A fascinating case from the U.S. Court of Appeals for the Tenth Circuit involving an attempt by a private utility company to take property which is now tribal land.
In Public Service Co. of New Mexico v. Barboan, No. 16-2050 (May 26, 2017), there wasn't a question that a federal statute prohibited a utility company from taking "tribal land." The big issue was what land fell within that definition.
The Navajo Nation owned undivided fractional interests in two parcels which the utility claimed it needed for a electric transmission line. The problem wasn't that the land was currently owned by the Navajos, and thus was tribal land, but that it originally had been allotted to individual Navajos during the time in which the federal government was making such individual allotments. Eventually, the Nation obtained fractional interests in the two parcels via a "buy back" consolidation program (14% for one parcel, a mere .14% for the other), thus setting up the two big issues in the case:
1. Is land that was once allotted to individual indians, but eventually became "tribal land," subject to the power of eminent domain under 25 U.S.C. § 357?2. If so, is tribal ownership of a fractional interest in these parcels enough to immunize the entire parcel from condemnation?
The Tenth Circuit's opinion is a worthy read, and starts off with a good history of indian property, allotment, the federal government's ownership, and the various ways in which the policies changed over time. The court rejected the utility's argument that once property was allotted to an individual, it was forever subject to condemnation ("once an allotment always an allotment," as the opinion puts it). What matters is tribal ownership, today. Slip op. at 21 ('The issue is not how the tribe acquired the land, but instead what is the land's present status now that the tribe has acquired it.").
It also doesn't matter how much (or how little) of each parcel is tribal land. Any fractional interest is enough to immunize the entire parcel from non-tribal condemnation. Slip op. at 21 ("No court has held that § 357 allows condemnation of tribal land, whether the tribal interest is fractional, future, or whole.").
The utility company argued this was bad policy -- installing energy transmission lines are good for tribes and indians, and this would certainly hold up and make more expensive the land acquisition process. But the bottom line for the court was that it didn't matter how hard it would be to condemn tribal lands, and "[w]hatever negative policy effects it claims may follow, [the utility]'s remedy lies elsewhere." Slip op. at 21.
And there's the lesson of the case for those of you who don't deal with Indian Country property: the holdout "problem" that condemnors often raise isn't really that big of a deal in reality. Or at least it didn't bother the Tenth Circuit much.
It rejected the utility's argument that the sky would fall, that lacking the power to forcibly acquire these parcels (and presumably the many more similarly situated), "will leave it vulnerable to trespass actions and paying higher compensation to obtain consent. Worse, it argues, because of congressional efforts to help tribes buy back interest in lands lost during the Allotment Era, the availability of condemnation under § 357 will continue to shrink as tribes avail themselves of well-funded programs enabling them to buy back formerly tribal land." Slip op. at 23. This argument, held the court, "has no force." Id. The utility needs to negotiate for voluntary rights-of-way, and could not force it. If that means the tribal claims are valuable and the tribe holds out for more or simply refuses, "that is the tribe's prerogative." Slip op. at 24.
Think about that one next time a condemnor claims that a property owner is being a "holdout," or is greedily holding up a project.
Public Service Co. of New Mexico v. Barboan, No. 16-2050 (10th Cir. May 26, 2017)
