Kelly v. United States Department of Interior

• Citation: 339 F. Supp. 1095
• Decision Date: 22 February 1972
• Docket Number: Civ. No. S-1098.
• Parties: Maude KELLY et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF the INTERIOR et al., Defendants.
• Court: U.S. District Court — Eastern District of California

339 F. Supp. 1095

Maude KELLY et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF the INTERIOR et al., Defendants.

Civ. No. S-1098.

United States District Court, E. D. California.

February 22, 1972.

COPYRIGHT MATERIAL OMITTED

George F. Duke, Lee J. Sclar, William P. Lamb, California Indian Legal Services, Berkeley, Cal., for plaintiffs Kelly, Heffington and Higgins.

Gard Chisholm, Jackson, Cal., for plaintiffs Cooper and Kilgore.

Dwayne Keyes, U. S. Atty., Richard H. Jenkins, Asst. U. S. Atty., Sacramento, Cal., for defendant.

Before JERTBERG, Circuit Judge, and MacBRIDE and CROCKER, District Judges.

MEMORANDUM AND ORDER

MacBRIDE, District Judge.

This is an action for an injunction to prohibit a proposed distribution of property under the Rancheria Act (P.L. 85-671 as amended by P.L. 88-419) and for a judgment declaring the plaintiffs' right to participate in the distribution. Originally enacted in 1958 and amended in 1964, the Rancheria Act authorizes the Secretary of the Interior to divide and distribute the assets of California Indian rancherias and reservations after the vote of a majority of the members of each reservation. Since the action seeks an injunction against the enforcement of an allegedly unconstitutional federal statute, 28 U.S.C. § 2282 required this three-judge court to be convened.

Under the Rancheria Act and its implementing regulations, the Secretary of the Interior prepared a list of the Indians of the Jackson Rancheria who were eligible to vote for a distribution of assets and later approved a plan containing a list of designated recipients. See 25 C.F.R. §§ 242.3 and 242.4. Excluded from both lists, plaintiffs protested without success at various stages of the administrative process. Although none of the plaintiffs actually reside on the Jackson Rancheria, they claim a right to share in the assets largely through Sally Yellowjacket, a common ancestor in the Mewak tribe who lived on the rancheria near the turn of the century.¹ Having exhausted their administrative remedies, they brought this action for judicial relief on eight separate grounds. We granted a preliminary injunction to halt the proposed distribution pending a hearing on the merits.

Plaintiffs have now moved for summary judgment, resting on only three of the eight asserted grounds of relief. Their main argument — and the one which required the convening of a three-judge court — is that the Rancheria Act delegates congressional authority to the Secretary of the Interior without an adequate standard, thus violating the Separation of Powers doctrine of the Constitution. They also attack the Rancheria Act regulations, first on the ground that the Secretary's cancellation of a rule under which they would have qualified for a distribution was arbitrary and capricious, and second, on the ground that the 1965 regulations were illegally issued. Disputing all three contentions, the United States has filed a cross-motion for partial summary judgment.

DELEGATION OF CONGRESSIONAL AUTHORITY

Relying on the principle that Congress may not delegate its legislative powers to administrative agencies without a standard to guide them, plaintiffs contend that the Secretary's authority to distribute property to "Indians of a rancheria or reservation" is unconstitutional because it provides no basis for discriminating between persons who do and do not qualify for the property. In support of their position, they cite the only two cases in American legal history which have found unlawful congressional delegations to administrative agencies,² Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935) and Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L. Ed. 1570 (1935). In the first decision, the Supreme Court struck down the President's authority to prohibit interstate shipments of oil, finding that Congress had declared "no policy ... no standard ... no rule" for determining when and under what conditions to outlaw the shipments. The President's power to adopt "codes of fair competition" recommended by trades and industries met a similar fate in Schechter Poultry Corp. v. United States, supra, where the Court found that the act contained "no" standards and conferred "unfettered" discretion. In both cases, a violation of the President's orders was a crime.

The potentially broad applications of Panama and Schechter, by now the standard citations for those who attack Congressional delegations, never blossomed. In Fahey v. Mallonee, 332 U.S. 245 at 249, 67 S.Ct. 1552 at 91 L.Ed. 2030 at 2036 (1947), the Supreme Court itself narrowly construed the decisions:

Both cited cases dealt with delegations of a power to make federal crimes of acts that never had been such before and to devise novel rules of law in a field in which there had been no settled law or custom. The latter case Schechter v. U. S. also involved delegations to private groups as well as to public authorities.

Other opinions of the Court have upheld congressional delegations of nearly boundless authority. Thus, the Court has given its approval to statutes granting administrators the power to ensure that certain businesses do not "`unduly or unnecessarily complicate the corporate structure,' or `unfairly or inequitably distribute voting power;'"³ to recover "excessive profits;"⁴ to fix prices of goods which "in his the administrator's judgment will be generally fair and equitable;"⁵ to appoint conservators to take over the business of savings and loan associations;⁶ and to perform numerous other functions — all without defining the administrator's sphere of authority.⁷

Whatever utility the doctrine forbidding unbounded delegations may now have, we feel that the Rancheria Act easily escapes censure. Its first redeeming feature is its plain purpose to establish a flexible program. Noting the difficulty of precisely defining the classes of Indians to benefit under the Rancheria Act, Congress deliberately left the choice to the Secretary,⁸ thus following a long custom of endowing the Secretary of the Interior with broad authority over Indian affairs. See Board of Com'rs of Pawnee County v. United States, 139 F.2d 248 at 251-252 (10th Cir. 1943). While it perhaps could have more clearly delineated the qualifying classes of Indians, it wisely chose to avoid the inequities latent in rigid classifications. In circumstances where Congress acknowledges an administrator's superior ability to implement its programs, the power to delegate should be — and is — especially broad. As the Supreme Court has remarked,

It is not necessary that Congress supply administrative officials with a specific formula for their guidance in a field where flexibility and the adaptation of the congressional policy to infinitely variable conditions constitute the essence of the program. Lichter v. United States, 334 U.S. 742 at 785, 68 S.Ct. 1294 at 1316, 92 L.Ed. 1694 at 1726 (1948); see also Currin v. Wallace, 306 U.S. 1 at 15, 59 S.Ct. 379, 83 L.Ed. 441 at 451 (1939).

Although somewhat broadly drafted to achieve flexibility, the Rancheria Act is sufficiently explicit to preserve a crucial safeguard, the right of meaningful judicial review.⁹ Balancing Congress frequent need to rely upon the wisdom of administrators to implement its programs effectively with the public's right to demand government by laws and not by men, the Supreme Court has developed a sensible test for evaluating the limits of Congress' power to delegate:

Only if we could say that there is an absence of standards for the guidance of the Administrator's actions, so that it would be impossible in a proper judicial proceeding to ascertain whether the will of Congress has been obeyed, would we be justified in overriding its choice of means for effecting its declared purpose ... (Emphasis ours.) Yakus v. United States, 321 U.S. 414 at 426, 64 S.Ct. 660 at 668, 88 L.Ed. 834 at 849 (1944).¹⁰

As we read it, the test requires only that the Act provide enough guidance to permit us to determine whether the Secretary's decisions fall somewhere within broad congressional objectives, a task for which we feel adequately equipped.

Viewed in context, the phrase "Indians of a rancheria" is not as obtuse as it may seem. To begin with, the word "of" has a rather accepted judicial construction; it generally means "`associated with' or `connected with' or `pertaining to.'" California Rice Industry v. Federal Trade Commission, 102 F.2d 716 at 721 (9th Cir. 1939); see also Harlan v. Industrial Accident Commission, 194 Cal. 352 at 361, 228 P. 654 (1924). This construction finds support in Congressional history, which reveals that the Act was intended to benefit "users" of the property.¹¹ Furthermore, § 5(d) of the Act, which authorizes the Secretary to sell rather than distribute unoccupied reservations, confirms what we feel to be obvious — that Congress intended to benefit Indians who have roots on the reservation property. Although far from precise, this standard achieves Congress' objective to establish flexibility and yet permits us to determine if the Secretary has wandered too far afield. We therefore think it is amply sufficient to remove any doubt about the constitutionality of the delegation.

CHANGE IN REGULATIONS

Plaintiffs next contend that the Secretary unlawfully change the administrative regulations which define the qualifying classes of Indians. In 1965, a year after Congress had amended the Rancheria Act, the Secretary deleted a section of the regulations under which Indians claiming a "special relationship" to the reservation could qualify for a share of the assets. Alleging that they qualify under this provision but not under the amended regulations, plaintiffs urge us to declare that the change resulting in their exclusion from the program was arbitrary and capricious. While their complaint broadly alleges that the amended regulations themselves are unreasonable and invidiously...