MIAMI TRIBE OF OK v. US

• Citation: 679 F. Supp.2d 1269
• Decision Date: 04 January 2010
• Docket Number: Civil Action Case No. 03-2220-DJW.
• Parties: MIAMI TRIBE OF OKLAHOMA, Plaintiff, v. UNITED STATES of America; Dirk Kempthorne, Secretary, United States Department of the Interior; and George Skibine, Assistant Secretary of Interior Bureau of Indian Affairs, Defendants.
• Court: U.S. District Court — District of Kansas

679 F.Supp.2d 1269

MIAMI TRIBE OF OKLAHOMA, Plaintiff, v. UNITED STATES of America; Dirk Kempthorne, Secretary, United States Department of the Interior; and George Skibine, Assistant Secretary of Interior Bureau of Indian Affairs, Defendants.

Civil Action Case No. 03-2220-DJW.

United States District Court, D. Kansas.

January 4, 2010.

Kip A. Kubin, Bottaro, Morefield, Kubin & Yocum, LC, Kansas City, MO, Christopher J. Reedy, Olathe, KS, for Plaintiff.

David D. Zimmerman, Office of United States Attorney, Kansas City, KS, for Defendants.

MEMORANDUM AND ORDER

DAVID J. WAXSE, United States Magistrate Judge.

This matter comes before the Court on Plaintiff Miami Tribe's APA Brief Seeking Equitable Relief to Remedy Wrongful Administrative Actions (doc. 130). Miami Tribe requests that the Court set aside the October 10, 2008 decision of the Interior Board of Indian Appeals ("IBIA") as arbitrary and capricious under the Administrative Procedures Act. Miami Tribe further requests that the Court grant judgment on its breach of trust claim in its favor and enter a permanent injunction against Defendants. The parties have consented to the exercise of jurisdiction by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). As set forth below, the Court affirms the IBIA's October 10, 2008 Order Affirming Decision in Part and Vacating in Part, denies Miami Tribe's requests for equitable relief, and dismisses the breach of trust claim set forth in Count II of Miami Tribe's Second Amended Complaint.

I. Procedural Posture of Matter Before the Court

James E. Smith ("Smith"), a member of the Miami Tribe of Oklahoma ("Miami Tribe"), holds a 3/38 restricted undivided interest in the Maria Christiana allotment, Miami No. 35 ("Miami Reserve"), located in Miami County, Kansas. In 2001, Smith submitted his application to the Bureau of Indian Affairs ("BIA") for approval to gift transfer one-third of his 3/3 8 undivided interest in Miami Reserve to Miami Tribe (hereinafter "application for gift conveyance"). The BIA denied Smith's application for gift conveyance on January 10, 2002.

On May 5, 2003, Miami Tribe commenced the present action in this Court seeking judicial review of the BIA's denial of Smith's application under the Administrative Procedures Act ("APA").¹ Miami Tribe also asserted claims that Defendants breached their fiduciary and trust duties to Miami Tribe, and that Defendants had violated substantive and procedural due process and property rights of Miami Tribe. Early in the case, the parties agreed to bifurcate Miami Tribe's request for judicial review under the APA from its claims based upon breach of trust and constitutional violations.

On June 22, 2005, 374 F.Supp.2d 934, the Court issued its Memorandum and Order reversing the BIA's January 11, 2002 decision that denied Smith's application for gift conveyance, and instructing the BIA to forthwith approve Smith's application.²

On July 7, 2005, Defendants filed their Motion for Reconsideration of the Court's June 22, 2005 Memorandum and Order, requesting that the Court reconsider its decision and affirm the BIA's denial of Smith's application. Defendants alternatively requested the Court remand the matter to the BIA rather than reversing the BIA's decision. On November 23, 2005, the Court granted Defendants' Motion for Reconsideration as to the portion of the Court's Memorandum and Order that directed the BIA to forthwith approve Smith's application for gift conveyance.³ The Court ordered that the case be remanded to the BIA for further proceedings consistent with the Court's June 22, 2005 Memorandum and Order. Specifically, the Court remanded the matter for the BIA to consider the proposed transfer's long-term impact on further fractionation of Miami Reserve.

On remand, the BIA approved Smith's application to give one-third of his 3/38 interest in Miami Reserve to Miami Tribe. The BIA issued its decision dated October 23, 2007, which notified Smith and Miami Tribe that Smith's application for gift conveyance was approved by the BIA. The letter, however, further advised that with respect to Smith's request to transfer his interest to Miami Tribe "in trust," Miami Tribe would need to submit an application for a trust acquisition under 25 C.F.R. 151. The BIA's October 23, 2007 letter stated, in pertinent part:

Your letter dated April 23, 2007, provided clarification that you wish to transfer 1/3 of your undivided interest to the Tribe with the interest to the Tribe to remain in "trust status." Therefore, the proposed gift conveyance will be processed as a two-part transaction consisting of a disposal by you and an acquisition by the Tribe in trust status. The disposal portion is considered in accordance with 25 CFR 152.17 and the acquisition portion will be processed in accordance with 25 CFR 151 upon the receipt of an application for a trust acquisition from the Tribe. In this regard, by copy of this letter, the Tribe is advised of the Bureau's findings that consideration will be given to the acquisition upon receipt of the application from the Tribe.

The Deed to Restricted Indian Land you executed on June 20, 2007, if approved, would have conveyed the interest in fee status to the Tribe. Therefore a deed transferring a 1/38 interest in Miami Reserve to the United States of America in Trust for the Miami Tribe of Oklahoma is enclosed for your review and execution.

The executed deed is to be returned to this office and will be included in the Tribe's fee-to-trust application.⁴

Miami Tribe appealed the BIA's October 23, 2007 decision on remand with the Interior Board of Indian Appeals ("IBIA"). On October 10, 2008, the IBIA issued its Order Affirming Decision in Part and Vacating in Part. The IBIA affirmed the BIA Regional Director's determination that Smith holds his interest in Miami Reserve in restricted fee title and that interest is not being held in trust by the United States.⁵ It vacated the decision "to the extent that it suggests that the interest to be conveyed to the Tribe would be an unrestricted fee simple interest."⁶ The IBIA's decision further indicated that "because the Tribe seeks title in the name of the United States in trust for the Tribe, and in the absence of any indication by the Tribe that it will accept Smith's gift if Smith holds restricted fee title, the Regional Director need not proceed further with the transaction at this time."⁷

On October 30, 2008, Miami Tribe filed its Second Amended Complaint (doc. 126) asserting two counts. In Count I, Miami Tribe seeks APA review of the BIA's refusal to approve Smith's request to transfer one-third of his interest in Miami Reserve "in trust" to Miami Tribe. In Count II, Miami Tribe asserts a common law breach of trust claim against Defendants based upon their alleged breaches of their fiduciary and trust duties. These breaches include the BIA's refusal to approve Smith's application, refusal to approve the transfer of Smith's interest in trust for the benefit of Miami Tribe, refusal to timely consider and act on Smith's appeal of the denial of his request for transfer, failure to protect and recognize Miami Tribe's jurisdiction over Miami Reserve, and failure to maintain and hold Miami Reserve in trust for the benefit of its Indian owners. Miami Tribe seeks equitable relief under the APA for these alleged breaches, including an order compelling Defendants to: (1) approve Smith's transfer in trust to Miami Tribe, (2) recognize and protect Miami Tribe's jurisdiction over Miami Reserve, (3) hold Miami Reserve in trust for the benefit of Miami Tribe and the other beneficial owners, and (4) process all future transfers of interests in Indian lands from a member to his or her Indian tribe within 180 days of the submission of the application for approval.

Miami Tribe filed the instant APA Brief Seeking Equitable Relief to Remedy Wrongful Administrative Actions (doc. 130) on December 15, 2008. Miami Tribe later filed supplements to the administrative record on February 23, 2009 (doc. 140) and May 21, 2009 (doc. 146). Defendants filed their Response to Miami Tribe's Second Supplement to the Administrative Record (doc. 147) on June 11, 2009.

In its APA brief, Miami Tribe requests that the Court set aside the IBIA's October 10, 2008 decision as arbitrary and capricious under the APA. It further requests that the Court grant equitable relief on its breach of trust claim and enter an order mandating that Defendants recognize the trust status of Miami Reserve, recognize Miami Tribe's jurisdiction over Miami Reserve, and process all future application for transfers of interest in Miami Reserve within 180 days.

The Court will first review the IBIA's October 10, 2008 decision, and will then address Miami Tribe's requests for specific equitable relief under the APA. The Court will then address Defendants' request for dismissal of the breach of trust claim set forth in Count II of Miami Tribe's Second Amended Complaint.

II. Review of IBIA's October 10, 2008 Decision

Miami Tribe seeks judicial review of the IBIA's October 10, 2008 decision affirming the BIA's post-remand determination that Smith holds his interest in Miami Reserve in restricted fee title and the interest is not being held in trust by the United States. It further seeks review of the agency's refusal to approve Smith's proposed gift transfer "in trust" to Miami Tribe. It contends that pursuant to the 1989 order partitioning Miami Reserve, entered in Midwest Investment Properties, Inc. v. DeRome,⁸ the last remaining 35 acres of Miami Reserve was conveyed "to the United States Government by and through the Bureau of Indian Affairs . . . in trust for the benefit of the Indian owners."⁹ Miami Tribe argues that absent any indication that Miami Reserve has been transferred out of trust by the United States, Smith's present interest in Miami Reserve continues to be held in trust.

According to Miami Tribe, if Smith's present...