Mahnomen County, Minn. v. Bureau of Indian Affairs

Decision Date24 March 2009
Docket NumberCivil No. 08-5180 (MJD/RLE).
Citation604 F.Supp.2d 1252
PartiesMAHNOMEN COUNTY, MINNESOTA, Plaintiff, v. The BUREAU OF INDIAN AFFAIRS, Dirk Kempthorne in his official capacity as the Secretary of the Interior, and the United States, Defendants.
CourtU.S. District Court — District of Minnesota

Scott G. Knudson and Daniel J. Supalla, Briggs and Morgan, P.A. for and on behalf of Plaintiff.

Amy S. Tryon, Trial Attorney, U.S. Dept. of Justice, Ronald J. Tenpas, Assistant Attorney General and Marcia M. Kimball, Department of the Interior, Office of the Solicitor for and on behalf of Defendants.

MEMORANDUM OPINION AND ORDER

MICHAEL J. DAVIS, Chief Judge.

This matter is before the Court on Defendants' (collectively "the United States") motion to dismiss or in the alternative for summary judgment.

BACKGROUND

The White Earth Band of Chippewa Indians (hereinafter the "Band") purchased certain parcels of land in 1991 upon which the Band operates gaming operations at the Shooting Star Casino (hereinafter referred to as the "Casino Property" or "Tract 1"). Id. It is the Band's position that the Casino Property was purchased through funds made available in the White Earth Lands Settlement Act ("WELSA"), Pub. L. 100-153, Act of Nov. 5,1987, 101 Stat. 886 (1986).

WELSA was enacted to address uncertainties as to title to certain allotted Indian lands within the White Earth Indian Reservation and as recompense to the Band for consequences that arose due to the uncertainties to land titles. WELSA §§ 2 and 6(a). In addition to settling unresolved legal issues raised by the Band, the United States and the State of Minnesota, WELSA provided for the establishment of "The White Earth Economic Development and Tribal Government Fund." WELSA § 12(b). WELSA further provides that any lands within the exterior boundaries of the reservation acquired through this fund "shall be held in trust by the United States." WELSA § 18. Section 18 further provided that lands so acquired by the Band "shall be deemed to have been reserved from the date of the establishment of said reservation and to be part of the trust land of the White Earth Band for all purposes."

In 1995, the Band applied to the federal government to put the Casino Property into trust. (AR001173.) The application was approved by the Assistant Secretary for Indian Affairs, subject to the Band satisfying all title requirements in accordance with 25 C.F.R. § 151.12, and that the Band obtain approval of all financing and land-related documents if such approval is required by 25 U.S.C. § 81 and/or 25 C.F.R. Part 162. (AR0001390.) Due to outstanding title objections, the Casino Property was not taken into trust at that time. (AR001274, 001053.)

In 2000, the Band inquired of the Bureau of Indian Affairs ("BIA") as to the effect of Section 18 of WELSA, and whether it had the effect of removing land purchased pursuant to that section from the requirements of 25 C.F.R. § 151. (AR001368.) In response, the BIA concurred in the opinion that "lands acquired pursuant to Section 18 of WELSA should follow the mandated acquisition requirement in 25 C.F.R. § 151." (AR001369.) In July 2002, the Band formally requested the BIA to take the Casino Property into trust as a mandatory acquisition under Section 18 of WELSA. (AR001251-52, 001086.) In support of its request, the Band submitted documents to demonstrate that the Casino Property, or Tract I, had been purchased with WELSA funds. (See AR000936, 000959-61, Affidavit of Frank Johnson, CFO for the Band, and audit reports.)

Initially, the BIA determined these documents were insufficient from which to determine whether the Casino Property was purchased with WELSA funds, and requested additional information from the Band, such as bank statements and other financial documents. (AR000894, 000730.) The Band did submit additional documents, but informed the BIA that many of the documents requested had been destroyed in a flood, including bank statements and cancelled checks. (AR000739-779, deeds, purchase agreements, the Band's investment plan.) A senior financial analyst at the Office of Indian Gaming Management ("OIGM") reviewed the documents the Band did submit, and concluded that such documents established by a preponderance of the evidence that WELSA funds had been used to purchase the Casino Property. (AR000255-57.)

On March 23, 2006, the BIA Midwest Regional Director issued a Notice of Decision to take the Casino Property into trust as a mandatory acquisition pursuant to Section 18 of WELSA. (AR000239-242.) The Notice, however, described two tracts of land, Tract 1 and Tract 2. The United States asserts that inclusion of the reference to Tract 2 was error.

The State of Minnesota properly appealed the BIA's decision to the Interior Board of Indian Affairs ("IBIA"). (AR000058-59.) The County, however, did not file a timely appeal. By Order dated July 3, 2008, the IBIA affirmed the decision of the BIA. State of Minnesota v. Acting Midwest Regional Director, 47 IBIA 122, 127 (2008) (AR00003-10.) The IBIA specifically found that the record supported the Regional Director's decision, which included the OIGM analysis of the financial documents, together with supporting documents. Id. After the IBIA issued its decision, the BIA published notice of its intent to acquire the land in trust in the Mahnomen Pioneer. (Ex. 2.)

STANDARDS OF REVIEW
A. Motion to Dismiss

When considering a motion to dismiss under Rule 12(b)(6), the Court "accept[s] as true all of the factual allegations contained in the complaint, and review[s] the complaint to determine whether its allegations show that the pleader is entitled to relief." Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008) (citing Bell Atlantic Co. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations ... a plaintiff's obligation to provide the "grounds" of his "entitle[ment] to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do ... Factual allegations must be enough to raise a right to relief above the speculative level ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Twombly, 127 S.Ct. at 1964-65 (citations omitted). "[W]e do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face." Id. at 1973.

B. Summary Judgment

Summary judgment is appropriate if, viewing all facts in the light most favorable to the non-moving party, there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party seeking summary judgment bears the burden of showing that there is no disputed issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. This burden can be met "by `showing'— that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S.Ct. 2548. The party opposing summary judgment may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine issue for trial. Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).

C. Review of Administrative Decisions

A final federal agency decision is reviewed pursuant to the Administrative Procedures Act ("APA"), 5 U.S.C. § 706(2). Under the APA, an agency decision can be reversed where the agency action was arbitrary or capricious, an abuse of discretion or otherwise not in accordance with the law. § 706(2)(A). "To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Overton Park, 401 U.S. at 416, 91 S.Ct. 814. Agency decisions are given a "high degree of deference." Sierra Club v. EPA, 252 F.3d 943, 947 (8th Cir.2001). "The court is not empowered to substitute its judgment for that of the agency." Overton Park, at 416, 91 S.Ct. 814.

Review is typically based solely on the administrative record. "In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error." 5 U.S.C. § 706.

If the record before the agency does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation. The reviewing court is not generally empowered to conduct a de novo inquiry into the matter being reviewed and to reach its own conclusions based on such an inquiry.

Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985).

D. Conversion of Motion to Dismiss to Summary Judgment

A motion to dismiss may be converted to a motion for summary judgment where matters outside of the pleadings are considered by the Court. Fed.R.Civ.P. 12(d). When the Court is reviewing agency action, as it is in this case, the Court "sits as an appellate tribunal, not as a court authorized to determine in a trial-type proceeding whether the Secretary's study was factually flawed." Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221, 1225 (8th Cir.1993). "The entire case on review is a question of law, and only a question of law. And because a court can fully resolve any purely legal question on a motion to dismiss, there is no inherent barrier to reaching the merits at the 12(b)(6) stage." Id. at 1226.

The County nonetheless asks that the Court...

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