Indian Nations Law Update - December 2011December 12, 2011
Supreme Court Agrees to Review Important Fee-to-Trust Decision
On Monday, December 12, 2011, the Supreme Court granted the petitions of the Secretary of the Interior (Secretary) and the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians (Tribe) to review the D.C. Circuit Court of Appeals decision in Patchak v. Salazar, 632 F.3d 702 (D.C. Cir. 2011). The Secretary, pursuant to his authority under the Indian Reorganization Act (IRA), had accepted 147 acres of fee land in Wayland Township, Michigan, into trust on behalf of the Tribe in 2009 for gaming purposes. Patchak, a neighboring land owner, sued under the Administrative Procedures Act, challenging the Secretary's decision on the ground that the Tribe was not under federal jurisdiction as of the date the IRA was enacted, as required pursuant to the Supreme Court's 2009 decision in Carcieri v. Salazar. The district court dismissed but the D.C. Circuit court reversed and reinstated Patchak's suit, holding that the negative effects of the proposed casino alleged by Patchak (loss of the area's rural character, diminished property value, loss of enjoyment of the agricultural land surrounding the casino site) gave him standing to assert the limitations on the Secretary's authority under the IRA. The Tribe had argued that Patchak's suit was barred, citing provisions of the Quiet Title Act, which waives the immunity of the United States to permit suits challenging the government's title but explicitly states that such waiver does not apply to tribal trust lands. The D.C. Circuit, disagreeing with previous decisions of other federal appellate courts, held that the tribal lands exception did not apply because Patchak was not asserting his own title in the land.
The questions presented in the Secretary's petition are (1) "Whether 5 U.S.C. § 702 [APA] waives the sovereign immunity of the United States from a suit challenging its title to lands that it holds in trust for an Indian Tribe" and (2) "Whether a private individual who alleges injuries resulting from the operation of a gaming facility on Indian trust land has prudential standing to challenge the decision of the Secretary of the Interior to take title to that land in trust, on the ground that the decision was not authorized by the Indian Reorganization Act, ch. 576, 48 Stat. 984." The questions presented in the Tribe's petition are (1) "Whether the Quiet Title Act and its reservation of the United States' sovereign immunity in suits involving 'trust or restricted Indian lands' apply to all suits concerning land in which the United States claims an interest, 28 U.S.C. § 2409a(a), as the Seventh, Ninth, Tenth, and Eleventh Circuits have held, or whether they apply only when the plaintiff claims title to the land, as the D.C. Circuit held" and (2) "Whether prudential standing to sue under federal law can be based on either (i) the plaintiff's ability to 'police' an agency's compliance with the law, as held by the D.C. Circuit but rejected by the Fifth, Sixth, Seventh, and Eighth Circuits, or (ii) interests protected by a different federal statute than the one on which suit is based, as held by the D.C. Circuit but rejected by the Federal Circuit."
Oral argument has not been scheduled. The case will probably be decided before the Court's term ends in June 2012 and could have important consequences for Indian country. If the D.C. Circuit's decision is left intact, attacks on trust acquisitions could multiply. The issues before the Court relate primarily to Patchak's standing and the federal government's sovereign immunity under the Quiet Title Act. It is possible, however, that the Court will in some manner also address the applicability of its 2009 decision in Carcieri to the Tribe's newly-acquired lands. The Match-E-Be-Nash-She-Wish Band was re-recognized through the federal acknowledgement process in 1998. While the Tribe clearly satisfies the standard that the Secretary has established to determine which tribes were "under Federal jurisdiction" as of June 18, 1934 for Carcieri purposes, that standard is only beginning to be tested in the courts.
Interior Department Publishes Proposed Leasing Regulations
The Department of the Interior has published proposed leasing regulations that would significantly amend and improve existing Part 162 regulations, which govern the Bureau of Indian Affairs' (BIA) exercise of its authority to approve leases of trust and restricted lands pursuant to the Long Term
- add separate subparts addressing leases for business leases, residential leases and leases for wind and solar energy leases;
- impose time limits for BIA to decide whether to approve leases which may encourage swift consideration even if the prescribed remedy for non-compliance (a tribe can institute time-consuming administrative appeal proceedings) is singularly unappealing
- facilitate assignments and mortgages of leases, as well as subleases
- provide for significantly greater deference to the decisions of tribes, including with respect to the issuance of leases at less than fair market value
Comments are due before January 31, 2012. Finalization of the proposed leasing regulations, combined with enactment of the HEARTH Act, which appears to have a fair chance of passage (see following summary), would collectively represent significant positive reform of Indian country leasing.
HEARTH Act Reported Favorably by House Natural Resources Committee
Currently, federal law provides that tribes cannot lease their lands for any purposes, even housing for members, without BIA approval. This requirement is objectionable because (1) delays associated with the approval process deter business development and housing development, and (2) paternalistic oversight of this nature is inconsistent with a tribe's right of self determination. The Helping Expedite and Advance Responsible Tribal Home (HEARTH) Act would permit tribes to enact leasing ordinances meeting specifications prescribed in the bill. Once the BIA has approved an ordinance, a tribe would no longer be required to seek BIA approval of leases. The House Natural Resources Committee approved the HEARTH Act on November 17, 2011. The Senate version of the same bill was reported favorably by the Senate Committee on Indian Affairs in July.
Godfrey & Kahn works with tribes seeking to reassert control over their lands, land records and realty operations, including adoption of leasing ordinances. For more information, contact Brian Pierson.
IRS Issues Advanced Notice of Its Intent to Adopt Burdensome New Rules on Tribal Governmental Pension Plans
IRS proposed rules published November 8th would disqualify tribes from offering governmental pension plans to employees unless all of the plan participants provide "substantially all" of their services "in the performance of essential governmental functions but not in the performance of commercial activities." Many tribes maintain administrative structures that support both governmental functions and business enterprises. If the proposed rule is finalized, tribes may be forced to evaluate the job descriptions of many employees and re-organize their pension plans accordingly. G&K's employee benefits attorneys assist tribes is optimizing their pension plans and assuring compliance with federal law.