Sault Ste. Marie Tribe of Chippewa Indians v. Haaland

• Decision Date: 06 March 2023
• Docket Number: 1:18-cv-02035 (TNM)
• Parties: SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS, Plaintiff, v. DEBRA A. HAALAND, in her official capacity as United States Secretary of the Interior, et al., Defendants, and SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGAN, et al., Defendant-Intervenors.
• Court: U.S. District Court — District of Columbia

1

SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS, Plaintiff, v. DEBRA A. HAALAND, in her official capacity as United States Secretary of the Interior, et al., Defendants, and SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGAN, et al., Defendant-Intervenors.

No. 1:18-cv-02035 (TNM)

United States District Court, District of Columbia

March 6, 2023

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

This case marks the latest chapter in the Sault Ste. Marie Tribe of Chippewa Indians' (“the Sault” or “the Tribe”) efforts to compel the Secretary of the Interior to take land into trust for a casino. Interior refused to do so because the Sault had not satisfied the terms of a land settlement statute, which requires purchases to be for “social welfare” or the “enhancement of tribal lands.”

The Sault contends that Interior's refusal was contrary to law and arbitrary or capricious under the Administrative Procedure Act. For relief, the Tribe seeks vacatur of the decision and either an order compelling Interior to take the land into trust or one directing it to issue a new decision. The Tribe pressed-and lost on-its two primary arguments in the D.C. Circuit. It now moves for summary judgment on three other grounds. Interior and Intervenors-three commercial casinos (“the Casinos”), the Nottawaseppi Huron Band of the Potawatomi, and the Saginaw Chippewa Indian Tribe of Michigan (collectively, the “Michigan Tribes”)-cross-move for summary judgment.

The Court holds that Interior's refusal to take the land into trust was neither contrary to law nor arbitrary. Interior's decision respects the natural, ordinary meaning of the land settlement statute. And Interior both engaged in reasoned decision-making and adequately explained the basis for its refusal. The Court will thus grant Interior and Defendant-Intervenors summary judgment.

I.

A.

The Sault is a federally recognized tribe with more than 40,000 enrolled members. AR3113.^[1]In the nineteenth century, the Sault's ancestors sold much of their land to the Federal Government for pennies on the dollar. See Treaty of March 28, 1836 (7 Stat. 491); 26 Ind. Cl. Comm. 550, 553 (Dec. 29, 1971) (Docket Nos. 18-E and 58). A congressional commission found the sale unconscionable and awarded the Sault and other tribes more than $10 million in damages. See Ind. Cl. Comm. at 561. Congress then passed the Michigan Indian Land Claims Settlement Act (“Michigan Act” or “Act”) to distribute those funds. See Pub. L. No. 105-143, 111 Stat. 2652 (1997).

Section 108 of the Act directs the Secretary of the Interior to transfer the Sault's monetary share into a “Self-Sufficiency Fund.” Id. § 108(a)(1)(A), (e)(1). The Fund contains principal and may also generate income through investment or interest. See id. § 108(b)(1), (c). The Act delineates different uses for Fund principal and Fund investment income and interest. The “principal” of the Fund

shall be used exclusively for investments or expenditures which the board of directors determines . . . (A) are reasonably related to . . . economic development development of tribal resources . . . (B) are otherwise financially beneficial to the tribe and its members . . . or (C) will consolidate or enhance tribal landholdings.

Id. § 108(b)(1). The “interest and other investment income”^[2]of the Fund, meanwhile,

shall be distributed . . . (1) as an addition to the principal of the Fund . . . (2) as a dividend to tribal members . . . (3) as a per capita payment to some group or category of tribal members designated by the board of directors . . . (4) for educational, social welfare, health, cultural, or charitable purposes which benefit the members of the [Tribe] . . . or (5) for consolidation or enhancement of tribal lands.

Id. § 108(c). This case turns on the interpretations of uses four and five for Fund income.

Whether land is purchased with Fund principal or income matters. According to the Michigan Act, land acquired using Fund income “shall be held in trust by the Secretary for the benefit of the tribe.” Id. § 108(f). And the Sault can build a casino on the land only if the parcel is held in trust, because trust status helps the Tribe qualify for an exception to the federal law governing gaming. See Sault Ste. Marie Tribe of Chippewa Indians v. Haaland, 25 F.4th 12, 18 & n.3 (D.C. Cir. 2022).

B.

Today, the Sault describes itself as “economically distressed and land-starved.” Pl.'s Renewed Mot. for Summ. J. (“Sault MSJ”) at 3, ECF No. 9. Its current trust lands-on which it operates casinos-are all in Michigan's upper peninsula. AR2154. But revenue from these casinos has declined. See Sault MSJ at 3. And about 14,000 of the Tribe's members live in the lower peninsula-far from existing trust lands. See id. Thus, the Tribe explains that its current landholdings are “woefully inadequate to meet the needs of” its members. Id.

To improve its situation, the Tribe's board voted to use Fund income to purchase a 71-acre plot in the Lower Peninsula-the “Sibley Parcel.” See, e.g., AR3149. Recall that if the Sault purchases land with Fund income (rather than principal), Interior “shall” hold such land “in trust . . . for the benefit of the tribe.” Pub. L. No. 105-143, § 108(f). And that would give the Tribe a chance to open a casino, see Sault Ste. Marie, 25 F.4th at 18 & n.3-the Sault's plan from the start, AR3112 n.1. So the Sault filed an application in June 2014 asking Interior to take the parcel into trust. AR3110-64.

Over the next two and a half years, Interior periodically asked for more information. See, e.g., AR2242-43 (October 2014 letter). For example, Interior contacted the Sault four months after receiving its application. See id. Interior informed the Tribe that it defines “enhancement” in § 108(c)(5)'s “enhancement of tribal lands” as “to make greater, as in cost, value, attractiveness, etc.; heighten, intensify, augment.” AR2243 (quoting Webster's New Twentieth Century Unabridged Dictionary). And Interior told the Sault it needed more proof that its planned acquisition meets this definition. See id. Following that letter, the Tribe supplemented the record. See AR2148-228.

Eventually, Interior sent the Sault an interim decision in January 2017 explaining that the Tribe had provided “insufficient evidence” to warrant taking the land into trust. AR969-74 (“January Letter”). Interior explained that its procedures “require evidence” that the parcel “meet[s] the requirements for mandatory acquisition.” AR969. To explain its “procedures,” Interior referred the Tribe to a guidance document. See id. n.3. That document explains that even if a statute such as the Michigan Act imposes a mandatory trust duty, the agency “will determine whether the parcel meets any additional required criteria . . . [and] will ensure that those criteria are met” before it takes land into trust.^[3]And Interior again asked the Tribe for more evidence. AR974.

Recall that the Michigan Act specifies these criteria. The Act instructs that Fund income “shall be distributed . . . for educational, social welfare, health, cultural, or charitable purposes” or for the “enhancement of tribal lands.” Pub. L. No. 105-143, § 108(c)(4-5). According to Interior, the Sault had failed to show that its plans for the Sibley parcel satisfied either end.

First, Interior explained that the Sault failed to show its purchase was for “educational, social welfare, health, cultural, or charitable purposes” under § 108(c)(4). AR971-72 n.25. The Tribe pledged to build a casino on the land and devote five percent of its income “to address the unmet social welfare, health and cultural needs” of tribe members living nearby. AR2160. Three percent would benefit tribal elders and two percent would create a college scholarship program. AR3150. But Interior found these proposals “too attenuated” to satisfy the Michigan Act. AR972 n.25. “Should the Tribe purchase land with Self-Sufficiency Fund income for a school, a job training center, a health clinic, or a museum,” Interior explained, “such purpose may fall within the scope of Section 108(c)(4).” Id. But as things stood, the Tribe could not satisfy the Michigan Act's requirements by using Fund income “to start an economic enterprise, which may generate its own profits, which . . . might then be spent on social welfare purposes.” Id. In other words, Interior found that the Sault's proposed use of the land fell outside the plain text of § 108(c)(4). See id.

Second, Interior informed the Tribe that it lacked sufficient evidence to conclude that the Sibley parcel constitutes an “enhancement of tribal lands” under § 108(c)(5). After Interior asked for more “enhancement” evidence in the October 2014 letter, AR2242-43, the Tribe submitted more information in response, AR2148-228. Relevant here, the Sault submitted two affidavits-one from the Tribe's Chief Financial Officer of Casinos (“the CFO”) and the other from the Director of the Tribal Housing Authority (“the Director”)-that it claims prove enhancement. AR2156, AR2213-15, AR2227-28. The CFO swore that the Sibley parcel “will allow the operation of casinos that, in turn, will enable the Tribe to improve its existing facilities on tribal lands in the Upper Peninsula.” AR2215. And the Director explained that gaming revenue is the most viable means of providing housing to tribal members, which is currently scarce. See AR2227-28.

Unconvinced Interior explained that the Tribe had again failed to “make a sufficient showing” of how the parcel would enhance its existing lands in Michigan's upper peninsula. AR973. And Interior rejected the Sault's claim that the purchase would enhance nearby lower peninsula land by “creating a critical mass of tribal lands” allowing for economic development and the delivery of...