Opinion
Case No. 2:03-CV-826 TC.
September 27, 2004
ORDER
The Plaintiffs, who are individual members of the Ute Indian Tribe, have filed suit against various federal government officials and agencies (for example, the Bureau of Indian Affairs) for alleged breach of trust duties concerning assets of the Ute Indian Tribe. The Ute Indian Tribe is an intervening defendant.
This matter comes before the court on six motions, four of which are dispositive: Plaintiffs' first Motion for Partial Summary Judgment (Dkt. #4), Plaintiffs' second Motion for Partial Summary Judgment (Dkt. #19), Ute Indian Tribe's Motion to Dismiss Second Amended Complaint (the Federal Defendants join in this motion) (Dkt. #23), Federal Defendants' Motion to Dismiss Second Amended Complaint (Dkt. #29), the Ute Indian Tribe's Motion to Strike or Dismiss Plaintiffs' second Motion for Partial Summary Judgment and Plaintiffs' "Pendent Tribal and State Claims" pleading (Dkt. #35), and Plaintiffs' Motion to Amend Complaint (Dkt. #39).
For the reasons set forth below, the court finds that it does not have subject matter jurisdiction over this matter. Accordingly, the court GRANTS the Federal Defendants' Motion to Dismiss Plaintiffs' Second Amended Complaint, GRANTS the Ute Indian Tribe's Motion to Dismiss Plaintiffs' Second Amended Complaint, and DENIES the remaining pending motions as MOOT.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs seek declaratory and injunctive relief from the U.S. Bureau of Indian Affairs ("BIA"), the U.S. Department of the Interior Office of Special Trustee ("OST"), Wayne Nordwall, in his official capacity as a regional director for the BIA, and Chester Mills, in his official capacity as Superintendent for the BIA's Uintah and Ouray Agency. Plaintiffs' claims against the Federal Defendants relate to the Ute Indian Tribe (the "Tribe") decision to retain John P. Jurrius as tribal financial advisor in December 2000 and the Tribe's December 2001 ordinance and referendum decision approving a tribal financial plan prepared by the Jurrius Group, LLP. They seek the following relief: declaratory judgments regarding alleged agency inaction concerning agency oversight of tribal asset management; an order enjoining the BIA and OST from approving future Jurrius transactions; and an order that the BIA conduct an equitable accounting of Jurrius transactions. Given the Tribe's interest in the transactions at issue, it sought leave and was granted permission to intervene.
Plaintiffs assert claims alleging violations by the BIA and, in one instance, the OST, of three statutes that concern two major tribal assets, which Mr. Jurrius and The Jurrius Group are assisting the Tribe in managing. Those three statutes are the Central Utah Project Completion Act (Pub.L. No. 102-575) ("CUPCA"), the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2000 (Pub.L. No. 106-398) ("NDA-2000"), and the American Indian Trust Fund Management Reform Act of 1994 (Pub.L. No. 103-412) ("Reform Act of 1994").
They also assert a general breach of trust claim. In support of this claim, Plaintiffs assert that "[t]o date the BIA has taken no steps to intervene and to investigate the precipitous decline in Tribal financial assets." (Compl. ¶ 41.) Plaintiffs contend that this alleged failure constitutes a breach of trust, and they seek an equitable accounting as a remedy for the alleged breach of trust. (See Compl. Prayer for Relief.)
All of their claims are brought under 5 U.S.C. § 706 of the Administrative Procedure Act (the "APA"). Indeed, the Plaintiffs cite the APA as one of the bases for the court's jurisdiction.
The Tribal Assets
The first of the two major tribal assets at issue is a water settlement fund of over $170 million granted to the Tribe in Section 506 of CUPCA. The water settlement fund, held in trust, was compensation for the government's decision not to build certain water development projects for the Tribe. CUPCA placed certain restrictions on the management of the fund.
The second of the two major tribal assets — the Naval Oil Shale Reserve Two (or NOSR-2) lands — was transferred to the Tribe under the NDA-2000. The NDA-2000 conveyed all right, title and interest of the United States in certain Naval oil shale reserve lands (including the mineral interests) to the Tribe in fee simple, thereby making them privately owned by the Tribe and not subject to government trust management.
Floyd Wopsock's November 2001 Letter to the BIA
On November 15, 2001, Plaintiff Floyd Wopsock, who was then Chairman of the Ute Tribal Business Committee, sent a letter to David Allison, Superintendent of the BIA's Uintah and Ouray Agency, requesting "that the BIA do an economic and legal investigation of Mr. Jurrius and The Jurrius Group and his recent activities" and that the BIA "review the [Investment Plan of The Jurrius Group] and the reputation and economic stability of Mr. Jurrius and The Jurrius Group." (Nov. 15, 2001 Letter from F. Wopsock to D. Allison at 1, attached as Ex. A to Plaintiffs' original Complaint and incorporated by reference into the Affidavit of Floyd Wopsock.) Mr. Wopsock's letter expressed concern that the Tribe would lose the water settlement funds provided to the Tribe through CUPCA. (See id.) He also requested that the BIA "look into what Mr. Jurrius and The Jurrius Group are doing with oil and gas lessees." (Id. at 2.) Specifically, he expressed concerned that a recent slow down, if not cessation, of oil and gas drilling on the reservation (from which the Tribe secures income) was caused by allegedly improper actions of Mr. Jurrius and The Jurrius Group. (Id.) He said he was contacting BIA because BIA "is the Tribe's trustee and . . . is responsible for watching over the Tribe's money and its other assets." Plaintiffs now claim that, despite BIA's receipt of Mr. Wopsock's letter and its duties as a trustee, the Federal Defendants have failed to fulfill their oversight duties.
Mr. Wopsock brings his claims in this suit as an individual member of the Ute Tribe. He does not profess to be officially representing the Ute Tribe in this matter.
The Tribe's Water Settlement Funds
Plaintiffs assert claims pertaining to the Tribe's water settlement funds pursuant to CUPCA and the Reform Act of 1994. The Reform Act of 1994 authorizes Indian tribes to withdraw funds held in trust by the United States out of federal management to allow tribes to privately reinvest those funds in an effort to achieve a greater rate of return than achieved under government trust management.
According to the Plaintiffs, The Jurrius Group, through its legal advisors, informed the Tribe that the water settlement funds are eligible for transfer under the Reform Act of 1994 from the Office of Special Trustee to a private investment company. To that end, The Jurrius Group proposed, and the Tribe and its members approved, a financial plan providing for, among other things, transfer of the water settlement funds out of the hands of the OST. Plaintiffs allege that "[t]he BIA has failed to protect the economic interests of Tribal members expressly inserted in P.L. 102-575 [CUPCA] by not advising the Tribe members that the legal position of the Jurrius Group . . . is directly in conflict with the special protections placed in Section 506(c) of P.L. 102-575 [CUPCA]." (Second Amended Compl. for Declaratory and Injunctive Relief (hereinafter "Compl.") ¶ 32.)
The water settlement funds have not yet been withdrawn from federal management. Under the Reform Act of 1994 and its implementing regulations, see 25 C.F.R. Part 1200, a tribe will be permitted to withdraw and reinvest its funds only after submitting a detailed investment plan which meets OST criteria for, among other things, proper investment goals and adequate protections against loss of principal. See 25 C.F.R. Pt. 1200. As required by the financial plan proposed by The Jurrius Group and approved by the Tribe and its members, the Tribe has submitted an application to the OST requesting that the Tribe be allowed to withdraw and reinvest its water settlement funds pursuant to the Reform Act of 1994.
To date, the OST has not issued a decision on the Tribe's application. In fact, the OST identified several additional items which the Tribe must provide before the application will even be considered complete. No one knows at this time whether the Tribe will satisfy the OST's additional application requirements, whether the OST will approve the application, or when either of those events will occur, if they do. Once the OST makes its decision or fails to make a timely decision, and if a party decides to challenge the OST's action, that decision or inaction must be challenged pursuant to the Department of Interior's hearings and appeals procedures, set out in 43 C.F.R. Part 4.See C.F.R. § 1200.21.
The Tribe's NOSR-2 Oil and Gas Assets
Plaintiffs' second claim pertains to Tribal NOSR-2 oil and gas assets and is brought pursuant to the NDA-2000. Specifically, Plaintiffs claim that "the BIA has failed to protect the interests of both Tribal members and the United States in assuring that the `value' of hydrocarbons proposed to be developed by the Jurrius Group under P.L. 106-398 [NDA-2000] fully protect the economic interests of both Tribal members and the United States." (Compl. ¶ 35.)
The Tribe has entered into, or is in the process of finalizing, exploration and development agreements with oil and gas companies which would allow development of the NOSR-2 minerals and bring income to the Tribe. The minerals have not, however, been developed due to an ongoing administrative appeal before the Department of Interior over the scope of BIA oversight of exploration and development agreements on NOSR-2 lands. (See Notice of Appeal, attached as Ex. E to Ute Indian Tribe's Mem. in Supp. of Mot. to Dismiss.)
Defenses Raised
The Federal Defendants and the Tribe have raised various defenses, including assertions that there is no final agency action under the APA so the court does not have subject matter jurisdiction over any of the Plaintiffs' claims. The Federal Defendants characterize the lack of final agency action as a lack of waiver of sovereign immunity. The Tribe characterizes the lack of final agency action as a ripeness issue. Either way, the result they seek is the same.
The defendants have also raised the defenses of standing and exhaustion of tribal and administrative remedies. Because the court finds it does not have subject matter jurisdiction, it does not reach those issues.
A claim against the federal government or any of its agencies is not allowed to proceed unless there has been a specific and unequivocal waiver of sovereign immunity by Congress. United States Dep't of Energy v. Ohio, 503 U.S. 607, 615 (1992); Affiliated Ute Citizens v. United States, 406 U.S. 128, 141-42 (1972); United States v. Murdock Machine Eng. Co. of Utah, 81 F.3d 922, 930-31 (10th Cir. 1996). Under the APA, sovereign immunity is waived for claims brought against the United States in federal court if: (1) the person bringing suit claims to have suffered harm because of final agency action (or inaction); (2) non-monetary relief is sought; (3) there is no other adequate remedy in a court; (4) the agency action challenged is not committed to the agency's discretion by law; and (5) there is not another statute that forbids the relief sought. See 5 U.S.C. §§ 701(a), 702, 704.
ANALYSIS
None of the laws under which Plaintiffs seek relief provides a private right of action against the United States, its agencies or officials. See Central Utah Project Completion Act, Pub.L. No. 102-575; Floyd D. Spence National Defense Authorization Act for Fiscal Year 2000, Pub.L. No. 106-398; American Indian Trust Fund Management Reform Act of 1994, Pub.L. No. 103-412. Accordingly, Plaintiffs must pursue their claims under the Administrative Procedure Act ("APA"). See Lujan v. National Wildlife Fed'n, 497 U.S. 871, 882 (1990) (holding that where environmental statutes FLPMA and NEPA did not provide private right of action, a right of action challenging agency action existed under the APA, 5 U.S.C. § 702); Japan Whaling Ass'n v. American Cetacean Soc'y, 478 U.S. 221, 230 n. 4 (1986) (holding that right of action against head of federal agency was created by APA, which states in 5 U.S.C. §§ 702 and 704 that "`final agency action for which there is no other adequate remedy in a court [is] subject to judicial review' at the behest of a `person . . . adversely affected or aggrieved by agency action'"); see also Norton v. Southern Utah Wilderness Alliance, 124 S. Ct. 2373, 2378 (2004) ("Where no other statute provides a private right of action, the `agency action' complained of [under the APA] must be `final agency action.'").
But Plaintiffs' APA claims must be ripe in order for this court to have subject matter jurisdiction. Gordon v. Norton, 322 F.3d 1213, 1219 (10th Cir. 2003).
In determining whether a case is ripe for review under the APA, the following factors are considered:
(1) whether the issues in the case are purely legal;
(2) whether the agency action involved is "final agency action" within the meaning of the Administrative Procedure Act, 5 U.S.C. § 704 ;
(3) whether the action has or will have a direct and immediate impact upon the plaintiff; and
(4) whether the resolution of the issues will promote effective enforcement and administration by the agency.Id. (emphasis added) (citing Ash Creek Mining Co. v. Lujan, 934 F.2d 240, 243 (10th Cir. 1991)). The Plaintiffs bear the burden of establishing ripeness, which, under the APA, necessarily includes establishing the existence of a final agency action. See id.
Plaintiffs also bear the burden of proving the United States has waived its sovereign immunity. James v. United States, 970 F.2d 750, 753 (10th Cir. 1992).
Under the APA, final agency action may consist of agency inaction. See 5 U.S.C. § 706(1) (authorizing court to "compel agency action unlawfully withheld or unreasonably delayed"); Norton v. Southern Utah Wilderness Alliance, 124 S. Ct. 2373, 2378 (2004) (hereinafter "SUWA") ("Failures to act are sometimes remediable under the APA"). To establish agency inaction subject to review under the APA, the Plaintiffs must show that the BIA or the OST failed to carry out a mandatory, nondiscretionary duty. See SUWA, 124 S. Ct. at 2378-79 ("a claim under § 706(1) can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take.") (emphasis in original).
Plaintiffs allege that the Federal Defendants violated their alleged trust duty by failing to respond to Mr. Wopsock's request for agency oversight and failing to oversee the allegedly problematic transactions proposed or carried out by Mr. Jurrius and The Jurrius Group. In essence, they claim that the BIA and OST have failed in their purported duties to protect the water settlement funds and the oil and gas assets of the Tribe from any improper actions by Mr. Jurrius and the Jurrius Group. They point to Mr. Wopsock's November 2001 Letter as the request for action that triggered the agencies' duty to respond.
To the extent Plaintiffs assert a violation of some general fiduciary duty to oversee the Tribe's business decisions, their claims fail because they have not alleged any specific source of any such trust duty. See United States v. Navajo Nation, 537 U.S. 488, 506-08 (2003); Shoshone Indian Tribe of the Wind River Reservation v. United States, 58 Fed. Cl. 77, 82 (Fed.Cl. 2003) ("Under Navajo Nation, in order for a duty to be imposed on the government, there must be more than a general trust relationship between the United States and an Indian tribe.").
With respect to the Tribe's oil and gas assets, there is no final agency action. First, the NDA-2000 granted the NOSR-2 lands to the Tribe in fee simple, and so it does not appear, although the court is not ruling one way or the other on this issue, that the NOSR-2 assets are subject to trust management by the BIA or OST. Accordingly, there appears to be no legal action that the BIA or OST is required to take (a prerequisite to a finding of final agency inaction, as set forth in SUWA). Second, even if the BIA or OST has some oversight fiduciary duty regarding the management of these assets, the existence and scope of that oversight duty is an issue currently pending before the Department of Interior in an administrative appeal which has yet to be resolved.
There are also finality problems concerning Plaintiffs' claims about the Tribe's water settlement funds. Plaintiffs have voiced concerns about the proposed financial plan and the fitness of Mr. Jurrius and The Jurrius Group to manage the funds for the Tribe's benefit. But Plaintiffs have raised issues that may never need to be addressed if the OST does not approve the Tribe's application for transfer of funds out of trust.
Moreover, many of their concerns will be addressed by the OST during the agency's review of the Tribe's application. The regulations implementing the Reform Act of 1994 require the OST to address some of the very issues raised by the Plaintiffs. For example, when evaluating the proposed management plan, the OST will
evaluate the individuals or entities that will manage the funds to be withdrawn, or that will advise the tribe on investing the funds to be withdrawn in order to determine if they have the capability and experience to manage the funds. Among the elements [the OST] will evaluate are: the number of years in business, the performance record for funds management, and the ability to compensate the tribe if the entity is found liable for failing to comply with the tribe's management plan (i.e., its assets, bonding, and insurance).25 C.F.R. § 1200.16(a). Also, "[f]or judgment or settlement funds [such as the Tribe's water settlement funds received pursuant to CUPCA], in addition to the criteria in § 1200.16, [the OST] will determine if the plan adequately provides for compliance with any conditions, uses of funds, or other requirements established by the appropriate judgment fund plan or settlement act." 25 C.F.R. § 1200.17. In other words, the OST is required to determine whether the Tribe's proposed management plan complies with the limitations in CUPCA (e.g., a requirement that two independent financial consultants approve investment transactions), an issue the Plaintiffs have raised in this case.
The issues raised by the Plaintiffs are not ripe for review under the APA because there is no final agency action by the BIA or the OST. See 5 U.S.C. § 704 (only "final agency action [is] subject to judicial review"); Willow Creek Ecology v. United States Forest Serv., 225 F. Supp. 2d 1312, 1315 (D. Utah 2002) ("Under the APA, judicial review of agency action is limited to final agency action."). Accordingly, the court does not have subject matter jurisdiction.
Individual defendants Wayne Nordwall and Chester Mills are being sued in their official capacities, so the same ripeness constraints apply to Plaintiffs' claims against them. See Eastwood v. Department of Corrections of the State of Oklahoma, 846 F.2d 627, 632 (10th Cir. 1988) ("As the Supreme Court has noted, suing officials in their official capacity `represent(s) only another way of pleading an action against the entity of which an officer is an agent.'") (quoting Monell v. New York City Dep't of Social Servs., 436 U.S. 658, 690 n. 55 (1978)).
ORDER
For the foregoing reasons, the court orders as follows:
1. The Federal Defendants' Motion to Dismiss Second Amended Complaint (Dkt. #29) is GRANTED. Specifically, all of Plaintiffs' claims are DISMISSED WITHOUT PREJUDICE;
2. The Ute Indian Tribe's Motion to Dismiss Second Amended Complaint (Dkt. #23) is GRANTED. Specifically, all of Plaintiffs' claims are DISMISSED WITHOUT PREJUDICE;
3. Plaintiffs' first Motion for Partial Summary Judgment (Dkt. #4) is DENIED AS MOOT;
4. Plaintiffs' second Motion for Partial Summary Judgment (Dkt. #19) is DENIED AS MOOT;
5. The Ute Indian Tribe's Motion to Strike or Dismiss Plaintiffs' second Motion for Partial Summary Judgment and Plaintiffs' "Pendent Tribal and State Claims" pleading (Dkt. #35) is DENIED AS MOOT; and
6. Plaintiffs' Motion to Amend Complaint (Dkt. #39) is DENIED AS MOOT.