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Potential Hurdle to Right-of-Way Acquisition and Renewals: The Tenth Circuit Holds Tribal Acquisition of an Undivided Interest in an Allotment Defeats Congressional Eminent Domain Authority

September 5, 2017
By Deana M. Bennett and Lynn H. Slade

On May 26, 2017, the Tenth Circuit issued its decision in Public Service Company of New Mexico v. Barboan,¹ upholding a New Mexico federal district court’s ruling² that tribal ownership of even a very small fractional interest in an allotment bars condemnation of any interest in the allotment, despite Congress’ intent in 25 U.S.C. § 357 that “lands allotted in severalty” be subject to condemnation under state law.  In so doing, the Tenth Circuit, in our view,³ misread Section 357 and the historical background against which it was enacted and misapplied Tenth Circuit and Supreme Court precedent.  Under the Tenth Circuit’s reading of Section 357, if a negotiated right-of-way cannot be obtained, and if a Tribe owns even a minute fractional interest in the allotment, current right-of-way holders serving a public purpose, such as electric and water utilities, state and local transportation agencies, and oil and gas pipelines, may not be able to resort to Section 357 to keep that important infrastructure in place.  Instead, the current right-of-way holders may find themselves facing trespass actions, including trespass damages and court orders requiring operations to cease and infrastructure removed.  In addition to impacting continued operations on existing rights-of-way, the uncertainty the Tenth Circuit’s opinion creates may also deter companies from locating new infrastructure on allotted lands and, consequently, inhibit extension of public utilities and transportation in some areas.

Background:  25 U.S.C. § 357 (“Section 357”), enacted in 1901, states:  “Lands allotted in severalty to Indians may be condemned for any public purpose under the laws of the State or Territory where located in the same manner as land owned in fee may be condemned, and the money awarded as damages shall be paid to the allottee.” Section 357 was enacted against the backdrop of the General Allotment Act (GAA), which, along with similar acts, “allotted” approximately 41 million acres of formerly tribal lands to individual Indian landowners.⁴ Those allotments were “checker-boarded” with millions of acres of newly patented non-Indian lands.  In enacting Section 357, the 1901 Congress intended to provide a right of eminent domain for public infrastructure and to ensure that the right was effective as to the millions of acres of allotted lands that would be interspersed with private lands.

PNM’s Attempts to Renew Its Right-of-Way: Public Service Company of New Mexico (PNM) was granted an easement for electrical transmission lines across multiple allotments in 1960.  The transmission line at issue is “a crucial component of PNM’s system for the transmission of electricity” to a portion of New Mexico. The transmission line crosses 57 allotments in total.  The original term of the right-of-way was fifty years, and PNM began the renewal process in 2009.  Under the Bureau of Indian Affairs’ (BIA) regulations governing rights-of-way across allotted lands,⁵ PNM was required to obtain consent to the renewal from a majority of the interest holders.  PNM attempted to do so, but ultimately failed to secure the requisite percentage with respect to five allotments. PNM then filed a condemnation action pursuant to Section 357.  In its condemnation action, PNM named the tract of land, the individual Indian landowners (the allottees), and the Navajo Nation, which had previously obtained an undivided interest in two of the five allotments, 13.6% in one and 0.14% in the second.

The Navajo Nation obtained its interests in the two allotments under the Indian Land Consolidation Act (ILCA) and the American Indian Probate Reform Act (AIRPA), a 2004 amendment to ILCA.⁶  Under the ILCA, a Tribe may acquire an interest in an allotment by gift or purchase, and under the AIRPA amendment to ILCA, a Tribe acquires an interest by operation of law under the “single heir rule”, when an individual Indian landowner with a 5% or smaller interest in an allotment dies intestate, without eligible heirs.  In addition to these statutory mechanisms, Tribes may acquire, and have been acquiring, interests in numerous allotments under the “Cobell Buy-Back program.”  Based on its ownership interests in two of the five allotments, the Navajo Nation moved to dismiss the condemnation case as to those two allotments.

District Court Ruling:  Judge James A. Parker, a New Mexico federal district judge, concluded that the Navajo Nation’s ownership of a fractional interest in the two allotments precluded condemnation under 25 U.S.C. § 357 for two reasons.  First, he concluded that tribal ownership of a fractional undivided interest in an allotment converted the land from allotted land to “tribal land,” and therefore the statute no longer applied.  Second, because the Navajo Nation is immune from suit, the court held that the action had to be dismissed as to the allotments in which the Nation owns an interest under Federal Rule of Civil Procedure 19, because it is an indispensable party. The district court dismissed the condemnation action as against the two allotments. The district court granted PNM’s motion to certify for interlocutory appeal the controlling questions of law presented in the case.
Tenth Circuit Upholds District Court Decision: The Tenth Circuit agreed with the district court that tribal ownership of a fractional undivided interest in the allotment converts the land from allotted land to “tribal land,” rendering Section 357 inapplicable.  Because the Tenth Circuit affirmed the district court on this issue, it did not address the effect of the Navajo Nation’s sovereign immunity, although the court suggested that, had it done so, it would have affirmed the district court.

In reaching its decision, the Tenth Circuit relied on the fact that Section 357 “does not mention any condemnation authority for rights-of-way through Indian reservations and other types of non-allotted tribal lands.”⁷ While acknowledging that Section 357’s silence with respect to tribal lands was consistent with the allotment-era goals to reduce Tribes’ roles and tribal land holdings, the court nevertheless was persuaded by the fact that Congress had not amended Section 357 to specifically address tribal interests in allotted lands, despite it “becom[ing] clear that tribes and reservations are here to stay.”⁸

The Tenth Circuit cited Nebraska Public Power District v. 100.95 Acres of Land in Thurston County (NNPD)⁹in support of its affirmance of the district court.  In NPPD, the Eighth Circuit concluded that land in which a Tribe had acquired an interest was “tribal land, beyond § 357’s condemnation reach.”¹⁰  NPPD, in turn, relied on a BIA right-of-way regulation defining “tribal land.”  The Tenth Circuit acknowledged that the BIA right-of-way regulations “have a limited impact on our interpretation of § 357 because they do not apply to condemnation actions,”¹¹ but relied on the regulatory definitions to “amplify” its conclusion about Section 357’s meaning.

On July 24, the Tenth Circuit denied PNM’s petition for rehearing en banc, and on July 31, the Tenth Circuit denied PNM’s petition to stay the mandate pending appeal.

Take-Away:  In our opinion, the Tenth Circuit opinion suffers from several flaws. First, the opinion conflicts with Section 357’s plain language and Congress’ intent.  In our view, Congress’ silence as to “tribal lands” in Section 357 is entirely appropriate given that the statute referred to “lands allotted in severalty,” the lands at issue in PNM undisputedly had been allotted, and Congress would have expected the allotted ownership to change over time. The historical backdrop against which Section 357 was enacted reinforces Congress’ intent to make condemnation available for public utilities and transportation across the thousands of allotments it authorized.  In our view, the lack of any language regarding “tribal lands” or tribal acquisition of interests in allotments should not be read as an indication that Congress intended subsequent ownership of undivided interests in an allotment to affect Section 357’s condemnation authority.

Second, it appears to us that the Tenth Circuit mischaracterized or ignored Tenth Circuit precedent. For example, the Tenth Circuit incorrectly characterized Transok Pipeline Co. v. Darks¹²as holding that Section 357 applies to “allotted land even after that land has passed to individual heirs of the allottees.” Importantly, however, in Transok,the appellants were non-Indians, not indicated to be allotted heirs, whose interests were not held in trust by the United States.  In addition, the Tenth Circuit also ignored the practical considerations underlying Yellowfish v. Stillwater¹³: “If condemnation is not permitted, a single allottee could prevent the grant of a right-of-way over allotted lands for necessary roads or water and power lines.” In our view, the opinion provides a roadmap for this result.

Third, the Tenth Circuit gave little weight to Section 357’s “in rem” nature, despite substantial briefing on the issue. “In rem” statutes are those that apply to a thing, a “res,” in this case the land to be condemned, and do not act upon, or require joinder of, the parties with ownership interests in the “res.” The Tenth Circuit, from our point of view, failed to give effect to the Supreme Court’s distinction in County of Yakima v. Confederated Tribes & Bands of Yakima Indian Nation¹⁴ between in rem and in personam jurisdiction.  Yakima affirmed “in rem”state taxation of formerly allotted land reacquired by a Tribe within its reservation, but invalidated “in personam” taxation of excise tax on sales of such lands.  As we read Section 357, it operates in rem because it applies to identified lands, those “allotted in severalty.” Consequently, under Yakima, tribal, or others’, acquisition of an interest in “land allotted in severalty” should not insulate that interest from actions under Section 357’s in rem authority.

Fourth, in our view, the Tenth Circuit’s decision is flawed because the court gave little weight to the language of the “congressionally approved mechanisms”¹⁵ by which the Navajo Nation acquired its interest. In ILCA, Congress repeatedly used the word “allotted land”¹⁶ when discussing allotted lands in which a Tribe has acquired an undivided interest under ILCA.  We read these provisions as confirming that Congress did not intend for allotted lands to lose their allotted status when a Tribe acquires an interest in an allotment.

Finally, it appears to us that the Tenth Circuit dismissed the very real consequences to PNM and other entities providing necessary public commodities whose infrastructure is now or will be located on allotted lands that could arise from the Tenth Circuit’s opinion.  For example, a federal district court in Oklahoma, cited favorably by the Tenth Circuit, recently found a pipeline company in trespass, after concluding that the pipeline company could not invoke Section 357 because of tribal ownership of fractional interests in allotments, and ordered the pipeline to cease operations immediately and remove the pipeline within six months.¹⁷ In our view, the Tenth Circuit’s decision could significantly affect right-of-way access across allotted lands both for new rights-of-way and renewals because it deprives utilities and other public entities of the ability to ensure access for fair market value without regard to allotment landowner consent, which in turn may negatively impact continued, reliable transportation of necessary public commodities—and the public—across allotted lands.

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