FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS June 19, 2012
FOR THE TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
CORA JEAN JECH; CHARLES
TILLMAN; DUDLEY WHITEHORN;
JOE HALL; JOANNA BARBARA;
R. E. YARBROUGH; CODY
TUCKER; JOHN JOHNSON,
No. 11-5064
Plaintiffs-Appellants, (D.C. No. 4:09-CV-00818-TLW)
(N.D. Okla.)
v.
DEPARTMENT OF INTERIOR; KEN
SALAZAR, Secretary of the Interior;
BUREAU OF INDIAN AFFAIRS;
LARRY ECHOHAWK, Assistant
Secretary, Indian Affairs; THE
UNITED STATES OF AMERICA,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before TYMKOVICH and BALDOCK, Circuit Judges, and BRORBY, Senior
Circuit Judge.
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Plaintiffs appeal the district court’s order dismissing their complaint for
failure to exhaust administrative remedies. They sued the United States of
America, the Department of the Interior (“DOI”) and its Secretary, and the Bureau
of Indian Affairs (“BIA”) and its Secretary. 1 They sought injunctive and
declaratory relief that would require the DOI to conduct the elections for
Principal Chief, Assistant Principal Chief, and Tribal Council of the Mineral
Estate (collectively, “Mineral Estate Officials”) of the Osage Tribe of Indians
(“Osage Tribe”). We affirm.
I. Background
The underlying facts are not in dispute. Plaintiffs are owners of interests in
the Osage Mineral Estate. These interests, called “headrights,” entitle the owner
to receive mineral revenue distributions from production of the Mineral Estate.
Headright owners are referred to as “shareholders.” Headrights may be owned by
non-Osage; not all Osage own headrights. Headrights pass to the heirs, devisees,
and assigns of the owners. A shareholder may own a fractionalized interest in a
headright or interests in many headrights. Income to a shareholder from the
Mineral Estate is based on his or her headright interests.
1
The BIA is an agency in the DOI. Woods Petroleum Corp. v. Dep’t of
Interior, 47 F.3d 1032, 1035 (10th Cir. 1995).
-2-
The Osage Allotment Act of 1906, as amended (“1906 Act”), created the
Mineral Estate, identified the original shareholders, and provided that headrights
would pass to their heirs, devisees, and assigns. See Act of June 28, 1906,
Pub. L. No. 59-820, 34 Stat. 539 (1906). The 1906 Act also prescribed the form
of the Osage Tribal government, including the election of Chiefs and a Tribal
Council. Under the 1906 Act, only shareholders were allowed to vote and the
tribal officials also had to be shareholders. Each voter was entitled to a weighted
ballot based on the value of his or her headright interest.
In 2004, Congress enacted the Reaffirmation of Certain Rights of the Osage
Tribe, Pub. L. No. 108-431, 118 Stat. 2609 (2004) (“Reaffirmation Act”).
Congress recognized that many people were considered Osage, but under the 1906
Act only shareholders were “members” of the Osage Tribe. The Reaffirmation
Act clarified that “legal membership” in the Osage Tribe meant headright owners,
id. § 1(a)(2) & (3), and reaffirmed “the inherent sovereign right of the Osage
Tribe to determine its own form of government,” id. § 1(b)(2). According to
plaintiffs, the Reaffirmation Act was intended “to clarify the right of all Osage
people to be considered tribal members and self-govern tribal affairs outside the
Mineral[] Estate.” Aplt. Opening Br. at 7.
Following enactment of the Reaffirmation Act, the Osage Tribe adopted a
new Constitution of the Osage Nation. The new Constitution changed the election
rules to allow all adult members of the Osage Tribe to vote in tribal elections,
-3-
even if they were not headright owners. In addition, tribe members who did not
own headrights could hold tribal office. Concerned that their headrights would be
governed by Mineral Estate Officials who were neither shareholders nor elected
solely by shareholders, various shareholders wrote to the BIA and demanded that
it conduct the 2006 election for the governing body of the Mineral Estate pursuant
to the 1906 Act, i.e., allow only shareholders to vote. See 25 C.F.R. Part 90
(governing DOI’s conduct of Osage elections). The BIA responded by issuing
several letters, all refusing the demands by plaintiff Tillman and others to conduct
the election, stating that the new Osage Constitution was consistent with the
Reaffirmation Act.
Plaintiffs did not appeal the BIA’s decision to the Interior Board of Indian
Appeals (“IBIA”), but instead filed the underlying lawsuit. They sought a
declaratory judgment and a mandatory injunction to require the DOI to conduct
tribal elections whereby Mineral Estate Officials would be elected only by
shareholders. They claimed that the DOI had the responsibility to administer the
tribal elections and to supervise the ratification of the Osage Constitution. They
asserted that their headright interests were diminished by allowing non-headright
owners to exercise primary control and authority over the Mineral Estate.
-4-
Defendants moved to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and
(b)(6). 2 A magistrate judge recommended granting defendants’ motion to dismiss
due to plaintiffs’ failure to exhaust administrative remedies. The magistrate judge
reasoned that plaintiffs were required to file an appeal with the IBIA and that
because they failed to do so, “the BIA’s decision [was] not eligible for judicial
review.” Aplt. App. at 330. The district court conducted a de novo review and
adopted the magistrate judge’s recommendation to grant defendants’ motion to
dismiss. Plaintiffs appeal, asserting that the letters from BIA officials represented
final agency action or, alternatively, that exhaustion would have been futile.
II. Analysis
This court has jurisdiction to review claims for relief other than money
damages against the United States, its agencies, and officers acting in their
official capacity under the Administrative Procedure Act (“APA”). Rural Water
Sewer & Solid Waste Mgmt. v. City of Guthrie, 654 F.3d 1058, 1070 (10th Cir.
2011) (citing 5 U.S.C. § 702); see also Bowen v. Massachusetts, 487 U.S. 879,
893, 910 (1988) (holding APA authorized review of agency action and grant of
relief that was not “money damages”). We may, however, “review only ‘final
agency actions.’” McKeen v. U.S. Forest Serv., 615 F.3d 1244, 1253 (10th Cir.
2010) (quoting 5 U.S.C. § 704). “[T]he hallmarks of APA finality” are: (1) the
2
The motion to dismiss also invoked Rule 12(b)(7) (failure to join a party),
but this rule is not pertinent to the issues presented on appeal.
-5-
agency “determined rights or obligations;” (2) “legal consequences flow” from
the agency action; and (3) the agency action “marks the consummation of the
agency’s decisionmaking process.” Sackett v. EPA, 132 S. Ct. 1367, 1371-72
(2012) (internal quotation marks omitted) (ellipsis omitted). In addition, “[t]he
APA’s judicial review provision . . . requires that the person seeking APA review
of final agency action have ‘no other adequate remedy in a court.’” Id. at 1372
(quoting 5 U.S.C. § 704). Dismissals under either Rule 12(b)(1) or 12(b)(6) “for
failure to exhaust administrative remedies under the BIA’s regulations . . . are
generally reviewed de novo.” Davis ex rel. Davis v. United States, 343 F.3d
1282, 1294 (10th Cir. 2003); see also id. at 1295 (noting that any findings of
jurisdictional facts are reviewed for clear error).
“A party must exhaust administrative remedies when a statute or agency
rule dictates that exhaustion is required.” Coosewoon v. Meridian Oil Co.,
25 F.3d 920, 924 (10th Cir. 1994). Pursuant to the DOI’s regulations, “[n]o
decision, which at the time of its rendition is subject to appeal to a superior
authority in the [DOI], shall be considered final so as to constitute Departmental
action subject to judicial review,” absent concerns not applicable here. 25 C.F.R.
§ 2.6(a). Where an official has failed to act, such as failing to conduct elections
for the Mineral Estate Officials as plaintiffs allege, the appeal process requires
the party to file a written request that “the official take the action originally asked
of him/her; (2) [d]escribe the interest adversely affected by the official’s
-6-
inaction;” and (3) state that an appeal shall be filed unless the official takes action
within ten days of his or her receipt of the written request or sets a date by which
action will be taken. 25 C.F.R. § 2.8(a). The official “must respond within ten
days of receipt of the request by either issuing a decision on the merits of the
request or establishing a later date by which a decision shall be made.”
Coosewoon, 25 F.3d at 925 (citing 25 C.F.R. §2.8(b)).
Plaintiffs acknowledge that they did not follow these appeal procedures.
They assert, however, that the letters from various BIA personnel, as well as the
DOI’s refusal to conduct the 2006 election, qualify as final agency action.
Plaintiffs also complain that the DOI did not conduct the election held in 2010,
but issues concerning that election were not raised in the district court and will
not be addressed here. See ClearOne Commc’ns, Inc. v. Biamp Sys., 653 F.3d
1163, 1182 (10th Cir. 2011) (“This court will generally not consider an argument
that was not raised in the district court.”). Plaintiffs contend that (1) the letters
announced the DOI’s settled agency position, (2) the letter from the Assistant
Secretary of Indian Affairs is final agency action, and (3) the decision set forth in
the letters “was final when rendered because it would not be made inoperative
pending appeal and it was a decision from which legal consequences flow,” Aplt.
Opening Br. at 17.
It is undisputed that the BIA personnel who wrote to the shareholders
consistently declined to step in and conduct the 2006 election. One of the letters
-7-
was issued by the Assistant Secretary of Indian Affairs. As the regulations
provide and defendants concede, a letter from the Assistant Secretary can be a
final agency action. See 25 C.F.R. § 2.6(c). Plaintiffs may not now argue,
however, that the Assistant Secretary’s letter constitutes final agency action
pursuant to § 2.6(c), because they did not present this argument to the magistrate
judge. See ClearOne Commc’ns, Inc., 653 F.3d at 1185 (holding party had
waived an issue not raised to the magistrate judge).
None of the letters explains the BIA’s reasoning for its conclusion that
“[t]he Osage Constitution, adopted by a vote of the Osage people, upholds the
intent and direction of the Congress,” Aplt. App. at 285 (Jan. 28, 2008, letter
from Assistant Secretary–Indian Affairs). Absent an appeal to the IBIA, the DOI
did not explain fully its reasoning, nor was it afforded “an opportunity to correct
[any] errors prior to judicial intervention, thus mooting many issues before they
reach the courts,” St. Regis Paper Co. v. Marshall, 591 F.2d 612, 613 (10th Cir.
1979).
Plaintiffs rely on authority from the District of Columbia for their claim
that the BIA letters were final agency action because they reflected the settled
position of the DOI and legal consequences flowed from the letters. E.g.,
Seminole Nation of Okla. v. Norton, 223 F. Supp. 2d 122, 126-29, 142
(D.D.C. 2002) (chronicling long and complex administrative history, which
included two agency appeals; concluding that one of many letters issued by the
-8-
BIA was “sufficient to constitute final agency action”). Plaintiffs therefore
contend that they were not required to file an appeal to the IBIA.
Under the circumstances of this case, we decline to depart from our circuit
authority concerning agency exhaustion. The exhaustion requirement
“‘recognizes the notion, grounded in deference to Congress’ delegation of
authority to coordinate branches of Government, that agencies, not the courts,
ought to have primary responsibility for the programs that Congress has charged
them to administer.’” United Tribe of Shawnee Indians v. United States, 253 F.3d
543, 550 (10th Cir. 2001) (quoting McCarthy v. Madigan, 503 U.S. 140, 145
(1992)). The requirement is particularly forceful “when the action under review
involves exercise of the agency’s discretionary power or when the agency
proceedings in question allow the agency to apply its special expertise.”
Id. (internal quotation marks omitted). As noted, none of the letters from the BIA
provides an analysis of the agency’s position concerning the 1906 Act, the
Reaffirmation Act, the new Constitution of the Osage Nation, or 25 C.F.R.
Part 90. Moreover, the record before us does not include all the letters written to
the BIA, so we cannot ascertain the precise issues the DOI was asked to address. 3
3
We determine that the letters from the BIA do not constitute final agency
action; therefore, we need not resolve the BIA’s argument that letters addressed to
a non-party cannot satisfy the exhaustion requirement.
-9-
Plaintiffs further argue that the DOI’s refusal to conduct the 2006 election
was subject to judicial review because the refusal was not made inoperative
pending appeal. See Darby v. Cisneros, 509 U.S. 137, 154 (1993) (“[W]here the
APA applies, an appeal to a superior agency is a prerequisite to judicial review
only when expressly required by statute or when an agency rule requires appeal
before review and the administrative action is made inoperative pending that
review.” (internal quotation marks omitted)). As the magistrate judge pointed
out, plaintiffs do not explain how the DOI’s refusal to act to conduct the 2006
election could be made inoperative. Aplt. App. at 331-32. Moreover, the
agency’s rules require appeal of the agency’s inaction. See 25 C.F.R. §§ 2.6(a),
2.8; Coosewoon, 25 F.3d at 925 (holding plaintiff was required to comply with
DOI’s administrative appeal requirement to challenge agency’s refusal to act).
Plaintiffs also contend that even if the BIA letters did not constitute final
agency action, plaintiffs were not required to exhaust administrative remedies
because exhaustion would have been futile. The futility exception may apply
where (1) the agency “lacked the authority or the ability to resolve [the dispute],”
(2) the case presents “purely a question of statutory interpretation,” or (3) “the
court would not benefit from allowing the [agency] to develop a full
administrative record on the issue.” Forest Guardians v. U.S. Forest Serv.,
641 F.3d 423, 433 (10th Cir. 2011) (per curiam).
-10-
Considering these criteria, we conclude that exhaustion would not be futile.
There is no dispute that the agency had the authority to grant the relief plaintiffs
sought. Plaintiffs focus on the second criterion, arguing that the pivotal issue
concerns the purely legal question of the Reaffirmation Act’s effect on the 1906
Act with respect to the Mineral Estate. But we determine that the third criterion
prevails. Exhaustion “serves the twin purposes of protecting administrative
agency authority and promoting judicial efficiency.” United Tribe of Shawnee
Indians, 253 F.3d at 550 (internal quotation marks omitted). “Exhaustion is
generally required as a matter of preventing premature interference with agency
processes, so that the agency may function efficiently and so that it may have an
opportunity to correct its own errors, to afford the parties and the courts the
benefit of its experience and expertise, and to compile a record which is adequate
for judicial review.” Weinberger v. Salfi, 422 U.S. 749, 765 (1975). We
conclude that requiring plaintiffs to exhaust their claims would further these
purposes and so would not be futile.
III. CONCLUSION
The judgment of the district court is AFFIRMED.
Entered for the Court
Bobby R. Baldock
Circuit Judge
-11-