Cully Corporation, Inc. v. North Slope Borough et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
CULLY CORPORATION, INC.,
Plaintiff,
vs.
NORTH SLOPE BOROUGH, and
STATE OF ALASKA, DEPARTMENT
OF NATURAL RESOURCES,
Defendants.
Case No. 2:23-cv-00001-JMK
CORRECTED ORDER GRANTING
MOTION FOR PARTIAL
SUMMARY JUDGMENT AND
REMANDING THE CASE TO
STATE COURT
This case involves gravel extraction and storage within Sections 29–32 of
Township 5 North, Range 44 West, Umiat Meridian (“Sections 29–32”). 	Central to the
parties’ dispute is whether Cully Corporation, Inc. (“Cully”),1 or the State of Alaska
(“State”) owns the surface estate of the Kokolik River within Sections 29–32.2 	At
Docket 9, Cully filed a Motion for Summary Judgment concerning its alleged ownership
of the bed of the Kokolik River in Sections 29–32. At Dockets 14 and 15, the North Slope
1 Cully is a Village Corporation formed to settle aboriginal land claims of the Alaska
Native people of the Point Lay area. See Second Amended Complaint, Docket 1-1 at 87; Borough
Answer, Docket 1-1 at 134 (admitting “Plaintiff is an Alaska corporation formed pursuant to the
Alaska Native Claims Settlement Act”); see also 43 U.S.C. § 1607(a).
2 Docket 1-1 at 27 (“Plaintiff prays for the following relief: A ruling that Cully, not the
State, owns legal title to the area encompassing the submerged lands underlying the Kokolik river
where the Borough has dredged for gravel from the 1980s through the present within Township 5
North, Range 44 West, Sections 29–33, Umiat Meridian.”).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 1 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 2 of 17
Borough (“NSB”), and the State filed Cross-Motions for Summary Judgment against Cully
regarding ownership of the bed of the Kokolik River and on Cully’s state law claims. The
Motions are fully briefed.3 	As set forth below, Cully’s Motion for Partial Summary
Judgment at Docket 9 is GRANTED. 	Defendants’ motions at Dockets 14 and 15 are
DENIED. 	The case—and its remaining state law issues—is REMANDED back to the
Superior Court for the State of Alaska.
I. 	BACKGROUND
A. 	Ownership History of Sections 29–32
In 1943, the federal government issued Public Land Order 82 (“PLO 82”)
withdrawing 48,800,000 acres “from sale, location, selection, and entry,”4 including
Sections 29–32.5 When Alaska became a State in 1959, ownership of the beds of navigable
waters withdrawn by PLO 82 did not pass to the State as they normally would have
pursuant to the equal footing doctrine.6 However, the Alaska Statehood Act authorized the
State 	to 	select 	and 	have 	transferred 	to 	it 	roughly 	105 	million 	acres 	of 	“vacant,
unappropriated and unreserved” federal land.7 	In 1960, one year after Alaska became a
State, the Secretary of the Interior (“Secretary") revoked PLO 82.8
3 See Docket 20, Docket 21, Docket 26, Docket 28.
4 Alaska v. United States, 213 F.3d 1092, 1093 (9th Cir. 2000) (quoting 8 Fed. Reg. 1599
(Feb 4, 1943)).
5 8 Fed. Reg. 1599-02 (Feb 4, 1943) (withdrawing lands north of the Brooks Range from
the U.S. border with Canada to the Arctic Ocean).
6 Alaska v. United States, 213 F.3d 1092, 1098 (9th Cir. 2000).
7 Alaska Statehood Act Pub. L. No. 85-508, 72 Stat. 339, 340 (1958).
8 25 Fed. Reg. 12,599-01 (Dec. 9, 1960).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 2 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 3 of 17
The State, pursuant to the Alaska Statehood Act, began the process of
selecting lands for conveyance from the federal government to the State. 	This process
included submitting applications to the Department of Interior (“DOI”). 	Because the
Secretary had revoked PLO 82, some of the State’s applications sought lands formerly
reserved by PLO 82—relevant to this case is Application F-033702, which sought transfer
of 	lands 	including 	Sections 	29–32.9 	Several 	months 	after 	the 	State 	submitted
Application F-033702, DOI issued a tentative approval for much of the lands selected by
the State, including Application F-033702.10 DOI’s tentative approval contemplated that
a land patent would be issued to the State before conveyance would become final.11
Sections 29–32 never were patented to the State. In 1971, Congress passed
the Alaska Native Claims Settlement Act (“ANCSA”) to settle aboriginal claims over areas
where Alaska Natives had lived for thousands of years.12 	Among other things, ANCSA
withdrew some townships which that had been “tentatively approved to, but not yet
patented to, the State under the Alaska Statehood Act.”13
In 1977, DOI followed up on its December 1965 tentative approval with a
subsequent decision (“1977 Decision”).14 	The 1977 Decision explained that Cully had
filed an application, pursuant to ANCSA, seeking lands in and around the Native Village.
Because the lands DOI tentatively had approved for conveyance to the State overlapped
9 Docket 9-6 at 1 (selecting 5 North 44 and 45 West).
10 Id. at 1–2.
11 Id. at 2.
12 Sturgeon v. Frost, 139 S. Ct. 1066, 1074 (2019).
13 43 U.S.C. § 1610(a)(2).
14 Docket 9-7.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 3 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 4 of 17
with lands that ANCSA made proper for conveyance to Native Villages, the 1965 tentative
approval was “vacated in part.”15 	The 1977 Decision approved for interim conveyance
Sections 29–32 to Cully, but excluded “the Kokolik River upstream from its mouth to the
east line of section 29.”16 Subsequently, in 1977, DOI issued Interim Conveyance No. 56
to Cully for lands in and around Point Lay Village, including Sections 29–32, but excluding
the Kokolik River.17 	In 1980, Congress passed 43 U.S.C. § 1631(b)(1), which vests
ownership to the riverbed of meanderable rivers where the surrounding land has been
conveyed pursuant to ANCSA or the Alaska Statehood Act. 	In 1990, DOI issued Patent
Number 50-90-0649, which patented to Cully most of the lands in Sections 29–32,
including the lands surrounding the Kokolik River in Sections 29–32.18
B. 	Gravel Operations in Sections 29–32
In 1981, NSB applied to the State for a Material Sale Contract to extract
500,000 cubic yards of gravel from the bed of the Kokolik River within Sections 29–30.19
In 1984, NSB proceeded to dredge materials from the bed of the Kokolik River without
authorization from the State.20
In 1990, NSB again applied to the State for a Material Sale Contract, this
time seeking to extract 300,000 cubic yards of gravel from bed of the Kokolik River within
15 Id. at 1–2.
16 Id. at 2–3.
17 Docket 9-10 at 1.
18 Docket 9-11.
19 Docket 14-3 at 24; Docket 15-2 at 1–2.
20 Docket 15-5 at 1–2.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 4 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 5 of 17
Sections 29–30.21 	The Army Corps of Engineers and the State of Alaska Division of
Governmental Coordination both published notice of NSB’s application.22 	In 1991, the
State and NSB entered into a Material Sale Contract permitting NSB to extract 300,000
cubic yards of gravel from the bed of the Kokolik River within Sections 29–30 at no cost
to NSB.23
In January 1999, NSB applied a third time to the State for a Material Sale
Contract 	seeking 	to 	extract 	500,000 	cubic 	yards 	from 	the 	Kokolik 	River 	within
Sections 29–32.24 Notice of NSB’s application again was provided via publication.25 In
March 1999, Lily Anniskett wrote to NSB on behalf of Cully, requesting that NSB lease
the gravel it was extracting as well as the site where NSB was storing the gravel.26 In turn,
NSB reached out to the State regarding Cully’s proposal.27 The State responded to NSB,
indicating that the State owns the riverbed of the Kokolik River within Sections 29–32.28
In October 1999, the State and NSB finalized their second Material Sale Contract,
permitting NSB to extract 500,000 cubic yards of gravel from the bed of the Kokolik River
21 Docket 14-3 at 33–39.
22 Id. at 44–52.
23 Id. at 63–76.
24 Id. at 80–82.
25 Docket 14-4 at 1–18.
26 Id. at 21.
27 Id. at 22.
28 Id. at 24 (“[T]he state owns the tidelands to the mean high water line in the case of the
Kokolik River.”).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 5 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 6 of 17
within Sections 29–32 at $0.50 per cubic yard for a total cost of $250,000.29 NSB has not
extracted gravel from the bed of the Kokolik River since 1999.30
In February 2013, the State determined that it did not own the bed of the
Kokolik River within Sections 29–32.31 	Subsequently, in 2014, the State withdrew its
designation of the relevant area as a “material sale site.”32 	In 2018, the State changed
course and, believing to own the bed of the Kokolik River within Sections 29–32, the State
redesignated the area as a “material sale site.”33 	Lastly, in 2021 and 2022, some of the
gravel stored within Sections 29–32 was removed for projects in the Village of Point Lay.34
II. 	LEGAL STANDARD
Summary judgment is appropriate where “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.”35 	A material fact is one that “might affect the outcome of the suit under the
governing law.”36 “A genuine issue of material fact exists when the evidence is such that
a reasonable jury could return a verdict for the nonmoving party.”37
29 Id. at 31–40; Docket 15-4.
30 Docket 14-1 at ¶ 7.
31 Docket 15-38 at 2 (“February 20, 2013 – It has been determined that the State does not
own the shorelands within the Kokolik River in this area [Sections 29–32] due to PLO 82. The
adjacent land owner has title to the shorelands.”).
32 Docket 15 at 30 n.95 (citing Docket 15-38).
33 Id.
34 Docket 14-1 at ¶ 9–10.
35 Fed. R. Civ. P. 56(a).
36 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
37 Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgmt., Inc., 618 F.3d 1025,
1031 (9th Cir. 2010).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 6 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 7 of 17
The party seeking summary judgment bears the initial burden of establishing
the absence of a genuine issue of material fact.38 	To establish that a fact cannot be
genuinely disputed, the movant either can cite the record or show “that the materials cited
do not establish the . . . presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.”39
Once the movant has made such a showing, the non-movant “bears the
burden of production under [FRCP] 56 to ‘designate specific facts showing that there is a
genuine issue for trial.’”40 	The non-moving party “must do more than simply show that
there is some metaphysical doubt as to the material facts.”41 	A party cannot “defeat
summary judgment with allegations in the complaint, or with unsupported conjecture or
conclusory statements.”42
“If a moving party fails to carry its initial burden of production, the non-
moving party has no obligation to produce anything, even if the nonmoving party would
have the ultimate burden of persuasion at trial.”43 	Ultimately, in ruling on a motion for
38 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
39 Fed. R. Civ. P. 56(c)(1).
40 Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986)).
41 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)
(internal citation omitted); see also Liberty Lobby, 477 U.S. at 252 (specifying that the non-movant
“must show more than the mere existence of a scintilla of evidence”); accord In re Oracle Corp.
Secs. Litig., 627 F.3d 376, 387 (9th Cir. 2010).
42 Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003).
43 Nissan Fire & Marine Ins. Co. v. Fritz Companies, Inc., 210 F.3d 1099, 1102–1103 (9th
Cir. 2000).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 7 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 8 of 17
summary judgment, the court must view the facts and draw all reasonable inferences in the
light most favorable to the non-moving party.44
“[W]hen parties submit cross-motions for summary judgment, each motion
must be considered on its own merits.”45 The court rules on each motion “on an individual
and separate basis.”46
III. 	DISCUSSION
A. 	Ownership of Sections 29–32
Cully argues that it owns the bed of the Kokolik River in Sections 29–32 by
virtue of Patent 50-90-0649 and operation of 43 U.S.C. § 1631(b)(1).47 The parties do not
dispute that Cully owns the uplands surrounding the Kokolik River.48 	In Cully’s view,
DOI’s 1977 Decision completely removed any and all property interest the State previously
had in Sections 29–32, including any interest in the bed of the Kokolik River.49 According
to Cully, the federal government retained ownership over the bed of the Kokolik River and
approved conveyance of the remaining uplands in Sections 29–32 to Cully.50 Lastly, when
Patent 50-90-0649 finalized the transfer of the uplands in Sections 29–32 to Cully, the
44 Scott v. Harris, 550 U.S. 372, 378 (2007).
45 Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th
Cir. 2001) (citations and quotation omitted).
46 Tulalip Tribes of Wash. v. Washington, 783 F.3d 1151, 1156 (9th Cir. 2015) (quoting
10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, FED. P RAC . & P ROC . § 2720 (3d
ed. 1998)).
47 Docket 9-1 at 20.
48 See Docket 15 at 19 n.60 (“The State does not dispute that Cully owns the uplands in
vicinity of the Kokolik River . . .”).
49 Docket 9-1 at 28–31.
50 Id. at 28–32.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 8 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 9 of 17
operation of 43 U.S.C. § 1631(b)(1)51 automatically transferred title of the bed of the
Kokolik River to Cully.52
Defendants argue that the State holds equitable title to the bed of the Kokolik
River.53 	The parties do not dispute that DOI tentatively approved the State’s F-033702
land application, which included the bed of the Kokolik River.54 Defendants believe that
DOI’s 1977 Decision approved the uplands within Sections 29–32 for conveyance to Cully,
but that the bed of the Kokolik River remains tentatively approved for conveyance to the
State and that the federal government did not retain an ownership interest in the bed of the
Kokolik River.55
The Court finds that Cully owns the bed of the Kokolik River within
Sections 29–32 based on: 	(1) the plain language of ANCSA, (2) the 1977 Order, and
(3) the State’s inconsistent historical interpretations.
(1) 	The plain language of ANCSA
ANCSA withdrew tentative approval over all lands within Township 5
North, Range 44 West, Umiat Meridian, including the bed of the Kokolik River within
Sections 29–32. Specifically ANCSA withdrew “[t]he lands in each township that encloses
51 “Whenever, . . . the Secretary conveys land to a [] Native Corporation . . . pursuant to
the Alaska Native Claims Settlement Act . . . which abuts or surrounds a meanderable lake, river,
or stream, all right, title, and interest of the United States, if any, in the land under such lake, river,
or stream lying between the uplands and the median line or midpoint, as the case may be, shall
vest in . . . the Native Corporation[].”
52 Docket 9-1 at 21.
53 Docket 15 at 21; Docket 28 at 10; Docket 14 at 18; Docket 26 at 4–5.
54 Docket 9-6 at 1; Docket 15-36 at 1.
55 Docket 15 at 22.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 9 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 10 of 17
all or part of any Native village identified” by ANCSA, as well as the “lands in each
township that is contiguous to or corners on the township that encloses all or part of such
Native village.”56 ANCSA further provides that “[a]ll lands located within the townships
described . . . that have been selected by, or tentatively approved to, but not yet patented
to, the State under the Alaska Statehood Act are withdrawn.”57
The Native Village of Point Lay’s core township is Township 5 North,
Range 45 West, Umiat Meridian.58 	Contiguous to and directly east of Point Lay’s core
township is Township 5 North, Range 44 West, Umiat Meridian, which contains the
disputed portion of the Kokolik River in Sections 29–32.59 	Because of its location in
relation to Point Lay’s core township, ANCSA withdrew all lands within the entire
township which had been tentatively approved for transfer to the State. 	Under the plain
language of ANCSA, DOI did not have discretion to maintain its tentative approval for any
lands within Township 5 North, Range 44 West, because they were withdrawn by statute.60
The State’s argument that DOI’s tentative approval remained because of language in the
1977 Order is incompatible with the language of ANCSA withdrawing “all lands,” even
those which had been tentatively approved by DOI.61
56 43 U.S.C. § 1610(a)(1).
57 43 U.S.C. § 1610(a)(2).
58 Docket 9-9 at 2.
59 The Court takes judicial notice of Township 5 North, Range 44 West, Umiat Meridian’s
location in relation to Township 5 North, Range 45 West, Umiat Meridian.
60 43 U.S.C. § 1610(a)(2).
61 Id.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 10 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 11 of 17
(2) 	DOI’s 1977 decision
The parties dispute how to interpret the 1977 Decision. Cully argues that the
State can have no property interest in the bed of the Kokolik River within Sections 29–32
because the 1977 Order explicitly rejected the State’s F-033702 land application.62 	The
State argues that, because the 1977 Decision explicitly excludes the bed of the Kokolik
River within Sections 29–32, DOI’s prior tentative approval remains,63 and the ambiguity
must be resolved by a final agency action by DOI.64 The 1977 Decision states in relevant
part:
On December 23, 1965, tentative approval was given
for the above lands [including Sections 2932] . . . .
On December 18, 1971, the Alaska Native Claims
Settlement Act (85 Stat. 688) became law. 	Section 11 of the
act 	withdrew 	all 	of 	the 	above-mentioned 	townships 	for
possible selection by the village of Point Lay.
On November 15, 1973, Cully Corporation Inc. (the
Point Lay village corporation) filed selection application F-
14922-A under the provisions of section 12(a) of the Alaska
Native 	Claims 	Settlement 	Act 	of 	December 	18, 	1971.
Section 12(a)(1) provides that village selections shall be made
from lands withdrawn by subsection 11(a): “Provided, That no
Village Corporation may select more than 69,120 acres from
lands withdrawn by subsection 11(a)(2).” Subsection 11(a)(2)
of the act withdrew for possible selection by the village
corporation 	those 	lands 	“that 	have 	been 	selected 	by, 	or
tentatively approved to, but not yet patented to, the State under
the Alaska Statehood Act.”
Village selection application F-14922-A, as amended,
has 	been 	properly 	filed, 	and 	the 	lands 	are 	available 	for
62 Docket 9-1 at 28–31.
63 Docket 15 at 22–24.
64 Docket 28 at 10; Docket 37 at 9.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 11 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 12 of 17
selection. 	Those portions of 	the 	village 	selection 	to be
described are unoccupied and do not include any lawful entry
perfected under or being maintained in compliance with laws
leading to acquisition of title, other than the above-mentioned
State selections.
Accordingly, for the above listed State selections, the
tentative approval given in the decision of December 23, 1965
must be and is hereby vacated in part and the applications
rejected as to the following described lands. 	In addition, the
surface estate of the following described lands, aggregating
approximately 	65,624 	acres 	is, 	considered 	proper 	for
acquisition by the Cully Corporation Inc., and is hereby
approved for interim conveyance pursuant to section 14(a) of
the act:
. . . .
T. 5 N., R. 44 W.
secs. 1 to 4, inclusive;
sec. 6;
secs. 8 to 30, inclusive;
sec: 31, excluding PLO 1851, Parcel 1;
secs. 32 to 36, inclusive;
excluding the Kasegaluk Lagoon, the Chukchi Sea, and
the Kokolik River upstream from its mouth 	to, 	the 	east
line of section 29.
. . . .
Therefore, the amount of validly State selected and
tentatively approved land to be conveyed to Cully Corporation
Inc. is 64,174 acres, which is less than the 69,120 acres they
are entitled to select under section 12(a)(l) of the act. 	The
following State selection applications have been rejected in
their entirety, and when this decision becomes final, the
cases 	will 	be 	closed: 	F-033699, 	F-033701, 	F-033702
[containing Sections 29–32], F-033705, F-033708. 	Further
action on the lands remaining in State selections F-033698, F-
033700, F-033703, F-033704 1 and F-033707 will be taken at
a later date.65
65 Docket 9-7 at 2–4 (emphasis added).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 12 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 13 of 17
The Court agrees with Cully’s interpretation. 	Cully’s interpretation gives meaning to all
of the 1977 Order, while the State’s argument would render portions of the 1977 Order
meaningless. 	The State fails to provide an explanation for what DOI meant when it
“rejected in its entirety” the State’s F-033702 application for lands including the bed of the
Kokolik River.66 	Accepting the State’s argument would require the Court ignore the
express language in the 1977 Order rejecting the State’s application in its entirety. Without
an alternative explanation, the Court sides with Cully and follows the plain language of the
1977 Order. Where the 1977 Order expressly rejected the State’s land application “in its
entirety,” the State was divested of any property interest previously granted by the 1965
tentative approval as to that land application. Where the 1977 Order excluded the bed of
the Kokolik River, the federal government retained ownership of those lands.
(3) 	State’s inconsistent positions
Lastly, 	the 	State’s 	historical 	inconsistent 	interpretations 	undermine 	its
present argument. Prior to 2013, the State believed it owned the bed of the Kokolik River
within Sections 29–32.67 	In February 2013, the State determined that it did not own the
bed of the Kokolik River within Sections 29–32, but subsequently, in May 2018, the State
66 Docket 15 at 22–24 (claiming that the State’s land selection to the bed of the Kokolik
River was not affirmatively rejected); Docket 28 at 9–10 (claiming that the exclusion of the
Kokolik River above gives the State equitable title in spite of application F-033702 being rejected
in its entirety).
67 Docket 15-21 (“The state owns the tidelands to the mean high water line in the case of
the Kokolik River.”).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 13 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 14 of 17
determined that it did own the relevant lands.68 	Nothing in the record explains why the
State’s position changed.69 During oral argument, the Court asked the State if the bed of
the Kokolik River within Sections 29–32 was included among the acreage the State is
claiming for possible conveyance from the Federal Government to the State of Alaska.70
Counsel for the State replied, “To my knowledge, as of right now, Your Honor, no.”71 The
State’s own everchanging position as to the ownership of the bed of the Kokolik River
serves to undermine its current position that it holds title to the disputed lands.
For the reasons stated above, the Court agrees with Cully. 	In 1977, DOI
retained ownership of the bed of the Kokolik River in Sections 29–32. In 1990, when DOI
patented to Cully the lands surrounding the Kokolik River within Sections 29–32, the
operation of ANCSA gave Cully legal title to the bed of the Kokolik River within
Sections 29–32. Cully’s Motion for Partial Summary Judgment is GRANTED.
B. 	Remaining State Law Issues
Defendants removed this action from state court because Cully alleged
ownership of submerged lands beneath navigable waters, which is a question of federal
law.72 Defendants ask the Court to exercise supplemental jurisdiction over the remaining
68 Docket 15-38 at 2 (“February 20, 2013 – It has been determined that the State does not
own the shorelands within the Kokolik River in this area [Sections 2932] due to PLO 82. 	The
adjacent land owner has title to the shorelands.”).
69 Id. (referencing a letter from Realty Services but not providing any context to the letter
or analysis from the letter).
70 Docket 37 at 15.
71 Id.
72 Docket 1 at 4–5.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 14 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 15 of 17
state law issues.73 	Defendants argue that Cully’s state law claims are barred by, among
other things, the relevant statute of limitations.74 	Cully argues that Defendants’ actions
including NSB’s continued occupancy of Cully’s land and the State’s 2018 decision to
reclassify a portion of Cully’s land as a “material sale site,” constitute a continuing trespass
and therefore are not barred in their entirety by the relevant statute of limitations.75
Federal 	courts 	are 	courts 	of 	limited 	jurisdiction,76 	but 	may 	exercise
supplemental jurisdiction over claims that form part of the same case or controversy.77
Federal courts may decline to exercise supplemental jurisdiction where the court already
has dismissed the claims over which it has original jurisdiction, as well as claims that raise
novel issues of state law.78 	In deciding whether to exercise supplemental jurisdiction
federal courts should consider “judicial economy, convenience, and fairness to litigants.”79
Where all issues over which a federal court has original jurisdiction have been decided well
in advance of trial, the remaining state law claims generally should be decided by the
appropriate state court.80
73 Id. at 8; Docket 15 at 28.
74 Docket 14 at 25; Docket 15 at 27–28.
75 Docket 20 at 30–38; Docket 21 at 30–46.
76 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
77 28 U.S.C. § 1367(a).
78 28 U.S.C. § 1367(c).
79 United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966).
80 Id. (“Needless decisions of state law should be avoided both as a matter of comity and
to promote justice between the parties, by procuring for them a surer-footed reading of applicable
law. Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a
jurisdictional sense, the state claims should be dismissed as well.”); see also Harrell v. 20th
Century Ins. Co., 934 F.2d 203, 205 (9th Cir. 1991) (“[I]t is generally preferable for a district court
to remand remaining pendent claims to state court[.]”).
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 15 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 16 of 17
In this case, the only claim over which this Court has original jurisdiction is
Cully’s asserted ownership of submerged lands beneath the navigable Kokolik River.81
Having found in favor of Cully above, the remaining claims and defenses are based solely
on state law. These issues previously were briefed before the Superior Court for the State
of Alaska, Second Judicial District at Kotzebue.82 	Given that both the Alaska Superior
Court and this Court have received briefing, there does not appear to be any advantage in
terms of judicial economy or convenience for this Court to adjudicate the remaining state
law issues.
Furthermore, based on the briefing by the parties, it appears that Alaska law
regarding continuing trespass is not fully developed and may represent a novel issue of
state law. 	Both sides acknowledge that, under Alaska law, where a continuing trespass
exists, “each harmful act constitutes a new cause of action for statute of limitations
purposes.”83 Predictably, the sides disagree on whether the facts of this case constitute a
continuing trespass. NSB relies predominantly on Alaska caselaw examining continuing
nuisance and caselaw from sister states examining continuing trespass.84 For its part, Cully
relies extensively on the SECOND RESTATEMENT OF TORTS to support its argument that
Defendants’ actions constitute a continuing trespass.85 The State argues that its actions are
81 Docket 1 at 4–6.
82 Id. at 4 (“On November 4, 2022, the State filed its Motion for Partial Summary
Judgment against Cully seeking a finding that Cully’s claims against the State are time-barred,
barred by the doctrine of laches, and fail to state a claim upon which relief could be granted.”).
83 Docket 14 at 26; Docket 15 at 30 n.100; Docket 20 at 33–34; Docket 21 at 38; Docket 26
at 7 (citing Oaksmith v. Brusich, 774 P.2d 191, 200 n.10 (Alaska 1989)).
84 Docket 14 at 25–31.
85 Docket 20 at 33–37; Docket 21 at 37–40.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 16 of 17

Cully Corp., Inc. v. North Slope Borough, et al. 	Case No. 2:23-cv-00001-JMK
Corrected Order Granting Motion for Partial Summary Judgment and Remanding to State Court 	Page 17 of 17
insufficient to constitute a continuing trespass.86 	Neither the State nor Cully provide
caselaw to determine the contours of continuing trespass in the context of a party permitting
another party occupy lands the original party does not actually own. Continuing trespass
appears to be a novel issue best suited for the state court system to adjudicate.
Because this Court has decided the only claim for which it had original
jurisdiction, the Court has discretion whether to exercise supplemental jurisdiction over the
remaining state law claims and defenses. Judicial economy, convenience, and fairness to
the litigants strongly favor remanding the remaining issues to state court. 	Therefore,
Defendants’ motions for summary judgment are DENIED, the case is REMANDED back
to the Superior Court for the State of Alaska, Second Judicial District at Kotzebue.
IV. 	CONCLUSION
For the reasons stated above, Cully’s Motion for Partial Summary Judgment
at Docket 9 is GRANTED. Defendants’ motions at Dockets 14 and 15 are DENIED. The
case—and its remaining state law claims and defenses—is REMANDED back to the
Superior Court for the State of Alaska, Second Judicial District at Kotzebue.
IT IS SO ORDERED this 14th day of February 2024, at Anchorage, Alaska.
/s/ Joshua M. Kindred
JOSHUA M. KINDRED
United States District Judge
86 Docket 28 at 15–19.
Case 2:23-cv-00001-JMK Document 45 Filed 02/14/24 Page 17 of 17