Smith v. Babbitt, CIV. 98-1302(JRT/RLE).

• Decision Date: 11 May 2000
• Docket Number: No. CIV. 98-1302(JRT/RLE).,CIV. 98-1302(JRT/RLE).
• Citation: 96 F.Supp.2d 907
• Parties: Patrick Theodore SMITH; Nancy Lee Smith Hart; Barbara Ann Smith; and Doreen Esther Smith, Plaintiffs, v. Bruce BABBITT, U.S. Secretary of Interior; Kevin Gover, Assistant U.S. Secretary for Indian Affairs; and Angela Lagarde, Welsa Project Director, Defendants.
• Court: U.S. District Court — District of Minnesota

96 F.Supp.2d 907

Patrick Theodore SMITH; Nancy Lee Smith Hart; Barbara Ann Smith; and Doreen Esther Smith, Plaintiffs, v. Bruce BABBITT, U.S. Secretary of Interior; Kevin Gover, Assistant U.S. Secretary for Indian Affairs; and Angela Lagarde, Welsa Project Director, Defendants.

No. CIV. 98-1302(JRT/RLE).

United States District Court, D. Minnesota.

May 11, 2000.

Paul G. Thibeault, Anishinabe Legal Services, Cass Lake, MN, for plaintiffs.

Friedrich A.P. Siekert, Assistant United States Attorney, Office of the United States Attorney, Minnepaolis, MN, for defendants.

MEMORANDUM OPINION AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

TUNHEIM, District Judge.

Plaintiffs filed this action in order to challenge the final administrative decision of the Interior Board of Indian Appeals ("IBIA"), an adjudicative body within the United States Department of the Interior ("DOI"), regarding an heirship determination under the White Earth Reservation Land Settlement Act of 1985 ("WELSA") 100 Stat. 61, as amended 101 Stat. 887, found as a note to 25 U.S.C. § 331. In its decision the IBIA determined that plaintiffs are not the heirs of the decedent, Esther Bellecourt Smith, for purposes of entitlement to compensation under WELSA. This matter is before the Court on defendants' motion for summary judgment affirming the IBIA's decision, and on plaintiffs' cross-motion for summary judgment reversing that decision.

BACKGROUND

Plaintiffs are the children of Theodore Simon Smith, who is the son of Esther Bellecourt Smith. Theodore Simon Smith predeceased Esther Bellecourt Smith, who died on November 6, 1980. Plaintiffs all were born between 1962 and 1969. At the time of each of the plaintiffs' birth, Theodore Simon Smith was living with their mother, Alice Windom, but was not married to her according to a marital contract established under the laws of the State of Minnesota.¹ Nevertheless, according to plaintiffs their parents were married at the time they were born according to the customs of the Chippewa Tribe. The IBIA's determination that plaintiffs are not heirs entitled to WELSA compensation is due primarily to their alleged status as "illegitimate"² children seeking to inherit the right to compensation from their paternal grandmother.

In the administrative proceedings below, the Administrative Law Judge ("ALJ") issued an initial determination on June 12, 1997 that plaintiffs were entitled to inherit WELSA compensation from Esther Bellecourt Smith. In his determination, the ALJ rejected plaintiffs' contention that they were the legitimate children of Theodore Simon Smith pursuant to an Indian "custom law" marriage.³ The ALJ nevertheless determined that plaintiffs were legitimate pursuant to federal law, 25 U.S.C. § 371, and thus heirs of the decedent for purposes of distribution of WELSA compensation.

The Bureau of Indian Affairs ("BIA"), acting through the Area Director of the Minneapolis Area Office (the "Area Director"), appealed the ALJ's determination to the IBIA. In response, plaintiffs filed a motion to dismiss on the ground that the Area Director did not have standing to appeal the ALJ's decision. The IBIA rejected this argument and accordingly denied plaintiffs' motion to dismiss. The IBIA thereafter reversed the ALJ's decision, holding that 25 U.S.C. § 371 is inapplicable to WELSA heirship determinations. Moreover, although plaintiffs argued in response to defendants' appeal that the ALJ's determination of the custom law marriage issue was erroneous, the IBIA declined to address their argument on the merits. In doing so, the IBIA held that plaintiffs were attempting to appeal the portion of the ALJ's order which held that they were not legitimate children of a custom law marriage, and furthermore, that their appeal was untimely under the applicable regulations. On these grounds the IBIA affirmed the ALJ's determination of the custom law marriage issue, but reversed and remanded the matter to the ALJ for an order consistent with its holding that 25 U.S.C. § 371 was inapplicable. The ALJ reluctantly entered a final amended order excluding plaintiffs as heirs on November 7, 1997, and this appeal followed.

ANALYSIS

I. Jurisdiction and Standard of Review

Plaintiffs premise federal jurisdiction to consider their appeal, inter alia, on 28 U.S.C. § 1331, and the Administrative Procedure Act ("APA"), 5 U.S.C. § 704, on the ground that their claims arise from a final agency decision of the DOI for which there is no other adequate remedy. The parties do not contest the Court's jurisdiction, and the Court agrees that federal jurisdiction to consider plaintiffs' appeal arises under the cited statutes. See Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977); Runs After v. United States, 766 F.2d 347, 351 (1985).

In reviewing a final agency decision, a court must examine and consider the whole administrative record, and set aside the decision if it is arbitrary, capricious, or an abuse of discretion. See 5 U.S.C. § 706(2)(a); Runs After, 766 F.2d at 351. In reviewing an agency's interpretation of a statute that it administers, a court must first determine whether the statute is ambiguous. See Sierra Club v. Davies, 955 F.2d 1188, 1193 (8th Cir.1992) (citing Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)). If Congress has expressed its intent unambiguously then the court, and the agency, must give effect to that intent. See id. If, on the other hand, the statute is ambiguous, then the court must defer to the agency's interpretation when that interpretation is reasonable and does not frustrate the purposes of the statute. See id.

II. Standing

Plaintiffs assert that the IBIA erred in finding that the Area Director had standing to appeal the ALJ's decision. Plaintiffs point to the DOI regulations governing the determination of heirs of persons entitled to inherit compensation under WELSA. 43 C.F.R. §§ 4.350-4.357. These regulations provide that "parties in interest" for purposes of WELSA heirship determinations include "the Project Director and any presumptive or actual heirs of the decedent, or of any issue of any subsequently deceased presumptive or actual heir of the decedent." 43 C.F.R. § 4.350(c)(4). When the Area Director filed his appeal to the IBIA in this matter, the regulations defined "Project Director" as "the officer in charge of the White Earth Reservation Land Settlement Branch of the Minneapolis Area Office, [BIA], at Cass Lake, Minnesota." 43 C.F.R. § 4.350(c)(3) (1997). The DOI amended this regulation on March 18, 1999, modifying the definition of "Project Director" as "the Superintendent of the Minnesota Agency, [BIA], or other [BIA] official with delegated authority from the Minneapolis Area Director to serve as the federal officer in charge of the White Earth Reservation Land Settlement Project." 43 C.F.R. § 4.350(c)(3) (1999).

Plaintiffs argue that the Area Director was not a "party in interest" with standing to appeal the ALJ's decision, because under the regulations applicable at that time he did not fall within the definition of a "Project Director." Plaintiffs further contend that by explicitly including the "Project Director" within the definition of parties in interest, the DOI intended to preclude all other administrative officials from appealing heirship determinations.

The IBIA rejected plaintiffs' argument on two grounds. First, the IBIA noted that at the time the governing regulations were enacted in 1991 the position of "Project Director" was held by a BIA official, as evidenced by the definition of that term as the officer in charge of a branch of the BIA Minneapolis Area Office. In 1995, however, the BIA signed a contract with the White Earth Band of Chippewa Indians ("White Earth") pursuant to the Indian Self-Determination Act, 25 U.S.C. § 450(f). Under the terms of the contract, the BIA assigned to White Earth many of the functions performed by the Project Director in connection with the administration of the WELSA project. The BIA position of "Project Director" was eliminated in the process, and the White Earth official who took over many of the former Project Director's duties became commonly known as the WELSA Project Director.

Plaintiffs appear to contend that BIA contracted to White Earth not only the administrative duties of the Project Director, but also his or her standing to appeal the heirship determinations of the ALJ. Plaintiffs suggest that the White Earth official known as the Project Director was the only person, other than the putative heirs of the decedent, who had standing to appeal the ALJ's decision.⁴

In addressing this argument, the IBIA took official notice of the contract between the BIA and White Earth.⁵ The IBIA noted that the contract did not purport to transfer to White Earth all of the Project Director's duties, but rather, some "non-contractible" functions were retained by the BIA and performed by the Superintendent of the BIA's Minnesota Agency. These functions include many of the Project Director's responsibilities in connection with the payment of WELSA compensation from federal funds. The IBIA held that under these circumstances the term "Project Director," as defined at 43 C.F.R. § 4.350(c)(3) (1997), "includes the Superintendent of the Minnesota Agency, as well as any other BIA official who is now performing any function which was performed by the Project Director in 1991." The IBIA further held that because the Superintendent of the Minnesota Agency acts under authority delegated to him or her by the Area Director, the Area Director shares the Superintendent's standing to appeal.

As an alternative ground for denying plaintiffs' motion to dismiss, the IBIA noted that under the DOI's general regulations on IBIA proceedings, the BIA is deemed "an interested party in any proceeding before the [IBIA]." 43 C.F.R. § 4.311(c). Plaintiffs contend that the...