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Gila River Indian Community v. United States

United States Court of Appeals, Ninth Circuit

May 20, 2013

Gila River Indian Community, a federally recognized Indian Tribe; Delvin John Terry; Celestino Rios; Brandon Rios; Damon Rios;Cameron Rios, Plaintiffs,
v.
United States of America; United States Department of the Interior; Kenneth Lee Salazar, in his official capacity as United States Secretary of the Interior; Larry Echo Hawk, in his official capacity as the Assistant Secretary for Indian Affairs of the United States Department of the Interior, Defendants-Appellees, John McComish, Arizona Legislature, Majority Leader; Chuck Gray, Arizona Legislature, Senate Majority Leader; State of Arizona; Kirk Adams, Arizona Legislature, Speaker of the House, Intervenor-Plaintiffs, and City of Glendale; Michael Socaciu; Gary Hirsch, Plaintiffs-Appellants, Tohono O'odham Nation, Intervenor-Defendant-Appellee. Gila River Indian Community, a federally recognized Indian Tribe; City of Glendale; Michael Socaciu; Delvin John Terry; Celestino Rios; Brandon Rios;Damon Rios; Cameron Rios;Gar y Hirsch, Plaintiffs, John McComish, Arizona Legislature, Majority Leader; Chuck Gray, Arizona Legislature, Senature Majority Leader; Kirk Adams, Arizona Legislature, Speaker of the House, Petitioners-Intervenors, and State of Arizona, Intervenor-Plaintiff-Appellant,
v.
United States of America; United States Department of the Interior; Kenneth Lee Salazar, in his official capacity as United States Secretary of the Interior; Larry Echo Hawk, in his official capacity as the Assistant Secretary for Indian Affairs of the United States Department of the Interior, Defendants-Appellees, Tohono O'odham Nation, Intervenor-Defendant-Appellee. Gila River Indian Community, a federally recognized Indian Tribe, Plaintiff-Appellant, and City of Glendale; Michael Socaciu; Delvin John Terry; Celestino Rios;Brandon Rios; Damon Rios;Cameron Rios, Gar y Hirsch, Plaintiffs, John McComish, Arizona Legislature, Majority Leader; Chuck Gray, Arizona Legislature, Senature Majority Leader; State of Arizona, Kirk Adams, Arizona Legislature, Speaker of the House, Intervenor-Plaintiffs,
v.
United States of America; United States Department of the Interior; Kenneth Lee Salazar, in his official capacity as United States Secretary of the Interior; Larry Echo Hawk, in his official capacity as the Assistant Secretary for Indian Affairs of the United States Department of the Interior, Defendants-Appellees, Tohono O'odham Nation, Intervenor-Defendant-Appellee. Gila River Indian Community, a federally recognized Indian Tribe; City of Glendale; Michael Socaciu; Gary Hirsch, Plaintiffs, John McComish, Arizona Legislature, Majority Leader; Chuck Gray, Arizona Legislature, Senature Majority Leader; State of Arizona, Kirk Adams, Arizona Legislature, Speaker of the House, Intervenor-Plaintiffs, and Delvin John Terry; Celestino Rios; Brandon Rios;Damon Rios;Cameron Rios, Plaintiffs-Appellants,
v.
United States of America; United States Department of the Interior; Kenneth Lee Salazar, in his official capacity as United States Secretary of the Interior; Larry Echo Hawk, in his official capacity as the Assistant Secretary for Indian Affairs of the United States Department of the Interior, Defendants-Appellees, Tohono O'odham Nation, Intervenor-Defendant-Appellee. Gila River Indian Community, a federally recognized Indian Tribe; City of Glendale; Michael Socaciu; Delvin John Terry; Celestino Rios; Brandon Rios;Damon Rios; Cameron Rios;Gar y Hirsch, Plaintiffs, State of Arizona, Intervenor-Plaintiff, and John McComish, Arizona Legislature, Majority Leader; Chuck Gray, Arizona Legislature, Senature Majority Leader; Kirk Adams, Arizona Legislature, Speaker of the House; Andy Tobin, House Majority Whip, Intervenor-Plaintiff-Appellants,
v.
United States of America; United States Department of the Interior; Kenneth Lee Salazar, in his official capacity as United States Secretary of the Interior; Larry Echo Hawk, in his official capacity as the Assistant Secretary for Indian Affairs of the United States Department of the Interior, Defendants-Appellees, Tohono O'odham Nation, Intervenor-Defendant-Appellee.

Argued and Submitted April 16, 2012—San Francisco, California

Amended July 9, 2013.

Appeal from the United States District Court for the District of Arizona David G. Campbell, District Judge, Presiding D.C. Nos. 2:10-cv-01993-DGC, 2:10-cv-02017-DGC, 2:10-cv-02138-DGC

COUNSEL

Patricia A. Millett (argued), Akin Gump Strauss Hauer & Feld, Washington, D.C. for Plaintiff-Appellant Gila River Indian Community; Catherine E. Stetson (argued), Hogan Lovells, Washington, D.C. for Plaintiff-Appellant City of Glendale; David R. Cole (argued), Dep. State Atty. Gen., Phoenix, Arizona, for Plaintiff-Intervenor-Appellant State of Arizona.

Aaron P. Avila (argued), Dep't of Just., Washington, D.C., for Defendants-Appellees the United States of America, et. al.; Seth P. Waxman (argued), Wilmer Cutler Pickering Hale and Dorr, Washington, D.C., for Defendant-Intervenor-Appellee the Tohono O'odham Nation.

Before: M. Margaret McKeown, N. Randy Smith, and Jacqueline H. Nguyen, [*] Circuit Judges.

SUMMARY[**]

Indian Tribes

The panel withdrew its prior opinion and published a superseding opinion affirming in part, and reversing and remanding in part, the district court's summary judgment in favor of federal defendants in an action by the City of Glendale seeking to set aside the United States Department of Interior's decision to accept in trust, for the benefit of the Tohono O'odham Nation, a 54-acre parcel of land known as Parcel 2 on which the Nation hoped to build a resort and casino.

The panel held the Gila Bend Indian Reservation Lands Replacement Act, read as a whole, was unambiguous and that § 6(c) of the Act created a cap only on land held in trust for the Nation, not on total land acquisition by the tribe under the Act. The panel held that § 6(d) of Act was ambiguous as to whether Parcel 2, located on a county island fully surrounded by city land, was within the City of Glendale's corporate limits. The panel held further that the Secretary of the Interior was mistaken in concluding that the term has a plain meaning, and remanded for the agency to consider the question afresh in light of the ambiguity the panel saw. Finally, the panel held that passage of the Act was within congressional power under the Indian Commerce Clause and was not trumped by the Tenth Amendment

Judge N.R. Smith dissented. Judge Smith would hold that the statutory text of the Act clearly prohibits the Secretary's ability to take land, that is "within the corporate limits" of a city, into trust when the city's limits wholly surround that land, such as the parcel at issue in this case. Judge Smith would also hold that a remand to the agency is improper because the case should be resolved against the agency under step one of the Chevron analysis.

AMENDED OPINION

McKEOWN, Circuit Judge

This case illustrates the nuances of our federalist system of government, pitting Indian tribe against Indian tribe, and State and local governments against the federal government and an Indian tribe. The City of Glendale and various other parties ("Glendale") seek to set aside the Department of the Interior's decision to accept in trust, for the benefit of the Tohono O'odham Nation ("the Nation"), a 54-acre parcel of land known as Parcel 2. The Nation hopes to build a destination resort and casino on Parcel 2, which is unincorporated county land, entirely surrounded by the City of Glendale. To say this plan has been controversial is an understatement. But the strong feelings and emotional drama of the casino fight do not dictate the outcome here. This appeal relates only to the status of the land as trust land and does not involve the particulars of Indian gaming, which are the subject of separate proceedings and pending legislation. The district court granted summary judgment for the government after concluding that the Secretary of the Interior reasonably applied the Gila Bend Indian Reservation Lands Replacement Act ("Gila Bend Act"), and that the Act did not violate the Indian Commerce Clause or the Tenth Amendment. We affirm in part, reverse in part, and remand.

Background

I. The Gila Bend Act

The Nation, earlier known as the Papago Tribe of Arizona, is a federally recognized Indian Tribe with over 28, 000 members. The Gila Bend Reservation was established as early as 1882. Today, the reservation includes noncontiguous land located near Tucson, Phoenix, and the town of Gila Bend, as well as points in between. In 1960, the federal government completed construction of the Painted Rock Dam ten miles downstream from the Gila Bend Reservation. During the late 1970s and early 1980s, the reservation was plagued by flooding from the dam, which eventually destroyed a large farm developed by the Nation, leaving the land unsuitable for economic use.

Congress responded to the flooding and the Nation's petition for a new reservation with the Gila Bend Act. The purpose of the Act was to "facilitate replacement of reservation lands with lands suitable for sustained economic use which is not principally farming . . . and promote the economic self-sufficiency of" the Nation. Pub. L. No. 99-503, 100 Stat. 1798, § 2(4). Under § 4 of the Act, the Nation transferred 9, 880 acres of reservation land to the United States in return for $30 million and the right to replace the lost reservation acre-for-acre. Id. at §§ 4(a), 6(c). Subject to the requirements and limitations of the Act, the Secretary of the Interior is required to take up to 9, 880 acres of land into trust for the benefit of the Nation, effectively making the land part of the Nation's reservation. Id. at § 6(d).

The Act permits the Nation to use the funds for various purposes, including the purchase of land, and economic and community development. § 6(a).[1] Section 6(c) imposes an acreage limit.[2] Section 6(d) establishes that trust land refers to land under subsection (c), and that such land cannot be taken into trust as reservation land if it is (i) outside certain counties, or (ii) "within the corporate limits of any city or town."[3]

Over the decades after passage of the Act, the Nation acquired land in Arizona but only one parcel has been taken into trust. Then, in 2003, the Nation purchased the disputed land as part of a 135-acre acquisition. The land is a "county island, " surrounded entirely by the City of Glendale. A county island is unincorporated land surrounded entirely by lands incorporated by the municipality. See Town of Gilbert v. Maricopa Cnty., 141 P.3d 416, 418 n.1 (Ariz.Ct.App. 2006) (describing county island).

In 2009, the Nation announced plans to use the land for gaming purposes and filed an application with the Department of the Interior to have the land held in trust under the Gila Bend Act. In response, the City of Glendale sought to annex a portion of the 135 acres. The Nation filed suit in state court challenging the annexation effort.[4] Due to ongoing state litigation, without relinquishing its claim to the full 135 acres, the Nation requested that the Department of the Interior accept into trust only a 54-acre portion of the land not at issue in state court: Parcel 2, the subject of this appeal.[5]

II. Prior Proceedings and Decisions

Although the Department of the Interior treated the Nation's trust application as an ex parte filing, in March 2009, both the City of Glendale and the Gila River Indian Community[6] filed lengthy submissions opposing the trust application. Their submissions argued that Parcel 2 fell "within the corporate limits" of the City of Glendale and was therefore ineligible for trust status under § 6(d) of the Gila Bend Act.

The Secretary of the Interior concluded that the requirements of the Gila Bend Act were met. Specifically, Parcel 2 is wholly within Maricopa County and is outside the City of Glendale's corporate limits. In considering whether the land qualified for trust status under § 6(d), the Secretary explained that "[t]he Western Regional Director of the BIA [Bureau of Indian Affairs], acting under authority of the Secretary, issued a waiver under Section 6(d) . . . that allowed the Nation to purchase up to five (5) separate areas of replacement land, rather than three, and further waived the requirement that one of these areas be contiguous to the San Lucy reservation." In any event, since Parcel 2 is only the second replacement land area to be held in trust under the Act, those waivers do not directly implicate the analysis here. Thus, in accord with the mandate of the Act, the Secretary determined that Parcel 2 must be held in trust for the Nation.

In upholding the Secretary of the Interior's decision, in a careful, comprehensive opinion, the district court concluded that Glendale had waived its argument regarding a total acreage cap under § 6(c) of the Act, because it failed to raise the issue in the administrative proceeding.[7] The district court then deemed the statutory language "within the corporate limits" in § 6(d) to be ambiguous as to county islands like Parcel 2, and concluded that Arizona law was inconclusive. Applying Chevron, the court deferred to the agency's interpretation of the statute and affirmed the trust decision as "based on a permissible construction of the statute." See Chevron, U.S.A., Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 843 (1984). Finally, the district court rejected the constitutional arguments under the Tenth Amendment and the Indian Commerce Clause.

"We review the grant of summary judgment de novo, thus reviewing directly the agency's action under the Administrative Procedure Act's (APA) arbitrary and capricious standard." Gifford Pinchot Task Force v. U.S. Fish & Wildlife Serv., 378 F.3d 1059, 1065 (9th Cir. 2004).

Analysis

We first consider two questions of statutory interpretation: Whether the Gila Bend Act's trust land acreage limit is implicated, and whether Parcel 2 is "within" the corporate limits of the City of Glendale. We evaluate an agency's interpretation of a statute it is entrusted to administer by first determining "whether Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842. If Congress has directly spoken, "the agency (and the court) must give effect to Congress's clearly expressed intent." Adams v. U.S. Forest Serv., 671 F.3d 1138, 1143 (9th Cir. 2012). If, on the other hand, a statute is ambiguous, we defer to the agency's interpretation where the "interpretation was 'a reasonable policy choice for the agency to make.'" Id. (quoting Chevron, 467 U.S. at 845).

The remaining issues pertain to the limits of congressional power under the Indian Commerce Clause and the Tenth Amendment.[8]

I. The Acreage Lim it in Section 6(c)

Section 6(c) of the Gila Bend Act provides that the Nation "is authorized to acquire by purchase private lands in an amount not to exceed, in the aggregate, 9, 880 acres." In turn, the following subsection, 6(d), describes trust land as being land acquired "pursuant to subsection (c)." Before the district court, Glendale argued for the first time that § 6(c) precludes the Nation from acquiring more than 9, 880 acres with money from the Act and that the Nation already had exceeded that acreage cap before acquiring Parcel 2. The Nation responds that the cap only applies to land held in trust via § 6(d), and not to land remaining in fee status.

While the Secretary of the Interior did not squarely consider the acreage cap because the issue was never framed as a barrier to taking Parcel 2 in trust, reading the Secretary's decision in context is telling. In determining whether the § 6(d) trustee requirements were met, the Secretary read the statute as creating a cap on land that could be held in trust under the Gila Bend Act, not as a cap on the total acreage that the Nation could acquire. The Secretary explained the basis of this reading, noting that "[t]he first, and so far only, land acquired in trust for the Nation" was 3, 200.53 acres acquired in September 2004. The decision goes on to state that there was another trust application for 3, 759.52 acres but that the land was still held in fee. Therefore, the Secretary did not consider land held in fee as relevant to the analysis of the acquisition limitations under the Gila Bend Act. The decision explicitly counts only the fee-to-trust lands, not lands remaining in fee status.

During agency proceedings, the Gila River Indian Community, one of the parties now raising the acreage cap argument, noted, in contrast to its current position, that "[s]ection 6(c) limits the number of acres that may be placed into trust to no more than 9, 880 acres." Appellants, including the Gila River Indian Community, now take the opposite position and argue that because the agency proceedings were non-adversarial, the issue should be considered on the merits. The Nation and the government maintain that the acreage cap argument was waived. The ultimate question is one of statutory construction.

Assuming, without deciding, that the argument was not waived, we hold that the statute read as a whole is unambiguous and that § 6(c) creates a cap only on land held in trust for the Nation, not on total land acquisition by the tribe under the Act.

Our goal is to understand the statute "as a symmetrical and coherent regulatory scheme" and to "fit, if possible, all parts into a harmonious whole." FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (citations omitted). Section 6(a) authorizes the Nation to use funds received under the Gila Bend Act "for land and water rights acquisition, economic and community development, and relocation costs." This authorization is broader than land acquisition and does not address trust acreage to replace the Nation's lost reservation land.

Apart from the general provisions of § 6(a), three provisions of the Act concern the divestment and replacement of reservation land. Section 4 concerns the original 9, 880-acre reservation, and specifies the conditions under which the Nation would forfeit its "right, title, and interest . . . in nine thousand eight hundred and eighty acres of [reservation] land." Subsections 6(c) and 6(d) provide for the replacement of this precise number of acres of reservation land. Section 6(d) explains the mechanism for restoring reservation land, which requires placing land in trust, and limits the location of reservation land. More specifically, § 6(d) provides:

The Secretary, at the request of the Tribe, shall hold in trust for the benefit of the Tribe any land which the Tribe acquires pursuant to subsection (c) which meets the requirements of this subsection. Any land which the Secretary holds in trust shall be deemed to be a Federal Indian Reservation for all purposes.

Section 6(c), in turn, limits the size of newly acquired trust land to that of the previous reservation: 9, 880 acres. Thus, § 6(c) imposes a limit upon the size of land placed in trust for reservation purposes, under § 6(d), rather than upon total land acquisition under § 6(a). Subsection 6(c) and 6(d) are internally cross-referenced and must be read together.

Aside from its inapplicability to non-reservation land, treating § 6(c) as a limit on land acquired under § 6(a) is problematic for other reasons. Congress crafted the Gila Bend Act to allow the Nation substantial autonomy in the use of funds and the acquisition of new reservation land. Because Congress did not expect the Nation to spend the Gila Bend Act funds immediately or all at once, Congress provided that the funds be invested in "interest bearing deposits and securities until expended." § 6(a). This requirement underscores that Congress did not intend for the tribe to spend a fixed dollar amount, or to spend a specific amount on land, or to acquire the land at any particular time. Rather, the Nation was to have broad discretion in the use of Gila Bend Act funds, and the yield on those funds. The ability to buy land without regard to the cap on trust acreage and then designate the parcels for conversion to trust is well within the "great flexibility" Congress authorized for the Nation. See H.R. Rep. No. 99-851, at 10 (1986) (envisioning the Nation to "have great flexibility in determining the use of funds provided under the Act.").

Of course, the Nation does not need statutory authorization to acquire and hold land in fee simple. The Nation has the right to buy and sell land just like other persons or entities. See Cohen's Handbook of Federal Indian Law § 15.04 (describing various forms of tribal land acquisition, including the purchase of fee simple title). Glendale's reading would mean that the Gila Bend Act purported to curtail the Nation's independent right to buy and sell land, an outcome we do not endorse and one that is inconsistent with decades of Indian law.

Further, § 6(b) relieves the Secretary of any audit or oversight responsibility for expenditure of funds under § 6(a): "The Secretary [of the Interior] shall not be responsible for the review, approval, or audit of the use and expenditure" of the replacement land funds. § 6(b). If § 6(a) were cabined by § 6(c), the Secretary would necessarily undertake a monitoring function as to expenditure of money for trust lands, a responsibility specifically disclaimed by the Act.

Finally, as a practical matter, even Glendale's interpretation would permit the Secretary to accept Parcel 2 in trust. This argument boils down to the view that the first 9, 880 acres acquired must go into trust. Nothing in the Act specifies that the lands must go into trust in a chronological order pegged to the time of acquisition. There is no FIFO (first in, first out) principle incorporated in the Act. The Act allows the Nation to replace, acre-for-acre, the 9, 880 acres of reservation land it relinquished to federal control under ยง 4(a). To date, the Secretary of the Interior has taken just one parcel into trust for the Nation, an approximately 3, 200-acre parcel known as San Lucy Farms. Acquisition in trust of the 54 acres in Parcel 2 would be the Nation's second trust acquisition and, after ...


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