Western Refining Southwest, Inc. et al v. United States Department of the Interior et al

Filing 32

MEMORANDUM OPINION AND ORDER by District Judge Judith C. Herrera denying 29 Motion to Dismiss for Want of Subject Matter Jurisdiction. (baw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
WESTERN REFINING SOUTHWEST, INC.
and WESTERN REFINING PIPELINE, LLC,
Plaintiffs,
vs.

Civ. No. 16-442 JH/GBW

U.S. DEPARTMENT OF THE INTERIOR, and
SALLY JEWELL, in her official capacity as
Secretary of the Interior,
Defendants.

MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Motion to Dismiss for Want of Subject Matter
Jurisdiction [Doc. 29] filed by intervenors Patrick Adakai and Frank Adakai (“the Adakais”).
The Court has considered the motion, along with the responses [Docs. 30 and 31] filed by the
Defendant and the Plaintiffs, respectively. The Adakais chose not to file a reply brief. After
consideration of the arguments advanced by the parties and the relevant legal authorities, the
Court concludes that the motion should be denied.
FACTUAL AND PROCEDURAL BACKGROUND
This case centers on the right-of-way for a buried oil pipeline in northwestern New
Mexico. Plaintiffs (collectively, “Western”) operate a buried crude oil pipeline that runs 75 miles
from the San Juan Basin to an oil refinery near Gallup, New Mexico. The pipeline at issue here
traverses tribal, federal, state, and privately owned land, and Western holds easements for rightsof-way across 74.48 miles of the pipeline. However, this case arises from a dispute over the

easement for a .52 mile segment of pipeline that crosses Navajo Indian Allotment No. 2073, land
that is held in trust by the United States and allotted to individual citizens of the Navajo Nation.
On June 22, 2009, Western filed an application to renew its existing right-of-way across
43 Navajo allotments, including the .52 mile portion of pipeline over Allotment No. 2073 that is
at issue in this case. At the time, one of the applicable BIA regulations stated: “The Secretary
may … grant rights-of-way over and across individually owned lands without the consent of the
individual Indian owners when . . . (2) The land is owned by more than one person, and the
owners or owner of a majority of the interests therein consent to the grant.” 25 C.F.R. §
169.3(c)(2) (Apr. 1, 2015). On August 2, 2010, the Bureau of Indian Affairs (“BIA”) granted the
request and issued a twenty-year renewal of the right of way over Allotment No. 2073. This
renewal was based on consent from the owners of what BIA calculated to be 60.26% of the
individual Indians who held interests in Allotment No. 2073. Among these individuals were Tom
Morgan (42.5% interest) and Mary B. Tom (14.16% interest). In return for their consent, the
interest owners accepted compensation from Western.
On December 6, 2012, the Navajo Nation first acquired an interest in Allotment No. 2073
through a probate proceeding for Ms. Anita Adakai. In 2016, the Navajo Nation acquired
additional interests in the Allotment through conveyances made under the BIA’s land buyback
program.
Patrick Adakai, who owns a .0038461% interest in Allotment No. 2073, appealed the
BIA’s decision to the Interior Board of Indian Appeals (“IBIA”). Adakai argued that the
consents obtained from other landowners were flawed and that the amount of compensation was
inadequate. On January 8, 2013, the IBIA vacated the renewal of the easement on an issue it
raised sua sponte: that because Morgan and Tom had only a life estate in the property and had

2 

bequeathed future remainder interests to others (referred to as “remaindermen”) through “gift
deeds,” their consent was legally insufficient without additional consents from these
“remaindermen.” See Doc. 1-2 at 5, 56 IBIA at 108; Doc. 1 at ¶ 13. The decision rested in the
theory that as holders of life estates only, Morgan and Tom lacked authority to encumber the
Allotment beyond their lifetimes. The IBIA remanded the matter to the BIA.
As a result of this decision, Western attempted to obtain consent from Morgan and Tom’s
remaindermen, and was successful in doing so with Tom’s. However, Western was able to obtain
consent from only four of Morgan’s eight remaindermen.
On April 8, 2014, the BIA relied upon the 2013 IBIA decision and the denial of consent
by half of Morgan’s remaindermen to deny Western’s easement renewal on Allotment No. 2073.
Doc. 1-1 at 1; 63 IBIA 41. Western appealed this decision to the IBIA.1 Then, in late 2015, the
BIA revised its regulations, for the first time requiring consent not only from the holder of a life
estate, but also from the holders of the remainder interest. 25 C.F.R. § 169.109 (2016). Those
revised regulations went into effect in April of 2016.
On May 4, 2016, the IBIA denied Western’s appeal in part by refusing to require the BIA
to renew the right-of-way across Allotment No. 2073 for a fixed and unqualified 20-year term.
Rather, the IBIA concluded that Western was entitled to a qualified right-of-way for 20 years or
the life of Morgan or Tom, whichever is the shortest period. Doc. 1-1 at 1-2, 13; 63 IBIA 41-42,
53. This was because “the deeds contain no language that expressly or impliedly reserved, for the
life tenants, the authority to grant an interest beyond their lifetimes.” Id. at 10, 63 IBIA at 50.

1

On September 4, 2014, while its appeal of the BIA’s decision was apparently pending, Western
Refining filed a lawsuit in this Court seeking under 25 U.S.C. § 357 to obtain by eminent domain
the right to continued presence and operation of its pipeline across Allotment No. 2073. See
Western Refining Southwest, Inc. v. 3.7820 Acres Of Land In McKinley County, New Mexico,
14cv804 KG/KK, Complaint, Doc. 1. That case has been stayed pending the final outcome of
this appeal of the administrative proceedings. See id. at Docs. 166 and 172.
3 

The IBIA also found that “because the owners of a majority of the future interests in the
Allotment did not consent to the [right-of-way] renewal, the [BIA] did not err in refusing to issue
an unqualified 20-year renewal.” Id. at 2, 63 IBIA 42.
In the case now before the court, Western has sued the United States and asks this Court
to set aside the IBIA requirement of remaindermen consent on the grounds that it is improperly
retroactive and contrary to law, including the General Right-of-Way Act of 1948, 25 U.S.C. §§
323-328 and applicable Department of Interior regulations. Western contends that the IBIA’s
2013 and 2016 decisions overturning renewal and then denying unqualified 20-year renewal of
the right-of-way on Allotment No. 2073 are final agency actions reviewable under the
Administrative Procedures Act (APA). Western asks for a declaration that consent of the
majority of current owners, and not their remaindermen, is all that was required under the
General Right-of-Way Act and then-existing regulations governing its right-of-way renewal
applications, and that the BIA’s 2010 renewal of the easement for a 20-year term is valid.
Western also asks the Court to enjoin the Defendant to approve a renewal of its 20-year
unqualified right-of-way over Allotment No. 2073.
On June 13, 2016, Patrick and Frank Adakai (“the Adakais”), who own a partial interest
in the Allotment, filed their Motion to Intervene, Answer, Motion to Dismiss, and Counterclaim
[Doc. 16]. In a Memorandum Opinion and Order [Doc. 28] entered November 29, 2016, the
Court denied the motion to intervene but expressly allowed the Adakais to file a new motion to
dismiss addressing only the issue of subject matter jurisdiction. That motion is currently before
the Court.

4 

STATUTORY FRAMEWORK
The APA is not a jurisdiction-conferring statute; it does not directly grant subject matter
jurisdiction to the federal courts. See Califano v. Sanders, 430 U.S. 99, 105 (1977); Air Courier
Conference v. Am. Postal Workers Union, 498 U.S. 517, 523 n. 3 (1991). Rather, the judicial
review provisions of the APA provide a limited cause of action for parties adversely affected by
agency action. See Bennett v. Spear, 520 U.S. 154, 175 (1997); Japan Whaling Ass’n v. Am.
Cetacean Soc’y, 478 U.S. 221, 230 n. 4 (1986). Although the APA does not directly grant
jurisdiction, the federal question statute, 28 U.S.C. § 1331, “confer[s] jurisdiction on federal
courts to review agency action, regardless of whether the APA of its own force may serve as a
jurisdictional predicate.” Califano, 430 U.S. at 105.
Judicial review under the APA is based upon “the whole record or those parts of it cited
by a party.” 5 U.S.C. § 706. The United States Supreme Court has explained, “the focal point for
judicial review [under the APA] should be the administrative record already in existence, not
some new record made initially in the reviewing court.” Camp v. Pitts, 411 U.S. 138, 142 (1973)
(per curiam); accord Fla. Power & Light v. Lorion, 470 U.S. 729, 743-44 (1985). Thus, even
though judicial review rests with a district court, the district court does not act as a fact-finder.
Fla. Power & Light, 470 U.S. at 744. Instead, “[t]he task of the reviewing court is to apply the
appropriate APA standard of review . . . based on the record the agency presents . . . .” Id. at 74344.
Under the APA, a reviewing court is authorized to “decide all relevant questions of law”
and may either “compel agency action unlawfully withheld or unreasonably delayed” or “hold
unlawful and set aside agency action, findings and conclusions found to be ... arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law ... [or] in excess of

5 

statutory jurisdiction ... [or] without observance of procedure required by law....” 5 U.S.C. § 706.
Where agency action is unlawfully withheld or unreasonably delayed, relief in the form of a
mandatory injunction may issue under the APA. See Mt. Emmons Min. Co. v. Babbitt, 117 F.3d
1167, 1170 (10th Cir. 1997) (citing 5 U.S.C. § 706(1)). Such extraordinary relief may issue only
to cure “final agency action for which there is no other adequate remedy in court.” 5 U.S.C. §
704. Agency action is defined as including “the whole or part of an agency rule, order, license,
sanction, relief, or the equivalent or denial thereof, or a failure to act.” 5 U.S.C. § 551(13).
DISCUSSION
In their motion to dismiss, the Adakais assert two arguments. First, they contend that the
Court lacks jurisdiction to order the Department of the Interior to grant a right-of-way across the
Navajo Nation’s trust land (Allotment No. 2073) without the consent of the Navajo Nation itself.
Doc. 29 at 2. They argue that because Western Refining seeks an order to burden the real
property interests of the Navajo Nation, it bears the burden to show subject matter jurisdiction is
present, and that in order to do so it must either demonstrate that Congress has enacted a statute
that governs the Navajo Nation in this matter, or otherwise show that the Navajo Nation’s
sovereign immunity has been waived. Second, the Adakais argue that the Court lacks jurisdiction
under the APA to review the decision of the Secretary of the Interior (“the Secretary”) regarding
the grant of a right-of-way across Indian lands. They contend that such a decision is
discretionary, and that the APA expressly excludes from its purview those matters committed to
agency discretion.
The Court will address the Adakais’ arguments in the reverse of the order in which they
were raised.

6 

I.

JURISDICTION UNDER THE APA
The APA provides that any “person suffering legal wrong because of agency action, or

adversely affected or aggrieved by agency action within the meaning of a relevant statute, is
entitled to judicial review thereof.” 5 U.S.C. § 702. The Supreme Court has recognized that the
APA “embod[ies] a basic presumption of judicial review.” Lincoln v. Vigil, 508 U.S. 182, 190
(1993) (quotation omitted). However, judicial review of agency action is unavailable in two
circumstances: “(1) statutes preclude judicial review; or (2) agency action is committed to
agency discretion by law.” 5 U.S.C. § 701(a)(1)-(2). Invoking the latter subsection, the Adakais
suggest that the Secretary’s decision is unreviewable because the determination whether to
permit the right of way at issue is committed to agency discretion by law. In support of this
argument, they cite 25 U.S.C. § 323, which states: “The Secretary of the Interior be, and he is
empowered to grant rights-of-way for all purposes, subject to such conditions as he may
prescribe, over and across any lands now or hereafter held in trust by the United States for
individual Indians or Indian tribes . . . .” (emphasis added). According to the Adakais, this
provision exempts BIA decisions regarding rights-of-way from review under the APA.
Under existing Tenth Circuit and Supreme Court precedent, the Adakais’ argument must
fail. According to the Supreme Court, the “committed to agency discretion” exception “is a very
narrow exception,” and the legislative history of the APA “indicates that it is applicable in those
rare instances where ‘statutes are drawn in such broad terms that in a given case there is no law
to apply,’ ” Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410 (1971). There is
“no law to apply” where “the statute is drawn so that a court would have no meaningful standard
against which to judge the agency’s exercise of discretion.” Heckler v. Chaney, 470 U.S. 821,
830 (1985). Although a determination of whether there is “law to apply” often focuses on the

7 

controlling statute, the Tenth Circuit has recognized that the “law to apply” can also be derived
from the agency’s regulations where the agency is acting pursuant to those regulations. See
McAlpine v. United States of America, 112 F.3d 1429, 1433 (10th Cir. 1997); Thomas Brooks
Chartered v. Burnett, 920 F.2d 634, 642 (10th Cir. 1990).
Here, there is law to apply to review the Secretary’s decision, as both Western Refining
and the Secretary point out. Western Refining alleges that under decisions of the Tenth Circuit,
the Defendant’s retroactive application of a new requirement—consent of all remaindermen—to
Western Refining’s request for renewal of easement is improper. This question will require the
Court to consider Tenth Circuit decisions on retroactivity and their application under the facts of
this case. Further, Western Refining argues that the requirement of remaindermen consent is
contrary to the General Right-of-Way Act of 1948, 25 U.S.C. §§ 323-328 and the applicable
Department of Interior regulations, including 25 C.F.R. § 169.3(c)(2) (2015), that were in effect
until early 2016. Thus, an evaluation of the propriety of the Defendant’s actions will require
interpretation and application of these authorities. Further, it is not the case that decisions on
rights-of-way are left to the unfettered discretion of the Department of the Interior. Rather, § 324
of the Right-of-Way Act provides, in relevant part:
No grant of a right-of-way over and across any lands belonging to a tribe … shall
be made without the consent of the proper tribal officials. Rights-of-way over and
across lands of individual Indians may be granted without the consent of the
individual Indian owners if (1) the land is owned by more than one person, and
the owners or owner of a majority of the interests therein consent to the grant …
25 U.S.C. § 324. Thus, the Court must construe not only this statute, but also the regulations
implementing it. Because there is law to apply on all of these issues, APA review is available.
Thus, this portion of the motion to dismiss will be denied.

8 

II.

JURISDICTION IN THE ABSENCE OF THE NAVAJO NATION
On August 2, 2010, when the BIA issued the twenty-year renewal of the right of way

(which has been administratively overturned) over Allotment No. 2073, the Navajo nation had
not yet acquired an interest in the Allotment.
The Adakais argue that Allotment No. 2073 is now tribal land under 25 C.F.R. § 169.2.
As a result, they contend this Court lacks jurisdiction to grant a right-of-way across the Navajo
Nation’s trust land absent tribal consent (or an act of Congress abrogating the Navajo Nation’s
sovereign immunity) and approval by the Secretary. They contend that as a result, the Navajo
Nation is a necessary and indispensable party that cannot be joined to this action by virtue of its
sovereign immunity, and without jurisdiction over all necessary parties, this Court cannot grant
the relief requested. In response, Western contends that (a) the Navajo Nation had no interest in
the Allotment during the relevant time period, (b) neither the Navajo Nation nor any other
allottee is a required party, and (c) dismissal is inappropriate even if some required party could
not be joined. Because the Court agrees with Western’s first argument, it need not address the
others.
The issue in this case, as in any APA case, is whether the Department acted in a manner
that was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, 5
U.S.C. § 706(2), when it denied Western’s right-of-way renewal application. “Agency action,
whether it is classified as ‘formal’ or ‘informal,’ will be set aside as arbitrary unless it is
supported by ‘substantial evidence’ in the administrative record.” Pennaco Energy, Inc. v. U.S.
Dep’t of the Interior, 377 F.3d 1147, 1156 (10th Cir. 2004) (citing Olenhouse v. Commodity
Credit Corp., 42 F.3d 1560, 1575 (10th Cir. 1994)). It is undisputed that Western submitted its
application in 2009, that the initial agency decision was made August 2, 2010, and that both of

9 

these events occurred before the Navajo Nation acquired its interest in the Allotment. In the
subsequent appeals, the IBIA considered the nature of the consent that a right-of-way applicant
must obtain from owners of interests in the Allotment. It is those decisions that are under review
in this case. This Court’s review under the arbitrary and capricious standard “is generally based
on the full administrative record that was before all decision makers.... The district court must
have before it the ‘whole record’ on which the agency acted.” Bar MK Ranches v. Yuetter, 994
F.2d 735, 739 (10th Cir. 1993) (citations omitted).
For this reason, the change in ownership interests in the Allotment that occurred
subsequent to the BIA’s decision are not relevant here. There is no suggestion in the record that
has been provided to this Court that the Navajo Nation’s subsequent acquisition of an ownership
interest in the Allotment was in the relevant administrative record or played any role in the
administrative decisions currently under review. Ownership interests in real property change
over time, but in terms of this Court’s review, the relevant time period is August 2, 2010. Both
logic and BIA regulations support this conclusion. As Western correctly points out, there could
be no finality in decision making if consent calculations had to be constantly reevaluated as a
result of later transfers of ownership interests through inheritance, sale, or gift. And, if the
Adakais’ proposed rule is correct, then any right-of-way could be undermined by any allottee at
any time by merely transferring a small interest to the Navajo Nation. Foreseeing this problem,
the regulations in force at the time of Western’s 2009 application provided that BIA could grant
a right-of-way without the consent of the heirs or devisees of a deceased owner when those heirs
or devisees “have not been determined.” 25 C.F.R. § 169.3(c)(4) (2009). Further, the current
regulations explicitly recognize that consent calculations must be made based upon BIA

10 

ownership records as of the date on which the application is submitted. 25 C.F.R. § 169.107(c)
(2016).
In light of the foregoing, the Court concludes that the acquisition of an ownership interest
by the Navajo Nation since the BIA decision under review is a change in factual circumstances
that does not alter the legal issues to be decided by this Court—that is, to determine whether
under the facts presented in the administrative record the decisions by the BIA and IBIA were
arbitrary, capricious, or contrary to law. Accordingly, the Navajo Nation is not a necessary party
and its absence has no effect on this case.

III.

AVAILABILITY OF MANDAMUS RELIEF
In a single sentence from the “Conclusion” section of their short motion, which was

dedicated to arguing the two points previously addressed above, the Adakais simply state, “Even
were the Court granted jurisdiction to adjudicate Plaintiffs’ claims against the Navajo Nation’s
real property interests in this case, the Court is not, without more, authorized to grant the
extraordinary equitable relief requested by Plaintiffs.” Doc. 29 at 5. Defendant construes this
single sentence as an argument that “even if subject matter jurisdiction exists in this case,
Plaintiffs have failed to state a valid claim for the mandamus relief they seek in this suit.” Doc.
30. at 7. However, in the Court’s view, the sentence in the motion that Defendants cite does not
make this argument.
First, the Adakais’ statement, standing alone, quite vague. It simply is unclear what
argument the Adakais are making in that sentence. However, viewed in the context of the
paragraph of which it is a part, it is clear to the Court that with that sentence the Adakais are
merely summarizing, or revisiting, their prior argument that the Secretary has sole discretion to

11 

determine whether or not to issue a right-of-way across an allotment, and that that the Court
lacks jurisdiction to review such a decision under the APA. See Doc. 29 at 5-6.
Second, even if the Defendant is correct in interpreting the meaning of the Adakais’
statement, that argument would be outside the scope of their authority to make in this motion.
That is, the Court granted the Adakais permission to file a motion to dismiss based solely on
subject matter jurisdiction. To the extent that they might be attempting to make an argument
regarding the types of potential relief that may be available to Western Refining, such argument
is outside the scope of the motion the Court permitted them to file. As a result, at this time the
Court will not take up the question of the types of relief that may be available to Western
Refining.
In light of the foregoing,
IT IS THEREFORE ORDERED that Motion to Dismiss for Want of Subject Matter
Jurisdiction [Doc. 29] is DENIED.

___________________________________
UNITED STATES DISTRICT JUDGE

12