By the late twentieth century, the federal school-trust framework had been the subject of Supreme Court doctrine for nearly a hundred and forty years. Trustees of Vincennes University v. Indiana (1852) had established that federal educational grants created enforceable trusts; Cooper v. Roberts (1855) had applied the doctrine to the Section 16 grant pattern; Ervien v. United States (1919) had fixed the rule that the enumerated trust purposes are exclusive; Lassen v. Arizona (1967) had required full money compensation for state takings of trust land; Andrus v. Utah (1980) had endorsed the characterization Utah itself pressed, that the grant was a “solemn agreement” which “in some ways may be analogized to a contract between private parties,” 446 U.S. at 507 — the “binding and perpetual obligation” formulation often quoted alongside it is Justice Powell’s, dissenting, at 523, and not the Court’s. What remained was the question of whether a state legislature, by statute, could authorize departures from the federal compact — whether the trust framework constrained the state’s legislative branch as fully as it constrained its executive officers.
Asarco Inc. v. Kadish, 490 U.S. 605 (1989), is the Supreme Court’s late-twentieth-century answer. A group of Arizona schoolteachers and the Arizona Education Association sued in state court, contending that Arizona Revised Statutes § 27-234(B) — authorizing mineral leases on state school trust lands without competitive bidding and at below-market royalties — was inconsistent with Section 28 of the New Mexico-Arizona Enabling Act of 1910. The Arizona Supreme Court agreed, holding the statute unconstitutional. The lessees sought review in the United States Supreme Court. Justice Kennedy, writing for the Court, addressed both Article III standing and the merits. On standing, the Court held that the teacher and association plaintiffs would not have had federal-court Article III standing originally, but that appellate jurisdiction was nonetheless proper because the lessees suffered injury from the adverse state-court judgment. On the merits, the Court affirmed, concluding “that the sale or lease of mineral lands granted to the State of Arizona under these federal statutes must substantially conform to the mandatory requirements set out in the Enabling Act,” 490 U.S. at 633 — the federal statutes being the Enabling Act of 1910 and the Jones Act of 1927, whose grant carries the Enabling Act’s conditions forward — and holding the court below “correct in declaring Ariz. Rev. Stat. Ann. § 27-234(B) (Supp. 1988) invalid as to nonhydrocarbon mineral leases.” The Court’s own words for the result are void and invalid; “unconstitutional” is the Arizona Supreme Court’s word, which this Court quoted.
The doctrinal contribution is twofold. First, Asarco closes the argument that a state legislature may, by statute, alter the practical contours of its trust duties for the granted lands — holding that the Enabling Act’s conditions travel with those lands and that a disposition not made in substantial conformity with them is void by the Act’s own terms. The case is the modern SCOTUS authority for the proposition that the federal trust framework constrains state legislative as well as executive action. Second, the standing portion — though split — confirms that state-court forums offer the principal venue for beneficiary enforcement, with state-court standing rules typically more generous than federal Article III requirements. Read with Lassen and Andrus, Asarco completes the doctrinal triangle of modern federal school-trust law: the trust is real (Lassen); the grant is a bargain the Government is held to (Andrus); the original terms cannot be unilaterally relaxed (Asarco).
Asarco is the SCOTUS terminus of the long doctrinal arc that began with Vincennes in 1852. From 1852 through 1989 — one hundred thirty-seven years — the United States Supreme Court spoke six times to the federal school-trust framework, each time reaffirming and refining its central propositions. After Asarco, the doctrinal floor was complete; the codifications that followed (the Restatement Third of Trusts, the Uniform Trust Code) work atop a foundation the Supreme Court had spent a century and a half laying.
“Congress provided … that the new State would hold those granted lands in trust and subject to the specific conditions set out in § 28 of the Act, 36 Stat. 574, which provided that the lands granted ‘shall be by the said State held in trust, to be disposed of in whole or in part only in the manner as herein provided.’” — Asarco Inc. v. Kadish, 490 U.S. 605, 611 (1989).
Primary source. Asarco Inc. v. Kadish, 490 U.S. 605 (1989), at supreme.justia.com and courtlistener.com · opinion 112268.
References. Asarco Inc. v. Kadish, 490 U.S. 605 (1989); Lassen v. Arizona, 385 U.S. 458 (1967); Andrus v. Utah, 446 U.S. 500 (1980); Trustees of Vincennes University v. Indiana, 55 U.S. (14 How.) 268 (1852).
