record” bears the burden of articulating compelling reasons

8

supported by specific factual findings in favor of sealing that “outweigh the general

9

history of access and . . . public policies favoring disclosure.” Id. at 1178-79. “In general,

10

‘compelling reasons’ sufficient to outweigh the public’s interest in disclosure and justify

11

sealing court records exist when such ‘court files might have become a vehicle for

12

improper purposes,’ such as the use of records to gratify private spite, promote public

13

scandal, circulate libelous statements, or release trade secrets.” Id. at 1179. “The mere

14

fact that the production of records may lead to a litigant’s embarrassment . . . or exposure

15

to further litigation will not, without more, compel the court to seal its records.” Id. This

16

compelling reasons standard is properly applied to dispositive motions “and related

17

attachments” because “the resolution of a dispute on the merits, whether by trial or

18

summary judgment, is at the heart of the interest in ensuring the ‘public’s understanding

19

of the judicial process and of significant public events.’” Id. (citation omitted).

20

Here, the parties have not demonstrated compelling reasons for sealing the terms

21

of the agreement between MARAZ-2006, LLC and Michael K. Schugg. Although one

22

does not ordinarily publicize the details of one’s own personal financial transactions,

23

“mere embarrassment” is insufficient to compel the Court to seal such records. See id.

24

Neither party offers specific factual findings in favor of sealing; the parties’ sole basis for

25

sealing is that the agreement is a personal financial relationship and that the Trustee’s

26

counsel has designated evidence relating to that agreement as “confidential.” Although

27

the parties have stipulated to filing under seal, the Court is not bound by a stipulation of

28

law “regardless of what the parties say the law might be.” U.S. Aluminum Corp./Texas v.

-5-

1

Alumax, Inc., 831 F.2d 878, 880 (9th Cir. 1987).

2

Accordingly, the Court finds the parties have not demonstrated compelling reasons

3

for filing under seal sufficient to overcome the strong presumption in favor of public

4

access to judicial records. The Court will deny the stipulation to file under seal.

5

III.

RIPENESS

6

The GRIC moves to dismiss the Trustee’s complaint pursuant to Federal Rule of

7

Civil Procedure (“Rule”) 12(b)(1) for lack of subject-matter jurisdiction. (Doc. 396). The

8

GRIC argues that despite the Court’s prior Order determining that the scope of the

9

implied easement was ripe for adjudication, it remains unripe and therefore the Court

10

lacks subject-matter jurisdiction over this issue. (Id. at 3-4).

11

In its previous Order on ripeness, the Court determined that the issue of the scope

12

of the implied easement had become ripe because the Trustee had since created a plan for

13

developing Section 16 that required improving the existing easements. (Doc. 332 at 13-

14

14). The GRIC refused (and refuses) to permit the Trustee to pave the implied easements

15

and use them to support the traffic necessary to use the developed Section 16. (Id. at 10).

16

Accordingly, the Court noted that “short of beginning to pave the easements or install the

17

utility lines on the easements, the Court can ascertain no next step that the Owners could

18

take before an actual case or controversy exists without potentially infringing the GRIC’s

19

rights to the easements.” (Id. at 11-12).

20

“Under the ‘law of the case’ doctrine, ‘a court is generally precluded from

21

reconsidering an issue that has already been decided by the same court, or a higher court

22

in the identical case.’” United States v. Alexander, 106 F.3d 874, 876 (9th Cir. 1997)

23

(quoting Thomas v. Bible, 983 F.2d 152, 154 (9th Cir. 1993)). “A court may have

24

discretion to depart from the law of the case where: 1) the first decision was clearly

25

erroneous; 2) an intervening change in the law has occurred; 3) the evidence on remand is

26

substantially different; 4) other changed circumstances exist; or 5) a manifest injustice

27

would otherwise result.” Id.

28

The GRIC does not contend that the Court’s prior Order was clearly erroneous or

-6-

1

that the law regarding ripeness has changed; rather, the GRIC argues that three factual

2

assertions that the Trustee previously made to the Court have since been proven to be

3

inaccurate. (Doc. 396 at 6). The GRIC alleges that because the Court’s prior Order

4

depended upon these representations, the Court should conclude the scope of the

5

easement issue remains unripe. (Id. at 3, 7).

6

First, the GRIC argues that contrary to the Trustee’s prior statement that he had

7

obtained an agreement from Johnson Utilities to provide water and sewer service to

8

Section 16, the Trustee has since admitted that there is no such written agreement. (Id. at

9

7). Second, the GRIC contends that a preliminary lotting diagram for Section 16 prepared

10

by a planning firm at the Trustee’s direction inaccurately depicted access points to

11

Section 16 and continued to inaccurately depict access points even after a subsequent

12

revision. (Id.) Third, the GRIC alleges that discovery has now revealed numerous steps in

13

the development process that the Trustee could undertake to develop Section 16 before

14

resolving the issue of the scope of the easement, including completing the steps necessary

15

for a tentative plat application to Pinal County. (Id. at 7-8).

16

None of these three points, however, show changed circumstances justifying a

17

readjudication of ripeness. As the Court explained in its prior Order, the Trustee cannot

18

obtain a development permit and a subdivision plat from Pinal County unless the

19

subdivision has paved access and additional utility lines installed along the implied

20

easements. (Doc. 332 at 9-10). Similarly, the Trustee also cannot submit even a tentative

21

plat application to Pinal County unless there are established paved access rights and

22

adequate utility lines to the proposed subdivision. (Doc. 402-1 at 3). The GRIC’s

23

arguments concern additional steps in the development process that are necessary to

24

obtain final approval for the planned development; however, the GRIC ignores that

25

expanding the existing easement into paved access is also necessary to obtain Pinal

26

County approval. The GRIC has unequivocally refused to permit the Trustee to pave the

27

existing easements, (Doc. 332 at 13), and offers no new evidence that they are now

28

willing to permit improvement of the easements.

-7-

1

Therefore, although the GRIC is correct that a resolution of the scope of the

2

implied easements is not itself sufficient to permit development of Section 16, the Trustee

3

aptly points out that under the GRIC’s argument, the Trustee could never obtain an

4

adjudication on the scope of the easements because completing the subdivision approval

5

process requires the Trustee to establish paved access and utilities.1 (Doc. 401 at 6).

6

Accordingly, the GRIC has not shown changed circumstances such that the issue of the

7

scope of the easements is no longer ripe. The GRIC’s extensive arguments to the contrary

8

are in the nature of a motion for reconsideration, and are not persuasive. The Court will

9

deny the GRIC’s motion to dismiss for lack of subject-matter jurisdiction.

10

IV.

SCOPE OF THE EASEMENTS

11

The Trustee moves for summary judgment on its declaratory judgment claim

12

against the GRIC as to the rights of Section 16 with respect to the implied easement along

13

Murphy Road. (Doc. 392 at 1). Specifically, the Trustee asks the Court to declare that he

14

has the right to construct a two-lane, 40-foot wide paved roadway on Murphy Road from

15

the southern boundary of the Reservation to Casa Blanca Road as well as the right to

16

install utility lines underneath Murphy Road from the southern border of the Reservation

17

to the southeast corner of Section 16. (Id.)

18

A.

19

The Court of Appeals has summarized the relevant facts concerning the creation of

20

Background

the implied easement in favor of Section 16 as follows:

21

Through the 1853 Gadsden Purchase, the United States
acquired title to land from Mexico, including what is now
Section 16. The following year, Congress adopted a law
providing that when a survey was completed of the lands
within the purchased territory, “sections numbered sixteen
and thirty-six in each township, in said Territory, shall be, and
the same are hereby, reserved for the purpose of being applied
to schools in said Territory, and in the States and Territories
hereafter to be created out of the same.” The lands were not

22
23
24
25
26
1

27
28

The evidence shows that utility providers, for example, will not commit to
provide utilities unless there exists a right to install utility lines. (Doc. 402-1 at 5).
Similarly, a professional engineer has testified that a tentative plat cannot be prepared
without having first established the rights for paved access and utilities. (Doc. 402-3 at 34).
-8-

literally meant to be sites for school buildings. Instead, the
state was able to sell and lease them to produce funds
supporting its schools. In 1863, Congress partitioned the
Territory of New Mexico to create the Territory of Arizona.
Section 16 became property of Arizona when a survey of the
land was filed in 1877.

1
2
3
4
5

Lyon v. Gila River Indian Cmty., 626 F.3d 1059, 1065-66 (9th Cir. 2010) (citations

6

omitted). Thus, the Court of Appeals held that the United States’ grant to Arizona of

7

Section 16 in 1877 at that time created an implied easement for the benefit of Section 16.

8

Id. at 1073-74. This easement was “effectively conveyed to each subsequent purchaser.”

9

Id. at 1074.

10

Murphy Road, the access route at issue, is a north-south dirt road running adjacent

11

to the eastern boundary of Section 16. (Doc. 278 at 7; Doc. 393 at 2). From the northeast

12

corner of Section 16, Murphy Road extends two miles through the Reservation before

13

intersecting with another road. (Doc. 278 at 7; Doc. 393 at 2). From the southeast corner

14

of Section 16, Murphy Road extends approximately one-half mile through the

15

Reservation before reaching the City of Maricopa. (Doc. 278 at 7; Doc. 393 at 2).

16

The Reservation district surrounding Section 16 encompasses 100 square miles

17

and has 2,222 enrolled tribal members. (Doc. 400-1 Ex. 3). The area surrounding Section

18

16 is currently undeveloped and is planned for agricultural development, but the GRIC

19

has no intention to ever change the land designations surrounding Section 16 from “open

20

space” or “agricultural.” (Id.) However, the City of Maricopa is separated from Section

21

16 by approximately a half-mile of Reservation and the City of Maricopa is undergoing

22

rapid development. (Doc. 278 at 13-14).

23

The Trustee’s current plan for developing Section 16 depicts 437 lots at a density

24

of one house per 1.25 acres. (Doc. 396-2 Ex. 23). Section 16 is currently zoned by Pinal

25

County as rural land, supporting a maximum development density of one house per 1.25

26

acres. (Doc. 393-1 Ex. 1 at 2-3).

27

B.

Legal Standard

28

In the absence of contrary precedent, Arizona follows the Restatement (Third) of

-9-

1

Property: Servitudes (the “Restatement”) with respect to the law of easements. See Scalia

2

v. Green, 271 P.3d 479, 481 ¶ 9 n.1 (Ariz. Ct. App. 2011); Paxson v. Glovitz, 50 P.3d

3

420, 424 ¶ 21 n.3 (Ariz. Ct. App. 2002).

4

“[A]n implied easement is based on the theory that whenever one conveys

5

property he includes or intends to include in the conveyance whatever is necessary for its

6

beneficial use and enjoyment. The creation of easements by implication is an attempt to

7

infer the intention of the parties to a conveyance of land. . . .” Koestel v. Buena Vista

8

Public Service Corp., 676 P.2d 6, 8 (Ariz. Ct. App. 1984); see also Restatement (Third)

9

of Property: Servitudes § 4.1(1) (2000) [hereinafter Restatement] (“A servitude should be

10

interpreted to give effect to . . . the circumstances surrounding creation of the servitude,

11

and to carry out the purpose for which it was created.”).

12

“The holder of an easement is entitled to use it ‘in a manner that is reasonably

13

necessary for the convenient enjoyment’ of the easement or servitude.” Paxton, 50 P.3d

14

at 427 ¶ 36 (quoting Restatement § 4.10). “[T]he manner, frequency, and intensity of the

15

use may change over time to take advantage of developments in technology and to

16

accommodate normal development of the dominant estate or enterprise benefitted by the

17

servitude.” Id. (quoting Restatement § 4.10). The holder “is not entitled to cause

18

unreasonable damage to the servient estate or interfere unreasonably with its enjoyment.”

19

Restatement § 4.10.

20

When “the manner of the use” of an easement is changed, “or the intensity, or

21

frequency of the use is increased, the change is permissible . . . only if the change is

22

reasonably necessary to accommodate normal development of the dominant estate.” Id.

23

cmt. f (emphasis added). The manner in which the easement was created is relevant to

24

determining whether the manner of use has changed. See id. As the Restatement explains,

25

what constitutes normal development depends, at least in part, on the prior use of the

26

dominant estate:

27
28

Since land use normally evolves, what may be abnormal
development at one time may become normal at a later time.
The degree and abruptness of transition may be relevant
factors in determining whether the dominant owner may
- 10 -

continue using an easement after changing use of the
dominant estate. A gradual transition from wilderness to
agricultural to suburban subdivision might be considered
normal, where an abrupt transition from wilderness to
subdivision would not. In one case, a roadway easement
could continue to be used by the dominant estate through all
phases of its development, while, in the other, it could not be
used to serve the subdivision.

1
2
3
4
5
6

Id. The nature of the easement is another factor in determining whether particular

7

development of the dominant estate is normal development:
Although generally easements are permitted to evolve along
with the properties they serve, the outcome in individual
cases may depend on how fast the transition is taking place in
the area and whether the easement was created by grant or
prescription. The degree of change permitted for a
prescriptive easement is generally less than that for an
expressly created easement. In balancing the interests of the
dominant-and servient-estate holders, conservation and
neighborhood preservation concerns should be relevant as
well as developmental concerns.

8
9
10
11
12
13
14

Id. cmt. h.

15

C.

16

Because the Court of Appeals held that the United States implied an easement in

17

its 1877 grant of Section 16 to Arizona, Lyon, 626 F.3d at 1073-74, the Court must

18

determine the scope of the easement from the circumstances surrounding that grant, see

19

Restatement § 4.1(1). At the outset, the Court notes the practical difficulty and

20

uncertainty of divining the intent of Congress in 1877. Nevertheless, the Court will apply

21

the Restatement, guided by decisions of other jurisdictions, to determine Congress’s

22

intent.

23

Analysis

1.

Current Zoning

24

The Trustee first argues that because Congress granted Section 16 to Arizona for

25

Arizona to use or sell to raise money for public schools, Congress intended that Section

26

16 be capable of its full economic development. (Doc. 392 at 10-11). Thus, the Trustee

27

contends, Congress intended that Section 16 could be used in ways other than merely

28

agricultural, including residential use to the extent permitted by zoning. (Id. at 11).

- 11 -

1

In support of his expansive view of Congressional intent, the Trustee relies upon

2

the Court of Appeals’ statement in this case that land grants designed to aid state schools

3

are to “be construed liberally.” (Id. at 11) (quoting Lyon, 626 F.3d at 1072)). The Trustee

4

also quotes this Court’s prior Order, in which the Court remarked that access to Section

5

16 “cannot be ‘so narrowly restrictive as to render the lands incapable of their full

6

economic development.’” (Doc. 278 at 25) (quoting Utah v. Andrus, 486 F. Supp. 995,

7

1009 (D. Utah 1979)). Contrary to the Trustee’s conclusion, however, neither the Court

8

of Appeals’ interpretation of school land grants nor this Court’s prior statements support

9

the conclusion that the scope of the easement necessarily grows to encompass current

10

zoning restrictions.

11

The Court of Appeals discussed the liberal construction of land grants in the

12

context of distinguishing grants intended to aid schools from federal land grants in

13

general, noting that “[c]ourts normally construe federal land grants narrowly, under a

14

longstanding rule that unless the language in a land grant is clear and explicit, the grant

15

will be construed to favor the [granting] government so that nothing passes by

16

implication.” Lyon, 626 F.3d at 1072 (internal quotation marks omitted). Although the

17

court then noted the exception that lands grants are to be liberally construed when “the

18

land grant at issue was made pursuant to legislation of Congress designed to aid the

19

common schools of the states,” id. (internal quotation marks omitted), it did so only for

20

the purpose of determining “whether the federal government’s conveyance of Section 16

21

to Arizona, as part of a school land grant, included an implied easement,” id. The liberal

22

construction of land grants applied only in determining whether an implied easement

23

existed, not its scope. See id. at 1074 (declining to opine on the scope of the easement).

24

Nor does Andrus, quoted in the Court’s prior Order, link the scope of an easement

25

to zoning permissions. In Andrus, the putative dominant estate had been the subject of a

26

school land grant to the state and was surrounded by federal land. 486 F. Supp. at 1000,

27

1002. The court found an implied easement existed in favor of the school-grant land, id.

28

at 1002, and noted that because Congress intended that the land be used to raise state

- 12 -

1

revenue, “the access rights of the state cannot be so restricted as to destroy the lands’

2

economic value. That is, the state must be allowed access which is not so narrowly

3

restrictive as to render the lands incapable of their full economic development.” Id. at

4

1009.

5

The Trustee asks the Court to read Andrus no further and conclude that full

6

economic development means any development permitted by current zoning. But the

7

Andrus court also held that “it is consistent with common law property principles to find

8

that the United States, as the holder of the servient tenement, has the right to limit the

9

location and use of Utah’s easement of access to that which is necessary for the state’s

10

reasonable enjoyment of its right.” Id. The court concluded that the federal government

11

could regulate the manner of access to the dominant estate. Id. Thus Andrus does not

12

stand for the proposition that the owner of the dominant estate may develop his land to

13

the extent permitted under the zoning laws; rather, Andrus merely provides that the land

14

may be reasonably enjoyed pursuant to its full economic development. Read in

15

conjunction with the Restatement’s emphasis upon normal development, it is clear that

16

development means normal change-of-use patterns and zoning restrictions are not

17

dispositive (although zoning may be evidence of what is considered normal

18

development). See Restatement § 4.10 cmt. f.

19

2.

Residential Use

20

Having established that the scope of the easement does not depend upon the

21

current zoning of Section 16, the Court turns to the issue of whether residential use is a

22

permissible use of the easement. See Restatement § 4.10 cmt. d (“The first step in

23

determining whether the holder of an easement is entitled to make a particular use

24

challenged by the owner of the servient estate is to determine whether the use falls within

25

the purposes for which the servitude was created.”). The GRIC contends that Congress

26

intended Section 16 to be used for only agricultural purposes and therefore the easement

27

is limited to uses necessary to support such agricultural use. (Doc. 399 at 8-10).

28

The GRIC’s argument is both muddled and unpersuasive. Essentially, the GRIC

- 13 -

1

argues that because the Enabling Act (which allowed Arizona to become a state)

2

permitted Arizona to lease school sections “in such manner as the legislature of the state

3

of Arizona may prescribe, for grazing, agricultural, commercial, and domestic purposes,”

4

and Arizona subsequently decided that land leased for one purpose could not be used by

5

the lessee for another purpose, Congress intended that Section 16 be used only for

6

continuing agricultural purposes as it was in 1877. (Doc. 8-10). This argument fails for

7

several reasons.

8

First, there is no evidence that Section 16 was used for agricultural purposes in

9

1877. The only evidence shows that portions of Section 16 have been farmed “since at

10

least the 1940s.” (Doc. 278 at 9). Thus, to the extent agricultural use of Section 16 is a

11

use not existing in 1877, this evidence supports the proposition that Section 16 may

12

develop from one land use to another. Second, although the GRIC is correct that a lessee

13

of Arizona trust land may use the land for only the purpose for which the land was leased,

14

see A.R.S. § 37-281, the subsequent actions of the Arizona legislature in restricting the

15

leased use of state trust land bear no relationship to the intent of Congress in conveying

16

that land thirty-five years prior to statehood. Third, although the Enabling Act was

17

enacted in 1910 (thirty-three years after Section 16 was granted to Arizona), it provided

18

that state trust land could be sold, which implies that the purchaser would have

19

unrestricted use of the land. See Enabling Act, ch. 310, § 28, 36 Stat. 568 (1910). To the

20

contrary, the Enabling Act demonstrates that Congress, at least in 1910, wanted to

21

maximize the value of school sections by ensuring that they were sold to the “highest and

22

best bidder.” Id.

23

Thus, nothing in either the Enabling Act or the Arizona legislature’s subsequent

24

acts establishes that Congress’s intent in 1877 was to restrict the future use of Section 16

25

to agricultural uses. The reasonable inference from Congress’s grant of Section 16 is that

26

Congress intended Section 16 to enjoy an easement commensurate with the most

27

productive use of the property as it developed. This comports with the law of easements.

28

- 14 -

3.

1

Normal Development

2

The scope of an easement is not static but rather changes as “reasonably necessary

3

to accommodate normal development of the dominant estate.” Restatement § 4.10 cmt. f.

4

Thus, although an easement may initially be used for agricultural use, it is not limited to

5

that use if normal development results in a residential use of the dominant estate. See id.

6

(“A gradual transition from wilderness to agricultural to suburban subdivision might be

7

considered normal, where an abrupt transition from wilderness to subdivision would

8

not.”).

9

The parties dispute whether a change in use of Section 16 from agricultural to

10

residential constitutes “normal development.” (Doc. 392 at 13; Doc. 399 at 10). The

11

GRIC contends that because it intends to maintain the surrounding Reservation land as

12

open or agricultural, the development of Section 16 at one house per 1.25 acres is

13

abnormal and “an abrupt and drastic departure from the longstanding pastoral nature” of

14

the area. (Doc. 399 at 14). The GRIC estimates that the proposed 440 homes in Section

15

16 will add more than 1,000 residents to the area; it asserts this is abnormal because only

16

approximately 2,222 tribal members live in the surrounding 100 square miles of

17

Reservation. (Id. at 13-14).

18

The GRIC’s emphasis on its use of Reservation land misstates the test for

19

determining the scope of an easement. The issue is whether the scope of the easement is

20

reasonably necessary to “accommodate normal development of the dominant estate.” See

21

Restatement § 4.10 (emphasis added). Here, the evidence shows the use of Section 16 has

22

transitioned since 1877 from open space (“wilderness”) to agricultural in the 1940s to

23

dairy operations (a more industrial agricultural use than simple farming). The transition

24

from agricultural dairy use to rural housing is not only normal development but

25

abnormally slow development. The City of Maricopa is located approximately one-half

26

mile away and has undergone rapid development. The Court cannot imagine a smaller

27

developmental step than the transition from a dairy farm to rural housing with one house

28

per 1.25 acres. Although Section 16 could conceivably be subdivided into still fewer lots

- 15 -

1

than the 437 planned, the existing Pinal County rural zoning appears to contain the

2

planned development to a normal pace.2

3

The GRIC is correct that the Trustee’s proposed development of Section 16 is

4

abrupt and abnormal compared to the surrounding Reservation. See (Doc. 399 at 14). But

5

there are two critical flaws in the GRIC’s conclusion; first, development is measured by

6

the dominant and not the servient estate. See Restatement § 4.10. Second, the GRIC’s use

7

of the surrounding Reservation constitutes abnormally slow development. The GRIC

8

admits that it intends to stagnate development by always maintaining the surrounding

9

land as open or agricultural in nature. Although the GRIC has the sovereign right to

10

develop or not develop its land as it best sees fit, it cannot use its abnormal lack of

11

development as justification for mischaracterizing normal development as “abrupt.” To

12

hold otherwise would permit the servient estate holder to undermine the easement

13

holder’s rights created at the time of the conveyance simply by choosing to forego normal

14

development on its property.3

15
2

16

Illustration 14 to Restatement § 4.10 is particularly illustrative:
O, the owner of Blackacre, conveyed a 60-foot-wide
easement to Able, the owner of Whiteacre, a 40-acre parcel of
undeveloped property in a rural area close to the suburbs of a
major city. Ten years later Whiteacre was subdivided into 160
lots. The developer plans to improve the easement to provide
primary access to the subdivision. In the absence of other
facts or circumstances, the easement can be improved to serve
the subdivision because the change from rural to suburban is
normal development, and the width of the easement suggests
that a substantial increase in use was contemplated by the
parties.

17
18
19
20
21
22
23

Restatement § 4.10 illus. 14. Although in this illustration the easement is express, in the

24

present case Congress intended the scope of the implied easement to accommodate

25

normal development.

26
27
28

3

Under the GRIC’s view, for example, if a neighboring dominant and servient
estate in New York’s Times Square were both single-family residences that had never
been further developed, the owner of the dominant estate could never develop the
property commercially regardless of the surrounding environment simply because the
owner of the servient estate refused to develop his property. Such a result would be
absurd.
- 16 -

1

Accordingly, the Trustee’s proposed use of the easement for the development of

2

Section 16 for rural residential use with one house per 1.25 acres is a manner reasonably

3

necessary for its convenient enjoyment. This finding is not sufficient to grant the

4

Trustee’s requested relief, however.
4.

5

Unreasonable Damage or Interference to the Reservation

6

The holder of an easement, although entitled to use the easement as reasonably

7

necessary for the convenient enjoyment of the dominant estate, “is not entitled to cause

8

unreasonable damage to the servient estate or interfere unreasonably with its enjoyment.”

9

Restatement § 4.10. This principle is at the core of GRIC’s complaint regarding the

10

proposed improvements to Murphy Road. The GRIC implies that the increase in

11

population and traffic would have detrimental effects to the surrounding Reservation

12

roads and property, (Doc. 399 at 13-14), although it offers no specific argument on this

13

point.

14

The Court cannot conclude on the present record whether use of the easement

15

consistent with development of Section 16 at one house per 1.25 acres would cause

16

unreasonable damage to the Reservation or interfere unreasonably with its enjoyment.

17

This is a factual question requiring the Court to consider the increased traffic to the

18

surrounding roads, vehicle noise, aesthetics of the area, and the character of the

19

surrounding property, among other considerations. See Restatement § 4.10 cmt. h (“What

20

constitutes unreasonable interference will depend largely on the circumstances . . .”).

21

Although the Court has previously issued factual findings concerning the increased traffic

22

and issues with the Gila River Police Department’s ability to handle such traffic, these

23

facts assume a 3.5 house per acre density, which is over four times as many houses as the

24

Trustee now proposes to construct. See (Doc. 278 at 13, 15). Thus, these findings do not

25

aid the Court in its present analysis.

26

The Court will deny summary judgment on this issue. At trial, the Trustee must

27

show that the traffic and other effects associated with an increased number of vehicles

28

using Murphy Road does not unreasonably interfere with the GRIC’s enjoyment of its

- 17 -

1
2

Reservation or cause unreasonable damage to the Reservation.
5.

Other Issues

3

Although the Court declines to rule at this time on the ultimate issue of whether

4

the scope of the easement includes a paved 40-foot wide access road with underground

5

utilities carrying the daily traffic of a 437 lot residential development, the Court may

6

properly decide narrower issues related to the easement’s scope, such as the installation

7

of underground utilities as well as the size and type of the roadway.

8

a.

Underground Utilities

9

The Trustee seeks to install underground utilities in the easement underneath

10

Murphy Road. The GRIC does not dispute that the easement may be used for ingress and

11

egress, but asserts that the Trustee has not presented sufficient evidence that the easement

12

was created to support the installation of underground utilities or of the precise location

13

of such utilities. (Doc. 399 at 11 n.11; Doc. 396 at 16).

14

Courts have regularly upheld the rights of holders of implied easements to install

15

underground utilities in their easements. See, e.g., Reece v. Smith, 594 S.E.2d 654, 657-

16

58 (Ga. Ct. App. 2004) (“The implied easement . . . was not strictly limited to [the]

17

original use of the easement for ingress and egress, but is available for uses that are

18

necessary to the reasonable enjoyment of any lawful development of the land, and that do

19

not unreasonably burden” the rights of the owners of the servient estate). United States v.

20

176.10 Acres of Land, 558 F. Supp. 1379 (D. Mass. 1983) is particularly illustrative.

21

There, the issue was whether an implied easement created in 1852 permitted the

22

construction of a driveway and underground utilities for use by a new residential

23

dwelling. 558 F. Supp. at 1380. The court concluded that it was “reasonable to assume

24

that the parties foresaw residential use of the landlocked parcel as a probable use and that

25

use would today include utilities as well as a driveway.” Id. at 1382. Thus, because

26

residential use was foreseeable to the parties in 1852, “use of the easement appropriate to

27

permit residential use of the dominant estate is, therefore, appropriate today.” Id. at 1381.

28

Similarly, the Trustee is entitled to use the easement for the reasonable enjoyment

- 18 -

1

of Section 16 so long as his use does not unreasonably burden the Reservation. Because

2

Section 16’s normal development includes residential use, and residential use now

3

involves utility service, the Trustee is entitled to use the easement for installation of

4

utility lines so long as this use does not unreasonably burden the Reservation. The Court

5

concludes that the installation of utility lines, regardless of their size or number, will not

6

unreasonably burden the Reservation because the lines will not be visible and will occupy

7

otherwise unused underground space within the easement under Murphy Road.

8

Consequently, the easement permits the Trustee to install underground utility lines under

9

the boundaries of Murphy Road.
b.

10

Dimensions and Paving of the Easement

11

The GRIC argues that the Trustee’s proposed dimensions for the Murphy Road

12

easement, 40-foot in width, would “drastically alter the current width of the road.” (Doc.

13

399 at 13). The evidence shows that the traveled surface of Murphy Road varies between

14

17 and 29.5 feet in width, excluding shoulder areas. (Doc. 393-4 Ex 4 Ex. A at 2 n.2;

15

400-1 Ex. 1 at 49:21-23). The shoulder area varies between 6 to 12 feet, thus adding

16

between 12 to 24 feet to the road’s width. (Doc. 404-1 Ex. 1 at 2-3).

17
18
19
20
21
22
23
24

The permissible dimensions of an easement “are those reasonably necessary” for
its enjoyment:
If the dimensions are not specified, the owner of the servitude
may use so much of the servient estate as reasonably
necessary to carry out the intended purpose. The dimensions
of the servitude may change over time as reasonably needed
to accommodate changing needs of the servitude owner and
changes in technology, limited by the proviso, however, that
changes that would unreasonably increase the burden on the
servient estate are not permitted.
Restatement § 4.8 & cmt. d.

25

In this case, the GRIC fails to point to any evidence other than its bare assertion

26

that the width of Murphy Road would be “drastically alter[ed]” that supports the

27

conclusion that a 40-foot wide easement is either not reasonable in light of the normal

28

development of Section 16 or would unreasonably increase the burden on the servient

- 19 -

1

estate.4 Because Murphy Road presently approximates forty feet in width including the

2

traveled surface and shoulder areas, it would not unreasonably increase the burden on the

3

Reservation to fix the road’s width at forty feet including shoulders, as the Trustee has

4

requested. Moreover, the Trustee has presented uncontroverted evidence that such a

5

width is necessary for the development of Section 16 at one house per 1.25 acres. The

6

GRIC even asserts that the Trustee may need a significantly wider easement to

7

accommodate Pinal County requirements. (Doc. 399 at 2).

8

Similarly, the Trustee may pave Murphy Road. “Frequently, reasonably necessary

9

uses [of an easement] will also include making improvements or constructing

10

improvements for use of the easement.” Restatement § 4.10 cmt. c. Congress intended

11

that Section 16 would undergo normal development, and such development includes the

12

improvements of roads. Paving a roadway is a reasonable improvement. See Hayes v.

13

Aquia Marina, Inc., 414 S.E.2d 820, 823 (Va. 1992).

14

The Court emphasizes that its determinations regarding paving and the width of

15

Murphy Road are not themselves dispositive of the Trustee’s requested relief. In other

16

words, although a road is often paved for the purpose of supporting increased traffic, the

17

Court is not in this Order declaring that the easement supports increased traffic. Indeed,

18

unless the Court concludes at trial that the easement supports increased traffic, paving a

19

40-foot wide Murphy Road would provide negative utility to the Trustee because he

20

would expend money to do so but he could not use the road to support his desired level of

21

traffic. The Court believes a showing of the level of traffic on Murphy Road and its

22

attendant effects under the Trustee’s proposed development is dispositive as to the

23

ultimate relief sought: a declaration that the easement supports a paved, 40-foot wide

24

Murphy Road with underground utilities carrying the traffic of development of Section

25

16 at a density of one house per 1.25 acres. This depends upon the Trustee’s success at

26
27
28

4

The GRIC also asserts that the “location of the proposed paved road is
unknown.” (Doc. 396 at 16). But the evidence clearly shows that the Trustee intends to
improve Murphy Road, and the location of Murphy Road is known. (Doc. 396-1 Ex. 14
at 2-3).
- 20 -

1

trial.

2

V.

RETAINED JURISDICTION

3

The Trustee asks the Court to retain jurisdiction after entering judgment in this

4

case “in case Pinal County determines that any additional improvements are necessary.”

5

(Doc. 392 at 1). The Trustee offers no authority supporting the proposition that the Court

6

may retain jurisdiction subsequent to entry of a final judgment. To the contrary, Rules 59

7

and 60 provide narrow mechanisms by which a party may move to alter or set aside a

8

judgment within a limited time period following its entry. See Fed. R. Civ. P. 59(e), 60.

9

Retaining jurisdiction after entry of final judgment would be inconsistent with these rules

10

and principles regarding the finality of judgments. The Court denies the Trustee’s

11

request.

12

VI.

CONCLUSION

13

Congress intended at the time of granting Section 16 to Arizona to permit the

14

owner of Section 16 to access the property in a manner commensurate with its normal

15

economic development. Because a transition from an agricultural farm use to rural

16

residential is normal development, the Trustee is entitled to improve the easement along

17

Murphy Road to a 40-foot wide paved roadway.

18

However, the Court cannot determine on the present factual record whether the

19

Trustee may use such a roadway for the purpose of supporting a residential development

20

with one house per 1.25 acres. At a bench trial, the Trustee must prove that the traffic and

21

other attendant effects from such a use will not cause unreasonable damage to the

22

Reservation or interfere unreasonably with the GRIC’s enjoyment of the Reservation.

23

For the foregoing reasons,

24

IT IS ORDERED that the Stipulation to File Select Summary Judgment Exhibits

25

and Accompanying References Under Seal (Doc. 394) is denied. The lodged sealed filing

26

(Doc. 395) is stricken but shall remain under seal. The Court has not considered the

27

sealed filing (Doc. 395) in making its determination.

28

IT IS FURTHER ORDERED that Gila River Indian Community’s Motion to

- 21 -

1
2
3
4
5
6

Dismiss (Doc. 396) is denied.
IT IS FURTHER ORDERED that Gila River Indian Community’s Motion for
Summary Judgment (Doc. 396) is denied.
IT IS FURTHER ORDERED that the Trustee’s Motion for Summary Judgment
Regarding Scope of Implied Easement (Doc. 392) is granted in part and denied in part.
Dated this 15th day of May, 2014.

7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

- 22 -