JoAnn Chase, et al. v. Andeavor Logistics, L.P., et al.
No. 20-1747
United States Court of Appeals For the Eighth Circuit
Submitted: February 18, 2021; Filed: September 13, 2021
Before LOKEN, BENTON, and KELLY, Circuit Judges.
Andeavor Logistics L.P. and its co-defendants (collectively, “Andeavor“) own and operate the High Plains Pipeline System, a 500-mile oil pipeline that transports oil from North Dakota‘s oil-rich Bakken region to a refinery in Mandan, North Dakota. In 1953, Andeavor‘s predecessor-in-interest obtained a twenty-year right-of-way from the Department of the Interior allowing the pipeline to cross lands on the Fort Berthold Indian Reservation. The right-of-way was renewed for successive twenty-year terms in 1973 and 1995 before expiring in 2013. Despite expiration, Andeavor continues to operate the pipeline across a mixture of tribal lands and individually-owned allotments, all held in trust by the United States. In 2017, Andeavor agreed with the Mandan, Hidatsa, and Arikara Nation, known as the Three Affiliated Tribes (the “Tribe“), to renew the right-of-way over tribal lands, and to pay trespass damages for continued operation of the pipeline after expiration. Andeavor then began renewal negotiations with individual Indian landowners. Some did not agree to renewal and the talks stalled.
In October 2018, certain landowners (the “Allottees“) filed this putative class action against Andeavor in the United States District
I. Background Facts and Procedural History
Part of Andeavor‘s High Plains Pipeline System crosses the Fort Berthold reservation in western North Dakota, home to the Three Affiliated Tribes. Within reservation boundaries, the pipeline crosses tracts of Tribal land, individually-owned Indian lands, and jointly-owned lands, all held in trust by the BIA. The Indian Right-of-Way Act of 1948 authorizes the Secretary of the Interior to “grant rights-of-way for all purposes, subject to such conditions as he may prescribe, over and across any lands now or hereafter held in trust by the United States for individual Indians or Indian tribes.” Act of Feb. 5, 1948, Pub. L. No. 80-407, 62 Stat. 17, codified at
Andeavor set out to negotiate right-of-way renewals to resolve its continuing trespass. At the Tribe‘s insistence, Andeavor refrained from negotiating with individual landowners until it completed negotiations with the Tribe. In February 2017, the Tribe and Andeavor agreed to renew the right-of-way and settle past trespass damages for Tribal land for roughly $2 million per acre. On January 30, 2018, the BIA sent Andeavor a 10-Day Show-Cause Letter stating the pipeline had been trespassing on individually-owned Indian lands since the right-of-way expired in 2013. On February 7, Andeavor informed the BIA that it was currently negotiating with individual landowners to obtain their consent for renewal. On April 10, the BIA asked the landowners to confirm that good-faith negotiations were in progress. Many did. Counsel for the Allottees requested that the BIA take no action to recover possession or seek trespass remedies while negotiations continued.
The negotiations did not bear fruit. In October 2018, the Allottees commenced this action in the Western District of Texas. The Amended Complaint alleged continuing trespass under federal common law, breach of the easement agreement, and unjust enrichment. They sought various forms of relief including compensatory and punitive damages, an accounting of profits, disgorgement, and an injunction requiring Andeavor to cease operations, remove the pipeline, and restore lands to their original conditions, as the easement agreement and federal regulations require.
The Allottees raise a host of issues in challenging the district court‘s dismissal of their Amended Complaint. Andeavor defends the judgment on numerous grounds. We review de novo the grant of a Rule 12 motion to dismiss, assuming all factual allegations in the pleadings are true and viewing them in the light most favorable to the nonmoving party. Wolfchild v. Redwood Cnty., 824 F.3d 761, 767 (8th Cir. 2016), cert. denied, 137 S. Ct. 447 (2016) (citations omitted). Dismissal is appropriate when the moving party is entitled to judgment as a matter of law. Id. (citations omitted).
II. Failure to Exhaust Administrative Remedies
In general, the well-established doctrine of administrative exhaustion requires a party to follow prescribed procedures for obtaining administrative remedies before seeking judicial relief. See Klaudt v. United States Dep‘t of Interior, 990 F.2d 409, 411 (8th Cir. 1993). Pursuant to explicit rule-making authority, see
Part 169 applies to rights-of-way for oil and gas pipelines crossing Indian land.
If a grantee remains in possession after the expiration, termination, or cancellation of a right-of-way, and is not accessing the land to perform reclamation or other remaining grant obligations, [BIA] may treat the unauthorized possession as a trespass under applicable law and will communicate with the Indian landowners in making the determination whether to treat the unauthorized possession as a trespass. Unless the parties have notified [BIA] in writing that they are engaged in good faith negotiations to renew or obtain a new right-of-way, [BIA] may take action to recover possession on behalf of the Indian landowners, and pursue any additional remedies available under applicable law, such as a forcible entry and detainer action. The holdover time will be charged against the new term.
The district court noted that in Klaudt, which involved nonpayment of tribal taxes for cattle grazing, we held that the “clearly detailed administrative process and remedies” in
The Allottees argue the district court erred in dismissing the Amended Complaint on exhaustion grounds because the BIA lacks the authority to grant all the relief they seek, and administrative exhaustion does not apply when an agency cannot grant the relief a party seeks. In McCarthy v. Madigan, the Supreme Court noted that exhaustion may not apply when “an agency may be competent to adjudicate the issue
presented, but . . . lack[s] authority to grant the type of relief requested.” 503 U.S. 140, 148 (1992); see id. at 156 (Rehnquist, C.J., concurring) (exhaustion “improper” when litigant seeks relief that is unavailable as an administrative remedy); Alpharma, Inc. v. Pennfield Oil Co., 411 F.3d 934, 937-38 (8th Cir. 2005).
On appeal, both parties agree the Indian Right-of-Way Act and its implementing regulations do not authorize the BIA to award the Allottees administrative trespass remedies. Section 169.410 only authorizes the BIA to seek administrative and judicial remedies on behalf of individual Indian landowners. The district court erred in not considering this exhaustion factor. The Allottees argue that lack of remedial authority is dispositive. Andeavor counters that the agency holdover process is not complete, that the “administrative remedy in itself is a remedy,” and that it would be “untenable” if the case was not dismissed and the BIA approved a right-of-way while the Allottees were suing for trespass. Andeavor further notes the regulations provide procedures the Allottees
We find nothing in the Indian Right-of-Way Act,
failed to exhaust required administrative remedies. What is far less clear is whether in this situation the agency‘s inability to provide all the remedies the Allottees seek warrants the further conclusion that the district erred in exercising its judicial discretion to require non-mandatory exhaustion.
III. The Primary Jurisdiction Alternative
As Andeavor argued in its Brief, exhaustion of administrative remedies is not the only jurisdictional issue presented on this record:
The doctrine of primary jurisdiction, like the rule requiring exhaustion of administrative remedies, is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulation duties. “Exhaustion” applies where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course. “Primary jurisdiction,” on the other hand, applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case, the judicial process is suspended pending referral of such issues to the administrative body for its views.
United States v. Western Pac. R.R., 352 U.S. 59, 63 (1956). “No fixed formula exists for applying the doctrine of primary jurisdiction.” Id. at 64. “The advisability of invoking primary jurisdiction is greatest when the issue is already before the agency,” and the agency‘s “informed opinion will be of material aid to the district court in the resolution of” remedial issues including damage claims. Miss. Power & Light Co. v. United Gas Pipe Line Co., 532 F.2d 412, 420 (5th Cir. 1976). Though the district court did not discuss this jurisdictional alternative and the Allottees did not refer to it in their initial Brief, “its invocation cannot be waived by the failure of the parties
to argue it, since the doctrine exists for the proper distribution of power between judicial and administrative bodies.” Red Lake Band of Chippewa Indians v. Barlow, 846 F.2d 474, 476 (8th Cir. 1988).
In their Reply Brief, the Allottees argue primary jurisdiction does not apply because “a trespass dispute does not fall outside the conventional competence of the
A. Federal Common Law Claims by Indians.
Andeavor argues that we lack subject matter jurisdiction because the Allottees do not have a federal common law trespass claim. The Allottees argue we have federal question jurisdiction under
federal law. But whether the Allottees’ assertion of a federal common law cause of action states a claim on which relief can be granted is a core issue that at some point must be resolved by a federal court. It is a complex issue.
The Constitution granted Congress “plenary authority” to “legislate concerning tribal property.” Winton v. Amos, 255 U.S. 373, 391 (1921). With its adoption, “Indian relations became the exclusive province of federal law.” Cnty. of Oneida, N.Y. v. Oneida Indian Nation of N.Y., 470 U.S. 226, 234 (1985) (Oneida II). The initial federal approach to Indian land policy was to establish tribal reservations by treaty. See Leech Lake Band of Chippewa Indians v. Cass Cnty., 108 F.3d 820, 822 (8th Cir. 1997), rev‘d on other grounds, 524 U.S. 103 (1998).
In Oneida Indian Nation of N.Y. v. County of Oneida, N.Y., 414 U.S. 661 (1974) (Oneida I), the Supreme Court reversed the dismissal for lack of subject matter jurisdiction of a suit by the Oneida Nation challenging the conveyance of lands that early federal treaties had reserved for the tribe. The Court noted the “accepted doctrine . . . that although fee title to the lands occupied by Indians when the colonists arrived became vested in the sovereign -- first the discovering European nation and later the original States and the United States -- a right of occupancy in the Indian tribes was nevertheless recognized.” Id. at 667. “That right, sometimes called Indian title and good against all but the sovereign . . . was extinguishable only by the United States.” Id.; see Wolfchild, 824 F.3d at 767-68 n.2. “Tribal rights were . . . entitled to the protection of federal law, and with respect to Indian title based on aboriginal possession, the power of Congress is supreme.” Oneida I, 414 U.S. at 669 (cleaned up). “[A]bsent federal statutory guidance, the governing rule of decision would be fashioned by the federal court in the mode of the common law.” Id. at 674; see Oneida II, 470 U.S. at 236.
Relying on the Oneida decisions, the Allottees argue that individual Indian landowners have federal common law claims against trespassers like Andeavor. But
this case is distinguishable from Oneida in two significant respects -- the Allottees are not a tribe, like the Oneida Nation, and the alleged source of their ownership interests was federal statutory allotments, not necessarily Indian title. In Oneida I, the Supreme Court carefully distinguished its prior decision in Taylor v. Anderson, 234 U.S. 74 (1914), which held that federal jurisdiction did not extend to an ejectment action by individual Indians based on lands they acquired under federal patents:
Taylor is more like those cases indicating that a controversy in respect of lands has never been regarded as presenting a Federal question merely because one of the parties to it has derived his title under an act of Congress. Once patent issues, the incidents of ownership are, for the most part, matters of local property law to be vindicated in local courts, and in such situations it is normally insufficient for “arising under” jurisdiction merely to allege that ownership or possession is claimed under a United States patent.
* * * * *
Here, the Oneidas assert a present right to possession based in part on their aboriginal right of occupancy which was not terminable except by act of the United States. Their claim is also asserted to arise from treaties guaranteeing their possessory right until terminated by the United States, and it is to these treaties that we must look to ascertain the nature of these Indian rights, and the extent of them. Finally, the complaint asserts a claim under the Nonintercourse Acts which put in statutory form what was or came to be the accepted rule -- that the extinguishment of Indian title required the consent of the United States. To us, it is sufficiently clear that the controversy stated in the complaint arises under the federal law within the meaning of the jurisdictional statutes and our decided cases.
Id. at 676-78 (emphasis added; cleaned up). In a concurring opinion, Justices Rehnquist and Powell observed that the Oneidas’ claimed right to possession “is based not solely on the original grant of rights in the land but also upon the Federal Government‘s subsequent guarantee” of those rights by statute. Id. at 684. When the
case returned to the Supreme Court in Oneida II, the Court affirmed the finding of liability under federal common law, reaffirming “that Indians have a federal common law right to sue to enforce their aboriginal land rights.” 470 U.S. at 235 (citations omitted). The Court noted that ”Oneida I implicitly assumed that the Oneidas could bring a common-law action to vindicate their aboriginal rights,” and that “absent federal statutory guidance, the governing rule of decision would be fashioned by the federal court in the mode of the common law.” Id. at 236.
What is referred to as the “Allotment Era” began in the late 1800s, when Congress adopted a policy that carved reservations into allotments and assigned land parcels to individual tribal members. The goal was to extinguish tribal sovereignty, erase reservation boundaries, and thereby compel assimilation of Indians into society at large. In the early years of this policy, many tribal members lost their allotted
Allotted lands held in trust under the Dawes Act proved to be “administratively unworkable and economically wasteful.” Hodel v. Irving, 481 U.S. 704, 707 (1987). In 1934, Congress “[r]eturn[ed] to the principles of tribal self-determination and self-governance which had characterized the pre-Dawes-Act era,” “halted further allotments,” and “extended indefinitely the existing periods of trust applicable to
already allotted (but not yet fee-patented) Indian lands.” Yakima, 502 U.S. at 255, citing the Indian Reorganization Act, 48 Stat. 984, codified as amended at
As the country industrialized and moved West, the “checkerboard” of lands owned by tribes, individual Indians, and individual non-Indians complicated the development of “train tracks, telegraph wires, and other conduits of modern commerce.” Davilla v. Enable Midstream Partners L.P., 913 F.3d 959, 964 (10th Cir. 2019). Special access statutes limiting rights-of-way to cross Indian lands further complicated the problem. See Neb. Pub. Power Dist. v. 100.95 Acres of Land, 719 F.2d 956, 958 (8th Cir. 1983). In response, Congress enacted the Indian Right-of-Way Act of 1948 to simplify the right-of-way granting process. Id. at 959. That statute governs the BIA‘s authority in resolving the Andeavor holdover dispute.
Andeavor argues that the Allottees have no federal common law trespass claims under Oneida I and Oneida II, which limit federal common law remedies to Indian tribal landowners whose present right to possession is based on an unextinguished Indian title (aboriginal right of occupancy). The Allottees counter, citing Oneida II for the proposition that “Indians have a federal common law trespass action against those who maintain an unauthorized presence on Indian trust land” because the “Indians’ right to ‘exclusive possession’ of their land is ‘a federal right.‘” They further argue that
The Allottees’ argument is not clearly supported by the Supreme Court‘s holding
[T]he language of the 1863 Act directly contradicts any claim that the loyal Mdewakanton had aboriginal title to the twelve square miles. . . . Thus, assuming the twelve square miles were set apart for the loyal Mdewakanton, the land was for the benefit of each individual -- not a tribe. This lawsuit, therefore, concerns “lands allocated to individual Indians, not tribal rights to lands,” and does not fall into the federal common law articulated in the Oneida progeny.
Id. (quoting Oneida I; emphasis in original). We went on to conclude that the 1863 Act did not provide a private federal remedy and affirmed the dismissal.
In their Brief on appeal, the Allottees argue that in Wolfchild, we “never addressed whether an Indian owner of allotted trust land has a cognizable claim for trespass under federal common law -- so Wolfchild has no direct bearing on whether, here, the Individual Landowners have a federal common law claim for trespass.” We
agree our decision in Wolfchild does not directly control the issue in this case because the plaintiffs in Wolfchild were fee simple owners of the land in question, whereas the Allottees are equitable owners of lands owned by the federal government in trust. But in Oneida I, the Supreme Court distinguished the Oneidas’ claim at issue from the Indian landowner claim in Taylor v. Anderson that did not raise a federal question:
Here, the right to possession itself is claimed to arise under federal law in the first instance. Allegedly, aboriginal title of an Indian tribe guaranteed by treaty and protected by statute has never been extinguished. In Taylor, the plaintiffs were individual Indians, not an Indian tribe; and the suit concerned lands allocated to individual Indians, not tribal rights to lands. Individual patents had been issued with only the right to alienation being restricted for a period of time.
414 U.S. at 676. Thus, while the specific issue in this case was not “addressed” in Wolfchild, our reliance on the above-quoted reasoning has a “direct bearing” on whether the Allottees have the federal common law rights they assert, or whether they must instead find an alternative basis for their claims under federal law. Our analysis in Wolfchild is certainly open to interpretation, and the BIA‘s views as to whether the distinction drawn in Oneida I applies to a right-of-way holdover situation may be relevant and persuasive. So we decline to decide the issue at this time.6
On July 2, 2020, after the Allottees submitted their initial Brief on appeal, the Regional Director of the BIA‘s Great Plains Regional Office (which covers North Dakota) sent a formal Notification of Trespass Determination to Andeavor (the “Notice“). The Notice stated that the pipeline had been trespassing on fifty acres of individually-owned trust lands for seven years, reflecting Andeavor‘s lack of good faith negotiations, and therefore the pipeline was no longer in the landowners’ best interest. The BIA ordered Andeavor to immediately cease pipeline use and pay treble damages totaling $187.2 million within thirty days, a decision Andover could appeal to the Interior Board of Indian Appeals (IBIA). Andeavor appealed, arguing the Notice ignored that it was in holdover status while negotiating with landowners, ignored its substantial work to obtain fair-market value appraisals, disregarded its record-setting offer of $66,000 per acre to the landowners, and calculated damages based on inapplicable grazing regulations.
Before the IBIA could rule, the Assistant Secretary for Indian Affairs assumed jurisdiction over the appeal (as regulations allow), vacated the Notice, and remanded to the Regional Director to issue a new decision based on specified criteria. The Assistant Secretary‘s order asserted that federal common law applied to Andeavor‘s trespass. In later supplemental guidance, the Regional Director was advised to rely only on
On remand, the Regional Director issued a Second Notice reducing the damages award to just under $4 million, ordering Andeavor to immediately cease operating the pipeline, and informing Andeavor the BIA might petition the
Department of Justice to seek common law damages including an accounting of all rents and profits tied to its trespass. Both Andeavor and the Allottees appealed the Second Notice to the IBIA. On January 14, 2021, the Assistant Secretary again assumed jurisdiction over the appeal, affirmed the Second Notice in its entirety, and declared it judicially reviewable as a final agency action. The IBIA dismissed the parties’ appeals.
On March 12, 2021, after the change in administrations, the Acting Secretary of the Interior issued a Decision vacating all prior BIA actions -- from the Regional Director‘s First Notice to the Assistant Secretary‘s January 14 Decision -- and returning the matter to the Regional Director with directions to:
- take such action as is necessary to address [Andeavor‘s] continued occupation of the expired right-of-way.
-
provide each of the interested parties with a full and fair opportunity to be heard in this matter, and - issue a new decision, as may be necessary and appropriate.
We are not aware of any further administrative actions the BIA has taken in this dispute. Nor are we aware the BIA has filed an action exercising its claimed authority to assert federal common law trespass claims against Andeavor on behalf of the Allottees. In April 2021, an Andeavor subsidiary filed suit against the United States in the District of North Dakota, seeking to set aside the Acting Secretary‘s vacatur. See Complaint, Tesoro High Plains Pipeline Co. v. United States, No. 1:21-cv-00090-DMT, ECF No. 1 (D.N.D. Apr. 23, 2021). That action is pending.
C. Primary Jurisdiction Analysis.
Taking these additional factors into account, we conclude the record on appeal and relevant authorities present a situation where it is proper to invoke the discretionary judicial doctrine of primary jurisdiction
and stay the action pending exercise of jurisdiction the agency has asserted, rather than invoke discretionary exhaustion principles and dismiss the action, which might delay determination of the Allottees’ judicial claims indefinitely depending on what action, if any, the BIA determines is “necessary and appropriate.”
First, the Allottees do not hold legal title to their lands. The federal government is the fee owner, holding the allotted lands in trust for the Allottees’ benefit. The BIA‘s role as trustee is the core of the many protections Congress has provided for these Indian lands. See
Second, the BIA has not simply been involved in this controversy, it has taken action, now vacated, and the Acting Secretary of the Interior has directed the Regional Director to “issue a new decision, as may be necessary and appropriate.” Because the BIA cannot afford the Allottees the full relief they seek, the district court need not stay this action until the administrative proceedings conclude. But any action the BIA now takes will be of significance in resolving the judicial dispute. For example, it is almost absurd to think the court will order Andeavor to remove a few
miles of its 500-mile pipeline at the individual Allottee landowners’ request if the BIA, the Tribe, or a significant portion of the other right-of-way beneficiaries object. This portion of the relief the Allottees seek must await agency action.
With respect to the Allottees’ claim for common law damages, the BIA may take the position that it has the exclusive right to seek damages on behalf of the
If an individual or entity takes possession of, or uses, Indian land . . . without a right-of-way and a right-of-way is required, the unauthorized possession or use is a trespass. . . . [The BIA] may take action to recover possession . . . and pursue any additional remedies available under applicable law. The Indian landowners may pursue any available remedies under applicable law, including applicable tribal law.
(Emphasis added.) This argument seems contrary to the Allottees’ basic legal position, because a claim under § 169.413 would be a statutory claim, not a common law claim, and the Supreme Court held in Oneida I, 414 U.S. at 674, and repeated in Oneida II, 470 U.S. at 236, that the governing rule of decision is federal common law “absent federal statutory guidance.” Congress has the power to create private rights of action. We find no express private right of action in the Indian Right-of-Way Act, and the Supreme Court does not look with favor on implied private rights of action. Cf. Poafpybitty v. Skelly Oil Co., 390 U.S. 365, 370 (1968). The views of the BIA on these legal issues would obviously be important.
Third, the Supreme Court noted in McCarthy that “even where a controversy survives administrative review, exhaustion of the administrative procedure may produce useful record for subsequent judicial consideration, especially in a complex or technically factual context.” 503 U.S. at 145. This factor supports invoking primary jurisdiction here, at least for a limited time. Not only is the judicial controversy within the BIA‘s area of expertise, the agency may have, or may be able to efficiently develop, facts that may be relevant to one or more legal issues, such as the extent to which the Allottees’ rights as equitable owners of Indian land now held in trust derive from unextinguished aboriginal title as opposed to “lands allocated to individual Indians, not tribal rights to lands.” Wolfchild, 824 F.3d at 768.
For these reasons, we conclude that primary jurisdiction, not exhaustion of BIA remedies, is the discretionary doctrine that should be invoked in this case at this stage of the proceedings. Ultimately, the key question is not whether federal law supplies Allottees a cause of action for trespass on individual Indian allotments, but whether there is a common law or statutory claim they have standing to assert and if so, what is the source of the law that will define whether continuing trespass is occurring and what remedies are available to what parties that have rights in the trust lands. The judicial process should be stayed to give the BIA a further opportunity to address these issues. But dismissal is not appropriate because the administrative process will not resolve the Allottees’ claims. Rather, the district court should stay the action for a reasonable period of time to see what action the agency may take. The court can then lift the stay, or further suspend the judicial process depending on what action, if any, the agency takes. We leave the details of this process, including the solicitation of views from
C. Remaining Issues.
In addition to the trespass claims in Count I of their Amended Complaint, the Allottees asserted three additional claims: Breach of Easement Agreement (Count II); Unjust Enrichment -- Imposition of Constructive Trust (Count III); and Punitive Damages (Count IV). Because the case must be remanded and stayed, we decline to consider these issues at this time. Among other reasons, the analysis of these issues would likely be affected if the BIA brings a breach-of-contract claim on behalf of the Allottees under the Right-of-Way Act. In a breach-of-contract action involving a right-of-way over individual trust allotments, the United States, as grantor, is an indispensable party. Cf. Cheyenne River Sioux Tribe of Indians v. United States, 338 F.2d 906, 909 (8th Cir. 1964), cert. denied, 382 U.S. 815 (1965); see also Minnesota, 305 U.S. at 388.
III. Conclusion
For the foregoing reasons, the judgment of the district court is reversed and the case is remanded for further proceedings not inconsistent with this opinion. The Allottees’ motion to dismiss Robin Fredericks as a plaintiff is denied.