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Beavertail, Inc. v. United States

United States District Court, D. Idaho

September 29, 2016

BEAVERTAIL, INC., et al., Plaintiff,


          B. Lynn Winmill Chief Judge.


         Pending before the Court is Defendant the United States of America's Motion to Dismiss for lack of subject-matter jurisdiction (Dkt. 23). The Court heard argument on the motion on September 6, 2016, and now issues its decision. For the reasons explained below, the Court will grant the motion with leave to amend.


         Grays Lake is a 22, 000-acre marsh in eastern Idaho, northeast of Soda Springs. Orestes S. John first surveyed Grays Lake in 1877, describing it as "a shallow lake of uncertain or variable extent. . . margined by fields of rule, and treacherous bog." See Sibbett Dec. ¶¶ 2, 3 & Ex. 1. The marsh was historically used by ranchers and homesteaders for haying and grazing.

         Over time, tensions arose between the ranchers and the United States government. Both sides claimed ownership to the property. The government wished to use the marsh as a water storage facility for the Shoshone Bannock Tribes and for a wildlife refuge, while the ranchers wished to continue using the marsh for haying and grazing.

         In 1965, to clarify uses and ameliorate tensions, various ranchers (including the plaintiffs here) and the government entered into identical 99-year Refuge Use and Cooperative Use Agreements. Compl., Dkt. 1, ¶ 4; see also Agreement, Dkt. 23-3. The agreement provides that the government will use the middle of the lakebed - which plaintiffs describe as a donut hole, or the inner ring - for a wildlife refuge and for water storage. As for the remaining, 1/2 -mile wide outer ring, the ranchers would continue to use that area for haying and grazing. See Dkt. 23-3.

         The government also proposed to build a "perimeter dike" that would enclose the donut hole. The basic idea was that the water within the dike would be used for the Tribes and for waterfowl, while the dried area outside the dike would be used for continued haying and grazing.

         The government began construction on the dike, but eventually gave up, concluding that it was not feasible. The government left the partially constructed dike in place, rather than removing it. Plaintiffs say that say the partially constructed dike has exacerbated spring flooding on their upland properties.

         In 2009, the plaintiffs notified the government that they were rescinding the agreement. They demanded that the government cease its use and occupation of Grays Lake. The government has not done so, contending, among other things, that the agreement allows it to leave structures - partially built or otherwise - in place.

         The ranchers filed this action in December 2012. Shortly thereafter, the Court granted the parties' motion to stay the proceedings while they attempted to settle their differences. Mar. 13, 2013 Stay Order, Dkt. 10. Several co-plaintiffs (including the Crystals, the Sibbetts, and Mr. Riley) resolved their disputes, which included selling their lakebed properties to the government. See Motion, Dkt. 23, at 3; Response, Dkt. 27, at 18-19. The remaining two plaintiffs - Beavertail, Inc. and Grays Lake Land & Cattle, Inc. - have not settled. In November 2015, the Court lifted the stay, and the government later filed its motion to dismiss.


         1. Rule 12(b)(1) - Subject Matter Jurisdiction

         A defendant may move to dismiss a complaint for lack of subject matter jurisdiction under Rule 12(b)(1) in one of two ways. See Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). The first is known as a "facial" attack, and it accepts the truth of the plaintiffs allegations but asserts that they are insufficient on their face to invoke federal jurisdiction. Id. The second method is known as a "factual" attack, and it does not assume the truth of plaintiff s allegations but instead challenges them by introducing extrinsic evidence, requiring the plaintiff to support his jurisdictional allegations with "competent proof." Id.

         Here, the government has launched a factual attack. When considering such an attack, Court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). "Once the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Safe Air for Everyone v. Meyer,373 F.3d 1035, 1039 (9th Cir.2004) (internal quotations omitted). Where no evidentiary ...

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