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Water Law Revision Recommended

Posted by Scott Siegwald - September 14th, 2021

South Dakota is in a state of drought, breaking century long records for extreme dryness. June 2021 has been the driest June in South Dakota over the past 127 recorded years, according to the government monitoring site, drought.gov. Another report from SDSU revealed that as of February of 2021, 89% of South Dakota was in some level of drought, with 50% being in severe drought or worse. As of August 2021, 100% of the state is facing abnormally dry conditions, while 92% of the state is experiencing moderate drought or worse, according to the U.S. Drought Monitor.

The governor of South Dakota declared a state of emergency in 2021 in response to the widespread drought conditions in the state. A recent news article indicated that all of South Dakota is suffering from drought conditions ranging from abnormally dry to extreme levels of drought.

The US Army Corps of Engineers estimate that the runoff amount for the year 2021 may be the 10th driest year since 1898, in the Upper Missouri River Basin, which constitutes the Missouri River water above Sioux City.

Mark Sweeney, a professor at the University of South Dakota, was recently quoted as saying, “Things like this should make us focus more on making sure we have plans in place for really severe droughts in this state so ultimately the economic impacts can be minimized to the best extent possible.”

The state has the legal authority to shut off water rights in times of emergencies. Historically the DENR, now known as the DANR, has issued orders to shut off junior surface water rights permits (based on a permit date or prior vested legal authority) in roughly 3 or 4 basins (A “basin” is “a natural or artificial land surface depression with or without perceptibly defined beds and banks to which surface runoff gravitates and collectively forms a flow of water continuously or intermittently in a definite direction.” Shut off orders have also been issued for irrigation rights. Most shut off orders direct water rights holders to stop using water are temporary. However, the current drought may very well result in more of this type of government action. From my experience I know that the staff of the DANR understands that this powerful ‘policing tool’ is not to be undertaken lightly. The DANR understands the importance of these water rights permits whether current, vested or otherwise legally created.

My objection is with the current legal process by which a shut off order should be issued, and under what fair processes such a decision can be made. The shut off procedure has never been considered by the state’s highest court. The current shut off procedure needs real change.

Due process rules and regulations of the state – which apply to other administrative contested matters – are not included in the South Dakota law which grants the chief engineer of the DANR the right to shut off a permit holder’s water rights. Current law states that the state’s chief engineer on his or her own, and without a hearing, may, after appropriate investigation, issue an order to shut off or limit a person or permit holder’s use of surface water or groundwater, or order them to plug or otherwise control a well. The current law is intended to protect those water rights of another user who has higher or earlier priority rights or to cause a user to discontinue the use of water to which that user has no legal right. The shut off law provides no rights to the user by way of advance notice and by way of providing the user with a description of the problem at hand. Nor does the law offer an opportunity to contest the ‘decision’ of the engineer or have a public hearing on the matter before the agency or before the state Water Management Board.

Courts in other jurisdictions have recognized that “once rights to use water are acquired, they become vested property rights. As such, they cannot be infringed by others or taken by governmental action without due process and just compensation.” At a minimum, the government must provide notice and opportunity for hearing appropriate to the nature of the action and reasonably calculated, under all the circumstances, to give parties notice of the proposed action and afford the water rights holder an opportunity to present arguments, objections, and facts. These safeguards should be placed in South Dakota law.

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Easements and the trouble they bring

Posted by David Ganje - June 14th, 2021

As a Harding County cowboy once said, “Hey, I ain’t asking for an easement on the land – just the right to recreate on the land.”  If you are an easement holder you probably have the right to walk across your neighbor’s land.  But if one’s obligation is the legal cousin to an easement – the “restrictive covenant” –  you may have to run across the land at night because you are not sure if you have the right to even be there.

Easements are different than restrictive covenants.  An easement is a conveyance, that is a transfer, of some real property rights. – usually to a neighboring property.  A restrictive covenant is not a transfer of rights but is a legal promise to do or not do a particular act concerning the property.  A restrictive covenant creates a limitation on the use of one’s land so that the value and enjoyment of another party’s land is protected.

This opinion piece is not a commentary on the proper strategy for negotiating easements but rather an overview of some of the bigger issues I run across in this legal neighborhood. Easement agreement terms and conditions are as broad as they are long.  For example, property requiring ingress or egress across BLM controlled land, such as the business property previously known as the Mustang Ranch, requires easements from various agencies of the government.  

On a more pedestrian level, easements may be established for personal, family or household purposes, as well as for agricultural and business purposes such as the typical ingress and egress scenario. With an easement taken or recorded on your land, you may own the land, but you may not control all its access and have unlimited use within the area of the easement.

The law has created one type of easement however which is like a restrictive covenant.  It is called a negative easement.  A negative easement prohibits a landowner from using his property in a particular manner. Wildlife easements, conservation easements, as well as light and air easements are examples of negative easements.  I have also dealt with what I call an “unofficial park easement.”  An unofficial park easement is a public right of entry to a limited area for a scenic overlook or for a rest stop along a highway.

Easements may provide tax benefits to the landowner.  By reducing the market value of a ranch property, an easement may substantially reduce the estate tax that are due when the ranch is inherited. 

Easements rights and obligations are not Mickey Mouse legal issues.  The granting of an easement is not the simple matter of giving another party access to land.  The large pending Keystone XL pipeline project is now at a critical stage because the US Army Corps of Engineers failed to follow federal law under the National Environmental Protection Act when the Corps granted an easement for the project.  A federal appellate court ruled this year in favor of the Standing Rock Sioux Tribe adjudging that the granting of the pipeline easement violated NEPA.  The appellate court affirmed the trial court’s vacating of the easement given through federal lands and ordered the Corps to prepare an Environmental Impact Statement.  The South Dakota Supreme Court in 2018 declined to hear challenges to the pipeline because of the lack of jurisdiction over other issues presented.

Reviewing landowner’s easement rights and responsibilities is serious stuff, not to be overlooked.  A party to a so-called informal or unrecorded easement is like a guy dating a rich lady from Sioux Falls.  Sooner or later, there is bound to be trouble.  Easements are everywhere.  Most real property in the state has some type of easement “attached” to it.

Ignore an easement at your peril.  And unrecorded easements and “gentleman’s agreements” are not covered by title insurance policies. Property easements are likely to have effect on your life.  Easement obligations need to be respected.  To illustrate, we have the recent criminal prosecution of a farmer in South Dakota for laying drain tile over a wildlife easement.  After the conviction in this case the prosecutor said that requiring the defendant to restore the wetlands sends an important message. I do not fault a prosecutor who is attentive to environmental issues. However, could the government’s message have been sent by other means? Could a required wetlands restoration and a civil enforcement proceeding have been filed against the farmer? Could the government have protected its rights civilly under the legal terms of the written easement agreement?  It appears that it is better to sin against God than to sin against a bureaucracy.  See my piece on this subject at:  https://www.capjournal.com/opinions/editorial/it-is-better-to-sin-against-god-than-against-a-bureaucracy/article_394720c8-4c2e-11e8-88a8-6b0a2f67acbe.html

David Ganje practices law in the area of natural resources, environmental and commercial law with Ganje Law Office. His website is Lexenergy.net.

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South Dakota Real Estate Rights

Posted by David Ganje - May 24th, 2021

In this opinion piece I discuss the recent case of a South Dakota farmer criminally convicted for setting drain tile on land subject to a federal wildlife easement. The defendant was charged with destroying real property of the United States because he drained and caused to be drained, without the authority and permission of the government, lands under a federal wildlife easement. The law referred to is the so-called disturbing protected wetlands law. In this Brookings County case the U S Attorney at the behest of the US Fish and Wildlife Service indicted the farmer for setting drain tile on land subject to an existing wildlife easement under which easement rules tiling was a prohibited act. The farmer was convicted after a jury trial, but not on the charge in the government’s indictment. The farmer has appealed the case. The appeal is pending.

The jury found the defendant guilty of an offense lesser than that charged by the filed criminal indictment. The farmer’s defense suggested he thought he had approval from the government to do the tiling after he had requested approval. The jury found the defendant guilty of “disturbing protected wetlands of the United States.” The jury did not find the defendant guilty of the indicted charge of knowingly disturbing protected wetlands of the United States.

I do not presume to pass judgment on whether the defendant was guilty of criminal charges. I opine here on the process. Prosecutorial discretion refers to the recommendation of an agency and a prosecutor’s decision to charge out a crime. Even though the Constitution does not declare who may prosecute or under what circumstances, the U S Supreme Court opined that a government’s decision to prosecute or not prosecute, whether through civil or criminal process, is a decision left to the government’s absolute discretion.

How was the public interest served by pursuing a felony indictment and conviction in this case? Protected wetlands law is a valuable, modern environmental management tool. There are important benefits to modern land-management and waterfowl production laws. Similar land preservation laws have been in effect since I was a kid. I have seen the worth these agricultural and environmental programs provide. Nevertheless the true merit of such laws and the defined prosecution of a case under such laws are separate matters. South Dakota real estate rights should run both ways.

A prosecuting attorney considers the recommendation of an agency and has the legal authority to decide whether or not to bring criminal charges, to determine the nature of any charges and to give a sentence recommendation after a conviction. This legal authority is one of the most significant powers held by the executive branch. In our society a prosecutor does not have to justify to the public its reasons for deciding to proceed or not proceed in a criminal matter.

In prosecuting a criminal case, among the factors a prosecutor considers is whether the public’s interest in a problem could be addressed by other available civil or regulatory remedies. The government may weigh and implement other non-criminal remedies in deciding how to proceed.

After the conviction in this case the prosecutor said that requiring the defendant to restore the wetlands sends an important message. One cannot fault a prosecutor who is attentive to environmental issues. Yet in the Brookings County case the jury did not find a knowing violation of the law. Could the message have been sent by other means? Could a required wetlands restoration and a civil proceeding have been taken against the farmer? Could the government have enforced its rights civilly under the legal terms of the easement? I am want to paraphrase a famous American admiral: It is better to sin against God than to sin against a bureaucracy.

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Condemnation of Property

Posted by David Ganje - May 19th, 2021

The use of eminent domain (condemnation) is a modern legal problem. Condemnation is the taking of property for a public use by a government and in some cases for private use by a developer or operator or by an approved business such as a utility, mall developer and others. A condemnor is the party taking the property. This taking of property is a legally approved right given to government agencies and private businesses under particular circumstances described in the law. Obtaining a legally approved easement or right-of-way by condemnation does not however take away the property owner’s title to the land. This continued ownership is important enough to be secured by the state constitution which provides that title to land taken for highways remains with the landowner. (SD Const Art VI, § 13.)

Read the full article on The Rapid City Journal

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For third time, Davison County approves controversial cropland drainage permit

Posted by David Ganje - April 22nd, 2021

For a third time, Davison County on Tuesday approved a controversial drainage permit application, which has already been entangled in a year-long court battle upon prior approvals.

The permit for Millan Acres’ plan for draining parts of two sections of land near Interstate 90 between Mitchell and Mount Vernon in Prosper Township was approved 7-0 by the Davison County Drainage Commission during a three-plus-hour meeting.

Read the full article on the Mitchell Republic.

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South Dakota Supreme Court to take Davison County drainage case later this month

Posted by David Ganje - April 15th, 2021

David L Ganje is acting as counsel for Kenneth Hostler.
Source: Mitchell Daily Republic

A battle over a rural Davison County drainage permit is going to the South Dakota Supreme Court, while a recent circuit court ruling turned back a second attempt to approve the permit.

The request from defendant John Millan, of Mitchell, for a drainage permit on his land between Mitchell and Mount Vernon, will go before the South Dakota Supreme Court on April 26. The court will consider non-oral arguments in the case on April 26.

View the full article by Marcus Traxler on MitchellRepublic.com

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Judgment on Water Rights and Property Rights

Posted by David Ganje - April 8th, 2021
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Motion to Compel Discovery

Posted by David Ganje - April 6th, 2021
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