Opinion
Case No. 2:95CV 1025 TC
October 22, 2003
ORDER
This case is before the court on the parties' cross motions for summary judgment. The factual and procedural background has been set forth in the parties' pleadings and in other orders of the court and will be repeated here when necessary to explain the decision, The issue for resolution is whether the Defendants (The State of Utah, the Utah State Department of Transportation, and the City of St. George, Utah, (collectively referred to as "the State Defendants")) have the authority to impose restrictions on the placement of billboards on land owned by the United States in trust for the Shivwits Band of Paiute Indians ("the Shivwits") and which is being used by a non-Indian sign company for billboard display. For the reasons explained below, the court concludes that the State Defendants do not have that authority.
ANALYSIS
I. Legal Standard
Under Federal Rule of Civil Procedure 56, a court may enter summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'" Fed.R.Civ.P, 56(c); see Anderson v. Liberty Lobby, Inc., 477 US. 242. 250-51 0986): Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998).
II. Discussion
The question of whether the State Defendants have the authority to regulate the placement of billboards on the subject property raises issues of tribal sovereignty and federal preemption. There is a recognized presumption against state jurisdiction in Indian country. Indian Country, U.S.A., Inc. v. Okla. Tax Comm'n, 829 F.2d 967, 976 (10th Cir. 1987) (citing California v. Cabazon Band of Mission Indians, 480 U.S. 202, 216 (1987)); see also. Santa Rosa Band of Indians v. Kings County, 532 F.2d 655, 666 (9th Cir. 1975) (when Congress "authorized the Secretary to purchase and hold title to lands for the purpose of providing land for Indians, it understood and intended such lands to be held . . . free of state regulation."). Even so, "the Court also has recognized that state laws may reach into Indian country `if Congress has expressly so provided.'" Indian Country, 829 F.2d at 976 (citing Cabazon. 480 U.S. at 207). Additionally, "a state may validly assert such jurisdiction even absent express consent in very limited circumstances." Id. (citing Cabazon, 480 U.S. at 215).
(A) Is the Subject Property "Indian Country"?
The threshold issue is whether the subject property is "Indian Country." The State Defendants argue that the subject property is not Indian country and therefore, they are free to impose state and local laws. See Narragansett Indian Tribe of Rhode Island v. Narragansett Elec Co., 89 F.3d 908, 915 (1st Cir. 1996) (concluding that if the subject property is not Indian Country, there is no bar to the exercise of the State's jurisdiction.) The statute defining the term "Indian country" provides that
[e]xcept as otherwise provided in sections 1154 and 1156 of this Title, the term "Indian country" as used in this chapter, means (a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation, (b) all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of the state, and (c) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of way running through the same.18 U.S.C. § 1151 (2003). This statute governs the applicability of federal criminal laws, but it has also been held to apply to questions of civil jurisdiction. See Alaska v. Native Vill. of Venetie Tribal Gov't, 522 U.S. 520, 527 n. 1 (1998) ("Generally speaking, primary jurisdiction over land that is Indian country rests with the Federal Government and the Indian Tribe inhabiting it, and not with the States"); DeCoteau v. District Country Court, 420 U.S. 425, 428 n. 2 (1975) (Section 1151 generally applies to questions of civil jurisdiction); Indian Country, 829 F.2d at 973 ("the Indian country classification [is] the benchmark for approaching the allocation of federal, tribal, and state authority with respect to Indians and Indian lands.").
Both sections are inapplicable to the issues in this case.
The Tenth Circuit has held that [t]o qualify as Indian country, [the land at issue] must satisfy one of the tests of 18 U.S.C. § 1151 "HRL Inc. v. Enyt'l Prot. Agency, 198 F.3d 1224, 1250 (10th Cir. 2000) (citing Mustang Prod. Co. v. Harrison, 94 F.3d 1382, 1384 (10th Cir. 1996)). The State argues that the subject property does not qualify as Indian Country under any of the three definitions provided by 18 U.S.C, § 1151. Although the subject property is clearly neither (a) on a reservation nor (c) an allotment, the question is whether it qualifies as a dependent Indian community.
Under the relevant law, an allotment is a parcel of land created out of a diminished Indian reservation and held in trust by the Federal Government for the benefit of individual Indians, See United States v. Pelican, 232 U.S. 442. 449 (1914).
The Supreme Court has narrowly defined "dependent Indian communities;"
We now hold that [the term "dependent Indian communities"] 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 land; second, they must be under federal superintendence.Venetie, 522 U.S. at 527. The Tenth Circuit has addressed this issue following Venetie, reaching the clear and unambiguous conclusion that "lands owned by the federal government in trust for Indian tribes are Indian Country pursuant to 18U.S.C § 1151." U.S. v Roberts, 185 F.3d 1125, 1131 (10th Cir. 1999): see also Oklahoma Tax Comtn'n v. Citizen Band Potwatomi Indian Tribe of Okla., 498 U.S. 505, 511 (1991) (test for determining whether land is Indian country depends not on formal "trust" or "reservation" status, but rather on "whether the area has been Validly set apart for the use of the Indians as such, under the superintendence of the Government/"); HRL Inc., 198 F.3d at 1249 (holding trust lands are Indian country under Supreme Court and Tenth Circuit precedent). Based on the Venetie decision, the Roberts Court determined that a trust land designation itself satisfies both federal set aside and superintendence requirements. 185 F.3d at 1132-33.
At the conclusion of its NEPA process, the Bureau of Indian Affairs ("the BIA") issued a Finding of "No Significant Impact" and stated that it would not seek to remove the land from trust status nor deny approval of the five billboard leases. Accordingly, as it now stands, the subject land is held in trust, and is clearly "Indian Country" under 18 U.S.C. § 1151.
(B) Has Congress Expressly Consented to Local and State Regulation over the Subject Property?
The State Defendants contend that Congress has explicitly authorized the imposition of Utah's and St. George's regulatory laws over the subject property through two federal statutes: (1) the Highway Beautification Act of 1966, and (2) Public Law 280.
1. Highway Beautification Act of 1966
The State argues that Congress expressly authorized imposition of state and local regulation regarding placement of billboards through the federal Highway Beautification Act of 1966 ("HBA"), 23 U.S.C. § 131 (2003). The HBA provides that
the erection and maintenance of outdoor advertising signs, displays, and devices in areas adjacent to the Interstate System and the primary system should be controlled in order to protect the public investment in such highways, to promote the safety and recreational value of public travel, and to preserve natural beauty.23 U.S.C. § 131 (a). Central to the State Defendants' argument is the provision of the HBA that "[all public lands or reservations of the United States which are adjacent to any portion of the Interstate System and the primary system shall be controlled in accordance with the provisions of this section and the national standards promulgated by the Secretary." 23 U.S.C. § 131 (h). There is little case law on this issue. Significantly, the State Defendants cite no case law to support their argument. The Shivwits rely primarily on the decision of the California Supreme Court in People ex rel. Dep't of Transp. v. Neagele Outdoor Adver., 698 P.2d 150, 155-58 (Cal. 1985). In Naegele, the State of California sought to regulate sixteen billboards on land held in trust for the Morongo Band of Mission Indians. Id., at 151-53. California cited its Outdoor Advertising Act (the statute by which California complies with the HBA) as authority for its exercise of jurisdiction. Id., at 153. The California Supreme Court held that the HBA did not authorize state jurisdiction over Indian trust land, and indeed that the HBA "reserved to federal authorities the responsibility for enforcing the act's provisions upon federal lands and reservations." Id, at 158. Like the Naegele Court, this court concludes that even if the HBA applies to the trust land at issue here, the Act is subject to federal (not state) enforcement, and the Act does not expressly authorize the regulation intended by Utah and St. George.
2. Public Law 280
The State Defendants point to Public Law 280 (codified in relevant part at 28 U.S.C. § 1360 (2003)) as an express grant from Congress to regulate the subject property. Under Public Law 280, state laws of "general application' are extended into Indian Country, to be applied with the same force and effect . . . as they have elsewhere within the State." 28 U.S.C. § 1360 (a). The United States Supreme Court has made clear that the relevant portion of Public Law 280 grants a state "jurisdiction over private civil litigation involving reservation Indians in state court," but not general civil regulatory authority. Bryan v. Itasca County, 426 U.S. 373, 384-85 (1976) (holding that Public Law 280 does not authorize state and local governments to apply their regulatory laws to Indian reservations); see also Cabazon, 480 U.S. at 208 (citing Bryan for the proposition that Public Law 280 jurisdiction does not confer general civil regulatory authority). Under this rule, Public Law 280 does not provide Utah and St. George with the authority to regulate the billboards on the subject property,
There is no dispute that the regulations at issue here are regulatory/civil and not criminal.
C. Even in the Absence of Express Congressional Consent, May the State Defendants Impose Regulations?
Even though the court has concluded that Congress did not expressly permit state or local regulation of the subject property, this does not end the analysis. Even in the absence of express Congressional permission, there are certain circumstances that permit a state to assert authority in Indian country, Cabazon, 480 U.S. at 215 (citing New Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 331-32 (1983)). Jurisdiction under such circumstances "remains the exception and not the rule."Seminole Tribe of Florida v. Florida, 517 U.S. 44, 148 n. 41 (1996).
The Court explained in Cabazon that resolution of this question
turns on whether the state authority is pre-empted by the operation of federal law; and "[s]tate jurisdiction is pre-empted . . . if it interferes or is incompatible with federal and tribal interests reflected in federal law, unless the state interests at stake are sufficient to justify the assertion of state authority." The inquiry is to proceed in light of traditional notions of Indian sovereignty and the congressional goal of Indian self-government, including its "overriding goal" of encouraging tribal self-sufficiency and economic development.Cabazon, 480 U.S. at 216 (citing Mescalero, 462 U.S. at 333-35).
A key factor in this analysis is that the federal government has expressly authorized this transaction, thereby showing a federal interest in the transaction, First, the BIA accepted the subject property in trust. Second, the leases to Kunz were expressly approved by the Department of the Interior in accordance with 25 U.S.C. § 415. Third, the BIA has conducted two Environmental Assessments ("EA") in connection with the transaction. See Shivwits Band Fee-to-Trust Land Transfer and Outdoor Advertising Leases, Final Environmental Assessment, at 1-3 (BIA March 2003) ("March 2003 EA," attached to Plaintiffs' and Federal Defendants' Cross-Motion as Ex, 9). The first EA, in 1995, assessed the environmental impacts of leasing the subject property to Kunz. The conclusion was that there was "No Significant Impact" resulting from the lease transaction. (1995 EA, attached as App. A to March 2003 EA). Following the March 2003 EA, the BIA reaffirmed its decision to take the subject property into trust and to approve the lease to Kunz. (March 2003 EA.)
25 C.F.R. § 1.4 (2003) provides additional support for the argument that the State Defendants do not have authority to regulate the subject property. It reads that, barring an exception not relevant to this case,
none of the laws, ordinances, codes, resolutions, rules or other regulations of any State or political subdivision thereof limiting, zoning or otherwise governing, regulating, or controlling the use or development of any real or personal property . . . shall be applicable to any such property leased from or held or used under agreement with and belonging to any Indian or Indian tribe, band, or community that is held in trust by the United States.25 C.F.R. § 1.4 (a). The State Defendants challenge the authority of this seemingly clear rule, arguing that the regulation was promulgated by the Secretary of the Interior without statutory authority. In support of this challenge, the State Defendants cite scholarly commentary and a district court case within the Tenth Circuit, Norvelle v. Sangre de Cristo Dev. Co., Inc., 372 F. Supp. 348 (D.N.M. 1974), rev'd on other grounds, 519 F.2d 370 (10th Cir. 1975), both of which call into question the authority of Section 1.4. However, this argument (supported by this very authority) was specifically rejected in the frequently cited caseof Santa Rosa Band of Indians v. Kings County, 532 F.2d 655, 665-66 (9th Cir. 1975). The Santa Rosa Court held that
The State Defendants further argue that Section 1.4 is inconsistent with, and superseded by, the Highway Beautification Act. However, as discussed above, the State Defendants have not demonstrated that Congress contemplated extension of the Highway Beautification Act into Indian country. Consequently, they have not shown that the HBA and Section 14 are in actual conflict.
25 U.S.C. § 465, which authorizes the Secretary to purchase land for the "purpose of providing land for Indians" and to take the title to such lands in trust, when read against the history of Federal policy governing use and control of Indian trust property, is sufficient to sustain [Section 1.4] as it applies to [the subject property in that case], obtained pursuant to § 465.Id. Following Santa Rosa, other courts have recognized the authority of Section 1A under 25 U.S.C. § 465. Connecticut ex rel. Blumenthal v. U.S. Dep't of Interior, 228 F.3d 82, 85-86 (2d Cir. 2000); Wyandotte Nation v. City of Kansas City, Kansas, 200 F. Supp.2d 1279, 1288 (D. Kan. 2002); City of Sault Ste, Marie, Mich. v. Andrus, 532 F. Supp. 157, 166 (D.D.C. 1980); see also. U.S. v. Roberts, 185 F.3d 1125, 1131-32 (10th Cir. 1999) (quoting Santa Rosa. "We are confident that when Congress in 1934 authorized the Secretary to purchase and hold title to lands for the purpose of providing lands for Indians, it understood and intended such lands to be held in the legal manner and condition in which trust lands were held under the applicable court decisions free of state regulation."). Some of these cases have explicitly announced that Section 1.4 generally exempts Indian trust lands from local zoning and regulatory requirements. Connecticut, 228 F.3d at 85-86; Wyandotte, 200 F. Supp.2d at 1288.
A final factor in the court's analysis is the Shivwits' economic interest in the lease transactions and the subject property, as compared with the State Defendants' countervailing interests. This factor is significant in view of Congress' "overriding objective of encouraging tribal self-government and economic development." Mescalero, 462 U.S. at 341. The State Defendants claim that the Shivwits have little, if any, economic stake in this affair. They correctly note that it is Kunz, not the Shivwits, who will use the subject land under the five lease agreements. Each lease agreement, it appears, extends for a twenty-year period, (See, e.g., "sample lease," attached as Ex. D, to Compl. at ¶ 4.) For example, one lease requires Kunz to pay the Shivwits $1800 every year for the first fifteen years, then $2,500 per year for the last five years of the lease, for a total gain for the Shivwits of $39,500 for that particular lease. (Id., at ¶ 5.) The State Defendants argue that the Shivwits stand to gain, in full, roughly $60,000 from these lease agreements over the twenty-year lease term, as compared to the approximately two million dollars that Kunz stands to gain over the twenty years. According to the State Defendants, this means that it is Kunz, not the Shivwits, who recovers the lion-share of the economic gain from this land use. But in light of evidence showing that the Shivwits' total revenues for the calendar year 1999 came to $90,417, the expected revenues from the lease agreement with Kunz is not insignificant, particularly to the Shivwits. (See Affidavit of Band Chairman Glenn Rogers (Rogers Affid.) at ¶ 4 (attached to Plaintiffs' Cross-Motion as Ex. 6).) It is also highly significant that, as a result of the transaction, the Shivwits own the subject property itself. When the twenty-year lease terms are complete, the Shivwits can use the subject property as they wish. The subject property, amounting to 25.32 total acres, "[is] located adjacent to the east side of 1-15 on the south end of the City of St. George, Utah, approximately 1 mile south of the Bloomington exit." (March 2003 EA at 1-1.) Because land in the 1-15 corridor is now developing rapidly, ownership of the subject property will clearly be beneficial to the Shivwits. (See Rogers Affid. at ¶ 7)
The Shivwits present evidence showing the economic importance of the lease transactions. Band Chairman Glenn Rogers calls the subject land "a very significant asset to the Shivwits Band" and "the best thing the Band has done to raise revenue since Restoration." (Rogers Affid. at ¶ 5;see also March 2003 EA, at 1-3 ("The Band Council has identified and pursued this opportunity as the best foreseeable opportunity for long-term economic development. No other land was found with a greater potential for economic benefit to Band members. Additionally, the Proposed Action increases the Band's land base.")) Moreover, Mr. Rogers' affidavit describes the Shivwits' ongoing "difficult negotiations over water rights" with the State Defendants who are their opponents in this case. (Rogers Affid, at ¶ 6.) Elaborating on the water rights dispute, Mr. Rogers notes that "[a]ll economic development for the Band has been on hold waiting for us to reach a settlement-except for the 1-15 billboard project. Acquiring the 1-15 land is the only way we have found to begin any economic development until we obtain water rights on the reservation." (Id., at ¶ 6.) The Shivwits are optimistic that various development plans involving land in the area of the subject property will provide the Band itself with "significant development opportunities in addition to outdoor advertising . . . for the Shivwits parcels." (Id. at ¶ 7.)
On the other side of the scale, the State Defendants identify their interests as (1) preserving the natural beauty of the area, (2) maintaining a consistent billboard regulatory program throughout the state; (3) enforcing the HBA in order to qualify for available federal highway funds; and (4) "preserving the right of local units of government to determine where commercial development will occur and to protect other areas from encroachment." (See Def s Mem. Supp. Mot. Summ. J. at 21.) Furthermore, the State Defendants argue that "permitting this scheme to proceed risks widespread undermining of the nationwide program of billboard regulation and perhaps other desirable regulatory programs" by encouraging "statute evading transactions" and "zoning defiance," But the court does not find these arguments persuasive for several reasons, First, the subject property is located in an area outside of St. George, Utah, which is already significantly developed. (See Rogers Affid. at ¶¶ 9-18 and attached Ex. 1-8.) Second, the State Defendants' argument concerning possible funding cuts by the federal government if the billboards remain is pure speculation. Third, it makes little sense that the federal government will deny the State Defendants federal funds for failing to control land which it has no authority to control. Finally, the State Defendants' "slippery slope" argument that other tribes will try to evade state zoning carries little weight in light of the procedures, including NEPA review (in which the State Defendants would be allowed to participate, through comment and otherwise), that the BIA and the Secretary of the Interior must follow before land can be taken into trust and then leased. In sum, when comparing the interests of the Shivwits and the federal government against those of the State Defendants, particularly in light of notions of Indian sovereign immunity, it is clear that the Shivwits' and the federal interests prevail.
D. Have the Shivwits "Marketed an Exemption?"
The State Defendants' contend that they should be allowed to regulate the subject property because the Shivwits are "marketing an exemption." In State of Washington v. Confederated Tribes of the Colville Indian Reservation, 447 U.S. 134 (1980), the Supreme Court held that the state could tax on-reservation sales of cigarettes at tribal smoke shops to nonmembers of the tribe who traveled to the shops to purchase those cigarettes. The case stated a rule that federal law prohibits Indian tribes from "marketing] an exemption from state taxation to persons who would normally do their business elsewhere." Id., at 155; Compare Cabazon, 480 U.S. at 219-20 (construction and operation of on-reservation gambling did not constitute marketing an exemption).
This issue is closely related to the federal preemption analysis because it involves careful scrutiny of the interests of the Shivwits in this transaction. See Cabazon, 480 U.S. at 219-20 (finding that because of the Cabazon and Morongo Bands' substantial economic interest and investment in allowing bingo and poker on their reservations, they were not "marketing an exception.") As discussed, the lease transactions themselves are of vital economic importance to the Shivwits. It is true that the Shivwits did not pay for the land, and that it is Kunz who profits in the main from the use of the land over the twenty-year term of the leases. But it is also true the Shivwits own the land, and will own it in fee simple at the conclusion of the lease terms. As described above, the ownership of this land provides significant economic opportunity to the Shivwits, both for the twenty-year period covered by the leases and (more importantly) when the leases conclude. On this basis, the circumstances here are different from those in Colville, where it was "painfully apparent that the value marketed by the smokeshops to persons coming from outside is not generated on the reservations by activities in which the Tribes have a significant interest." Colville, 447 U.S. at 155. Rather, the facts more closely resemble those of Cabazon. where "the Cabazon and Morongo are generating value on the reservations through activities in which they have a substantial interest." Cabazon, 480 U.S. at 220. Accordingly, the court finds that the Shivwits have not marketed an exemption by obtaining the subject land and leasing it to Kunz.
CONCLUSION
For the reasons set forth above, the court holds that the State Defendants have no authority, express or implied, to regulate Kunz's placement of billboards on the subject property, held in trust for the Shivwits. The State Defendants' Motion for Summary Judgment is DENIED, and the Shivwits' and Federal Defendants' Cross-Motion for Summary Judgment is GRANTED.
SO ORDERED.