A North Dakota state trial court has ruled that the state’s anti-corporate farming law (N.D. Cent. Code §10-06.1-1 et seq.) does not violate the Dormant Commerce Clause and is, therefore, constitutional. A non-profit conservation group, Crosslands, Inc., was organized with the purpose of acquiring farmland so as to convert it to habitat for wildfowl and other wildlife. Crossroads acquired various tracts of agricultural land without following state law which required it to receive the governor’s consent before purchasing agricultural land. In 2003,Crosslands bought 949 acres in Griggs County and later bought another 480 acres in Cavalier County without receiving the Governor’s consent. The state Attorney General sued to enforce the statute against Crosslands in 2005, and during the litigation on the matter, learned that Crosslands had acquired 320 acres in Ward County in 1985.
Crosslands argued that the state’s corporate farming law was unconstitutional because it discriminated against interstate commerce. But, the court disagreed, noting that the state anti-corporate farming law is not discriminatory because it applies to all corporations, whether they are North Dakota corporations or corporations from other states. The court also determined that the North Dakota anti-corporate farming law was unlike similar South Dakota and Nebraska laws that have been struck down in recent years by federal courts.
While the court upheld the law as constitutional, the court did not require Crosslands to divest itself of all of the land that it had acquired. Crosslands was allowed to retain title to the Ward County land because it had acquired the land as a gift. Under the anti-corporate farming law, conservation groups (such as Crosslands) are only prohibited from acquiring land by purchase. However, Crosslands was required to divest itself of all of the Cavalier County land, but could keep about half of the Griggs County land because some of it was not “agricultural land” covered by the law – it was wetlands and wetlands buffer areas (buffer areas are exempt as land that is necessary to complement the use of adjoining non-agricultural land). Stenehjem v. Crosslands, Inc., No. 20-05-C-002 (Griggs County Dist. Ct. Jun. 5, 2009).