JAMES O. BROWNING, District Judge.
Plaintiffs Ida C. Begay, Nita R. Augustine, Kee Augustine, Kee Sandoval, George Harkes, Jr., Alice J. White, Ben C. Yazzie, and Louise J. Yazzie are members of the Navajo Nation in Arizona, New Mexico, and Utah. See Complaint for Equitable and Legal Relief ¶ 1, at 2, filed February 11, 2009 (Doc. 1)("Complaint"). The Navajo Nation is a federally recognized Indian tribe, and the individual Plaintiffs are residents of New Mexico. See Complaint ¶ 1, at 2. The individual Plaintiffs are also allottees who, pursuant to the General Allotment Act of 1887, 25 U.S.C. §§ 331-357, have an ownership interest in land within the boundaries of the Navajo Nation. See Complaint ¶ 1, at 2. In Indian law, allotment is a term of art which means a parcel of fixed land, taken from a larger, common parcel, granted to an individual. See Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 142, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972).
Shii Shi Keyah Allottees Association ("Association") is an organization composed of 2,500 to 3,000 individual Indian allottees and landowners in the Four Corners Region.
Defendants are comprised of the following:
(i) Defendant Public Service Company of New Mexico ("PNM"), a wholly-owned subsidiary of PNM Resources, Inc., is organized under the laws of the State of New Mexico and has its principal place of business in Albuquerque, New Mexico. See Complaint ¶ 11, at 3.
(ii) Defendant New Mexico Gas Company ("NMGC") is a subsidiary of Continental Energy Systems LLC, is organized under the laws of the State of New Mexico, and has a principal place of business in Albuquerque, New Mexico. See id. ¶ 12, at 3.
(iii) Defendant El Paso Corporation is a Delaware corporation with its principal place of business in Houston, Texas. See id. ¶ 13, at 4. The Court refers to El Paso Corporation and its subsidiary, El Paso Natural Gas Company, collectively as "El Paso Natural Gas."
(iv) Defendant Enterprise Products Partners L.P. ("Enterprise") is a publicly traded Delaware limited partnership with
(v) Defendant Kinder Morgan is a group of entities comprised of Kinder Morgan Energy Partners, L.P., a publicly traded Delaware limited partnership, with its principal place of business in Lakewood, Colorado; Kinder Morgan Management, LLC, a publicly traded Delaware limited liability company with its principal place of business in Houston, Texas; and Knight Inc., a Delaware corporation with its principal place of business in Houston, Texas. See id. ¶ 15, at 4.
(vi) Defendant Transwestern Pipeline Co., LLC ("Transwestern") is a Delaware limited liability company with its principal place of business in Houston, Texas. See id. ¶ 16, at 4.
(vii) Defendant Tucson Electric Power Company ("Tucson Electric") is a wholly owned subsidiary of Unisource Energy Corporation, is organized under the laws of the State of Arizona and has its principal place of business in Tucson, Arizona. See Complaint ¶ 17, at 4-5.
(viii) Defendant Western Refining, Inc ("Western Refining") is a publicly traded Delaware corporation organized under the laws of the State of Delaware, with its principal place of business in El Paso, Texas. See id. ¶ 18, at 5.
(ix) Defendant Ken Salazar is the Secretary of the Interior. See Complaint ¶ 19, at 4.
PNM, NMGC, El Paso Natural Gas, Enterprise, Kinder Morgan, Tucson Electric, and Western Refining are referred herein as the "Corporate Defendants." Each of the Corporate Defendants owns rights-of-way on allotment lands in which one or more of the individual Plaintiffs own an interest. See id. ¶ 29, at 7. PNM owns several rights-of-way in New Mexico and has transferred some of its ownership interests in some rights-of-way to NMGC. See id. ¶ 11, at 3.
On February 11, 2009, the Plaintiffs filed their Complaint for Equitable and Legal Relief asserting that the Department of Interior's Bureau of Indian Affairs ("BIA") did not fulfill its statutory obligations under 25 U.S.C. § 325 and 25 C.F.R. §§ 169.1-.28 with regard to granting rights-of-way over the land of the individual Plaintiffs and of the potential class members. See Complaint ¶ 20, at 5. Specifically, the Plaintiffs assert that the BIA is required to review all proposed rights-of-way on allotment land for pipelines, electrical transmission lines, and other uses. See id. ¶ 31, at 8. The Plaintiffs also contend that the BIA is obliged to approved the proposed rights-of-way "only if they are priced at fair market value, and only after obtaining an appraisal value of the land at issue and advising the Navajo allottees regarding the appraisals to assist them in the [right-of-way] negotiations." Id. (citing 25 C.F.R. § 169.12). The Plaintiffs allege that the Secretary, acting through the BIA's offices, has breached his fiduciary duties by failing, and continuing to fail: (i) to obtain appraisals; (ii) to require market value as a condition for granting rights-of-way on allotment land; and (iii) to advise the landowners of the appraisal information. See Complaint ¶ 36, at 9. The Plaintiffs assert that the United States did not, in most cases, obtain appraisals of the rights-of-way, and, therefore, did not determine the fair market
The Plaintiffs also seek certification as a class of all Navajo allottees with rights-of-way on their allotments in the Checkerboard Area within the Navajo Nation. See Complaint ¶ 48, at 11. The Checkerboard Area is the area of land within the Navajo Nation where Navajo allotment lands are intermingled with trust lands of the Navajo Nation, private lands that the Navajo Nation and individual Navajos own, land owned by non-Indians, and federal lands, in a checkerboard pattern. See id. ¶ 27, at 7. The Association brings its claim only with regard to Count I of the Complaint. See Plaintiffs' Response at 38-39. The individual Plaintiffs, and the class they seek to certify, ask the Court to certify Count II as a class action on behalf of all Navajo allottees with rights-of-way owned by the Corporate Defendants on their allotments in the Checkerboard Area of the Navajo Nation and to designate the Plaintiffs' counsel as class counsel. They further ask the Court to declare that the Corporate Defendants hold, and continuously have held, the rights-of-way in constructive trust for the benefit of the allottees, and that, by maintaining their pipelines and other transmission lines on the allottees' property, the Corporate Defendants have breached that trust. Additionally, they request the Court to declare that the Corporate Defendants have continuously committed trespass and wrongful invasion and occupation of their allotments; to cancel the outstanding rights-of-way, and to enjoin the Defendants to immediately remove their pipelines and transmission lines from the allottees' land. The Plaintiffs ask the Court to award damages, including punitive damages; to order the Corporate Defendants to pay the Plaintiffs the value of all rights-of-way from the time they received them, with interest thereon; to award disgorgement of profits, restitution, or other appropriate relief; and to award Plaintiffs costs of suit, including reasonable attorneys' fees, and all other appropriate equitable or legal relief. See Complaint ¶¶ A-H, at 14-15, and ¶¶ A-I, at 16-17.
As part of their claims, the Plaintiffs request that their counsel be designated as class counsel. See id. ¶ B, at 12. They request that a declaratory judgment be entered against the United States declaring that the practices of which the Plaintiffs complain in the Complaint are a breach of trust and violation of the fiduciary duty towards the Navajo allottees. See id. ¶ C, at 12. Additionally, they request that the Court preliminarily and permanently enjoin the United States to perform its duties under the statutes and regulations that regulate the grant of rights-of-way on trust lands; that the Court grant injunctive or other appropriate relief to prevent future renewal or awarding of rights-of-way on allottee land at below fair-market value and without an appraisal; and that the Court award the Plaintiffs their costs of suit, including reasonable attorneys' fees and other appropriate equitable or legal relief. See Complaint ¶¶ D, E and F, at 13.
On July 1, 2009, the Federal Defendants filed the Federal Defendants' Motion to
On July 1, 2009, the Federal Defendants filed the Federal Defendants' Motion to Strike (Doc. 45), requesting that pursuant to rule 12(f) the Court strike Exhibit A to the Complaint (the Site Visit Report) and any reference to it in the pleadings, because the report "was prepared by an officer of the court whose impartiality was called into question" and such striking "will serve to protect the public's confidence in the judicial process." Motion to Strike ¶ 8, at 4. The Federal Defendants argue that inclusion of the report in the pleadings is prejudicial to them. See id. ¶ 9, at 4. On July 15, 2009, the Corporate Defendants filed their Motion to Strike Special Master Report (Exhibit A) from Plaintiffs' Complaint (Doc. 52), contending that the report "is redundant, immaterial, and impertinent to this case," particularly because it was suppressed in the litigation for which it was created. Motion to Strike Report ¶ 5, at 4.
On July 15, 2009, Transwestern filed Defendant Transwestern Pipeline Company, LLC's Motion to Dismiss Plaintiffs' Claims for Ejectment or Removal of Pipeline and for Trespass for Lack of Jurisdiction (Doc. 53), asserting that the Natural Gas Act of 1938, 15 U.S.C. §§ 717 through 717z ("NGA"), abrogates or preempts the Plaintiffs' common-law trespass claims. See Transwestern's Motion to Dismiss at 2. Further, it asserts that, under the NGA, FERC has exclusive jurisdiction over the dedication and abandonment of interstate natural-gas pipelines, and that the Plaintiffs' request conflicts with FERC's jurisdiction. See Transwestern's Motion to Dismiss at 2. Transwestern argues that, accordingly, the Court is without jurisdiction to order Transwestern to abandon or to remove its pipelines which are under FERC's governance. See id. at 2.
On July 15, 2009, El Paso Natural Gas filed its Motion to Dismiss pursuant to Rule 12(b)(6) (Doc. 54)("El Paso's First Motion to Dismiss"), asking the Court to dismiss the claim against El Paso Natural Gas under Counts II and III of the Complaint. See El Paso's First Motion to Dismiss at 1. El Paso Natural Gas contends that the Federal Defendants do not have an enforceable trust duty to the Plaintiffs pertaining to the approval of rights of way, and, even if they did, the Plaintiffs cannot assert claims based on "private trust law principles of transferee liability" to "a third-party grantee from the government of [rights-of-way] on allotted lands." El Paso's First Motion to Dismiss at 3. El Paso Natural Gas also asserts that the NGA has displaced the trespass claims.
On July 15, 2009, El Paso Natural Gas filed El Paso's Motion to Dismiss Pursuant to Rule 12(b)(1) and 12(b)(7) (Doc. 55)("El Paso's Second Motion to Dismiss"), requesting the dismissal of the Plaintiffs' claims against them in Counts II and III of the Complaint. El Paso Natural Gas asserts that the Plaintiffs' claims are not ripe for review because the Plaintiffs have not asserted that they exhausted their administrative remedies. See El Paso's Second Motion to Dismiss at 2. El Paso Natural Gas further argues that, if the Court
On July 15, 2009, Kinder Morgan filed its Motion to Dismiss for Lack of Subject Matter Jurisdiction (Doc. 56), requesting the Court to dismiss the Plaintiffs claims regarding Allotments No. 11465 and 11469 for lack of standing.
On July 15, 2009, the Corporate Defendants filed their Joint Motion to Dismiss and Memorandum in Support of Defendant Enterprise Products Partners, L.P., Kinder Morgan, Transwestern Pipeline Company, LLC, Western Refining, Inc., Public Service Company of New Mexico, New Mexico Gas Company, Inc., and Tucson Electric Power Company Pursuant to Fed. R.Civ.P. 12(b)(1) and 12(b)(7) (Doc. 57), contending that Plaintiffs have failed to exhaust their required administrative remedies, the action is not ripe for judicial review, the Federal Defendants' immunity was not waived, and the claims against the Federal Defendants are time-barred. See Joint Motion to Dismiss at 3. They further allege that the Court should dismiss the Complaint because the Federal Defendants are indispensable parties. See Joint Motion to Dismiss at 3.
Also on July 15, 2009, the Corporate Defendants filed their Joint Motion to Dismiss and Memorandum in Support of Defendants Enterprise Products Partners, L.P., Kinder Morgan, Transwestern Pipeline Company, LLC, Western Refining, Inc., Public Service Company of New Mexico, New Mexico Gas Company, Inc., and Tucson Electric Power Company Pursuant to Fed.R.Civ.P. 12(b)(6) (Doc. 58), asserting that the General Right of Way Act of 1948, and its implementing regulations, do not impose a trust responsibility upon the United States which gives rise to liability against the Federal Defendants. Specifically, these Defendants contend that the Right of Way Act "and its regulations do not reflect the kind of pervasive management and control that give rise to a trust duty" and, therefore, the Plaintiffs' constructive-trust claim fails. See Enterprise's Second Motion to Dismiss at 3, 22. Further, they argue that the Right of Way Act "does not evince an intent to authorize a private right of action against" the third-party grantees of the rights-of-way. See Enterprise's Second Motion to Dismiss at 3. The movants assert that, if the Plaintiffs cannot recover against the Federal Defendants, then the Plaintiffs cannot succeed on a claim against the Corporate Defendants. See id. at 3. They additionally argue that the Complaint fails to state a claim against them for trespass because the Plaintiffs consented to the movants entering their land for the right-of-way purposes. See Enterprises Second Motion to Dismiss at 3. Lastly, they argue the Complaint fails under the applicable statute of limitations. See Enterprise's Second Motion to Dismiss at 3.
On September 9, 2009, the Plaintiffs' filed their response, addressing all of the motions that the Federal Defendants and Corporate Defendants had previously filed. The Plaintiffs assert that the Federal Defendants breached their trust responsibilities under the Indian Rights of Way Act, 25 U.S.C. §§ 323-28 and its implementing regulations, to the detriment of the class. See Plaintiffs' Response at 12. They argue that the Corporate Defendants benefitted from and participated in the breach by
The Plaintiffs noted in their response that they cited the Indian Tucker Act, 28 U.S.C. § 1505, in their Complaint, but are not proceeding under the Act because, with regard to the Federal Defendants, they are not seeking money damages. See Plaintiffs' Response at 18. The Plaintiffs base the Court's jurisdiction on the federal-question jurisdiction statute, 28 U.S.C. § 1331, and the General Allotment Act, 25 U.S.C. § 345, and assert that the Federal Defendants have waived sovereign immunity under 5 U.S.C. § 702.
On October 23, 2009, the Federal Defendants filed their reply. See Doc. 64. On November 4, 2009, the Corporate Defendants filed their reply to their motion to strike, see Doc. 70, reiterating the points they previously argued in their motion and contending that, in their response, the Plaintiffs never explained why the Court should allow the report to be used in this matter. See Western Refining's Report at 1. On November 4, 2009, the Corporate Defendants filed their reply briefs pertaining to their motions to dismiss under Fed. R.Civ.P. 12(b)(1) and 12(b)(7) and Fed. R.Civ.P. 12(b)(6). See Docs. 71 and 72.
Also on November 4, 2009 Transwestern filed its reply in support of its motion to dismiss the Plaintiffs' claims for ejectment or removal of pipeline, for trespass, and for lack of jurisdiction. See Doc. 73. On November 4, 2009, El Paso Natural Gas also filed its reply to its motion to dismiss under rule 12(b)(6), contending that the Plaintiffs do not allege that it violated any law or allege any facts upon which relief against a third party could be granted. See Doc. 74 at 1. On that same day, El Paso Natural Gas also filed its reply to its motion to dismiss under rule 12(b)(1) and 12(b)(7), see Doc. 75, arguing that the Plaintiffs' response fails to establish that their claim presents a ripe case or controversy under Article III of the United States Constitution, particularly arguing that the Plaintiffs have failed to exhaust their administrative remedies and the United States is an indispensable party. See El Paso Natural Gas Reply at 1 at 15.
On December 10, 2009, the Plaintiffs filed the Plaintiffs' Motion for Leave to File Sur-Reply to Pages 11-16 of "El Paso's Reply Memorandum in Support of Motion to Dismiss Pursuant to Rule 12(b)(6)," Doc. 82, stating that El Paso Natural Gas argued for the first time in its reply brief that its activities were privileged under the Noerr-Pennington doctrine
Rule 12(b)(1) empowers a court to dismiss a complaint for "lack of jurisdiction over the subject matter." Fed. R.Civ.P. 12(b)(1). The party invoking federal jurisdiction bears the burden of establishing its existence. See Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir.1974). The United States Court of Appeals for the Tenth Circuit has held
Alto Eldorado Partners v. City of Santa Fe, No. CIV 08-0175 JB/ACT, 2009 WL 1312856, at **8-9 (D.N.M. Mar. 11, 2009) (Browning, J.) (citations omitted). As the United States Court of Appeals for the Fifth Circuit stated:
Williamson v. Tucker, 645 F.2d at 412-13 (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)).
Under rule 12(b)(6), a court may dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R.Civ.P. 12(b)(6). "The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true." Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir.1994). The sufficiency of a complaint is a question of law, and when considering and addressing a rule 12(b)(6) motion, a court must accept as true all well-pleaded factual allegations in the complaint, view those allegations in the light most favorable to the non-moving party, and draw all reasonable inferences in the plaintiff's favor. See Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir.2006); Hous. Auth. of Kaw Tribe v. City of Ponca City, 952 F.2d 1183, 1187 (10th Cir.1991).
A complaint challenged by a rule 12(b)(6) motion to dismiss does not require detailed factual allegations, but a plaintiff's obligation to set forth the grounds of his or her entitlement to relief "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "Factual allegations must be enough to raise a right to relief above the speculative level...." Id. (internal citation omitted). "[T]he Supreme Court [of the United States] recently... prescribed a new inquiry for us to use in reviewing a dismissal: whether the
Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir.2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570, 127 S.Ct. 1955) (internal citations omitted).
The Supreme Court has recently expounded upon the meaning of Bell Atlantic Corp. v. Twombly.
Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009) (citation omitted). Additionally, the Supreme Court has commented:
Id. at 1950.
Under rule 12(b)(7), the court may dismiss a case for failure to join a necessary and indispensable party under rule 19. The Court exercises discretion in deciding a rule 12(b)(7) motion. See Citizen Band Potawatomi Indian Tribe of Okla. v. Collier, 17 F.3d 1292, 1293 (10th Cir.1994) (citing Navajo Tribe of Indians v. New Mexico, 809 F.2d 1455, 1471 (10th Cir. 1987)). The movant bears the burden to produce evidence which shows the nature of the interest, possessed by an absent party, that such party's absence will impair the protection of that interest, and that, accordingly, the claims should be dismissed. See Citizen Band Potawatomi Indian Tribe v. Collier, 17 F.3d at 1293. Defendants can satisfy this burden with "affidavits of persons having knowledge of the interest as well as other relevant extra-pleading evidence." Id. (quoting Martin
In deciding whether a person is indispensable under rule 19(b), the Court applies a three-part analysis. See Citizen Potawatomi Nation v. Norton, 248 F.3d 993, 997 (10th Cir.2001). First, the Court determines, under rule 19(a), whether the party is a required or "necessary" party. A party is required if the party can be served with process, its joinder will not deprive the court of subject-matter jurisdiction, and:
Fed.R.Civ.P. 19(a). If a person is required, but has not been joined, the court must determine whether joinder is feasible. See Citizen Potawatomi Nation v. Norton, 248 F.3d at 997. If the party is required but cannot be joined, the Court must then determine under rule 19(b) whether the party is indispensable. To conclude that a party is indispensable, the Court must find "in equity and good conscience" that the action should not proceed in the party's absence. Fed.R.Civ.P. 19(b). See Sac & Fox Nation of Mo. v. Norton, 240 F.3d 1250, 1259 (10th Cir.2001). In making this determination, the Court, using its discretion, balances the following factors:
Fed.R.Civ.P. 19(b). See Thunder Basin Coal Co. v. Sw. Pub. Serv. Co., 104 F.3d 1205, 1211 (10th Cir.1997).
Earlier case law generally describes those parties who should be joined under rule 19(a) as necessary parties, and those necessary parties whose absence requires that a case be dismissed under rule 19(b) as indispensable parties, or necessary and indispensable parties. The 2007 amendments to the rules changed the term necessary parties to required parties. These amendments were stylistic only, however, and much of the case law interpreting rule 19 predates the amendments and refers to necessary and indispensable parties.
One basis on which a party may be a required, or necessary, party is if, "in that person's absence, the court cannot accord complete relief among existing parties." Fed.R.Civ.P. 19(a)(1)(A). A court is able to afford complete relief when a party's absence "does not prevent the plaintiffs from receiving their requested ... relief." Sac & Fox Nation of Missouri v. Norton, 240 F.3d 1250, 1258 (10th Cir. 2001). As Moore's Federal Practice explains, this provision "requires joinder when nonjoinder precludes the court from
Those cases discussing the complete-relief segment of rule 19(a) look at whether a plaintiff or other claimant can be granted complete relief without adding parties. For example, in Salt Lake Tribune Pub. Co., LLC v. AT & T Corp., 320 F.3d 1081 (10th Cir.2003), the Tenth Circuit analyzed whether the district court could grant the plaintiff all the relief that it was seeking on its claims. See id. at 1097. In Associated Dry Goods Corp. v. Towers Financial Corp., 920 F.2d 1121 (2d Cir.1990), the United States Court of Appeals for the Second Circuit held that an absent party was a necessary party to afford a counterclaimant complete relief because the counterdefendant could not comply with the injunction that the counterclaimant sought without the consent of the absent party. See id. at 1124. In Champagne v. City of Kansas City, Kan., 157 F.R.D. 66 (D.Kan. 1994), a number of paramedics filed suit against Kansas City, alleging overtime-pay violations. The City sought to join as plaintiffs other paramedics who had not sued. See id. at 67. The district court held:
Champagne v. City of Kansas City, Kan., 157 F.R.D. at 67 (citation omitted).
Another way in which a party can be a required or necessary party is if the "person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may ... leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest." Fed. R.Civ.P. 19(a)(1)(B) and 19(a)(1)(B)(ii). Preventing inconsistent obligations does not curtail future litigation.
Delgado v. Plaza Las Americas, Inc., 139 F.3d 1, 3 (1st Cir.1998) (citations omitted). While the Tenth Circuit has not devoted extended discussion to inconsistent obligations, it has given, as an example of inconsistent obligations, a hypothetical scenario
The application of rule 19 is subject to rule 23. See Fed.R.Civ.P. 19(d).
Under rule 23(a), a class action may be maintained only if:
Fed.R.Civ.P. 23(a). To have a class action, the class must also satisfy one of the provisions of rule 23(b). See Dixon v. Valdez, 167 F.R.D. 688, 690 (D.N.M.1996) (Black, J.)(quoting Sollenbarger v. Mountain States Tel. & Tel. Co., 121 F.R.D. 417, 423 (D.N.M.1988)). Rule 23(a)(3) requires that the named representative's claims be typical of the class' claims. See Fed R. Civ. P. 23(a)(3). The typicality requirement ensures that absent class members are adequately represented by evaluating whether the named plaintiff's interests are sufficiently aligned with the class' interest. See Baby Neal ex rel. Kanter v. Casey, 43 F.3d 48, 57 (3d Cir.1994); Nicodemus v. Union Pac. Corp., 204 F.R.D. 479, 490 (D.Wyo.2001). The essential characteristics of the named plaintiffs' claims must be the same as or similar to the class' claims, but they need not be identical; the Tenth Circuit has affirmed that factual differences among some of the class members will "not defeat typicality under Rule 23(a)(3) so long as the claims of the class representative and class members are based on the same legal or remedial theory." Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir.1988). "[T]here may be varying fact situations among individual members of the class and this is all right so long as the claims of the plaintiffs and the other class members are based on the same legal or remedial theory." Penn v. San Juan Hosp., Inc., 528 F.2d 1181, 1189 (10th Cir.1975). Accordingly, differences in the amount of damages will not defeat typicality. See Harrington v. City of Albuquerque, 222 F.R.D. 505, 511 (D.N.M. 2004) (Hansen, J.).
To protect the due-process interests of unnamed class members—who are bound by any judgment in the action— rule 23(a)(4) requires that the named representative provide fair and adequate protection for the class' interests. See Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 379 n. 5, 116 S.Ct. 873, 134 L.Ed.2d 6 (1996) (characterizing adequacy of representation as a constitutional requirement); Lile v. Simmons, 143 F.Supp.2d 1267, 1277 (D.Kan.2001) ("Due process requires that the Court `stringently' apply the competent representation requirement because class members are bound by the judgment (unless they opt out), even though they may not actually be aware of the proceedings."). The Tenth Circuit has identified two questions relevant to the adequacy of representation inquiry: (i) whether the named plaintiffs and their counsel have any conflicts with other class members; and (ii) whether the named plaintiffs and their counsel vigorously prosecute the action on behalf of the class. See Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1187-88 (10th Cir.2002). In considering this second question, the experience and competence of the attorney representing the class may inform the court's analysis. See Lopez v. City of Santa Fe, 206
A court "may strike from a pleading ... any redundant, immaterial, impertinent, or scandalous matter." Hill v. Cray Research, Inc., 864 F.Supp. 1070, 1073 (D.N.M.1991). See Ysais v. N.M. Judicial Standard Comm'n, 616 F.Supp.2d 1176, 1184 (D.N.M.2009) (Browning, J.); Leviton Mfg. Co., Inc. v. Zhejiang Dongzheng Elec. Co., No. CIV 05-0301, 2006 WL 4060663, at *1 (D.N.M. Sept. 18, 2006) (Browning, J.); Fed.R.Civ.P. 12(f). "Motions to strike, however, are generally a disfavored and drastic remedy." Sierra Club v. Tri-State Generation & Transmission Ass'n, Inc., 173 F.R.D. 275, 285 (D.Colo.1997). "To be impertinent or immaterial, the allegations must have no possible bearing on the controversy." Employers Ins. of Wausau v. Musick, Peeler, & Garrett, 871 F.Supp. 381, 391 (S.D.Cal. 1994). Evidentiary allegations are not usually proper pleading, but allegations supplying background or historical material or other matter of an evidentiary nature will not be stricken unless unduly prejudicial to defendant. See Fuchs Sugars & Syrups, Inc. v. Amstar Corp., 402 F.Supp. 636, 637-38 (S.D.N.Y.1975). Irrelevant allegations will be stricken as scandalous only if they degrade defendants' moral character, contain repulsive language, or detract from the dignity of the court. See Nault's Auto. Sales v. Am. Honda Motor Co., 148 F.R.D. 25, 30 (D.N.H.1993) (citation omitted). Relevant allegations will be stricken as scandalous only if they satisfy the above criteria and go into unnecessary detail. See id. Motions to strike are granted or denied in the court's discretion. See The Wilderness Soc'y v. Kane County, Utah, 581 F.3d 1198, 1226, n. 25 (10th Cir.2009).
A federal court may hear cases only where the plaintiff has standing to sue. Standing has two components. First, standing has a constitutional component arising from Article III's requirement that federal courts hear only genuine cases or controversies. Second, standing has a prudential component. See Habecker v. Town of Estes Park, Colo., 518 F.3d 1217, 1224 n. 7 (10th Cir.2008) (noting that, in addition to constitutional standing requirements, "the Supreme Court recognizes a set of `prudential' standing concerns that may prevent judicial resolution of a case even where constitutional standing exists"). The burden of establishing standing rests on the plaintiffs. See, e.g., Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 104, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). The plaintiffs must "allege ... facts essential to show jurisdiction. If they fail to make the necessary allegations, they have no standing." FW/PBS v. City of Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990) (internal citations and quotations omitted). Moreover, where the defendant challenges standing, a court must presume lack of jurisdiction "unless the contrary appears affirmatively from the record." Renne v. Geary, 501 U.S. 312, 316, 111 S.Ct. 2331, 115 L.Ed.2d 288 (1991) (quoting Bender v. Williamsport Area School Dist., 475 U.S. 534, 546, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986) (internal quotation omitted)). "It is a long-settled principle that standing cannot be inferred argumentatively from averments in the pleadings but rather must affirmatively appear in the record." Phelps v. Hamilton, 122 F.3d 1309, 1326 (10th Cir.1997) (quoting FW/PBS v. City of Dallas, 493 U.S. at 231, 110 S.Ct. 596) (internal citations and quotations omitted).
"Article III of the Constitution limits the jurisdiction of federal courts to
"Standing is determined as of the time the action is brought." Smith v. U.S. Court of Appeals, for the Tenth Circuit, 484 F.3d 1281, 1285 (10th Cir.2007) (quoting Nova Health Sys. v. Gandy, 416 F.3d 1149, 1154 (10th Cir.2005)). In Smith v. U.S. Court of Appeals, for the Tenth Circuit, the Tenth Circuit rejected a plaintiff's standing to challenge the Colorado appellate courts' practice of deciding cases in non-precedential, unpublished opinions, which the plaintiff asserted allowed courts to affirm incorrect decisions without interfering with official, "published" law. The Tenth Circuit noted that the plaintiff had recently taken his state appeal, and therefore
Id., 484 F.3d at 1285.
By contrast, in Nova Health Sys. v. Gandy, the Tenth Circuit found that abortion providers had standing to challenge a recently enacted Oklahoma parental-notification law on the grounds that they were in imminent danger of losing patients because of the new law. Although finding standing, the Tenth Circuit was careful to frame the issue as whether, "as of June 2001 [the time the lawsuit was filed]," Nova faced any imminent likelihood that it would lose some minor patients seeking abortions. 416 F.3d at 1155. Moreover, while focusing on the time of filing, the Tenth Circuit allowed the use of evidence from later events—prospective patients lost because of the notification law after the lawsuit began—to demonstrate that the plaintiff faced an imminent threat as of the time of filing. See id.
"Prudential standing is not jurisdictional in the same sense as Article III standing." Finstuen v. Crutcher, 496 F.3d 1139, 1147 (10th Cir.2007). Prudential standing consists of "a judicially-created set of principles that, like constitutional standing, places limits on the class of persons who may invoke the courts' decisional and remedial powers." Bd. of County Comm'rs of Sweetwater County v. Geringer, 297 F.3d 1108, 1112 (10th Cir.2002) (internal quotation marks omitted). Generally, there are three prudential-standing requirements: (i) "a plaintiff must assert his own rights, rather than those belonging
Most relevant here is the rule that a "plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties." Aid for Women v. Foulston, 441 F.3d 1101, 1111 (10th Cir.2006) (quoting Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). There is an exception to this general rule, however, known as third-party standing or jus tertii. Third-party standing is allowed when: (i) "the party asserting the right has a close relationship with the person who possesses the right;" and (ii) "there is a hindrance to the possessor's ability to protect his own interests." Aid for Women v. Foulston, 441 F.3d at 1111-12.
To have standing to seek judicial review of agency's administrative actions, a plaintiff must demonstrate that he or she has suffered an injury in fact, and that his or her interest is arguably within the zone of interests intended to be protected by the relevant statute. Corrugated Container Corp. v. Community Services Administration, 429 F.Supp. 142, 150 (W.D.Va. 1977). Additionally, it must be obvious "that relevant statutes neither preclude judicial review nor commit action in question solely to agency's discretion." Id.
With regard to a class action, courts have held that, if any single plaintiff has standing, the court has jurisdiction over the case and need not consider whether any other plaintiff has standing as well. See Watt v. Energy Action Educ. Found., 454 U.S. 151, 160, 102 S.Ct. 205, 70 L.Ed.2d 309 (1981); Mountain States Legal Foundation v. Glickman, 92 F.3d 1228, 1232 (D.C.Cir.1996). Plaintiffs suing under the Administrative Procedures Act ("APA") must also establish that they are "adversely affected or aggrieved ... within the meaning of a relevant statute" by some final agency action. 5 U.S.C. § 702. See Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 882, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Plaintiffs must establish standing as a prerequisite for declaratory relief. See Rector v. City & County of Denver, 348 F.3d 935, 946 (10th Cir.2003) (affirming dismissal of request for declaration that city ordinance is unconstitutional, on the basis that "the abstract possibility that Plaintiffs may receive a contestable parking ticket in the future certainly does not satisfy Article III's requirements."). As to injunctive relief, plaintiffs must demonstrate a "personal stake in the outcome." F.E.R. v. Valdez, 58 F.3d 1530, 1534 (10th Cir.1995). Plaintiffs must demonstrate a sufficient likelihood that they will be harmed in the future by the allegedly illegal conduct. Id.
An organization may represent its members' interests provided it can establish that: "(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." Hunt v. Wash. State Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.E.2d 383 (1977); Am. Forest & Paper Ass'n v. EPA, 154 F.3d 1155, 1158-59 (10th Cir.1998). An association, representing a class, must meet a similar test for standing as individuals do.
To meet the test's first prong, "the association must allege that its members, or any one of them, are suffering immediate or threatened injury as a result of the challenged action of the sort that would make out a justiciable case had the members themselves brought suit." Warth v. Seldin, 422 U.S. at 511, 95 S.Ct. 2197. Further, the Supreme Court requires allegations of "specific, concrete facts demonstrating that the challenged practices harm [plaintiffs] and that [plaintiffs] personally would benefit in a tangible way from the court's intervention." Id. at 508, 95 S.Ct. 2197 (emphasis added).
"The issue in the causation inquiry is whether the alleged injury can be traced to the defendant's challenged conduct, rather than to that of some other actor not before the court." Ecological Rights Found. v. Pacific Lumber, 230 F.3d 1141, 1151 (9th Cir.2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). The Tenth Circuit has distinguished between the injury-in-fact requirement and the causation requirement:
Comm. to Save the Rio Hondo v. Lucero, 102 F.3d 445, 451-52 (10th Cir.1996). The relevant showing for purposes of Article III standing, is injury to the plaintiff. See Friends of the Earth, Inc. v. Laidlaw Env. Services (TOC), Inc., 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000).
To establish redressability, "a plaintiff must ... establish it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Comm. to Save the Rio Hondo v. Lucero, 102 F.3d at 452. A plaintiff seeking injunctive relief satisfies the redressability requirement "by alleging a continuing violation or the imminence of a future violation of an applicable statute or standard." NRDC v. Sw. Marine, 236 F.3d 985, 995 (9th Cir.2000).
For purposes of a standing analysis, however, the court assumes that the alleged legal violations have occurred and asks whether a favorable decision in the case will redress the injury that the plaintiffs have alleged. See Comm. to Save the Rio Hondo v. Lucero, 102 F.3d at 452. To satisfy redressability, the plaintiff need show only "the likelihood (as opposed to speculation [or certainty]) that the injury will be redressed by a favorable decision." Sw. Ctr. for Biological Diversity v. Clark, 90 F.Supp.2d 1300, 1310 (D.N.M. 1999) (Mecham, Senior Judge). Where the plaintiff has established that the challenged action causes him or her an ongoing injury in fact, then an order invalidating and enjoining further engagement in the challenged action will redress the injury. See Friends of the Earth, Inc. v. Laidlaw Env. Services (TOC), Inc., 528 U.S. at 185-186, 120 S.Ct. 693.
The final element for the association to show is that the interests it seeks to protect are germane to the association's purpose. See id. at 181, 120 S.Ct. 693. Merriam-Webster Online defines germane as (i) "closely akin" and (ii) "being at once
Sometime standing is confused with ripeness. Standing and ripeness are closely related doctrines "in that each focuses on whether the harm asserted has matured sufficiently to warrant judicial intervention." Skull Valley Band of Goshute Indians v. Nielson, 376 F.3d 1223, 1234 (10th Cir.2004) (quoting Johnson v. Missouri, 142 F.3d 1087, 1090 n. 4 (8th Cir.1998)). The difference between the two is that standing concerns who may bring an action while ripeness concerns when the action may be brought. See ACORN v. City of Tulsa, Okla., 835 F.2d 735, 738 (10th Cir.1987).
"The question of ripeness, like other challenges to a court's subject matter jurisdiction, is treated as a motion under Rule 12(b)(1)." New Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir.1995). See Fed.R.Civ.P. 12(b)(1). "In order for a claim to be justiciable under Article III, it must be shown to be a ripe controversy." New Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir.1995). Ripeness pertains to timing of a case and is intended "to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements." New Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir.1995) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 148, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)). Ripeness is a component of the Article III requirement that limits judicial review to "cases or controversies." U.S. Const. art. III, § 2. See U.S. West, Inc. v. Tristani, 182 F.3d 1202, 1208 (10th Cir. 1999). To satisfy Article III's case-or-controversy requirement, a claim must present an impending "injury in fact." Nat'l Treasury Employees Union v. United States, 101 F.3d 1423, 1427 (D.C.Cir.1996). To satisfy the injury in fact requirement, a "plaintiff must allege concrete plans rather than mere `some day intentions.'" Verizon Wireless (VAW) v. City of Rio Rancho, NM, 476 F.Supp.2d 1325, 1331 (D.N.M.2007) (quoting Roe # 2 v. Ogden, 253 F.3d 1225, 1229 (10th Cir.2001)).
New Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir.1995). Fitness of the issue for judicial resolution involves both whether the issue is purely legal and whether the agency action is final. See Abbott Labs. v. Gardner, 387 U.S. 136, 149-52, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). The other prong of the ripeness test is the hardship to the parties of withholding judicial review. See id. This prong is concerned with "whether the challenged action creates a direct and immediate dilemma for the parties." See, e.g., New Mexicans for Bill Richardson v. Gonzales,
The federal government and its agencies may be sued only if it has waived its sovereign immunity. See Dahl v. United States, 319 F.3d 1226, 1228 (10th Cir.2003). "Sovereign immunity is not waived by general jurisdictional statutes such as 28 U.S.C. § 1331 (federal question jurisdiction), 28 U.S.C. § 1340 (jurisdiction over actions arising under the Internal Revenue Code), and 28 U.S.C. § 1361 (action to compel a government officer to perform his duty)." Lonsdale v. United States, 919 F.2d 1440, 1444 (10th Cir.1990). The waiver must be unequivocally expressed and not liberally construed; consent is strictly construed in favor of the federal government. See United States v. Nordic Village, Inc., 503 U.S. 30, 33-34, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992). When the acts complained of by the plaintiff pertain to actions of defendants in their official capacity as agents of the United States, the claim is, in actuality, against the United States. See Atkinson v. O'Neill, 867 F.2d 589, 590 (10th Cir.1989) (citing Burgos v. Milton, 709 F.2d 1, 2 (1st Cir.1983)).
The APA confers jurisdiction on federal district courts with respect to non-monetary claims. See Castella v. Army & Air Force Exch. Serv., 657 F.Supp. 25, 27 (N.D.Tex.1986). Specifically, 5 U.S.C. § 702 provides:
The APA does not, through § 702, create an independent basis of jurisdiction, see Eagle-Picher Indus., Inc. v. United States, 901 F.2d 1530, 1531 (10th Cir.1990); it allows for judicial review of final agency action only if there is also an independent basis for subject-matter jurisdiction, see Colo. Dep't of Soc. Servs. v. Dep't of Health & Human Servs., 558 F.Supp. 337, 339 (D.Colo.1983). Notably, before review of the grievance may occur, the party must demonstrate that statutes do not preclude judicial review and that the action is not committed to agency discretion by law. See Heckler v. Chaney, 470 U.S. 821, 828, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985).
"The doctrine of exhaustion of administrative remedies is one among related doctrines—including abstention, finality, and ripeness—that govern the timing of federal-court decisionmaking." McCarthy v. Madigan, 503 U.S. 140, 144, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992), superceded by statute on other grounds as recognized in Garrett v. Hawk, 127 F.3d 1263, 1265 (10th Cir.1997). A court conducting an exhaustion inquiry must give "paramount importance" to congressional intent. McCarthy v. Madigan, 503 U.S. at 144, 112 S.Ct. 1081 (quoting Patsy v. Bd. of Regents of Fla., 457 U.S. 496, 501, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982)). Where Congress provides that certain administrative remedies are exclusive, exhaustion is required. See Patsy v. Bd. of Regents of Fla., 457 U.S. at 502 n. 4, 102 S.Ct. 2557 (citing Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638 (1938)). Moreover, even where there is no explicit statutory exhaustion requirement, courts must draw guidance from congressional intent "in determining whether application of the doctrine would be consistent with the statutory scheme." Patsy v. Bd. of Regents of Fla., 457 U.S. at 502 n. 4, 102 S.Ct. 2557. Thus, in deciding whether exhaustion of federal remedies is required, "courts generally focus on the role Congress has assigned to the relevant federal agency, and tailor the exhaustion rule to fit the particular administrative scheme created by Congress." Id. (citing McKart v. United States, 395 U.S. 185, 193-95, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969)).
The Supreme Court has recognized at least three broad exceptions to the exhaustion requirement: (i) "First, requiring resort to the administrative remedy may occasion undue prejudice to subsequent assertion of a court action," McCarthy v. Madigan, 503 U.S. at 146-47, 112 S.Ct. 1081; (ii) "Second, an administrative remedy may be inadequate `because of some doubt as to whether the agency was empowered to grant effective relief,'" id. at 147, 112 S.Ct. 1081 (quoting Gibson v. Berryhill, 411 U.S. 564, 575, n. 14, 93 S.Ct. 1689, 36 L.Ed.2d 488 (1973)); and (iii) "Third, an administrative remedy may be inadequate where the administrative body is shown to be biased or has otherwise predetermined the issue before it," McCarthy v. Madigan, 503 U.S. at 147, 112 S.Ct. 1081. Not only does a party's failure to exhaust mandatory administrative remedies bar the court from hearing that party's claim, but it also prevents the court from treating that party as a class member in a class action claim. See Arctic Slope Native Ass'n v. Sebelius, 583 F.3d 785, 796 (Fed.Cir.2009).
Pursuant to 28 U.S.C. § 2401(a), with few exceptions, "every civil action commenced against the United States shall be barred unless the complaint
A statute of limitations commences when "[a] plaintiff has reason to know of his injury when he should have discovered it through the exercise of reasonable diligence." Indus. Constructors Corp. v. U.S. Bureau of Reclamation, 15 F.3d 963, 969 (10th Cir.1994). "A plaintiff need not know the full extent of his injuries before the statute of limitations begins to run." Id. Under New Mexico law, the statute of limitations for claims based on accounts, unwritten contract, injuries to and conversion of property, fraud, and other actions is four years. See NMSA 1978, § 37-1-4. The statute of limitations begins to run on the date on which the plaintiff discovered or reasonably should have discover the trespass. See id.
Article VI, Clause 2, of the Constitution provides that the laws of the United States
Gade v. Nat'l Solid Wastes Mgmt. Assoc., 505 U.S. 88, 98, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992) (citations omitted).
Preemption may be express or implied. See id. When faced with express preemption—where a statute expressly states that it preempts certain areas of state law—a court must determine the scope of the preemption that Congress intended. See Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (stating that "the purpose of Congress is the ultimate touch-stone in every pre-emption case."). "Congress may indicate pre-emptive intent through a statute's express language or through its structure and purpose." Altria Group, Inc. v. Good, 129 S.Ct. at 543. When the text of a preemption clause is susceptible to more than one plausible reading, courts ordinarily "accept the reading that disfavors pre-emption." Bates v. Dow Agrosciences, LLC, 544 U.S. 431, 449, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005). Preemption arguments are analyzed under Rule 12(b)(1). See Lewis v. Donley, 2009 WL 1492139 *12 (D.Alaska 2009).
Implied conflict preemption is found when it is impossible for a private party to comply with both state and federal requirements, see English v. General Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990), or where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941). "Pre-emptive intent may also be inferred if the scope of the statute indicates that Congress intended federal law to occupy the legislative field, or if there is an actual conflict between state and federal law." Hines v. Davidowitz, 312 U.S. at 67, 61 S.Ct. 399 (citing Freightliner Corp. v. Myrick, 514 U.S. 280, 287, 115 S.Ct. 1483, 131 L.Ed.2d 385 (1995)).
The Supreme Court, in the past, found that implied preemption may take the form of "obstacle" preemption.
Geier v. Am. Honda Motor Co., 529 U.S. at 907-08, 120 S.Ct. 1913 (Stevens, J., dissenting).
The Supreme Court, however, has now begun to back away from finding implied preemption based on an alleged conflict with the purposes underlying federal regulations. In 2002, the Supreme Court issued a unanimous decision in Sprietsma v. Mercury Marine, 537 U.S. 51, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002), rejecting implied conflict preemption of state law claims that a boat engine was defective because it lacked a propeller guard. In 2008, in Altria Group. Inc. v. Good, the Supreme Court rejected the plaintiffs' obstacle-preemption claim that Maine's Unfair Practices Act was implicitly pre-empted by a similar federal act, the Federal Cigarette Labeling and Advertising Act, because it presented an obstacle to the Federal Trade Commission. See 129 S.Ct. at 551. Most recently, in Wyeth v. Levine, ___ U.S. ____, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009), six Justices of the Supreme Court, including Justices Breyer and Kennedy, who joined in the majority decision in Geier v. American Honda Motor Co., rejected the plaintiff's two implied preemption arguments—impossibility preemption and obstacle preemption. See Wyeth v. Levine, 129 S.Ct. at 1203 (holding that "it is not impossible for Wyeth to comply with its state and federal law obligations and that Levine's common-law claims do not stand as an obstacle to the accomplishment of Congress' purposes in the [Federal Food, Drug, and Cosmetic Act]."). In so ruling, Justice Stevens, writing for the majority, narrowly limited Geier v. American
Of particular import for the current status of implied obstacle preemption was Justice Thomas' concurring opinion in Wyeth v. Levine, in which he wrote:
129 S.Ct. at 1205 (Thomas, J., concurring in the judgment). Justice Thomas stressed his concern:
129 S.Ct. at 1207. Justice Thomas emphasized that, when analyzing the preemptive effect of federal statutes or regulations, "[e]vidence of pre-emptive purpose must be sought in the text and structure of the provision at issue" to comply with the Constitution. Id. at 1207-08 (citing CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993)).
Moreover, the Supreme Court has put renewed emphasis on the presumption against preemption. See Wyeth v. Levine, 129 S.Ct. at 1195 n. 3. "In areas of traditional state regulation, [the court] assume[s] that a federal statute has not supplanted state law unless Congress has made such an intention clear and manifest." Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005) (internal quotation marks omitted). If confronted with two plausible interpretations of a statute, the court has "a duty to accept the reading that disfavors pre-emption." Bates v. Dow Agrosciences LLC, 544 U.S. at 449, 125 S.Ct. 1788. See Wyeth v. Levine, 129 S.Ct. at 1195; Cipollone v. Liggett Group, Inc., 505 U.S. 504, 518, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992).
Where Congress has acted to invade an area of law that federal common law formerly occupied, the Court's role in lawmaking is limited. See City of Milwaukee v. Illinois, 451 U.S. 304, 314, 101 S.Ct. 1784, 68 L.Ed.2d 114 (1981). "It is for Congress, not federal courts, to articulate the appropriate standards to be applied as a matter of federal law." Id. at 317, 101 S.Ct. 1784. "Where the issues raised require the expertise of administrative agencies, federal courts often decline to exercise the jurisdiction and refuse to hear the claim based on the doctrine of primary jurisdiction." Tampa Interstate 75 Ltd. P'ship v. Fla. Gas Transmission, 294 F.Supp.2d 1277, 1279 (M.D.Fla.2003)
The NGA regulates natural-gas companies, including the transportation by them of natural gas in interstate commerce. See 15 U.S.C. § 717(a) & (b). Congress has declared that "the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest, and that Federal regulation in matters relating to the transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary in the public interest." 15 U.S.C. § 717(a). As part of the regulation, all natural gas companies must obtain from the FERC a certificate of public convenience and necessity authorizing their operations and acts. See 15 U.S.C. § 717f(c)(1)(A).
When Congress decided regulation of the natural gas industry was necessary, it entrusted regulation to the FERC's informed judgment, and not to the preference of the court. See United Gas Pipe Line Co. v. Fed. Energy Reg. Comm'n, 657 F.2d 790, 794 (5th Cir.1981). FERC has primary jurisdiction over claims for trespass and ejectment of a FERC certified pipeline. See Tampa Interstate 75 Ltd. P'ship v. Fla. Gas Transmission, 294 F.Supp.2d at 1279.
28 U.S.C. § 1331 grants jurisdiction over cases "arising under the Constitution, laws, or treaties of the United States" and provides jurisdiction in some cases involving Indians and Indian tribes. "Th[e Supreme] Court has . . . emphasized `the distinctive obligation of trust incumbent upon the Government in its dealings with these dependent and sometimes exploited people.'" United States v. Mitchell, 463 U.S. 206, 225, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) (quoting Seminole Nation v. United States, 316 U.S. 286, 296, 62 S.Ct. 1049, 86 L.Ed. 1480 (1942)). When the statutes and regulations delegate to the United States full responsibility to manage the Indian resources and land for the benefit of the Indians, then the fiduciary responsibility is greater and the duties may be enforced. See United States v. Navajo Nation (Navajo I), 537 U.S. 488, 505, 123 S.Ct. 1079, 155 L.Ed.2d 60 (2003). "[A] fiduciary relationship necessarily arises when the Government assumes such elaborate control over forest and property belonging to the Indians. All of the necessary elements of a common-law trust are present: a trustee (the United States), a beneficiary (the Indian allottees), and a trust corpus (Indian timber, lands, and funds)." United States v. Mitchell, 463 U.S. 206, 225, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983).
Id.
The Indian General Allotment Act of 1887, 24 Stat. 388, as amended, 25 U.S.C. §§ 331 through 358 (the "General Allotment Act"), was created "to end the tribal and nomadic life of the Indians. . . ." Hopkins v. United States, 414 F.2d 464, 467 (9th Cir.1969). The General Allotment Act provided for the allotment of land within Indian reservations to those Indians residing on the reservation and stated that the United States would "retain title to such allotted lands in trust for the benefit of the allottees." United States v. Mitchell, 445 U.S. 535, 540-41, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980). 25 U.S.C. § 345 allows for actions regarding allotments, providing:
Pursuant to 25 U.S.C. § 323, the Secretary of the Interior is authorized to grant rights-of-way for all purposes, subject to such conditions as he may prescribe, over and across lands held in trust by the United States for individual Indians or Indian tribes, communities, bands, or nations. The requirements for compensation for such rights-of-way is set forth in 25 U.S.C. § 325, which states in relevant part: "No grant of a right-of-way shall be made without the payment of such compensation as the Secretary of the Interior shall determine to be just." The accompanying regulations further set forth the compensation requirement for the rights-of-way.
25 C.F.R. § 169.12. While, generally, consent of the owner or owners of the land is required for the granting of a right of way, see 25 C.F.R. § 169.3, 25 U.S.C. § 324 sets forth the instances when consent of the owner or owners is not required.
The process and timing for appeal of the agency's decision is set forth in detail in the regulations:
25 C.F.R. § 2.9(a).
25 C.F.R. § 169.2. An appeal process has also been created for cases in which an official fails to act upon request of an affected person or persons. See 25 C.F.R. § 2.8(a) ("A person or persons whose interests are adversely affected, or whose ability to protect such interests is impeded by the failure of an official to act on a request to the official, can make the official's inaction the subject of appeal.").
The regulations set forth in 25 C.F.R. § 2.6 prescribe when decisions are final agency action subject to judicial review.
Id. § 2.6(a). See W. Shoshone Bus. Council v. Babbitt, 1 F.3d 1052, 1055 n. 3 (10th Cir.1993).
"It is a well established principle of equity that a third party who pays money to a fiduciary for the benefit of the beneficiary, with knowledge that the fiduciary intends to misappropriate the money or otherwise be false in his trust, is a participant in the breach of trust and liable therefor [sic] to the beneficiary." Seminole Nation v. United States, 316 U.S. at 296, 62 S.Ct. 1049. To be liable, the third person must knowingly participate in the trustee's breach. See Mertens v. Hewitt Assocs., 508 U.S. 248, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993). A person who "has colluded with a fiduciary" in committing a breach of duty, and who benefits form the act, is liable to the beneficiary. Lawrence Warehouse Co. v. Twohig, 224 F.2d 493 (8th Cir.1955) (quoting Restatement (First) of Restitution § 138 (1937)).
The most difficult part of analyzing the Plaintiffs' case is that they have not provided certain material facts, such as when the United States granted the rights-of-way, whether the Plaintiffs consented to them, whether there were any appeals, and what rights-of-way had appraisals performed on them. In the end, however, despite the gaps in some of the factual background of the Plaintiffs' case, their Complaint presents too many problems. The Court will dismiss the Plaintiffs' case for a variety of reasons.
Both the Federal Defendants and Western Refining have moved the Court to strike Exhibit A to the Complaint (the Site Visit Report) and any reference to it in the pleadings, because the report "was prepared
A court "may strike from a pleading . . . any redundant, immaterial, impertinent, or scandalous matter." Hill v. Cray Research, Inc., 864 F.Supp. at 1073. See Ysais v. N.M. Judicial Standard Comm'n, 616 F.Supp.2d at 1184 (Browning, J.); Leviton Mfg. Co., Inc. v. Zhejiang Dongzheng Elec. Co., No. CIV 05-0301, 2006 WL 4060663, at *1 (Browning, J.); Fed. R.Civ.P. 12(f). "Motions to strike, however, are generally a disfavored and drastic remedy." Sierra Club v. Tri-State Generation & Transmission Ass'n, Inc., 173 F.R.D. at 285. "To be impertinent or immaterial, the allegations must have no possible bearing on the controversy." Employers Ins. of Wausau v. Musick, Peeler, & Garrett, 871 F.Supp. at 391. Irrelevant allegations will be stricken as scandalous only if they degrade defendants' moral character, contain repulsive language, or detract from the dignity of the court. See Nault's Auto. Sales v. Am. Honda Motor Co., 148 F.R.D. at 30.
The Court sees no reason to strike the report. At the motion-to-dismiss stage, the Court is interested only in whether it has jurisdiction and whether the Plaintiffs plead a claim to relief that is plausible on its face. See Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d at 1177. The Court is not concerned with the evidentiary value of the report, and may eventually find that it cannot be considered as evidence in this matter. It provides, however, a basis for the Plaintiffs' factual allegations, even if it turns out to be unreliable. When analyzing a motion to dismiss under rule 12(b)(6), the Court must take all well-pleaded factual allegations as true, see Mobley v. McCormick, 40 F.3d at 340, and the report was the basis for the Plaintiffs' allegation that the BIA was approving appraisals of rights-of-way at below market value.
Western Refining argues that inclusion of the report "would prejudice the ROW Grantees by requiring them to answer allegations that [another court] determined should have no future effect." Motion to Strike Report ¶ 5, at 3-4. At the motion-to-dismiss stage, because the Court takes all well-pleaded facts in the Complaint as true, Western Refining and the other Defendants would have to answer the allegations in the Complaint—which refer to or rely upon the report—with or without the report attached. Similarly, the remainder of Western Refining's and the Federal Defendants' arguments on this issue appear to attack the degree to which the Court should consider the report as substantive evidence. Except with respect to matters of the Court's jurisdiction, the evidentiary weight of any given document is irrelevant at this stage in the ligation. While attachment of the report might be redundant to the Plaintiffs' factual allegations, the Court does not believe the report's attachment to the Complaint warrants imposition of the "disfavored and drastic remedy" of being stricken under rule 12(f). Sierra Club v. Tri-State Generation & Transmission Ass'n, Inc., 173 F.R.D. at 285. The Court therefore denies both motions to strike.
The Plaintiffs have filed a motion seeking leave to file a surreply to one of the underlying motions to dismiss. The Court sees no sound reason why the motion should be denied. The Court thus grants the Plaintiffs' motion.
To have standing, a petitioner must have incurred an injury. As all parties acknowledge, there are no rights-of-way encumbering Allotments 11465 and 11469. The owners with interest in those allotment have not incurred any injury with regard to those allotments. Accordingly, the Court will dismiss Kee Sandoval as a Plaintiff from this matter with regard to those allotments.
In response to the allegations that their Complaint is untimely, the Plaintiffs assert that 28 U.S.C. § 2401 is not jurisdictional. See Plaintiffs' Response at 32. Typically, a statute of limitations would not present jurisdictional issues; however, here, where the statute of limitations limits the waiver of sovereign immunity by the Federal Defendants, the issue whether the statute of limitations has passed raises jurisdictional concerns. The reason for this jurisdictional issue is that the Court has no jurisdiction to entertain actions against the United States unless the United States has waived its sovereign immunity. See 14 C. Wright, A. Miller, & E. Cooper, Fed. Prac. & Proc. Juris. § 3654 (3d ed.)("The natural consequence of the sovereign immunity principle is that the absence of consent [to suit] by the United States is a fundamental defect that deprives the district court of subject matter jurisdiction."). The statute of limitations is the end-point of the window of time during which the United States has waived its immunity from suit. See id. ("[A]n action against the government may be brought only . . . within the time limits set out in the applicable statute, which means that a statute of limitations defense cannot be waived by the government and its application in a particular case will be decided under federal, rather than state, law."). When the limitations period expires, effectively, the United States has withdrawn its waiver of immunity, and the Court once again has no jurisdiction to entertain the action. See Ctr. for Biological Diversity v. Hamilton, 453 F.3d at 1334 ("Unlike an ordinary statute of limitations, § 2401(a) is a jurisdictional condition attached to the government's waiver of sovereign immunity, and as such must be strictly construed.")(quoting Spannaus v. Dep't of Justice, 824 F.2d at 55). As the Supreme Court explained:
United States v. Mottaz, 476 U.S. 834, 841, 106 S.Ct. 2224, 90 L.Ed.2d 841 (1986).
The Plaintiffs do not state in their Complaint any information regarding the dates on which any of the rights-of-way were granted; nevertheless, the Federal Defendants provided the following information regarding Allotments 1497, 11164, 11358, 11359 and 11445:
The proper statute of limitations with regard to the Plaintiffs' claims is six years.
The Plaintiffs attempt to extend the accrual of their claims until the Special Master's Report in Cobell v. Norton. The report certainly gave the Plaintiffs more information, but they should have been asking about and determining the existence of appraisals and whether they were
The Plaintiffs also assert that the limitations period has never begun to run, because under the Indian Trust Accounting Statute, Act of Nov. 10, 2003, Publ. L. No. 108-108, Tit. I, 117 Stat. 1263, "the statute of limitations shall not commence to run on any claim . . . concerning losses to or mismanagement of trust funds, until the affected tribe or individual Indian has been furnished with an accounting of such funds from which the beneficiary can determine whether there has been a loss." Act of Nov. 10, 2003. See Plaintiffs' Response at 23. The Plaintiffs assert they have never been furnished with an accounting of their funds, and therefore the claims have never accrued. See Plaintiffs' Response at 23-24. The United States Court of Federal Claims, however, has held that the ITAS applies only to trust funds and not to other property such as parcels of land. See Rosales v. United States, 89 Fed.Cl. 565, 580 (2009) ("Shoshone held that ITAS only applies to trust funds, and that the statute does not toll a claim for breach of fiduciary duty regarding trust assets.")(emphasis in original)(citing Shoshone Indian Tribe of Wind River Reservation v. United States, 364 F.3d 1339, 1348-50 (Fed.Cir.2004)); Oenga v. United States, 83 Fed.Cl. 594, 611 (2008) ("[T]he Federal Circuit has indicated, as set forth above, that the ITAS is limited to claims of failure or delay in activities such as `(1) collecting payments under the . . . contracts, (2) depositing the collected monies into the Tribes' interest-bearing trust accounts, or (3) assessing penalties for late payment.'")(citing Shoshone Indian Tribe of Wind River Reservation v. United States, 364 F.3d at 1350-51). The Court agrees that the plain language of the ITAS applies to claims of mismanagement of trust "funds." See Act of Nov. 10, 2003 ("the statute of limitations shall not commence to run on any claim . . . concerning losses to or mismanagement of trust funds")(emphasis added). The Oxford English Dictionary Online defines "funds" as "Money at a person's disposal; pecuniary resources." Oxford English Dictionary Online, "fund, n." (2d ed.1989, Oxford University Press), available at http:// dictionary.oed.com/cgi/entry/50090902 (last visited Apr. 1, 2010).
The Defendants assert that the Court must dismiss the Plaintiffs' Complaint because the claims are not ripe for review. Plaintiffs argue that their matter is ripe because it is redressable now. See Plaintiff's Response at 41. Considering the factors for determining ripeness set forth by the Tenth Circuit in Sierra Club v. U.S. Department of Energy, 287 F.3d 1256 (10th Cir.2002), this matter is not ripe for review. See 287 F.3d at 1262-63. The causes of action are not ripe for review until there has been a final agency action. See McKart v. United States, 395 U.S. 185, 193, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969) ("The doctrine [of exhaustion of remedies] provides `that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.'"); Dry Creek Lodge, Inc. v. United States, 515 F.2d 926 (10th Cir.1975) (acknowledging the rule that "no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted," but finding that it is not a jurisdictional doctrine and requiring the plaintiff be able to argue on the issue before dismissal); Coosewoon v. Meridian Oil Co., 25 F.3d 920, 924 (10th Cir.1994) ("Under Department of Interior regulations, if an agency decision is subject to appeal within the agency, a party must appeal the decision to the highest authority within the agency before judicial review is available.")(citing 25 C.F.R. § 2.6(a)). None of the Plaintiffs have asserted that they have appealed the granting of the rights-of-way. The Plaintiffs believe that redress for them must be through the court system. There is, however, an administrative procedure established, pursuant to the same statutes under which the Plaintiffs assert jurisdiction, and which provide them with a means of redress. By not exhausting their administrative remedies, the Plaintiffs have failed to create an administrative record supporting their claims. Certainly, because there are few specific details regarding the granting of the rights-of-way in the Complaint itself, the Court would benefit from further development through the administrative process of the issues presented. Judicial intervention would inappropriately interfere with the agency's administrative action. The Court, therefore, finds that the Plaintiffs' claims are not ripe for review and will dismiss them.
The Plaintiffs contend that they were not required to exhaust their administrative remedies with regard to their claims, because they are challenging "an agency-wide breach of trust." What the Plaintiffs are trying to do is circumvent the exhaustion requirement. The Plaintiffs had a right at the time the rights-of-way were granted to appeal the decision of the BIA. The Department of Interior's regulations, 25 C.F.R. Part 2, set forth the appeal process and exhaustion requirement. To the Court's knowledge, from a careful review of the Complaint and the briefs on this motion, no appeals were made. Now, years later, in fact many years later for some, even after some of the Plaintiffs agreed to renew the rights-of-way, these Plaintiffs are contending that they should be able to contest the United States' actions. In approving the rights-of-way, there was an appeal process and an exhaustion requirement. The exhaustion requirement is not waivable, even by attempting to become a member of a class.
The Plaintiffs argue that exhaustion is not required because the Defendants do not point a procedure that would give them relief. See Plaintiffs' Response at 62. There is relief and a procedure for review set forth in the statutes. Because the Plaintiffs did not exercise their administrative rights and missed their opportunity for redress, however, the Plaintiffs have now formulated their argument into a challenge to a "multi-year policy" of the Federal Defendants neglecting their trust duties. The Court cannot properly permit them to circumvent the proper processes and continue to pursue a claim in the federal court; to do so would encourage claimants to litigate and disregard the administrative process. The Plaintiffs contend that, because they allege "a systematic failure," there is not "procedure that would give [them] relief." Plaintiffs' Response at 41. Having not sought redress through the proper appeals process within the Department of Interior for each right-of-way, however, the Plaintiffs cannot now seek redress in federal court for all rights-of-way.
The Plaintiffs' arguments also do not fall under the three broad exceptions to the exhaustion requirement. The Plaintiffs have not argued that "requiring resort to the administrative remedy may occasion undue prejudice to subsequent assertion of a court action." McCarthy v. Madigan, 503 U.S. at 146-47, 112 S.Ct. 1081. The Plaintiffs have also not argued that "an administrative remedy may be inadequate `because of some doubt as to whether the agency was empowered to grant effective relief.'" Id. at 147, 112 S.Ct. 1081 (quoting Gibson v. Berryhill, 411 U.S. 564, 575 n. 14, 93 S.Ct. 1689, 36 L.Ed.2d 488 (1973)). Moreover, the Plaintiffs have not shown that "an administrative remedy may be inadequate" because "the administrative body is shown to be biased or has otherwise predetermined the issue before it." McCarthy v. Madigan, 503 U.S. at 147, 112 S.Ct. 1081. Indeed, the Plaintiffs had recourse through the administrative-appeal process, and they did not avail themselves of the process.
The Plaintiffs argue that this remedy is inadequate, because they are alleging not "a mere failure to act on request" but "a breach of trust owing to the Secretary's failure to perform express statutory duties." Plaintiffs' Response at 35. That the Plaintiffs are asserting a failure to perform a duty does not justify not seeking an appeal through the proper process. They never gave the appeal process an opportunity to work for them. The administrative process is the forum in which the Plaintiffs had to seek redress; they cannot bypass that process unless they are able to show that exhaustion would be futile. See Fizer v. Safeway Stores, Inc., 586 F.2d 182, 183 (10th Cir.1978); White Mountain Apache Tribe v. Hodel, 840 F.2d 675, 677 (9th Cir.1988) (stating that futility will be found only in "exceptional circumstances" such as "by virtue of a preannounced decision by the final administrative decision-maker," or "objective and undisputed evidence of administrative bias which would render pursuit of an administrative remedy futile"). The Plaintiffs' arguments do not evidence futility in the usual sense of the word, i.e., that the administrative procedure would not do any good. See The American Heritage Dictionary of the English
The Plaintiffs assert that exhaustion would be futile because they are asserting a "systemic" violation. Plaintiff's Response at 38-39. Yet the Plaintiffs' Complaint does not describe a violated general policy; instead, it asserts specific violations of federal law, the kind of violation that can be remedied in an administrative proceeding. Furthermore, in White Mountain Apache Tribe v. Hodel, the plaintiffs alleged general "poor performance on the part of the government as trustee for the Tribe's natural resources on its reservation in Arizona"—something that could likewise be considered a "systemic" violation. 840 F.2d at 676. See id. at 677 ("[The plaintiffs'] complaints concern a series of management decisions within the Bureau of Indian Affairs and the Department of the Interior."). The United States Court of Appeals for the Ninth Circuit found that the claim was not one that is exempt from the APA's exhaustion requirements.
White Mountain Apache Tribe v. Hodel, 840 F.2d at 678. The Ninth Circuit thus held that it is "exceptional circumstances," not "systemic violations," that might relieve a plaintiff of the duty to exhaust his administrative remedies prior to initiating suit in federal court. The Court agrees, and likewise agrees that the fact that a violation may be continuous or ongoing is not such an exceptional circumstance.
The Plaintiffs also contend that they did not need to exhaust their remedies because they did not receive notification from the BIA of their right to appeal. They argue that the exhaustion requirement was forfeited because of administrative inaction. See Plaintiffs' Response at 49. Failure of the BIA to provide a notice does not necessarily cancel the administrative-remedy process. See Cheyenne-Arapaho Tribes Okla. v. United States, 966 F.2d 583, 588 (10th Cir.1992) (citing 25 C.F.R. § 2.4 (1981)). Instead, failure of the agency to give notice of the initial agency action simply extends the time in which the plaintiff can appeal that action. To the extent that the Plaintiffs did not know about the agency action in this case, their time to appeal that action to the reviewing authority begins to run from the time they received notice. See Cheyenne-Arapaho Tribes Okla. v. United States, 966 F.2d at 588 ("[F]ailure to give such notice [of administrative action] extends the time in which appeal from the decision may be taken. The regulation is explicit: when proper notice has not been given, the right to appeal continues until such notice is received.").
See also 25 C.F.R. § 2.8(a) ("A person or persons whose interests are adversely affected, or whose ability to protect such interests is impeded by the failure of an official to act on a request to the official, can make the official's inaction the subject of appeal, as follows. . . .").
Because the Plaintiffs have not exhausted their administrative remedies, their cause of action is not subject to judicial review. Further, because they have not exhausted their administrative remedies, i.e., there has been no final agency action, Congress has not waived sovereign immunity under the APA. A prerequisite to the waiver of sovereign immunity under the APA is that there be final administrative action. See 5 U.S.C. § 704. While there is an exception to this requirement for non-statutory review, the exception applies only "where the absence of federal court jurisdiction over an agency action `would wholly deprive' the aggrieved party' of a meaningful and adequate means of vindicating its statutory rights.'" Long Term Care Partners, LLC v. U.S., 516 F.3d 225, 233 (4th Cir.2008) (quoting Bd. Governors, Fed. Reserve Sys. v. MCorp Fin., Inc., 502 U.S. 32, 43, 112 S.Ct. 459, 116 L.Ed.2d 358 (1991)). Here, the Plaintiffs have an adequate and statutorily prescribed administrative review process available to them, and they did not avail themselves of that process. Because the Plaintiffs have not exhausted their administrative remedies and do not fall into any exception to the final-agency-action requirement, Congress has not waived sovereign immunity, and the Court will thus dismiss the suit against the Federal Defendants.
The Plaintiffs contend that the Corporate Defendants knew or should have known about the United States' breach of trust and, as a result, the Corporate Defendants have caused a constructive trust to be imposed upon their rights-of-way. See Complaint ¶¶ 22, 43 and 44, at 6, 11. The Plaintiffs failed to avail themselves of their administrative remedies, and, as a result, they missed their opportunity to contest the appraised value of their rights-of-way and obtain redress. Recognizing that they missed that opportunity, the Plaintiffs cannot now seek redress against the Corporate Defendants for the United States' alleged acts or omissions.
The Plaintiffs seek a constructive trust over the rights-of-way that the Corporate Defendants currently hold. "A constructive trust is a legal fiction, `an equitable remedy devised to prevent unjust enrichment and compel restitution of property that in equity and good conscience does not belong to the Defendant.'" United States v. Andrews, 530 F.3d 1232, 1237 (10th Cir.2008). Black's Law Dictionary defines it as "[a]n equitable remedy that a court imposes against one who has obtained property by wrongdoing." Black's Law Dictionary at 1649 (9th ed.2009).
As an initial matter, the Plaintiffs have not asserted sufficient facts to establish a plausible claim against the Corporate Defendants for breach of trust, justifying a constructive trust. The Court cannot discern, from the facts alleged, precisely what the Plaintiffs allege that the Corporate Defendants knew. The Plaintiffs allege that "the ROW defendants either knew, or in the exercise ordinary care, should have known" of the breaches of trust. That allegation, however, is just a "[t]hreadbare recital[] of the elements of a cause of action, supported by mere conclusory statements," and the Supreme Court in Ashcroft v. Iqbal declared that such was insufficient to state a claim. 129 S.Ct. at 1949-50. The Plaintiffs allege a range of prices at which someone at the Navajo office—someone who is not a Defendant in this action—was appraising rights-of-way and allege that the price was "far below fair market value," but there is no indication what fair market value is or how significant a departure these appraised prices were. In a separate paragraph, the Plaintiffs allege that the BIA was aware that the appraisals which it was approving were many times lower than what the Navajo Nation was charging for similar rights-of-way, but that fact again fails to speak to the Corporate Defendants' knowledge.
The most complete allegation of the Corporate Defendants' knowledge is in paragraph 38, in which the Plaintiffs conclusorily state: "Similarly, the [Corporate] defendants knew that they were paying far less to the Navajo Allottees for exactly the same access that had cost them many times more on adjacent or nearby Navajo Nation lands and, in some cases, on adjacent or nearby fee land." Complaint ¶ 38, at 10. These allegations have two problems. First, they do not provide the Court with a basis to compare the prices that the Corporate Defendants paid to the fair market value, and thereby determine whether the Corporate Defendants were put on notice that the United States was short-changing the Indians. More importantly, the Complaint is silent whether the Corporate Defendants, in their dealings with the United States to acquire these rights-of-way, would have known of the restrictions upon the Federal Defendants to provide the Plaintiffs with no less than fair market value for the rights-of-way. Thus, even if the Court were to find that having knowledge of the United States' failure to properly perform under the statutory and regulatory scheme would justify imposition of a constructive trust in this case, the factual allegations do not plausibly state such a claim.
If the Court were to find only that the Plaintiffs had properly pled their claim for constructive trust against the Corporate Defendants under Twombly and Iqbal, the Court probably would give the Plaintiffs leave to amend. The flaws in the pleadings themselves are likely fixable. The possibility of amendment raises the question, then, whether the Court should allow any constructive trust to be imposed on the Corporate Defendants under the theory that the Plaintiffs suggest.
It appears that the Plaintiffs recognize that significant and possibly insurmountable barriers stand in the way of bringing their claims directly against the United States in this case, and that is what prompted them to stretch to try to come up with theories under which they could
Against the Corporate Defendants, the Plaintiffs assert that they can obtain relief even without proving the Corporate Defendants participated in the breach of trust. See Plaintiffs' Response at 25. The Plaintiffs argue that, "[u]nder federal Indian law, a grant made on an allottee's land in violation of U.S. statutory law is void—and cannot be remedied by severing the unlawful part—thus divesting grantees of any right." Plaintiffs' Response at 25 (citing Smith v. McCullough, 270 U.S. 456, 463-65, 46 S.Ct. 338, 70 L.Ed. 682 (1926); Hallam v. Commerce Min. & Royalty Co., 49 F.2d 103, 103 (10th Cir.1931)). Both of these cases involve an allottee who granted interests in his or her property, which interest he or she did not have the power to grant. Here, however, there is no dispute that the Plaintiffs had the power to give the rights-of-way. The issue in this case is whether the proper procedures were followed and adequate compensation given, and not whether the action taken was made without proper authority.
The Plaintiffs also contend that the Corporate Defendants are liable to the Plaintiffs as third parties. See Plaintiffs' Response at 15 (citing Seminole Nation v. United States, 316 U.S. at 296, 62 S.Ct. 1049). The Plaintiffs argue that, because the Corporate Defendants "reaped this windfall" they, and not the taxpayers, should be held accountable. The Supreme Court in Seminole Nation v. United States stated: "It is a well established principle of equity that a third party who pays money to a fiduciary for the benefit of the beneficiary, with knowledge that the fiduciary intends to misappropriate the money or otherwise be false to his trust, is a participant in the breach of trust and liable therefor to the beneficiary." 316 U.S. at 296, 62 S.Ct. 1049. The facts of this case, however, are substantially different from those in Seminole Nation v. United States, and the Court finds it inapplicable. In that case, the plaintiff alleged that the third-party whom it sought to hold accountable—the United States—was aware
316 U.S. at 295-96, 62 S.Ct. 1049. Thus, in Seminole Nation v. United States, the defendant—the United States—was alleged to be aware of something that constituted a breach of fiduciary duty by other fiduciaries.
The posture of Seminole Nation v. United States was peculiar and is materially different from the posture of this case. In this case, the alleged fiduciary is the United States, and the third-parties that the Plaintiffs seek to hold accountable are private business entities. In Seminole Nation v. United States, the fiduciaries that were allegedly fraught with corruption were the Seminole tribe officials, and the third-party that the Seminole Nation sought to hold accountable was the United States, a fiduciary with respect to the Seminole Nation. That the relevant defendant—the United States—was a fiduciary to the plaintiffs was not lost on the Supreme Court, which stated:
Seminole Nation v. United States, 316 U.S. at 295-96, 62 S.Ct. 1049 (emphasis added). The trust relationship between the Seminole Nation and the United States was significant to the Supreme Court's decision to invoke an equitable doctrine of constructive trust and to hold the United States liable in that case. The Corporate Defendants have no fiduciary duties directly to the Plaintiffs; rather, each Corporate Defendant "is [no]thing more than a mere contracting party." Id. at 296, 62 S.Ct. 1049. Instead, the Corporate Defendants' have fiduciary duties to their shareholders to get the best deal they legally can. The United States' fiduciary duty to the Seminole Nation, combined with clearly fraudulent and criminal conduct, gave the Supreme Court in Seminole Nation v. United States a more substantial equitable basis to hold the United States liable that the facts do here to hold the Corporate Defendants liable. The allegations in the Complaint in this case, even assuming their truth, do not provide the kind of substantial basis in equity to justify holding the Corporate Defendants liable for the United States' alleged breach of trust. Seminole Nation v. United States is therefore inapposite. The Court is also skeptical of the wisdom of establishing precedent that could cause private companies to distrust engaging in business dealings with the United States because those companies could be held liable for the United States' misconduct toward Indians. The Plaintiffs' claim is properly against the United States, and can be vindicated through completion of the administrative process and then, if they are still not satisfied, in federal district court. The Court will therefore dismiss the Plaintiffs' vicarious-fiduciary-breach claims against the Corporate Defendants. Because the Plaintiffs do not adequately plead their claim, and because the case without the United States is now not one in which it would be equitable to hold private third-party companies liable for the United States' alleged breaches of trust in the absence of an exhaustion of administrative procedures against the United States, the Court will dismiss the claims against the Corporate Defendants for constructive trust.
The Court does not address a case in which both the United States and the Corporate Defendants are properly before the Court, a case in which the administrative procedures against the United States have been exhausted and there are findings of conclusive knowledge on the part of the Corporate Defendants that the United States is intentionally or recklessly defrauding the Plaintiffs, or a case in which the United States or another fiduciary is known to be insolvent and unable to satisfy
The Plaintiffs contend that, because the Corporate Defendants knew or should have known of the United States' breach of trust, the Corporate Defendants' construction and maintenance of its pipelines constitutes trespass. See Complaint ¶¶ 23, 45, at 6, 11. The Plaintiffs seek both trespass damages and equitable relief from the Corporate Defendants. They request cancellation of the rights-of-way and removal of its pipelines. See id. ¶ 52 at 14-15; id. ¶ 55 at 16-17. The Complaint does not specify whether the Plaintiffs are proceeding under state or federal law for their claims of trespass and ejectment, but the Plaintiffs' Response clarifies twice that they are proceeding under a federal theory. See Plaintiffs' Response at 43-45 (explaining that preemption arguments are irrelevant because the Plaintiffs are proceeding under a federal theory for their trespass and ejectment claims).
Nevertheless, it is not clear under what authority the Plaintiffs believe they can bring claims for trespass and ejectment. They cite to 25 U.S.C. § 325 as the basis for their claims, see Plaintiffs' Response at 44-45 ("Plaintiffs pursue a right founded on a statute, i.e., the Indian Lands Rights-of-Way Act."), but that statute does not create the cause of action they seek to assert. Rather, that statute states:
25 U.S.C. § 325. This statute proscribes granting of rights-of-way under certain conditions, but does not purport to create a private right of action for trespass where a right-of-way applicant acquires one that does not satisfy those conditions.
Many of the cases that the Plaintiffs cite agree that federal law governs claims by Indians to enforce property rights. See Wilson v. Omaha Indian Tribe, 442 U.S. 653, 670-71, 99 S.Ct. 2529, 61 L.Ed.2d 153 (1979) ("In these circumstances, where the Government has never parted with title and its interest in the property continues, the Indians' right to the property depends on federal law, `wholly apart from the application of state law principles which normally and separately protect a valid right of possession.'")(quoting Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 677, 94 S.Ct. 772, 39 L.Ed.2d 73 (1974)); Jicarilla Apache Tribe v. Andrus, 687 F.2d at 1341 (stating that a state-court case "is not controlling here because we are concerned with oil and gas leases on Indian lands which are governed by federal law.").
The United States Court of Appeals for the Ninth and Second Circuits have found that there exists a federal common law cause of action for trespass on Indian lands. See United States v. Milner, 583 F.3d 1174, 1182-83 (9th Cir.2009) (stating that "[f]ederal common law governs an action for trespass on Indian lands" and asserting that federal common law of trespass "generally comports with the Restatement of Torts"); Cayuga Indian Nation of N.Y. v. Pataki, 413 F.3d 266, 281 (2d Cir.2005) ("The Supreme Court has recognized a variety of federal common law causes of action to protect Indian lands from trespass, including actions for ejectment, accounting for profits, and damages.")(quoting United States v. Pend Oreille Pub. Util. Dist. No. 1, 28 F.3d 1544, 1549 n. 8 (9th Cir.1994)). "Under the Restatement, a person is liable for trespass if he intentionally causes a thing to enter land in the possession of another or fails to remove from the land a thing which he is under a duty to remove." United States v. Milner, 583 F.3d at 1182-83 (internal citations, quotation marks, and alterations omitted). The Restatement further clarifies that such entry is an "intrusion" only when "the possessor's interest in the exclusive possession of his land has been invaded by the presence of a person or thing upon it without the possessor's consent." Restatement (Second) of Torts § 158 cmt. c (1965).
In this case, the Corporate Defendants are using the allotment lands pursuant to consent. So far as the Court understands the Plaintiffs' allegations, each of the Corporate Defendants currently have rights-of-way passing through the allotment lands. That would require the Corporate Defendants to have gone through the steps necessary to be granted a right-of-way, which include receiving consent, in writing, from the relevant tribe or landowner, see 25 C.F.R. § 169.3; id. § 169.19, and issuance of the right-of-way by the United States. The Plaintiffs do not contest that the Defendants properly executed this portion of the right-of-way granting process. Both the United States and the relevant tribe or individual, therefore, must have given the Corporate Defendants written consent, in the form of a right-of-way, to use the land at issue. Now that they have the rights-of-way, the Corporate Defendants have legal authorization to use the lands. The Court thus finds that the Plaintiffs' Complaint states facts from which it is clear that, at this point, they have no claim for trespass against the Corporate Defendants.
The Court also finds, however, that the Plaintiffs' claims against the Corporate Defendants might be premature. If the Plaintiffs succeed in having the rights-of-way declared invalid through their claims against the United States, the Plaintiffs should have another opportunity to assert that the Corporate Defendants are trespassing upon land in their possession. Until that time, however, the Court will not invalidate the rights-of-way that the United States has granted, based on allegations of misconduct by the United States, in a suit solely against a third-party corporate right-of-way grantee. The
The Plaintiffs might argue that the Court's interpretation of the law conflicts with Indian law; however, the Plaintiffs are not prevented from bringing their claims, if done in the proper venue. The APA regulations allow for a redress of grievances and, once those remedies are exhausted, the Plaintiffs will have recourse to the federal courts. With a remedy in the appropriate forum, the Court does not see any conflict with Indian law.
Complaint ¶¶ 48 & 51, at 11-13. Because the Court has decided to dismiss the Plaintiffs' case, the Court need not address their request for class certification. The Court has dismissed the individual Plaintiffs' claims against the Federal Defendants for failure to exhaust their administrative remedies. The Court has also dismissed the claims against the Corporate Defendants for failure to state a claim upon which relief can be granted, and because the FERC has jurisdiction over the claims involving interstate natural gas pipelines. There is thus no Plaintiff with standing to bring the cause of action. The Plaintiffs ask the Court to infer "that out of [the] thousands of members [of the association], one or more would suffer the disputed [rights-of-way]." Plaintiffs' Response at 39. Of the individual Plaintiffs presented to the Court, however, none have standing. There has not been any indication that the proposed class has sought any administrative remedies. The Court is not prepared to accept the inference that the Plaintiffs propose. Accordingly, the Court will decline the Plaintiffs' request to certify the class. Because there is no class, the Court also need not discuss whether to designate counsel for the class.
