State of Utah v. Babbitt, s. 94-4062

Decision Date26 April 1995
Docket NumberNos. 94-4062,94-4063,s. 94-4062
Citation53 F.3d 1145
PartiesSTATE OF UTAH, Board of Trustees of the Utah Navajo Trust Fund, Plaintiffs-Appellees, v. Bruce BABBITT, in his capacity as Secretary of the United States Department of the Interior; Department of the Interior; Bureau of Indian Affairs; Navajo Area Director, Bureau of Indian Affairs; United States of America, Defendants-Appellants, Navajo Nation, Intervenor-Appellant, and Chuska Energy Co., Intervenor.
CourtU.S. Court of Appeals — Tenth Circuit

Philip C. Pugsley, Asst. Atty. Gen. (Brian Farr and Reed Richards with him on the brief), Salt Lake City, UT, for plaintiffs-appellees.

David C. Shilton, Atty., Dept. of Justice (Lois J. Schiffer, Acting Asst. Atty. Gen., Washington, DC, Thornton W. Field and Edward J. Shawaker, Attys., Dept. of Justice, Washington, DC, and Edwin G. Winstead, Field Sol., U.S. Dept. of the Interior, Window Rock, AZ, with him on the brief), Washington, DC, for defendants-appellants.

Kevin N. Anderson (Joe Lennihan, Navajo Nation Dept. of Justice, Window Rock, AZ, Diane H. Banks and Douglas R. Brewer of Fabian & Clendenin, Salt Lake City, UT, with him on the brief), Las Vegas, NV, for intervenor Navajo Nation.

Before KELLY, BARRETT and HENRY, Circuit Judges.

PAUL J. KELLY, Jr., Circuit Judge.

Defendants-appellants appeal from the district court's judgment in favor of Plaintiffs-appellees. Our jurisdiction arises under 28 U.S.C. Sec. 1291 and we affirm.

Background

Under the Act of March 1, 1933 ("Act"), 47 Stat. 1418, as amended, 82 Stat. 121 (1968), the federal government took 552,000 acres of land from the public domain and added it to the Navajo Reservation. The Act provided that if "oil or gas [were] produced in paying quantities within the lands ... added to the Navajo Reservation, 37 1/2 per centum of the net royalties accruing therefrom derived from tribal leases [would] be paid to the State of Utah." 47 Stat. 1418, as amended, 82 Stat.121 (1968); Aplee.Supp.App. at 30. The royalties collected by Utah were to be used to provide benefits to the Navajos who resided on the added lands. Oil was subsequently discovered on one of the added tracts of land, known as the Aneth Extension. Royalties derived from leases on the land were divided according to the Act, with 37 percent going to Utah and 62 1/2 percent going to the Navajo Nation.

In 1968, Congress amended the Act to allow more flexibility in distributing funds to the Navajos. Specifically, the amendment provided that the State of Utah was to spend the royalties collected "for the health, education, and general welfare of the Navajo Indians residing in San Juan County." Act of May 17, 1968, 82 Stat. 121; Aplee.Supp.App. at 32. Congress effected this change after determining that many Navajo Indians did not reside permanently on the added lands, but moved back and forth between this area and other locations.

In 1987, the Navajo Nation and Chuska Energy Co. ("Chuska") entered into what was referred to as an "operating agreement." The agreement appointed Chuska as the exclusive oil and gas operator of certain land and as the sales agent for the oil and gas produced from the land. The agreement was approved by the Area Director of the Bureau of Indian Affairs ("BIA"). Under the terms of the agreement, Chuska paid the Navajo Nation both a set sum for each acre of land it utilized and a percentage of the gross proceeds, initially 20 percent, received from the sale of production on the land.

Previously unleased portions of the Aneth Extension constitute part of the land being developed by Chuska under the agreement. Consequently, in November 1990, Utah demanded payment of 37 1/2 percent of the royalties from the production of oil and gas on that particular land. The Area Director, however, found that such payment was not required because the Act only applied to leases, as opposed to an operating agreement. Utah appealed the BIA Area Director's decision to the Interior Board of Indian Appeals ("IBIA"), which affirmed the BIA's decision. Utah then challenged the IBIA's holding in federal district court, and the Navajo Nation and Chuska intervened as defendants. The district court subsequently granted summary judgment in favor of Utah.

The federal Defendants now appeal, arguing that the district court erred both in finding that the royalty-sharing provision of the Act applied to the agreement and holding the Secretary of the Interior ("Secretary") responsible for the collection and payment of royalties owed to the State of Utah. The Navajo Nation also appeals, arguing that the district court erred in reversing the IBIA's decision, and holding that the Act refers to any revenue flowing from tribal leases, and ordering an accounting from Defendants.

I. The 1933 Act

We review a grant of summary judgment de novo, applying the same legal standard used by the district court under Fed.R.Civ.P. 56(c). James v. Sears, Roebuck & Co., 21 F.3d 989, 997-98 (10th Cir.1994). "Summary judgment is appropriate if 'there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.' " Hagelin for President Comm. v. Graves, 25 F.3d 956, 959 (10th Cir.1994) (quoting Fed.R.Civ.P. 56(c)), cert. denied, --- U.S. ----, 115 S.Ct. 934, 130 L.Ed.2d 880 (1995). We consider the "factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment." Blue Circle Cement, Inc. v. Bd. of County Comm'rs., 27 F.3d 1499, 1503 (10th Cir.1994).

We also review de novo the district court's interpretation of a federal statute. FDIC v. Lowery, 12 F.3d 995, 996 (10th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 2674, 129 L.Ed.2d 809 (1994). When reviewing an agency's interpretation of a statute it administers, we first determine whether the statute is unambiguous. In re BDT Farms, Inc., 21 F.3d 1019, 1021 (10th Cir.1994) (citing Chevron U.S.A. Inc v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984)). If the intent of Congress is clear then we must give effect to that intent. Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781. "The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent." NLRB v. Viola Industries-Elevator Div., Inc., 979 F.2d 1384, 1392 (10th Cir.1992) (quoting Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. at 2781 n. 9). If, however, the statute is ambiguous or silent on the issue in question, we must determine whether the agency's determination is based on a permissible construction of the statute. United States v. Undetermined Quantities of Bottles of An Article of Veterinary Drug, 22 F.3d 235, 238 (10th Cir.1994) (citing Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781). If so, we will defer to the agency's interpretation. Chevron, 467 U.S. at 844, 104 S.Ct. at 2782.

In determining the meaning of a statute, we look at not only the statute itself but also at the larger statutory context. BDT Farms, 21 F.3d at 1021 (citing Rake v. Wade, --- U.S. ----, ----, 113 S.Ct. 2187, 2193, 124 L.Ed.2d 424 (1993)). We may ascertain the intent of Congress through statutory language and legislative history. See Train v. Colorado Pub. Int. Research Group, Inc., 426 U.S. 1, 10, 96 S.Ct. 1938, 1942, 48 L.Ed.2d 434 (1976) (" 'When aid to construction of the meaning of words, as used in the statute, is available, there certainly can be no rule of law which forbids its use, however clear the words may appear on superficial examination.' " (quoting United States v. Am. Trucking Ass'ns, 310 U.S. 534, 543-44, 60 S.Ct. 1059, 1064, 84 L.Ed. 1345 (1940)) (internal quotations omitted)). See also Chevron, 467 U.S. at 859-64, 104 S.Ct. at 2790-92; Miller v. Commissioner of Internal Revenue, 836 F.2d 1274, 1282 (10th Cir.1988).

The language in the Act provides that royalties from oil or gas production on the added lands "derived from tribal leases" will be paid to Utah "for the benefit of the Indians residing therein." 47 Stat. 1418, as amended, 82 Stat. 121 (1968); Aplee.App. at 30-31. "Tribal leases" are not specifically defined, but nothing in the statute suggests that the term only finds application if the instrument is captioned "tribal lease" or "lease," without regard to the instrument's true function.

The Act's legislative history makes clear that Congress intended the Navajos residing on the added lands to benefit from leasehold development on that particular land. The House Report accompanying the legislation states that "[p]rovision is made for disposition of any revenue arising from any oil and gas which might be discovered within the area." H.R.Rep. No. 1883, 72d Cong., 2d Sess. 2 (1933). Because we find Congress' intent clear, we are unable to subscribe to the agency's narrow, technical view.

We further believe that the particular agreement at issue falls squarely within the meaning of the term "lease" as used in the Act. "[S]tatutory terms are often clarified by the remainder of the statutory scheme--because the same terminology is used elsewhere in a context that makes [the term's] meaning clear...." Rake, --- U.S. at ----, 113 S.Ct. at 2193 (internal quotations omitted). We construe a statutory term so that it "fits most logically and comfortably into the body of both previously and subsequently enacted law." West Virginia Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 100-01, 111 S.Ct. 1138, 1148, 113 L.Ed.2d 68 (1991) ("[O]ur role [is] to make sense rather than nonsense out of the corpus juris.") (citations omitted).

The Act does not define the term "lease," and no regulations were promulgated pursuant to the statute. Congress and the Department of the Interior, however, have consistently defined "lease" in functional terms.

In 1936, a regulation governing the development and production of oil and gas on Indian lands defined a "lease" as "...

To continue reading

Request your trial
50 cases
  • Southern Ute Indian Tribe v. Amoco Production Co.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • 20 Julio 1998
    ... ... ) failed to pay severance tax to the Tribe; and 5) in collusion with State of Colorado officials, deprived the Tribe of federally guaranteed rights ... 56(c)." Utah v. Babbitt, 53 F.3d 1145, 1148 (10th Cir.1995). Summary judgment is ... ...
  • Southern Ute Indian Tribe v. Amoco Production Co., 94-1579
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • 16 Julio 1997
    ... ... ) failed to pay severance tax to the Tribe; and 5) in collusion with State of Colorado officials, deprived the Tribe of federally guaranteed rights ... 56(c)." Utah v. Babbitt, 53 F.3d 1145, 1148 (10th Cir.1995). Summary judgment is ... ...
  • U.S. v. Singleton
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • 1 Julio 1998
    ... ...         The plea agreement does, however, state three specific promises made by the government to Mr. Douglas in return ... See Utah v. Babbitt, 53 F.3d 1145, 1148 (10th Cir.1995). Our inquiry begins with ... ...
  • Navajo Health Found.—Sage Mem'l Hosp., Inc. v. Burwell
    • United States
    • U.S. District Court — District of New Mexico
    • 23 Noviembre 2016
    ... ... inconsistent with the regulation." June 2015 Response at 9 (citing Utah v. Babbitt , 53 F.3d 1145, 1150 (10th Cir. 1995) ; Auer , 519 U.S. at ... why facts precluding summary judgment cannot be presented; and (iv) state with specificity how the desired time would enable the nonmoving party to ... ...
  • Request a trial to view additional results
4 books & journal articles
  • CHAPTER 1 BASICS OF SUCCESSFUL NATURAL RESOURCE DEVELOPMENT PROJECTS IN INDIAN COUNTRY
    • United States
    • FNREL - Special Institute Natural Resources Development in Indian Country (FNREL)
    • Invalid date
    ...made in response to the Secretary's notice insulates the agreement from a challenge under 25 U.S.C. § 177. [11] .Utah v. Babbitt, 53 F.3d 1145 (10%gth%g Cir. 1995), construed a 1987 "operating agreement" between the Navajo Nation and Chuska Energy Co. ("Chuska") with reference to the Act of......
  • CHALLENGING AGENCY ACTION AND INACTION: THE PROBLEM OF LEADING A HORSE TO WATER
    • United States
    • FNREL - Special Institute Natural Resources and Environmental Administrative Law and Procedure II (FNREL)
    • Invalid date
    ...1691 (1995)("In the absence of clear Congressional intent, we give deference to reasonable agency regulations"); State of Utah v. Babbitt, 53 F.3d 1145, 1148 (10th Cir. 1995) ("The judiciary is the final authority on issues of statutory construction and must reject administrative constructi......
  • CHAPTER 11 CHALLENGING AGENCY ACTION AND INACTION: THE PROBLEM OF LEADING A HORSE TO WATER
    • United States
    • FNREL - Special Institute Natural Resources & Environmental Administrative Law and Procedure (FNREL)
    • Invalid date
    ...(1995) ("In the absence of clear Congressional intent, we give deference to reasonable agency regulations"); State of Utah v. Babbitt, 53 F.3d 1145, 1148 (10th Cir. 1995) ("The judiciary is the final authority on issues of statutory construction and must reject administrative constructions ......
  • CHAPTER 6 NEGOTIATING AND DRAFTING INDIAN MINERAL DEVELOPMENT ACT AGREEMENTS
    • United States
    • FNREL - Special Institute Natural Resources Development and Environmental Regulation in Indian Country (FNREL)
    • Invalid date
    ...in the regulations to "lease" would also include any form of agreement entered into pursuant to the IMDA. See, State of Utah v. Babbitt, 53 F.3d 1145 (10 Cir. 1995). [132] 132. Bureau of Indian Affairs, 8 Annual National Indian Energy & Minerals Conference — Introduction to Indian Mineral D......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT