United States of America v. 32.42 Acres of Land, et al., Case No. 10-56568 (9th Cir. 2012).
By Michael Wilmar and Nady Nikonova
The United States condemned tide and submerged lands leased by the Port of San Diego to the U.S. Navy. The Port held the lands under a trust grant from the State of California, and therefore defending the state’s sovereign interest in the lands was the responsibility of the California State Lands Commission (“Commission”). The complaint in the eminent domain action explicitly listed “any tidelands trust rights of the State of California” as part of the estate to be taken. The Commission did not dispute the federal government’s power to condemn the land. The issue was whether the state’s public trust rights are extinguishable by the power of eminent domain or whether they will “re-emerge” if the United States conveys the property to a private party. The Ninth Circuit unanimously upheld the district court’s decision, holding that neither the equal-footing doctrine nor the public trust doctrine prevents the federal government from fully extinguishing California’s public trust interest in the land through eminent domain.
According to the Ninth Circuit, the equal-footing doctrine granted states full rights over their tide and submerged lands upon entering the Union,  but once the initial land rights were granted, the force of the doctrine was spent. Thus, the equal-footing doctrine prevents the United States from giving away after statehood state lands subject to the public trust to third parties since those lands had previously been granted to states and the federal government had no title. However, the doctrine does not prevent the United States from using the power of eminent domain to take the land from the states thereafter. The court acknowledged there was a strong presumption against defeating through conveyances to third parties a state’s title to state lands acquired at statehood, which would be possible after condemnation. The court also acknowledged that, as a policy matter, the United States had refrained from granting tide and submerged lands to third parties absent exceptional circumstances. However, the court held this was a policy choice by Congress, not a limitation on Congress’s power imposed by the equal footing doctrine.
Public Trust Doctrine
Because the public trust doctrine is a matter of state law, the court reasoned that allowing the Commission’s interest to survive the federal government’s eminent domain action would “subjugate the federal government’s eminent domain power to California’s state law” and run afoul of the Supremacy Clause. The court also rejected the Commission’s proposal for the trust to become “quiescent” and then “re-emerge” when the United States transferred it to a third party. The court held that it is “irrelevant” whether the federal government could achieve its objective by taking a lesser interest in the land since using its power of eminent domain fully extinguishes the state’s public trust interest in the land.
In sum, the Ninth Circuit held that the power eminent domain grants the federal government a new title unencumbered by a state’s public trust interest, regardless of whether it later conveys the land to a third party. The court states that “[h]aving paid just compensation, the United States is entitled to the interest it sought in its complaint in condemnation: full fee simple, free of California’s public trust.” Neither the equal-footing doctrine nor the public trust doctrine “prevents the federal government from taking that interest in the land unencumbered.”
 It is well-settled under California law that these lands are held by the State of California subject to the public trust for commerce, navigation and fishery, which limits both the alienability of these lands and the uses to which they can be put. See Illinois Central R.R. Co. v. Illinois, 146 U.S. 387 (1892); People v. California Fish Co., 138 P. 79 (Cal. 1913); Marks v. Whitney, 491 P.2d 790 (Cal. 1971); National Audubon Society v. Superior Court of Alpine County, 658 P.2d 709 (Cal. 1983).