author: MEIERHENRY, Justice.

text:
    2005 SD 27
    DAKOTA SYSTEMS, INC., a South Dakota corporation, Missouri Valley Cellular, Inc., a South Dakota corporation, Eastern South Dakota Cellular, Inc., a South Dakota corporation, Sanborn Cellular, Inc., a South Dakota corporation, Verizon Wireless (VAW) LLC, a Delaware limited liability company, and Cellular Inc. Network Corporation, a Colorado corporation, Plaintiffs and Appellants, v. Gary VIKEN, Secretary of the South Dakota Department of Revenue and Regulation, Defendant and Appellee.
    No. 23189.
    Supreme Court of South Dakota.
    Argued on Jan. 11, 2005.
    Decided Feb. 23, 2005.

      Robert L. Ernst, Verizon Wireless, Bed-minster, New Jersey, Dennis Duncan of Frieberg, Zimmer, Duncan & Nelson, LLP, Parker, South Dakota, Kimball R. Anderson, David E. Koropp of Winston & Strawn, LLP, Chicago, Illinois, Attorneys for plaintiffs and appellants.
    Lawrence E. Long, Attorney General, David D. Wiest, Assistant Attorney General, Pierre, South Dakota, Attorneys for defendant and appellee.
   MEIERHENRY, Justice.

[¶ 1.] This is an appeal from the trial court’s grant of summary judgment in favor of defendant, Gary Viken, Secretary of the South Dakota Department of Revenue and Regulation (Viken). Plaintiffs’ complaint requested a refund for taxes wrongfully collected and also sought a declaratory judgment that SDCL Chapter 10-33A violates state and federal law.

FACTS

[IT 2.] In the 2003 Legislative Session, the South Dakota Legislature passed House Bill No. 1104, entitled, “An Act to impose an excise tax on the gross receipts of personal communications system, wireless, and cellular telecommunications companies.” 2003 SD Laws ch 58. House Bill No. 1104 is codified at SDCL Chapter 10-33A, and became effective on July 1, 2003. It contains a total of twenty sections pertaining to the “tax of four percent upon the gross receipts of telecommunications services.” SDCL 10-33A-4. It is the nature and effect of these various sections that is at issue in this case.

[¶ 3.] Plaintiffs (Verizon) provide commercial mobile radio service (CMRS) in South Dakota under the trade-name “Verizon Wireless.” Verizon paid the taxes owed under SDCL Chapter 10-33A “under protest” pursuant to SDCL 10-27-2. Verizon then challenged the tax regime of SDCL Chapter 10-33A in an eight-count complaint filed September 17, 2003. In Count I, Verizon alleged that the licensing and other requirements imposed by SDCL Chapter 10-33A regulate market entry in express violation of 47 USC § 332(c)(3)(A) of the Communications Act of 1934. In Count II, Verizon alleged that SDCL Chapter 10-33A prohibits or may have the effect of prohibiting the provision of CMRS in violation of 47 USC § 253 of the Telecommunications Act of 1996. In Count III, Verizon contended that SDCL Chapter 10-33A was preempted under general principles of field preemption.

[¶ 4.] In Count IV, Verizon alleged that House Bill No. 1104, which is codified at SDCL Chapter 10-33A, violated the single subject rule found in Article III, § 21 of the South Dakota Constitution. According to the averments in Verizon’s complaint, the subject matter of the act is not single because it includes both the imposition of a regulatory regime and the creation of a tax scheme. In addition, it contains provisions unrelated to the gross receipts tax disclosed by the title, including an appropriation provision.

[¶ 5.] In Count VIII, Verizon sought a declaratory judgment seeking to have the telecommunications gross receipt tax declared “void, unconstitutional, and without force of law....”

[¶ 6.] Viken filed a Motion for Summary Judgment, and after a hearing the circuit court ruled in favor of Viken on all issues. The court determined that the tax statutes were not preempted and did not otherwise violate federal law nor did they violate the single subject rule of our state Constitution. The trial court also determined that the declaratory judgment action was not permitted because of sovereign immunity. Verizon appeals.

STANDARD OF REVIEW

[¶ 7.] The issues in this case are questions of law and are reviewed de novo. See Boomsma v. Dakota, Minnesota, & Eastern Railroad Corp., 2002 SD 106, ¶ 13, 651 N.W.2d 238, 242 (stating that the preemptive force of federal statutes is a question of law) (overruled on other grounds); Cleveland v. BDL Enterprises, Inc., 2003 SD 54, ¶ 12, 663 N.W.2d 212, 217 (stating that whether a statute is constitutional is reviewed de novo); State v. Burgers, 1999 SD 140, ¶ 8, 602 N.W.2d 277, 279 (stating that whether a court has jurisdiction to entertain an action is a question of law reviewed de novo).

ISSUES

I. Whether the trial court erred in its determination that seeking declaratory relief against a state official sued in his official capacity violates principles of sovereign immunity.

II. Whether the trial court erred in its determination that House Bill No. 1104, which is codified at SDCL Chapter 10-33A, did not violate the single subject rule found in Article III, § 21 of the South Dakota Constitution.

III. Whether the trial court erred in its determination that SDCL Chapter 10-33A was not preempted by or in violation of federal law.

DECISION

Declaratory Relief

[¶ 8.] The first issue is whether the trial court incorrectly determined that the doctrine of sovereign immunity prohibits Verizon from bringing a declaratory judgment action against the State. Verizon sought a declaratory judgment holding SDCL Chapter 10-33A unconstitutional and void. The declaratory judgment action did not seek a refund of taxes. Viken claims that the declaratory judgment action is impermissible under the principles of sovereign immunity. Viken cites to Pennington County v. State ex rel. Unified Judicial System to support his claim. 2002 SD 31, 641 N.W.2d 127. That case, however, is distinguishable. Pennington County sued the State directly, claiming that the Unified Judicial System owed rent for portions of the Pennington County Courthouse. The County sought a declaratory ruling on whether the State had to pay for the Courthouse space. We concluded that sovereign immunity barred the action because the suit was directly against the State and involved an action for which the State has not consented to be sued.

[¶ 9.] Conversely, we have stated that actions against officers of the state who “violate and invade the personal and property rights of the plaintiffs under color or authority unconstitutional and void, are not suits against the state.” White Eagle Oil & Refining Co. v. Gunderson, 48 S.D. 608, 617, 205 N.W. 614, 617 (1925). Reaching a similar conclusion, the Nebraska Supreme Court recently stated: “We have held that a declaratory judgment action attacking the constitutionality of a statute or seeking relief from an invalid act or an abuse of authority by an officer or agent is not a suit against the state and is therefore not prohibited by principles governing sovereign immunity.” Northwall v. Dept. of Revenue, 263 Neb. 1, 637 N.W.2d 890, 896 (2002) (citations omitted); see also Miller v. Egan, 265 Conn. 301, 828 A.2d 549, 560 (2003) (“Sovereign immunity does not bar suits against state officials acting in excess of their statutory authority or pursuant to an unconstitutional statute ....”) (citation and quotations omitted); Cf. Tucker v. Hinds County, 558 So.2d 869, 872-73 (Miss.1990) (“to allow the sovereign immunity defense to block suits based on other provisions of the Mississippi Constitution would render them ... meaningless.”). In addition, a review of our caselaw shows frequent challenges to the constitutionality of a statute by way of declaratory judgments. See Vilhauer v. Horsemens’ Sports, Inc., 1999 SD 93, 598 N.W.2d 525; Boever v. South Dakota Bd. of Accountancy, 1997 SD 34, 561 N.W.2d 309; South Dakota Physician’s Health Group v. State By and Through Dept. of Health, 447 N.W.2d 511 (S.D.1989); Wyatt v. Kundert, 375 N.W.2d 186 (S.D.1985). Since a challenge to the constitutionality of a statute, without more, is not a suit against the state, the declaratory judgment action does not violate the principles of sovereign immunity.

[¶ 10.] Additionally, Viken asserts that because an adequate remedy is available via the tax refund statute located at SDCL 10-27-2, a declaratory judgment action cannot be maintained. In Arneson v. Baker, 76 S.D. 262, 264-66, 77 N.W.2d 325, 326-27 (1956), this Court held that declaratory actions to determine the illegality of a tax are permissible. We also addressed whether a tax refund statute precluded seeking a declaratory judgment on the legality of a tax, and we found it did not, stating: “Reason would seem to support adoption of this construction of the statute, permitting speedy determination of such questions as are here involved without any interruption of the collection processes, and in a manner which would permit the joinder in interest of many plaintiffs who might otherwise, however much aggrieved, be individually unable to secure review of such questions.” Id. at 266, 77 N.W.2d 325. In our more recent decision in Agar School District No. 58-1 v. McGee, we distinguished Ameson by stating, “[t]he issue [in Ameson ] was limited to the legality of the tax and not the question of refunds.” 1997 SD 31, ¶ 16, 561 N.W.2d 318, 323. In the case before us, the declaratory judgment does not seek a refund, but is limited to the legality of the tax. Such an action is permissible under our caselaw and the trial court had jurisdiction to rule on the action. A declaratory judgment action is allowed under these circumstances.

Single Subject Rule

[¶ 11.] The second issue raised by Verizon is whether the trial court erred in its determination that House Bill No. 1104, codified at SDCL Chapter 10-33A, did not violate the single subject rule required by Article III, § 21 of the South Dakota Constitution. Article III, § 21 of the South Dakota Constitution states: “No law shall embrace more than one subject, which shall be expressed in its title.” In Simpson v. Tobin, we set forth the principles by which we apply this constitutional provision, as follows:

We just recently enunciated the general legal principles involved in attacks on constitutionality of statutes as it concerns the mandate expressed in Article III, § 21. In Independent Community Bankers[Ass’n of South Dakota, Inc. v. State 1 suprame N.W.2d 737 (SD 1984)] we said that every legislative act is accorded a presumption in favor of its constitutionality and that this presumption is overcome only by proof beyond a reasonable doubt that it violates fundamental constitutional principles. Article III, § 21 does not require that the title index the contents of the Act and there is no restriction on the scope of a single subject provided it is encompassed in the title. If the provision of the Act fairly relates to the subject, it will meet constitutional requirements. Objections to a legislative act on the grounds that it embraces more than one subject not adequately expressed in its title should be grave, and the conflict between the statute and the constitution must be plain and manifest, before it may be justifiably declared unconstitutional and void. We also held that sound policy and legislative convenience dictate liberal construction of the title and the subject matter in reviewing compliance with Article III, § 21.

Simpson v. Tobin, 367 N.W.2d 757, 767 (S.D.1985). We also addressed the purpose of Article III, § 21, as developed and explained in a “long line of our cases, to be as follows:”

(1) prevent combining into one bill several diverse measures which have no common basis except, perhaps their separate inability to receive a favorable vote on their own merits;
(2) prevent the unintentional and unknowing passage of provisions inserted in a bill of which the title gives no intimation; and
(3) fairly apprise the public of matters which are contained in the various bills and to prevent fraud or deception of the public as to matters being considered by the legislature.

Id.

[¶ 12.] The act at issue here is entitled “An Act to impose an excise tax on the gross receipts of personal communications system, wireless, and cellular telecommunications companies.” Verizon contends that “the licensing, bonding and other restrictions of the statute are not in any way a necessary part of a tax statute, but rather are an independent regulatory regime that the title of the bill would not have put the public on notice was being adopted as part of a simple tax.” In addition, Verizon asserts that the special appropriations contained in the bill are separate subjects not contained in the bill title. We will address these two assertions separately.

[¶ 13.] Verizon claims throughout its brief that the licensing, bonding and other provisions of SDCL Chapter 10-33A create a regulatory regime. In particular, Verizon points to the imposition of tax licensing requirements (SDCL 10-33A-7, - 8), the criminalization of certain conduct relating to payment of the tax (SDCL 10-33A-17), the assignment of personal liability for payment of the tax on a corporation’s officers (10-33A-18), the possible requirement of posting a bond before being issued a tax license (SDCL 10-33A-9, - 13, -18), and the provision providing for the refusal to issue a tax license to persons who are delinquent in payment of other taxes levied by the State of South Dakota (SDCL 10-33A-9).

[¶ 14.] Although these provisions may not be necessary to the implementation of a tax, we disagree with Verizon’s characterization of the statutes as a regulatory regime in violation of the single subject rule of Article III, § 21 of the South Dakota Constitution. These sections all “fairly relate” to the gross receipt tax referenced in the title. See Simpson, 367 N.W.2d at 767. These provisions all have a common basis, that is, to implement a gross receipt tax. See Id. The act as passed was not fraudulent or deceptive as to these matters. See Id.

[¶ 15.] The title of the act revealed that the act would impose an excise tax. A liberal construction of this title and its subject matter would encompass provisions providing for a means of assessing and collecting the tax, and rules for ensuring compliance with the tax statutes. In reality, this is all that the alleged “regulatory” provisions do. For example, the tax license application requirement that Verizon takes exception to simply requires a telecommunication company to provide its name, location, and other information the secretary may require. Once this basic information is provided, the secretary “shall grant” the tax license. SDCL 10-33A-8. While the implementation of civil liability on certain corporate officers and criminalization of certain violations of the tax law do not fall within the subject of the title as clearly as the licensing requirements, the title’s revelation of the new tax does “fairly apprise” the public of the potential for the inclusion of the type of civil and criminal sanctions included in this act. We have stated: “Any legislative act is accorded a presumption in favor of constitutionality and that presumption is not overcome until the unconstitutionality of the act is clearly and unmistakably shown and there is no reasonable doubt that it violates fundamental constitutional principles.” South Dakota Association of Tobacco and Candy Distributors v. State, 280 N.W.2d 662, 664-65 (S.D.1979). Verizon has not overcome the presumption of constitutionality as it relates to these provisions.

[¶ 16.] That being said, a more persuasive argument for violation of Article III, § 21, stems from the special appropriation provisions of the act. In addition to implementing a tax, the act appropriates the revenues which the tax produces. SDCL 10-33A-5,10-33A-6. Sixty percent of the revenue is to be deposited into the property tax reduction fund, and forty percent of the revenue is to be deposited into the county telecommunications gross receipts fund. Id. The county fund is created by the act and the money in this fund is to be distributed to the counties four times a year. Id. Viken concedes that this is a special appropriation. The question is whether including such an appropriation in this act violated the South Dakota Constitution.

[¶ 17.] Initially we note that Article XII, § 2 of the South Dakota Constitution addresses appropriations other than those made in the general appropriations bill. It states in relevant part: “All other appropriations shall be made by separate bills, each embracing but one object, and shall require a two-thirds vote of all the members of each branch of the Legislature.” Although this Constitutional provision has not been made an issue in the case, it demonstrates the importance of appropriations and the particular scrutiny with which they should be analyzed.

[¶ 18.] Here the act was entitled “An Act to impose an excise tax on the gross receipts of personal communications system, wireless, and cellular telecommunications companies.” The title does not suggest the specific purpose for which this revenue is to be raised or otherwise suggest that the revenue will be used or appropriated for a particular purpose. Concerning this line of reasoning, we find the following language from our caselaw to be particularly helpful:

The controlling principle is stated in 42 AmJur, Public Funds, § 47, p 749, as follows: ‘As a general rule an appropriation a necessity for which is suggested by the title of an act, if it has congruity and proper connection with the subject or object stated therein, need not be specifically expressed in the title; * * The elements of congruity and connection with the subject are not drawn in question. Our concern is whether the quoted language of the title is sufficient to indicate an appropriation is necessary to the accomplishment of the purpose of the act.

Boe v. Foss, 76 S.D. 295, 311, 77 N.W.2d 1, 10 (1956) (internal citations omitted). We acknowledged a similar analysis in Independent Community Bankers Ass’n of South Dakota, Inc. v. State, where we stated: “When the title of a legislative act expresses a general subject or purpose which is single, all matters which are naturally and reasonably connected with it, and all measures which will or may facilitate the accomplishment of the purpose so stated, are germane to its title.” 346 N.W.2d 737, 741 (S.D.1984) (citation and quotations omitted).

[¶ 19.] We have explained that appropriations that facilitate and accomplish the stated purpose of a bill, even if such appropriations are not expressly addressed in the bill’s title, do not violate our constitution. Boe, 76 S.D. at 311-12, 77 N.W.2d at 10-11. Such appropriations are germane to the title expressing the purpose of the legislation and the public is thereby fairly apprised of the appropriation. However, the title of House Bill No. 1104 proclaims only that a tax is being enacted, and says nothing of the purpose of the tax. Since the title of this bill does not even address the purpose of the tax, it obviously does not indicate that an appropriation is necessary to accomplish its purpose. Therefore, we hold that the appropriation provisions now located at SDCL 10-33A-5 and SDCL 10-33A-6 violate Article III, § 21 of the South Dakota Constitution.

Separability

[¶ 20.] Verizon claims that the unconstitutional provisions require us to strike down the entire act because the provisions are not separable. If the remaining legislation can take effect without the offending provisions, we attempt to uphold the remainder under the “doctrine of separability.” We have said:

Unconstitutional provisions of a statute may be extracted and the remainder left intact. State ex rel. Wieber v. Hennings, 311 N.W.2d 41 (S.D.1981). The “doctrine of separability” requires this court to uphold the remaining sections of a statute if they can stand by themselves and if it appears that the legislature would have intended the remainder to take effect without the invalidated section. Hogen v. South Dakota State Board of Transportation, 245 N.W.2d 493 (S.D.1976).

South Dakota Educ. Association/NEA v. Barnett, 1998 SD 84, ¶ 32, 582 N.W.2d 386, 394 (quoting Simpson, 367 N.W.2d at 768). Thus, separability is a two part test requiring (1) that the remaining sections can stand by themselves, and (2) that the Legislature would have intended the remaining sections to take effect. Id.

[¶ 21.] In this case, the remaining sections of this act can stand by themselves without the stricken appropriation provisions. The non-appropriation provisions in no way require the co-existence of the appropriations provisions in order to function properly or be effective. Thus, the first prong of the separability test is easily met. However, it is not as evident that the Legislature would have intended the remaining provisions to take effect without the invalidated sections.

[¶ 22.] Legislative history reveals that the original bill did not contain the appropriation provisions. This non-appropriating form of the bill was easily passed in the House by a vote of 60-8. The bill then moved to the Senate, where it was reviewed by the Senate State Affairs Committee. The committee voted 7-2 in favor of the bill, which still did not contain the appropriation provisions. It was only after the senate committee’s vote that the appropriation provisions were added. The Senate then voted 24AL1 to pass the bill. The amended bill went back to the House where it was passed by a vote of 67-2. The bill then went before the Governor, who exercised his line-item veto power to strike the appropriation provisions from the bill, believing that the provisions were unconstitutional. The bill went back to the Legislature, where the Senate voted to over-ride the veto by a vote of 26-7 and the House voted to override the veto by a vote of 57-12.

[¶ 23.] Since the House originally passed the act without the appropriation provisions, we can assume the House would have intended the act to survive without them. The Senate, however, never passed the bill without the appropriation provisions. Its intent is not as clear. However, Secretary Viken points out that the tax revenue generated by the act was included in the state budget. Without the tax, the State would have had a budget deficit in 2004 of over 3 million dollars. Therefore, based on the pre-appropriation provisions voting record in the House, in addition to the apparent necessity of the tax to balance the State budget, we conclude that the Legislature would have intended the bill to take effect without the appropriation sections. We find the doctrine of separability to be applicable to this case. Despite the unconstitutionality of SDCL 10-33A-5 and 10-33A-6, the remaining provisions of SDCL Chapter 10-33A shall remain in effect.

Federal Preemption

[¶ 24.] The remaining issues raised by Verizon deal with whether federal law preempts SDCL Chapter 10-33A. Initially, we acknowledge that neither party disputes the State’s ability to impose a gross receipts tax upon CMRS providers. It is the manner in which the tax is imposed and enforced that is at issue here.

Field Preemption

[¶ 25.] First, Verizon asserts that conditioning the exercise of a federally licensed privilege on obtaining a separate, state license to exercise the same privilege is prohibited by general principles of field preemption. Verizon claims that because federal law gives the Federal Communication Commission the authority to license a CMRS provider, the state is preempted from any licensing requirement. The U.S. Supreme Court explained federal preemption in a particular field as follows:

Under the Supremacy Clause, U.S. Const., Art. VI, cl. 2, state laws that interfere with, or are contrary to the laws of congress, made in pursuance of the constitution are invalid. The ways in which federal law may pre-empt state law are well established and in the first instance turn on congressional intent. Congress’ intent to supplant state authority in a particular field may be expressed in the terms of the statute. Absent explicit pre-emptive language, Congress’ intent to supersede state law in a given area may nonetheless be implicit if a scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it, if the Act of Congress ... touch[es] a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject, or if the goals sought to be obtained and the obligations imposed reveal a purpose to preclude state authority. When considering pre-emption, we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.

Wisconsin Pviblic Intervenor v. Mortier, 501 U.S. 597, 604-05, 111 S.Ct. 2476, 2481-82, 115 L.Ed.2d 532, 542-43 (1991) (internal citations and quotations omitted). In other words, “when Congress intends federal law to occupy the field, state law in that area is altogether preempted under the doctrine of field preemption.” Kroll v. Finnerty, 242 F.3d 1359, 1364 (Fed.Cir.2001) (citations and quotations omitted).

[¶ 26.] We acknowledge that Verizon has defined the preempted “field” specifically as the field of licensing CMRS providers. Verizon cites Sperry v. Florida in support of its field preemption argument on licensing. 373 U.S. 379, 385, 83 S.Ct. 1322, 1326, 10 L.Ed.2d 428, 432-33 (1963). Sperry involved federal preemption of the regulation of the practice of law before the U.S. Patent Office. Federal regulations allowed non-lawyers to obtain a federal license to appear before the Patent Office and to prosecute and present patent applications. The Florida bar sought to enjoin a federal licensee who was not licensed to practice law in Florida from prosecuting patent applications in Florida. The Supreme Court held that Florida could not impose licensing requirements or qualifications in addition to those already imposed under the federal law. The Supreme Court noted that the laws granting the federal licensing authority had no qualification that the licensing be consistent with state law, and the court would not “read in” such a qualification. Id. at 385-86, 83 S.Ct. at 1326, 10 L.Ed.2d at 433.

[¶ 27.] In contrast to the unqualified licensing authority involved in Sperry, CMRS providers are expressly subject to various state regulation under the acts at issue here. See 47 USC § 332(c)(3)(A) (preserving the states authority to regulate the other terms and conditions of commercial mobile services.); Telecommunication Act of 1996, Public Law 104-104, § 601(c)(2), 110 Stat. 56, 143-44, reprinted in 47 USC § 152, Application Note 2 (preserving the state’s ability to impose taxation laws). These qualifications to providing CMRS pursuant to a federal license make the principles of licensing preemption described in Sperry inapposite. See e.g. In re Lucas, 317 B.R. 195, 204 (Bankr.D.Mass. 2004) (distinguishing Sperry by recognizing that unlike federally granted authority to appear before the patent office, authority to appear in a bankruptcy case is qualified by the requirement that such appearances be consistent with proper state regulation.)

[¶ 28.] Sperry is further distinguished from the case at hand by the nature of the “licensing” in the respective cases. The Court in Sperry determined that the state retained authority to control the practice of law in Florida “except to the limited extent necessary for the accomplishment of the federal objectives.” Sperry, 373 U.S. at 402, 83 S.Ct. at 1335, 10 L.Ed.2d at 442. The federal objective in issuing federal patent licenses is, at least in part, to regulate the conduct and qualifications of those practicing patent law before the patent office. See Id. at 402, 83 S.Ct. at 1334-1335, 10 L.Ed.2d at 442 (“[T]he State is primarily concerned with protecting its citizens from unskilled and unethical practitioners, interests which, as we have seen, the Patent Office now safeguards by testing applicants for registration, and by insisting on the maintenance of high standards of integrity.”) The State of Florida was attempting to achieve the same objective through its licensing requirements. This obviously interfered with the accomplishment of the federal objectives.

[¶ 29.] Considering the FCC licensing requirements involved in this case, the federal objective was addressed in Cincinnati Bell Telephone Co. v. F.C.C. as follows:

In its Second Report and Order, the FCC noted that it had statutory authority to allocate licenses by auction under 47 U.S.C. § 309(j), which commands the FCC to establish criteria for license eligibility that would “pro-mot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants....” Id. at 7707; 47 U.S.C. § 309(j)(3)(B) (Supp. V 1994). The FCC concluded that Section 309(j)(3)(B) reflected an explicit congressional approval of promoting competition in the industry and of a wide distribution of Personal Communications Service licenses. Second Report and Order, 8 F.C.C.R. at 7707. The FCC also concluded that its goal was to promote broad participation by wireless communications businesses in Personal Communications Service, ensure that existing Cellular operators did not exert undue market power, but at the same time take advantage of the Cellular operators’ expertise and existing infrastructures for the expeditious development of the new Personal Communications Service.

Cincinnati Bell Telephone Co. v. F.C.C., 69 F.3d 752, 757 (6thCir.l995). The federal objective of promoting competition and providing for a wide distribution of licenses is completely unrelated to South Dakota’s licensing objective. The South Dakota tax license seeks merely to aid in the efficient and effective administration of a valid state tax. Therefore, because the federal authority over licensing and regulation of telecommunication companies is qualified and expressly allows various state and local regulation, and also because the state tax licensing objective is unrelated to the federal licensing objective, the principles of field preemption found in Sperry are not applicable.

[¶ 30.] However, the federal acts at issue do contain express preemptive language in relation to certain aspects of CMRS regulations. The express preemption issues and the statutes from which they are derived are addressed separately below.

The Telecommunications Act and the Safe-Harbor of Section 601

[¶ 31.] 47 USC § 253(a) states:

No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.

Under this statute, if any provision of SDCL Chapter 10-33A prohibits or has the effect of prohibiting the ability of an entity to provide telecommunication services, the provision would be preempted and invalid. Congress, however, provided a “state tax saving provision” in connection with this preemptive statute.

[¶ 32.] The law provides in relevant part: “nothing in this Act or the amendments made by this Act shall be construed to modify, impair, or supersede, or authorize the modification, impairment, or super-session of, any State or local law pertaining to taxation”. Telecommunication Act of 1996, Public Law 104-104, § 601(c)(2), 110 Stat. 56, 143-44, reprinted in 47 USC § 152, Application Note 2.

[¶ 33.] By including the tax saving provision of § 601(c)(2), Congress clearly expressed its intention of preventing 47 USC 253(a) of the Telecommunications Act of 1996 from interfering with a state’s ability to impose and collect taxes from CMRS providers. Further, a liberal interpretation of the state tax saving provision is supported by the Supreme Court’s statement that “a court interpreting a federal statute pertaining to a subject traditionally governed by state law will be reluctant to find preemption.” CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664, 113 S.Ct. 1732, 1737, 123 L.Ed.2d 387, 396 (1993). Although the exact function and relationship between each section of SDCL Chapter 10-33A and the gross receipt tax varies, there is no question that each of the sections “pertain to” a state taxation law. Accordingly, the statutes at issue all fall within the safe-harbor of Section 601. Therefore, the restrictions of 47 USC § 253 are inapplicable. However, since the state tax saving provision limits its application to the provisions and amendments of the Telecommunications Act of 1996, it is inapplicable to the Communications Act of 1934 provision found in 47 USC § 332(c)(3)(A), as amended by the Omnibus Reconciliation Act of 1993. See Boomer v. AT & T Corp., 309 F.3d 404, 423 (7thCir.2002). Therefore, the preemptive force of 47 USC § 332(c)(3)(A) must be separately addressed.

Section 332(c)(3)(A) of the Communications Act of 193k

[¶ 34.] While 47 USC § 332(c)(3)(A) prohibits a State from regulating market entry generally, it authorizes the State to regulate and impose other requirements on telecommunication service providers. The statute provides:

Notwithstanding sections 152(b) and 221(b) of this title, no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. Nothing in this sub-paragraph shall exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for a substantial portion of the communications within such State) from requirements imposed by a State commission on all providers of telecommunications services necessary to ensure the universal availability of telecommunications service at affordable rates.

47 USC § 332(c)(3)(A) (emphasis added). Verizon has taken the position that any condition, restriction or barrier to its ability to enter or remain in any market within South Dakota violates the Communications Act. This position is incompatible with the act’s express grant of limited regulatory power to the States and is inconsistent with the general purpose of the Communications Act.

[¶ 35.] The importance of a law’s purpose to the issue of preemption has been addressed by the Supreme Court:

[T]he purpose of Congress is the ultimate touchstone in every pre-emption case. As a result, any understanding of the scope of a pre-emption statute must rest primarily on a fair understanding of congressional purpose. Congress’ intent, of course, primarily is discerned from the language of the pre-emption statute and the statutory framework surrounding it. Also relevant, however, is the structure and purpose of the statute as a whole, as revealed not only in the text, but through the reviewing court’s reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law.

Medtronic, Inc. v. Lohr, 518 U.S. 470, 485-86, 116 S.Ct. 2240, 2250-51, 135 L.Ed.2d 700, 716 (1996) (internal citations and quotations omitted).

[¶ 36.] The North Dakota Supreme Court has described the purpose of the preemption provision of the Communications Act as follows: “(1) to ensure that similar mobile services are subject to consistent regulatory treatment; and (2) to impose only the level of regulation necessary to promote competition and protect mobile communications customers.” Consolidated Telephone Co-op. v. Western Wireless Corp., 637 N.W.2d 699, 703 (N.D.2001) (citing Bell Atlantic Mobile, Inc. v. Dep’t. of Pub. Util. Control, 253 Conn. 453, 754 A.2d 128, 132 (2000)). The FCC has expressed its belief that “that Congress ... intended generally to preempt state and local rate and entry regulation of all commercial mobile radio services to ensure that similar services are accorded similar regulatory treatment and to avoid undue regulatory burdens, consistent with the public interest.” In re Implementation of Sections S(N) and 332 of the Communications Act, Regulatory Treatment of Mobile Services, Second Report and Order, 9 FCCR 1411, 1504 (1994). We agree that the federal preemption was intended by Congress to promote competition and prevent burdensome regulation.

[¶ 37.] The general purpose of promoting competition and avoiding undue regulatory burdens does not support Verizon’s contention that any barrier or condition to operating within the State’s borders is invalid and improper. This is particularly true considering Congress has reserved various regulatory and taxing powers to the States. See 47 USC § 332(c)(3)(A); See also 4 USC § 119-126 (codifying the Mobile Telecommunications Sourcing Act, which provides call origination rules for the purpose of imposing state taxes.) In fact, the federal courts have approved the placement of some barriers to a CMRS provider’s ability to compete within a market. This approval demonstrates that the Communications Act is not an absolute bar to any and all restrictions, direct or indirect, on a CMRS provider’s access to markets within a state.

[¶ 38.] One such barrier has been franchise fees imposed by local governments. Courts have consistently ruled that local governments may charge CMRS providers franchise fees and impose related franchise requirements for use of rights of way as long as the fees are applied on a competitively neutral and nondiscriminatory basis. See In re Metromedia Fiber Network, Inc., 313 B.R. 153, 157-61 (Bankr.S.D.N.Y.2004); 47 USC 253(c). Such fees and requirements fall under the savings provision of 47 USC § 253(c), but just like the tax savings provision, such requirements are not excepted or saved from § 332(c)(3)(A). See 47 USC § 253(e) (“Nothing in this section shall affect the application of section 332(c)(3) of this title to commercial mobile service providers.”) Although requiring a fee may be a barrier to entering a market; fees, when properly charged, have consistently been upheld. See TCG Detroit v. City of Dearborn, 206 F.3d 618, 625 (6thCir.2000). The following language from the Federal Second Circuit Court of Appeals illustrates this point:

Under the language and legislative history of Section 253, municipalities clearly retain their longstanding capacity to manage their rights of way and obtain reasonable compensation. It may be, therefore, that denial of access would be an appropriate remedy where a telecommunications company refuses to consider a city’s proper request for fees or disregards a locality’s attempt to manage its rights of way.... Section 253 does not assert that any telecommunications company may gain unconditional access to all cities’ streets, but instead that cities must not raise barriers to entry that are discriminatory or not competitively neutral.

City of Rome, N.Y. v. Verizon Communications, Inc., 362 F.3d 168, 181 (2ndCir.2004).

[¶ 39.] It is these same franchise fee cases against local governments (not state officials) that Verizon cites as authority supporting its position that any and all barriers to providing CMRS in South Dakota are preempted. However, the issue in the cited cases was whether franchise licenses from the local governments could be withheld at the discretion of the local authorities and/or conditioned on burdensome requirements. See City of Auburn v. Qwest Corp., 260 F.3d 1160, 1175-76 (9thCir.2001) (“ ‘[A]ny ‘process for entry’ that imposes burdensome requirements on telecommunications companies and vests significant discretion in local governmental decisionmakers to grant or deny permission to use the public rights-of-way ‘may ... have the effect of prohibiting’ the provision of telecommunications services in violation of the [Act].’ ” (citing Bell Atl. v. Prince George’s County, 49 F.Supp.2d 805, 814 (D.Md.1999)). The cases can be distinguished on at least two grounds. First, the parties involved and the nature of the requirements/barriers are different. Second, the statute at issue was 47 USC § 253, which preempts state regulation that prohibits or has the “effect of prohibiting” CMRS. We have already determined that the South Dakota tax statutes at issue here are not subject to 47 USC § 253 because of the tax savings provision of Section 601(c)(2). Therefore we are not concerned with whether our statutes have the “effect of prohibiting” CMRS; rather, we must determine whether our statutes regulate market entry in violation of § 332(c)(3)(A).

[¶ 40.] After reviewing the statutory framework of the Communications Act and the intent and purpose of Congress in enacting its provisions, we cannot agree with Verizon’s all encompassing interpretation of the “regulation of market entry.” Congress did not intend to prohibit any state activity having the effect of interfering with communications services or creating a barrier to market entry. 47 USC § 332(c)(3)(A) itself provides an exception to the prohibition of market entry regulation when it states, “this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services.” Therefore, even if a regulation of other conditions of commercial mobile services arguably results in market entry barriers, such regulation is expressly authorized.

[¶ 41.] In an analogous situation involving the FCC’s preemption of state and local entry regulation of Satellite Master Antenna Television, the FCC stated that States could still regulate in other areas as long as the regulation was not “undertaken as a pretext for the actual purpose of frustrating achievement of the preeminent federal objective”, which was the development of broadband communications. Earth Satellite Communications, Inc., 95 FCC2d 1223, ¶ 21 (1983). In the present case, the licensing “requirements” at issue do not frustrate the purpose of the Communications Act and are not a pretext for regulating market entry. They are valid, reasonable and indiscriminately applied administrative requirements intended to aid in the collection of valid state taxes.

[¶ 42.] Having determined that Congress did not intend the prohibition of market entry regulation to encompass all barriers or conditions to entry, we now look to the provisions of SDCL Chapter 10-33A. Specifically, we must determine if the barriers or conditions to market entry created by these provisions are prohibited.

[¶ 43.] The foremost condition to entering the South Dakota CMRS market is obtaining a tax license. See SDCL 10-33A-7. We agree with Verizon that Congress intended to prohibit state “regulation” of market entry. Further, we agree that a main source of regulation is legal license requirements. See American Prof'l Testing Serv., Inc. v. Harcourt Brace Jovanovich, 108 F.3d 1147, 1154 (9thCir.l997). However, the fact that license requirements are a main source of market entry regulation does not mean license requirements are always regulations. As discussed above, the federal courts affirmative rulings on other local communications requirements, the express allowance of the regulation of “other terms and conditions” contained in 332(c)(3)(A), as well as the general purpose of the act in relation to preemption, show that Congress did not intend to prohibit any law which could have the effect of creating even an insubstantial and indirect barrier to entry. Instead, Congress intended a less prohibitive and more direct definition of “regulation of market entry.”

[¶ 44.] Whether the licensing requirements of SDCL Chapter 10-33A are, in effect, regulations of market entry as prohibited by federal law depends upon the nature of the requirements or conditions placed upon obtaining the license. See AT & T Comrmmications of the Pacific Northwest, Inc. v. City of Eugene, 177 Or.App. 379, 35 P.3d 1029, 1050 (2001) (addressing registration requirements and stating: “The company has cited no authority for the proposition that requiring all providers to supply minimal information to the city amounts to a regulation of entry within the meaning of the statute, and we have found none.”) The “requirements” for obtaining a South Dakota Gross Receipts Tax License are to provide your business name and location to the State and to have paid all taxes previously assessed by the State. SDCL 10-33A-7, -9. In addition, criminal and civil sanctions and simple record keeping requirements are imposed on CMRS providers in relation to the tax. SDCL 10-33A-15, -17, - 18. These provisions are addressed below.

Business information and sanctions

[¶ 45.] SDCL 10-33A-7 requires a telecommunications company to “set forth the name under which the applicant transacts or intends to transact business, the location of the place of business, and such other information as the secretary may require.” We are not persuaded that this is the “regulation of market entry” anticipated and prohibited by 47 USC 332(c)(3)(A). This indiscriminate and non-prohibitive condition to entry is little more than a notice requirement. Specifically, a provider must notify the State to whom and what location it should send tax information. In this manner, the licensing requirements are analogous to the registration requirements upheld in City of Eugene, 35 P.3d at 1050 (holding that requiring providers to provide minimal information is not regulation).

[¶46.] There is no dispute that South Dakota may impose a gross receipts tax on CMRS providers. It seems obvious that the power to tax necessarily requires the power to enforce a tax. This is, in fact, all that the allegedly improper tax provisions do. South Dakota is not regulating market entry simply by requiring market participants to notify the State and obtain a tax license. Neither has it undertaken market entry regulation by imposing basic record keeping requirements to aid in the administration of the tax. See SDCL 10-33A-15. Further, we do not find that imposing criminal and economic sanctions on those who violate the tax laws to be market entry regulation in violation of the Communications Act. Stretched to its logical extreme, such a broad interpretation of the regulation of market entry could encompass any attempted application of state civil or criminal law to a CMRS provider.

[¶ 47.] By analogy, various federal courts have rejected such a broad interpretation of the regulation of rates under 332(c)(3)(A). See Brown v. Washington/Baltimore Cellular, Inc., 109 FSupp2d 421, 423 (D.Md.2000) (“Congress did not preempt all claims that would influence rates, but only those that involve the reasonableness or lawfulness of the rates themselves.”); Moriconi v. AT & T Wireless PCS, LLC, 280 FSupp2d 867, 876 (E.D.Ark.2003) (finding § 332 of the Communications Act “lacks the extraordinary preemptive power necessary to convert Plaintiffs state law challenges to Defendant’s marketing and advertising practices into a federal claim.”). In Phillips v. AT & T Wireless, the court stated that “not all matters affecting wireless providers’ rates are preempted rate regulation under the FCA.” 2004 WL 1737385, 7 (S.D.Iowa July 29, 2004). Similarly, we find that not all matters affecting market entry are preempted market entry regulation.

[¶ 48.] We believe that Congress did not intend to prohibit states from imposing basic notice and record keeping requirements concerning the imposition of lawful taxation nor did it intend through the enactment of 47 USC 332(c)(3)(A) to prohibit economic and criminal sanctions for violation of state tax laws.

Delinquency in payment of state taxes

[¶ 49.] One of the provisions of the tax law, SDCL 10-33A-9, gives the Secretary of Revenue the discretion to refuse to issue a license if the applicant is delinquent in paying other taxes. It also allows the Secretary to require a bond or other security as a condition to staying in business. It provides:

The secretary may refuse to issue a telecommunications gross receipts tax license to any person who is delinquent in payment of other taxes levied by the State of South Dakota. The secretary may also require an applicant to furnish to the state a bond, or other adequate security, as security for payment of any gross receipts tax that may become due, or require a bond or security as a condition precedent to remaining in business as a telecommunications company.

SDCL 10-33A-9. In addition, SDCL 10-33A-11 provides for the revocation of the license for failure to file a return or pay the tax; SDCL 10-33A-13 provides for reinstatement of a license; and SDCL 10-33A-17(5) & (6) criminalize operating without a license or after a license has been revoked or cancelled.

[¶ 50.] Whether these conditions to providing CMRS in South Dakota constitute the regulation of market entry is a much closer question. While the prohibition of state regulation of market entry is not ambiguous, what constitutes such regulation and what falls within the “other terms and conditions” exception is not so obvious. Initially we point out that these laws do not prevent any entity from entering the South Dakota market, but only prohibit those that are already in the South Dakota market and have not paid their taxes from continuing to do business within the State as a CMRS provider. Only those businesses that refuse or otherwise fail to pay their South Dakota taxes will be subject to the sanction. We are not convinced that the application of these statutes is the regulation of market entry anticipated and prohibited by the Communications Act. Further, the purpose of these delinquency provisions is to aid in the enforcement of valid state taxes and not to regulate market entry. Therefore, because the delinquency provisions do not impose barriers to “entry” but impose requirements for continued operations, and because the delinquency provisions are not “regulations” as intended or contemplated by Congress, and because such provisions may even be included under the “other terms and conditions” exception to § 332(c)(3)(A), we find that they are not preempted by 47 USC § 332(c)(3)(A).

[¶ 51.] Accepting Verizon’s position, a state would be allowed to impose certain regulations, conditions, and requirements (including taxes) on telecommunications service providers, yet states would not be allowed to sanction such providers or prohibit them from operating within their boundaries when they refuse to comply with the requirements. It seems a tenuous position to assert that the intent of Congress was to allow regulation and taxation while completely prohibiting the most obvious and effective sanctions for violation of these valid state law mandates.

[¶ 52.] Since we have determined that the various provisions within SDCL Chapter 10-33A are not preempted by federal law, we need not reach the issue of the separability of any of these provisions.

[¶ 53.] The trial court is reversed as to Issue 1, reversed in part as to Issue 2 and affirmed on Issue 3.

[¶ 54.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and ZINTER, Justices, concur.

      . The Governor's line item veto striking certain portions of the bill was over-ridden by the legislature.

      . The FCC has chosen to identify wireless telecommunications service as "commercial mobile radio service.” See 47 CFR § 20.3, 47 USC § 332(d)(1).

      . Counts V through VII of the original complaint are not at issue on appeal.

      . 47 USC § 332(c)(3)(A) states in relevant part: "no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services.” (Emphasis added).

      .47 USC § 253 states in relevant part: "No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.”

      . Viken relies on the following language from the case:
      The State is immune from suit unless it consents. The legislature may designate "in what manner and in what courts suits may be brought against the state." SD Const art III, § 27. The State may also waive sovereign immunity by legislative enactment identifying the conditions under which lawsuits of a specified type would be permitted. The State did not consent to be sued in this case. Therefore, the trial court did not have jurisdiction to enter declaratory relief in favor of the county.

        Pennington County v. State ex rel. Unified Judicial System, 2002 SD 31, ¶ 14, 641 N.W.2d 127, 131 (internal citations and quotations omitted).

      . The statute in question was nearly identical to SDCL 10-27-1, which prohibits the use of injunctions "to restrain or delay the collection of any tax” and limits the remedy for wrongfully collected taxes to "payment under protest and an action to recover, as provided in SDCL 10-27-2.”

      . Interestingly, after here claiming the provisions are unnecessary, in Verizon’s later argument on separability it submits that without these provisions "the remaining sections will not be able to stand by themselves.”

      . Currently the application requires an applicant to provide the following: (1) name; (2) address; (3) phone number; (4) contact person; (5) South Dakota Sales Tax Permit Number; and (6) a business description.

      . Although 47 USC § 332(c)(3)(A) was enacted as part of the Omnibus Budget Reconciliation Act of 1993, the parties and much of the caselaw refer to it only as part of the Communications Act of 1934, without mention of the Omnibus Budget Reconciliation Act. For this reason, we refrain from any further reference to the Omnibus Budget Reconciliation Act and will address § 332(c)(3)(A) as part of the Communications Act, which it amended.

      . A House of Representatives report stated:
      It is the intent of the Committee that the states still would be able to regulate the terms and conditions of these services. By terms and conditions, the Committee intends to include such matters as customer billing information and practices and billing disputes and other consumer protection matters; facilities siting issues (e.g.zoning); transfers of control; the bundling of services and equipment; and the requirement that carriers make capacity available on a wholesale basis or such other matters as fall within a state’s lawful authority. This list is intended to be illustrative only and not meant to preclude other matters generally understood to fall under "terms and conditions.”
      H.R.Rep. No. 103-111 (1993), reprinted in 1993 USCCAN 378, 588.

      . Verizon’s assertion that the statutes give the secretary authority to promulgate rules that would constitute market entry regulation in violation of federal law is incorrect. "[W]e presume the Legislature intended to enact a valid statute, and where a statute can be construed so as not to violate the constitution, we will adopt such a construction.” State v. Martin, 2003 SD 153, ¶ 26, 674 N.W.2d 291, 300 (citation and quotations omitted). Since the Legislature does not have authority to regulate market entry of CMRS providers, it follows that it did not delegate such authority to the Secretary of Revenue and Regulation, nor did it grant authority to promulgate any other illegal rules.

      . Concerning the bonding requirements found in SDCL Chapter 10-33A, a CMRS provider is subject to the possibility of a bonding requirement only if the provider is delinquent in South Dakota taxes, or if the responsible corporate officer elects not to be personally liable for failure to file returns or pay the tax due. See SDCL 10-33A-9, -18. In such cases, without the bonding option the delinquent provider would be unavoidably prohibited from continuing operations within the state and the responsible officers could not escape personal liability. The bonding option gives providers an opportunity to continue to operate despite the delinquency and also allows officers to avoid personal liability. In this respect, the bonding options remove rather than impose barriers.


source: Caselaw Access Project

license: Public Domain

text:
    2005 SD 26
    Rita M. TIBBITTS and Alwin R. Tibbitts, Plaintiffs and Appellees, v. ANTHEM HOLDINGS CORPORATION a Colorado corporation, Defendant and Appellant.
    No. 23148.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 10, 2005.
    Decided Feb. 23, 2005.

      Frank A. Bettmann of Finch, Bettmann, Maks & Hogue, Rapid City, South Dakota, Attorneys for appellee, R.M. Tibbitts.
    Kenneth R. Dewell of Johnson and Eies-land, Rapid City, South Dakota, Attorneys for appellee, A.R. Tibbitts.
    James W. Olson of Wilson, Olson & Nash, Rapid City, South Dakota, Attorneys for defendant and appellant.
   MEIERHENRY, Justice.

[¶ 1.] This is an appeal from a judgment to quiet title in abandoned highway land to Rita and Alwin Tibbitts (Tibbitts). We affirm in result.

FACTS

[¶ 2.] In January of 1980, the State of South Dakota Department of Transportation (DOT) formally abandoned a portion of an old highway in Pennington County and declared that any rights reverted to the former owner, his heirs or assigns. The DOT had platted the portion of the road at issue a few weeks prior to the abandonment. The plat split the highway land into two equal lots divided by the road’s center line. The lots were platted as Lot W and Lot W-l. Lot W is made up of the northern portion of the abandoned road and is adjacent to Lot 1 (Lot A), which is owned by Tibbitts. Lot W-l is made up of the southern portion of the abandoned road and is adjacent to Tract 2, which is owned by Anthem Holdings Corporation (Anthem). The parties dispute ownership of the two lots after the State’s abandonment.

[¶ 3.] Despite the highway being abandoned in 1980, the issue of the ownership did not arise until June of 2000, when Tibbitts conducted a survey of their property. The survey showed that they had placed some of their improvements on Lot W and some pavement on Lot W-l. The Defendant, Anthem Holdings, gave Tib-bitts a notice of wrongful possession of Lots W and W-l. Tibbitts denied Anthem’s claim and on September 11, 2001, commenced this lawsuit to quiet title. Tib-bitts claimed ownership of Lot W. Anthem counterclaimed to quiet title of both Lots W and W-l in its favor. The trial court found that the highway property reverted to the owners of the adjacent lots. Accordingly, the trial court ruled that one-half belonged to Tibbitts (Lot W), and one-half belonged to Anthem (Lot W-l). Anthem appeals, claiming all of the property should have reverted to it.

ISSUE

Whether the trial court erred in determining that the abandoned highway right of way reverted to the adjoining property owners.

STANDARD OF REVIEW

[¶ 4.] The trial court decided this case on stipulated facts, exhibits and briefs. Our resolution of the case turns upon the interpretation of contracts and the application of law. Interpretation of contracts is a question of law, reviewed de novo. Prunty Const., Inc. v. City of Canistota, 2004 SD 78, ¶ 10, 682 N.W.2d 749, 753. We review a trial court’s conclusions of law de novo. Parmely v. Hildebrand, 2001 SD 83, ¶ 6, 630 N.W.2d 509, 512.

DECISION

[¶ 5.] In order to decide who owns Lots W and W-l, it is necessary to trace the history of their ownership. Prior to 1929 what are now Tract 2, Lot A, Lot W and Lot W-l were all part of one large piece of land owned by Charles Snyder. In 1929, Charles Snyder deeded a strip of this land to Pennington County for a highway right of way. Additional land was granted by another deed executed in 1933. Although “deeds” were used to convey the land, the deeds stated they were for a “right of way.” Thus, our initial inquiry is whether the deeds passed title of the land to the County in fee or only transferred an easement. The trial court concluded that the land was conveyed in fee. The trial court erred in this conclusion.

[¶ 6.] Since the County purchased its interest in the land, as opposed to condemning the land, we look to the language of the deeds from the landowner to the County to determine if the land was transferred in fee. The original deeds to the County specifically state that the conveyances were for rights of way. The 1929 deed conveyed “[a] strip of land, 80 feet wide for highway right of way situated in the Wisconsin Placer.... ” The 1933 deed conveyed “[rjight of way for the Hill City-Rapid City Highway across the Wisconsin Placer.... ” Further supporting an easement conveyance is a 1930 map. The map depicts the land the County intended to acquire for highway purposes. This map includes the land at issue here and is conspicuously titled a “RIGHT OF WAY MAP.”

[¶ 7.] We have stated that “[w]here the term ‘right of way’ is used in a deed it usually indicates that only an easement or right of passage is being conveyed or reserved.” Northwest Realty Co. v. Jacobs, 273 N.W.2d 141, 144 (S.D.1978); see also Pluimer v. City of Belle Fourche, 1996 SD 65, ¶¶ 14-17, 549 N.W.2d 202, 205-06 (finding that the State held only an easement for highway purposes); Cuka v. State, 80 S.D. 232, 237, 122 N.W.2d 83, 85 (1963) (stating that where a warranty deed was used to convey property to the State for a highway, “[a]n easement was all the state could acquire regardless of the form of the instrument of conveyance”). In this case, the deeds conveying an interest in the land to the County conveyed only rights of way, and title to the land remained in the grant- or, Charles Snyder.

[¶8.] Having determined that title to the land remained with the grantor, we must now track the chain of title to the present day. At the time of the conveyance of the rights of way, Charles Snyder was the sole owner of the land over which the rights of way passed and all land adjacent to the rights of way. In 1937 Snyder platted and sold Lot A, a portion of the land adjacent to the rights of way. The deed for Lot A is silent as to whether any portion of the adjacent right of way land at issue here is included in the conveyance. South Dakota law provides that “[a] transfer of land bounded by a highway passes the title of the person whose estate is transferred to the soil of the highway in front, to the center thereof, unless a different intent appears from the grant.” SDCL 43-25-29. Applying this statute we have said: “The conveyance of property fronting on a street or highway is presumed to carry title to the center of the street or highway, ‘unless the fee in the street is expressly reserved in the conveyance.’ ” Pluimer, 1996 SD 65, ¶ 13, 549 N.W.2d at 205 (quoting Holida v. Chicago & N.W. Transp. Co., 398 N.W.2d 742, 744 (S.D.1986)) (additional quotations and citations omitted).

[¶ 9.] Anthem contends that the fee in the street was expressly reserved by virtue of the description of Lot A contained in the deed of conveyance. This description provides a boundary line that is located at the edge of the adjacent right of way property, rather than at the center of the right of way property. Anthem purports that since the boundary was defined as the edge of the right of way property, the right of way property was reserved. We do not agree. We examined an analogous situation in Sweatman v. Bathrick, 17 S.D. 138, 95 N.W. 422 (1903). In Sweatman, the boundary line for a plat was defined as “running northerly along Sherman street 17 feet more or less.” Id. at 423. We concluded that even though the description indicated the lot line ran “along Sherman street,” it actually included the property to the center line of the street. Id. at 427. We reviewed and considered other states’ conflicting caselaw on whether a reversion in an adjacent street is conveyed along with the property when the boundary is described as “the edge of the street.” Ultimately, this Court sided with the jurisdictions that found the distinction between a boundary description “bounded by a highway,” as opposed to “bounded by the edge of a highway” too technical. Id. A better rule, we concluded, is to require the fee in the adjoining highway to be “expressly reserved” in the conveyance. Id.

[¶ 10.] This same principle applies to the facts of this case. The description of the conveyed land provided a boundary line for the property at the edge of the adjacent highway, not at the middle of the highway. No mention of the adjacent highway right of way is made in the conveyance. Nevertheless, as we found in Sweatman, failure to include the highway right of way in a boundary description does not constitute an “express reservation” of the right of way property. Since the original conveyance of Lot A did not expressly reserve the fee in the street, the conveyance transferred title to the center of the highway. Consequently, the conveyance of Lot A included what is now Lot W.

[¶ 11.] Through the years Lot A, which includes Lot W, changed ownership many times with Tibbitts eventually acquiring title in 1991. None of the prior grantors of Lot A expressly reserved fee in the street. As a result, all of the various conveyances of Lot A passed title to “the soil of the highway in front, to the center thereof.” SDCL 43-25-29. By law, the highway easement platted as Lot W reverted to the owner of the land when it was abandoned by the State in 1980. South Dakota law sets forth the reversion as follows:

If the Department of Transportation or any board of county commissioners determines that any lands ... acquired as public use easements are no longer required for use in constructing or repairing public highways, the Transportation Commission or the board shall adopt a resolution to that effect and such lands shall revert to their former owner or his assigns.

SDCL 31-19-60. Thus, the rights in Lot W reverted to Tibbitts as the assignees of the original owner of those rights.

[¶ 12.] Much of Anthem’s argument focuses on plats that were executed long after the 1937 conveyance of Lot A. These later plats included all of the abandoned highway right of way as part of Tract 2, which is now owned by Anthem. However, we have determined that the 1937 conveyance of Lot A included the adjacent highway right of way land because the highway land was not expressly reserved by the grantor of Lot A. Any discrepancies or mistakes in later plats are irrelevant to the true and rightful ownership of the highway right of way land. What is now Lot W was conveyed as part of Lot A and is included in Lot A. Later plats that erroneously included Lot W as part of Tract 2 do not have the effect of legally transferring ownership of the property.

[¶ 13.] The trial court determined that the State held fee title to Lots W and W-l; and when the land was abandoned by the State, it reverted to the adjacent landowners pursuant to SDCL 43-16-3. Although the trial court was incorrect as to the property interest held by the State, the ultimate decision of the trial court was correct.

[¶ 14.] The trial court is affirmed.

[¶ 15.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and ZINTER, Justices, concur.

      . Had the County taken the land by condemnation, the South Dakota Constitution, Article VI, § 13 would have required the fee to remain with the landowner. The Constitutional provision provides in relevant part: "The fee of land taken for railroad tracks or other highways shall remain in such owners, subject to the use for which it was taken.” Id.

      . The pertinent definition of "right-of-way” states: "The right to build and operate a railway line or a highway on land belonging to another, or the land so used.” Black's Law Dictionary 1326 (7th ed 1999).

      . Although the rights of way were originally granted to the County and not the State, SDCL 31-4-2 was subsequently enacted. It states:
      All rights-of-way of the state trunk highway system, together with all appurtenance thereto, the right or interest in or to which was or is in any county shall be and the same are hereby transferred to and vested in the state of South Dakota for highway purposes.

      . The deed states:
      Lot "A" of Wisconsin Placer No. 910 in the NW1/4 of Sec. 22, Twp. 1 S. Range 5 East, Being a portion of the Wisconsin Placer enclosed by Highway 85 Alternate and the Right & Left branches of the Keystone-Rapid City road described as follows: Beginning at Cor. 1 from which the Center of Sec. 22 T. 1 S.R. 5 E. bears S 44 25' E 1508 ft. distant; Thence N.E. around a 10 curve to the Right 188 Ft. to Cor. 2 which is the intersection of the south side of Highway No. 85 Alternate with the Rapid City-Keystone Cut-off; Thence S. 65 05' W. 242 ft. along south side Highway 85 Alternate to Cor. 3; Thence S. 65 30' E. 128 Ft. along line 10-11 of Wisconsin to Cor. No. 1 and place of beginning enclosing .28 acre, more or less, according to plat filed in office of Register of Deeds of Pennington County, South Dakota.
      (We note that the border at the south side of Highway 85 referenced in the deed is not the border at issue in this case; rather, it is the border around the 10 curve that is at issue.)

      . SDCL 43-16-3 provides: "An owner of land bounded by a road or street is presumed to own to the center of the way, but the contrary may be shown.”


author: ZINTER, Justice.

text:
    2005 SD 31
    STATE of South Dakota, Plaintiff and Appellee, v. Lance BREKKE, d/b/a B First Builders, Defendant and Appellant.
    No. 23313.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 10, 2005.
    Decided March 2, 2005.
    Lawrence E. Long, Attorney General, Jeffery J. Tronvold, Assistant Attorney General, Pierre, SD, for plaintiff and ap-pellee.
    Jason Adams, Minnehaha County Public Defender, Sioux Falls, SD, for defendant and appellant.
   ZINTER, Justice.

[¶ 1.] Lance Brekke was convicted of ten counts of failure to file a contractor’s excise tax return. Brekke appeals the denial of his motion for a judgment of acquittal, arguing that the offenses proven at trial were not the offenses alleged in the information. Brekke also appeals the trial court’s jury instructions that instructed on elements of offenses that were not alleged in the information. We reverse and remand for entry of the judgment of acquittal.

Facts and Procedural History

[¶2.] Lance Brekke applied for, and was issued, a contractor’s excise tax license by the South Dakota Department of Revenue. The statute at issue required both license holder’s and “eontractor[’s] whose receipts are subject to contractor’s excise tax in this state during the periods specified” to file excise tax returns. Filing was required for both types of individuals in a specified manner that depended upon the amount of the person’s excise “tax liability.” See SDCL 10-46A-1.6.

[¶ 3.] Brekke filed his first tax return for the July — December 1996 reporting period; however, he failed to file any returns from January, 1997, through May, 1998. In May, 1998, an employee of the Department contacted Brekke about the failure to file returns. Brekke subsequently filed returns for 1997 and the first half of 1998. However, Brekke failed to file another tax return.

[¶ 4.] Between July, 1998, and January, 2000, the Department sent Brekke twenty-four notices that he had failed to file tax returns. After further contacts, Brekke scheduled a meeting with representatives of the Department. However, Brekke did not appear at the scheduled meeting, and he never rescheduled the appointment.

[¶ 5.] On February 21, 2003, a complaint was filed charging seven counts of failure to file a contractor’s excise tax return, and three counts of failure to file a contractor’s excise tax return two or more times within a twelve month period, in violation of SDCL 10-46A-1.6, 10-46A-13.1(4), and 10-46A-13.1(7). The first seven counts were misdemeanors and the last three counts were felonies. Brekke waived a preliminary hearing and the State filed an information.

[¶ 6.] The information referred to all three of the foregoing statutes. However, as previously mentioned, the operative statute (SDCL 10-46A-1.6) contained two offenses: one that required the “holder” of a license to file returns, and the other that required “contractors] whose receipts are subject to contractor’s excise tax in this state” to file returns. This information only alleged the second alternative; i.e., that Brekke was a contractor who had gross receipts subject to the tax. The information specifically alleged that Brekke had committed “the public offense of Failure to File Contractor’s Excise Tax Return ... in that he did then and there unlawfully being a contractor whose gross receipts were subject to contractor’s excise tax fail to file a contractor’s excise tax return.... ” (Emphasis added).

[¶ 7.] However, the State did not prove that allegation at trial. Instead, the State’s evidence was restricted to proof that Brekke was a license holder who failed to file excise tax returns. Consequently, Brekke moved for a judgment of acquittal at the close of the State’s case. Brekke pointed out that the State’s witnesses did not prove the elements of the offense with which he was charged. Brekke’s motion for judgment of acquittal was denied. Brekke also objected to the trial court’s jury instructions on the same grounds, and those objections were overruled.

[¶ 8.] Brekke was found guilty on all counts. He now appeals, raising the following issues:

1. Whether the trial court erred in refusing to grant the motion for judgment of acquittal; and
2. Whether the trial court erred in instructing the jury.

Decision and Analysis

Motion for Judgment of Acquittal

[¶ 9.] The motion for a judgment of acquittal was grounded on the allegation that the evidence was insufficient to support the offense charged. When determining the sufficiency of the evidence, “[t]he denial of a motion for judgment of acquittal presents a question of law, and thus our review is de novo.” State v. Disanto, 2004 SD 112, ¶ 14, 688 N.W.2d 201, 206.

[¶ 10.] In determining whether the evidence was sufficient to prove the offense alleged in the information, we first examine the relevant statutes. SDCL 10-46A-1.6 provides:

Any person who is the holder of a contractor’s excise tax license or is a contractor whose receipts are subject to contractor’s excise tax in this state during the periods specified by this section shall make a return and remittance to the Department of Revenue and Regulation on forms prescribed and furnished by the department in the-following manner:
(1) Any person whose tax liability is one thousand dollars or more annually, shall file the return and remit the tax on or before the twentieth day of the month following each monthly period;
(2) Any person whose tax liability is less than one thousand dollars annually, shall file the return and remit the tax on or before the last day of the month following each two-month period;
(3) Any person whose tax liability is one thousand dollars or more annually and who remits the tax by electronic transfer to the state, shall file the return by electronic means on or before the twenty-third day of the month following each monthly period and remit the tax on or before the second to the last day of the month following each monthly period.
The secretary of revenue and regulation may grant an extension of not more than five days for filing a return and remittance. Unless an extension is granted, the person with the tax liability shall pay the penalty or interest as provided by § 10-59-6 if a return or remittance is not made on time.

(Emphasis added). SDCL 10-46A-13.1(4) and (7) then impose a criminal penalty for the failure to comply with SDCL 10-46A-1.6.

[¶ 11.] On appeal, Brekke correctly points out that under this statutory scheme, the State had the option of charging that Brekke violated SDCL 10-46A-1.6 because he was either a license holder or because he was a person who had gross receipts subject to the tax. However, while the State elected to charge Brekke as a contractor who had gross receipts subject to the tax, the State did not prove that allegation.

[¶ 12.] The State concedes that “there are two ways a person [in] business could be subject to the filing requirements,” and that “[t]he State did not accurately set forth the first element for the ten counts in the information.” Nevertheless, the State argues that this was a “nonfatal defect” that was cured. The State relies on the rule that a defective information may be cured “if the information sets forth the proper statute, the jury instructions set forth all the essential elements of the offense, and the State proves all the essential elements at trial.” State v. Stone, 467 N.W.2d 905, 907 (S.D.1991) (quoting State v. Swallow, 350 N.W.2d 606, 609 (S.D.1984); State v. Lachowitzer, 314 N.W.2d 307 (S.D.1982); State v. Larson, 294 N.W.2d 801 (S.D.1980)).

[¶ 13.] In this case, the information set forth the proper statutes, alleging that Brekke violated SDCL 10-46A-1.6, 10-46A-13.1(4) and 10-46A-13.1(7). The question is whether the jury instructions and the State’s proof established all of the essential elements of the offense. Those elements, as set forth in SDCL 10-46A-1.6, require proof that:

(1)The person is the holder of a contractor’s excise tax license or is a contractor whose receipts were subject to the contractor’s excise tax during the specified period;
(2)The person failed to make a tax return and remit it to the Department;
(3)The person failed to do so in the following manner: (a) within the 20th day of the month following each monthly period if their tax liability is $1000 or more annually; (b) on or before the last day of each two-month period if their tax liability is less than $1000 annually; or (c) before the 23rd day of the month if their tax liability is $1000 or more annually and they remit the tax by electronic transfer.

[¶ 14.] Assuming without deciding that the State’s proof and the jury instructions were adequate with respect to element (1) and (2), we observe that there was no proof or jury instruction with respect to element (3), requiring filing in a “manner” that was dependent upon the amount of the person’s “tax liability.” Proof of some tax liability was required because SDCL 10-46A-1.6 provides that both license holders and contractor’s “shall make a return ... to the Department in the following manner....” The statute then goes on to specify that manner by listing three scenarios in which reports must be filed. However, each scenario only requires a return for a person who’s “tax liability is” within certain ranges, and a person who owes no tax has no “tax liability.” Therefore, to satisfy element (3), the State was required to prove, and the court should have instructed, that Brekke had to have had some tax liability.

[¶ 15.] The Legislature’s specific language confirms this conclusion. First, the statutory language requiring that the tax liability “is” within certain ranges suggests that the filing requirement is only imposed if a person has some tax liability. Indeed, even SDCL 10-46A-1.6(2), which requires filing for persons with less than $1000 tax liability, contemplates some tax liability. That subdivision contemplates some tax liability because it requires that the taxpayer shall not only file the return, but also “remit the tax.” (Emphasis added.) Second, the last paragraph of the statute confirms that some tax liability was intended because it specifically provides that “the person with the tax liability” is further obligated to pay interest and penalties for delinquent returns. Id. (Emphasis added.) Finally, it must be observed that the Legislature could not have intended a requirement of filing without any tax liability because the statute would then require contractors, who were no longer engaged in any business, to forever file returns merely because of their status as license holders. We do not believe that the Legislature intended such an absurd result.

[¶ 16.] We therefore conclude that because the jury instructions did not set forth, and the State did not prove, Brekke’s tax liability under element (3) of SDCL 10-46A-1.6, the State’s concededly defective information was not cured. Because the defective information was not cured, Brekke’s motion for a judgment of acquittal should have been granted, and we need not further discuss the jury instruction issue.

[¶ 17.] Reversed and remanded for entry of judgment of acquittal.

[¶ 18.] GILBERTSON, Chief Justice, and SABERS, KONENKAMP, and MEIERHENRY, Justices, concur.

      . The Secretary of the Department of Revenue also had authority under SDCL 10-46A-1.7 to alter the times for filing. The Secretary was authorized to "require or allow a return and remittance to be filed on a monthly, bimonthly, semiannual, or annual basis.” Id.

      . SDCL 10-46A-13.1(4) provides in relevant part:
      Any person who:
      (4) Fails to file a return required by this chapter within sixty days from the date the return is due is guilty of a Class 1 misdemeanor;

      . SDCL 10-46A-13.1(7) provides in relevant part:
      Any person who:
      (7) Violates either subdivision (2) or subdivision (4) of this section two or more times in any twelve-month period is guilty of a Class 6 felony;

      . The jury instructions indicated that two laws required a contractor, who had been issued an excise tax license, to file a contractor's excise tax return with the Department. The trial court did not instruct on the element that Brekke had gross receipts subject to the tax during the statutory period. It also did not instruct that filing was required in the "manner” set forth in the statute that was dependant upon a person's "tax liability”.
      Specifically, Jury instruction number 9 only stated, in pertinent part:
      The elements of the crime of failing to file a contractor's excise tax form are, that, at the time and place alleged:
      1. The defendant was the holder of a contractor’s excise tax license; and
      2. The defendant failed to file a return for the reporting period on the forms prescribed by the Department of Revenue within thirty days from the date the return was due.
      Jury instruction number 13 stated, in part: The crimes involved in this proceeding all involve the failure of the defendant, as a holder of the excise tax license, to file the excise tax return form as required. These proceedings are not concerned with whether or not the defendant had an obligation to pay any excise taxes or whether any such taxes were even due.
      It is also immaterial to these charges whether the defendant received any payments as a contractor or subcontractor. These charges involve the non-filing of the required form, not whether any payments in whatever form or method were received by the defendant in one capacity or another.

      . The State's evidence was limited to proving Brekke’s status as a license holder who failed to file a return. The States first witness, Bretta Bullion, testified that Brekke had applied for and was issued a contractor’s excise tax license. Bullion also testified that she had helped Brekke prepare returns in the past. Shawn Swanson then testified that he had contacted Brekke about his failure to file excise tax returns, that the State had not received returns from the second half of 1998 through April of 2002, and that Brekke had missed his appointment. The State's last witness, Richard Sprenger, testified that after the complaint had been filed, Brekke came to the Department to file his tax returns. Sprenger further testified that no return, with dates corresponding to the counts listed in the information had ever been filed. However, no witness ever testified that Brekke had receipts subject to the excise tax during any of the relevant reporting periods or that he had any tax liability.

      . The adequacy of the State's proof with respect to element (1) is subject to argument as to whether the State was required to prove the alternative offense it alleged in the information. Although the State clearly proved its allegation that Brekke was a license holder, that proof did not necessarily establish the charged offense that Brekke was a contractor who had receipts subject to the tax during the relevant periods. Indeed, Brekke may not have done any work during the statutory period, or he may have performed work that was not subject to the excise tax. Although not offered to the jury, there is evidence in the record (used in support of a State motion in limine) that reflects that some of Brekke's prior returns indicated no gross receipts subject to the tax and therefore no tax liability.


author: ERICKSON, Circuit Judge.

text:
    2005 SD 28
    Arley RANCOUR and Alamarie Rancour, Plaintiffs and Appellants, v. GOLDEN REWARD MINING COMPANY, L.P., Defendant and Appellee.
    No. 23211.
    Supreme Court of South Dakota.
    Considered on Briefs Jan. 10, 2005.
    Decided March 2, 2005.

      John R. Frederickson, Thomas E. Adams, Deadwood, South Dakota, Karen Adams, Legal Intern, Attorneys for plaintiffs and appellants.
    Gary D. Jensen of Beardsley, Jensen & VonWald, Rapid City, South Dakota, Attorney for defendant and appellee.
   ERICKSON, Circuit Judge.

[¶ 1.] Landowners near Lead, South Dakota, sought a judgment declaring that they enjoy a prescriptive easement over roadways on property owned by a mining company. The trial court found in favor of the mining company, holding that the landowners’ use of the roadways was permissive. We affirm.

FACTS

[¶ 2.] Leaving Lead, South Dakota, southwest on U.S. 85/14A a driver descends a long winding hill past various businesses and a portion of the Mickelson Trail. Approximately two miles down Highway 85 on the east side of the road, in an area commonly known as Ruby Flats, Arley and Alamarie Rancour (Rancours) purchased 147 acres of undeveloped property. This is an area of old mining claims nestled below Sugarloaf Mountain. For over one hundred years the primary access to this property has been from two roads — first, what is now designated Old Abandoned Highway 85 and, secondly, over what is known as the Powder House Road (collectively Roads). The Roads traverse property owned by Golden Reward Mining Company (Golden Reward) before crossing over the Rancour property. Powder House Road continues across the Rancour property and then back onto property owned by Golden Reward.

[¶ 3.] The Roads are private, generally not maintained, partly asphalt and partly gravel roadbeds. Except for these old roadbeds, three vacant powder houses and an idle gravel pit, the parties agree the property is forested and undeveloped. Over the years the Roads have been used by the general public for a variety of recreational uses, including snowmobiling, four-wheeling, hunting, and mountain biking. The public has traveled the Roads through both the Golden Reward and Rancour properties without objection from either party.

[¶ 4.] In 1999 Arley Rancour met with Jim Lessard, Golden Reward’s Land and Exploration Manager, to inform him that he intended to commence logging on his property, which meant he would be driving logging trucks on the Roads. Rancour testified that Lessard told him that if he intended to use the Roads he must fix a gate at the nearby gravel pit. Lessard remembers this exchange differently. While he does not indicate his response, Lessard testified he went to Golden Reward’s General Manager and suggested they ask Rancours to fix the gate in exchange for damages incurred on the Roads from logging activity. Rancours rejected this request and instead brought this action seeking a judgment declaring they held a prescriptive easement over the Roads.

STANDARD OF REVIEW

[¶ 5.] The trial court’s findings of fact will not be set aside unless clearly erroneous. Kokesh v. Running, 2002 SD 126, ¶ 10, 652 N.W.2d 790, 793. “Clear error is shown only when, after a review of all the evidence, ‘we are left with a definite and firm conviction that a mistake has been made.’ ” Id. (citing New Era Mining Co. v. Dakota Placers, Inc., 1999 SD 153, ¶ 7, 603 N.W.2d 202, 204). “The trial court’s findings of fact are presumed correct and we defer to those findings unless the evidence clearly preponderates against them.” Id. (citing Lewis v. Moorhead, 522 N.W.2d 1, 3 (S.D.1994)). “Conclusions of law are reviewed under a de novo standard, giving no deference to the circuit court’s conclusions of law.” Id. (citing Sherburn v. Patterson Farms, Inc., 1999 SD 47, ¶ 4, 593 N.W.2d 414, 416).

ISSUES

.Whether the trial court erred in determining Rancours’ use of. the roadway was permissive.

Whether the trial court erred in determining Rancours’ use of the roadway was not exclusive.

ANALYSIS

ISSUE ONE

[¶ 6.] Whether the trial court erred in determining Rancours’ use of the roadway was permissive.

[¶ 7.] Under South Dakota law a prescriptive easement arises “from use of another’s land adverse to the owner of that land or that owner’s interest in the land against which a servitude is sought.” Thompson v. E.I.G. Palace Mall, LLC, 2003 SD 12, ¶ 6, 657 N.W.2d 300, 303. The claimant of a prescriptive easement must meet a two pronged test by clear and convincing evidence: First, the claimant must show “an open, continued, and unmolested use of the land in the possession of another for the statutory period ... of 20 years.” Id. Second, the claimant must prove that the use of the property is “in a manner that is hostile or adverse to the owner.” Id. ¶ 7. Golden Reward concedes Rancours used the Roads for ingress and egress to their property for over twenty-one years. Therefore, Rancours satisfy the first prong of this test and we turn to the second prong.

[¶ 8.] The hostile or adverse requirement under South Dakota law requires that the claimant’s use be to the “physical exclusion of all others under a claim of right.” Id. Generally, a prima facie showing of open and continuous use of the land owner’s property with the owner’s knowledge creates a presumption that the claimant’s use is adverse and under a claim of right. Vivian Scott Trust v. Parker, 2004 SD 105, ¶ 6, 687 N.W.2d 731, 734. Even when a prescriptive easement is presumed, the land owner may rebut the presumption of adverse possession with proof that the use was by permission or not under a claim of right. Id.

[¶ 9.] However, “when one claims an easement by prescription over wild or unenclosed lands of another, mere use of the way for the required time is not generally sufficient to give rise to a presumption that the use is adverse.” Cox v. Cox, 84 Idaho 513, 373 P.2d 929, 934 (1962). The passageway over unenclosed and unimproved land is deemed permissive. Id. The reason for this rule is that it “assumes the owner of such land in many instances will not be in position to readily detect or prevent others from crossing over his land, and, even if he did, he might not enter any objection because of a desire to accommodate others and because such usage resulted in no immediate damage to him.” Id. Additionally, “in such instances the landowner would probably have no reason to think the users of the passageway were attempting to acquire any adverse right .” Id. While Rancours made a prima facie showing concerning open, continued and unmolested use of Golden Reward’s property, the trial court found that the lands were wild and therefore any use was presumed to be permissive and that Rancours had failed to rebut the presumption of permissiveness. This finding was not clearly erroneous.

[¶ 10.] In this case, both Rancours and Golden Reward operated for many years under the mistaken belief that Rancours and the general public had a right to traverse the Roads. Karl Emanuel, Golden Reward’s former Chief Geologist, testified that Golden Reward knew the Roads had been used for the last 110 years by the public. He also indicated that abutting landowners had used the property for access over that same time frame for the same purpose. More importantly, Lessard testified that while permission was never expressly given, it was Golden Reward’s policy that the general public could use the Roads because it was too difficult and expensive to police the activity, no damage was being done and given the nature of the public use it was good public relations to allow the access to continue. Therefore, Rancours have failed to rebut the presumption of permissive use.

ISSUE TWO

[¶ 11.] Whether the trial court erred in determining Rancours’ use of the roadway was not exclusive or adverse.

[¶ 12.] The trial court found Rancours’ use of the property was not sufficient to give Golden Reward notice that the use was adverse to its interests and that Rancours’ use did not physically exclude all others from the Roads. The record established that Rancours’ property remained undeveloped. Moreover, Ranc-ours entered the property on average once a month, primarily for recreational purposes and then in the winter to harvest Christmas trees for sale. Under the circumstances of this case, Rancours failed to show that their use of the Roads was distinguishable from the uses made by the general public and was sufficient to put Golden Reward on notice that Rancours’ use was different than that of the general public. Thus, the trial court correctly concluded that Rancours failed to show that their use was to the “physical exclusion of all others under a claim of right.” Thompson, 2003 SD 12, ¶ 7, 657 N.W.2d at 304.

[¶ 13.] Affirmed.

[¶ 14.] ERICKSON, Circuit Judge, for SABERS, Justice, disqualified.

[¶ 15.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER and MEIERHENRY, Justices, concur.


author: /s/Helen M. Meyer Associate Justice

text:
    Kurt G. KUEHN, Respondent, v. ST. LOUIS COUNTY, and St. Louis County/Self-Insured, Relators.
    No. A04-2378.
    Supreme Court of Minnesota.
    March 30, 2005.
    Alan L. Mitchell, St. Louis County Attorney, Timothy 0. Lee, Asst. County Attorney, Duluth, MN, for Relators.
    Michael J. Cuzzo, Cuzzo, Bradt & En-vall, PA, Duluth, MN, for Respondent.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed November 16, 2004, be, and the same is, affirmed without opinion. See Hoff v. Kempton, 317 N.W.2d 361, 366 (Minn.1982) (summary dispositions have no precedential value because they do not commit the court to any particular point of view, doing no more than establishing the law of the case).

Employee is awarded $1,200 in attorney fees.

BY THE COURT:

/s/Helen M. Meyer Associate Justice


author: /s/G. Barry Anderson Associate Justice

text:
    In re Petition for Disciplinary Action Against Daniel Francis JAMBOR, a Minnesota Attorney, Registration No. 229520.
    No. A04-1504.
    Supreme Court of Minnesota.
    April 1, 2005.
   ORDER

The Director of the Office of Lawyers Professional Responsibility has filed a petition for disciplinary action alleging that respondent Daniel Francis Jambor, who has been suspended from the practice of law since June 29, 2001, see In re Jambor, 627 N.W.2d 333 (Minn.2001), has committed additional professional misconduct warranting public discipline. The Director alleges that Jambor attempted to use an affidavit of service from a dismissed lawsuit to obtain a default judgment in a subsequent lawsuit in violation of Minn. R. Prof. Conduct 1.1, and falsely advised the district court that he had no evidence of the defendant’s residence, in violation of Minn. R. Prof. Conduct 3.3(a) and 8.4(d).

In a stipulation filed by the parties, respondent admitted his conduct violated the Rules of Professional Conduct and waived his rights under Rule 14, Rules on Lawyers Professional Responsibility (RLPR). The parties jointly recommended in the stipulation that the appropriate discipline is a six-month suspension under Rule 15, RLPR, and payment of $900 in costs under Rule 24, RLPR, with no waiver of the reinstatement hearing provided for in Rule 18, RLPR. The parties recommended that reinstatement be conditioned upon: (1) payment of costs in the amount of $900 pursuant to Rule 24(d), RLPR; (2) compliance with Rule 26, RLPR; (3) successful completion of the professional responsibility portion of the bar examination under Rule 18(e), RLPR; and (4) satisfaction of the continuing legal education requirements under Rule 18(e), RLPR. The parties further recommended that, upon reinstatement, respondent be placed on two years supervised probation subject to the conditions of probation set forth in In re Jambor, 598 N.W.2d 690 (Minn.1999).

On December 15, 2004, this court issued an order directing the parties to file briefs addressing why more severe discipline was not warranted and setting the matter on for oral argument. This court heard oral argument on the matter on March 8, 2005. This court concludes that the recommended discipline is appropriate and that respondent’s six-month suspension shall run retroactively from December 15, 2004, as requested by respondent at oral argument.

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that respondent Daniel Francis Jambor is suspended from the practice of law for six months, effective retroactively from December 15, 2004. The reinstatement hearing is not waived and is subject to the agreed-upon terms set forth above. Following reinstatement, respondent shall be placed on supervised probation for two years subject to the terms of probation set forth in In re Jambor, 598 N.W.2d 690. Respondent shall pay $900 in costs under Rule 24, RLPR.

BY THE COURT:

/s/G. Barry Anderson Associate Justice

BLATZ, C.J., took no part in the consideration or decision of this case.


author: /s/Sam Hanson Chief Justice

text:
    Jill R. VOSHAGE, Relator, v. STATE of Minnesota-MNSCU ST. UNIV.-WINONA, and Self-Insured, Respondents, Community Memorial Hospital, Blue Cross/Blue Shield & Blue Plus, Hartford Life, and Gunderson, Ltd., Intervenors.
    No. A04-2438.
    Supreme Court of Minnesota.
    April 4, 2005.
    Karl W. Sonneman, Sonneman & Sonne-man, Winona, MN, for Relator.
    Peter J. Pustorino, Stacy P. Bouman, Pustorino Tilton Parrington <& Lindquist, Minneapolis, MN, for Respondent.
   AMENDED ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed November 24, 2004, be, and the same is, affirmed without opinion. See Hoff v. Kempton, 317 N.W.2d 361, 366 (Minn.1982) (summary dispositions have no precedential value because they do not commit the court to any particular point of view, doing no more than establishing the law of the case).

BY THE COURT

/s/Sam Hanson Chief Justice