Appeals Court Says NC Can't Claim Ownership Of Yadkin Riverbed

Apr 5, 2017

Updated Thursday, April 6, 2017
A federal appeals court has ruled that North Carolina cannot claim ownership of the riverbed near dams along the Yadkin River. In a 2-1 decision this week, judges upheld a lower court ruling in the state's lawsuit against aluminum giant Alcoa over control of a 45-mile stretch of the Yadkin.

The ruling at the Fourth Circuit Court of Appeals in Richmond came after oral arguments last fall in which lawyers battled over Alcoa's ownership claim, American history and whether the river has ever been navigable.

The appeals court found that Alcoa had clear title to 99 percent of the property, and can claim the remaining 1 percent by "adverse possession," because it has controlled it uncontested for decades.

The court also noted that state officials failed to prove a key legal point in its lawsuit - that the river was navigable in the past.  

Alcoa formerly operated four dams along the river. They originally powered a smelter on Badin Lake, where 1,000 people once worked. The smelter closed a decade ago and the jobs are gone, but  Alcoa continued to make money selling electricity from the dams - $210 million since the plant closed, according to the Associated Press.

State officials since the administration of former Gov. Beverly Perdue have been trying to prove their ownership claim so the state can have a say in what happens to the hydroelectric dams. They've argued that since the smelter is closed, the state hasn't derived any benefit from the operations.

Alcoa sold the dams for an undisclosed sum to startup Cube Hydro earlier this year, but the case has continued.

During oral arguments in October, one of the appeals court judges joked that the arguments were so interesting the case should go straight to the U.S. Supreme Court.

It’s not clear yet if the ruling means the end of the case. Carl Tobias, a law professor at the University of Richmond, says it does have issues the courts may be interested in exploring further.

“It seems to me, first of all, you got a 2-1 split among the judges, and substantial disagreement, so it might be a good case to ask the entire court en banc (all 15 judges) to hear the appeal and see how the judges would decide,” he said.

Tobias said it's also the kind of case that could pique the interest of the U.S. Supreme Court, “just because it does invoke all of these important questions that we have - federal-state relations, who holds the riverbeds in states, and private entities’ claims to those. I think all of that is really interesting to legal scholars and others.”

A spokeswoman for N.C. Attorney General Josh Stein told the WFAE the state is reviewing the decision and working to determine next steps."

THURSDAY UPDATE: The Attorney General's office says it will ask for a re-hearing of the case by the full 15-member court. 

RELATED LINKS

April 3, 2017, 4th Circuit Court of Appeals opinion in State of North Carolina v. Alcoa Power Generating Inc. (PDF)

April 18, 2017, 4th Circuit amended opinion (PDF) 

Feb. 2, 2017, CubeHydroPartners.com, "Cube Hydro Carolinas, an affiliate of Cube Hydro Partners, acquires four hydroelectric power plants in North Carolina"