Oneida Tribe of Indians of Wisconsin v. Village of Hobart, Wisconsin
Filing
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ORDER granting 24 Motion to Dismiss Third Party Complaint; signed by Judge William C Griesbach on 4/18/2011. (cc: all counsel) (Griesbach, William)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
ONEIDA TRIBE OF INDIANS
OF WISCONSIN,
Plaintiff,
v.
Case No. 10-C-137
VILLAGE OF HOBART,
Defendant.
DECISION AND ORDER
In this action, Plaintiff Oneida Tribe of Indians of Wisconsin seeks declaratory and
injunctive relief precluding the Village of Hobart from assessing a utility fee for land in the Village
owned by the United States and held in trust for the Tribe. The Village filed a third-party complaint
against the United States, including the United States Department of Interior and its Secretary
Kenneth Salazar, in which it alleges that the Clean Water Act requires the United States to pay the
Village’s storm water fees to the extent the Oneida are not liable for such fees. The complaint also
argues that a federal regulation exempting tribal trust land from property laws is illegal under the
Administrative Procedure Act (APA) and provisions of the Constitution. Presently before me is the
motion to dismiss filed by the United States in which the government argues that the Village’s
claims are barred by sovereign immunity. The Government further argues that any claims under the
APA are not ripe because the Village has not appealed the decision of a Bureau of Indian Affairs
official that it now challenges. For the reasons given below, the motion to dismiss will be granted.
In 2007 the Village of Hobart began enforcing a village ordinance that imposes a storm
water run-off fee on property located within the Village. The Village states that it was forced by
federal law to charge such fees in an effort to abate pollution. Within the Village, the United States
owns roughly 1420 acres of land, which it holds in trust for the Tribe. The Village ordinance
applies to both the Tribe’s trust land as well as the land the Tribe owned in fee. The Tribe contested
these charges but ultimately paid the money it was charged for its trust land into an escrow account
subject to further proceedings to determine the legitimacy of the water charges. (Charges for the
Tribe’s fee land are not at issue here.) The Tribe applied to the Bureau of Indian Affairs for relief,
and the regional director agreed with the Tribe. He deemed the fee an improper tax, directed the
Village to remove the Tribe’s trust property from the tax certificate list, and ordered the Village to
cease any efforts to collect the fee. (Compl., Ex. D.) In its third-party complaint, the Village asserts
that the government is liable for any fees for which the Tribe is not liable. It also seeks review of
the BIA’s determination that the storm water fees levied on tribal trust land are an improper tax.
I. Section 313 of the Clean Water Act
The Village’s third-party complaint alleges that if the Tribe is not liable for payment of the
fees, then the United States is. Citing § 313 of the Clean Water Act, 33 U.S.C. § 1323(a), the
Village argues that the federal government is subject to all local water quality regulations, including
service charges. It further argues that § 313 provides a waiver of the government’s sovereign
immunity. Section 313 provides as follows:
(a) Each department, agency, or instrumentality of the executive, legislative, and
judicial branches of the Federal Government (1) having jurisdiction over any
property or facility, or (2) engaged in any activity resulting, or which may result, in
the discharge or runoff of pollutants, and each officer, agent, or employee thereof in
the performance of his official duties, shall be subject to, and comply with, all
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Federal, State, interstate, and local requirements, administrative authority, and
process and sanctions respecting the control and abatement of water pollution in the
same manner, and to the same extent as any nongovernmental entity including the
payment of reasonable service charges. The preceding sentence shall apply (A) to
any requirement whether substantive or procedural (including any recordkeeping or
reporting requirement, any requirement respecting permits and any other
requirement, whatsoever), (B) to the exercise of any Federal, State, or local
administrative authority, and (C) to any process and sanction, whether enforced in
Federal, State, or local courts or in any other manner. This subsection shall apply
notwithstanding any immunity of such agencies, officers, agents, or employees under
any law or rule of law.
33 U.S.C. § 1323(a) (emphasis added).
In a nutshell, the statute provides that if an agency of the federal government is engaged in
discharge of pollutants, or if it owns a property, it must comply with all local and state laws and
regulations involving abatement of water pollution. This includes “the payment of reasonable
service charges.” Id. Section 1323(a) requires federal agencies to comply with state and local
water-quality requirements “in the same manner, and to the same extent as any nongovernmental
entity.” “Congress intended this section to ensure that federal agencies were required to ‘meet all
[water pollution] control requirements as if they were private citizens.’” Center For Native
Ecosystems v. Cables, 509 F.3d 1310, 1332 (10th Cir. 2007) (citation omitted).
The United States argues, however, that the Village has no authority to impose fees on tribal
trust land, and thus § 313 and its waiver of sovereign immunity do not apply. The government
concedes that § 313 allows recovery of service charges, but it argues such charges must have been
validly imposed by the Village before the United States must pay them. Because the Village has
no authority to impose fees on trust land, the government argues that it has not waived its sovereign
immunity under § 313.
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The Village protests that the government is using circular logic: after all, the question of the
Village’s authority to impose fees on tribal land is the crux of its case, so the government’s
immunity argument begs the question. That is, in the Village’s view, the government has jumped
to an argument on the merits of the case – whether the Village had authority to impose the fees –
rather than asserting any basis for sovereign immunity. The Village is correct that the government’s
immunity argument (if that is what it is) is really an argument on the merits. In essence, the
government is saying it is immune because the Village would lose its lawsuit if this Court were to
consider the merits. But that, of course, is not what sovereign immunity provides. Immunity would
preclude this Court from even reaching the merits because the government would not be a suable
entity. The question is whether the waiver of immunity found in § 313 would apply here. But
because the government merely argues that the Village’s § 313 claim is a loser on the merits – not
that § 313 is inapplicable – it appears that the government has conceded that § 313 would apply to
the Village’s claim.
In fact, it appears that § 313 is applicable here. Because the United States is not a discharger
of pollutants on the trust land, I must assume that the Village is relying on subsection (1), which
governs federal agencies “having jurisdiction over any property or facility.” 33 U.S.C. § 1323(a)(1).
The federal government does have jurisdiction over the property at issue here, which is land owned
by the government and held in trust for the Tribe. The text of § 313 governs the dispute because
the Department of the Interior is an agency of the federal government having jurisdiction over the
property, and thus § 313 makes it subject to local requirements “respecting the control and
abatement of water pollution . . . including the payment of reasonable service charges.” 33 U.S.C.
§ 1323(a). Accordingly, because the Village is attempting to obtain payment of service charges
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from the government for property in the government’s jurisdiction, § 313 and its waiver of
immunity apply. I am thus unable to conclude that the government is immune from suit.
But the fact that the government may have waived immunity for alleged violations of § 313
does not end matters. The government also argues that § 313 creates no independent cause of
action. Instead, it asserts that parties seeking relief must rely on the APA.
The Clean Water Act itself contains a citizen suit provision. That clause provides that suits
may be brought:
(1) against any person (including (i) the United States, and (ii) any other
governmental instrumentality or agency to the extent permitted by the eleventh
amendment to the Constitution) who is alleged to be in violation of (A) an effluent
standard or limitation under this chapter or (B) an order issued by the Administrator
or a State with respect to such a standard or limitation, or
(2) against the [EPA] Administrator where there is alleged a failure of the
Administrator to perform any act or duty under this chapter which is not
discretionary with the Administrator.
33 U.S.C. § 1365(a).
The Village does not argue that either of the above subsections is implicated here. In fact,
it does not explain its argument that § 313 of the CWA authorizes an independent cause of action
at all. This is perhaps not surprising, as cases support the government’s position that the APA is
the only way for a plaintiff to bring a claim for a § 313 violation when the CWA’s citizen suit
provision is inapplicable. For example, in Center for Native Ecosystems v. Cables, the plaintiff
alleged that the U.S. Forest Service was violating Wyoming water quality regulations, in violation
of § 313 of the CWA. 509 F.3d 1310,1332 (10th Cir. 2007). The claim was brought, and
considered, under the APA. Id. at 1328 (“The APA, under which CNE's CWA claim is brought . . .
limits judicial review not otherwise provided by statute to ‘final agency action for which there is
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no other adequate remedy in a court.’”) The same was true in Swanson v. U.S. Forest Service, 87
F.3d 339, 345 (9th Cir. 1996), where the court found that the “Administrative Procedure Act [is]
the statute which would entitle [plaintiff] to relief from the government's alleged violation of state
water quality standards.” See also Hells Canyon Preservation Council v. Haines, 2006 WL
2252554, *1 (D.Or. 2006) (“Plaintiffs' claims under . . . § 313 of the CWA are also governed by
the APA.”); City of Shoreacres v. Waterworth, 332 F. Supp.2d 992, 1004 (S.D. Tex. 2004)
(“Because neither NEPA nor the CWA provide an independent right of action, Plaintiffs' claims for
review under NEPA and the CWA fall under the Administrative Procedure Act.”)
The Village has not explained how its CWA claim against the United States would be
reviewable under the APA. The United States itself has not taken any final action with respect to
the Village’s demand that the government pay the fees assessed by the Village for tribal land. It was
the Tribe that refused to pay the fee, not the United States. The Village asserts, briefly, that the
Tribe’s failure to pay the fees should be imputed to the United States because the Tribe, in refusing
to pay, cited the Department of Interior’s opinion that the fees constituted an impermissible tax. But
that opinion merely addressed the viability of the fee relative to the Tribe itself; no one ever
suggested to the BIA that the federal government should pick up the tab itself. The Village has not
cited any authority that would allow this court to review a non-government party’s actions under
the APA standard for arbitrary and capricious conduct (discussed below). Nor has it provided any
reason to believe that review of the Tribe’s actions (even if “imputed” to the United States) would
be appropriate under the APA. In sum, the question of whether the government should be liable
under § 313 for payment of the Village’s storm water fees has never been presented to any federal
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agency. Accordingly, I can find no basis upon which the APA would grant the Village relief under
these circumstances.
II. APA Review of the BIA’s Decision that the Fees are an Improper Tax
The Village also challenges the BIA’s conclusion that its storm water fees constitute an
improper tax. The APA waives the government’s sovereign immunity for review of some
administrative decisions. Unless the action is made reviewable by statute (not applicable here),
however, the challenged action must constitute a “final agency action” before it is subject to judicial
review under the APA. 5 U.S.C. § 704. If the agency action is final and thus reviewable, a court
may only overturn it if it finds the action was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).
The United States argues that the APA does not apply here because there has been no “final
agency action” to speak of. In Bennett v. Spear, the Supreme Court explained:
As a general matter, two conditions must be satisfied for agency action to be
considered “final”: First, the action must mark the consummation of the agency's
decisionmaking process--it must not be of a merely tentative or interlocutory nature.
And second, the action must be one by which rights or obligations have been
determined, or from which legal consequences will flow.
520 U.S. 154, 177-78 (1997).
The Village points to the letter sent by BIA Regional Director Terrance Virdan in which he
deemed the storm water fee an improper tax and directed the Village to cease any efforts to collect
the fee. (Compl., Ex. D.) The Village argues this was a final agency action because it was a
definitive statement as to the validity of the storm water fees and the BIA expected immediate
compliance with it.
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The United States argues, however, that the Village failed to take advantage of
administrative procedures to appeal the decision, and thus the decision of the regional director was
not “final” for purposes of the APA. Applicable BIA regulations provide that “No decision . . . shall
be considered final so as to constitute Departmental action subject to judicial review under 5 U.S.C.
§ 704, unless . . . the official to whom the appeal is made determines that public safety, protection
of trust resources, or other public exigency requires that the decision be made effective
immediately.” 25 C.F.R. § 2.6(a). Similarly, 43 C.F.R. § 4.314(a) provides that decisions of a BIA
official are not final unless the Interior Board of Indian Appeals makes the decision effective
pending a decision on appeal. Neither of these conditions for finality has been satisfied.
The federal regulations provide that administrative procedures must be followed
before seeking relief in the court system. 25 C.F.R. § 2.6. There are clearly detailed
administrative processes and remedies set forth in 25 C.F.R. Part 2 and 43 C.F.R.
Part 4. Appellants, however, did not initiate even the first steps of the administrative
appeal process. Instead, they asserted their claims for the first time in federal court.
Klaudt v. United States Dept. of Interior, 990 F.2d 409, 411 (8th Cir. 1993).
The Village’s claim that the agency’s action is final rests on nothing more than its own sayso. The purpose of the agencies’ various exhaustion requirements is not to create an officious and
burdensome bureaucracy, it is to allow the agency to direct its expertise at fully developing a record
and solving regulatory problems after full consideration. Id. at 412. The Supreme Court has held
that when the APA applies, appeal to “superior agency authority” is a prerequisite to judicial review
when an agency rule requires appeal before review and the administrative action is made inoperative
pending that review. Darby v. Cisneros, 509 U.S. 137, 154 (1993). Here, the regulations cited by
the government explicitly state that agency action is not final for APA purposes unless the decision
has been deemed final by the agency. The regulations further provide that any appeal may be taken
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to the Interior Board of Indian Appeals (IBIA). 25 C.F.R. § 2.4(e). See, e.g., Miami Tribe of
Oklahoma v. United States, 2008 WL 2906095, *5 (D. Kan. 2008) (“Applying these regulations,
the Court finds that the October 23, 2007 decision of the Regional Director of the BIA is subject
to appeal to the IBIA and has not been made effective pending a decision on appeal. As such, the
decision is not yet a final agency action for purposes of APA review under 5 U.S.C. § 704.”)
The Village suggests that appeal through the administrative process would be “futile”
because it is clear what the government’s position is. But the futility exception to the exhaustion
requirement is not an open-ended invitation for disgruntled plaintiffs to put words in the mouths of
federal agencies whose ultimate opinions have not yet been sought. The fact that a BIA regional
director issued an opinion that the government is now defending in this litigation does not excuse
the Village’s failure to exhaust. Futility does not mean an administrative challenge is likely to lose,
it means the challenge would be pointless. Presumably, the BIA created an appeals process not
because it has nothing better to do, but because it serves a meaningful function. Perez v. Wisconsin
Department of Corrections, 182 F.3d 532, 536 (7th Cir. 1999) (“As for the possibility that
administrative remedies could be declared futile ex ante, without ever being tried: what would be
the point of asking judges to be seers? . . . No one can know whether administrative requests will
be futile; the only way to find out is to try.”)
Accordingly, I conclude that the letter of the BIA regional director does not constitute a final
agency action subject to review under the Administrative Procedure Act. And because there is no
final agency action, the Village’s “as applied” constitutional challenge to 25 C.F.R. § 1.4 is not yet
ripe either. That is, absent any final action “applying” the regulation to the Village, the claim fails.
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III. Conclusion
For the reasons given above, I conclude that the APA provides the only avenue for review
of the issues presented in the Village of Hobart’s third-party complaint. Because there is no “final
agency action” to review, however, the APA does not provide a cause of action. Accordingly, the
motion to dismiss the third-party complaint is GRANTED.
SO ORDERED this
18th
day of April, 2011.
s/ William C. Griesbach
William C. Griesbach
United States District Judge
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