Navajo Nation et al v. United States Department of the Interior et al, No. 3:2019cv08340 - Document 23 (D. Ariz. 2020)
Court Description: ORDER granting Defendants' Motion to Dismiss 17 and dismissing this action for lack of subject matter jurisdiction. IT IS FURTHER ORDERED directing the Clerk to enter judgment accordingly and close this case. Signed by Judge John J Tuchi on 11/23/20. (REK)
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Navajo Nation et al v. United States Department of the Interior et al Doc. 23 Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 1 of 8 1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Navajo Nation, et al., 10 Plaintiffs, 11 v. 12 United States Department of the Interior, et al., 13 No. CV-19-08340-PCT-JJT ORDER Defendants. 14 15 At issue is Defendants’ Motion to Dismiss (Doc. 17, MTD), to which Plaintiffs 16 Navajo Nation and Navajo Nation Gaming Enterprise (the “Enterprise”) filed an 17 Opposition (Doc. 21, Opp’n) and Defendants filed a Reply (Doc. 22, Reply). The Court 18 finds the Motion appropriate for resolution without oral argument. See LRCiv 7.2(f). For 19 the reasons that follow, the Court grants Defendants’ Motion. 20 I. BACKGROUND 21 Navajo Nation is a federally recognized Indian tribe with its reservation located 22 predominantly in northeastern Arizona. Navajo Nation created the Enterprise under its laws 23 for the primary purpose of conducting gaming and related business activities. On August 16, 24 2010, the Enterprise purchased 435 acres of land just east of Flagstaff, Arizona, where it 25 planned to construct what is now the Twin Arrows Casino Resort. That same day, to allow 26 access to the casino from Interstate 40, the Enterprise entered into an easement agreement 27 with Steven and Patsy Drye. The agreement expressly granted a perpetual nonexclusive right 28 in a 500-foot easement over the Dryes’ property to the Enterprise and the public. The Dockets.Justia.com Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 2 of 8 1 agreement further stated that the easement “shall run with the land” and be “governed” by 2 Arizona law. (Doc. 17-1, MTD Ex. A, Easement Agreement ¶¶ 3, 4).1 The Enterprise 3 recorded its interest in the easement in the Coconino County Recorder’s Office the same day, 4 August 16, 2010. In February 2015, the Enterprise assigned its right, title, and interest in the 5 easement to Navajo Nation, which subsequently recorded its interest in May 2015. 6 On June 11, 2012, the Hopi Tribe purchased land from the Dryes, including the land 7 underlying the Enterprise’s easement. The special warranty deed that conveyed the land to 8 the Hopi Tribe (“Hopi Fee Deed”) subjected the land to “matters of record in the Official 9 Records of the Coconino County Recorder’s Office.” (Doc. 17-2, MTD Ex. B, Hopi Fee 10 Deed at 1.) Additionally, the Hopi Fee Deed explicitly acknowledged the Enterprise’s 11 easement. (Hopi Fee Deed at 14.) 12 On August 22, 2012, the Hopi Tribe submitted a fee-to-trust application to the 13 Western Regional Director of the Bureau of Indian Affairs (“BIA”), which is a federal 14 agency within the Department of the Interior (“DOI”). The application requested that the 15 BIA take the newly purchased land into trust for the benefit of the Hopi Tribe, pursuant to 16 the Navajo Hopi Land Dispute Settlement Act of 1996. The application acknowledged the 17 Enterprise’s interest in the easement. (Doc. 1, Compl. ¶ 26.) On December 16, 2013, the 18 Western Regional Director issued a Letter Decision approving the application. The Letter 19 Decision provided that any notified parties shall have thirty days from “receipt” of the 20 Letter Decision to appeal. (Compl. ¶ 27.) On December 19, 2013, the Western Regional 21 Director published notice of the Letter Decision in the Arizona Daily Sun. (Compl. ¶ 29.) 22 On or around January 19, 2014, he placed the Hopi property into trust pursuant to a special 23 warranty deed (“Hopi Trust Deed”) later recorded on April 25, 2014. (Compl. ¶ 30; Doc. 24 21-2, Opp’n Ex. 2., Hopi Trust Deed.) The Hopi Trust Deed makes no explicit mention of 25 the Enterprise’s (or now, Navajo Nation’s) easement. 26 27 28 1 Although the Court may consider evidence in resolving a Rule 12(b)(1) motion, the Court would also take judicial notice of the documents the parties provided in their briefs, namely, the Easement Agreement, the Hopi Fee Deed, and the Hopi Trust Deed. See Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). -2- Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 3 of 8 1 In May 2015, the Hopi Tribe “asserted that it had jurisdiction” over the easement, 2 and the Enterprise disagreed. (Compl. ¶ 31.) Unable to resolve the disagreement with the 3 Hopi Tribe, Navajo Nation submitted a Freedom of Information Act request to the BIA in 4 March 2016 seeking a number of documents related to the Letter Decision that approved 5 the Hopi Tribe’s fee-to-trust application. On July 26, 2016, the BIA responded by 6 providing a portion of the application along with the Letter Decision. Believing that this 7 receipt of the Letter Decision started the clock on the thirty days to appeal, Navajo Nation 8 filed a Notice of Appeal with the Internal Board of Indian Appeals (“IBIA”) on August 25, 9 2016, seeking reversal of the Letter Decision. On May 7, 2019, the IBIA dismissed Navajo 10 Nation’s appeal as untimely and for lack of jurisdiction. 11 On December 13, 2019, Navajo Nation and the Enterprise filed this suit against the 12 DOI; the BIA; the IBIA; David Bernhardt, in his official capacity as the United States 13 Secretary of the Interior; Tara Katuk Mac Lean Sweeney, in her official capacity as the 14 Assistant Secretary of the Interior for Indian Affairs; and Allen Anspach, in his official 15 capacity as the Acting Western Regional Director of the Bureau of Indian Affairs, alleging 16 that they violated procedural due process and the Administrative Procedures Act. 17 Specifically, Plaintiffs claim that Defendants misapplied 25 CFR § 151.12(d)(2)(ii)(A), a 18 regulation that requires BIA officials to provide written notice of approved decisions to 19 interested parties who made themselves known in writing. Plaintiffs allege that they 20 suffered procedural harms because, despite having actual knowledge of the Enterprise’s 21 recorded property interest in the easement, the Western Regional Director did not provide 22 actual written notice of the Letter Decision to the Enterprise at the time he issued the Letter 23 Decision or within a reasonable time thereafter, and the IBIA dismissed Plaintiffs’ appeal. 24 (Compl. ¶¶ 28, 36.) Defendants now move to dismiss this suit under Rule 12(b)(1), 25 contending that Plaintiffs have failed to allege facts sufficient to establish Article III 26 standing—and thus, this Court’s subject matter jurisdiction. (MTD at 8.)2 27 28 2 Defendants also move to dismiss under Rule 12(b)(6), but the Court will resolve the Motion under Rule 12(b)(1). -3- Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 4 of 8 1 II. LEGAL STANDARD 2 “A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) may 3 attack either the allegations of the complaint as insufficient to confer upon the court subject 4 matter jurisdiction, or the existence of subject matter jurisdiction in fact.” Renteria v. 5 United States, 452 F. Supp. 2d 910, 919 (D. Ariz. 2006) (citing Thornhill Publ’g Co. v. 6 Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979)). “Where the jurisdictional 7 issue is separable from the merits of the case, the [court] may consider the evidence 8 presented with respect to the jurisdictional issue and rule on that issue, resolving factual 9 disputes if necessary.” Thornhill, 594 F.2d at 733; see also Autery v. United States, 424 10 F.3d 944, 956 (9th Cir. 2005) (“With a 12(b)(1) motion, a court may weigh the evidence 11 to determine whether it has jurisdiction.”). The burden of proof is on the party asserting 12 jurisdiction to show that the court has subject matter jurisdiction. See Indus. Tectonics, Inc. 13 v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990). 14 III. ANALYSIS 15 To bring a justiciable lawsuit into federal court, Article III of the Constitution 16 requires that a plaintiff have “the core component of standing.” Lujan v. Defenders of 17 Wildlife, 504 U.S. 555, 560 (1992). To satisfy Article III’s standing requirements, the 18 plaintiffs must show that they suffered a “concrete and particularized” injury that is “fairly 19 traceable to the challenged action of the defendant,” and that a favorable decision would 20 likely redress the injury. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 21 528 U.S. 167, 180–81 (2000). In the complaint, the plaintiffs must “alleg[e] specific facts 22 sufficient” to establish standing. Schmier v. U.S. Court of Appeals for Ninth Circuit, 279 23 F.3d 817, 821 (9th Cir. 2002). If the plaintiffs fail to allege such facts, the Court should 24 dismiss the complaint. See, e.g., Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 25 1115, 1123 (9th Cir. 2010). Here, Defendants challenge the first two prongs of the Article 26 III inquiry, arguing that Plaintiffs have not shown that they suffered a concrete and 27 particularized injury, nor have they shown that the alleged injury is fairly traceable to 28 Defendants’ actions. (MTD at 8.) -4- Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 5 of 8 1 With regard to the first prong, allegations of a “bare procedural violation, divorced 2 from any concrete harm,” do not satisfy the requirements of Article III standing. Spokeo, 3 Inc. v. Robins (Spokeo I), 136 S.Ct. 1540, 1549–50 (2016). However, the “violation of a 4 procedural right granted by statute can be sufficient in some circumstances to constitute 5 injury in fact.” Id. at 1544. The Ninth Circuit determines whether there is sufficient injury 6 in fact by asking: “(1) whether the statutory provisions at issue were established to protect 7 [the plaintiffs’] concrete interests (as opposed to purely procedural rights), and if so, (2) 8 whether the specific procedural violations alleged . . . actually harm, or present a material 9 risk of harm to, such interests.” Robins v. Spokeo, Inc. (Spokeo II), 867 F.3d 1108, 1113 10 (9th Cir. 2017). 11 To support their position, Plaintiffs analogize this case to Spokeo II, in which the 12 Ninth Circuit found that certain statutory violations created injury in fact. (Opp’n at 9.) In 13 Spokeo II, the plaintiff alleged that the defendant published an inaccurate credit report 14 about him in violation of the Fair Credit Reporting Act (“FCRA”). Spokeo II, 867 F.3d at 15 1110. The plaintiff contended that he had no need to allege any additional harm because 16 the FCRA’s purpose is to protect consumers’ concrete interest in the accuracy of credit 17 reporting, and thus the inaccurate credit report itself was a violation concrete enough to 18 establish standing to sue. Id. at 1112. Applying its two-step approach, the Ninth Circuit 19 agreed. Analyzing the first step, the court found that the FCRA procedures at issue were 20 established to protect consumers’ concrete interest in accurate credit reporting. Id. at 1115. 21 It noted that inaccurate credit reporting “can itself constitute a concrete harm,” and that the 22 “real-world implications” of these harms seem “patent on their face.” Id. at 1114. In 23 analyzing the second step, the court found that the defendant’s violations actually harmed, 24 or created a “material risk of harm” to, the plaintiff’s concrete interest because the 25 misrepresentations made by the defendant were of the type that may be important to those 26 making use of a consumer report. Id. at 1115, 1117. Thus, the court held that the plaintiff’s 27 complaint sufficiently alleged concrete injury. Id. at 1117. 28 -5- Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 6 of 8 1 In applying this test to the present case, however, the same cannot be said about 2 Plaintiffs’ allegations. First, unlike the plaintiff in Spokeo II, Plaintiffs here have not 3 demonstrated that the regulations allegedly violated were implemented to protect concrete, 4 and not purely procedural, interests. Plaintiffs state that the regulations regarding written 5 notice to interested parties in 25 CFR § 151 “are designed to clarify competing property 6 owners’ legal rights and interests.” (Opp’n at 9.) But denial of the mere clarification of 7 property rights, without more, does not automatically “constitute a concrete harm”—the 8 underlying property right is what it is—and thus the harm does not seem “patent on [its] 9 face.” See Spokeo II, 867 F.3d at 1114. 10 Even if Plaintiffs could establish that 25 CFR § 151 protects their concrete interests, 11 they still do not satisfy second step of the Ninth Circuit test. Plaintiffs have not 12 demonstrated that the alleged regulatory violations actually harmed, or created a material 13 risk of harm to, Plaintiffs’ concrete interest. Plaintiffs state that the 25 CFR § 151 14 regulations are intended to “protect the very concrete property interests” of interested 15 parties. (Opp’n at 10.) They further allege that Defendants’ violation “directly caused the 16 deprivation of Plaintiffs’ substantive property rights” and that it is the “ultimate deprivation 17 of Plaintiffs’ substantive property rights” that is the basis of this suit. (Opp’n at 8.) Plaintiffs 18 go on to claim that their allegations of violations of 25 CFR § 151 “compounded with the 19 real property rights at issue” are sufficient for standing purposes. (Opp’n at 11.) But 20 implicit in Plaintiffs’ arguments is the proposition that, while there is a concrete interest in 21 Plaintiffs’ real property rights, that interest is divorced from any procedural rights to notice 22 and appeal. Because the concrete interest is in the property rights and not the rights to 23 notice or appeal, to satisfy the second step of the test Plaintiffs must establish that there 24 was harm, or a material risk of harm, to their property rights. 25 Plaintiffs have not sufficiently demonstrated any harm or risk of harm to their 26 property rights. Both parties agree that Plaintiffs’ rights in the easement were preserved in 27 the transaction between the Dryes and the Hopi Tribe, which culminated in the Hopi Fee 28 Deed. Nevertheless, Plaintiffs claim that their property rights were not preserved in the -6- Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 7 of 8 1 transaction between the Hopi Tribe and the United States, which culminated in the Hopi 2 Trust Deed. (Opp’n at 11–12.) Plaintiffs base their argument on the fact that, while the 3 Hopi Fee Deed referenced the existence of the easement and Plaintiffs’ rights in it, the Hopi 4 Trust Deed made no such acknowledgment. Plaintiffs attempt to further this point by 5 alleging that the Hopi Tribe subsequently “asserted that it had jurisdiction” over the 6 easement (Compl. ¶ 31), and that Defendants’ regulatory violations “allowed—and perhaps 7 emboldened—the Hopi Tribe to assert jurisdiction.” (Opp’n at 15.) 8 However, a lack of explicit reference to the easement alone is not sufficient to 9 demonstrate that the Hopi Trust Deed extinguished any rights Plaintiffs had in the 10 easement. Plaintiffs entered into an agreement with the Dryes that stated that the easement 11 “shall run with the land” and be “governed” by Arizona law.3 (Easement Agreement at 12 ¶¶ 3, 4.) Plaintiffs have not established that their property interest in the easement was 13 somehow extinguished or otherwise adversely affected, and the Hopi Tribe’s mere 14 “assert[ion]” of jurisdiction does not rise to the level of a recognizable legal harm. 15 Furthermore, by Plaintiffs’ own admission, Plaintiffs have a “continuing interest in a public 16 road . . . overlaying [the] easement.” (Doc. 1-2, Compl. Ex. 1 at 4 (emphasis added).) Thus, 17 Plaintiffs do not satisfy the second step of the Ninth Circuit’s test. 18 Because Plaintiffs have not demonstrated that the regulatory provisions at issue 19 were designed to protect a concrete interest instead of a merely procedural one or that the 20 alleged violations produced harm, or a material risk of harm, to their concrete interests, 21 Plaintiffs have not produced sufficient allegations to establish injury in fact. Instead, 22 Plaintiffs’ allegations are what they cannot be for Article III purposes: allegations of a 23 “bare procedural violation, divorced from any concrete harm.” See Spokeo I, 136 S. Ct. at 24 1549–50. 25 Defendants have also challenged Plaintiffs’ standing on the grounds that the alleged 26 injury is not fairly traceable to Defendants’ challenged actions. To establish standing, 27 3 28 Arizona property law dictates that “[o]nce an easement is recorded, it runs with the land and burdens the servient estate’s successors.” See, e.g., Scalia v. Green, 271 P.3d 479, 481 (Ariz. Ct. App. 2011). -7- Case 3:19-cv-08340-JJT Document 23 Filed 11/23/20 Page 8 of 8 1 Plaintiffs must demonstrate a “causal connection between the injury and the conduct 2 complained of.” Lujan, 504 U.S. at 560. In other words, the injury may not result from “the 3 independent action of some third party not before the court.” Id. (quoting Simon v. E. Ky. 4 Welfare Rights Org., 426 U.S. 26, 42 (1976)). 5 Plaintiffs fail to meet this prong of the standing test for similar reasons as they fail 6 to meet the first. Plaintiffs allege that their injury—“the deprivation of their rights to fully 7 enjoy the Road Easement without interference from, or dispute with, the Hopi Tribe”—is 8 causally connected to the conduct complained of—“Defendants’ failure to provide notice 9 to Plaintiffs of the Letter Decision.” (Opp’n at 14.) Plaintiffs attempt to link the two by 10 claiming that Defendants’ failure to provide notice “allowed—and perhaps emboldened— 11 the Hopi Tribe to assert jurisdiction” over the easement. (Opp’n at 15.) However, because 12 Plaintiffs have failed to demonstrate that Defendants’ actions actually deprived Plaintiffs 13 of any property rights, it cannot be said that Defendants’ actions “allowed . . . the Hopi 14 Tribe to assert jurisdiction.” Instead, this assertion of jurisdiction—whatever that may have 15 actually been—was the “independent action of some third party not before the court.” See 16 Lujan, 504 U.S. at 560. As recounted above, Plaintiffs have failed to allege a concrete and 17 particularized injury that is fairly traceable to Defendants’ actions. Plaintiffs thus have not 18 established Article III standing to sue. 19 20 21 22 23 IT IS THEREFORE ORDERED granting Defendants’ Motion to Dismiss (Doc. 17) and dismissing this action for lack of subject matter jurisdiction. IT IS FURTHER ORDERED directing the Clerk to enter judgment accordingly and close this case. Dated this 23rd day of November, 2020. 24 25 Honorable John J. Tuchi United States District Judge 26 27 28 -8-
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