HRI, Inc. v. Environmental Protection Agency

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

HRI, INC.,

Petitioner,
v.

ENVIRONMENTAL PROTECTION
AGENCY,

Respondent.
No. 97-9556

NAVAJO NATION,

Intervenor,

BEVERLY MARTIN,

Amicus Curiae.

NEW MEXICO ENVIRONMENT
DEPARTMENT,

Petitioner,
v.

UNITED STATES
ENVIRONMENTAL PROTECTION
No. 97-9557
AGENCY,

Respondent.
 NAVAJO NATION,

Intervenor,

BEVERLY MARTIN,

Amicus Curiae.

ORDER
Filed March 30, 2000

Before EBEL, BRISCOE and LUCERO, Circuit Judges.

These matters are before the court on petitioners’ petitions for rehearing

with suggestions for rehearing en banc. Upon review, the panel grants rehearing

for the limited purpose of modifying one sentence in the court’s slip opinion filed

on January 6, 2000. The sentence is found on page 55 of the slip opinion and is

the first sentence of the paragraph which begins “The parties do not dispute that

Section 17 was purchased with funds from a 1928 Act of Congress appropriating .

. . .” The sentence should be modified by adding the word “materially” before the

word “dispute.” The petitions are denied in all other respects.

The suggestions for rehearing en banc were transmitted to all of the judges

of the court who are in regular active service as required by Fed. R. App. P. 35.

As no member of the panel and no judge in regular active service on the court

requested that the court be polled, the suggestions are also denied.

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 Entered for the Court
Patrick Fisher, Clerk of Court

By: Keith Nelson
Deputy Clerk

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 F I L E D
United States Court of Appeals
Tenth Circuit

PUBLISH JAN 6 2000

UNITED STATES COURT OF APPEALS PATRICK FISHER
Clerk
TENTH CIRCUIT

HRI, INC.,

Petitioner,
v.

ENVIRONMENTAL PROTECTION
AGENCY,

Respondent.
No. 97-9556

NAVAJO NATION,

Intervenor,

BEVERLY MARTIN,

Amicus Curiae.
 NEW MEXICO ENVIRONMENT
DEPARTMENT,

Petitioner,
v.

UNITED STATES
ENVIRONMENTAL PROTECTION
AGENCY,
No. 97-9557
Respondent.

NAVAJO NATION,

Intervenor,

BEVERLY MARTIN,

Amicus Curiae.

Appeal from a Decision of the United States Environmental Protection
Agency

Paul E. Frye, Nordhaus, Haltom, Taylor, Taradash & Frye, LLP, Albuquerque,
New Mexico (Daniel I.S.J. Rey-Bear and Jill E. Grant of Nordhaus, Haltom,
Taylor, Taradash & Frye, LLP and Herb Yazzie, Attorney General, and James R.
Bellis, Assistant Attorney General, Navajo Nation Department of Justice, Window
Rock, Arizona, with him on the brief) for the Intervenor, Navajo Nation.

Jeptha P. Hill, Law Office of Jep Hill, Austin, Texas, for the Petitioner, HRI, Inc.

Susan M. McMichael, Special Assistant Attorney General (Carl John McKay,
Assistant General Counsel, with her on the brief) Santa Fe, New Mexico, for the
Petitioner, New Mexico Environment Department.

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Thomas Allen Lorenzen, Environmental Defense Section, US Department of
Justice (Lois J. Schiffer, Assistant Attorney General, Environment & Natural
Resources Division with him on the brief), Washington, D.C., for the Respondent,
Environmental Protection Agency.

Johanna Matanich and Roderick Ventura, DNA - People’s Legal Services, Inc.,
Crownpoint, New Mexico, filed an amicus curiae brief for Beverly Martin.

Before EBEL, BRISCOE and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

This case involves petitions for review of actions by the United States

Environmental Protection Agency (“EPA”) under the Safe Drinking Water Act

(“SDWA”), 42 U.S.C. §§ 300f to 300j-26. Petitioners Hydro Resources, Inc.

(“HRI”) and New Mexico Environment Department (“NMED”) challenge EPA’s

decision to implement the direct federal underground injection control (“UIC”)

program on certain New Mexico lands, the jurisdictional status of which EPA

considers disputed. Petitioner NMED challenges an additional EPA decision to

implement the direct federal UIC program on adjoining lands that EPA considers

Indian country under 40 C.F.R. § 144.3 and 18 U.S.C. § 1151. These petitions

require us to consider several important questions, including the level of

procedural formality required for EPA decisions regarding federal Indian country

jurisdiction under the SDWA; the effect of state adjudications against a tribe on

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EPA’s authority to assess whether lands are Indian country; and the Indian

country status of certain federal trust lands in the Eastern Navajo Agency. We

exercise jurisdiction under 42 U.S.C. § 300j-7(a)(2), dismissing in part and

remanding in part.

I

The historical and procedural background is complex and implicates issues

of administrative and environmental law as well as federal Indian law. To

elucidate the issues involved, we briefly relate the history of the lands in question

and the procedural history of their regulation under the SDWA.

A. Background: Sections 8 and 17 and the Eastern Navajo Agency

HRI, a non-Indian corporation, proposes to operate a uranium mine in

McKinley County, New Mexico. This mine site—the “Churchrock mine” site—is

located in an area of northwestern New Mexico often known as the

“checkerboard” because of its pattern of mixed Indian and non-Indian land title,

originally stemming from railroad land grants. The lands at issue consist of two

parcels. The first comprises approximately 160 acres located in the southeast

portion of Section 8, Township 16N, Range 16W, owned by HRI in fee simple

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and hereinafter referred to as the Section 8 property. 1 The United States owns the

remainder of Section 8 in fee simple; the status of that land is not at issue here.

The second parcel is in Section 17, Township 16N, Range 16W, south of

and contiguous to the Section 8 property. Section 17 is a split estate. The surface

is owned by the United States in trust for the Navajo Nation. HRI holds the

mineral rights, as well as certain surface use rights under a 1929 reservation and a

1959 Surface Owner’s Agreement between the Nation and Santa Fe Pacific

Railroad Company, a predecessor in interest to HRI. This agreement allows HRI

to use the surface of Section 17 for mining purposes. This petition for review

concerns approximately 200 acres in the northwest quadrant of Section

17—hereinafter referred to as the Section 17 property.

These lands are located in the “checkerboard” area of the Eastern Navajo

Agency, within the borders of the State of New Mexico, in an area often referred

to as the “EO 709/744 area” because of its establishment as an Indian reservation

under two executive orders bearing those numbers. In Pittsburg & Midway Coal

Co. v. Yazzie, 909 F.2d 1387, 1419-20 (10th Cir. 1990) (hereinafter Yazzie), a

case involving Navajo efforts to tax a coal mine in northwestern New Mexico, we

held that the reservation status of the EO 709/744 area was terminated by

1
There is apparently some dispute as to the extent of the acreage owned by HRI in
Section 8. Because we remand the question of Section 8 jurisdiction to EPA for further
proceedings, we need not resolve the discrepancies in the delineation of that property.

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executive and Congressional action. We noted that not long after Executive

Orders 709 and 744 added some 1.9 million acres of land in northwestern New

Mexico to the Navajo Reservation in 1907, Presidents Roosevelt and Taft issued

two additional executive orders, EO 1000 in 1908 and EO 1284 in 1911, which

restored unalloted lands in the EO 709/744 area to the public domain. See id. at

1391-92. 2 Concluding that the language of restoring lands to the public domain

sufficed to terminate the EO 709/744 area as a reservation, see id. at 1419, we

declined to declare the entire EO 709/744 area to be a de facto reservation in the

face of evidence of Congressional intent to disestablish that area, see id. at 1420.

We nevertheless recognized the predominantly Navajo demographic character of

the area, see id. at 1419, and the complicated jurisdictional questions created by

the “checkerboard” nature of land titles in the area, id. at 1421, and remanded the

case to the district court to determine “to what extent the surface rights of the

South McKinley Mine are held by the Navajo Tribe or by Navajo allottees.” Id. at

1422.

Some of the jurisdictional questions that Yazzie left open were revisited in

Pittsburg & Midway Coal Co. v. Watchman, 52 F.3d 1531 (10th Cir. 1995)

(hereinafter Watchman), which reversed the district court’s finding on remand

2
For a thorough history of legislative and executive action pertaining to the
establishment and disestablishment of reservation status for this area, see generally
Yazzie, 909 F.2d at 1389-92.

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that the South McKinley Mine is not Indian country under a “dependent Indian

community” analysis. See id. at 1542-45. Relying on Supreme Court and circuit

precedent recognizing dependent Indian communities both geographically very

large and very small, we held that the district court erred in restricting the

“community of reference” of its analysis to the mine site alone. See id. at 1543-

45. Watchman also stated a four-part test for determining whether a given

community of reference constitutes a dependent Indian community under 18

U.S.C. § 1151(b). See id. at 1545. 3

B. Statutory Framework under the SDWA

The SDWA is an environmental statute establishing overall minimum

drinking water protection standards for the nation, and providing, in many

instances, for delegation of specific regulation and enforcement to states and

Indian tribes. The statute directs EPA to establish minimum requirements for

3
For the reasons set forth in Section IV of this decision, we need not address the
precise impact of Alaska v. Native Village of Venetie Tribal Government, 522 U.S. 520,
118 S. Ct. 948 (1998) (hereinafter “Venetie”), on the holding of Watchman. We note,
however, that in Venetie, the Supreme Court reversed a decision of the Ninth Circuit
applying a six-factor test—similar to our Watchman test—for dependent Indian
community status to certain Alaskan Native lands. See Venetie, 118 S. Ct. at 955 n.7.
The Court concluded that three of the factors relied on by the Ninth Circuit “were
extremely far removed from the [set-aside and superintendence] requirements” of the
dependent Indian community test. Id. These three factors—nature of the area,
relationship of area inhabitants to Indian tribes and the federal government, and the
degree of cohesiveness of the area and its inhabitants—comprise parts of the second and
third prongs of the test adopted in Watchman, 52 F.3d at 1545, and presumably Venetie
reduces substantially the weight to be afforded them.

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control of underground injection processes in order to protect sources of drinking

water. See 42 U.S.C. § 300h. 42 U.S.C. § 300h-1 provides for state primary

enforcement of UIC programs (“primacy”) upon a showing by that state that its

program meets the requirements of the SDWA. For states without programs, or

whose programs have been disapproved, EPA is required to prescribe federal UIC

requirements. See 42 U.S.C. § 300h-1(c). In 1986, Congress added 42 U.S.C.

§ 300h-1(e), providing for primary UIC program enforcement responsibility by an

Indian Tribe under certain circumstances. 42 U.S.C. § 300h-1(e) additionally

provides that until a Tribe assumes primary responsibility, the “currently

applicable underground injection control program shall continue to apply,” and if

such program does not exist, EPA shall prescribe one.

1. UIC Programs: State, Federal, and Tribal

Two UIC programs are at issue in this case. One is New Mexico’s

program, the other EPA’s program for Indian lands. EPA approved New

Mexico’s program for “Class III” wells, used for in situ leach uranium mining,

effective August 10, 1983. See 40 C.F.R. § 147.1601. The approval of New

Mexico’s program specifically extended to “[certain categories of] injection wells

in the State of New Mexico, except for those on Indian lands.” Id.

Effective November 25, 1988, EPA approved an EPA-administered UIC

program for “Indian lands in New Mexico.” 40 C.F.R. § 147.1603. After

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Congress in 1986 authorized EPA to treat Indian tribes as states for SDWA

purposes, see 42 U.S.C. § 300h-1(e), the agency approved the Navajo Nation, in

1994, for Treatment as a State (“TAS”) with respect to “all lands located within

the exterior boundaries of the Navajo Reservation . . . all satellite reservations . . .

and the following lands located outside the boundaries of the formal Navajo

Reservation within the Eastern Navajo Agency: all Navajo tribal trust lands, all

Navajo allotments, and all tribal fee lands and federal lands previously

determined to be part of ‘Indian country.’” (VI R. Tab 112 at 1.) EPA did not

approve the Navajo Nation’s TAS application with respect to private fee lands

and state trust lands within the Eastern Navajo Agency, stating that the Navajo

Nation had “not demonstrated the requisite jurisdiction.” Id. The Navajo Nation

has not yet assumed primacy in SDWA enforcement for those lands for which its

TAS application was approved.

In the preamble to its final rule promulgating federally administered UIC

programs for, inter alia, Navajo Indian lands, EPA addressed comments regarding

the agency’s treatment of the jurisdictional boundaries of Indian lands. See 53

Fed. Reg. 43096, 43097 (Oct. 25, 1988). The preamble states in relevant part:

[T]he definition of Indian lands adopted for the UIC program is set
forth in 40 CFR 144.3. Whatever definition is chosen, there will be
disagreements about whether particular lands fall within the
definition. An Indian tribe would probably object to a State
exercising jurisdiction over lands it perceives as Indian lands, and a
State would object to an Indian tribe exercising authority over lands

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 which it believes to be non-Indian lands. Thus, disputes could
prevent both the State and the Indian tribe from exercising primary
enforcement responsibility for a UIC program. In order to ensure
regulation of injection wells and minimize any disruption, pending
the resolution of jurisdictional disputes, EPA will implement the
Federal UIC program for disputed lands.

Id. To avoid undue delay in implementation of the UIC program, EPA set forth

the following strategy for implementing the UIC program on disputed lands:

As described above, EPA will assume that lands described by the
definition in 40 CFR 144.3 are Indian lands and will begin
implementation of the UIC program on them. If disputed territory is
later adjudged to be non-Indian lands, it will be deleted from the
EPA Direct Implementation Indian land program and added either to
the EPA (non-Indian land) DI program for that state or to the State
program, as appropriate.

Id.

2. Aquifer Exemptions

As a general rule, the SDWA prohibits contamination of an underground

source of drinking water, defined broadly at 40 C.F.R. § 144.3. Because certain

aquifers within that definition will never be used as sources of drinking water,

however, EPA adopted criteria for exempting certain aquifers from SDWA

requirements. See 40 C.F.R. § 146.4; see generally Western Nebraska Resources

Council v. EPA, 793 F.2d 194, 196 (8th Cir. 1986) (hereinafter WNRC)

(describing aquifer exemption process). 40 C.F.R. § 144.7(b)(3) provides that

“[s]ubsequent to program approval or promulgation, the Director may, after notice

and opportunity for a public hearing, identify additional exempted aquifers. . . .

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Any disapproval by the Administrator shall state the reasons and shall constitute

final Agency action for purposes of judicial review.” EPA regulations specify

that the identification of an aquifer as exempt, subsequent to a grant of primacy to

a state or tribe, is a revision to that state or tribe’s UIC program under 40 C.F.R.

§ 154.32. See 40 C.F.R. § 144.7(b)(4). Program revisions that EPA deems

substantial must be carried out in accordance with the rulemaking process set

forth in 40 C.F.R. § 145.32(b). See WNRC, 793 F.2d at 199 (concluding that

approval of 6.7 acre aquifer exemption is “nonsubstantial program revision” that

need not be accomplished through formal rulemaking).

The SDWA itself provides for a public hearing regarding promulgation of

any rule approving, disapproving, or approving in part a state’s UIC program

under 42 U.S.C. § 300h-1(b)(2) or (3). See 42 U.S.C. § 300h-1(b)(4). Agency

regulations also provide procedures for revision of state programs, see 40 C.F.R.

§ 145.32, and withdrawal of state programs, see 40 C.F.R. § 145.44.

C. Procedural History

In 1989, NMED approved a “discharge plan” (DP-558) for underground

injection by HRI on property located within Section 8, and applied for an aquifer

exemption for the underlying aquifer. On June 21, 1989, EPA approved New

Mexico’s request for an aquifer exemption for HRI’s Section 8 mine site.

In April 1992, HRI requested extension of its permit to Section 17, and

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NMED applied for an additional aquifer exemption for the Section 17 property.

Following a hearing and comment period, EPA issued a letter from the Director of

the Water Management Division of EPA Region 6 to the Secretary of NMED,

declining to approve the Section 17 aquifer exemption on the ground that Section

17 is Indian land under 40 C.F.R. § 144.3. 4

New Mexico, however, continued to process HRI’s DP-558 permit. The

Navajo Nation moved to dismiss the state permit proceeding for lack of

jurisdiction on the ground that Section 17 is Indian country. In mid-1994, a

NMED hearing officer denied the Navajo Nation’s motions and issued a proposed

order, subsequently adopted by the Secretary of NMED, ruling that New Mexico

had authority to regulate the Section 17 property and that Section 17 was not

Indian country. The Navajo Nation appealed NMED’s decision to the New

Mexico Water Quality Control Commission (“WQCC”). The WQCC hearing

officer dismissed the appeal as untimely.

Another state proceeding also involved the lands in question here. This

proceeding is referred to as the “G-190 application,” a water rights proceeding

before the New Mexico State Engineer. In the G-190 application proceeding,

HRI’s predecessor-in-interest, the United Nuclear Corporation (“UNC”), sought a

4
Although EPA Region 6 is generally responsible for supervising New Mexico’s
UIC program, under an internal EPA three-region agreement, EPA Region 9 is
responsible for the federal UIC program for the Navajo Nation.

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transfer of water rights pertaining to the Churchrock mine site. The Navajo

Nation opposed the water rights application on its merits, and also objected on the

ground that the State Engineer lacked jurisdiction over Sections 8 and 17 as

Indian country. The State Engineer adopted a hearing officer’s report finding

New Mexico had jurisdiction, but denying UNC’s transfer application on its

merits. UNC sought review in state court, and the Navajo Nation moved to

dismiss for lack of jurisdiction, based again on the Indian country issue. The

state district court affirmed the State Engineer’s judgment, finding insufficient

water rights on the merits. Its opinion also stated, without analysis, that “[t]he

mining areas in Section[s] 8 and 17 are not within the boundaries of the Navajo

Nation nor are they Indian country; therefore, the water rights within them are

subject to state law.” (III R. Tab 67 at 1.) The Navajo Nation appealed the

jurisdictional issue; UNC initially cross-appealed the ruling on the merits, then

moved to dismiss its cross-appeal. The New Mexico Court of Appeals dismissed

UNC’s cross-appeal, and in February 1996, dismissed the Navajo Nation’s appeal

as moot.

In August 1995, subsequent to the 1994 NMED decision on the Section 17

amendment to DP-558, NMED again requested from EPA an extension of the

Section 8 aquifer exemption to Section 17. EPA again, in a letter from Region 6

dated August 24, 1995, rejected the state aquifer exemption and stated that HRI

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must obtain a federal UIC permit prior to obtaining an aquifer exemption. This

letter instructed HRI and NMED that HRI should submit applications to EPA

region 9 for an aquifer exemption under the federal UIC program.

Following Region 6’s August 24, 1995, TAD disapproval, NMED engaged

in a lengthy process with EPA Region 9 and the Navajo Nation to resolve the

jurisdictional dispute through “joint permitting” of Section 17. During 1995 and

1996, representatives from EPA, NMED, and the Navajo Nation met and

exchanged correspondence regarding a hybrid joint permitting scheme. These

communications culminated in the EPA letter giving rise to the current dispute.

This July 14, 1997, letter, sent to NMED Secretary Mark E. Widler and copied to

HRI, stated EPA’s position requiring federal permitting for both Section 17 and

Section 8. Specifically, it notes: “EPA believes that Section 17 clearly is Indian

country,” but also “treat[s] the status of Section 17 as in dispute”—requiring

federal permitting but not requiring NMED to concede jurisdiction. (I R. Tab 48

at 2.) Further, based on EPA’s determination that “the Navajo Nation has

presented substantial arguments to support its claim that Section 8 is within

Indian country,” the letter indicates that EPA would treat Section 8 as in dispute

under the dispute rule of the Indian lands UIC rule preamble. Id. With respect to

Section 8, the letter provides that “EPA has not taken a final position on the

Indian country status of Section 8, only that the status is in dispute.” Id. The

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letter and a legal analysis contained in an accompanying memorandum rejected

the argument that the state proceedings foreclosed EPA from acknowledging a

jurisdictional dispute over the lands in question.

II

As an initial matter, we must ascertain whether we have jurisdiction to

review these EPA actions. 42 U.S.C. § 300j-7(a)(2) provides for review of any

action by the Administrator of EPA under the SDWA (other than actions

pertaining to the establishment of national primary drinking water standards) “in

the circuit in which petitioner resides or transacts business which is directly

affected by the action.” Section 300j-7(a) further provides that

[a]ny such petition shall be filed within the 45-day period beginning
on the date of the promulgation of the regulation or any other final
Agency action with respect to which review is sought . . . and may be
filed after the expiration of such 45-day period if the petition is
based solely on grounds arising after the expiration of such period.

42 U.S.C. § 300j-7(a). This 45-day period is jurisdictional, reflecting “a

deliberate congressional choice to impose statutory finality on agency [action], a

choice we may not second-guess.” WNRC, 793 F.2d at 198 (quoting Eagle-Picher

Indus., Inc. v. EPA, 759 F.2d 905, 911 (D.C. Cir. 1985)); see also Mesa Airlines

v. United States, 951 F.2d 1186, 1187 (10th Cir. 1991) (stating that statutory time

limit for review of administrative agency action is “jurisdictional and not

discretionary”).

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 A. Section 8

With respect to Section 8, the petition for review is timely. EPA

announced its decision to treat the Section 8 lands as disputed Indian country and

implement the direct federal UIC program in a letter dated July 14, 1997, and the

petitions for review were filed August 27, 1997. 5

We must additionally determine, however, whether petitioners’ challenge

with respect to EPA’s actions regarding Section 8 is ripe for purposes of judicial

review. See Mobil Exploration & Producing U.S., Inc. v. Department of Interior,

180 F.3d 1192, 1197-99 (10th Cir. 1999). Before we can review an agency

decision, we must assess “the fitness of the issues for judicial decision and the

hardship to the parties of withholding court consideration.” Ash Creek Mining

Co. v. Lujan, 934 F.2d 240, 243 (10th Cir. 1991) (quoting Abbott Labs. v.

Gardner, 387 U.S. 136, 149 (1967)). In making this determination, we look to

four factors:

(1) whether the issues in the case are purely legal; (2) whether the
agency action involved is ‘final agency action’ within the meaning of
the Administrative Procedure Act, 5 U.S.C. § 704; (3) whether the
action has or will have a direct and immediate impact upon the
plaintiff and (4) whether the resolution of the issues will promote
effective enforcement and administration by the agency.

5
The Navajo Nation argues, in response to what it contends is an implied facial
challenge to EPA’s 1988 dispute rule by NMED, that such a challenge is untimely by
almost a decade. Because we do not think NMED’s brief can fairly be read to raise such
a facial challenge, we do not reach this claim of untimeliness.

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Ash Creek Mining Co., 934 F.2d at 243 (citations omitted).

As for the first factor, the questions of agency compliance with the relevant

statutes and regulations and of jurisdiction under federal Indian law present

purely legal issues.

The second question is whether agency action is final within the meaning of

the APA. The SDWA specifically provides for review of “any other final action

of the Administrator,” 42 U.S.C. § 300j-7(a)(2); the pertinent question is whether

EPA’s July 1997 letter represents such a final action. The Supreme Court has

stated that:

As a general matter, two conditions must be satisfied for agency
action to be “final”: First, the action must mark the “consummation”
of the agency’s decisionmaking process, Chicago & Southern Air
Lines, Inc. v. Waterman SS Corp., 333 U.S. 103, 113 (1948)—it must
not be of a merely tentative or interlocutory nature. And second, the
action must be one by which “rights or obligations have been
determined,” or from which “legal consequences will flow,” Port of
Boston Marine Terminal Assn. v. Rederiaktiebolaget Transatlantic,
400 U.S. 62, 71 (1970).

Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (parallel citations omitted). The

second Bennett condition is met here: Definite legal consequences flow from

EPA’s designation of Section 8 as disputed Indian lands for SDWA

purposes, namely the requirement that HRI apply for a permit under the federal

UIC program to proceed with underground injection. What the Navajo Nation

contests is whether the action marks the consummation of the decision-making

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process. 6 See Mobil Exploration, 180 F.3d at 1197-99 (holding that “tentative or

interlocutory action” does not represent “the consummation of the agency’s

decisionmaking process” and thus is not final agency action for APA purposes).

In the July 14, 1997 letter, EPA Regional Administrator Felicia Marcus states “I

want to emphasize, though, that EPA has not taken a final position on the Indian

country status of Section 8, only that the status is in dispute.” (I R. Tab 48 at 2.)

It is our view that EPA’s designation of Section 8 as disputed Indian country is a

final action—so far as it goes. The determination that a dispute exists represents

the consummation of one decision-making process, and necessarily alters legal

relationships. See Ash Creek Mining Co., 934 F.2d at 243. Judicial evaluation of

whether that determination was proper under the relevant laws and regulations

will undoubtedly be of benefit to all the parties, allowing them to proceed on the

proper course within the framework of the SDWA regulatory relationship.

The question of the propriety of EPA’s invocation of its dispute rule,

however, is a distinct one from the underlying legal matter of the Indian country

status of Section 8. EPA’s July 14, 1997, letter, as well as government counsel’s

6
EPA itself does not specifically argue that the Section 8 decision is unripe for
review, although it does refrain from taking a final position on the Indian country status
of Section 8, arguing instead that it “has not had an opportunity to consider whether
Section 8 is part of a ‘dependent Indian community’ after Venetie, and it did not develop
a record below with the Venetie standard in mind,” (EPA Br. at 47), and therefore should
be entitled to remand to reconsider its ruling in light of Venetie, 522 U.S. 520.
Nevertheless, the threshold issue of ripeness is necessarily before us.

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assertions at oral argument, indicates that the agency has not taken a final

position on the underlying jurisdictional question; the agency requests instead the

opportunity to develop a further administrative record in light of Venetie, 522

U.S. 520. Thus, although we will address the question of whether the agency

properly designated Section 8 as “in dispute” for purposes of SDWA regulation,

we conclude that if such a dispute does exist, its merits are not ripe for further

judicial review at this juncture. See Mobil Exploration, 180 F.3d at 1197-99.

As for the additional Abbott Laboratories ripeness requirements, the action

in this case does have a direct and immediate impact on petitioner HRI—HRI

must now obtain a permit from EPA prior to commencing underground injection

on Section 8. It is less apparent whether the Section 8 action has an immediate

impact on petitioner NMED. EPA’s July 14, 1997, letter refraining from taking a

final position on the Section 8 jurisdictional issue does not appear to foreclose

entirely some sort of joint or dual permitting scheme. Because HRI has not

sought the federal permit, we are not faced with a situation in which HRI would

proceed with underground injection under a federal permit that does not satisfy

the requirements of New Mexico’s UIC program. However, given that at least

HRI is impacted by the decision, we need not delve further into the degree to

which it impacts NMED. Resolution of these issues would certainly promote

effective enforcement and administration by the agency, and resolution of the

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jurisdictional status of these lands will facilitate regulation by the appropriate

authorities of underground injection activity. See Ash Creek Mining Co., 934

F.2d at 243.

Therefore, we conclude that under the APA, EPA’s decision to treat Section

8 as disputed Indian country and impose federal UIC requirements is final and

ripe for judicial review. The underlying question of the final Indian country

status of Section 8, however, is not yet ripe for review because EPA has not

completed its decision-making process with respect to that issue. See Bennett,

520 U.S. at 177-78.

B. Section 17

As for Section 17, respondents EPA and Navajo Nation argue that NMED’s

petition for review is untimely under 42 U.S.C. § 300j-7(a). We disagree. EPA’s

decision, contained in its letter of July 14, 1997, to treat the jurisdictional status

of Section 17 as “in dispute,” constitutes a revisitation of EPA’s prior decision,

thereby reopening the decision for review.

EPA’s initial determination that Section 17 is Indian country was made in

EPA Region 6’s denial of NMED’s request for a Section 17 aquifer exemption on

November 23, 1993. According to the explicit terms of 40 C.F.R. § 144.7(b)(3),

this disapproval was a reviewable final agency action for purposes of 42 U.S.C.

§ 300j-7(a)(2). No petition for review was filed within 45 days of that aquifer

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exemption disapproval. Therefore, the instant petition for review can be timely

only if it is either “based solely on grounds arising after the expiration of such

period,” 42 U.S.C. § 300j-7(a), or else within the 45-day period of a later and

distinct final agency action, including, under certain circumstances, one

reconsidering and reaffirming the initial decision. See, e.g., ICC v. Brotherhood

of Locomotive Eng’rs , 482 U.S. 270, 278 (1987).

Petitioners cite to EPA Region 9’s July 1997 letter as a separate and

reviewable final action, citing its assertion of the dispute rule:

Although EPA believes that Section 17 clearly is Indian country, we
have also cited a second basis for EPA permitting HRI’s proposed
project on Section 17 under the federal SDWA—EPA’s retained
authority to issue permits on disputed lands. Our decision to treat the
status of Section 17 as in dispute does not require NMED to concede
jurisdiction, nor does it grant the Navajo Nation jurisdiction. Rather,
EPA has determined only that there is a dispute such that EPA will
issue the permit until the status of Section 17 is resolved.

(I R. Tab 48 at 2.) This language certainly suggests that EPA Region 9, in its July

1997 letter, reconsidered or revisited the earlier Region 6 decision to treat Section

17 as Indian country, and issued a new decision to treat it as “in dispute.” 7 Yet

7
Although the July 1997 letter asserts two alternative positions—that the Section
17 land is Indian country, and that it is disputed Indian country—before us EPA defends
its determination that Section 17 definitively is Indian country. (EPA Br. at 41-43.)
Despite the two alternative positions, and EPA’s July 1997 retreat to the dispute rule from
its earlier definitive assertion of jurisdiction, we conclude the July 1997 letter represents a
sufficiently final agency decision to be ripe for review on its merits, see Ash Creek
Mining Co., 934 F.2d at 243, particularly considering the strong effect of resolution on
promoting effective enforcement and administration of the SDWA.

- 21 -
absent clear exercise of reconsideration authority, we look as well to the events

and correspondence in the several years preceding the July 1997 letter to

determine whether it represents a distinct and reviewable final agency action.

While NMED argues that the relevant final action of which it seeks review, with

respect to both properties at issue, is EPA’s action of stating in its July 14, 1997,

letter that HRI must apply for a federal UIC permit for both sections 8 and 17,

this does not entirely resolve the issue. The July 1997 letter may constitute the

relevant determination for purposes of timeliness, but only if we can conclude it

represents new and separate decision, or a modification EPA’s prior decision, and

not a mere reassertion of, or refusal to reconsider, a prior decision. For the

reasons set forth below, we conclude that it does constitute a new and separate

decision triggering a new limitations period for petitioners to seek judicial

review.

In ICC, 482 U.S. at 278, the Supreme Court, considering the reviewability

of a decision by the ICC not to reopen a proceeding under its reconsideration

authority pursuant to 49 U.S.C. § 10327(g), held that “[w]hen the Commission

reopens a proceeding for any reason and, after reconsideration, issues a new and

final order setting forth the rights and obligations of the parties, that order—even

if it merely reaffirms the rights and obligations set forth in the original order—is

reviewable on its merits.” The Court directed that when an ICC decision is

- 22 -
formally characterized as one denying reconsideration, reviewing courts should

not look beyond that formal characterization to determine whether reconsideration

in fact occurred. See id. at 280. The situation here, however, does not involve

EPA’s decision to exercise or refuse to exercise an explicit statutory authority to

reconsider a decision as was the case in ICC . Therefore, lacking such a formal

designation—reconsideration or denial of reconsideration—we must look to the

substance of EPA’s action to determine whether it represents a new decision or

merely a reaffirmance of previous action. Doing so, we conclude that EPA

Region 9’s July 14, 1997, letter examining the merits of the jurisdictional dispute

over Section 17 (and Section 8) and asserting application of the dispute rule,

represents a new and separate final decision on the jurisdictional status of Section

17. If EPA had simply reasserted its original position, as it did at various points

in three years of correspondence with NMED, it would not have reopened its

decision. EPA’s detailed examination of the issue in its July 1997 letter and its

affirmative assertion of the application of the dispute rule reflect a sufficient

degree of separateness, novelty, and finality, to trigger the limitations period for

judicial review. 8
Cf. ICC, 482 U.S. at 278; Sendra Corp. v. Magaw , 111 F.3d

8
The parties raise the issue of the “reopener doctrine,” which renews the statutory
time limit for judicial review in cases “where an agency has—either explicitly or
implicitly—undertaken to ‘reexamine its former choice.’” National Mining Ass’n v.
United States Department of Interior, 70 F.3d 1345, 1351 (D.C. Cir. 1990) (quoting
Public Citizen v. Nuclear Regulatory Comm’n, 901 F.2d 147, 151 (D.C. Cir. 1990)). We
(continued...)

- 23 -
162, 167 (D.C. Cir. 1997) (“If for any reason the agency reopens a matter and,

after reconsideration, issues a new and final order, that order is reviewable on its

merits, even though the agency merely reaffirms its original decision. . . . The

new order is, in other words, final agency action and as such, a new right of

action accrues and starts the running of a new limitations period for judicial

review.” ) (citations omitted). 9

(...continued)
8

decline to address its application here. Although the reopener doctrine is “well
established” in the District of Columbia Circuit, National Ass’n of Reversionary Property
Owners v. Surface Transportation Bd., 158 F.3d 135, 141 (D.C. Cir. 1998), we are not
aware of its prior invocation in this Circuit. Nor are we aware of its application outside
the context of formal agency rulemaking. See id. Because we conclude that EPA’s
informal reconsideration of its decision regarding Section 17 in the July 14, 1997, letter
represents an explicit change of position, and therefore a distinct final decision
reviewable on its merits, see ICC, 482 U.S. at 278, we decline to decide whether or not to
adopt the “reopener doctrine” in this Circuit or determine whether it could apply in a
context other than that of formal agency rulemaking.
9
We reject petitioners’ alternative argument that the state court and administrative
adjudications constitute grounds arising after the expiration of the 45-day period, so as to
permit an untimely petition for review. Even under the broadest possible construction of
“grounds arising,” the latest ruling in those cases—the New Mexico Court of Appeals’
summary dismissal of the appeals of the state district court’s review of the “G-190
application” proceeding—occurred on January 10, 1996, more than 45 days prior to the
filing of this challenge. It is an unreasonable construction of 42 U.S.C. § 300j-7(a) to
suggest that grounds arising subsequent to a final decision furnish aggrieved parties with
an indefinite period of time to initiate a petition for review. Rather, grounds arising
subsequent to the expiration of the initial 45-day period for review, see 42 U.S.C. § 300j-
7(a), initiate an additional 45-day period. Even under the petitioners’ theory that the state
court adjudications required EPA, under the preamble to its rule, to reverse its
determination with respect to the Section 17 land, EPA’s March 4, 1996, refusal to
reconsider its initial determination would necessarily serve as relevant final agency
action. That decision issued more than 45 days prior to the filing of the instant petitions
(continued...)

- 24 -
 EPA’s reconsideration of its position on Section 17 and its articulation of

alternative grounds for federal UIC implementation—namely, application of its

dispute rule—are more than merely a reassertion of an earlier position. Rather,

the reconsideration and articulation of alternative grounds constitute a new and

distinct decision on the Section 17 issue and present sufficiently final agency

action to permit judicial review pursuant to 42 U.S.C. § 300j-7(a). An assertion

that the agency simply “believes” Section 17 is Indian country would appear to

represent a retreat from an actual determination of its status. This conclusion is

bolstered by the agency’s specific statement of what it is determining: “only that

there is a dispute such that EPA will issue the permit until the status of Section 17

is resolved.” (I R. Tab 48 at 2.)

The conclusion that EPA’s July 14, 1997, letter is a distinct final action for

purposes of triggering the limitations period for judicial review is bolstered by

examination of the correspondence between the parties following EPA Region 6’s

August 24, 1995, denial of temporary aquifer designation status for Section 17.

As previously noted, that letter instructed HRI to apply to EPA Region 9, with

responsibility for the Navajo Nation federal UIC program, for an aquifer

exemption and discharge permit. Instead of HRI applying for a federal permit,

NMED engaged in a lengthy exchange with EPA Region 9 and the Navajo Nation

9
(...continued)
for review.

- 25 -
regarding a potential “joint permitting” arrangement. Throughout that process,

NMED continued to assert Section 17 was not Indian country. Yet it is unclear to

what extent Region 9 and NMED considered there to be an ongoing dispute

regarding Section 17’s Indian country status that was awaiting determination or

redetermination. In correspondence from Region 9 to NMED dated March 20,

1996, Region 9 appears to assume it was proceeding under Region 6’s earlier

determinations that Section 17 was Indian country. By contrast, a joint letter to

HRI, sent by EPA Region 9 to NMED on June 21, 1996, but apparently never

approved by NMED, proposed to admit that the parties had been “unable to

resolve [their] dispute over whether EPA or NMED has permitting authority over

Section 17 under the [SDWA],” to acknowledge “the potential for litigation at the

end of the permitting process,” and to express “confiden[ce]” that “[r]egardless of

the ongoing legal dispute,” a resolution could be reached. (I R. Tab 37 at 3.)

The likelihood of inter-agency cooperation decreased in late 1996 and early

1997. On February 11, 1997, Region 9 Administrator Felicia Marcus noted in a

letter to NMED:

In the last three years both EPA and NMED have held firm to our
positions that each of us has exclusive authority under the [SDWA]
to permit HRI’s activities on Section 17. Unfortunately, we have
made no real progress towards any cooperative permitting process
that would enable us to overcome the jurisdictional dispute, and I am
pessimistic about any future success along those lines, given the
Navajo Nation’s firm opposition to joint permitting and other
problems . . . . Our inability to resolve the jurisdictional issue

- 26 -
 appears to be impacting HRI.

(I R. Tab 44 at 1-2). Marcus then went on to propose EPA take jurisdiction over

Section 17 based on the dispute rule. This resolution would “enable HRI to

submit a permit application to EPA without having to wait for a legal resolution

of the jurisdictional dispute.” ( Id. at 2.) After NMED responded by setting forth

specific statutes, regulations, and case law that it maintained supported its

position, Region 9 issued its July 14, 1997, letter and an accompanying

“Analysis” rejecting NMED’s positions and stating unambiguously that EPA was

assuming jurisdiction over both Sections 8 and 17 under the dispute rule.

When considered collectively, this correspondence indicates that Region 9

reconsidered or reexamined Region 6’s Indian country determination as to

Section 17. The correspondence reflects Region 9 considered there to be an

ongoing dispute that could be resolved notwithstanding Region 6’s prior

determinations. Significantly, both NMED and HRI expressly considered that

litigation of Region 9’s decision was possible, perhaps even likely.

EPA reasons that, because it never wavered from Region 6’s initial

determination that Section 17 was Indian country, the July 1997 letter and

analysis cannot give rise to an independently reviewable determination. In its

July 1997 letter and accompanying analysis, however, Region 9 did not merely

reiterate what Region 6 had previously stated; nor did it issue a cursory

- 27 -
reaffirmance or summary of Region 6’s prior position; it examined for the first

time the legal precedent offered by NMED and HRI, analyzed that precedent in

light of the particular factual scenario at hand, and reasoned from its

understanding of the facts and law that Section 17 was Indian country. A large

portion of Region 9’s July 1997 Analysis was devoted to discussing and

distinguishing Yazzie , 909 F.2d 1387, and Watchman , 52 F.3d 1531, neither of

which EPA had addressed before, and the latter of which arose after Region 6’s

initial 1993 TAD decision. In short, Region 9’s July 14, 1997, determination

marked the only time EPA forthrightly examined all interested parties’ competing

positions and issued an opinion analyzing the issue in significant depth. It was

the culmination of what can be characterized either as Region 9’s independent

determination regarding the Indian country status of Section 17, or as Region 9’s

reexamination of Section 17’s status (as determined by Region 6) at NMED’s

request. Because NMED petitioned for judicial review within 45 days of Region

9’s July 14, 1997, letter and Analysis, this court has jurisdiction to review EPA’s

determination that Section 17 is Indian country.

III

Now that we have established our jurisdiction to review these agency

determinations, we ask did EPA’s actions violate the SDWA or EPA regulations.

We conclude they did not.

- 28 -
 Under the APA, a court can set aside informal agency decisions, such as

those before us, if the decisions were “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with the law.” 5 U.S.C. § 706(2)(a).

We owe some degree of deference, under certain circumstances, to an agency’s

interpretation of its governing statutes and regulations. See Chevron, U.S.A., Inc.

v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984). While

petitioners argue that EPA’s determinations with respect to issues of Indian

jurisdiction are entitled to no deference because they are matters outside the

agency’s expertise, such an argument cannot successfully extend to the agency’s

interpretation of its own procedural requirements. 10 Interpretation of the

procedural regulations pertaining to the grant, modification, and withdrawal of

primacy and to the grant, denial, or revocation of aquifer exemptions are matters

within the agency’s expertise, and entitled to deference under Chevron, 467 U.S.

at 842-43. Chevron requires that we ask “whether the agency’s answer is based

on a permissible construction of the statute” when Congress has not “directly

spoken to the precise question at issue.” Id. Because Congress has delegated

authority to EPA to implement the SDWA, see 42 U.S.C. §§ 300f, 300g-1, we

10
While petitioners suggest that EPA’s interpretation of 18 U.S.C. § 1151 is not
entitled to any deference because Congress has not delegated interpretive power to EPA
with respect to that statute, see Chevron, 467 U.S. at 844, we need not resolve that issue,
because of our conclusion, see infra Section IV.A, that EPA’s decision regarding the
Indian country status of Section 17 is correct even absent any deference.

- 29 -
apply Chevron deference to the agency’s construction of those procedural

requirements of its implementation left unspecified by Congress.

In addition to this deference to an agency’s construction of statutes, we also

owe deference to its construction of its own regulations. “[P]rovided an agency’s

interpretation of its own regulations does not violate the Constitution or a federal

statute, it must be given ‘controlling weight unless it is plainly erroneous or

inconsistent with the regulation.’” Stinson v. United States, 508 U.S. 36, 45

(1993) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414

(1945)). If EPA’s action represents a direct violation of statutory terms that are

not ambiguous, the action is of course “not in accordance with the law” and

entitled to no deference. See Chevron, 406 U.S. at 842-43; Mission Group

Kansas v. Riley, 146 F.3d 775, 780 (10th Cir. 1997).

A. Section 8

HRI argues that EPA’s assertion of federal UIC jurisdiction over Section 8

directly violates the SDWA’s provision: “[U]ntil an Indian Tribe assumes

primary enforcement responsibility, the currently applicable underground

injection control program shall continue to apply.” 42 U.S.C. § 300h-1(e).

Because EPA recognized New Mexico’s jurisdiction over Section 8 by granting

the 1989 aquifer exemption, petitioners argue, New Mexico’s is the “currently

- 30 -
applicable” UIC program, and thus should continue to apply until a tribe assumes

primary responsibility.

Such an analysis mischaracterizes the scope of EPA’s authority under the

SDWA. EPA does not have the power to change the Indian country status of

land—that is a status conferred by Congress. If Section 8 is indeed Indian

country, then New Mexico’s program could not extend to it in the first instance

and cannot be “currently applicable” within the meaning of the statute. An

aquifer exemption by EPA cannot change the congressionally-defined

jurisdictional status of the land. If the land in question is Indian country, the

“currently applicable” program must necessarily be governed by the federal Indian

lands UIC regulations, 40 C.F.R. Pt. 147, subpart HHH. See 40 C.F.R.

§ 147.3000(a) (“The UIC program for the Indian lands of the Navajo . . . in New

Mexico is administered by EPA”). Accordingly, we reject this argument as a

basis for reversal of EPA’s decision requiring HRI to seek a federal SDWA

permit for Section 8.

42 U.S.C. § 300h-1(b)(3) provides that after approval of a state UIC

program, “the State shall have primary enforcement responsibility for

underground water sources until such time as the Administrator determines, by

rule, that such State no longer meets the requirements of clause (i) or (ii) of

paragraph (1)(A) of this subsection.” HRI contends that the 1989 approval of a

- 31 -
program amendment to include the Section 8 aquifer exemption determined

conclusively that Section 8 is under New Mexico primacy, and therefore EPA

cannot unilaterally amend or withdraw that primacy determination without making

a determination of noncompliance pursuant to 42 U.S.C. § 300h-1(b)(3). We

disagree that 42 U.S.C. § 300h-1(b)(3) controls. A more reasonable reading of

subsection (b)(3), viewed in the context of the entire SDWA scheme of delegated

regulation and enforcement, limits its application to those instances in which EPA

disapproves an entire previously approved state UIC program or substantive

elements thereof. EPA’s decision at issue does not revoke New Mexico’s

“primary enforcement responsibility for underground water sources” as

contemplated by 42 U.S.C. § 300h-1(b)(3). Rather, it simply determines that

certain lands are outside the reach of New Mexico’s program as previously

approved by 40 C.F.R. § 147.1601, pursuant to 42 U.S.C. § 300h-1(b).

Review of the regulations implementing the SDWA helps to elucidate the

appropriate circumstances for application of the procedures required by 42 U.S.C.

§ 300h-1(b)(3). 40 C.F.R. § 145.34 procedurally provides for when a state, either

on its own initiative, see § 145.34(a), or on the initiative of EPA Administrator,

see § 145.34(b), is relieved of its responsibilities under the SDWA. 11 For such a

11
40 C.F.R. § 145.34, titled “Procedures for withdrawal of State programs,”
provides, in relevant part, as follows:
(a) A State with a program approved under this part may voluntarily
(continued...)

- 32 -
substantial transfer of enforcement authority, § 145.34 understandably requires

extensive notice and hearing requirements, particularly so in the case of an

involuntary withdrawal, in which case the State is afforded the opportunity to

remedy instances of noncompliance. See § 145.34(b)(1). The rulemaking

requirements of 42 U.S.C. § 300h-1(b)(3) are directed at regulating the significant

act of finding a state program substantively defective, with its accompanying

requirements of opportunity to cure defects and provision for orderly transfer.

Although it seems apparent that the precise circumstances of this case were not

explicitly contemplated by Congress in enacting the SDWA or by the agency in

promulgating the procedural regulations thereunder, our consideration of the

purpose and particular requirements of 40 C.F.R. §§ 145.32 and 145.34, persuades

us that the regulations pertaining to program revision, see 40 C.F.R. § 145.32, are

more appropriately applicable to the action before us for review.

We do not accept the “tail wags the dog” argument that a relatively small

jurisdictional reassessment of certain geographic areas amounts to a determination

(...continued)
11

transfer program responsibilities required by Federal law to EPA by taking
the following actions, or in such other manner as may be agreed upon with
the Administrator.
***
(b) Approval of a State UIC program may be withdrawn and a Federal
program established in its place when the Administrator determines, after
holding a public hearing, that the State program is not in compliance with
the requirements of SDWA and this part.

- 33 -
that a state’s UIC program no longer meets SDWA requirements, invoking the

procedures established by 42 U.S.C. § 300h-1(b)(3) and 40 C.F.R. § 145.34(b).

Instead of constituting a withdrawal of a state program, see 40 C.F.R. § 145.34,

EPA’s assertion of permitting jurisdiction over Sections 8 and 17 is better

characterized as a state program revision appropriately controlled by the

procedures set forth in 40 C.F.R. § 145.32(b)(4). See WNRC, 793 F.2d at 199

(“under the agency’s regulations, nonsubstantial program revisions need not be

accomplished through formal rulemaking”). Therefore, EPA’s action did not

violate 42 U.S.C. § 300h-1.

40 C.F.R. § 145.32 allows for “program revision[s],” at the initiative of

either the approved State or EPA. See § 145.32(a) (“Either EPA or the approved

State may initiate program revision”). Given our conclusion that EPA’s action is

not contrary to statute, and that the agency regulatory procedures for program

revision are a proper exercise of delegated authority under the statute, we analyze

EPA’s interpretation of its regulations under the Chevron framework. See

Mission Group Kansas, 146 F.3d at 780-81. Under that standard, we conclude

that EPA reasonably asserted jurisdiction as an EPA-initiated program revision

pursuant to 40 C.F.R. § 145.32(a).

The propriety of this revision turns on whether it is a “substantial” revision,

requiring adherence to the particular notice and comment requirements of 40

- 34 -
C.F.R. § 145.32(b)(2)—requirements that even EPA does not contend were met.

Section 145.32 provides that “[w]henever EPA determines that the proposed

program revision is substantial, EPA shall issue public notice and provide an

opportunity to comment for a period of at least 30 days.” 40 C.F.R.

§ 145.32(b)(2). The regulation further requires that “[n]otice of approval of any

substantial revision shall be published in the FEDERAL REGISTER. Notice of

approval of non-substantial program revisions may be given by a letter from the

Administrator to the State Governor or his designee.” 40 C.F.R. § 145.32(b)(4).

The tentative revocation of the Section 8 aquifer exemption, affecting some 160

acres, is reasonably construed as a “nonsubstantial program revision.” WNRC,

793 F.2d at 199. 12 Therefore, we find no procedural violation in the EPA’s

assertion of jurisdiction.

B. Section 17

As for Section 17, we similarly conclude that because EPA’s denial of an

aquifer exemption and assertion of federal jurisdiction under the dispute rule does

not represent a program withdrawal, it does not implicate the procedural

requirements of 40 C.F.R. § 145.32. EPA’s initial action as to Section 17

12
WNRC, 793 F.2d at 198-201, the only published case to address directly
appropriate procedural requirements for substantial and non-substantial aquifer
exemptions under the SDWA and its regulations, approved EPA’s determination that a
3,000 acre aquifer exemption request constituted substantial revision, but a 6.7 acre
exemption constituted nonsubstantial revision.

- 35 -
represented a disapproval of a request for an additional aquifer exemption under

40 C.F.R. § 144.7(b)(3), which provides only that such disapproval “shall state

the reasons and shall constitute final Agency action for purposes of judicial

review.” EPA’s initial letter of disapproval states the jurisdictional grounds for

that action, and thereby satisfies the procedural requirements of § 144.7(b)(3).

Likewise, its July 1997 letter states in considerable detail the reasons for its

assertion of jurisdiction under the dispute rule and substantive federal Indian law.

As we noted with respect to Section 8, assertion of federal jurisdiction over an

area of land encompassing some 200 acres is reasonably construed as a

nonsubstantial program revision for purposes of 40 C.F.R. § 145.32(b)(4), and we

find no violation of procedural law or regulation. Whether EPA’s substantive

decision regarding Section 17 represents an abuse of discretion or decision

contrary to law is a question we confront below.

- 36 -
 IV

We now consider whether EPA’s decision to assert SDWA jurisdiction over

Sections 8 and 17 constitutes an action contrary to law or an abuse of discretion

by EPA in light of the state adjudications discussed in Section I.C, supra, and

prior EPA actions. Petitioners claim that EPA, by subjecting Sections 8 and 17 to

the direct federal implementation UIC program, violated the terms of the

- 37 -
preamble to its Indian lands UIC regulations 13 because that land was “later

adjudged” to be non-Indian land. 53 F.R. 43,096, 43,097. Petitioners

additionally argue that the collateral estoppel effects of the previous state

adjudications foreclose the Navajo Nation from asserting that the lands in

question are Indian country. Although EPA, which was not party to these

adjudications, is not directly bound under the law of collateral estoppel,

petitioners assert that EPA is obligated to regard these adjudications as binding

under the “later adjudged” language of its dispute rule and thus required to

remove the lands from the federal UIC program. 14 53 Fed. Reg. at 43,097.

13
Although petitioners do not explicitly raise a facial challenge to the dispute rule,
their suggestions of its illegitimacy run contrary to the established canon of statutory
construction requiring that “statutes are to be construed liberally in favor of the Indians,
with ambiguous provisions interpreted to their benefit.” Montana v. Blackfeet Tribe, 471
U.S. 759, 766 (1985). We also note that “[w]hile language in the preamble of a
regulation is not controlling over the language of the regulation itself . . . the preamble to
a regulation is evidence of an agency’s contemporaneous understanding of its proposed
rules,” and therefore provides guidance in evaluating whether the agency’s interpretation
of its regulation is consistent with the structure and language of the rule. Wyoming
Outdoor Council v. United States Forest Service, 165 F.3d 43, 53 (D.C. Cir. 1999).
14
Petitioner HRI contends that the full faith and credit statute, 28 U.S.C. § 1738,
precludes EPA from reaching a decision contrary to the state adjudications. Section 1738,
however, provides only that state court decisions “shall have the same full faith and credit
in every court within the United States . . . as they have by law or usage in the courts of
such State . . . from which they are taken.” Under New Mexico law, it is well established
that one prerequisite to the application of the doctrine of collateral estoppel is that “the
party to be estopped was a party to the prior proceeding.” Shovelin v. Central New
Mexico Elec. Coop., Inc., 850 P.2d 996, 1000 (N.M. 1993). It is undisputed that EPA
was not a party to the prior proceedings; thus, under New Mexico law of collateral
estoppel, it is not bound by those proceedings.

- 38 -
Because EPA was not a party to those adjudications, and because EPA, as an

agency of the federal government, has an independent duty to protect Indian

interests, we conclude that the agency did not err in finding, despite the state

adjudications, a legitimate dispute as to the jurisdictional status of the lands in

question. 15

The federal government bears a special trust obligation to protect the

interests of Indian tribes, including protecting tribal property and jurisdiction.

See, e.g., Oneida County v. Oneida Indian Nation, 470 U.S. 226, 247 (1985)

(holding that “[t]he canons of construction applicable in Indian law are rooted in

the unique trust relationship between the United States and the Indians”); Morton

v. Mancari, 417 U.S. 535, 555 (1974) (recognizing “Congress’ unique obligation

toward the Indians); United States v. Creek Nation, 295 U.S. 103, 109-10 (1935)

(holding that the federal executive is held to a strict fiduciary standard in

relations with Indian tribes and is to take “all appropriate measures for protecting

15
The Navajo Nation claims that the doctrine of collateral estoppel does not apply
to these adjudications because the adjudications failed to constitute a full and fair
opportunity to be heard. We need not reach that issue of New Mexico state law because
of our conclusion, predicated upon the federal trust obligation to protect the Indian
nations’ interests and interpret ambiguities in favor of Indians, that EPA’s interpretation
of its dispute rule is a permissible one. Even if the Navajo Nation were be bound by the
adjudications under New Mexico law—an issue we explicitly do not reach today—we
conclude that, under the “later adjudged” language of the preamble, EPA did not violate
either its own regulations in placing Section 8 in the federal UIC program or in declining
to remove Section 17 therefrom, because EPA was justified in interpreting the preamble’s
language as requiring that an adjudication be binding upon the United States for the
adjudication to resolve conclusively a jurisdictional dispute.

- 39 -
and advancing” those tribes’ interests). Felix Cohen’s Handbook summarizes the

impact of this relationship on agency action:

[T]he federal trust responsibility imposes strict fiduciary standards
on the conduct of executive agencies — unless, of course, Congress
has expressly authorized a deviation from these standards in exercise
of its “plenary” power. Since the trust obligations are binding on the
United States, these standards of conduct would seem to govern all
executive departments that may deal with Indians, not just those such
as the Bureau of Indian Affairs which have special statutory
responsibilities for Indian affairs. Moreover, in some contexts the
fiduciary obligations of the United States mandate that special regard
be given to the procedural rights of Indians by federal administrative
agencies.

Felix S. Cohen, Handbook of Federal Indian Law at 225 (footnotes omitted) (1982

ed.); see also Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985) (discussing

canon of statutory construction, derived from the trust relationship, requiring

construction of statutes liberally in favor of Indians and resolution of ambiguities

in their favor). The trust relationship and its application to all federal agencies

that may deal with Indians necessarily requires the application of a similar canon

of construction to the interpretation of federal regulations.

Additional Supreme Court cases emphasize a particular federal duty to

safeguard Indian interests in land. See Drummond v. United States, 324 U.S. 316,

318 (1945) (holding that suits by the United States to protect Indian land interests

are not barred by prior adjudications against individual Indians); United States v.

Candelaria, 271 U.S. 432, 444 (1926) (same). Considering this duty, and the

- 40 -
broad definition of Indian country in both 18 U.S.C. § 1151 and the SDWA

regulations, as well as the complicated jurisdictional history of many Indian

lands, we conclude that it is reasonable for EPA to adopt an interpretation of its

regulations requiring, when lands are in dispute, presumptions in favor of Indian

country status and resulting federal jurisdiction. Moreover, considering the trust

duty, we hold it is permissible for EPA—at least under circumstances such as

these, involving adjudications ultimately resolved not on the merits but on

procedural grounds, and implicating pure issues of federal Indian law—to decline

to consider as “adjudged” lands as to which the agency was not a party to the

relevant proceedings.

The fundamental constitutional principles supporting independent federal

inquiry into the title status of Indian land apply with even greater force to

disputes over Indian country jurisdictional status. Jurisdictional status of land

implicates not only ownership, but also the core sovereignty interests of Indian

tribes and the federal government in exercising civil and criminal authority over

tribal territory.

EPA’s assumption that the land was not Indian country, when it previously

granted an aquifer exemption for Section 8, can neither change the

congressionally-determined status of that land, nor deprive the federal

government of its duty and prerogative to protect Navajo governance of Indian

- 41 -
lands. In considering the Indian country status of certain Creek nation lands in

Oklahoma, we stated: “[T]he past failure to challenge Oklahoma’s jurisdiction

over Creek Nation lands, or to treat them as reservation lands, does not divest the

federal government of its exclusive authority over relations with the Creek nation

or negate Congress’s intent to protect Creek tribal lands and Creek governance

with respect to those lands.” Indian Country U.S.A., Inc. v. Oklahoma, 829 F.2d

967, 974 (10th Cir. 1987) (citing United States v. John, 437 U.S. 634, 652-53

(1978)). Congress’s intent to protect tribal lands and governance extends no less

to EPA than to other departments of the federal government, and therefore, in

accordance with Indian Country, U.S.A., the agency’s interpretation of its rule to

permit recognition of a dispute under the circumstances of this case is clearly

permissible.

Our recent decision in Osage Tribal Council v. Department of Labor, 187

F.3d 1174 (10th Cir. 1999), is not to the contrary. In Osage Tribal Council, 187

F.3d at 1183-84, we rejected an argument that the Secretary of Labor violated his

trust responsibility to the Osage Tribe by initiating a proceeding under the

employee protection provisions of the SDWA. The facts of that case involved the

termination of an environmental inspector employed by the Tribal Council to

monitor its compliance with SDWA provisions. See id. at 1178. When the

inspector was terminated, allegedly for filing environmental violation reports

- 42 -
protected under the SDWA, the Secretary brought a proceeding under 42 U.S.C.

§ 300j-9(i), and an Administrative Law Judge found in favor of the inspector.

See id. The Tribal Council appealed, alleging in part that “in bringing [the]

action, the Secretary of Labor . . . violated the federal government’s trust

responsibility toward the tribe.” Id. at 1183 (citing Creek Nation, 295 U.S. at

109; Cohen, supra, at 226). We restated the trust doctrine, but concluded that the

Tribal Council had not demonstrated a breach of the Secretary’s “strict fiduciary

standards when charged with administering Indian lands or funds” because “rather

the Secretary was carrying out his duties with respect to Congress’ mandate on

safe drinking water.” Id. at 1183-84 (citations omitted).

In Osage Tribal Council, the Secretary of Labor was in no way

administering Indian lands. In this case, by contrast, EPA’s decision, while made

within the framework of administering the SDWA, implicates the core federal

trust responsibilities of administering—and safeguarding—Indian lands. While

there is no allegation before us of a breach of a specific statutory, treaty, or trust

obligation, we nevertheless reaffirm that the federal executive is to consider its

strict fiduciary obligation when interpreting regulations that directly affect its

“administ[ration of] Indian lands.” Id. at 1183 (citing Morton v. Ruiz, 415 U.S.

199, 236 (1974); Seminole Nation v. United States, 316 U.S. 286, 296 (1942)).

The trust duty is not relevant to the decision at issue in Osage Tribal Council:

- 43 -
whether or not to enforce the employee protection provisions of the SDWA

against a tribe pursuant to Congress’s unequivocal mandate that those provisions

apply to tribes. See id. at 1180-83. It is most relevant, however, when an agency

decision necessarily incorporates a determination as to whether certain lands are

within the scope of tribal territorial sovereignty. See, e.g., United States v. Santa

Fe Pac. R.R. Co., 314 U.S. 339, 353-54 (1941) (applying principle of “solicitude

of the Federal government” for Indian welfare and principle of resolving

ambiguities in favor of Indians to question of tribal jurisdiction over land). Thus,

this case is entirely unlike the decision in Osage Tribal Council, which implicated

a clear congressional mandate regarding enforcement of SDWA whistleblower

provisions against Indian Tribes, but did not implicate decisions defining the

extent of Indian territorial sovereignty. The fact that the trust doctrine does not

bar whistleblower suits against a tribe that happen to arise under the SDWA, see

Osage Tribal Council , 187 F.3d at 1183-84, does not create a per se prohibition

against application of the doctrine to government agencies whenever the SDWA

happens to be involved, and certainly not when tribal lands and tribal territorial

sovereignty are directly involved.

Also unlike Osage Tribal Council, this case does not reflect an assertion of

an affirmative cause of action based on an official’s alleged violation of a trust

duty. Rather, that duty and its accompanying canon of construction simply

- 44 -
provide additional support for EPA’s interpretation of its regulation: That the

agency, in the course of SDWA adjudication, may make an independent

evaluation, based on federal law, of the Indian country status of disputed lands.

The fact that EPA is not specifically charged with administration of Indian lands

or funds does not render unreasonable its solicitude for core Indian interests. Our

conclusion that there is no right of action under the trust duty to contest the

Secretary of Labor’s enforcement of a clear congressional mandate to apply a

statutory rule to Indian tribes, see id. , does not obviate application of the canon

of construing ambiguities to favor Indian interests to executive officials when

their actions necessarily implicate determinations of the extent of tribal

sovereignty.

Petitioners argument—that EPA’s rejection of the Navajo Nation’s TAS

application as to private fee lands in the Eastern Navajo Agency forecloses EPA’s

assertion that a dispute exists as to jurisdiction over Section 8—is without merit.

EPA’s September 20, 1994, partial approval of the Navajo Nation’s TAS

application states that “the Navajo nation has not satisfied the third criterion . . .

under section 1451 of the SDWA for federal land and tribal fee lands (except for

the lands in these categories that have already been determined to be part of

‘Indian country’), private fee lands, and New Mexico state trust lands within the

Eastern Navajo Agency.” (VI R. Tab 112 at 25). EPA explicitly declined to find

- 45 -
that the Navajo Nation has no jurisdiction over federal lands, some tribal fee

lands, private fee lands, and New Mexico state trust lands:

It is important to note what determination EPA is and is not making
in this case at this time. For those categories of lands for which EPA
cannot determine whether the Navajo Nation has jurisdiction, EPA is
simply stating that the Navajo Nation has not adequately shown that
it does have jurisdiction. However, EPA is not determining that the
Navajo Nation does not have jurisdiction. Neither is EPA
determining whether or not such lands are “Indian lands” for the
purposes of EPA’s UIC program in New Mexico.

Id. at 20. By its own terms, EPA’s 1994 TAS decision took no position on the

“Indian lands” status of such lands, and therefore its decisions later with respect

to Sections 8 and 17 cannot be characterized as impermissible collateral attacks

on its 1994 TAS decision.

For these reasons, we decide that EPA is not foreclosed by the state

adjudications or by its earlier actions in the TAS proceeding from finding a

legitimate dispute as to the Indian country status of the lands at issue, and

therefore EPA did not violate the terms of its dispute rule, either in declining to

remove Section 17 from the federal UIC program or in placing Section 8 into that

program as disputed Indian country.

V

- 46 -
 EPA regulations define “Indian lands” for the purpose of the SDWA as

“‘Indian country’ as defined in 18 U.S.C. 1151.” 40 C.F.R. § 144.3. 18 U.S.C.

§ 1151 defines Indian country as:

(a) all land within the limits of any Indian reservation under the
jurisdiction of the United States Government, notwithstanding the
issuance of any patent, and including rights-of-way running through
the reservation, (b) all dependent Indian communities within the
borders of the United States whether within the original or
subsequently acquired territory thereof, and whether within or
without the limits of a state, and (c) all Indian allotments, the Indian
titles to which have not been extinguished, including rights-of-way
running through the same.

Petitioners assert that even if EPA’s actions were procedurally correct

under the SDWA, the agency erred in its substantive decisions, pursuant to

§ 1151, regarding the Indian country status of the lands in question. We thus

review whether EPA erred in finding a legitimate dispute as to the Indian country

status of Section 8 and in finding Section 17 to be Indian country.

A. Section 8

EPA does not argue that the Section 8 property is conclusively Indian

country; rather, it requests the opportunity to reach a final decision as to whether

the Section 8 land constitutes a “dependent Indian community” under 18 U.S.C.

§ 1151(b), following the Supreme Court’s intervening clarification of the

standards therefor in Alaska v. Native Village of Venetie Tribal Gov’t, 522 U.S.

520, 118 S. Ct. 948 (1998). While Venetie does not foreclose EPA’s application

- 47 -
of its dispute rule, the ultimate merits of that dispute are not ripe for resolution.

See supra Section II.A.

Petitioners tell us that even if the designation of Section 8 as “in dispute”

did not violate the SDWA, its interpreting regulations, and the federal full faith

and credit statute, EPA’s decision is invalid because no legitimate dispute can

exist as to Section 8, which is conclusively non-Indian country. Although we do

not determine definitively whether Section 8 is Indian country because the

question is not ripe for judicial review, we conclude that there is a legitimate

dispute, following Venetie, as to whether Section 8 falls within a “dependent

Indian community” under 18 U.S.C. § 1151(b). See United States v. Roberts , 185

F.3d 1125, 1133 (10th Cir. 1999) (noting that, after Venetie, “the relationship

between informal reservations and dependent Indian communities is not entirely

clear under current case law”). Specifically, there are grounds for dispute as to

the first branch of the Watchman test for 18 U.S.C. § 1151(b): What constitutes

the proper “community of reference” in determining the Indian country status of

Section 8? Watchman, 52 F.3d at 1542-43; accord United States v. Adair, 111

F.3d 770, 774-75 (10th Cir. 1997). Because we lack a decision below on the

appropriate community of reference, see Watchman, 52 F.3d at 1542-43

(remanding community of reference question for lower court determination), and

on the application of the set-aside and superintendence tests required by Venetie,

- 48 -
118 S. Ct. at 955, for 18 U.S.C. § 1151(b), we are not in an appropriate position

to resolve the dispute itself at this time.

Although it appears that, in disapproving of the Ninth Circuit’s multi-factor

test for identifying a dependent Indian community, Venetie, 118 S. Ct. at 955 n.7,

may require some modification of the emphases in the second step of our

dependent Indian community test in Watchman, 52 F.3d at 1545, nothing in

Venetie speaks to the propriety of the first element of that test—determination of

the proper community of reference. See Venetie, 118 S. Ct. at 955 & n.7.

Watchman, 52 F.3d at 1542-43, explicitly declined to define with precision the

proper community of reference for another mine site within the EO 709/744 area.

Instead, it simply rejected the district court’s restriction of that community of

reference to the mine site alone. See id. Presumably because of the categorical

effect of the Alaska Native Claims Settlement Act (“ANCSA”) on virtually all

Alaskan native lands, the Supreme Court in Venetie was not even presented with

the question of defining the proper means of determining a community of

reference for analysis under § 1151(b). See Venetie, 118 S. Ct. at 955-56 (noting

that ANCSA “revoked the Venetie Reservation along with every other reservation

in Alaska but one, see 43 U.S.C. § 1618(a), and Congress stated explicitly that

ANCSA’s settlement provisions were intended to avoid a ‘lengthy wardship or

trusteeship.’ § 1601(b)”).

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 Because Venetie does not speak directly to the issue, barring en banc

review by this court, Watchman, 52 F.3d at 1542-45, continues to require a

“community of reference” analysis prior to determining whether land qualifies as

a dependent Indian community under the set-aside and supervision requirements

of 18 U.S.C. § 1151(b). Cf. United States v. Mazurie, 419 U.S. 544, 549-51

(1975) (analyzing the entirety of the Fort Washakie, Wyoming area, not only the

Blue Bull Bar itself, to determine whether the bar is within a “non-Indian

community” within the meaning of 18 U.S.C. § 1154). Under at least one

theory—that the community of reference in the current action is the entire

Churchrock Chapter, a theory neither adopted nor rejected in Watchman—Section

8 might qualify as a dependent Indian community. See Watchman, 52 F.3d at

1545 (declining to resolve whether the entire Tsayatoh Chapter is the appropriate

community of reference for the South McKinley Mine site). Therefore, we cannot

conclude that EPA abused its discretion in concluding that a dispute exists as to

the Indian country jurisdictional status of Section 8. As discussed in Section II.A,

supra, the merits of that dispute are not currently ripe for review.

We are mindful of petitioners’ concern over the delay this jurisdictional

dispute has caused in HRI’s plans for mining operations, and of their concern that

remanding to the agency for a final decision on the jurisdictional dispute may

further delay the ultimate resolution of the jurisdictional question. We note,

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however, that HRI has long had, and declined to exercise, the option of applying

for a permit under the federal direct implementation UIC program, and that its

choice not to do so undermines the force of these temporal concerns.

B. Section 17

Section 17 is Indian country pursuant to 18 U.S.C. § 1151(a). Under

Supreme Court and Tenth Circuit precedent, trust lands such as the Section 17

property are Indian country. See Oklahoma Tax Comm’n v. Citizen Band

Potawatomi Indian Tribe, 498 U.S. 505, 511 (1991); Roberts, 185 F.3d at 1131

(holding that “official ‘reservation’ status is not dispositive and lands owned by

the federal government in trust for Indian tribes are Indian country pursuant to

[18] U.S.C. § 1151”).

The definitions of Indian country in § 1151 derive from several Supreme

Court decisions from the first half of this century. See United States v.

McGowan, 302 U.S. 535 (1938); United States v. Pelican, 232 U.S. 442 (1914);

United States v. Sandoval, 231 U.S. 28 (1913); see also Venetie, 118 S. Ct. at

953-55 (discussing codification in 18 U.S.C. § 1151 of doctrines of Sandoval,

Pelican, and McGowan). Those cases and their progeny instruct that the test for

whether land qualifies as Indian country by virtue of its status as a reservation or

dependent Indian community is twofold: whether land has been validly set aside

by the federal government for the use of Indians; and whether that land is subject

- 51 -
to federal supervision. See Venetie, 118 S. Ct. at 954; Potawatomi, 498 U.S. at

511; McGowan, 302 U.S. at 539.

We have interpreted Supreme Court precedent as establishing that formal

designation as a reservation is not a necessary precondition for land to qualify as

Indian country under § 1151(a). See Roberts, 185 F.3d at 1131. The Court has

held that its cases

make clear that a tribal member need not live on a formal reservation
to be outside the State’s taxing jurisdiction; it is enough that the
member live in ‘Indian Country.’ Congress has defined Indian
country broadly to include formal and informal reservations,
dependent Indian communities, and Indian allotments, whether
restricted or held in trust by the United States.

Oklahoma Tax Comm’n v. Sac & Fox Nation, 508 U.S. 114, 123 (1993)

(hereinafter Sac and Fox). The Court’s clarification of the test for dependent

Indian communities under § 1151(b) does not alter the broad definition of

“reservation” for Indian country purposes in Sac & Fox, 508 U.S. at 123. See

Venetie, 118 S. Ct. at 954-55 (discussing requirements for “dependent Indian

community” status). Accordingly, our recognition in Yazzie, 909 F.2d 1387, that

the Eastern Navajo Agency had been terminated as a formal reservation does

prevent lands within the EO 709/744 area from qualifying under § 1151(a) as

“informal reservations,” Sac & Fox, 508 U.S. at 123, provided they meet the

appropriate conditions. Yazzie, 909 F.2d at 1422, stands for the proposition that

land is not necessarily Indian country under § 1151(a) simply by virtue of being

- 52 -
within the boundaries of the EO 709/744 area. To qualify as Indian country, it

must satisfy one of the tests of 18 U.S.C. § 1151. See Mustang Prod. Co. v.

Harrison, 94 F.3d 1382, 1384 (10th Cir. 1996) (holding that “disestablishment of

the reservation is not dispositive of the question of tribal jurisdiction. In order to

determine whether the Tribes have jurisdiction we must instead look to whether

the land in question is Indian country”) (internal quotations and citation omitted).

In support of the proposition that Section 17 does not constitute Indian

country, petitioners point to our statements in Yazzie that “[a]lthough subsection

1151(a) clarifies that checkerboard titles within an existing reservation do not

affect the status of an Indian reservation as reservation, subsections 1151(b) and

(c) allow checkerboard jurisdiction outside reservation boundaries,” and that “the

land is not Indian reservation, although presumably much of it is Indian country.”

Yazzie, 909 F.2d at 1422. That language, however, does not amount to a holding

that subsection 1151(a) informal reservation land cannot exist within the EO

709/744 area, particularly so considering the Supreme Court’s subsequent explicit

holding in Potawatomi, 498 U.S. at 511, that trust land outside a formally

designated reservation can qualify as a reservation for tribal immunity purposes.

Yazzie and Watchman are more properly read to stand for the proposition that

land does not acquire reservation status simply by virtue of its being within the

EO 709/744 area, absent other evidence of congressional set-aside and

- 53 -
supervision. Venetie, 118 S. Ct. at 953-54, teaches that there is little difference

in substance between the tests under § 1151(a) and § 1151(b), emphasizing the

focus on set-aside and supervision for a dependent Indian community just as for a

reservation. See also Sac & Fox, 508 U.S. at 123 (stating that “Congress has

defined Indian country broadly to include formal and informal reservations,

dependent Indian communities, and Indian allotments, whether restricted or held

in trust by the United States”); Roberts, 185 F.3d at 1130-33 (recognizing

informal reservations).

Understandably, Watchman did not address the issue of whether land held

in trust by the federal government for a tribe could constitute Indian country

under § 1151(a) even outside the established reservation boundaries, because the

mine site at issue in that case involved no such trust land. See Watchman, 52

F.3d at 1534 (discussing surface ownership interests in mine site, which included

land held in trust by the United States for individual Navajo allottees, but not for

the Navajo Nation). Therefore, it cannot foreclose the conclusion required by the

controlling cases of Potawatomi and Roberts.

Because we decide that Yazzie and Watchman do not foreclose the

existence of Indian country within the EO 709/744 area, we must look to the facts

of federal action with respect to Section 17 to assess whether it qualifies as Indian

country in the form of an informal reservation under subsection 1151(a) or

- 54 -
dependent Indian community under subection 1151(b). Cf. Roberts, 185 F.3d at

1133 (holding that tribal trust land qualifies as Indian country under set-aside and

superintendence tests, without resolving the question of whether it is to be

categorized under § 1151(a) or § 1151(b)). In sum, under relevant Supreme Court

and circuit precedent, Section 17 is Indian country pursuant to 18 U.S.C.

§ 1151(a).

1. Set-aside

In assessing the Indian jurisdictional status of Section 17, we look first to

whether it was set aside by the federal government. The initial history of the

surrounding area is set forth in detail in Yazzie, and we need not discuss it in

depth here. What is particularly pertinent to the set-aside inquiry is congressional

action following the termination of the EO 709/744 area as a reservation.

We have held that “for purposes of defining Indian country, the term simply

refers to those lands which Congress intended to reserve for a tribe and over

which Congress intended primary jurisdiction to rest in the federal and tribal

governments. . . . A formal designation of Indian lands as a ‘reservation’ is not

required for them to have Indian country status.” Indian Country U.S.A., 829

F.2d at 973 (citing McGowan, 302 U.S. at 538-39). Moreover, “tribal lands, trust

lands, and certain allotted lands generally remain Indian country despite

disestablishment.” Id. at 975 n.3. In McGowan, 302 U.S. at 537-39 & n.4, the

- 55 -
Court held that land purchased under congressional appropriation of funds for the

purpose of “procuring home and farm sites, with adequate water rights” and “[f]or

the purchase of land and water rights” for Indians was validly set aside for

purposes of the Indian country determination.

The parties do not materially dispute that Section 17 was purchased with

funds from a 1928 Act of Congress appropriating:

[f]or purchase of additional land and water rights for the use and
benefit of Indians of the Navajo Tribe (at a total cost not to exceed
$1,200,000, which is hereby authorized), title to which shall be taken
in the name of the United States in trust for the Navajo Tribe, fiscal
years 1928 and 1929, payable . . . .: Provided, that in purchasing such
land title may be taken, in the discretion of the Secretary of the
Interior, for the surface only.

Act of May 29, 1928, ch. 853, 45 Stat. 883, 899-900 (“1928 Act”).

“[S]ection seventeen, containing six hundred forty acres” of “Township

sixteen north, range sixteen west” of the New Mexico Meridian was conveyed by

the Santa Fe Pacific Railroad Company to “the UNITED STATES OF AMERICA,

IN TRUST FOR THE NAVAJO TRIBE,” on June 14, 1929. (III R. Tab 65, Ex.

K, at 1-3.) This conveyance was subject to a reservation, to the Santa Fe

Railroad, of “all oil, gas, coal and minerals” as well as “the right to prospect for,

mine and remove the same and to use so much of the surface of said lands as shall

be necessary” for mining purposes. (Id. at 5.) The congressional directive to

purchase railroad lands for the benefit of the Navajo is sufficiently clear so that,

- 56 -
once because it is evident that the lands in question were purchased under that

congressional appropriation and are held in trust for the Navajo, the lands satisfy

the set-aside element of the Indian country test. See McGowan, 302 U.S. at 537-

39.

NMED’s argument that Yazzie, 909 F.2d at 1418, forecloses the possibility

that the 1928 appropriation could create de facto reservation lands within the EO

709/744 area misreads our decision in Yazzie. NMED quotes language in Yazzie

to the effect that “congressional appropriations for water development on the

Pueblo Bonito ‘Reservation’ or ‘subdivision of the Navajo Reservation’ in the

years from 1919 to 1927 do not show that Congress recognized the 709/744 area

in New Mexico as maintaining reservation status.” Id. The quoted language,

however, dealt with our rejection of the Navajo Nation’s argument that the

appropriations at issue implicitly reversed the 1908-1911 disestablishment of the

EO 709/744 reservation in its entirety. It is another question altogether whether a

subsequent 1928 statute demonstrates an intent to set aside some limited portion

of those lands for the use and benefit of the Navajo. It is inconsistent with our

precedent to say that the conclusion that the 709/744 area was disestablished as

reservation forecloses the possibility of Indian country existing within that area.

See Yazzie, 909 F.2d at 1421-22 16; see also Watchman, 52 F.3d at 1542-44

16
In Yazzie, we noted the “fact that the 709/744 area in New Mexico remains
(continued...)

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(concluding that trust allotments are Indian country under § 1151(c) and

indicating that non-reservation land could constitute Indian country under the

“dependent Indian community” analysis of § 1151(b)). In rejecting arguments

that a “tribal convenience store should be held subject to state tax laws because it

does not operate on a formally designated ‘reservation,’ but on land held in trust

for the Potawatomis,” Potawatomi, 498 U.S. at 511, recognized that subsection

1151(a) allows Indian country jurisdiction outside reservation boundaries. See

also Roberts, 185 F.3d at 1133 (holding that Venetie is not a “repudiation of the

Court’s prior discussions of ‘informal’ reservations”). 17

The 1928 Act, which specifies only a lump sum of money and not particular

lands to be purchased, is nevertheless sufficient to establish congressional intent

(...continued)
16

checkerboarded Indian country in a way that may complicate jurisdictional questions in
civil cases such as this one creates an issue for examination on remand. . . . It is well to
remember that Congress has authorized checkerboard jurisdiction under its definition of
Indian country in 18 U.S.C. § 1151. Although subsection 1151(a) clarifies that
checkerboard titles within an existing reservation do not affect the status of an Indian
reservation as reservation, subsections 1151(b) and (c) allow checkerboard jurisdiction
outside reservation boundaries.”
17
While Potawatomi dealt with whether the trust land at issue was validly set apart
for Indian use in the context of determining tribal sovereign immunity, and the case
before us involves the definition of Indian country under 18 U.S.C. § 1151, we can see no
meaningful difference between the necessary inquiry in those two contexts. In assessing
both § 1151 jurisdiction and sovereign immunity, the Potawatomi court adopted the
precise inquiry it had framed in an earlier case dealing with § 1151: “whether the area has
been ‘validly set apart for the use of the Indians as such, under the superintendence of the
Government.’” Potawatomi, 498 U.S. at 511 (quoting John, 437 U.S. at 648-49)
(sovereign immunity inquiry); cf. John, 437 U.S. at 648-49 (§ 1151 inquiry).

- 58 -
to set aside lands purchased thereunder, including Section 17, for the Navajo. We

do not believe that Congress’s plenary power over Indian affairs, see Morton, 417

U.S. at 551-52, is so limited that it is unable to set aside lands for Indians without

specifying the precise lands in question. See McGowan, 302 U.S. at 537-39. If

congressional intent to set aside land and water for Indian use is otherwise

evident, as we conclude it is here, we can see no reason for a judicially-imposed

rule that would prohibit Congress from delegating to the Secretary of the Interior

discretion to select, within specified limits, the particular lands to be purchased.

See Roberts, 185 F.3d at 1133-35. The language of the 1928 Act appears

remarkably similar to that of the 1916 Act at issue in McGowan, which the

Supreme Court found indicative of congressional intent to set aside some 20 acres

of land in the Reno Indian Colony as a dependent Indian community. See

McGowan, 302 U.S. at 537 & n.4 (quoting Act of May 18, 1916, ch. 125, 39 Stat.

123, 143, as authorizing “[f]or the purpose of procuring home and farm sites, with

adequate water rights . . . for the non-reservation Indians in the State of Nevada,

$15,000”). Because of the similar language of the 1928 Act, see 45 Stat. at 899-

900, McGowan controls the set-aside aspect of the Indian country test for Section

17, and Yazzie does not foreclose the existence of subsection 1151(a) Indian

country in the relevant area.

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 2. Federal Supervision

The second element of the test for Indian country is federal supervision.

We have before us uncontested evidence in the record that the Section 17 land is

supervised by the Bureau of Indian Affairs in the same manner as lands within the

formal Navajo reservation. The Affidavit of Genevieve Denetsone, Area Realty

Officer, Navajo Area Office, BIA, provides with respect to Section 17 that:

[t]he Bureau of Indian Affairs (BIA) actively oversees and regulates
the acquisition and use of interests in and the use of the trust
property described as Section 17, T16N, R16W, N.M.P.M., as
required by federal law. The BIA provides the same federal
oversight and applies the same statutory and regulatory requirements
concerning the acquisition of interests in Section 17 as it does to
analogous land within the formal 1880 reservation boundaries.

(IV R. Tab 88 Ex. C at 2.) This degree of supervision is closely analogous to the

degree we found sufficient for the Indian country test in Roberts, 185 F.3d at

1135 (finding federal supervision of trust property where United States retains

title, continues to oversee the property, and treats it as trust property) and

substantially greater than the minimal degree we held insufficient in Buzzard v.

Oklahoma Tax Comm’n, 992 F.2d 1073, 1076-77 (10th Cir. 1993).

The degree of federal supervision of the Section 17 land is entirely unlike

the minimal supervision of Alaskan native lands that the Supreme Court rejected

as insufficient in Venetie, 118 S. Ct. at 956. Following enactment of the ANCSA,

“federal protection of the [Alaskan native] land is essentially limited to a

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statutory declaration that the land is exempt from adverse possession claims, real

property taxes, and certain judgments as long as it has not been sold, leased, or

developed.” Id. The Court distinguished this minimal level of superintendence

from the “active control” present in McGowan, 302 U.S. at 537-39 (emphasizing

that the federal government had retained title to the land to protect Indians),

Pelican, 232 U.S. at 447 (finding supervision of allotments where the lands were

“under the jurisdiction and control of Congress”), and Sandoval, 231 U.S. at 37

n.1 (citing statute placing Pueblo land under the “absolute jurisdiction and

control” of Congress). Venetie, 118 S. Ct. at 956. The Venetie Court rejected the

government’s provision of social programs as merely general federal aid, and not

indicia of active federal control. See id. Here, by contrast, the federal

government directly retains title to the land in question, and exercises federal

control over the acquisition of interests not only in the land itself but also in its

use, just as it does for formal reservation land. (IV R. Tab 88 Ex. C at 2); see

also Roberts, 185 F.3d at 1135. This is analogous to the situation in Roberts and

entirely unlike the virtually complete divestiture of federal control found under

the ANCSA. Cf. Buzzard, 992 F.2d at 1076-77 (holding that mere restraint on

alienation is insufficient federal superintendence to confer federal jurisdiction

under Indian country statute).

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 The split nature of the surface and mineral estates does not alter the

jurisdictional status of these lands for SDWA purposes. In promulgating its

regulations for the Indian lands UIC program, EPA specified that “[i]f ownership

of mineral rights and the surface estate is split, and either is considered Indian

lands, the Federal EPA will regulate the well under the Indian land program.” 53

Fed. Reg. at 43,098. This is not an unreasonable interpretation of the SDWA,

considering the federal government’s role in protecting Indian interests and the

relationship of mining and underground injection to Indian communities and their

public water supplies. Furthermore, with respect to Section 17, the 1928 Act

specifically provided that “in purchasing such lands title may be taken, in the

discretion of the Secretary of the Interior, for the surface only.” Ch. 853, 45 Stat.

at 899-900. We simply do not see how this language, which provides for the

possibility of split estates, undermines the essential aim of the relevant

appropriation: “[f]or purchase of additional land and water rights for the use and

benefit of Indians of the Navajo Tribe.” Id.

As we stated in Cheyenne-Arapaho Tribes v. Oklahoma, 618 F.2d 665, 668

(10th Cir. 1980), we remain “convinced that, barring possible specific exceptions

to which our attention is not directed, lands held in trust by the United States for

the Tribes are Indian Country within the meaning of § 1151(a).” See also

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Roberts, 185 F.3d at 1131. Petitioners have not cited, and we do not identify, any

exceptions to this rule pertinent to these lands.

Thus, under Sac & Fox, Potawatomi, and Venetie, we conclude that Section

17 is Indian country under 18 U.S.C. § 1151(a). Section 17 might qualify as

Indian country under 18 U.S.C. § 1151(b) as well. However, a dependent Indian

community analysis would require us to delve into potentially difficult questions

regarding the impact of Venetie on the Watchman analysis—questions that we are

not required to reach today in light of the clear Indian country status of the land

in question under 18 U.S.C. § 1151(a). See John, 437 U.S. at 648 n.17 (declining

to consider grounds for federal jurisdiction under § 1151(b) and (c) after finding

jurisdiction under § 1151(a)).

VI

EPA did not exceed its statutory authority or abuse its discretion in

determining that the Section 17 lands constitute Indian country and the Section 8

lands are subject to a jurisdictional dispute requiring implementation of the direct

federal UIC program under the SDWA. The petitions for review are thus

DISMISSED; the Section 8 issue is hereby REMANDED to EPA for a final

determination as to whether that land is a dependent Indian community under 18

U.S.C. § 1151(b). 18

18
Petitioners’ motions to file addenda to their briefs are GRANTED;
(continued...)

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 (...continued)
18

Respondents’ motions to strike briefs are DENIED.

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