South Dakota v. United States Department of the Interior

LOKEN, Circuit Judge.

The State of South Dakota and the City of Oacoma, South Dakota, appeal the district court’s dismissal of their challenge to the Secretary of the Interior’s acquisition of commercial land in trust for the Lower Brule Tribe of Sioux Indians. Concluding that 25 U.S.C. § 465, the statute authorizing acquisition of the land, is an unconstitutional delegation of legislative power, we reverse.

I.

In March 1990, the Tribe submitted an application under 25 U.S.C. § 465, asking the Secretary to acquire ninety-one acres of land in trust for use by the Tribe. The land is located seven miles from the Tribe’s reservation and is partially within the City of Oaco-ma. The Tribe stated that the land would be used to create an industrial park adjacent to an interstate highway, explaining that “[t]his site, Trust status for the land, and tax advantages are critically necessary for the development to occur.”

The State of South Dakota and the City of Oacoma protested in writing to the Secretary’s Bureau of Indian Affairs (“BIA”). When BIA’s Area Director notified the State and the City in March 1991 that the Tribe’s application would be approved, they appealed to the Interior Board of Indian Affairs. BIA then disclosed that the Assistant Secretary for Indian Affairs had approved the application in December 1990, without notifying the protestants. The Board dismissed the appeal because it has no jurisdiction to review decisions by the Assistant Secretary. State of South Dakota & Town of Oacoma v. Aberdeen Area Director, BIA, 22 I.B.I.A. 126 (1992).

In July 1992, the State and the City filed this action against the Department of the Interior and certain of its officials seeking judicial review under the Administrative Procedure Act, 5 U.S.C. §§ 701-706. For convenience, we will refer to the defendants collectively as “the Secretary,” because he is the Executive Branch official authorized to act under § 465. We will refer to the State and the City collectively as “plaintiffs.”

Plaintiffs allege that they are aggrieved by the Secretary’s acquisition because it deprives them of tax revenues and may place the land beyond their regulatory powers. They contend that the acquisition is invalid because § 465 is an unconstitutional delegation of legislative power. Alternatively, they contend (i) that the agency violated its internal rules of procedure and the Assistant Secretary acted beyond the scope of his delegated authority; (ii) that the approval was arbitrary and capricious and not in accordance with the agency’s governing regulations, see 25 C.F.R. §§ 151.1 — .14; and (iii) that the Tribe plans to develop the land as a gaming casino and the Secretary was aware of the Tribe’s true intentions but failed to comply with the approval procedures of the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-2721.

In November 1992, the Secretary took title to the lands in trust for the Tribe. In January 1994, the Secretary moved to dismiss on the ground that a § 465 acquisition is action “committed to agency discretion by law” and therefore not subject to judicial review. See 5 U.S.C. § 701(a)(2); Heckler v. Chaney, 470 U.S. 821, 828-30, 105 S.Ct. 1649, 1654-55, 84 L.Ed.2d 714 (1985). The district court granted the motion to dismiss, concluding that § 465 is not an unconstitutional delegation of legislative power because the statute identifies the agency to which power is delegated and “clearly delineates the general policy to be applied and the bounds of that delegated authority.” Without reaching the “committed to agency discretion” issue, the court also held, sua sponte, that it had no jurisdiction to review plaintiffs’ other claims because the *881Quiet Title Act, 28 U.S.C. § 2409a, which permits the United States to be sued to resolve real property disputes, “does not apply to trust or restricted Indian lands.”1

II.

On appeal, plaintiffs argue that § 465 provides no legislative standards or boundaries governing the Secretary’s acquisitions. The Secretary responds that the statutory purpose of “providing land for Indians” sufficiently defines the general policy and boundaries of the delegated power. The Secretary notes that the Supreme Court has not invalidated a federal statute on delegation grounds since A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 542, 55 S.Ct. 837, 848, 79 L.Ed. 1570 (1935), and Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935). Interestingly, the same Congress enacted both the Indian Reorganization Act, of which § 465 was a part, and the statutes invalidated in Schechter Poultry and Panama Refining. It is appropriate to consider whether § 465 satisfies the nondelegation doctrine as it has evolved since 1935, particularly because no other appellate court has done so.2

The nondelegation doctrine is easy to state: “Congress may not constitutionally delegate its legislative power to another branch of Government.” Touby v. United States, 500 U.S. 160, 165, 111 S.Ct. 1752, 1755, 114 L.Ed.2d 219 (1991) (citation omitted). It is difficult to apply. A court must inquire whether Congress “has itself established the standards of legal obligation, thus performing its essential legislative function.” Schechter Poultry, 295 U.S. at 530, 55 S.Ct. at 843. But the court must be mindful that the doctrine does not prevent Congress from obtaining the assistance of its coordinate Branches. Therefore, so long as Congress “lay[s] down by legislative act an intelligible principle” governing the exercise of delegated power, it has not unlawfully delegated its legislative power. J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409, 48 S.Ct. 348, 352, 72 L.Ed. 624 (1928), quoted in Touby, 500 U.S. at 165, 111 S.Ct. at 1755, and Mistretta v. United States, 488 U.S. 361, 372, 109 S.Ct. 647, 655, 102 L.Ed.2d 714 (1989). A delegation is overbroad “[o]nly if we could say that there is an absence of standards for the guidance of the Administrator’s action, so that it would be impossible in a proper proceeding to ascertain whether the will of Congress has been obeyed.” Yakus v. United States, 321 U.S. 414, 426, 64 S.Ct. 660, 668, 88 L.Ed. 834 (1944).

The Supreme Court has recognized that judicial review is a relevant safeguard in considering delegation issues:

It is “constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority. Private rights are protected by access to the courts to test the application of the policy in the light of these legislative declarations.”

Skinner v. Mid-America Pipeline Co., 490 U.S. 212, 219, 109 S.Ct. 1726, 1731, 104 L.Ed.2d 250 (1989), quoting American Power & Light Co. v. SEC, 329 U.S. 90, 105, 67 S.Ct. 133, 142, 91 L.Ed. 103 (1946). Justice Marshall eloquently stated this principle in his concurring opinion in Touby: “judicial review perfects a delegated-lawmaking scheme by assuring that the exercise of such power remains within statutory bounds.” 500 U.S. at 170, 111 S.Ct. at 1758. Thus, when the Secretary argued to the district court that his actions under § 465 may not be judicially reviewed because the statute commits them *882entirely to agency discretion, he implicitly acknowledged that this delegation issue requires a particularly close look. See United States v. Garfinkel, 29 F.3d 451, 459 (8th Cir.1994) (“[JJudieial review is a factor weighing in favor of upholding a statute against a nondelegation challenge”) (citation omitted).

We begin by examining the very broad language of § 465:

The Secretary of the Interior is hereby authorized, in his discretion, to acquire ... any interest in lands ... within or without existing reservations ... for the purpose of providing land for Indians.
# * * * * *
Title to any lands or rights acquired ... shall be taken in the name of the United States in trust for the Indian tribe or individual Indian for which the land is acquired, and such lands or rights shall be exempt from State and local taxation.

By its literal terms, the statute permits the Secretary to purchase a factory, an office building, a residential subdivision, or a golf course in trust for an Indian tribe, thereby removing these properties from state and local tax rolls. Indeed, it would permit the Secretary to purchase the Empire State Building in trust for a tribal chieftain as a wedding present. There are no perceptible “boundaries,” no “intelligible principles,” within the four corners of the statutory language that constrain this delegated authority — except that the acquisition must be “for Indians.” It delegates unrestricted power to acquire land from private citizens for the private use and benefit of Indian tribes or individual Indians.

The Secretary’s power to purchase land under § 465 triggers the complementary power to acquire land by condemnation under 40 U.S.C. § 257. See United States v. 29 Acres of Land, 809 F.2d 544, 545 (8th Cir.1987). It is therefore appropriate to consider the delegation question in the context of the federal government’s extensive condemnation powers.

The power to acquire land by condemnation for a public purpose is an inherent aspect of sovereignty. See Kohl v. United States, 91 U.S. 367, 371-72, 23 L.Ed. 449 (1875). In exercising that power, Congress need not select the particular land to be taken; that function may be delegated to the Executive Branch. See Chappell v. United States, 160 U.S. 499, 510, 16 S.Ct. 397, 400, 40 L.Ed. 510 (1896). So long as the condemnation serves a public use, “the necessity or expediency of appropriating any particular property is not a subject of judicial cognizance.” Mississippi & Rum River Boom Co. v. Patterson, 98 U.S. 403, 406, 25 L.Ed. 206 (1878). However, “a claim that a taking is not ‘for public use’ is open for judicial consideration.” United States ex rel. T.V.A v. Welch, 327 U.S. 546, 557, 66 S.Ct. 715, 720, 90 L.Ed. 843 (1946) (Frankfurter, J., concurring).

It is settled that the United States may purchase land by condemnation for an Indian reservation as a public use. See United States v. McGowan, 302 U.S. 535, 58 S.Ct. 286, 82 L.Ed. 410 (1938); State of Minnesota v. United States, 125 F.2d 636, 640 (8th Cir.1942). That same power authorizes Congress to acquire non-reservation lands in trust for a public use that benefits Indians or Indian tribes. But the question under the nondelegation doctrine is, for what public use does § 465 authorize the Secretary to acquire land. By defining no boundaries to the exercise of this power, the statute leaves the Secretary free to acquire for a multitude of purposes, for example, to expand a reservation,3 to provide farm land for rural Indians, to provide a factory for unemployed urban Indians, to provide a golf course for tribal recreation, or to provide a lake home for a politically faithful tribal officer. These are very different public uses, and the last is, of course, no public use at all.

Despite the government’s broad, inherent power to acquire land for public use, the nondelegation doctrine surely requires at a *883minimum that Congress, not the Executive, articulate and configure the underlying public use that justifies an acquisition. In some cases, the public use underlying each acquisition is obvious, as when Congress authorizes an agency to acquire lands and buildings to house the agency’s operations. But when Congress authorizes the Secretary to acquire land in trust “for Indians,” it has given the agency no “intelligible principle,” no “boundaries” by which the public use underlying a particular acquisition may be defined and judicially reviewed. This legislative vacuum in turn greatly expands the extent of the standardless delegation.

III.

The legislative history of § 465 suggests that Congress did not intend to delegate unrestricted power to acquire land “for Indians.” The statute was enacted as section 5 of the Indian Reorganization Act of 1934, 48 Stat. 985. The Report of the Committee on Indian Affairs stated:

The bill now under consideration definitely puts an end to the allotment system through the operation of which the Indians have parted with 90,000,000 acres of their land in the last 50 years.... To make many of the now pauperized, landless Indians self-supporting, it authorizes a long term program of purchasing land for them.
% & ‡ Hi
Section 5 authorizes the Secretary of the Interior to purchase or otherwise acquire land for landless Indians.
The title to land thus acquired will remain in the United States. The Secretary may permit the use and occupancy of this newly acquired land by landless Indians; he may loan them money for improvements and cultivation, but the continued occupancy of this land will depend on its beneficial use by the Indian occupant and his heirs.

H.R.Rep. No. 1804, 73d Cong., 2d Sess. 6-7 (1934). In the House floor debate, Representative Howard, a chief sponsor of the bill, further explained the purpose of section 5:

Section 5 sets up a land acquisition program to provide land for Indians who have no land or insufficient land, and who can use land beneficially.... This program would permit the purchase of land for many bands and groups of landless Indians and would permit progress toward the consolidation of badly checkerboarded Indian reservations, as well as provide additional agricultural land to supplement stock grazing or forestry operations.

78 Cong.Rec. 11730 (June 15, 1934). Representative Howard characterized the acquisition of trust lands to be used for farming as “the keystone of the new Indian policy.” 78 Cong.Rec. 11729. Representative Hastings described the land to be acquired as “Indian subsistence-homesteads.” Id. at 9269.

This agrarian focus is not surprising in a Congress acting against the backdrop of an industrial sector ravaged by the Great Depression. Yet in drafting § 465, Congress failed to include standards to reflect its limited purpose. Instead, the Secretary was delegated unrestricted power to acquire land “for Indians” in a statute that contained no “boundaries” defining how that power should be exercised. The Secretary has responded by asserting all of the unlimited power conferred by the statute’s literal language. First, he promulgated regulations that place no restrictions on the purpose for which land may be placed in trust “for Indians.” See 25 C.F.R. § 151.10. Second, when his acquisition procedures and decisions were challenged in court, he asserted that his exercise of this power is not subject to judicial review under the APA because it is “committed to agency discretion.”

This case illustrates the problems created by the exercise of such unrestricted power. Intending only that the Secretary acquire rural lands suitable for farming, grazing, and logging by Indians, Congress in § 465 addressed only one intergovernmental issue — it made the lands taken in trust exempt from state and local property taxes. But when the Secretary acquires urban land for industrial or commercial uses, other important issues inevitably arise. For example, the South Dakota Attorney General asked the Secretary whether the City of Oacoma’s ordinances, including its zoning ordinances, would be enforceable against the property if *884it was taken in trust. The Secretary’s Field Solicitor responded:

If the parcel is not declared to be part of the reservation, then ordinances which are civil or regulatory in nature and which do not affect the proprietary interest of the United States, acquired by virtue of acquisition of title to the land, may apply. See State of Florida, supra; Mescalero Apache Tribe v. Jones, [411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114 (1973) ].

(Emphasis added.) This answer suggests that the BIA will force the State and the City to establish their right to regulate the trust land in court, where BIA will no doubt argue that state and local regulatory powers are preempted. The result is a legislative void. Congress, not the BIA, and indeed not the courts, should define in the first instance the extent to which lands taken in trust for industrial and commercial Indian use are thereby freed from state and local zoning ordinances, building codes, health and safety regulations, and other exercises of the police power.

Had the Secretary acted consistently with § 465’s legislative history — by limiting his acquisition authority to purposes such as forming or enlarging reservations, restoring alienated allotment lands, and providing other lands for agrarian uses — we would face the question whether the statute’s over-breadth was suitably slimmed by this legislative history and agency interpretation. Normally, delegation questions are considered in light of a statute’s legislative history and context, see Garfinkel, 29 F.3d at 458, and any narrowing agency interpretation, see International Union, UAW v. OSHA, 938 F.2d 1310 (D.C.Cir.1991); 37 F.3d 665 (D.C.Cir.1994) (decision after remand). But in this case, the agency has interpreted the statute as broadly as possible, consistent with its literal language. We have approved that interpretation in another context and as a panel may not overrule a prior panel opinion. See Chase v. McMasters, 573 F.2d 1011, 1015-16 (8th Cir.1978), cert. denied, 439 U.S. 965, 99 S.Ct. 453, 58 L.Ed.2d 423 (1978). Moreover, if we now took a more limited view of the statute, the Secretary’s regulations would be overbroad, and there would be no basis upon which to uphold this acquisition. Thus, we conclude that we must accept the agency’s interpretation and construe the statute literally for purposes of applying the nondelegation doctrine.

IV.

There are additional, procedural aspects of the Secretary’s acquisition program that further support our decision. The administrative record reveals that the Tribe purchased the land in question for $80,255.94, three months after it filed the § 465 application, and after the BIA’s Lower Brule Agency had recommended favorable action on the application. The record does not disclose (i) whether the purchase price was based upon tax free commercial use by the Tribe, and (ii) the price the United States paid when it acquired the land from the Tribe in November 1992. Plaintiffs criticize the administrative record as contrived and inadequate. The Secretary argues that procurement practices of the Tribe and BIA under § 465 are not subject to judicial review.

There are many opportunities for abuse in a program of this nature. For example, a seller who knows that land is being sold for a tax free use will charge more for that land, thereby capturing some of the economic benefit of tax free status that Congress intended for the Indians. Here, if the Tribe paid such a monopoly rent, the congressional purpose has been frustrated. But if the Secretary reimbursed the Tribe for that purchase price, the taxpayers have suffered from agency ignorance or misfeasance. Given the extensive standards that Congress has built into other procurement programs, see, e.g., 10 U.S.C. Ch. 159; 41 U.S.C. §§ 251-260, the total absence of procurement principles and safeguards in § 465 violates the nondelegation doctrine.

Y.

Those who drafted § 465 failed to incorporate the limited purpose reflected in the legislative history. Presumably, they either drafted poorly or ignored the delegation issue. The agency that received this inartful delegation then used the absence of statutory controls to claim unrestricted, unreviewable *885power. The result is an agency fiefdom whose boundaries were never established by Congress, and whose exercise of unrestrained power is free of judicial review. It is hard to imagine a program more at odds with separation of powers principles.

In his concurring opinion in Industrial Union Dept., AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 685-86, 100 S.Ct. 2844, 2886, 65 L.Ed.2d 1010 (1980), Justice (now Chief Justice) Rehnquist summarized the functions of the nondelegation doctrine as articulated in prior Supreme Court cases:

First, and most abstractly, it ensures to the extent consistent with orderly governmental administration that important choices of social policy are made by Congress, the branch of our Government most responsive to the popular will. Second, the doctrine guarantees that, to the extent Congress finds it necessary to delegate authority, it provides the recipient of that authority with an “intelligible principle” to guide the exercise of the delegated discretion. Third, and derivative of the second, the doctrine ensures that courts charged with reviewing the exercise of delegated discretion will be able to test that exercise against ascertainable standards.

(Citations omitted.) We conclude that § 465 fails all three of these nondelegation criteria and is invalid. Accordingly, the Secretary had no authority to acquire the lands in question in trust for the Tribe. The judgment of the district court is reversed and the case is remanded for further proceedings consistent with this opinion.

. The court relied on State of Florida v. United States Dep't of the Interior, 768 F.2d 1248 (11th Cir.1985), cert. denied, 475 U.S. 1011, 106 S.Ct. 1186, 89 L.Ed.2d 302 (1986). Contra, City of Sault Ste. Marie v. Andrus, 458 F.Supp. 465, 470-72 (D.D.C.1978). We doubt whether the Quiet Title Act precludes APA review of agency action by which the United States acquires title. But given our conclusion that § 465 is an unconstitutional delegation of power, we need not decide this issue. The court in Florida conceded that the Quiet Title Act does not bar claims "that the Secretary acted unconstitutionally or beyond his statutory authority when the United States acquired title to the land.” 768 F.2d at 1255 n. 9.

. To our knowledge, only one other district court has considered the nondelegation question in the sixty-year life of the statute, and its perfunctory analysis is unpersuasive. See City of Sault Ste. Marie, 458 F.Supp. at 473.

. A separate provision of the Indian Reorganization Act specifically authorized the Secretary to acquire lands to form new reservations or to enlarge existing reservations. See 25 U.S.C. § 467. In State of Minnesota, supra, we upheld a condemnation under a different, far more specific statute after careful judicial review of the Secretary's decision.