Prieto v. US, Civ. A. No. 84-3636.

CourtUnited States District Courts. United States District Court (Columbia)
Citation655 F. Supp. 1187
Decision Date13 March 1987
PartiesDora PRIETO, Plaintiff, v. UNITED STATES of America, et al., Defendants.
Docket NumberCiv. A. No. 84-3636.

655 F. Supp. 1187

Dora PRIETO, Plaintiff,
v.
UNITED STATES of America, et al., Defendants.

Civ. A. No. 84-3636.

United States District Court, District of Columbia.

March 13, 1987.


655 F. Supp. 1188

Daniel M. Crane, Larkin, Noel & Falk, Washington, D.C., Michael D. Harris, Best, Best & Krieger, Palm Springs, Cal., for plaintiff.

Susan V. Cook, Land and Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., for defendants.

MEMORANDUM

HAROLD H. GREENE, District Judge.

By way of an unusual administrative history, this case presents the Court with the responsibility to determine whether the Department of Interior and its Bureau of Indian Affairs (BIA) have fairly treated one of the citizens under their special protection. Plaintiff Dora Prieto, an American Indian, challenges two administrative rulings — one by the Department of Interior's Board of Indian Appeals (IBIA), the other by the Department's Deputy Assistant Secretary for Indian Affairs—that revoked the trust status of land on which she hoped to erect and lease billboards. In a motion for summary judgment, plaintiff asks the Court to restore the land to trust status, or in the alternative to remand this matter to the BIA. The government also has moved for summary judgment.

The motions raise interesting and complex questions about statutory requirements for trust status, the nature of Indians' personal savings, rules of construction for laws pertaining to Indians, and much more. Most of these questions need not be reached in this decision. Upon review of the administrative record in accordance with 5 U.S.C. § 706, the Court finds that the IBIA abused its discretion and acted arbitrarily and capriciously in upholding the revocation of plaintiff's trust status, and further that the Department of Interior is estopped by its own conduct from revoking this trust status. Plaintiff's motion for summary judgment will thus be granted and the government's motion will be denied. The trust status of plaintiff's land will now be restored.

I

Plaintiff Dora Prieto is an enrolled and alloted member of the Agua Caliente Tribe at the Cahuilla Indians of Palm Springs, California, a federally recognized Indian tribe. In 1980, she negotiated the purchase for $46,120 of about 55 acres of land alongside Interstate Highway 10 in Riverside County, California, next to the Agua Caliente Reservation. Plaintiff planned to erect and lease billboards on the land, which is about 100 feet wide and three miles long. When plaintiff bought the land, it was not in Indian trust or restricted status.1

Plaintiff applied to the BIA to have this land accepted into trust under the provisions of 25 U.S.C. § 409a (1986),2 presumably in order that the land be exempt from local taxes as well as from the Highway Beautification Act, 23 U.S.C. § 131, and the

655 F. Supp. 1189
California Outdoor Advertising Act, Cal. Bus. & Prof.Code §§ 5201 et seq. (West 1974). Section 409a states that
whenever any nontaxable land of a restricted Indian ... is sold under existing law to any ... person or corporation ... the money received for said land may, in the discretion and with the approval of the Secretary of the Interior, be reinvested in other lands selected by said Indian, and such land so selected and purchase shall be restricted as to alienation, lease, or incumbrance, and nontaxable in the same quantity and upon the same terms and conditions as the nontaxable lands from which the reinvested funds were derived, and such restrictions shall appear in the conveyance.

Since 1958, plaintiff had sold 67 acres of trust land in five separate transactions, but most of the revenue from these sales was not deposited in her Individual Indian Money Account, as trust proceeds normally would be.3 Moreover, instead of using her own money for the purchase of the land in question here, plaintiff borrowed the $46,120 from a company called the Naegele Outdoor Advertising Company of California. These facts may have raised doubts about whether plaintiff's purchase met the requirements of section 409a, but the purchase was reviewed and approved by the Director of the Palm Springs Field Office of the BIA. Indenture to the United States in trust for appellant was recorded on February 19, 1981.

Meanwhile, plaintiff planned her billboard venture. On September 17, 1980, she entered into a business agreement with the Naegele Company.4 Plaintiff also sought and obtained Certificates of Zoning Compliance for the land from the Agua Caliente Tribal Council. She sought and obtained approval, including construction permits, from the California Department of Transportation. Finally, she entered into contracts for the use of the property for advertising purposes and built storage facilities on the property.5

On November 25, 1981, more than nine months after the land was placed in trust, the County of Riverside filed a "notice of appeal" from the BIA's decision. Riverside County argued that the BIA had not been authorized to take the land into trust because the funds for its purchase were not derived from the sale of other trust or restricted lands as required by section 409a. The county also alleged that its appeal was timely because it had been given inadequate notice of the intention to place the property in trust.

On March 5, 1982, the Acting Area Director of the Sacramento BIA Office informed the county in writing that it did not have the right to appeal the decision. The Director told the county that it had:

neither the rights of protest nor appeal of his decision ... Under the circumstances, had I accepted your Notice of Appeal, it would have been considered untimely and the case closed pursuant to 25 C.F.R. 2.10, because your notice was not filed within 30 days of my decision, and the record shows that the County was on notice of the matter.6

Nevertheless, although the appeal deadline had run, the Acting Area Director decided

655 F. Supp. 1190
that the county's appeal notice would be treated as a complaint requesting reconsideration of the decision, pursuant to 25 C.F.R. § 2.2, and that the decision would, in fact, be reconsidered. The county did not appeal this decision although it was advised of the right to do so

On March 26, 1982, more than a year after the grant of trust status, the Acting Area Director issued a notice for plaintiff to show cause why the trust status of her property should not be terminated. The notice read:

I have reviewed your Individual Indian Money Account ... The records reveal that the funds used for the purchase of the subject property were not received from the sale of trust of restricted lands.
You are, therefore, notified that unless proof or evidence is offered tracing such purchase money for the subject property to funds received from the sale of trust or restricted lands, the ... property so acquired is subject to loss of its trust status.7

Plaintiff responded to this notice by affidavit on May 13, 1982. She stated that she had sold some 67 acres of trust land between 1958 and 1979, and that under section 409a she had the right to replace those 67 acres with the 55 acres she now acquired. She also made several other legal arguments (e.g., that section 409a does not require the tracing of funds to their ultimate source).

On July 2, 1982, the Acting Area Director determined that plaintiff's land did not qualify for trust status under section 409a. He based his decision on the fact that the $46,120 used to purchase the land did not come from an Individual Indian Money Account but rather from a personal banking account.8 Plaintiff appealed this decision to the IBIA.

The IBIA issued its decision on March 22, 1983, holding that plaintiff's land purchase ws ineligible for trust status under section 409a.9 The IBIA examined the legislative history of that provision and found that Congress intended to require a showing that the purchase funds "have been derived from the prior taking or sale. This requirement may ... mean that an individual must trace funds intended for the purchase of replacement property to their ultimate source."10 The IBIA stated that use of an Individual Indian Money Account was the easiest but not the only, way to satisfy this "tracing" requirement. In any case, the IBIA decided, plaintiff's land could not qualify because the purchase price was obtained on loan from Naegele. However, the IBIA vacated and remanded the Acting Area Director's revocation of trust status in light of newly passed legislation, the Indian Land Consolidation Act, 96 Stat. 2515, "which seems to authorize the BIA, in its discretion, to accept appellant's property in trust, regardless of the prior character of the land or the nature of funds used to acquire it."11 See 25 U.S.C. § 465.

One crucial aspect of this IBIA decision remains to be discussed. Before reviewing the merits of plaintiff's appeal, the IBIA questioned whether the Secretary even had "authority to reconsider and revoke his approval of an acquisition of land in trust." Although the IBIA found that the pertinent regulations did not provide means for reconsideration, see 25 C.F.R. § 151, and that "reconsideration should not be undertaken lightly," it held that the decision to reconsider was proper "based on evidence suggesting the possibility that approval may have been obtained through fraud or misrepresentation." Finding no fraud, the IBIA nevertheless decided that:

once reconsideration is properly undertaken, due process requires that persons potentially affected by reconsideration be
655 F. Supp. 1191
given an opportunity to be heard. Conclusive evidence that the transaction did not meet the statutory or regulatory requirements then provides grounds for termination of the trust status. It is immaterial whether the initial erroneous decision was made as a result of misrepresentation, mistake, or for some other legally sufficient reason.12

Final agency action in this matter was taken on September 26, 1984, when...

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18 practice notes
  • Pueblo of Santa Ana v. Kelly, No. Civ. 96-0002 MV/WWD.
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • 12 Julio 1996
    ...under circumstances in which the government has a trust relationship with the claimant. The Tribes rely on Prieto v. United States, 655 F.Supp. 1187 (D.D.C.1987) and Pangilinan v. Castro, 1985 WL 3792 (D.N. Mariana Islands 1985), aff'd, De Mesa v. Castro, 844 F.2d 642 (9th Cir.1988), for th......
  • Douglas Timber Operators Inc. v. Salazar, Civil Action No. 09–1704(JDB).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 31 Marzo 2011
    ...83 S.Ct. 1373, 10 L.Ed.2d 491 (1963); Belville Mining Co. v. United States, 999 F.2d 989 (6th Cir.1993); Prieto v. United States, 655 F.Supp. 1187, 1191 (D.D.C.1987) (discussing inherent authority in the administrative adjudication context, but finding that it was “completely clear that the......
  • Navarro v. U.S. Dep't of Homeland Sec., Case No. 17-cv-06404-DMR
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 1 Abril 2020
    ...to consider the plaintiff's reliance interests), appeal filed, Nov. 28, 2018 (Nos. 18-5343, 18-5345). See also Prieto v. United States, 655 F. Supp. 1187, 1191-92 (D.D.C. 1987) (holding that agency's decision to rescind land's trust status nine months after initial decision violated the APA......
  • Belville Min. Co. v. U.S., Nos. 91-3623
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • 26 Julio 1993
    ...the initial decision; and 4) the agency had attempted to use the pretext of fraud to justify reconsideration. Prieto v. United States, 655 F.Supp. 1187, 1192-93 (D.D.C.1987). To the factors enumerated by these courts we would add another factor we believe to be relevant here: the probable i......
  • Request a trial to view additional results
18 cases
  • Pueblo of Santa Ana v. Kelly, No. Civ. 96-0002 MV/WWD.
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • 12 Julio 1996
    ...under circumstances in which the government has a trust relationship with the claimant. The Tribes rely on Prieto v. United States, 655 F.Supp. 1187 (D.D.C.1987) and Pangilinan v. Castro, 1985 WL 3792 (D.N. Mariana Islands 1985), aff'd, De Mesa v. Castro, 844 F.2d 642 (9th Cir.1988), for th......
  • Douglas Timber Operators Inc. v. Salazar, Civil Action No. 09–1704(JDB).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 31 Marzo 2011
    ...83 S.Ct. 1373, 10 L.Ed.2d 491 (1963); Belville Mining Co. v. United States, 999 F.2d 989 (6th Cir.1993); Prieto v. United States, 655 F.Supp. 1187, 1191 (D.D.C.1987) (discussing inherent authority in the administrative adjudication context, but finding that it was “completely clear that the......
  • Navarro v. U.S. Dep't of Homeland Sec., Case No. 17-cv-06404-DMR
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 1 Abril 2020
    ...to consider the plaintiff's reliance interests), appeal filed, Nov. 28, 2018 (Nos. 18-5343, 18-5345). See also Prieto v. United States, 655 F. Supp. 1187, 1191-92 (D.D.C. 1987) (holding that agency's decision to rescind land's trust status nine months after initial decision violated the APA......
  • Belville Min. Co. v. U.S., Nos. 91-3623
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • 26 Julio 1993
    ...the initial decision; and 4) the agency had attempted to use the pretext of fraud to justify reconsideration. Prieto v. United States, 655 F.Supp. 1187, 1192-93 (D.D.C.1987). To the factors enumerated by these courts we would add another factor we believe to be relevant here: the probable i......
  • Request a trial to view additional results

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