In Kingman Reef Atoll Investments v. United States of America, (— F.3d —, 2008 WL 4070267, C.A.9 (Hawaii), Sept. 4, 2008), the United States Court of Appeals considered a private party’s claim that it owned a coral reef because the United States government had abandoned its interest in the property. The court found that the government had never “clearly and unequivocally” surrendered its interest in the area, and that the claim was therefore barred by the 12-year statute of limitations in the Quiet Title Act of 1972.
Kingman Reef is a narrow coral atoll surrounding a central lagoon in the Pacific Ocean, about 900 miles south of Hawaii. Kingman Reef Atoll Investments (“KRAI”) claimed ownership of the reef dating to 1922, when an employee of a predecessor company took possession of it as a fishing base.
Meanwhile, the United States Navy asserted its ownership of the reef in the 1930s and in 1934 President Franklin Roosevelt issued an executive order placing it under the jurisdiction of the Navy. Throughout the 1930s, KRAI’s predecessor, the Leo-Fullard family (“Family”), corresponded with Navy officials about the reef and in 1938 the Navy wrote the Family flatly declaring that it controlled the lands and the Family’s claims were invalid.
In the 1990s, the United States Fish and Wildlife Service (“FWS”) sought to obtain the reef as a wildlife preserve, and in 2001 the Secretary of the Interior declared it the Kingman Reef National Wildlife Refuge.
In 2005, KRAI brought suit asserting its ownership of the reef and claiming that the United States had abandoned it during the period between the Navy’s claims in the 1930s and the creation of the wildlife refuge. The district court dismissed the suit finding that it violated the 12-year statute of limitations of the Quiet Title Act of 1972 (“QTA”). KRAI appealed.
The court reviewed the QTA, which allows private parties to sue the United States to resolve disputes over property ownership. It contains a 12-year statute of limitations. In Shultz v. Dep’t of Army 886 F.2d 1157 (9th Cir. 1989), the statute of limitations was judged to have accrued when “the landowner or his predecessors-in-interest knew or should have known of the United States’ claim.”
Here, KRAI’s predecessors clearly knew of the government’s claim when the Navy informed them of it in 1938. The court found that because QTA’s statute of limitations was retroactive, it expired in this matter in 1950. KRAI’s suit was therefore barred.
The Court also rejected KRAI’s argument that even if its predecessors knew of the government claim in 1938, the United States abandoned the reef until the FWS became interested in it, which should have triggered a new 12-year period for legal action beginning at that time. Failure to show interest in the property or enforce access restrictions does not constitute an abandonment, the court said. Rather, for the government to abandon a property, it must act affirmatively and “clearly and unequivocally” to do so. The court added, there is no evidence to this effect and the government therefore did not abandon its claim to the reef.
The court concluded KRAI’s statute of limitations for seeking title to the reef began accruing in 1938 and expired in 1950. The district court was therefore correct to dismiss the case for lack of jurisdiction and its ruling was affirmed.