State of Alaska v. United States ( 2016 )


Menu:
  •                  FOR PUBLICATION
    
      UNITED STATES COURT OF APPEALS
           FOR THE NINTH CIRCUIT
    
    STATE OF ALASKA DEPARTMENT OF             No. 14-35051
    NATURAL RESOURCES; DEPARTMENT
    OF TRANSPORTATION AND PUBLIC                 D.C. No.
    FACILITIES,                               4:13-cv-00008-
                 Plaintiffs-Appellants,            RRB
    
                      v.
                                                OPINION
    UNITED STATES OF AMERICA; AGNES
    M. PURDY, Owner of Native
    Allotment No. 50-2008-0437
    certificate no.; that portion of Native
    Allotment No. 50-2008-0437
    currently occupied by Chicken Ridge
    Alternate, Myers Fork Spur, Chicken
    to Franklin and Chicken Ridge
    Trails, containing 17.5 acres;
    BARBARA A. REDMON, on behalf of
    Anne L. Purdy, Owner of Native
    Allotment No. 50-2013-0004,
    certificate no.; that portion of Native
    Allotment No. 50-2013-0004
    currently occupied by Chicken to
    Franklin and Chicken Ridge Trails,
    containing approximately 6.4 acres
    of land; DENA’ NENA’ HENASH,
    Tanana Chiefs Conference, an
    Alaska non-profit corporation,
                     Defendants-Appellees.
    2      STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES
    
            Appeal from the United States District Court
                     for the District of Alaska
         Ralph R. Beistline, Senior District Judge, Presiding
    
                       Argued and Submitted
                  May 12, 2015—Anchorage, Alaska
    
                           Filed March 14, 2016
    
             Before: William C. Canby, Jr., Jay S. Bybee,
                 and Paul J. Watford, Circuit Judges.
    
                        Opinion by Judge Watford
    
    
                               SUMMARY*
    
    
        Quiet Title / Declaratory Judgment / Condemnation
    
         The panel affirmed the district court’s dismissal of quiet
    title and declaratory judgment claims for lack of subject
    matter jurisdiction, and vacated the dismissal of a
    condemnation claim in a case involving a land dispute
    between the State of Alaska and two Alaska Natives, Agnes
    and Anne Purdy, concerning ownership of rights-of-way for
    four public trails that cross the Purdys’ land.
    
        The Purdys acquired ownership of the parcels in question
    under the Alaska Native Allotment Act through allotments by
    the federal government. The State of Alaska contended that
    
      *
        This summary constitutes no part of the opinion of the court. It has
    been prepared by court staff for the convenience of the reader.
          STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES     3
    
    the allotments were subject to rights-of-way for four trails.
    Federal statute R.S. 2477, repealed in 1976, granted rights of
    way over public lands; it was self-executing; acceptance of a
    grant was determined by state law; and under Alaska law an
    R.S. 2477 grant could be accepted through public use.
    
        Addressing the State of Alaska’s Quiet Title Act claim,
    the panel held that the State of Alaska’s quiet title claim was
    barred. The panel held that the United States was a necessary
    party to the claim because it held an interest in the Purdys’
    allotments (by virtue of the restraint on alienation), and
    recognition of the R.S. 2477 rights-of-way would impair the
    United States’ interest. The panel further held that the
    United States had not waived its immunity from suit pursuant
    to the Quiet Title Act’s Indian lands exception, which
    preserves the United States’ immunity from suit when the
    United States claims an interest based on that property’s
    status as trust or restricted Indian lands. The panel concluded
    that the district court properly dismissed the claim for lack of
    subject matter jurisdiction.
    
        The panel held that the district court correctly dismissed
    the State of Alaska’s claim for declaratory relief under 28
    U.S.C. § 2201, which sought essentially the same relief as the
    quiet title claim.
    
        Addressing the State of Alaska’s condemnation claim
    against the Purdys and the United States under 25 U.S.C.
    § 357, the panel held that although the district court had
    subject matter jurisdiction to hear the State’s condemnation
    claim, the claim could not proceed as pleaded. The panel
    held that the United States was an indispensable party to the
    claim. The panel further held that the district court erred in
    dismissing the claim on the ground that the United States had
    4     STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES
    
    not waived its sovereign immunity because Congress waived
    the government’s immunity with respect to such claims. The
    panel also held that the United States’ express consent to the
    condemnation claim was not required. The panel concluded
    that the State improperly pleaded its condemnation claim, and
    remanded so that the State may be given an opportunity to
    amend the claim if it so chooses.
    
    
                             COUNSEL
    
    Michael C. Geraghty, Attorney General, David A. Wilkinson
    (argued), Assistant Attorney General, Mary Ann Lundquist,
    Senior Assistant Attorney General, Fairbanks, Alaska, for
    Plaintiffs-Appellants State of Alaska Department of Natural
    Resources and Department of Transportation and Public
    Facilities.
    
    Sam Hirsch, Acting Assistant Attorney General, David C.
    Shilton and John Emad Arbab (argued), Attorneys,
    Environment & Natural Resources Division, United States
    Department of Justice, Washington, D.C., for Defendant-
    Appellee United States of America.
    
    Michael C. Kramer (argued) and Justin J. Andrews, Kramer
    and Associates, Fairbanks, Alaska, for Defendants-Appellees
    Agnes Purdy and Anne Purdy.
    
    Richard D. Monkman, Harry R. Sachse, and Maile S.
    Tavepholjalern, Sonosky, Chambers, Sachse, Miller &
    Munson, LLP, for Defendant-Appellee Dena’ Nena’ Henash
    (Tanana Chiefs Conference).
          STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES     5
    
                              OPINION
    
    WATFORD, Circuit Judge:
    
        This case involves a land dispute between the State of
    Alaska and two Alaska Natives, Agnes and Anne Purdy.
    Agnes Purdy owns a 160-acre parcel of land in eastern Alaska
    near the town of Chicken; her sister Anne owns a neighboring
    40-acre parcel. The State contends that it owns rights-of-way
    for four public trails that cross the Purdys’ land, trails which
    the State wants to keep open for public use. The Purdys
    dispute the State’s claim of ownership and want to stop
    members of the public from trespassing on their property by
    using the trails.
    
         The State sued the Purdys and the United States (as well
    as other defendants not relevant here) in federal court. Three
    of the State’s claims are at issue: (1) a claim seeking to quiet
    title to the four rights-of-way; (2) a declaratory judgment
    claim seeking essentially the same relief; and (3) a claim
    seeking to condemn for public use whatever portions of the
    rights-of-way the State does not already own. The district
    court dismissed these claims for lack of subject matter
    jurisdiction and entered partial final judgment under Federal
    Rule of Civil Procedure 54(b). The remainder of the action
    has been stayed pending resolution of this appeal.
    
        We conclude that the district court properly dismissed the
    quiet title and declaratory judgment claims for lack of subject
    matter jurisdiction. We vacate dismissal of the condemnation
    claim because that claim may proceed if the State chooses to
    amend it on remand.
    6     STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES
    
                                   I
    
        The Purdys acquired ownership of the parcels in question
    under the Alaska Native Allotment Act, 43 U.S.C. § 270–1 et
    seq. (1970). Congress repealed the Act in 1971 but included
    a savings provision for applications pending on the repeal
    date. 43 U.S.C. § 1617(a). As relevant here, the Act
    authorized the Secretary of the Interior to allot up to 160
    acres of land to Alaska Natives, subject to a restraint on
    alienation. The relevant portion of the statute provides:
    
           The Secretary of the Interior is authorized and
           empowered, in his discretion and under such
           rules as he may prescribe, to allot not to
           exceed one hundred and sixty acres of vacant,
           unappropriated, and unreserved nonmineral
           land in Alaska . . . to any Indian, Aleut, or
           Eskimo of full or mixed blood who resides in
           and is a native of Alaska, and who is the head
           of a family, or is twenty-one years of age; and
           the land so allotted shall be deemed the
           homestead of the allottee and his heirs in
           perpetuity, and shall be inalienable and
           nontaxable until otherwise provided by
           Congress . . . .
    
    § 270–1. To qualify for an allotment, an applicant needed to
    show “substantially continuous use and occupancy of the land
    for a period of five years.” § 270–3.
    
       The Purdys applied for their respective allotments in 1971
    before the Act was repealed. After a decades-long
    administrative process, the Bureau of Land Management
    (BLM) approved the Purdys’ allotment applications,
          STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES       7
    
    concluding that Agnes had shown continuous use and
    occupancy of her 160-acre parcel since 1931, and that Anne
    had shown continuous use and occupancy of her 40-acre
    parcel since 1955. In 2008 and 2012, the BLM issued
    allotment certificates to the Purdys that transferred title to the
    land. As mandated by the Act, the allotment certificates
    contain a restraint on alienation stating that the land “shall be
    inalienable and nontaxable until otherwise provided by
    Congress or until the Secretary of the Interior . . . approves a
    deed of conveyance vesting in the purchaser a complete title
    to the land.”
    
        The State contends that the Purdys’ allotments are subject
    to rights-of-way for the following trails: the Chicken to
    Franklin Trail, the Chicken Ridge Trail, the Chicken Ridge
    Alternative Trail, and the Myers Fork Spur Trail. The State’s
    complaint alleges that the public began using these trails in
    the late 1800s, long before the Purdys’ use and occupancy of
    their allotments began. The State further alleges that, by
    virtue of this public use, it acquired ownership of the rights-
    of-way under an unusual federal statute known as R.S. 2477.
    That statute, first enacted in 1866, provides: “The right of
    way for the construction of highways over public lands, not
    reserved for public uses, is granted.” 43 U.S.C. § 932 (1970).
    Congress repealed the statute in 1976, but rights-of-way in
    existence on the date of repeal were preserved. Lyon v. Gila
    River Indian Community, 
    626 F.3d 1059
    , 1076 (9th Cir.
    2010).
    
         R.S. 2477 is unusual, as land-grant statutes go, because of
    its self-executing nature. No formal document memorializing
    the grant of a right-of-way needed to be executed by a federal
    official. Southern Utah Wilderness Alliance v. BLM,
    
    425 F.3d 735
    , 741 (10th Cir. 2005). Nor did a State, as the
    8     STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES
    
    recipient of the grant, need to take any formal steps to accept
    the federal government’s grant of a right-of-way. Acceptance
    of a grant is determined by state law, and under Alaska law
    an R.S. 2477 grant could be accepted through public use.
    Fitzgerald v. Puddicombe, 
    918 P.2d 1017
    , 1019 (Alaska
    1996); Hamerly v. Denton, 
    359 P.2d 121
    , 123 (Alaska 1961).
    “The extent of public use necessary to establish acceptance of
    the RS 2477 grant depends upon the character of the land and
    the nature of the use.” Fitzgerald, 918 P.2d at 1020. While
    “infrequent and sporadic” use is insufficient, Hamerly,
    359 P.2d at 125, “continuous use is not required,” Fitzgerald,
    918 P.2d at 1020. Beyond that, the Alaska cases provide little
    guidance as to the quantum of public use that must be shown,
    other than to note that the ultimate question is whether there
    has been public use “for such a period of time and under such
    conditions as to prove that the grant has been accepted.”
    Hamerly, 359 P.2d at 123.
    
         The State’s complaint alleges facts that, in its view,
    establish sufficient public use of the four trails to prove
    acceptance of the grant. For example, the State alleges that
    in 1926, some 517 people, 215 pack horses, 29 sleds, and 75
    tons of freight traversed the Chicken to Franklin Trail, while
    261 people, 86 pack horses, and 5 tons of freight traversed the
    Chicken Ridge Trail. Whether the public’s use of the four
    trails was sufficient to prove acceptance under Alaska law is
    an issue that has not previously been resolved through
    litigation. The State seeks to litigate that issue now. And it
    seeks more particularly to show that, because the rights-of-
    way were accepted before the Purdys’ use and occupancy of
    their allotments began, the Purdys took title subject to the
    State’s pre-existing ownership interests.
          STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES       9
    
                                    II
    
        The first question raised by this appeal is whether the
    district court had jurisdiction to hear the State’s quiet title
    claim, by which it seeks to establish ownership of the four
    contested rights-of-way. The second question is whether the
    State may condemn for public use whatever portions of the
    rights-of-way it does not already own.
    
                                    A
    
        The district court correctly held that the State’s quiet title
    claim is barred. The United States is a necessary party to that
    claim but has not waived its immunity from suit.
    
       To establish ownership of the rights-of-way, the State
    sued the United States under the Quiet Title Act (QTA),
    28 U.S.C. § 2409a. The QTA states in relevant part:
    
            The United States may be named as a party
            defendant in a civil action under this section
            to adjudicate a disputed title to real property
            in which the United States claims an interest,
            other than a security interest or water rights.
            This section does not apply to trust or
            restricted Indian lands . . . .
    
    § 2409a(a). The State had to name the United States as a
    defendant because it holds an interest in the Purdys’
    allotments (by virtue of the restraint on alienation), and
    recognition of the R.S. 2477 rights-of-way would impair the
    United States’ interest. See Minnesota v. United States,
    
    305 U.S. 382
    , 386 n.1 (1939); United States v. City of
    McAlester, 
    604 F.2d 42
    , 46 (10th Cir. 1979). The State had
    10    STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES
    
    to sue under the QTA because that statute provides “the
    exclusive means by which adverse claimants [may] challenge
    the United States’ title to real property.” Block v. North
    Dakota, 
    461 U.S. 273
    , 286 (1983). The QTA governs even
    when an adverse claimant, like the State here, asserts
    ownership of less than a fee simple interest. Mills v. United
    States, 
    742 F.3d 400
    , 405 (9th Cir. 2014); State of Alaska v.
    Babbitt (Albert), 
    38 F.3d 1068
    , 1074 (9th Cir. 1994).
    
        The United States may be sued only if a statute expressly
    waives its sovereign immunity. Block, 461 U.S. at 280. The
    QTA waives the United States’ immunity with respect to
    claims covered by that statute, but the statute excludes from
    its coverage claims involving “trust or restricted Indian
    lands.” 28 U.S.C. § 2409a(a). This exclusion, known as the
    Indian lands exception, preserves the United States’ immunity
    from suit “when the United States claims an interest in real
    property based on that property’s status as trust or restricted
    Indian lands.” United States v. Mottaz, 
    476 U.S. 834
    , 843
    (1986).
    
        The Indian lands exception applies if the federal
    government has a “colorable claim” that the lands in question
    are trust or restricted Indian lands. Wildman v. United States,
    
    827 F.2d 1306
    , 1309 (9th Cir. 1987). That test is met so long
    as the federal government’s position “was not undertaken in
    either an arbitrary or frivolous manner.” Albert, 38 F.3d at
    1076.
    
        The federal government has a colorable claim that the
    Purdys’ allotments are restricted Indian lands. The allotments
    are Indian lands because the Purdys received the allotments
    under the Alaska Native Allotment Act. See State of Alaska
    v. Babbitt (Foster), 
    75 F.3d 449
    , 450–52 (9th Cir. 1996). And
          STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES    11
    
    those lands are considered “restricted” by virtue of the
    restraint on alienation contained in the allotment certificates.
    See 25 C.F.R. § 152.1(c); State of Alaska, 45 IBLA 318,
    321–22 (1980). Thus, the allotment certificates alone give
    rise to a colorable claim that the lands in question are
    restricted Indian lands, see Foster, 75 F.3d at 452, unless the
    State can show that the rights-of-way it asserts were validly
    granted before the allotments were issued.
    
        The State successfully made that showing in State of
    Alaska v. Babbitt (Bryant), 
    182 F.3d 672
     (9th Cir. 1999). As
    in this case, the land at issue in Bryant was allotted to an
    Alaska Native (William Bryant), whose use and occupancy of
    the land began in 1964. In 1961, however, the federal
    government had earlier appropriated the same land to the
    State for use as a material site right-of-way under a federal
    highway statute. Id. at 673, 677 n.32. There was no dispute
    that the 1961 grant to the State had in fact been made: The
    statute authorizing the grant required then, as it does now,
    that the Secretary of Transportation file “a map showing the
    portion of such lands or interests in lands” that the federal
    government wished to appropriate. 23 U.S.C. § 317(a). As
    a legal matter, then, the land was simply not available for
    allotment when Bryant began occupying it in 1964, and the
    BLM therefore lacked the authority to allot the land to Bryant
    in the first place. Given those facts, we held that the federal
    government had no claim, much less a colorable one, that the
    lands in question were trust or restricted Indian lands.
    Bryant, 182 F.3d at 676–77.
    
        Our case is different. We do not have a clear and
    undisputed grant from the federal government to the State of
    an interest in the Purdys’ allotments. To be sure, we have a
    potential grant of such an interest under R.S. 2477, but
    12    STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES
    
    whether the rights-of-way were accepted (and when) is open
    to dispute. Resolution of that issue would require a fact-
    intensive inquiry into the nature and character of the public’s
    use of the four contested trails from the late 1800s through
    the 1920s. The State may be right that it has the better of the
    argument—that if given the chance to do so, it could
    successfully show public use of the trails “for such a period
    of time and under such conditions as to prove that the grant
    has been accepted.” Hamerly, 359 P.2d at 123. But even
    accepting as true all of the State’s factual allegations
    concerning the nature and character of public use that
    occurred, the question remains whether that use establishes,
    as a legal matter, acceptance of the grants under Alaska law.
    We cannot say that the issue is so open and shut that arguing
    against recognition of the R.S. 2477 rights-of-way amounts
    to an arbitrary or frivolous position. The federal government
    therefore has a colorable claim that the lands in question are
    restricted Indian lands.
    
        Because the Indian lands exception applies, the district
    court correctly dismissed the State’s quiet title claim for lack
    of subject matter jurisdiction. (We decline to address the
    State’s argument that its quiet title claim against the Purdys
    may proceed in the United States’ absence, as the State failed
    to assert that argument below in opposition to the Purdys’
    motion to dismiss.) The district court also correctly
    dismissed the State’s claim for declaratory relief under
    28 U.S.C. § 2201, which sought essentially the same relief as
    the quiet title claim. A claim under the Declaratory Judgment
    Act may not be used as an end run around the QTA’s limited
    waiver of sovereign immunity. McMaster v. United States,
    
    731 F.3d 881
    , 900 (9th Cir. 2013).
          STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES     13
    
                                   B
    
        The State has also asserted a condemnation claim against
    the Purdys and the United States under 25 U.S.C. § 357. That
    statute provides: “Lands allotted in severalty to Indians may
    be condemned for any public purpose under the laws of the
    State or Territory where located in the same manner as land
    owned in fee may be condemned, and the money awarded as
    damages shall be paid to the allottee.” The United States is
    an indispensable party to this claim, given the interest it holds
    in the Purdys’ allotments. See Minnesota, 305 U.S. at 386.
    The State adequately named the United States as a defendant
    to the condemnation claim when it incorporated by reference
    the parties named in paragraphs 15–21 of the complaint,
    which included the United States.
    
        The district court dismissed the State’s condemnation
    claim on the ground that the United States had not waived its
    sovereign immunity. That ruling was in error. By
    authorizing condemnation actions under § 357, Congress
    waived the United States’ immunity with respect to such
    claims. See Minnesota, 305 U.S. at 388; Jachetta v. United
    States, 
    653 F.3d 898
    , 907 (9th Cir. 2011).
    
        The Purdys contend that the State may not pursue
    a condemnation claim—even though authorized under
    § 357—unless the United States expressly consents to the
    suit. That contention is squarely foreclosed by our precedent,
    which holds that such consent is not required. See Southern
    California Edison Co. v. Rice, 
    685 F.2d 354
    , 356–57 & n.5
    (9th Cir. 1982); Nicodemus v. Washington Water Power Co.,
    
    264 F.2d 614
    , 617–18 (9th Cir. 1959). The Purdys rely on
    United States v. Pend Oreille County Public Utility District
    No. 1, 
    135 F.3d 602
     (9th Cir. 1998), but that case is
    14    STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES
    
    distinguishable. The condemning authority there sought to
    condemn both tribal reservation land and individual Indian
    allotments by flooding the lands through construction of a
    dam. Id. at 606, 607. Because the reservation land could not
    be condemned under § 357 (only the individual allotments
    could), we held that the condemning authority needed the
    consent of the United States to proceed. 135 F.3d at 613–14.
    This case, by contrast, like Rice and Nicodemus, involves an
    attempt to condemn only individual allotments, so express
    consent by the United States is not required. See Rice,
    685 F.2d at 357; Nicodemus, 264 F.2d at 617–18.
    
        Although the district court had subject matter jurisdiction
    to hear the State’s condemnation claim, that claim may not
    proceed as pleaded. The State has alleged a “confirm-and-
    condemn” claim that asks the district court first to “confirm”
    the extent of the rights-of-way it already owns under R.S.
    2477. The State then asserts that it will condemn only those
    portions of the four trails it does not already own. The State
    may not plead the claim in this manner. Because the State’s
    claim under the QTA is barred, it may not litigate title to the
    contested rights-of-way through the back door by asserting a
    condemnation claim under § 357. See Match-E-Be-Nash-
    She-Wish Band v. Patchak, 
    132 S. Ct. 2199
    , 2205 (2012). If
    the State wishes to condemn the contested rights-of-way in
    full and pay just compensation for their taking, it must make
    that intention clear. We vacate the district court’s dismissal
    of the State’s condemnation claim and remand the case so
         STATE OF ALASKA DEP’T OF NAT. RES. V. UNITED STATES   15
    
    that the State may be given an opportunity to amend that
    claim, if it so chooses.
    
      AFFIRMED in part, VACATED in part, and
    REMANDED.
    
       The parties shall bear their own costs.