CHAPTER 10 JUDICIALLY DISMANTLING INDIAN COUNTRY IN THE 10TH CIRCUIT: LESSONS FROM HYDRO RESOURCES AND OSAGE NATION

• Jurisdiction: United States

Natural Resources Development on Indian Lands
(Mar 2011)
CHAPTER 10
JUDICIALLY DISMANTLING INDIAN COUNTRY IN THE 10TH CIRCUIT: LESSONS FROM HYDRO RESOURCES AND OSAGE NATION
Alexander T. Skibine ¹
University of Utah
S.J. Quinney College of Law
Salt Lake City, Utah

ALEXANDER TALLCHIEF SKIBINE is a professor at the University of Utah S.J. Quinney College of Law in Salt Lake. Professor Skibine received a B.A. in political science and French literature from Tufts University and a J.D. from Northwestern University School of Law. Before joining the faculty at the University of Utah S.J. Quinney College of Law in 1989, Professor Skibine served as Deputy Counsel for Indian Affairs for the U.S. House of Representatives Committee on Interior and Insular Affairs. Professor Skibine has published many articles in the area of federal Indian law and he is frequently invited to speak on federal Indian law issues at venues around the country. He is a member of the Illinois and District of Columbia bar associations. Professor Skibine teaches administrative law, constitutional law, torts, and federal Indian law.

This paper focuses on two recent cases from the Tenth Circuit, Hydro Resources Inc. v. EPA,² (HRI) and Osage Nation v. Irby.³ In HRI, the court abandoned its community of reference test (hereinafter, COR), and held that some non-Indian fee land located next to the Navajo reservation but not within the reservation was not "Indian Country" for the purposes of the Clean Water Act. In Osage Nation, the court held that the Osage Nation reservation had been disestablished by a 1906 Act of Congress. Both cases were influenced by Supreme Court opinions which, perhaps not coincidentally, were written by Justice Thomas,⁴ a Justice who almost never rules in favor of tribal interests and is, arguably, the most anti-tribal Justice in a Court filled with Justices unfriendly to tribal rights.

Five years ago, I wrote an article arguing that while the Supreme Court was ruling disproportionately against tribal interests, the same thing was not true for lower federal courts.⁵ I concluded that perhaps some lower federal judges realized that many of these Supreme Court decisions were not based on sound legal principles and, therefore, these judges were going out of their way to distinguish their cases from such questionable precedents.⁶ In the last five years, the attitude of the lower courts seems to have changed. I think that these two cases, HRI and Osage Nation, reflect the fact that nowadays, courts of appeals are much more willing to go along with the Supreme Court program. In fact, some courts of appeals have gone beyond the call of duty and seem to be ruling against tribal interests even though Supreme Court precedents do not require them to do so. The results in these two cases reflect, however, an accurate perception by lower courts that the Supreme Court is basically anti tribal and that if it was to grant cert in those cases, the overwhelming odds would be that it would rule against a finding of Indian Country in those

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cases.

Part I of this paper analyzes HRI and Alaska v. Native Village of Venetie,⁷ the Supreme Court decision which influenced the Tenth Circuit to abandon its COR test. Part II looks at the Osage Nation case and draws some analogies with Carcieri v. Salazar,⁸ the Supreme Court's most recent Indian case dealing with statutory construction. Part III explains why, in both HRI and Osage, the Supreme Court should have used the Indian canon of statutory construction according to which statute enacted for the benefit of Indians are supposed to be construed liberally and any ambiguities found in them are supposed to be resolved in the Indians' favor. Finally the Conclusion draws some comparisons between HRI and Osage Nation and also briefly reviews the scholarly debate exploring what may be driving the Supreme Court to rule against tribal interests.

PART I: HYDRO RESOURCES V. EPA.

Before mining one of its property located in New Mexico, close to the Navajo Indian reservation, HRI had to obtain a Safe Drinking Water Act permit (SDWA). The issue in this case was whether HRI had to obtain the permit from the EPA or the state of New Mexico. If HRI's property was within "Indian Country," the permit would have to be acquired from EPA. The term "Indian Country" is derived from 18 USC 1151, a statute enacted in 1948. Under 1151, Indian Country consists of (1) all lands within Indian reservations, (2) Indian allotments held in trust or restricted status even if those are located outside of Indian reservations, and (3) Dependent Indian Communities. Since the land in question here was not within an Indian reservation and was not an Indian allotment the only way it could be considered Indian Country was if it was part of a "dependent Indian community."

EPA took the position that under Tenth Circuit precedent, the "community of reference" for defining what is a dependent Indian community in this case was the whole Church Rock Chapter of the Navajo Nation.⁹ This is an area of about 57,000 acres where 80% of the land is owned in trust by the United States for the benefit of the Navajo tribe or individual Navajos. Another 10% is owned by the BLM. The last 10% is owned by non-Indian entities such as HRI or the State of New Mexico. 98% of the population living on those 57,000 acres consists of members of the Navajo Nation.

In a 6-5 en banc decision, the Tenth Circuit overturned the panel decision which had ruled in favor of EPA. The en banc Court held that HRI's property, which was held in fee,

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was not within a Dependent Indian Community and therefore did not qualify as Indian Country. The SDWA permit, therefore, had to be acquired from the state of New Mexico and not EPA. In order to come to this result, the majority had to abandon the Community of reference test.¹⁰ This test, also referred as the Watchman test consists of a two step multi factored approach.¹¹ As phrased by the HRI majority "At its first step, the test required the identification of an appropriate community of reference. When identifying an appropriate community of reference a court had to consider three factors: (1) the geographical definition of the area proposed as a community, (2) the status of the area in question as a community, and (3) the community of reference within the context of the surrounding area."¹² The HRI court then added the following: "Having identified a community of reference, our test then sought at the second step to determine whether the community qualified as a dependent Indian community. And this we said, required the balancing of still more factors:" (1) whether the United states has retained title to the lands which it permits the Indians to occupy and authority to enact regulations and protective law respecting territory; (2) the nature of the area in question, the relationship of the inhabitants in the area top Indian tribes and to the federal government, and the established practice of government agencies towards th area; (3) whether there is an element of cohesiveness manifested either by economic pursuits in the area, common interests, or needs of the inhabitant as supplied by that locality; and (4) whether such lands have been set apart for the use, occupancy and protection of dependent Indian people."¹³

A. The Majority:

Briefly stated, the majority believed that the 1998 Supreme Court decision in Alaska v. Venetie,¹⁴ required the abandonment of the community of reference test.

The HRI's majority remarked that in Venetie, the Supreme Court specifically overturned a 9th circuit decision that had used a 6 factor balancing test to determine whether the land was Indian country. Instead the Venetie Court held that 1151 (b) "refers to a limited category of Indian lands that are neither reservations nor allotments, and that satisfy two requirements: first they must have been set aside by the federal government for the use of the Indians as Indian lands; second, they must be under federal

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superintendence."¹⁵ On the other side, EPA acknowledged that the Venetie decision had an impact on the test but took the position that it only eliminated the second and third factors of the second step's four factors. Under EPA's theory, factor I and 4 were in accord with Venetie's approach and, therefore, if a high percentage of the land within a "community of reference" was still set aside for Indians and under federal supervision, then all the land in that area should be treated as Indian Country.

Besides relying on Venetie, the Tenth Circuit also relied on the history, purpose and structure of 1151(b). Thus the court noted that the purpose 1151(b) was to codify two previous Supreme Court cases:¹⁶ United States v. Sandoval,¹⁷ and United States v. McGowan.¹⁸ Both cases involved lands specifically set aside for the benefit of Indians and under active federal superintendence. The HRI court also remarked that the structure of the 1151(b) reflected the "notion that some explicit, congressionally approved action is required to create "Indian Country,"¹⁹ and the very notion of the COR test was in contravention of this idea.

Finally the Tenth Circuit put forth some normative and practical arguments supporting its interpretation of the statute. Normatively, it should only be for Congress to add or terminate Indian country. It is not for the courts, the states or the tribes to enlarge tribal territory.²⁰ Practically speaking, the court stated that "Venetie's set aside and superintendence requirements at least ensure that the boundaries of dependent Indian community will be precisely and predictably defined."²¹ Thus, in the last part of the opinion, the majority criticized the COR test for being nebulous, unpredictable, and impractical. It argued that under the test used by EPA, the community of reference may be much bigger, so as to for instance include Gallup or the whole of McKinley county...