Miami Tribe of Oklahoma v. United States

FILED
United States Court of Appeals
Tenth Circuit

August 30, 2011
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

MIAMI TRIBE OF OKLAHOMA,

Plaintiff-Appellee,
v. No. 10-3060
UNITED STATES OF AMERICA,
KENNETH SALAZAR, Secretary,
United States Department of the
Interior, LARRY ECHOHAWK,
Assistant Secretary of Interior, Bureau
of Indian Affairs,

Defendants-Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
(D.C. NO. 2:03-CV-2220-DJW)

Ellen J. Durkee (Ignacia S. Moreno, Assistant Attorney General, and M. Alice
Thurston, United States Department of Justice, Environment & Natural Resources
Division, Appellate Section, Washington, District of Columbia, and Lanny D.
Welch, United States Attorney on opening brief, and Barry R. Grissom, United
States Attorney on reply brief, and David D. Zimmerman, Assistant United States
Attorney, District of Kansas, Kansas City, Kansas, with her on the briefs), United
States Department of Justice, Environment & Natural Resources Division,
Appellate Section, Washington, District of Columbia, for Appellants.

Christopher J. Reedy (Kip A. Kubin, Bottaro, Morefield & Kubin, L.C., Kansas
City, Missouri, with him on the brief) Olathe, Kansas, for Appellee.

Before TYMKOVICH, McKAY, and GORSUCH, Circuit Judges.
TYMKOVICH, Circuit Judge.

This appeal requires us to consider whether the Bureau of Indian Affairs

(BIA) properly exercised its discretion to reject a gift of property by a member of

the Miami Tribe of Oklahoma to the tribe.

James Smith wanted to transfer to the tribe a portion of his property interest

in the Maria Christiana Reserve No. 35, located southwest of Kansas City, where

the tribe has plans to develop gaming facilities. Federal law and restrictions on

Smith’s fee interest required the BIA to approve any transfer. Citing concerns

regarding fractionation of the land interests in the Reserve as well as the long-

range best interests of Reserve landowners, the BIA denied Smith’s application to

transfer the land. Miami Tribe challenges that decision. We hold the BIA

properly exercised its discretion in denying the application.

This appeal also raises a novel jurisdictional question regarding our review

of administrative decisions following a remand from district court. In this case,

we conclude the government has not abandoned its right to challenge the district

court’s remand order, even though the government substantially prevailed in the

district court’s final judgment.

For the reasons set forth below, we find the district court erred in its

remand order reversing the BIA’s denial of Smith’s application. Therefore we

VACATE the district court’s final judgment and its order reversing the BIA, and

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we REMAND for further consideration of Smith’s application consistent with this

opinion.

I. Background

The Maria Christiana Reserve No. 35 (Reserve) 1 is a 35-acre parcel of land

located in Miami County, Kansas. It is approximately 180 miles from Miami

Tribe’s current land-base in Ottawa County, Oklahoma. Because it bears on the

merits of this appeal, we review the relevant portions of the complicated history

of Miami Tribe’s emigration to, and eventual departure from, the Reserve. 2

A. History of the Reserve

The origins of the Reserve trace back to 1838. Through a treaty with

Miami Tribe, the United States set aside land west of the Mississippi River with

the implied understanding that the tribe, then located in Indiana, would emigrate

there. See Treaty with the Miamies, 7 Stat. 569, 571 (Nov. 6, 1838). In 1840, the

tribe ceded all its land in Indiana and agreed to move to land in Kansas, which the

United States Senate had designated. See Treaty with the Miamies, 7 Stat. 582,

582–85 (Nov. 28, 1840).

1
The Reserve is variously known as the Maria Christiana allotment, Miami
Reserve No. 35, Miami 35, Allotment No. 35, and Maria Christiana Miami
Reserve No. 35. We consider all to refer to the same 35-acre parcel of land in
Miami County, Kansas.
2
Additional details on the history of the Reserve can be found in a
thorough district court opinion from a separate case involving Miami Tribe and
the Reserve. See Miami Tribe of Okla. v. United States, 927 F. Supp. 1419,
1424–26 (D. Kan. 1996).

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 The tribe moved to the land in Kansas in 1846, but a large number of tribal

members remained in Indiana and severed their relationship with the tribe. See

Miami Tribe of Okla. v. United States, 281 F.2d 202, 213 (Ct. Cl. 1960); 17 Op.

Att’y Gen. 410, 411–12 (1882). The Miami Tribe was split into two groups: (1)

the Western Miamis, who emigrated to Kansas and were considered part of Miami

Tribe, and (2) the Indiana Miamis, who remained in Indiana and were no longer

members of the tribe. See 12 Op. Att’y Gen. 236, 239 (1867).

In 1854, the Western Miamis ceded all but 70,640 acres of their land in

Kansas to the United States in return for payments to the tribe and other

investments. See Treaty with the Miami Indians, 10 Stat. 1093, 1093 (June 5,

1854). The 1854 treaty acknowledged the division of Miami Tribe into two

groups—Western Miamis and Indiana Miamis—after its move to Kansas and

excluded the Indiana Miamis from receiving payment for the ceded Kansas lands.

Id. at 1094–95. The 1854 treaty, however, did divide up payments still owed to

the Western and Indiana Miamis from the 1840 treaty. Id. at 1095. Only Indiana

Miamis who were on an agreed-upon list, which could be modified only with the

consent of the Indiana Miamis, would receive payment. Id. at 1099.

In 1858, several families, including that of Maria Christiana DeRome,

petitioned Congress to be included on the list of Indiana Miamis who would

receive payments under the 1840 treaty. The DeRome family were excluded from

the 1854 list because they were not considered of Miami blood. Miami Tribe of

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Okla. v. United States, 927 F. Supp. 1419, 1424 (D. Kan. 1996) (citing H.R. Exec.

Doc. No. 23, 49th Cong., 1st Sess. 1, 6 (1886)). In a unilateral decision,

Congress added the petitioners to the list. 3 See Act of June 12, 1858, 11 Stat.

329, 332. Congress also directed that each individual receive a portion of the

unpaid annuity payments and be allotted 200 acres of land from the 70,640

retained by the tribe in Kansas. Id. That is, these individuals were given land

retained by the Western Miamis even though the individuals were not Western

Miamis, or even considered of Miami blood. In 1859, the Reserve was patented

as a restricted Indian allotment of 200 acres. 4 It was from this allotment that the

Maria Christiana Reserve No. 35 was created.

3
By 1867, the names added by Congress in 1858 had been removed from
the list. See Miami Tribe of Okla., 927 F. Supp. at 1425 n.4; 12 Op. Att’y Gen.
236, 244 (Sept. 20, 1867).
4
There are two types of allotments: (1) a “trust allotment,” which is “a
parcel of land owned by the United States in trust for an Indian,” or (2) a
“restricted allotment,” which is “owned by an Indian subject to a restriction on
alienation in the United States or its officials.” C OHEN ’ S H ANDBOOK OF F EDERAL
I NDIAN L AW § 16.03[1] (2005 ed.). A trust allotment is conveyed through a trust
patent, under which the United States holds the land for a designated period in
trust for the sole use and benefit of the allottee and conveys the land in
unrestricted fee at the end of the trust period. See United States v. Bowling, 256
U.S. 484, 486–87 (1921). A restricted allotment, similarly, is conveyed through a
land patent, under which the allottee holds the land in fee with a restriction on
alienation. See id. at 487. The Reserve’s land patent for the restricted allotment
provided the land “shall never be sold or conveyed by the grantee or her heirs
without the consent of the Secretary of the Interior, for the time being.” See
Miami Tribe of Okla. v. United States, 679 F. Supp. 2d 1269, 1278 (D. Kan.
2010).

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 Several years later the Miami Tribe, now consisting only of the Western

Miamis, entered into a treaty encouraging it to move from Kansas to Oklahoma.

See Treaty with the Peorias, Kaskaskias, et. al., 15 Stat. 513, 520 (Feb. 23, 1867).

Congress agreed to purchase the Western Miami’s unallotted lands in Kansas if

the tribe signified its interest in selling, which it did. See Act of Mar. 3, 1873, 17

Stat. 631, 631. Those who remained in Kansas could, meeting certain

requirements, become United States citizens, but would end their membership in

the tribe. Id. at 632. Those members who moved to Oklahoma retained their

tribal membership. Id.

Through that same 1873 legislation, Congress directed the Secretary of the

Interior to take a census of the Western Miamis and determine who was entitled

to the lands and monies set aside for the Western Miamis from the sale of their

land in Kansas through the 1854 treaty. Id. In compiling this census, the

individuals added by Congress in 1858 to the list of Miami Indians were not

included. Id. at 632–33. These Miami Indians were not considered members of

the Western Miamis and only Western Miamis were entitled to payment under the

1854 treaty. See 17 Op. Att’y Gen. 410, 414–15 (July 7, 1882). Those not on the

census were not entitled to share in the proceeds from the lands sold under the

1873 legislation or from the annuities in the 1854 treaty. Id. Again, the

legislation reinforced that individuals, such as Maria Christiana DeRome, were

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not part of the Western Miamis, who had settled in Kansas and eventually moved

to Oklahoma.

In 1891, after a petition to Congress and an action before the Court of

Claims, the United States reimbursed the Western Miamis for the money

erroneously paid as back annuities to the individuals erroneously added in 1858 as

well as for the value of the land allotted to them. See Miami Tribe of Okla., 281

F.2d at 212. Fast forwarding to 1960, the Western Miamis again brought suit in

the Court of Claims, seeking interest on the payments made in 1891. The court

awarded interest from the time of the erroneous payments (1858) and allotments

(1859) until 1891. Id.

For this appeal, the most important fact is that Maria Christiana DeRome

was not a member of the Western Miamis and should not have received the

allotment of land that became the Reserve. In fact, Miami Tribe was reimbursed

by the United States for the land improperly allotted to non-members—including

the Reserve allotted to Maria Christiana DeRome.

B. Smith’s Gift Transfer

Smith holds a 3/38 undivided restricted fee interest in the 35-acre Reserve. 5

While the Department of the Interior has found it “not entirely clear” how

5
Over time, the original 200-acre allotment dwindled to its current size of
35 acres. After Maria Christiana DeRome’s death in 1860, her family sold 120
acres. In 1986, based on a claim of adverse possession, a court partitioned the
remaining 80 acres, granting 45 acres to Midwest Investment Properties, Inc. and
leaving 35 acres to the Indian landowners in restricted fee. See Aple. App. at 4.

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interests in the Reserve descended to the many heirs of Maria Christiana DeRome,

it is undisputed that Smith inherited his interest as an heir of DeRome and shares

his interest with over 20 other landowners. 6 Aplt. App. at 149–50; see also id. at

171–78 (June 2009 BIA Title Status Report listing current interest-holders in the

Reserve).

Smith is also a member of Miami Tribe. In 1996, to strengthen its

connection with the Reserve, the tribe amended its constitution and adopted all

current Reserve landowners, enlisting them as tribal members. Then, in 2001,

Smith decided to give a portion of his interest to the tribe, ostensibly as a benefit

to the tribe and its members. Because the land was held in restricted fee, as we

describe in greater detail below, federal law required the BIA to approve the

transfer. Smith applied to the BIA for approval to convey by gift 1/3 of his 3/38

undivided interest (i.e. 1/38 interest) in the Reserve to Miami Tribe.

The BIA denied Smith’s application for two reasons. It found the transfer

(1) was not in the long-range best interests of Smith or other Reserve landowners,

and (2) conflicted with the federal government’s policy of avoiding further

fractionation of interests in Indian lands. Smith appealed to the Interior Board of

6
While not at issue in this appeal, Smith also holds a 3/19 restricted
beneficial life estate interest in the Reserve. Aplt. App. at 170. Smith acquired
this interest in 2007 through a probate proceeding upon the death of his aunt,
Earline Smith Downs. Id. at 169–70. Miami Tribe holds the remainder interest in
Smith’s life estate. Id. at 169.

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Indian Appeals (IBIA) of the United States Department of the Interior, which

affirmed the BIA’s decision.

C. Federal Court Proceedings

Miami Tribe brought suit in federal district court challenging the BIA’s

denial of Smith’s application on various statutory and constitutional grounds. 7

The primary challenge was under the Administrative Procedures Act (APA),

which was bifurcated from the other claims so it could be addressed first.

Following bifurcation, the district court issued an order (2005 Order) with

respect to the APA claim and reversed the BIA’s decision. The district court

found the BIA’s decision was arbitrary and capricious, and contrary to law,

because (1) Smith, as a tribal member, possessed a special relationship with

Miami Tribe, (2) the BIA failed to consider the long-range best interests of the

tribe, and (3) Miami Tribe exercised jurisdiction over the Reserve, which brought

the gift within the federal government’s policy encouraging such transfers. The

court remanded the matter to the BIA with instructions to approve Smith’s

application, while acknowledging other claims still remained pending before the

district court.

7
Miami Tribe has been involved in myriad litigation regarding the
Reserve. See Miami Tribe of Okla. v. United States, 927 F. Supp. 1419 (D. Kan.
1996); Miami Tribe of Okla. v. United States, 5 F. Supp. 2d 1213 (D. Kan. 1998);
Kansas ex rel. Graves v. United States, 86 F. Supp. 2d 1094 (D. Kan. 2000);
Kansas v. United States, 249 F.3d 1213 (10th Cir. 2001).

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 The BIA objected and filed a motion requesting the district court reconsider

its decision and affirm the BIA’s decision. In the alternative, the government

requested the court remand the matter to the BIA for its consideration, rather than

outright reversing the BIA with instructions to approve Smith’s application.

The district court granted in part and denied in part the government’s

motion and modified its 2005 Order. Rather than mandate the BIA approve

Smith’s application on remand, the court remanded the case to the BIA for further

proceedings “consistent” with the 2005 Order. Specifically, the court remanded

the case for the BIA to consider the long-term impact of Smith’s proposed

transfer on the further fractionation of the Reserve.

Given the procedural posture it faced, the BIA filed a notice of appeal

seeking our review of the 2005 Order and the order on reconsideration. Before

any briefing, however, the BIA shifted gears and moved to voluntarily dismiss the

appeal. It conceded

[T]hat significant questions could be raised with respect to the
appealability of the [2005 Order] in its present form. We want to
ensure that any appeal is focused on the merits of this action rather
than on issues of appellate jurisdiction . . . . Accordingly, federal
defendants intend to seek a Rule 54(b) judgment in district court and,
if granted, file a new notice of appeal.

Amended Motion to Voluntarily Dismiss Appeal at 1, Miami Tribe of Okla. v.

United States, No. 06-3037 (10th Cir. Apr. 24, 2006).

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 After dismissal of the appeal, the district court stayed the remaining two

counts pending the BIA’s disposition on remand. The court determined resolution

of the issue on remand would simplify the remaining issues before the court and

promote judicial economy. At this point, the BIA requested a Rule 54(b)

judgment as to the 2005 Order from which the government could take an

immediate appeal. The BIA argued the district court had already decided to stay

the remaining counts and resolve the APA count to simplify the issues and

promote judicial economy. Any potential harm from piecemeal litigation, it

contended, would be outweighed by resolving the APA claim on the merits first.

The tribe opposed the motion, asserting the 2005 Order was not a final decision

and the government’s request was untimely.

The district court denied the government’s request for several reasons. The

court, first, found the 2005 Order was not an ultimate disposition of a claim and

the remand order “fully contemplates further proceedings once the BIA issues its

decision upon remand.” Aplt. App. at 78. Second, the 2005 Order was not

distinct and separable from the two unresolved claims, and the BIA’s decision on

remand would likely affect future determination of those claims. Third, denying

the motion follows the general rule that administrative-remand orders are

ordinarily not appealable because they are non-final decisions. The district court

found the exceptions to this rule did not apply because the government failed to

show either that the 2005 Order resolved a serious and unsettled question or that

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it was foreclosed from future appellate review of the issues. Finally, the

government’s motion was filed ten months after the 2005 Order was issued and

the court found this excessive delay justified its denial. The BIA did not seek to

appeal this order.

On remand, the BIA approved Smith’s application but denied his request to

convey the land in trust status because Smith held the land in restricted fee, not

trust. 8 The BIA stated the tribe needed to submit a fee-to-trust application, which

it had not, before the BIA would accept the land in trust status for the tribe. See

generally 25 C.F.R. part 151. The IBIA affirmed the BIA’s decision.

Miami Tribe returned to federal court to challenge this decision. The tribe

filed a two-count amended complaint alleging the BIA’s refusal to transfer

Smith’s interest in trust (1) violated the Indian Land Consolidation Act (ILCA),

and (2) was a breach of trust. The district court affirmed the BIA’s order and

dismissed the tribe’s breach of trust claim. See Miami Tribe of Okla. v. United

States, 679 F. Supp. 2d 1269 (D. Kan. 2010).

With the entry of a final judgment, the government filed a notice of appeal

seeking review of the district court’s 2005 Order reversing the BIA’s initial denial

of Smith’s application.

8
Whether land is held in restricted fee or trust can determine whether the
land is eligible for gaming under federal Indian gaming laws. See G. William
Rice, Some Thoughts on the Future of Indian Gaming, 42 A RIZ . S T . L. J. 219,
241–44 (2010).

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 II. Discussion

The BIA urges us to reverse the 2005 Order because the BIA’s decision to

deny Smith’s application was properly within its discretion. It also argues the

tribe lacks jurisdiction over the Reserve, and further, that denying Smith’s

transfer does not conflict with federal government policy promoting consolidation

of tribal lands.

The tribe in turn argues we lack jurisdiction because the BIA cannot appeal

the district court’s decision affirming the BIA’s own determination. It also

contends the 2005 Order was correct because the tribe has jurisdiction over the

Reserve and the BIA’s fractionation concerns were unfounded.

First we consider our appellate jurisdiction before turning to the merits.

A. Appellate Jurisdiction

Miami Tribe claims we lack jurisdiction because the government’s appeal

of the district court’s final judgment affirming the BIA’s decision presents no

case or controversy.

The government responds that we have jurisdiction for several reasons.

First, the government appeals from the first and only final judgment of the district

court. Throughout the remand and subsequent district court proceedings, the

government was clear it intended to appeal the 2005 Order. In its view, the final

judgment of the district court on appeal here, even though it affirms the BIA’s

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decision on remand, is a direct and natural consequence of the unfavorable 2005

Order that controlled the BIA’s decision on remand.

Second and relatedly, the government argues it could not appeal the 2005

Order any earlier. It notes administrative-remand orders—such as the 2005

Order—are generally not immediately appealable because they are non-final

judgments. The government acknowledges the limited exception to this rule,

which permits an immediate appeal when an agency is likely foreclosed from

seeking future appellate review, but argues the exception does not apply here.

From this procedural posture, two jurisdictional questions present

themselves. The first is whether the government—even after the BIA approved

Smith’s application on remand—has standing to challenge the 2005 Order. The

government prevailed in the district court after remand because the court affirmed

the BIA’s approval of Smith’s application. But the government claims the 2005

Order circumscribed its discretion, which made the outcome on remand

inevitable, and therefore has standing to challenge the order now. So we must

consider whether the government can appeal in these circumstances.

The second question is whether the government should have taken an

immediate, interlocutory appeal of the 2005 Order, and whether the government’s

decision not to pursue an earlier appeal precludes its present challenge to the

order.

We address each question in turn.

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 1. BIA Appeal of the 2005 Order

We first consider whether the BIA has standing to challenge the 2005 Order

through an appeal from the district court’s final judgment.

It is bedrock law that we have jurisdiction over all final decisions of federal

district courts under 28 U.S.C. § 1291. This jurisdiction is generally contingent

upon “the existence of a decision by the District Court that ends the litigation on

the merits and leaves nothing for the court to do but execute the judgment.”

Coopers & Lybrand v. Livesay, 437 U.S. 463, 467 (1978) (quotations omitted).

With a final judgment from a district court, “a notice of appeal which names the

final judgment is sufficient to support review of all earlier orders that merge in

the final judgment.” McBride v. CITGO Petroleum Corp., 281 F.3d 1099, 1104

(10th Cir. 2002). “[I]t is a general rule that all earlier interlocutory orders merge

into final orders and judgments except when the final order is a dismissal for

failure to prosecute.” Id. (citing 16A Wright & Miller, F EDERAL P RACTICE &

P ROCEDURE § 3949.4 (3d ed. 1999 & Supp. 2001)). Through an appeal of a final

judgment, a party can obtain appellate review of both the final judgment and any

interlocutory orders.

Generally, “only a party aggrieved by a judgment or order of a district

court may exercise the statutory right to appeal,” and thus a “party who receives

all that he has sought generally is not aggrieved by the judgment affording the

relief and cannot appeal from it.” Deposit Guaranty Nat’l Bank v. Roper, 445

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U.S. 326, 333 (1980). But in certain cases, an “appeal may be permitted from an

adverse ruling collateral to the judgment on the merits at the behest of the party

who has prevailed on the merits, so long as that party retains a stake in the appeal

satisfying the requirements of Art. III.” Id. at 334; see also Amazon, Inc. v. Dirt

Camp, Inc., 273 F.3d 1271, 1275 (10th Cir. 2001) (“[A] prevailing party is

aggrieved and ordinarily can appeal a decision granting in part and denying in

part the remedy requested.” (quotation omitted)). Thus, if a party prevails in the

final judgment of a district court, but has sustained an adverse ruling in a district

court’s prior interlocutory order, the party may still have standing to appeal under

Article III.

A recent Supreme Court case is instructive. In Camreta v. Greene, 131 S.

Ct. 2020 (2011), the Court considered an appeal by a prevailing party in the

context of qualified immunity and Section 1983 suits for money damages. There,

government officials were permitted to challenge a lower court’s ruling that their

conduct violated the Constitution, even though the Court also determined the

officials were protected from liability by qualified immunity. Id. at 2029–30.

The Court noted in certain circumstances it has “recognized that an appeal

brought by a prevailing party may satisfy Article III’s case-or-controversy

requirement.” Id. at 2028–29 (citing Deposit Guaranty Nat’l Bank v. Roper, 445

U.S. 326 (1980); Elec. Fittings Corp. v. Thomas & Betts Co., 307 U.S. 241

(1939)). In such a situation, the “critical question under Article III” is whether a

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party can demonstrate injury, causation, and redressability and therefore, despite

being nominally the prevailing party, “retains the necessary personal stake in the

appeal.” Camreta, 131 S. Ct. at 2029. 9 The BIA meets these requirements in this

appeal.

A central inquiry in assessing the BIA’s continuing interest in an appeal

challenging the 2005 Order is whether the order limited the BIA’s discretion on

remand.

“When an administrative agency has made an error of law, the duty of the

Court is to correct the error of law committed by that body, and, after doing so to

remand the case to the [agency] so as to afford it the opportunity of examining the

evidence and finding the facts as required by law.” NLRB v. Enter. Ass’n of

Pipefitters Local 638, 429 U.S. 507, 522 (1977) (quotation omitted). Under the

law of the case doctrine, on remand, an agency must abide by a district court’s

remand order. See Poppa v. Astrue, 569 F.3d 1167, 1170 (10th Cir. 2009). We

have stated that

[A]lthough primarily applicable between courts of different levels,
the doctrine [of law of the case] and the mandate rule apply to
judicial review of administrative decisions, and require the
administrative agency, on remand from a court, to conform its further

9
Even though it could hear an appeal by a prevailing party under Article
III, the Court noted it generally declines to hear such appeals as “a matter of
practice and prudence.” Camreta, 130 S. Ct. at 2030. It chose to consider the
appeal in Camreta in order to clarify a question of constitutional law guiding the
conduct of government officials. Id. at 2032.

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 proceedings in the case to the principles set forth in the judicial
decision, unless there is a compelling reason to depart.
Copart, Inc. v. Admin. Review Bd., U.S. Dep’t of Labor, 495 F.3d 1197, 1201

(10th Cir. 2007) (quotation omitted); see also 3 A DMIN . L. & P RAC . § 8:31 (3d

ed.) (“The ‘law of the case’ doctrine applies on remand and the agency is bound

by findings and conclusions from the reviewing court if properly within judicial

authority.”). An agency may depart from the law of the case on remand under

only a few narrow exceptions, none of which apply here. See Grigsby v.

Barnhart, 294 F.3d 1215, 1219 n.4 (10th Cir. 2002) (“There are three

‘exceptionally narrow’ reasons to depart from the law of the case: (1) when the

evidence in a subsequent trial is substantially different; (2) when controlling

authority has subsequently made a contrary decision of the law applicable to such

issues; or (3) when the decision was clearly erroneous and would work a manifest

injustice.” (quotation omitted)).

Here, the law of the case doctrine required the BIA to conform its

proceedings on remand to the 2005 Order. While the BIA failed to reference the

2005 Order in its decision on remand, neither party disputes the BIA had to

comply with the legal standards it set forth. In doing so, the BIA in particular

had to follow the order’s directive to consider certain factors on remand. And

although the district court amended its initial order—removing its mandate to

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approve Smith’s application 10—it made clear the court understood the law

required BIA approval of Smith’s application. In this way, the BIA’s discretion

on remand was channeled through the limitations of the 2005 Order.

This case is not a situation where an agency exercised uncircumscribed

discretion on remand and simply changed its mind. In such a case, the new

decision would be solely due to the agency’s discretionary action, not a court

order. In contrast, here the BIA operated under the district court’s interpretation

of the law governing the BIA’s approval process as set forth in the 2005 Order.

While the BIA has discretion to approve land transfers—and arguably retained

discretion on pain of contempt to deny the gift on remand 11—it was bound by the

district court’s ruling that Miami Tribe had jurisdiction (which we discuss below)

over the Reserve for the purposes of the ILCA. This finding required the BIA to

10
Despite removing its command to approve the application, the district
court expected the BIA’s actions on remand to be “consistent” with the 2005
Order.
11
At oral argument, the tribe asserted the BIA should have denied the
conveyance a second time if it disagreed with the 2005 Order and then challenged
the order through a contempt proceeding. We look unfavorably on forcing an
agency to suffer a contempt citation as a vehicle for an appellate challenge to a
district court’s administrative-remand order. See Occidental Petroleum Corp. v.
S.E.C., 873 F.2d 325, 332 (D.C. Cir. 1989) (“[I]f the SEC is not permitted to
appeal the district court’s order now, it will be bound to proceed under the legal
standard imposed by the district court. (Its only other choice would be to violate
the court’s order and risk contempt, which we do not think Congress, in enacting
§ 1291, intended to encourage, and which the SEC has not intimated it will do.)”);
15B Wright & Miller, F EDERAL P RACTICE & P ROCEDURE § 3914.32 (2d ed.)
(“[C]ourts also note the unseemliness of forcing a government agency to act in
contempt so as to force an opportunity for immediate appeal.”).

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further a statutory preference expressed in 25 U.S.C. § 2216(a)—encouraging the

consolidation of lands between Indians and tribes “that exercise[] jurisdiction

over the land.” That policy preference directly affected the BIA’s calculus on

remand.

The 2005 Order constrained the BIA’s discretion on remand. Given these

circumstances, the BIA retains a personal stake in the adverse, interlocutory 2005

Order to confer standing to appeal, even though the government nominally

prevailed in the district court’s final judgment.

2. Interlocutory Appeal

The government initially sought an interlocutory appeal of the 2005 Order,

and at first, this may appear to be the more prudent solution to the BIA’s

dilemma. But, under § 1291, a “remand by a district court to an administrative

agency for further proceedings is ordinarily not appealable because it is not a

final decision.” Bender v. Clark, 744 F.2d 1424, 1426–27 (10th Cir. 1984). 12

Nonetheless, this “administrative-remand rule” is not without exception, and in

certain circumstances an immediate appeal is possible. Baca-Prieto v. Guigni, 95

F.3d 1006, 1008 (10th Cir. 1996).

12
Nor did the district court issue a Rule 54(b) order certifying its partial
ruling as a final judgment.

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 We have recognized a “practical finality rule” that operates as an important

caveat to the general limitation on appeals from an administrative-remand order. 13

Graham v. Hartford Life & Accident Ins. Co., 501 F.3d 1153, 1157 (10th Cir.

2007); see also Baca-Prieto, 95 F.3d at 1009 (noting the Bender line of cases is a

“prudential limitation on the administrative-remand rule”). “The practical finality

rule may be invoked when the lack of immediate review of an order for an

administrative remand would violate basic judicial principles,” Graham, 501 F.3d

at 1157 (quotation omitted), namely issues that are both “urgent and important.”

Trout Unlimited v. U.S. Dep’t. of Agric., 441 F.3d 1214, 1218 (10th Cir. 2006).

“If these two conditions are met, this court will apply a balancing test and assert

jurisdiction if ‘the danger of injustice by delaying appellate review outweighs the

inconvenience and costs of piecemeal review.’” Id. (quoting Bender, 744 F.2d at

1427).

In practice, we have applied the practical finality rule “when it is necessary

to ensure that we can review important legal questions which a remand may make

effectively unreviewable, because administrative agencies may be barred from

seeking district court (and thus circuit court) review of their own administrative

decisions.” Graham, 501 F.3d at 1158 (quotation omitted); see also Baca-Prieto,

13
The practical finality rule “borrows some concepts from the collateral
order doctrine” but is broader and more practical in its application. Graham v.
Hartford Life & Accident Ins. Co., 501 F.3d 1153, 1158 n.3 (10th Cir. 2007); see
id. (“We have contrasted the balancing test of the practical finality rule with the
mechanical analysis of the collateral order doctrine.”) (quotations omitted).

-21-
95 F.3d at 1010 (finding the remand order decided an important issue regarding

INS exclusion jurisdiction and directed the decision on remand from which the

INS would have no appeal); Cotton Petroleum v. U.S. Dep’t of Interior, 870 F.2d

1515, 1521–22 (10th Cir. 1989) (noting the district court remand order resolved

“threshold legal issues” and we based our decision both on the importance of the

issue and the fact “delay in review . . . would likely result in further disputes and

litigation, confusion and danger of injustice”). In cases where we determined we

lacked jurisdiction, we found the issues insignificant or subject to future appellate

review. See Trout Unlimited, 441 F.3d at 1219 (finding no reason compelling

“urgent or immediate judicial consideration” because “delayed review will not

[cause] injustice,” and will not cause additional disputes and litigation). 14

When we have heard interlocutory appeals under the practical finality rule,

central to our analysis was a concern the agency likely would be foreclosed from

future appellate review. That was not the case here. At the time of the 2005

Order, two counts of Miami Tribe’s complaint remained pending before the

14
Similarly, we have declined jurisdiction over appeals involving private
litigants seeking immediate appeal of remand orders because the issues presented
would be reviewable upon conclusion of the remand proceedings. See Mesa Oil,
Inc. v. United States, 467 F.3d 1252, 1256 (10th Cir. 2006) (“[Abatement of
financial] penalty decision is reviewable upon conclusion of the remanded
proceedings irrespective of who prevails upon the [collection of] payment
issue . . .”); Trout Unlimited, 441 F.3d at 1219 (“If the Forest Service’s decision
on remand is not satisfactory, Defendant-Intervenors can pursue administrative
remedies and, if necessary, seek review in the district and appellate courts at a
later stage in the proceedings.”).

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district court and had been stayed for further proceedings before the agency. 15

Future appellate review likely was not foreclosed and the government’s

immediate appeal likely would not have fallen within the practical finality

exception.

As a general matter, if additional proceedings in a district court are

contemplated after remand to an agency—as here—we think the better rule is for

the government to wait until a final judgment is entered. This comports with the

final judgment rule’s preference for a single appeal, even if the agency prevails

on some of the claims on remand. The rule, moreover, avoids the perverse

incentive encouraging an agency to seek an immediate appeal of a remand order

(even if it was unlikely the case fell within the practical finality exception) if the

agency had a whiff that we would take jurisdiction over the interlocutory appeal.

We have located one case, Viraj Group, Ltd. v. United States, 343 F.3d

1371 (Fed. Cir. 2003), with a similar procedural posture to that presented here. It

also examined whether the government had standing to appeal when it prevailed

15
The two outstanding, unresolved counts pending before the district court
distinguish this case from the practical finality line of cases. In those cases,
where we asserted jurisdiction and reviewed administrative-remand orders under
the practical finality exception, all outstanding issues had been resolved by the
district court. See Baca-Prieto, 95 F.3d at 1008; Cotton Petroleum, 870 F.2d at
1521. When denying the government’s request for a Rule 54(b) judgment, the
district court here noted there would be further proceedings and stated the
unresolved counts would likely be affected by the BIA’s decision on remand.

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in the lower court’s final judgment, but had previously sustained adverse

interlocutory orders remanding to the agency. The court observed the

[A]ppeal comes to us in a strange posture: The government has
appealed from the court’s decision affirming the government
agency’s determination; in other words, the winner has appealed
because its determination was affirmed by the trial court only on the
basis of reasoning with which it disagrees.

Id. at 1375. The government asserted it had standing to appeal—even though it

was the prevailing party—because it could not appeal from the earlier remand

decisions based on the general rule that administrative-remand decisions are not

final judgments. Like here, Viraj raised the question of “whether the government

. . . should have appealed from one of the [lower court]’s earlier decisions, and

whether its failure to do so deprives it of standing in this appeal.” Id. at 1376.

Addressing the government’s situation, the court noted

The fact that the government perhaps could have appealed from one
of the court’s earlier decisions creates a circular dilemma. To hold
that the government could have appealed sooner, we must necessarily
find that it cannot bring this appeal; and to hold that it cannot bring
this appeal, we must find that it could have appealed sooner.

Id. The court went on to conclude that

Rather than bootstrap our reasoning to reach those two conclusions
we believe that the better course is to hold that the government has
sufficient standing to bring this appeal. Even though technically the
prevailing party under the [lower court]’s final decision, the government
prevailed only because it acquiesced and abandoned its original position,
which it had zealously advocated, and adopted under protest a contrary
position forced upon it by the court. Thus, in substance, the government is
truly the non-prevailing party in this case. To hold otherwise would exalt

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 form over substance. We therefore are satisfied that this appeal presents a
case or controversy that we can address on the merits.

Id.

We find this reasoning persuasive and applicable. Given the procedural

posture of this case, and the district court’s inherent limitations on remand, the

government is “truly the non-prevailing party” on the core issue of its statutory

discretion and Miami Tribe’s jurisdiction over the Reserve. We conclude we have

jurisdiction to hear the government’s challenge to the 2005 Order through its

appeal from the district court’s final judgment.

B. Merits

Having assured ourselves we have jurisdiction to hear the government’s

appeal, we turn to the merits of the BIA’s challenge to the 2005 Order.

Smith owned a 3/38 undivided restricted interest in the Reserve and applied

to give 1/3 of his interest (i.e. 1/38 interest) to Miami Tribe. He wanted to make

the gift because of his “desire to do something for the benefit of the Miami Tribe

and its members.” Aplt. App. at 132. The BIA denied Smith’s application

because (1) the gift transfer was not in Smith’s or other Reserve landowners’

long-range best interests, and (2) the transfer would conflict with the

government’s policy regarding fractionated interests in Indian land. In its 2005

Order, the district court reversed the BIA’s decision, finding it arbitrary and

capricious, and contrary to law. We disagree with this conclusion, finding the

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BIA properly applied the applicable statutes and regulations when it denied

Smith’s application.

We review the district court’s 2005 Order reversing the BIA de novo, and

we will set aside agency action “only if we conclude that it was ‘arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.’”

McKeen v. U.S. Forest Serv., 615 F.3d 1244, 1253 (10th Cir. 2010) (quoting 5

U.S.C. § 706(2)(A)). Agency action is arbitrary and capricious if it “entirely

failed to consider an important aspect of the problem, offered an explanation for

its decision that runs counter to the evidence before the agency, or is so

implausible that it could not be ascribed to a difference in view or the product of

agency expertise.” United Keetoowah Band of Cherokee Indians of Okla. v. U.S.

Dept. of Hous. & Urban Dev., 567 F.3d 1235, 1239 (10th Cir. 2009) (quoting

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43

(1983)).

When reviewing an agency’s interpretation of a statute, “[i]f Congress has

spoken directly to the issue, that is the end of the matter; the court, as well as the

agency, must give effect to Congress’s unambiguously expressed intent.” United

Keetoowah Band, 567 F.3d at 1240 (citing Chevron U.S.A., Inc. v. Natural Res.

Def. Council, 467 U.S. 837, 842–43 (1984)). “If the statute is silent or

ambiguous, we proceed to . . . ask ‘whether the agency’s answer is based on a

permissible construction of the statute.’” Id. (quoting Chevron, 467 U.S. at 843).

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When answering that question, we “afford considerable deference to agencies

interpreting ambiguities in statutes that Congress has delegated to their care.”

Hydro Res., Inc. v. EPA, 608 F.3d 1131, 1145 (10th Cir. 2010) (en banc).

“Deference is especially due when an agency’s interpretation of a statute rests

upon its considered judgment, a product of its unique expertise.” Qwest Commc’n

Int’l., Inc. v. FCC, 398 F.3d 1222, 1230 (10th Cir. 2005).

When considering agency action made pursuant to its own regulations, we

do not “decide which among several competing interpretations best serves the

regulatory purpose,” but rather “give substantial deference to an agency’s

interpretation of its own regulations.” Morris v. U.S. Nuclear Regulatory

Comm’n, 598 F.3d 677, 684 (10th Cir. 2010). The agency’s interpretation will

control “unless ‘plainly erroneous or inconsistent with the regulation.’” Plateau

Mining Corp. v. Fed. Mine Safety & Health Review Comm’n, 519 F.3d 1176, 1192

(10th Cir. 2008) (quoting Auer v. Robbins, 519 U.S. 452, 461, (1997)).

At the outset, we also note the overarching regulatory framework governing

a gift of Indian land. In the Indian Land Consolidation Act (ILCA), the United

States stated its policy of encouraging the consolidation of Indian land ownership

and preventing further fractionation of Indian lands. See 25 U.S.C. §§ 2201 note,

2216(a). Under the ILCA, the Secretary of the Department of the Interior “is

authorized in his discretion, and upon application of the Indian owners . . . to

approve conveyances, with respect to lands or interests in lands held by individual

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Indians.” Id. § 483. An Indian may give an interest in land to a tribe “for an

amount less than the fair market value of that interest.” Id. § 2216(b). Such a

gift is a two-part transaction consisting of the disposal and acquisition of the land.

See 25 C.F.R. parts 151 (acquisitions) & 152 (disposal). Our focus in this case is

the disposal of Indian land, specifically Smith’s gift of a restricted interest in the

Reserve to Miami Tribe. The BIA has promulgated regulations—applicable here,

25 C.F.R. §§ 152.23 and 152.25(d)—addressing the sale, exchange, and

conveyance of Indian trust or restricted lands.

Before addressing the BIA’s decision applying these regulations, we must

consider whether the tribe has jurisdiction over the Reserve and the ILCA

encourages approval of Smith’s application.

1. Miami Tribe’s Jurisdiction Over the Reserve

The tribe’s jurisdiction over the Reserve is a key threshold issue. The

ILCA policy encouraging land consolidation between Indians and Indian tribes

applies only to land the tribe has jurisdiction over. See 25 U.S.C. § 2216(a)(2)

(encouraging consolidation of land ownership “between Indians and the tribal

government that exercises jurisdiction over the land”) (emphasis added). If the

Miami Tribe exercises jurisdiction over the Reserve, the ILCA’s policy would

apply and substantially change the calculus of the BIA’s decision.

The tribe argues it has jurisdiction over the Reserve and the congressional

directive to facilitate consolidation applies to Smith’s gift to the tribe. The BIA

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did not apply this policy preference at first because it contends the tribe does not

exercise jurisdiction over the Reserve. But, in the 2005 Order, the district court

concluded the tribe had jurisdiction and therefore the policy preference in

§ 2216(a) served as the backdrop to the BIA’s decision on remand.

In our review of the BIA’s decision, we consider the tribe’s jurisdiction

over the Reserve, first, to determine whether the BIA should have started with

this policy preference or simply a clean slate with nothing tilting the decision

either way. After a careful review of the history, applicable law, and our previous

cases reviewing the tribe’s connection to the Reserve, we can safely conclude the

tribe does not have jurisdiction over the Reserve and therefore does not exercise

jurisdiction for the purposes of § 2216(a).

Congress passed the ILCA to address the problem of increasingly

fractionated interests of Indian lands as well as to govern land conveyances

between Indians and their tribes. In the ILCA, Congress stated

It is the policy of the United States to encourage and assist the
consolidation of land ownership through transactions–
(1) involving individual Indians;
(2) between Indians and the tribal government that exercises
jurisdiction over the land; or
(3) between individuals who own an interest in trust and
restricted land who wish to convey that interest to an Indian or
the tribal government that exercises jurisdiction over the parcel
of land involved . . . .

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25 U.S.C. § 2216(a) (emphasis added). To remedy the fractionation problem, the

federal government favors consolidation of lands between Indians and tribes, but

only regarding land where a tribe exercises jurisdiction.

The ILCA does not define when a tribe “exercises jurisdiction over the

land.” The district court found the tribe exercised jurisdiction over the Reserve

for the purposes of the ILCA and therefore the policy encouraging land

consolidation applied to Smith’s gift. But the BIA argues we previously resolved

the issue in Kansas v. United States, 249 F.3d 1213 (10th Cir. 2001) (Miami IV),

finding the tribe lacked jurisdiction over the Reserve.

In Miami IV, Kansas sought injunctive relief from a National Indian

Gaming Commission (NIGC) determination that the Reserve’s 35-acre parcel

constituted “Indian lands” under the Indian Gaming Regulatory Act (IGRA). 249

F.3d 1213, 1220 (10th Cir. 2001); see 25 U.S.C. § 2703(4) (defining “Indian

lands” as all lands within an Indian reservation or restricted fee land held by a

tribe or Indian “over which an Indian tribe exercises governmental power”). The

district court concluded the NIGC’s decision ignored the threshold question of

whether the tribe exercised jurisdiction over the Reserve and granted a

preliminary injunction against all gaming related activities on the Reserve.

On appeal, we determined the NIGC “put the cart before the horse” when it

decided Miami Tribe exercised “governmental power” over the Reserve without,

first, determining whether the tribe had jurisdiction over the Reserve. Miami IV,

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249 F.3d at 1229. We reasoned “before a sovereign may exercise governmental

power over land, the sovereign, in its sovereign capacity, must have jurisdiction

over that land.” Id. Any analysis of “Indian lands” under the IGRA must begin

with the “threshold question of the Tribe’s jurisdiction, . . . [which] focuses

principally on congressional intent and purpose, rather than recent unilateral

actions of the Miami Tribe.” Id. The tribe could not exercise governmental

power over the Reserve without first having jurisdiction over the Reserve.

Considering the jurisdiction issue, we found the “most probative evidence

of congressional intent and purpose . . . is the language of the legislation and

treaties” regarding Miami Tribe and the Reserve. Id. The district court in Miami

IV had already “thoroughly analyzed the question” of the tribe’s jurisdiction over

the Reserve and “concluded that no lawful basis existed to suggest the Tribe

presently had jurisdiction over the tract.” Id. at 1230 (citing Miami Tribe of Okla.

v. United States, 927 F. Supp. 1419, 1424–27 (D. Kan. 1996) (Miami I)). We

agreed, finding “Congress years ago ‘unambiguously intended to abrogate the

Tribe’s authority of its lands in Kansas and move the Tribe to new lands in

Oklahoma.’” Id. (quoting Miami I, 927 F. Supp. at 1426). Among other events,

in 1873, the tribe agreed to sell its land in Kansas and Congress expressly

abrogated the tribe’s jurisdiction over those Kansas lands.

The tribe did not appeal the district court’s findings regarding jurisdiction

over the Reserve, and in Miami IV we found those conclusions to be res judicata.

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Rather than challenge the district court’s conclusions, Miami Tribe also asserted

its recent activities on the Reserve supported its claim for jurisdiction. We

rejected this argument, finding that the tribe’s recent connections to the Reserve

(by adopting landowners as tribal members) did nothing to alter the fact that

Congress had abrogated the tribe’s jurisdiction over the Reserve long ago.

The same analysis is true here. Congress abrogated Miami Tribe’s

jurisdiction over the Reserve over a century ago. Nothing changes the fact that

“in 1873, Congress expressly abrogated the Tribe’s jurisdiction [over its former

lands in Kansas], which was effective no later than 1924 when any members of

the Tribe remaining in Kansas—and their heirs—became naturalized citizens.”

Miami IV, 249 F.3d at 1230 (quoting Kansas ex rel. Graves v. United States, 86 F.

Supp. 2d 1094, 1096 (D. Kan. 2000) (Miami III)). In addition to this clear

abrogation by Congress, the Reserve was originally allotted to Maria Christiana

DeRome, who was not a member of the Western Miamis. In fact, Miami Tribe

was reimbursed by the United States for the value of the Reserve precisely

because the land was erroneously taken from the tribe and allotted to a non-

member.

To be sure, the tribe is actively connected to the Reserve. For example, it

has among other things (1) adopted the Reserve landowners as members of the

tribe, (2) received consent from the Reserve landowners to assert tribal

jurisdiction pursuant to a lease, and (3) developed the Reserve, including

-32-
regularly maintaining it and providing security. The tribe contends these actions

demonstrate it exercises jurisdiction over the Reserve.

But these are the same activities we rejected as a basis for the tribe’s claim

of jurisdiction over the Reserve in Miami IV. Compare Miami IV, 249 F.3d at

1230–31 with Miami I, 374 F. Supp. 2d at 945. In Miami IV, we examined the

tribe’s recent activity within the Reserve, including the adoption of landowners as

members, but stated

None of these recent events, however, alters the conclusion that
Congress abrogated the Tribe’s jurisdiction over the tract long ago,
and has done nothing since to change the status of the tract. An
Indian tribe’s jurisdiction derives from the will of Congress, not from
the consent of fee owners pursuant to a lease under which the lessee
acts.
Miami IV, 249 F.3d at 1230–31. Similarly, here, Miami Tribe cannot “exercise

jurisdiction” under § 2216(a) without a Congressional grant of jurisdiction over

the Reserve. 16

In sum, the tribe lacks jurisdiction over the Reserve as required by the

ILCA. Accordingly, the statutory policy in § 2216(a) encouraging consolidation

does not apply to Smith’s gift. Without that preference weighing in the tribe’s

16
Even if Miami IV were not on point, the case law does not support the
proposition that adoption of a landowner by a tribe confers jurisdiction. See
United States v. Mazurie, 419 U.S. 544 (1975). The tribe cannot create Indian
reservation lands ex nihilo by adopting landowners into the tribe and claiming all
of the new member’s property.

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favor, the decision to approve Smith’s gift rests squarely within the BIA’s

discretion. 17

2. The BIA’s Decision

Having settled the issue of the tribe’s jurisdiction, we now consider the

BIA’s two reasons for deciding, in its discretion, to deny Smith’s application: (1)

the gift was not in Smith’s or other Reserve landowners’ long-range best interests,

and (2) the transfer would conflict with the federal government’s fractionation

policy.

Long-Range Best Interests

The BIA denied Smith’s application, first, because it determined the gift

was not in the long-range best interests of Smith or other Reserve landowners.

When the BIA considers an application for a gift of restricted Indian land, the

application “may be approved if, after careful examination of the circumstances in

each case, the transaction appears to be clearly justified in the light of the

long-range best interest of the owner or owners or as under conditions set out in

§ 152.25(d).” 25 C.F.R. § 152.23 (emphasis added). Section 152.25(d) governs

17
Even if we found § 2216(a) applied, the BIA would still retain its
discretion to deny the application. In that situation, while a closer question, the
BIA would properly be within its discretion if it denied Smith’s application for
any of the reasons articulated in its regulations. The policy preference in
§ 2216(a) encourages the consolidation of land ownership but does not mandate
it.

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“Gifts and conveyances for no consideration or less than the appraised fair market

value,” and states

With the approval of the Secretary, Indian owners may convey trust
or restricted land, for less than the appraised fair market value or
for no consideration when the prospective grantee is the owner’s
spouse, brother, sister, lineal ancestor of Indian blood or lineal
descendant, or when some other special relationship exists between
the grantor and grantee or special circumstances exist that in the
opinion of the Secretary warrant the approval of the conveyance.

Id. § 152.25(d) (emphasis added). Distilling these regulations, an Indian may

give an interest in restricted land if they have a special relationship with the

grantee, and the BIA may approve such a gift if it concludes the gift is in the

long-range best interests of the landowners.

In applying these regulations, the BIA has a duty to consider the donor’s

best interest

In the case of a gift conveyance, it is BIA’s duty to ensure that the
prospective donor understands and intends the effect of his/her
action. It is also BIA’s duty to make a careful examination of the
circumstances to determine whether the transaction is in the donor’s
best interest. BIA must refrain from approving a gift deed where
there is any question as to the donor’s intent or where the facts show
the conveyance is not in the donor’s best interest.

Downs v. Acting Muskogee Area Dir., 29 IBIA 94, 97 (1996) (citation omitted).

When deciding whether to approve a gift conveyance the “BIA owes a duty only

to the landowner(s) . . . [which] includes discerning the grantor’s intent and

refraining from approving deeds where a question exists concerning that intent.”

LeCompte v. Acting Great Plains Reg’l Dir., 45 IBIA 135, 143 (2007). The

-35-
actual determination of whether to approve a gift conveyance “is a matter within

the discretion of BIA.” Id. While perhaps these regulations reflect a paternalistic

mindset, the simple fact is that applicable federal law vests substantial discretion

with the BIA to approve or reject gift transfers by Indians.

Applying these regulations, the BIA acknowledged the special relationship

between Smith and Miami Tribe—under § 152.25(d)—but found the partial

transfer was still not in the long-range best interests of Smith or the other Reserve

landowners—under § 152.23. In particular, the BIA found the transfer raised

concerns regarding “tract management, competing interests between the tribe and

the individual Indian landowners, and the potential for land use conflicts.” Id.

Also, the recent history and gaming-related aspects of the Reserve “continue[d] to

cause [BIA] concern over the propriety of such a transaction.” 18 Id. The BIA

acknowledged Smith’s desire to benefit the tribe, but stated “the existing business

lease with the tribe will accomplish this” because the lease “gives the Tribe the

necessary tool to undertake the development of a gaming facility and improve the

potential for significant revenue for the Indian landowners.” Id.

18
The BIA received an opinion from a Realty Officer (RO) stating it could
not recommend approval of Smith’s gift conveyance because the transfer was not
in Smith’s or other individual landowners’ long-range best interest or in
compliance with the federal government’s policy on fractionated interests. See
Aplt. App. at 143–46. The RO provided detail regarding gaming activities and
the Reserve. The RO was not convinced the transaction was one without the
expectation of compensation due to the recent history and gaming implications of
the Reserve.

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 The BIA also noted its position that Indian landowners should “receive at

least fair market value when disposing of property” and that Indian tribes should

pay fair market value for land purchases “unless special circumstances warrant

otherwise.” Aplt. App. at 133. While acknowledging the special relationship

between Smith and the tribe, the BIA found there were no “special circumstances

that would justify a gift of a portion of [Smith’s] undivided interest to the Tribe”

rather than a sale of the interest. Id.

In summary, the special relationship between Smith and the tribe did not

overcome the BIA’s finding that “the proposed gift conveyance [was] not in the

long-range best interest of either [Smith] or the other Indian owners of the

allotment.” Id.

Our review under the APA’s familiar arbitrary and capricious standard

gives the BIA wide latitude to administer its duties under the regulatory scheme

adopted by Congress. Our duty is “to ascertain whether the agency examined the

relevant data and articulated a rational connection between the facts found and the

decision made.” Citizens’ Comm. to Save Our Canyons v. Krueger, 513 F.3d

1169, 1176 (10th Cir. 2008) (quotation omitted). Therefore, “the ultimate

standard of review is a narrow one [and we are] not empowered to substitute [our]

judgment for that of the agency.” Utah Envtl. Congress v. Richmond, 483 F.3d

1127, 1134 (10th Cir. 2007) (quoting Citizens to Preserve Overton Park, Inc. v.

Volpe, 401 U.S. 402, 416 (1971)) (alteration in original). We may not second-

-37-
guess the BIA so long as it acts within the boundaries set by Congress, and it has

done so here.

Under these principles, the BIA properly interpreted and applied its own

regulations, §§ 152.23 and 152.25(d), both of which afford discretion to approve a

land transfer. The BIA recognized the special relationship between Smith and the

tribe. But a special relationship permits a gift; it does not mandate it. See 25

C.F.R. § 152.25(d) (“Indian owners may convey . . . restricted land . . . when

some other special relationship exists . . . .”) (emphasis added). A gift

conveyance also “may be approved” if after a “careful examination” of the

circumstances the BIA determines the transfer is “clearly justified” as being in the

long-range best interest of the landowners. Id. § 152.23. There are no explicit

factors the BIA must consider when making its determination. Nevertheless, the

BIA explained its rationale for denying Smith’s application in some detail. Given

those plausible grounds, we cannot substitute our judgment for the BIA’s

considered judgment.

The tribe claims the disjunctive “or” in § 152.23 requires the BIA to

approve a gift when a special relationship exists under § 152.25(d) without

performing a long-range best interests analysis. The government, in contrast,

argues the BIA must review a gift for the long-range best interests, even when the

gift falls within § 152.25(d). Section 152.25(d), itself, imposes no limits on the

BIA’s discretion to approve a gift. The BIA’s discretion is limited only by the

-38-
general restriction that its decision not be arbitrary and capricious or contrary to

law. Despite this, the BIA chooses to apply the long-range best interests analysis

as a self-imposed limit to channel its discretion under § 152.25(d). That choice is

neither plainly erroneous nor inconsistent with the regulation because it is a

reasonable framework to guide the BIA’s otherwise unfettered discretion.

Therefore, we defer to the BIA’s interpretation of its own regulation. See Plateau

Mining, 519 F.3d at 1192.

The tribe also argues the consolidation policies set out in §§ 2216(a) and

(b) of the ILCA reinforce the special relationship between Smith and the tribe is

enough to compel approval of the transfer. But, as we discussed above, § 2216(a)

does not apply because the tribe lacks jurisdiction over the Reserve. And

§ 2216(b) only provides that a gift “may be made” for less than fair market value

if certain statutory conditions are met; not that it must occur. The decision is still

within the discretion of the BIA and its consideration of the long-range best

interests under § 152.23. If Congress intended to require the BIA to approve all

transfers that qualified under §§ 2216(b) or 152.25(d) it certainly could have, but

it did not.

In addition, the BIA’s preference toward land transfers for fair market

value does not run afoul of § 2216(b). Nothing in the statute abrogates the BIA’s

discretionary review of gift transfers or mandates their approval. If anything, the

statute provides some protection to the agency by immunizing “approval of a

-39-
transaction” from allegations of “breach of trust by the Secretary.”

§ 2216(b)(1)(A)(ii).

In short, the BIA’s denial of Smith’s application was a valid exercise of its

administrative discretion. It was neither arbitrary nor capricious for the BIA to

conclude the partial transfer of Smith’s property interest to the tribe was not in

his or other Reserve landowners’ long-range best interests.

Fractionation

The BIA’s second reason for denying the gift, dovetailing with its best

interests conclusion, was that it conflicted with the federal government’s policy

opposing the creation of additional fractional interests in Indian lands.

Fractionation of Indian lands is an unintended consequence of the federal

government’s allotment policy, which allotted parcels of land to tribal members.

As those members died, the land passed to their descendants and soon multiple

owners took the place of the original allottee. See Babbitt v. Youpee, 519 U.S.

234, 237–39 (1997) (discussing the fractionation problem). Even though the

allotment policy ended in 1934, the “consequences of that policy—fractional

property interests—persists, and make a substantial amount of Indian land

uneconomic.” C ONFERENCE OF W ESTERN A TTORNEYS G ENERAL , A MERICAN

I NDIAN L AW D ESKBOOK 120 (4th ed. 2008); see generally Jessica A. Shoemaker,

Comment, Like Snow in the Spring Time: Allotment, Fractionation, and the

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Indian Land Tenure Problem, 2003 W IS . L. R EV . 729 (2003); D AVID H. G ETCHES ,

ET . AL ., F EDERAL I NDIAN L AW 174–75 (5th ed. 2005). 19

In 2000, Congress amended the ILCA “to slow future fractionation and to

consolidate existing fractional interests.” C ONFERENCE OF W ESTERN A TTORNEYS

G ENERAL , supra, at 123. The amendments reiterated its concerns regarding

fractionation and stated

It is the policy of the United States–
(1) to prevent the further fractionation of trust allotments
made to Indians;
(2) to consolidate fractional interests and ownership of those
interests into usable parcels;
(3) to consolidate fractional interests in a manner that
enhances tribal sovereignty;

19
See C ONFERENCE OF W ESTERN A TTORNEYS G ENERAL , supra, at 120–21
(4th ed. 2008) (quotation omitted):

A fractional property interest is a small, undivided interest in a
tract of land held in common with a number of other small interests.
When the original owners of allotments died, their heirs received
joint undivided interests in the original allotment. Thus 40-, 80-, and
160-acre parcels became splintered into multiple undivided interests
in land, with some parcels having hundreds, and many parcels having
dozens, of owners. Because the land was held in trust and often
could not be alienated or partitioned, the fractionation problem grew
and grew over time. . . . Fractionated land interferes with
comprehensive and constructive tribal land use plans. It presents
financing barriers, and the costs of assembling sites or pooling rights
for natural resource development and other projects may be
unsurmountable. Consequently, the land is usually leased rather than
improved and used by the owners. At times, it is impossible to
secure agreement among all owners to lease and, as a result, valuable
land is in a state of quasi-abandonment.

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 (4) to promote tribal self-sufficiency and self-determination;
and
(5) to reverse the effects of the allotment policy on Indian
tribes.
Indian Land Consolidation Act Amendments of 2000, Pub. L. No. 106-462, § 102,

114 Stat. 1991, 1992 (2000) (codified at 25 U.S.C. § 2201 note) (emphasis

added). One goal of the ILCA was “to promote consolidation of existing

fractional interests, not to create new fractional interests for tribes to purchase.”

Downs, 29 IBIA at 98. It is against this background that the BIA considered what

effect Smith’s gift would have on fractionation of the Reserve.

At the time of the BIA’s decision, it was not seriously contestable that

Smith’s gift of only 1/3 of his interest would further contribute to the

fractionation of the Reserve. 20 If approved, the gift would have divided Smith’s

interest and made the tribe an additional landowner in the Reserve. 21 The BIA

recognized that, in its experience, “highly fractionated ownership interests greatly

complicate the [BIA’s] land management efforts and the successful discharge of

the federal Government’s trust responsibility.” Aplt. App. at 133.

20
As we have noted, in 2006 the tribe acquired a 3/19 remainder interest in
the Reserve subject to Smith’s life estate. However, the tribe had not yet
obtained this interest when the BIA considered, and denied, Smith’s application in
2002.
21
The precise number of landowners is unclear. The government states
there are currently over 20 different Reserve landowners. Aplt. Br. at 3.
However, as of June 2009, the BIA listed over 65 separate fee or trust interests
held in the Reserve. See Aplt. App. at 171–78. Some interests were for as little
as .03%. Id. at 172.

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 When considering Smith’s application, the BIA relied on its analysis in

Downs v. Acting Muskogee Area Director, 29 IBIA 94 (1996), 22 where the BIA

had previously denied a request to give an interest in the Reserve to Miami Tribe.

The BIA found Smith’s gift presented the same issues as presented in Downs. 23

In Downs, the BIA denied the gift transfer because there was no special

relationship—Downs was not a member of Miami Tribe—and, like here, the

conveyance was not in Downs’s or the other landowners’ best interests from a

“practical land management standpoint, nor as a sound estate planning strategy.”

Id. at 96. The BIA determined the continued fractionation of the Reserve, and

injection of a tribal ownership interest, would “present very significant tract

management issues which would affect not only [Downs], but the other owners as

22
Earline Smith Downs held a 16.4592% interest in the Reserve and sought
to give 1% to the Miami Tribe and retain a 15.4592% interest.
23
When the IBIA affirmed the BIA’s decision, it noted Smith’s request for
a gift conveyance was similar to that made in Downs, with the one difference that
Smith is a member of the tribe, and Downs was not. Smith v. Acting E. Okla.
Reg’l Dir., 38 IBIA 182 (2002).

Smith and Miami Tribe attempted to offer new evidence to the IBIA during
their appeal that (1) a plan existed to consolidate the fractional interests of the
heirs to the allotments, and (2) heirs representing 25% of the interests had agreed
to transfer their interests to the tribe. The new evidence of a consolidation plan
was offered to distinguish Smith’s situation from Downs with respect to the ILCA
fractionation considerations. The IBIA declined to consider this information
because it was not presented to the BIA and concluded Smith and the tribe failed
to distinguish their case from Downs with respect to fractionation.

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well.” 24 Id. Despite being framed as a gift, the BIA also found Downs’s

proposed conveyance was “obviously not a conveyance without compensation,”

and expressed its “concern over the propriety of the proposed transaction.” Id.

As in Downs, here, the BIA found “[c]onveying only 1/3 of [Smith’s]

undivided interest in the allotment would add to, rather than eliminate, the further

fractionation of individually-owned Indian lands.” Aplt. App. at 133–34. The

transfer of only a portion of Smith’s interest (1) “would not serve to consolidate

fractional interests and the ownership of those interest [sic] into usable parcels,”

(2) “would not enhance tribal sovereignty or promote tribal self-sufficiency and

self-determination over what can be accomplished through the lease,” and (3)

“does not reverse the effects of the allotment policy on the Miami Tribe due to

the off-reservation, out-of-state location of the tract.” Id. at 133. For these

reasons, the BIA concluded Smith’s gift conveyance should be denied because it

would conflict with federal government policy on fractionation.

The district court concluded the BIA’s decision was “based upon the

immediate, short-term effect of the proposed transfer” and failed to consider

Smith’s proposed transfer “based upon the long-term impact on fractionation.”

24
The BIA concluded managing the Reserve was difficult because of its
distance from BIA locations and other trust or restricted lands, and further
fractionation of ownership would only make the situation more difficult. Also,
the BIA noted that, generally, tribes and individual owners often have competing
interests in the use of land when the tribes own only a small interest. Miami
Tribe had plans to establish gaming on the reserve, but this plan was speculative
and BIA determined the best use of the land was agricultural.

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Miami Tribe of Okla., 374 F. Supp. 2d 934, 941–42 (D. Kan. 2005). The tribe had

included the Reserve in its land consolidation plan approved by the BIA and was

actively involved with the Reserve. The BIA’s “exclusive focus on the short-term

impact” of Smith’s gift transfer on further fractionation of individually-owned

Indian lands—in light of Miami Tribe’s connections and ties with the

Reserve—convinced the court that the BIA “failed to consider an important aspect

of a factor upon which it relied in making its decision.” Id. at 942.

We disagree. The BIA gave proper consideration to the potential for

additional fractionation of the Reserve. Specifically, it was concerned about

“highly fractionated ownership interest greatly complicat[ing] the Bureau’s land

management efforts . . . [and] tract management, competing interests between the

Tribe and the individual Indian landowners, and the potential for land use

conflicts.” Aplt. App. at 133. And nothing suggests the BIA’s focus was solely

on any short-term effects. The agency could conclude Smith’s gift did not further

any of the goals listed in the United States’ policy on fractionation—enhancing

tribal sovereignty, or promoting tribal self-sufficiency and self-determination, see

25 U.S.C. § 2201 note—because the Reserve is outside of Miami Tribe’s territory

in Oklahoma and the tribe has no jurisdiction over the Reserve. The BIA properly

determined Smith’s gift would cause further fractionation of the Reserve by

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splitting Smith’s ownership interest and adding Miami Tribe as a partial

landowner. 25

In sum, the BIA’s conclusion that Smith’s transfer would increase

fractionation of the Reserve was not arbitrary and capricious, or contrary to law.

III. Conclusion

For the foregoing reasons, we VACATE the district court’s final judgment

and the 2005 Order reversing the BIA, and we REMAND for further consideration

of Smith’s application consistent with this opinion.

25
Subsequent to the BIA’s denial of Smith’s application and the 2005
Order, Miami Tribe acquired a 3/19 remainder interest in the Reserve subject to
Smith’s beneficial life estate. Aplt. App. at 170; see supra n.6. While we express
no opinion on the matter, the fact that the tribe now possesses an interest in the
Reserve may affect the BIA’s fractionation analysis on remand.

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