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Indian Nations Law Update - July 2012

July 05, 2012

Supreme Court Decision Will Hurt Tribes' Efforts to Restore Land Base
On June 18, the United States Supreme Court (Court) ruled in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 2012 WL 2202936, that a private landowner complaining of potential adverse impacts from a proposed tribal gaming enterprise could sue to challenge a decision by the Secretary of the Interior (Secretary) to acquire the site of the enterprise in trust for the Tribe. It made no difference, the court ruled, that the Secretary had already acquired the property and federal law prevented challenges to the government's title. Justice Sotomayor was the sole dissenter in the Court's 8-1 ruling.

The Secretary, pursuant to his authority under the Indian Reorganization Act (IRA), had acquired 147 acres of fee land in Wayland Township, Michigan, in trust for the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians (Tribe) in 2009 for gaming purposes. Patchak, a neighboring land owner, had sued under the Administrative Procedures Act (APA), asserting standing based on alleged adverse impacts on his property from gaming. Patchak challenged the Secretary's authority to acquire the land 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.

While the suit was pending, the government took title to the land in trust for the Tribe. The district court then dismissed under the Quiet Title Act (QTA), which waives the immunity of the United States to permit suits challenging the government's title but explicitly excludes suits challenging title to Indian lands. The D.C. Circuit Court of Appeals reversed and reinstated Patchak's suit, holding that the QTA exclusion did not apply because Patchak was not asserting his own title in the land. The Supreme Court affirmed:

"Patchak's lawsuit therefore lacks a defining feature of a QTA action. He is not trying to disguise a QTA suit as an APA action to circumvent the QTA's "Indian lands" exception. Rather, he is not bringing a QTA suit at all. He asserts merely that the Secretary's decision to take land into trust violates a federal statute -- a garden-variety APA claim. See 5 U. S. C. §§706(2)(A), (C) ("The reviewing court shall . . .hold unlawful and set aside agency action . . . not in accordance with law [or] in excess of statutory jurisdiction [or] authority"). Because that is true -- because in then-Assistant Attorney General Scalia's words, the QTA is "not addressed to the type of grievance which [Patchak] seeks to assert," H. R. Rep. 94-1656, at 28 -- the QTA's limitation of remedies has no bearing. The APA's general waiver of sovereign immunity instead applies."

The Court also rejected the argument that Patchak could not sue under the APA because the statute he challenged, the Indian Reorganization Act, was not intended for his benefit:

"The prudential standing test Patchak must meet "is not meant to be especially demanding." Clarke v. Securities Industry Assn., 479 U. S. 388, 399 (1987). We apply the test in keeping with Congress's "evident intent" when enacting the APA "to make agency action presumptively reviewable." Ibid. We do not require any "indication of congressional purpose to benefit the would-be plaintiff." Id., at 399-400. And we have always conspicuously included the word "arguably" in the test to indicate that the benefit of any doubt goes to the plaintiff. The test forecloses suit only when a plaintiff's "interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit." ...

And because §465's implementation encompasses these issues, the interests Patchak raises -- at least arguably -- fall "within the zone . . . protected or regulated by the statute."

The decision is unwelcome news for Indian country. While the Court explicitly disclaimed any intention to address the merits of Patchak's Carcieri argument, the ruling opens the door to challenges to fee-to-trust acquisitions by private parties generally and, in particular, encourages challenges to the Secretary's authority under Carcieri contending that a tribe seeking to place land into trust was not under federal jurisdiction on June 18, 1934. The APA's 6-year statute of limitations will permit challenges to any fee-to-trust decision within six years after the decision is made. Challengers can ignore the requirement of the federal regulations that objections be filed within 30 days after the Secretary publishes notice of intent to take land into trust. In her spirited dissent, Justice Sotomayor identified the potential adverse consequences of the Court's decision:

"The Court's opinion sanctions an end-run around these [QTA] vital limitations on the Government's waiver of sovereign immunity. After today, any person may sue under the Administrative Procedure Act (APA) to divest the Federal Government of title to and possession of land held in trust for Indian tribes -- relief expressly forbidden by the QTA -- so long as the complaint does not assert a personal interest in the land. That outcome cannot be squared with the APA's express admonition that it confers no "authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought." 5 U. S. C. §702. The Court's holding not only creates perverse incentives for private litigants, but also exposes the Government's ownership of land to costly and prolonged challenges."

Several barriers remain to persons seeking to challenge fee-to-trust acquisitions. First, the Secretary of the Interior has adopted a very liberal test to determine whether a tribe was under federal jurisdiction in 1934. Evidence that the government engaged in acts reflecting federal supervision over a tribe at any time in its pre-1934 history is sufficient to establish jurisdiction. Jurisdiction, once established is presumed to continue in the absence of affirmative government action to terminate jurisdiction. Second, individuals seeking to take advantage of the Court's decision will still have to establish at least an arguable claim that they are adversely affected by the proposed purposes for which land is taken into trust. Finally, acquisitions that occurred more than six years ago are beyond challenge.

Supreme Court Rules in Favor of Tribe in ISDA Contract Support Costs Case
On June 18th, the United States Supreme Court decided Salazar v. Ramah Navajo Chapter, 2012 WL 2196799, in favor of the Chapter. The Ramah Navajo Chapter (Chapter), a political subdivision of the Navajo Nation, had sued the Secretary of the Interior and others (DOI) to recover the full contract support costs (CSC) associated with programs operated by the Chapter under self-determination contracts with the DOI pursuant to the Indian Self-Determination Act (ISDA). which mandates that government agencies fully fund ISDA contracts. DOI later failed to fulfill its contract with the Ramah Chapter because Congress did not appropriate sufficient funds and capped appropriations at a level well below the CSCs. The DOI argued that the ISDA's provision that payments be "subject to appropriations" relieved the government of liability for CSC. The Court rejected the government's argument holding that the government contracts were binding, notwithstanding the Congress' failure to appropriate sufficient funds. The solution to the government's dilemma, according to the Court, lay with the Congress:

"On the one hand, Congress obligated the Secretary to accept every qualifying ISDA contract, which includes a promise of "full" funding for all contract support costs. On the other, Congress appropriated insufficient funds to pay in full each tribal contractor. The Government's frustration is understandable, but the dilemma's resolution is the responsibility of Congress. ...

For the period in question, however, it is the Government -- not the Tribes -- that must bear the consequences of Congress' decision to mandate that the Government enter into binding contracts for which its appropriation was sufficient to pay any individual tribal contractor, but insufficient to pay all the contracts the agency has made. (Quotes omitted.)"

The justices' positions in the Court's 5-4 decision defy attempts to identify a pro-Indian country or anti-Indian country alignment pattern. They majority included justices Sotomayor, Scalia, Kennedy, Thomas and Kagan. The dissenters were Roberts, Ginsburg, Breyer and Alito.

USDA Announces Availability of Rural Business Opportunity Grants
The Rural Business Opportunity Grants program is available to public bodies, nonprofit corporations, Indian tribes, institutions of higher education, and rural cooperatives. RBS is authorized to make grants up to $50,000 to pay for technical assistance, training, and planning activities that improve economic conditions in rural areas (i.e., population of 10,000 or less). Funds may be used to

  1. Identify and analyze business opportunities that will use local rural materials or human resources - this includes opportunities in export markets, as well as feasibility and business plan studies;
  2. Identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and managers;
  3. Establish business support centers and otherwise assist in the creation of new rural businesses;
  4. Conduct local community or multi-county economic development planning;
  5. Establish centers for training, technology, and trade that will provide training to rural businesses in the utilization of interactive communications technologies to develop international trade opportunities and markets;
  6. Conduct leadership development training of existing or prospective rural entrepreneurs and managers; or
  7. Pay reasonable fees and charges for professional services necessary to conduct the technical assistance, training, or planning functions.
  8. USDA is currently accepting applications. The application deadline is August 6, 2012. USDA estimates that is will award $2.37 million, of which $1.14 million is reserved for projects benefitting tribes.

Godfrey & Kahn assists tribes in connection with the RBOG and other USDA programs, as well with the establishment of business lending and other programs to encourage Indian country economic development. Contact Brian Pierson at 414.287.9456 or pierson@gklaw.com.

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