State of Utah v. Babbitt

830 F. Supp. 586, 1993 WL 276331
CourtDistrict Court, D. Utah
DecidedJuly 20, 1993
Docket92-C-376G
StatusPublished
Cited by4 cases

This text of 830 F. Supp. 586 (State of Utah v. Babbitt) is published on Counsel Stack Legal Research, covering District Court, D. Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State of Utah v. Babbitt, 830 F. Supp. 586, 1993 WL 276331 (D. Utah 1993).

Opinion

MEMORANDUM DECISION AND ORDER

J. THOMAS GREENE, District Judge.

This matter came before the court on plaintiffs’ motion for summary judgment and defendants’ cross motion for summary judgment. Plaintiffs moved in the alternative to supplement the record and for extended discovery. Plaintiffs, the State of Utah and the Board of Trustees of the Utah Navajo Trust Fund, were represented by Paula K. Smith and Linda Priebe. The United States defendants were represented by Stephen J. Sorenson and Thornton Field. Intervenor Navajo Nation was represented by Marceline R. Gomez. Intervenor CHUSKA Energy Co. was represented by Alan L. Sullivan. The parties filed extensive memoranda and supporting materials, after which the court heard oral argument and took the matter under advisement. Now being fully advised, the court renders its Memorandum Decision and Order.

FACTUAL BACKGROUND

This matter is properly before this court as an administrative appeal of an Interior Board of Indian Appeals (“IBIA”) decision pursuant to the Administrative Procedures Act. 5 U.S.C. § 551 et seq. (1988). This dispute centers on the interpretation of the Act of March 1, 1933 (“the 1933 Act”). 47 Stat. 1418, as amended, 82 Stat. 121 (1968).

The 1933 Act added lands from within the State of Utah to the Navajo Indian Reservation. The newly added lands are referred to as the “Aneth Extension”. The 1933 Act provided that such lands were for the benefit of the Indians who “settle thereon.” Id. The 1933 Act further provides in pertinent part:

Should oil or gas be produced in paying quantities within the lands hereby added to the Navajo Reservation, 37$ per centum of the net royalties accruing therefrom derived from tribal leases shall be paid to the State of Utah: Provided That said 37$ per centum of said royalties shall be expended by the State of Utah for the health, education, and general welfare of the Navajo Indians residing in San Juan County ....

47 Stat. 1418, as amended 82 Stat. 121 (emphasis added).

The Navajo Nation and Chuska Energy Company, (“Chuska”), entered into an oil and gas operating agreement on February 18, 1987, (“the Agreement”), under the authority of the Indian Mineral Development Act (“IMDA”). 25 U.S.C. §§ 2101-2108 (1988). 2 Under the Agreement, Chuska was authorized to conduct oil and gas operations on tribal lands, including land located in the Aneth Extension. Oil is currently being produced from the Aneth Extension under the Agreement. The State of Utah has not received any royalties from oil developed in the Aneth Extension pursuant to that Agreement.

By letter dated November 27, 1990, the State of Utah demanded from the Navajo Area Office, Bureau of Indian Affairs, (“BIÁ”), payment of 37$% of the oil royalties generated by the Agreement' and derived from the Aneth Extension. 3 The BIA Area Director replied that the State- of Utah is not entitled to receive 37$% of the owner’s royalties by reason of the Agreement under the 1933 Act because the Agreement is not a lease and the 1933 Act applies only to “leas *590 es”. 4 The State of Utah appealed the Area Director’s decision to the Interior Board of Indian Appeals (“IBIA”) on February 19, 1991. The IBIA affirmed the Area Director, holding that the 1933 Act does not reach non-lease agreements entered into under the Indian Mineral Development Act, and that the Agreement in question is not a lease within the meaning of the 1933 Act. State of Utah, Board of Indian Affairs and Division of Indian Affairs v. Navajo Area Director, Bureau of Indian Affairs, 21 IBIA 282, 303, 309 (March 31, 1992). The State of Utah appealed the IB IA’s decision to this court.

SUMMARY JUDGMENT

Summary judgment is appropriate if “the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. Ln considering summary judgment, the judge does not weigh the evidence and determine the truth of the matter, but rather determines whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The material facts in this case are not in dispute.

ANALYSIS

I. Whether the Court should defer to the agency’s conclusion that the 1933 Act does not reach non-lease agreements.

Congress has spoken directly and affirmatively to the issue of whether the term “lease” should be broadly interpreted. This court holds that for purposes of the 1933 Act, the term “lease” incorporates non-lease instruments. Consequently, this court does not defer to the agency’s interpretation of the 1933 Act and gives effect to Congress’ clearly expressed intent.

A. Standard of review and applicable principles.

This court’s review of the IBIA’s administrative decision is guided by the Administrative Procedures Act, 5 U.S.C. § 706 (1988), 5 and the principles enunciated in Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Chevron set forth a two-tiered test. “First, always, is the question whether Congress has directly spoken to the precise question at issue.” 467 U.S. at 842, 104 S.Ct. at 2781. If Congress’ intent is clear, the reviewing court must not defer to the agency, but it must give effect to Congress’ intent. Id. at 842-43, 104 S.Ct. at 2781-82; see also Estate of Cowart v. Nicklos Drilling, 505 U.S. —, —, 112 S.Ct. 2589, 2594, 120 L.Ed.2d 379 (1992); Dole v. United Steelworkers, 494 U.S. 26, 42-43, 110 S.Ct. 929, 938-39, 108 L.Ed.2d 23 (1990). On matters of statutory construction, the “judiciary is the final authority ... and must reject administrative constructions which are contrary to clear congressional intent.” N.L.R.B. v. Viola Industries-Elevator Div., Inc., 979 F.2d 1384, 1392 (10th Cir.1992) (quoting Chevron, 467 U.S. at 843, 104 S.Ct. at 2782).

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830 F. Supp. 586, 1993 WL 276331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-of-utah-v-babbitt-utd-1993.