Norvell v. Sangre De Cristo Development Co., Inc.

Decision Date30 June 1975
Docket NumberNos. 74-1365,s. 74-1365
Citation519 F.2d 370
PartiesDavid L. NORVELL, Attorney General of the State of New Mexico, et al., Appellees, v. SANGRE de CRISTO DEVELOPMENT COMPANY, INC., and Rogers C. B. Morton, et al., Appellants, and Mescalero Apache Tribe, Appellant-Intervenor. to 74-1367.
CourtU.S. Court of Appeals — Tenth Circuit

Paul L. Bloom, Sp. Asst. Atty. Gen., Santa Fe, N. M. (Frank Bachicha, Jr., Bd. of County Commissioners, Santa Fe, N. M., and Harry S. Connelly, Jr., Santa Fe, N. M., on the brief), for appellee, Norvell.

Frank Bachicha, Jr., Santa Fe, N. M., for Bd. of County Commissioners, Santa Fe, N. Mex., Intervenor-Appellee.

John J. Zimmerman, Dept. of Justice, Washington, D. C. (Edmund B. Clark, Anthony S. Borwick, Dept. of Justice, Washington, D. C., Wallace H. Johnson, Asst. Atty. Gen., Santa Fe, N. M., Victor R. Ortega, U. S. Atty., Richard J. Smith, Asst. U. S. Atty., Albuquerque, N. M., on the brief), for appellant, Rogers C. B. Morton.

George E. Fettinger, Alamogordo, N. M. (Norman D. Bloom, Jr., Alamogordo, N. M., on the brief), for appellant-intervenor Mescalero Apache Tribe.

Philip R. Ashby, P. A., Albuquerque, N. M., amici curiae for Pueblo De Chochiti and Pueblo of San Ildefonso.

Toby F. Grossman, Albuquerque, N. M., answer brief on behalf of amicus curiae, American Indian Law Center.

Before LEWIS, Chief Judge, and HOLLOWAY and BARRETT, Circuit Judges.

BARRETT, Circuit Judge.

This action was initiated by the State of New Mexico (hereinafter referred to as State or Appellee) in which the Board of Commissioners of Santa Fe County, New Mexico was permitted to join as Intervenor (hereinafter referred to as Board) against Sangre de Cristo Development Company, Inc., et al., (hereinafter referred to as Company), and Rogers C. B. Morton, Secretary of the Interior of the United States, et al., (hereinafter referred to as Federal Defendants) for a judgment declaring that the State has certain jurisdiction over the Sangre de Cristo Development Company and its activities under a 99-year lease granted it in 1970 by the Pueblo de Tesuque, an Indian Tribe, on reservation land within five (5) miles of the City of Santa Fe, New Mexico. Further relief was prayed in the nature of administrative review and injunction. Jurisdiction was predicated under 28 U.S.C. § 2201 and 5 U.S.C. §§ 701-706.

The Federal Defendants filed a Motion to Dismiss or in the alternative for Summary Judgment pursuant to Rule 12(b), Fed.R.Civ.P. on the grounds, inter alia, that: the Pueblo of Tesuque is an indispensable party to the action; the Congress has not consented to the suit; and that the action is not a case or controversy within the meaning of Art. III, Section II of the Constitution. The Motion was denied following hearing by an Amended Order of the Trial Court entered on May 19, 1972, wherein the Court made reference to its consideration of "the briefs and arguments" of counsel (the briefs are not before us on appeal) in concluding that the Motions "are not well taken." During those proceedings, counsel for the Federal Defendants argued that the United States Government did not rely upon 25 C.F.R. § 1.4 when the lease was negotiated and, further, that the United States had done nothing in the transaction "to frustrate the State's jurisdiction." He opined that the lease recognizes State jurisdiction in four specific areas. (Vol. II, pp. 41-42). His oral argument was apparently directly at odds with the Federal Defendants's memorandum. (Vol. II, pp. 51-52). However, counsel for Federal Defendants thereafter, in the course of the motion proceedings, attempted to clarify his position, i. e., that he was not conceding State jurisdiction, but rather contending only that if the State should be held to have jurisdiction, the lease requires that the lessee Company comply with applicable State laws (Vol. II, pp. 60-61). Finally, at trial the Federal Defendants took the position that 25 C.F.R. § 1.4 applied and that the State had no jurisdiction.

The grounds advanced by the Federal Defendants in support of the 1971 Motion, insofar as they relate to their contention that the action is not a case or controversy within the meaning of Art. III, Section II of the Constitution were based on arguments that: (a) the State's contention that its liquor laws apply to the dispensing of alcoholic beverages on the leased premises is not ripe because no liquor has been served or dispensed; (b) the State's contention that the Construction Industries Commission has jurisdiction is not ripe because no construction has been undertaken and if the sales office of the Company comes within the Act it has not been red-tagged; and (c) the State's "morass of hypothetical confrontations" set forth in Count III, including the matter of ad valorem taxes due to the State, is not ripe for determination because the State has never proceeded to "set foot" on the property to estimate the value of the property and no formal assessment or levy has been made. Significantly, our opinion in Davis v. Morton, 469 F.2d 593 (10th Cir. 1972), had not yet been rendered, wherein we reversed and remanded, holding that the subject lease did involve major federal action requiring compliance with the National Environmental Protection Act (NEPA) mandates.

The Federal Defendant's Motion to Dismiss or in the alternative for Summary Judgment was renewed at the conclusion of all of the evidence on or about September 4, 1973. The record does not reflect that further argument was directed to the Court relative to the "ripeness" issue (or solicited by the Court) but it does reflect that the Trial Court was aware of our reversal in Davis v. Morton, supra, and our remand for compliance with NEPA.

In its Memorandum Opinion filed February 20, 1974, the Trial Court ruled that the State has jurisdiction over the Company and its activities at its Colonias de Santa Fe Subdivision (on the reservation land under the 99-year lease) for specific purposes. The Court, after reviewing a number of decisions, stated that although there is no question that Congress has plenary powers over all Indian affairs and can, if it so desires, preclude State jurisdiction, it is nevertheless erroneous to assume " . . . that exclusive authority over Indian lands and all uses of and activities thereon is, in the absence of a specific delegation of such authority to the State, vested in the Congress. The States have, on the contrary, had certain authority in the absence of specific preemption of that authority by Congress. The passage of Public Law 280 was not intended to and did not oust existing State jurisdiction." (Appendix, p. 195). The Court observed that without regard to Public Law 280 there are circumstances under which State laws have application on Indian land, in the absence of express federal legislation to the contrary, referring specifically, for example, to murder of a non-Indian by a non-Indian on an Indian reservation, taxation applicable to a non-Indian undertaking activities on Indian reservations, lessees of mineral rights in Indian lands subject to State gross production taxes and State excise taxes on petroleum produced from such lands. The Court also noted that State courts have jurisdiction over actions by Indians against non-Indians. In essence, the Trial Court held that "In the absence of governing acts of Congress, the resolution of whether a given State action is permitted depends on whether it infringes upon the rights of the Indians to make their own laws and be ruled by them." (Appendix, p. 197). Proceeding therefrom, the Court concluded that State of New Mexico laws and actions governed (a) in the issuance, regulation and sale of liquor on the subject lands, (b) subdivision control, (c) in the application of the State Construction Licensing Act, and (d) in the regulation and protection of the water supply, etc. The Trial Court observed that " . . . none of these state laws interfere with tribal self-government" (Appendix, p. 205), and, more directly to the heart of the dispute before us, that State law application in these areas does not conflict with federal preemption under 25 U.S.C.A. § 415(a) 1 and 25 C.F.R. § 1.4. 2 The Trial Court agreed with the State in its contention that § 415(a), supra, "as it stood at the time of the lease was entered into authorized only what is reflected by the provisions of 25 C.F.R. § 131 3 so that Section 415(a) cannot be thought to have vested in the Secretary's authority to regulate such things as construction, water and land subdivision."

This appeal was taken from the judgment declaring that specifically designated State of New Mexico statutes are applicable to the Company in its operation and activities at the Colonias de Santa Fe Subdivision under the lease of May 24, 1970, and further that 25 C.F.R. § 1.4 is not a valid and enforceable regulation of the Secretary of the Interior to the Subdivision. Appellants argue that the State of New Mexico is without any jurisdiction whatsoever over the property or activities in relation to the leasehold agreement, inasmuch as the lease and/or sub-leases cover lands owned by the Pueblo of Tesuque.

On appeal, during oral arguments, this Court propounded these questions to the parties and directed that supplemental briefs be filed in response thereto, to-wit: (1) Whether there is a proper case and controversy, and one ripe for judicial determination, on the issues decided by the Trial Court; and (2) Whether this action is one in which the grant of declaratory relief was a proper exercise of discretion. The supplemental briefs filed indicate that when the Trial Court judgment of February 20, 1974, was entered it was known that all activities under the Master Lease had been in limbo following the 1972 injunction imposed in Davis v. Morton, supra. We observe that the injunction is even now in force and effect, and that even though some...

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