BISMARCK — The North Dakota Supreme Court ruled in favor of the state Thursday, July 30, in a major dispute over oil and gas mineral rights beneath Lake Sakakawea, unlocking more than $200 million in disputed royalties.
The case, Sorum v. North Dakota, arose out of a dispute over the constitutionality of a 2017 law permitting the state to refund royalties it said it had incorrectly earned off land beneath the lake. The court's opinion, written by Justice Jerod E. Tufte, ruled that the state could assess these royalties and distribute them to private mineral operators.
The case was a complicated hashing of land rights law, hinging on a contested definition of Lake Sakakawea's borders. The implications of the case are significant, since $200 million in royalties have accumulated from that land in just the last few years. The North Dakota Supreme Court's decision will set a precedent for distribution of money accumulated off the land going forward.
Since the case started in a lower trial court, the mineral royalties have been housed in a holding account at the Bank of North Dakota, pending legal approval for their redistribution.
In North Dakota, mineral rights are defined by the historical, rather than the current boundaries of a body of water. In this case, the construction of the Garrison Dam in 1947 significantly altered Lake Sakakawea's borders, leaving speculators with the complicated task of drawing the lake's pre-dam geography to determine present-day land-ownership.
After the passage of the 2017 law, former gubernatorial candidate Paul Sorum and Rep. Marvin Nelson, D-Rolla, sued the state, arguing that the distribution of funds amounted to unconstitutional gift-giving.
Defendants in the case included Gov. Doug Burgum, Attorney General Wayne Stenehjem, and the Land Board.
The high court's opinion reverses a decision made last year by a state district judge, which ruled that, while the law was constitutional, refunding the royalties would mean "gifting" to private parties.
In a statement, Burgum applauded the court's decision, stating the ruling "allows the state to right this wrong by returning funds to thousands of mineral owners that it never should have collected in the first place, and to do so without violating the anti-gift clause in the North Dakota Constitution."
The ruling does not mean that the $200 million currently housed at the Bank of North Dakota will all go back to mineral operators. Rather, the state now has permission to assess those funds and determine which belong to the state and which to private operators.
Jodi Smith, commissioner of the Land Board, said her department has not formally discussed the ruling yet but expects they will meet to address it next week.
Readers can reach reporter Adam Willis, a Report for America corps member, at email@example.com.