The Wetland Reserve Program easements are "reserved interest
deeds". They give the NRCS all rights not specifically reserved to the
landowner in the document. This is a very landowner-unfriendly arrangement. I
know of no land trust that uses such instruments.
The Department of Agriculture's attorneys like them -- precisely because if
anything does go to court, the reserved interest deeds make it clear that if
there is a question about whether the landowner or NRCS has a right, the default
answer is that NRCS has it.
In addition, WRP "easements" are also contracts -- the landowner is
required to do wetland restoration (good thing), to NRCS's future specification.
Would you sign a contract requiring you to undertake expensive work without
saying what that work was -- only that you would be told exactly what it was in
WRP is a very useful -- and important -- program for wetlands restoration, and
it helps deliver income to farmers from land that is best used for wetlands
rather than ag production. But its record of success with landowners is due
more to administration by farm-friendly and knowledgeable local NRCS personnel
than to its formal structure and instruments. In this case, this human element
may have run into some serious bumps.
By the way, thanks largely to work by Ducks Unlimited, the South Dakota House
resoundingly defeated the legislation referred to in the posted article, which
was intended to make permanent conservation easements illegal.
Land Trust Alliance
From: Barry H. Epstein [mailto:BEpstein@...........]
Sent: Tue 2/17/2004 7:22 PM
To: Kathryn Kelly; LandTrust
Subject: RE: [LT] FW: Caution, Conservation Easement Altered
I've read the Ninth Circuit opinion (issued Sept. 15, 2003) and just re-read it
in response to this email. The write-up attached to Kathryn's post is somewhat
misleading because the CE at issue in the litigation is far from the typical
private land trust-type CE for several reasons.
The case involved a conservation easement sold by the landowner (Big Meadows
Grazing Association) to the U.S. Natural Resource Conservation Service (NRCS)
under the Wetlands Reserve Program. The federal statute concerning the Wetland
Reserve Program requires that a landowner enter into an agreement to grant an
easement and to implement a wetland conservation plan on the property. The CE
covered 1,812 acres and the landowner was paid $1.9 million.
Unlike a typical private land trust CE, this easement provided that the
landowner granted to the NRCS the affirmative right to undertake "any"
restoration activities on the property: "The [U.S.] shall have the right
to enter unto the easement area to undertake ... any activities to restore,
protect, manage, maintain, enhance, and monitor the wetland and other natural
values of the easement area." So the CE included affirmative restoration
rights in favor of the grantee. Not a typical CE.
According to the Ninth Circuit opinion, the landowner thought the NRCS's
restoration plan was too much and sued. The Court found that nothing in the
easement precluded the scope of the restoration plan the NRCS had adopted. The
plan did not exceed the scope of the easement rights granted to NRCS (in a real
property sense). Further, nothing in the statute gave the landowner the right
to approve the restoration plan.
As noted above, the affirmative rights to undertake a major restoration project
on the property make this easement quite different from the typical CE, which
only contains negative prohibitions on activities by the underlying owner (and
very limited ancillary affirmative rights in favor the easement holder, such as
access for easement monitoring purposes).
The real issue in that case was that the landowner wanted more control over the
restoration plan that would be undertaken on their property. However, the
landowner didn't obtain the right to control the scope of the restoration plan
in the easement and also did not have any right to control the scope of the plan
by statute. There does not appear to be anything in the statute that would have
prevented the landowner from reserving more control over the restoration
activities. But they didn't.
I don't see why the perpetual versus maximum 30-year term for a CE, as
mentioned in the attached write-up, is at all relevant to the issues in this
litigation. Same dispute exists between the landowner and NRCS either way.
It's certainly true that landowners who "give away" (for $1.9
million!!) some of their property rights do need to fully understand what they
are giving up. That's true for any contract involving real estate or anything
else. Good drafting and clear communication beforehand are what apparently were
missing in the Big Meadows case.
Barry H. Epstein
Fitzgerald Abbott & Beardsley LLP
1221 Broadway, 21st Floor
Oakland, CA 94612
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From: Kathryn Kelly [mailto:kkelly@.........]
Sent: Tuesday, February 17, 2004 10:43 AM
Subject: [LT] FW: Caution, Conservation Easement Altered
Does anyone know the actual facts on this?
Yolo Land Trust
PO Box 1196
Woodland, CA 95776
(530) 795-3220 fax
From: ellenk@.......... [mailto:ellenk@.............]
Sent: Thursday, February 12, 2004 3:57 PM
Subject: Caution, Conservation Easement Altered
Caution, Conservation Easement Altered
A recent decision by the Ninth Circuit Court of Appeals should send up red
flags for landowners before they enter into any type of conservation easement
agreement. The government paid $1.9 million to Big Meadows Grazing Association
for a permanent conservation easement on 1,812 acres in Flathead County, Montana
to "restore, manage, maintain, and enhance" wetlands. Before the
agreement was finalized, the government informed Big Meadows that it would cost
them $80,000 to implement the conservation plan, but after the deal was done,
the government projected the plan would cost Big Meadows $486,000 to implement.
Big Meadows objected to the new plan saying it was "radically
different" and refused to agree to the changes. The government informed Big
Meadows it didn't need their approval and went ahead with the project. Big
Meadows took their complaint to District Court and lost. The Association
appealed the decision and the Ninth Circuit Court of Appeals subsequently ruled
for the government. In South Dakota, legislators have recognized the problems
attached to perpetual conservation easements and have filed HB 1194, which
limits conservation easements to 30 years. It has been approved by the House
Agriculture Committee and is headed for the full House. State representative Jim
Lintz said; "[M]any people who give away those future property rights may
not fully understand what they're doing." In real estate law, you cannot
prevent someone from conveying their land if they desire to sometime in the
future, except where a conservation easement is attached. Environmentalists have
done their homework. Landowners need to do theirs.