Phelps Dodge Corporation, a New York Corp. v. State of Arizona, State Land Department, and Andrew L. Bettwy, State Land Commissioner

This appeal concerns the validity of a reservation of mineral rights by appellant, the State of Arizona (“Arizona”), in certain lands (“Land”) within its boundaries. Said Land was initially granted to appellant by the United States as school trust lands under the Arizona Enabling Act, Section 24 of the Act of Congress of June 20, 1910 ( 36 Stat. 557 ).

On June 28, 1934, the United States Congress passed the Taylor Grazing Act (“Grazing Act”), 43 U.S.C. § 315 et seq., which authorized, among other things, the exchange of federal land for real property owned by states or private individuals. In 1936, Congress amended Section 28 of the Arizona Enabling Act to permit Arizona to dispose of school trust lands by exchange under such regulations as the Arizona legislature might prescribe. ( 49 Stat. 1477 ). In 1945, prior to the enactment of such regulations, Arizona, pursuant to an “equal acre” exchange under the Grazing Act, reconveyed the Land to the United States reserving to itself “all Mineral Deposits and Rights.” Arizona received in return certain federal land subject to a mineral reservation in favor of the United States. In 1948, the Arizona legislature enacted the…