Johnson v. Usa, et al.Johnson v. Usa, et al.
OPINION
John Joseph Tuchi, District Judge, Presiding
Argued and Submitted April 1, 2025
Submission Vacated April 2, 2025
Resubmitted July 28, 2025
Phoenix, Arizona
Filed July 28, 2025
Before: William A. Fletcher, D. Michael Fisher,* and Ryan D. Nelson, Circuit Judges.
Opinion by Judge R. Nelson
SUMMARY**
Small Tracts Act / Administrative Procedure Act
The panel reversed the district court‘s summary judgment in favor of the United States in an action brought by Charley Johnson under the Administrative Procedure Act (“APA“) alleging that the U.S. Forest Service‘s decision to exclude corrals from a Small Tracts Act (“STA“) sale was arbitrary and capricious.
Under the STA, the Secretary of Agriculture may sell, exchange, or interchange ten acres or less encroached upon by improvements that a landowner built on National Forest Service land in good-faith reliance on an erroneous survey or title search.
Johnson, on behalf of his trust, bought about 21 acres bordering the Tonto National Forest in Gila County, Arizona. Johnson learned that most of the improvements on the land were not on his private property, but on National Forest Service land. To resolve the encroachment, Johnson filed an STA application, and the Forest Service sold Johnson a 0.59-acre parcel that included land under the house, barn, and well, but not the corrals. Johnson sued under the APA, alleging that the Forest Service‘s decision to exclude the corrals from the STA sale was arbitrary, capricious, or not in accordance with law.
The APA sets out a presumption of judicial review, which is rebutted to the extent that a challenged agency action is “committed to agency discretion by law.”
The panel held that the APA‘s
COUNSEL
Danielle R. Bettencourt (argued), Fairfield and Woods PC, Denver, Colorado; William G. Klain, Fennemore Craig PC, Phoenix, Arizona; for Plaintiff-Appellant.
Neil Singh (argued), Assistant United States Attorney; Caitlin B. Noel, Appellate Chief; Gary M. Restaino, United States Attorney; Office of the United States Attorney, United States Department of Justice, Phoenix, Arizona; for Defendants-Appellees.
OPINION
R. NELSON, Circuit Judge:
Congress passed the Small Tracts Act (STA) to help the United States Forest Service resolve boundary disputes over small parcels of National Forest System (NFS) land. See Pub. L. No. 97-465, 96 Stat. 2535 (1983). Relevant here, the Secretary of Agriculture may sell, exchange, or interchange ten acres or less encroached upon by improvements that a landowner built on NFS land in good-faith reliance on an erroneous survey or title search.
The question is whether STA conveyances fall within the Administrative Procedure Act‘s (APA) narrow exception to judicial review for actions “committed to agency discretion by law.”
A
In 2006, Charley Johnson, on behalf of his trust, bought about 21 acres bordering the Tonto National Forest in Gila County, Arizona. The parcel came with a house, barn, saddle house, well, corrals, and other ranch-related improvements that the previous landowner built in the 1950s. Based on the Bill of Sale and a professional title search, Johnson believed that he owned each improvement, and that none encroached on federal land.
As it happens, Johnson was mistaken. The northern boundary of Johnson‘s property was farther south than he thought. So when his neighbor commissioned a survey, Johnson learned for the first time that most of his improvements were located not on his private property, but on NFS land.
To resolve the encroachment, Johnson filed an STA application with the Forest Service.1 Johnson proposed purchasing six to eight acres of NFS land to cover the encroaching improvements. After processing the application for about a decade, the Service set survey monuments for a 4-acre sale. This proposed parcel encompassed all the encroaching improvements, giving Johnson clear title to each.
Later, the Forest Service reversed course. The Service offered to resolve the encroachment by selling Johnson a smaller, 0.59-acre parcel. This new proposal included the land under the house, barn, and well—but not the corrals.
According to the Forest Service, the corrals were “not in trespass” because they were “authorized range improvements” owned by the United States. See
Johnson disputed the Forest Service‘s decision, arguing that the corrals were not “authorized range improvements” and should be considered for sale. He explained that the previous owners constructed the corrals decades before. And Johnson regularly paid property taxes on the corrals, as did the original owners. Though Johnson insisted that the corrals be included in the sale, he “reluctantly agree[d]” to buy the 0.59 acres when the Service refused to revisit its decision.
With Johnson agreeing to the purchase, the Forest Service found that the sale was “in the public interest.” See
An appraiser, Amy Edwards, valued the property at $27,000. Johnson contested the valuation and again asked the Forest Service to reconsider its decision excluding the corrals. His request was denied.
B
Johnson sued under the APA, alleging that the Forest Service‘s decision to exclude the corrals from the STA sale was arbitrary, capricious, or not in accordance with law. See
Johnson moved for summary judgment. See Johnson v. United States, 718 F. Supp. 3d 942, 944 (D. Ariz. 2024). The district court‘s order addressed whether STA decisions are “committed to agency discretion by law,” and thus exempt from judicial review under
After concluding that it was not arbitrary or capricious to rely on the Edwards appraisal, the district court denied Johnson‘s motion and entered summary judgment for the Government. Id. at 947-49. Johnson timely appealed.
II
We have jurisdiction under
III
This appeal begins and ends with
The APA sets out a “basic presumption of judicial review,” Abbott Lab‘ys v. Gardner, 387 U.S. 136, 140 (1967), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99, 105 (1977), and permits courts to “hold unlawful and set aside agency action if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,‘” Fejes v. FAA, 98 F.4th 1156, 1159 (9th Cir. 2024) (quoting
Section 701(a)(2)‘s exception for action committed to agency discretion is read “quite narrowly.” Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 586 U.S. 9, 23 (2018). The APA cannot preclude judicial review of agency decisions simply because they are discretionary; the statute itself “command[s] that courts set aside agency action that is an abuse of discretion.” Dep‘t of Com. v. New York, 588 U.S. 752, 772 (2019) (emphasis added). As the Supreme Court has explained, agency action is “committed to agency discretion” only in “‘those rare circumstances where the relevant statute is drawn so that a court would have no meaningful standard against which to judge the agency‘s exercise of discretion.‘” Id. (quoting Weyerhaeuser, 586 U.S. at 23). Simply put, judicial review is unavailable when there is “no law to apply.” Overton Park, 401 U.S. at 410 (quotation omitted).
To be sure, the STA gives the Forest Service broad authority to resolve disputes involving NFS lands. The STA‘s regulations make clear that the “sale, exchange, or interchange of lands . . . under these rules are discretionary.”
Despite this broad discretion, the STA and its regulations provide “meaningful standard[s]” for evaluating the Forest Service‘s decision whether to convey NFS land. See Dep‘t of Com., 588 U.S. at 772 (quotation omitted). The STA authorizes conveyances that the Secretary determines are “in the public interest.”
As these regulations show, this is not one of the “rare instances” where there is “no law to apply.” Perez Perez v. Wolf, 943 F.3d 853, 860 (9th Cir. 2019) (quotation omitted). Though the decision to authorize or deny an STA conveyance is discretionary, the exercise of that discretion is cabined by meaningful regulatory standards.4 Compare
At least one other circuit has suggested as much. In Citizens’ Committee to Save Our Canyons v. U.S. Forest Service, 297 F.3d 1012 (10th Cir. 2002). The court explained that once the Forest Service decides to convey land under the STA, it must examine various criteria “to decide if the land should be conveyed.” Id. at 1027. One criterion, the court noted, is whether the interchange is “in the ‘public interest.‘” Id. (quoting
Also instructive are our cases involving the Federal Land Policy and Management Act (FLPMA). See Pub. L. No. 94-579, 90 Stat. 2743 (1976). Like the STA, FLPMA authorizes the Secretary of the Interior to sell certain public lands, such as scattered, isolated tracts that are difficult or uneconomic to manage.
Against this backdrop, the district court erred in confining its analysis to the Forest Service‘s compliance with the STA‘s “mandatory” provisions. Johnson, 718 F. Supp. 3d at 947. For starters, no authority supports the district court‘s holding that judicial review under the APA is “necessarily limited to the select few provisions in the STA and its accompanying regulations that are mandatory.” Id. And though the district court framed Johnson‘s case as a challenge to the Service‘s exercise of its discretion, an agency‘s discretionary decision still falls within a court‘s APA review. See Beno v. Shalala, 30 F.3d 1057, 1066 (9th Cir. 1994) (“[T]he mere fact that a statute contains discretionary language does not make agency action unreviewable.“). We have often held that “where the agency has reserved to itself certain decisions as within its discretion, or even its sole discretion,” that “does not deprive us of the right to review its actions for an abuse of its discretion or to determine if its actions were otherwise arbitrary and capricious.” Jajati v. U.S. Customs & Border Prot., 102 F.4th 1011, 1017 (9th Cir. 2024) (citation modified) (quoting ASSE Int‘l, Inc. v. Kerry, 803 F.3d 1059, 1071 (9th Cir. 2015)).
It makes sense why. Whether agency action falls within a broad grant of discretion is “entirely distinct” from whether a court can conduct APA review to determine whether an agency “‘justif[ied] its choice on specious grounds,’ see Newman v. Apfel, 223 F.3d 937, 943 (9th Cir. 2000), failed to satisfy ‘the general requirements of reasoned agency decisionmaking,’ see Dep‘t of Com., 588 U.S. at 773, or ‘fail[ed] to comply with its own regulations,’ see ASSE, 803 F.3d at 1069 (quoting Abdelhamid v. Ilchert, 774 F.2d 1447, 1450 (9th Cir. 1985)).” Id. (citation modified). Thus, courts can review the Forest Service‘s discretionary decisions under the STA, considering the statutory requirements and regulations to which the Service must adhere. See, e.g.,
Returning to this case, Johnson argues that the Forest Service‘s decision to exclude the corrals from the STA sale was arbitrary or capricious. He challenges the Service‘s conclusion that the corrals are “authorized range improvements” not subject to sale under the STA. The district court declined to evaluate Johnson‘s arguments based on the assumption that its review was limited to compliance with the STA‘s mandatory provisions. Again, that assumption was wrong.5 A court‘s APA review is not restricted to the STA‘s mandatory provisions—it also looks to how the Service exercised its discretion in light of the statutory and regulatory requirements. See Jajati, 102 F.4th at 1017. On remand, the district court must consider whether the Service‘s decision to exclude the corrals from the STA sale—including its conclusion that the corrals are “authorized range improvements” owned by the United States—was “arbitrary, capricious, an abuse of discretion, or otherwise not in
B
The Government‘s counterargument is unpersuasive. It maintains that discretionary action under the STA is exempt from judicial review because the STA is a “permissive type statute.” This argument stems from a few Ninth Circuit cases, decided in the 1960s and 70s, that predate the Supreme Court‘s current instructions on when action is committed to agency discretion under the APA.
The “permissive type” label got its start in Ferry v. Udall, 336 F.2d 706 (9th Cir. 1964). Relying on a pre-APA case, we reasoned that “courts may not review a decision committed to the [agency‘s] discretion pursuant to a ‘permissive type’ statute.” Id. at 712; see id. (citing United States ex rel. McLennan v. Wilbur, 283 U.S. 414 (1931)). By contrast, courts could review decisions under “a ‘mandatory type’ statute,” even when the decision “involve[d] some degree of discretion.” Id. Ferry did not explain when a statute falls into one category or the other.
We fleshed out the distinction in Mollohan v. Gray, 413 F.2d 349 (9th Cir. 1969). “With a mandatory type statute, administrative discretion is limited to deciding whether the statutory requirements have been met; if they are met, the [agency] must take certain action.” Id. at 351. But with “a permissive type statute, even where an applicant meets all of the statutory requirements, the [agency] still has discretion to refuse to act.” Id. According to Mollohan, decisions under this second category of statutes—the permissive types—are unreviewable. Id.
The Government seizes on this point, arguing that the STA is a permissive type statute because the Forest Service may deny a conveyance even if all requirements are met. See
Here‘s the problem: we rejected the mandatory/permissive framework fifty years ago. The plaintiffs in Strickland v. Morton sought judicial review of the Secretary of the Interior‘s denial of their homesteading applications. 519 F.2d 467, 468 (9th Cir. 1975). Relying on Mollohan, the district court dismissed the plaintiffs’ action for lack of jurisdiction. Id. The federal statute at issue—like the statute in Mollohan—was a permissive type statute. Id. So the district court concluded that it lacked authority to review the Secretary‘s decision because it was committed to agency discretion under our precedent. Id.
On appeal, we noted that the district court “correctly applied the legal principles set forth in . . . Mollohan.” Id. Still, we concluded that Mollohan needed “reinspection” after the Supreme Court‘s intervening decision in Overton Park, which “drastically limit[ed] and confin[ed]” the judicial review exception for actions committed to agency discretion. Id. Not only did Overton Park significantly narrow
It is no wonder, then, that Strickland jettisoned Mollohan‘s mandatory/permissive framework. We explained: “In light of the test stated in Overton Park,” the question is not whether a statute is permissive
IV
The Forest Service‘s discretionary decisions under the STA are subject to judicial review. The STA and its regulations provide “meaningful standard[s]” for evaluating the Service‘s exercise of its discretion. Id. at 772 (quoting Weyerhaeuser, 586 U.S. at 23). That analysis, contrary to the district court‘s reasoning, is not limited to the STA‘s mandatory provisions. Johnson is thus entitled to APA review of the Service‘s decision to exclude the corrals from his STA sale.
REVERSED and REMANDED.