Sault Ste. Marie Tribe of Chippewa Indians v. Haaland

• Decision Date: 04 February 2022
• Docket Number: C/w 20-5125, 20-5127, 20-5128,No. 20-5123,20-5123
• Citation: 25 F.4th 12
• Parties: SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS, Appellee v. Debra A. HAALAND, in Her Official Capacity as Secretary of the Interior and United States Department of the Interior, Appellants Saginaw Chippewa Indian Tribe of Michigan, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

25 F.4th 12

SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS, Appellee

v. Debra A. HAALAND, in Her Official Capacity as Secretary of the Interior and United States Department of the Interior, AppellantsSaginaw Chippewa Indian Tribe of Michigan, et al., Appellees

No. 20-5123

C/w 20-5125, 20-5127, 20-5128

United States Court of Appeals, District of Columbia Circuit.

Argued March 30, 2021

Decided February 4, 2022

Erika B. Kranz, Attorney, U.S. Department of Justice, argued the cause for federal appellants. With her on the briefs were Jonathan D. Brightbill, Principal Deputy Assistant Attorney General, Eric Grant, Deputy Assistant Attorney General, and John Smeltzer, Attorney.

Pratik A. Shah argued the cause for non-federal appellants. With him on the briefs were William A. Szotkowski, Leah K. Jurss, and Merrill C. Godfrey.

Michael A. Carvin, William D. Coglianese, Ian Heath Gershengorn, and Zachary C. Schauf were on the briefs for appellants MGM Grand Detroit, LLC, et al.

Danielle Spinelli argued the cause for appellees. With her on the brief were Kelly P. Dunbar and Kevin M. Lamb.

Samuel F. Daughety was on the brief for amici curiae Professors Alexander T. Skibine, Richard B. Collins, and Robert J. Miller in support of appellees.

Before: Henderson and Rao, Circuit Judges, and Sentelle, Senior Circuit Judge.

Dissenting opinion filed by Circuit Judge Henderson.

Rao, Circuit Judge:

This case involves a dispute about whether land acquired by the Sault Ste. Marie Tribe of Chippewa Indians ("Tribe") must be taken into trust by the Department of the Interior. The Tribe purchased the Sibley Parcel with interest from its Self-Sufficiency Fund and sought to have the land taken into trust with a view to establishing gaming operations. The Tribe claimed the Parcel was acquired for the "enhancement of tribal lands," one of the permitted uses of Fund interest specified in Section 108(c) of the Michigan Indian Land Claims Settlement Act ("Michigan Act"). Interior concluded, however, that the mere acquisition of additional land was not an "enhancement" under the Michigan Act. Interior declined to take the Parcel into trust because the Tribe failed to demonstrate how the Parcel would improve or enhance tribal lands, particularly because the land was located in Michigan's Lower Peninsula far from the Tribe's existing lands in the Upper Peninsula.

The Tribe sued Interior. The district court granted summary judgment to the Tribe, holding that the Michigan Act imposed a mandatory duty on Interior to take the Parcel into trust, and therefore Interior lacked the authority to verify whether the Tribe's acquisition was a proper use of Fund interest under the Act. Sault Ste. Marie Tribe of Chippewa Indians v. Bernhardt , 442 F. Supp. 3d 53, 63 (D.D.C. 2020). The court further held that, even if Interior had such authority, it was unlawfully exercised because the acquisition of land "that increases the Tribe's total landholdings" was an "enhancement" of tribal lands. Id. at 73.

Under the plain meaning of the Michigan Act, we hold that before assuming a trust obligation, Interior has the authority to verify that the Tribe properly acquired the land with Fund interest, consistent with the limited uses for such interest in Section 108(c). Furthermore, in exercising that authority, Interior correctly determined that "enhancement of tribal lands" does not include an acquisition that merely increases the Tribe's landholdings. Rather, to enhance tribal lands, an acquisition must improve the quality or value of the Tribe's existing lands. We therefore reverse and remand for proceedings consistent with this opinion.

I.

A.

With more than 40,000 members, the Sault Ste. Marie Tribe of Chippewa Indians is the largest Indian tribe east of the Mississippi River. The Tribe descends from a group of Chippewa bands that historically occupied lands in the Upper Peninsula of Michigan. The Tribe, however, ceded much of its ancestral lands to the federal government through an 1836 treaty. See Treaty with the Ottawa and Chippewa, 7 Stat. 491 (Mar. 28, 1836).

More than a century later, Congress created the Indian Claims Commission and authorized it to hear, among other things, claims that treaties between Indian tribes and the United States were based on unconscionable consideration. Act of Aug. 13, 1946, ch. 959, § 2, 60 Stat. 1049, 1050. The Tribe brought such a claim, along with two other tribes party to the 1836 Treaty. The Commission held that the Treaty was unconscionable and ordered the United States to pay these tribes more than $10 million. Bay Mills Indian Cmty. v. United States , 26 Ind. Cl. Comm. 538, 542, 560 (1971) (finding the government paid only fifteen percent of the land's fair value under the Treaty). The United States did not distribute the judgment funds for several decades, in part because the three tribes could not reach an agreement on how to divide the money.

In 1997, the tribes and the federal government negotiated a compromise that resulted in the Michigan Act, Pub. L. No. 105-143, 111 Stat. 2652 (1997).¹ The Act provided for the distribution of the judgment funds among the tribes with separate sections of the statute governing each tribe's use of its judgment funds. Michigan Act § 104.

Section 108 of the Michigan Act requires the Sault Ste. Marie Tribe to establish a "Self-Sufficiency Fund" to hold its share of the judgment. Id. § 108(a)(1). The Tribe's Board of Directors is named the trustee of the Fund and makes expenditure and distribution decisions, and "the Secretary [has] no trust responsibility for the investment, administration, or expenditure" of the Fund. Id. § 108(a)(2), (e)(2).

The Act also delineates distinct uses for Fund principal and interest. Id. § 108(b)–(c). As relevant here, Fund interest may be expended for only five uses: "an addition to the principal"; "a dividend to tribal members"; "a per capita payment to some group or category of tribal members"; "educational, social welfare, health, cultural, or charitable purposes which benefit the [Tribe's] members"; or "consolidation or enhancement of tribal lands." Id. § 108(c). If the Tribe acquires lands with Fund interest, those lands "shall be held in trust by the Secretary for the benefit of the tribe." Id. § 108(f).

B.

This dispute arises out of Interior's refusal to take into trust a parcel of land acquired by the Tribe.

Using Fund interest, the Tribe purchased 71 acres, known as the "Sibley Parcel," in the Lower Peninsula of Michigan. In its application to have Interior take the Parcel into trust, the Tribe acknowledged that it purchased the Parcel in anticipation of conducting gaming activities on the land. The Tribe contended that the Michigan Act gave Interior no authority to determine whether land acquired with Fund interest was for a use allowed by the Michigan Act, leaving that evaluation solely with the Tribe's Board. Because the Board had made the determination that the acquisition would "consolidat[e] or enhance[ ] ... tribal lands" and used Fund interest, the Tribe maintained Interior had a mandatory duty to take the parcel into trust under Section 108(f). The Tribe also argued that the purchase constituted an "enhancement" of tribal lands because it "increas[ed] the total land possessed by the Tribe."

After some back and forth, Interior issued an interim decision concluding that before taking the land into trust it was required to verify both that the purchase of the Sibley Parcel complied with the Michigan Act's requirements for the use of Fund interest and that the Tribe had in fact used interest for the purchase. Relying on an earlier decision concerning the Bay Mills Indian Community, Interior maintained that "enhancement" means only acquisitions that "make greater, as in cost, value, attractiveness, etc.; heighten; intensify; [or] augment" existing tribal lands.² The Tribe had failed to provide sufficient evidence that the Sibley Parcel on the Lower Peninsula would constitute an "enhancement" of the Tribe's existing lands in the Upper Peninsula. Interior gave the Tribe an opportunity to submit further evidence by keeping its application open, but the Tribe did not do so. Interior issued a final decision denying the Tribe's application to take the land into trust, reiterating that the Tribe had failed to establish that the acquisition of this parcel would increase the value of existing tribal lands.

The Tribe filed a claim under the Administrative Procedure Act in the District Court for the District of Columbia, arguing that Interior's decision was contrary to law or arbitrary and capricious. Three casinos and two tribes intervened as defendants.

The district court granted summary judgment to the Tribe. Sault Ste. Marie , 442 F. Supp. 3d at 58. It first held that Interior had no authority to determine whether the Tribe's acquisition of the parcel complied with the uses of Fund interest set forth in Section 108(c) because Section 108(f) creates a mandatory duty for Interior to take into trust any land purchased with Fund interest. As an additional and independent ground, the court held that the Tribe's acquisition of the Sibley Parcel was an "enhancement of tribal lands" within the meaning of Section 108(c). The court rejected Interior's interpretation of "enhancement" as an acquisition that only increases the value of existing tribal lands. The court determined that "enhancement" unambiguously includes any acquisition that increases the total amount of tribal lands, even if a parcel does not increase the quality or value of existing tribal lands. The court, however, declined to issue an order compelling Interior to take the Sibley Parcel into trust. Instead, the court vacated Interior's decision and remanded to the agency for further proceedings. Interior appealed.

We review the grant of summary judgment de novo "and therefore, in effect, review directly the decision of the agency." Purepac Pharm. Co. v. Thompson , 354 F.3d 877, 883 (D.C. Cir. 2004) (cleaned up). The Tribe...