Those of us that have enjoyed the Sportsman’s Paradise that is Louisiana by hunting, fishing and exploring the great outdoors and those of us who have had the pleasure and good fortune to work as landmen running title in our great state have likely confronted the issue of determining whether a waterway is privately owned or public and/or who owns the bed, bottom or banks of a waterway. The changing course and/or widening of waterways in Louisiana, be it the Red River in Bossier and Caddo Parishes, Calcasieu Lake in Cameron Parish, Grand Lake-Six Mile Lake in St. Martin and St. Mary Parishes and even the Mississippi River or Gulf of Mexico, present unique title issues to private landowners, the state of Louisiana and oil and gas industry folks, including oil and gas landmen and title attorneys. In addition, coastal erosion has a similar effect on title and, therefore, mineral ownership. These questions of ownership can create a nightmare for an exploration and production company trying to obtain rights of way or take leases near a waterbody in Louisiana and/or pay royalties on oil and gas leases covering these lands. This article addresses the basics associated with classifying ownership of waterways in Louisiana and how that ownership, including mineral rights therein, can change over time.
In Louisiana, it is well settled that, by virtue of its inherent sovereignty, the state owns the beds or bottoms of all navigable waters in the state, whether lakes, rivers, streams, bays or in the Gulf of Mexico (See State ex rel. Bd. of Comm’rs of Atchafalaya Basin Levee Dist. v. Capdeville, 146 La. 94, 83 So. 421 (1919). The state of Louisiana owns the land that is covered by water of a river or stream at its ordinary low water mark; the land lying between the ordinary low water mark and the ordinary high water mark is called the bank and belongs to the owner of the adjacent land. Specifically, under Louisiana Civil Code Article 450, the waters and bottoms of natural navigable water bodies are declared to be public things owned by the state. But the banks of navigable rivers and streams are private things subject to public use (See La. Civ. Code art. 456). Louisiana Code articles 499 and 500 discuss accretion and dereliction. Accretion formed successively and imperceptibly on the bank of a river or stream, whether navigable or not, is called alluvion. The alluvion belongs to the owner of the bank, who is bound to leave public that portion of the bank which is required for the public use. Alluvion and accretion are sometimes used synonymously. However, accretion is defined as the act of growing to a thing and is usually applied to the gradual and imperceptible accumulation of land by natural causes, as out of the sea or river. Accretion is the addition of portions of soil by gradual deposition through the operation of natural causes. The term alluvion is applied to the deposit itself, while accretion denotes the act (See Walker Lands, Inc. v. E. Carroll Par. Police Jury, 38,376 (La. App. 2 Cir. 4/14/04), 871 So. 2d 1258, writ denied, 2004-1421 (La. 6/3/05), 903 So. 2d 442). Conversely, dereliction is formed by water receding imperceptibly from a bank of a river or stream. The owner of the land situated at the edge of the bank left dry owns the dereliction (See La. Civ. Code art. 499). However, there is no right to alluvion or dereliction on the shore of the sea (the Gulf of Mexico) or of lakes (See La. Civ. Code art. 500).
Water bodies that were navigable in 1812, when the state of Louisiana was admitted into the Union, and continue to be navigable are public things (See La. Civ. Code art. 450). Conversely, water bodies that were non-navigable in 1812 and continue to be non-navigable are private things. Questions then arise as to the status of water bodies that have become navigable or ceased to be navigable after 1812 (See 2 La. Civ. L. Treatise, Property § 4:2 (5th ed.)). Since the state (in its public capacity) generally owns only navigable bodies of water and non-navigable waterbodies are privately owned, resolution of many of the issues raised in this regard hinge on navigability. Generally speaking, a body of water is navigable in law if it is navigable in fact, and a body of water is navigable in fact if it is capable of being used for commercial purposes over which trade and travel are or may be conducted in the customary modes of trade and travel (See Walker Lands, Inc. v. E. Carroll Par. Police Jury, 38,376 (La. App. 2 Cir. 4/14/04), 871 So. 2d 1258, writ denied, 2004-1421 (La. 6/3/05), 903 So. 2d 442; and Ramsey River Rd. Prop. Owners Ass’n, Inc. v. Reeves, 396 So. 2d 873 (La. 1981)). Hence, navigability must be proven.
Navigability is a question of fact that may require substantial evidence. Moreover, the peculiar geophysical conditions that prevail at the Gulf coast prevent the drawing of a bright line of demarcation between the sea, rivers, lakes, and other inland non-navigable bodies of water. Thousands of acres of marshlands are traversed by innumerable bayous that empty into lakes, bays, and inlets. Fresh water mixes with salt water on the way to the open Gulf and tides cause salt water to enter into bodies of water further inland and render them brackish. Salinity alone can hardly furnish the criterion for the classification of a body of water as sea or as an inland water body. Moreover, the rather frequent absence of a perceptible current renders difficult the classification of a body of water as a river rather than sea or a lake.
Judith Perhay, Louisiana Coastal Restoration: Challenges and Controversies, 27 S.U. L. Rev. 149, 165 (2000). According to well-settled Louisiana jurisprudence, land that becomes part of the bed of a navigable river ceases to be susceptible of private ownership; it thus becomes a public thing, owned by the state in its capacity as a public person. It is the same when lands are eroded by the waters of the sea or of a navigable lake and become sea-bottom or lake-bottom (See A.N. Yiannopoulos, Louisiana Civil Law Treatise, Property § 75, at 151-152 (3d ed. 1991); see also La. Civil Code art. 500). Thus, as private lands erode into navigable water bodies, that new water bottom becomes the property of the state. The state of Louisiana’s interest in this eroded land is articulated in the Louisiana Constitution (See La. Const. art. IX, §3, 4(A); Ryan M. Seidemann, Curious Corners of Louisiana Mineral Law: Cemeteries, School Lands, Erosion, Accretion, and Other Oddities, 23 Tul. Envtl. L.J. 93, 119 (2009)). This change in ownership includes the underlying mineral rights. This is significant to oil and gas exploration and development in our state as it affects large amounts of valuable resources.
You may wonder whether, under the federal due process clause, compensation may be due to a landowner whose land becomes owned by the state by virtue of accretion, dereliction, erosion or subsidence. Surprisingly, this area of the law is somewhat uncharted, and this may be due, in large part, to the “Freeze Statute.”
In response to transfers to the state of Louisiana of previously privately owned lands, the legislature enacted what is commonly referred to as the “Freeze Statute”. Under the Freeze Statute (now codified at Louisiana Revised Statute 9:1151, certain mineral rights in lands transferred to the state of Louisiana by the occurrence of erosion, accretion, dereliction or subsidence may be protected, in that, if before the change the lands were subject to a valid mineral lease, the mineral owner of those leased lands and his lessee will retain those mineral rights for as long as that lease is in effect. The Freeze Statute provides, in full, as follows:
In all cases where a change occurs in the ownership of land or water bottoms as a result of the action of a navigable stream, bay, lake, sea, or arm of the sea, in the change of its course, bed, or bottom, or as a result of accretion, dereliction, erosion, subsidence, or other condition resulting from the action of a navigable stream, bay, lake, sea, or arm of the sea, the new owner of such lands or water bottoms, including the state of Louisiana, shall take the same subject to and encumbered with any oil, gas, or mineral lease covering and affecting such lands or water bottoms, and subject to the mineral and royalty rights of the lessors in such lease, their heirs, successors, and assigns; the right of the lessee or owners of such lease and the right of the mineral and royalty owners thereunder shall be in no manner abrogated or affected by such change in ownership.
The Freeze Statute was first enacted by the Louisiana legislature in 1952 and was later amended by Act No. 963 in 2001 to specifically include erosion and subsidence and also to cover the sea and arms of the sea. The effect of the Freeze Statute is that (i) where a change of ownership occurs as a result of accretion, dereliction, erosion or subsidence and (ii) a mineral lease granted before the change is being maintained as to that land as of the time of the change, that same land is acquired subject to and encumbered by any oil, gas or mineral leases covering the property, and subject to the mineral and royalty rights of the lessor, lessee and royalty owners in said lease as long as the lease is maintained.
Louisiana courts have long upheld the constitutionality of the Freeze Statute. In State v. Placid Oil Co., 300 So.2d 154 (1973), the Supreme Court of Louisiana plainly stated that the Freeze Statute is constitutional and rejected arguments that it is a deprivation of property without due process and an impairment of the obligations of a contract. Additionally, in Cities Services Oil and Gas Corp. v. State, 574 So.2d 455 (La. App. 2d Cir. 1991), writs denied, 578 So.2d 132 (La. 1991), reconsideration denied, 580 So.2d 663 (La. 1991), cert. denied, 502 U.S. 863 (1991), the Louisiana Second Circuit Court of Appeal, citing Placid and LSU Law Professor Lee Hargrave’s, “Statutory and Horatory” Provisions of the Louisiana Constitution of 1974, 43 La. Law Review 647, 661-62 (1983), explained:
Nothing is taken from the riparian landowner who has gained land by accretion if he obtains the land without the mineral rights; he had no vested interest in the land to begin with. Article IX, section 3 does not prohibit the state, which obtains land by dereliction, from obtaining less than full ownership, as no alienation or authorization of alienation [sic] has occurred.
Cities Services Oil and Gas Corp. v. State dealt with the changing course of the Red River near the boundaries between Caddo and Bossier Parishes between 1966 and 1978. The state asserted claims to ownership of land acquired by accretion in the Red River, and since the state had granted a lease on the former river bed (“State Lease 6002”), the state argued that the new bed was covered by this lease. The case presented two issues: (i) did the coverage of State Lease 6002 remain with just the old river bed, did it change and provide coverage to the new river bed in place of the old river bed, or did it provide coverage to both the old and new riverbeds, along with the land formed between the two, and (ii) did the owner of the land formed by accretion have a right to the minerals underlying same under the Freeze Statute.
On the first issue, the Cities court found that State Lease 6002 covered only the former riverbed and did not move to the new bed. The State Lease at issue contained language stating it covered land “now or formerly” constituting the riverbed owned by the state as of a specific date. Citing this language, the court concluded that State Lease 6002 did not follow the movement of the river. On the second issue, the court found the owners of the accretion formed due to the movement of the river were entitled to the mineral rights therein not subject to lease. Thus, the Cities court held that the Freeze Statute “clearly and unambiguously applies only when there is a change of ownership of land or water bottoms caused by the action of a navigable stream and there is in effect a mineral lease covering and affecting the lands or water bottoms.” Furthermore, the Cities court explained “the statute does not require that there be actual mineral production from the leased land in order for the statute to be effective.” In short, under the Freeze Statute and the ruling in Cities, full ownership of land can be transferred as a result of accretion in the absence of a lease. However, if the relevant land is subject to an outstanding lease, then the rights of the lessee(s) and lessor(s) are protected as long as the lease is maintained. Upon termination of the lease, mineral ownership devolves to the owner of the land. Note, just as the state can acquire land with less than full ownership as a result of accretion, dereliction, erosion, or subsidence by application of the Freeze Statute, a riparian (private) land owner can also take advantage of the benefits of the Freeze Statute.
For the state to make a claim under the Freeze Statute, the alluvion or accretion formed would have to have formed after the relevant state lease was granted covering a navigable water bottom at the time of the lease (See State v. Cockrell, 162 So. 2d 361 (La. Ct. App.), writ refused, 246 La. 343, 164 So. 2d 350 (1964)).
Waterbodies throughout Louisiana and the Louisiana coast remain some of the most outstanding areas of the world. These places brimming with beauty and abundant resources are our namesake. We would all do well to understand the challenges involved in developing and applying permanent legal rules for the management of these lands where constant physical change can lead to what is land today becoming open water tomorrow (and, even if far less common, vice versa).