Village of Hobart WI v. United States Department of The Interior et al
Filing
52
DECISION AND ORDER signed by Judge William C Griesbach on 1/28/2025 DENYING the Village's 39 Motion to Supplement and Complete the Administrative Record and Engage in Discovery. The clerk is directed to set the matter on the court's calendar to address further scheduling. (cc: all counsel) (Griesbach, William)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
VILLAGE OF HOBART, WI,
Plaintiff,
v.
Case No. 23-C-1511
UNITED STATES DEPARTMENT
OF THE INTERIOR, et al.,
Defendants,
and
ONEIDA NATION,
Intervenor Defendant.
DECISION AND ORDER DENYING PLAINTIFF’S MOTION TO SUPPLEMENT THE
ADMINISTRATIVE RECORD AND ENGAGE IN DISCOVERY
The Village of Hobart filed this action challenging the Department of the Interior’s decision
to take land into trust for the Oneida Nation pursuant to § 5 of the Indian Reorganization Act (IRA)
of 1934, 25 U.S.C. § 465. The case is currently before the court on the Village’s motion to
supplement the administrative record and to engage in extra-record discovery. For the following
reasons, the motion will be denied.
BACKGROUND
The IRA authorizes the Secretary of the Interior to acquire land and place it into trust for
individual Indians and tribes “for the purpose of providing land for Indians.” 25 U.S.C. § 465.
The effect of granting fee-to-trust applications is that it removes the land placed in trust from state
and local jurisdictions and exempts such land from state and local taxation. This results in
shrinkage of the tax base of the local government in which the property is located and the
elimination of state and local government authority to enforce zoning, public safety, or
environmental regulations on the land. 25 C.F.R. § 1.4. As a result, state and local governments
with jurisdiction over the lands that are subject to fee-to-trust applications have a strong interest in
the process.
On April 12, 2006, the Business Committee of the Oneida Nation enacted several
resolutions requesting that the BIA accept several parcels of fee land owned by the Nation into
trust. In 2007, the Nation submitted 56 fee-to-trust applications to the BIA for 133 parcels
containing 2,673 acres of land. The parcels are all located within the Village. The Village received
notice of the applications and submitted its comments opposing the applications.
The Midwest Regional Director of the BIA ruled in favor of the Nation and issued six
notices of decision to accept certain parcels into trust for the benefit of the Nation. In 2010, the
Village timely appealed the six notices of decision to the IBIA. On May 9, 2013, the Interior
Board of Indian Appeals (IBIA) concluded that while the Regional Director had authority to take
the land into trust, she failed to consider tax loss implications, potential land use conflicts, and
jurisdictional problems. See Vill. of Hobart v. Acting Midwest Regional Director, 57 IBIA 4, 2013
WL 3054077 (2013) (Hobart I). The IBIA vacated the Regional Director’s notices of decision
and remanded the matter for the Regional Director to consider these issues as well as the Village’s
arguments with respect to environmental impacts and bias in decision making. The IBIA did not
consider the Village’s arguments regarding the constitutionality of the IRA finding that it lacked
jurisdiction to do so.
On January 19, 2017, the Regional Director issued a decision accepting the fee land into
trust. See Dkt. No. 1-4. The Village again appealed the Regional Director’s decision to the IBIA.
2
As part of its appeal, the Village asserted that the Regional Director’s decision was the product of
bias due to the decision being processed and issued under a Memorandum of Understanding
(MOU) entered into between the BIA and a number of tribes, including the Nation. The BIA and
the Nation entered into the MOU to facilitate the expeditious processing of fee-to-trust
applications. Dkt. No. 1-3 at 2. In accordance with the MOU, the BIA hired additional employees
to process the fee-to-trust applications, and the tribes funded the salaries of those additional
employees. The Village argued that because the fee-to-trust applications were processed by
employees whose jobs were funded by the Nation, the decisions were not the product of a neutral,
independent decision maker. It claimed that the MOU fostered improper ex parte communications,
created an impermissible conflict of interest, and is contrary to the Indian Self-Determination and
Education Act, 25 U.S.C. § 5301, et seq., and the Tribal Self-Governance Act, 25 U.S.C. § 5361,
et seq. The IBIA affirmed the Regional Director’s decision in full on September 21, 2023. See
Vill. of Hobart v. Acting Midwest Regional Director, 69 IBIA 84, 2023 WL 6458987 (2023)
(Hobart II).
The Village initiated this action under the Administrative Procedure Act (APA), 7 U.S.C.
§ 701, et seq., on November 10, 2023, seeking to vacate the IBIA’s decision on the ground that it
is arbitrary and capricious and represents an abuse of discretion. The Village asserts that the BIA
and the IBIA violated its right to due process as a result of the bias created by the MOU. The
Village also challenges the constitutionality of the IRA, 25 U.S.C. § 5108, and 25 C.F.R. § 1.4.
ANALYSIS
A. Motion to Supplement the Record
The defendants filed the administrative record from the IBIA appeal with the court on June
28, 2024, and relodged the administrative record with the court on July 30, 2024. The Village
3
moved to supplement the record, arguing that the defendants have not provided the court with the
entire administrative record that was before the IBIA.
An index included in the administrative record submitted to the IBIA notes the existence
of “post-remand privileged documents” and “pre-remand privileged documents” amounting to
2,391 total pages. See Dkt. No. 35-13 at 1138–40. The index submitted to the IBIA stated, “The
following documents are confidential privileged communications exempt from disclosure under
the Freedom of Information Act and should not be released outside the Department of the Interior.
They are included in the Administrative Record in compliance with 43 CFR 4.335.” Id. at 1138.
The index provided a description of the documents, the date they were created, the sender of each
document, the recipient, the nature of the material or communication, and the claimed privilege.
The defendants produced the documents to the IBIA in a sealed box, but the documents were not
reviewed by the IBIA or disclosed to the Village. The Village requests that the court compel The
defendants to produce and disclose the 2,391 pages of excluded documents.
The defendants argue, however, that the Village waived any argument regarding the
disclosure of documents. They assert that because the Village did not object to the sealed
documents being withheld from review by the IBIA or request that they be disclosed to the Village
when the IBIA was reviewing the Regional Director’s decision, it cannot raise the argument here.
If the Village believed the sealed documents contained evidence of bias on the part of the Regional
Director, it should have demanded access to them at that stage of the proceeding and presented its
argument to the IBIA so that the IBIA could have addressed it in the first instance instead of
waiting until after the IBIA had issued its decision.
The defendants’ argument is persuasive. In a normal case, objections not made in the trial
court are waived on appeal. Administrative appeals to district courts work the same way.
4
“[O]rderly procedure and good administration require that objections to the proceedings of an
administrative agency be made while it has opportunity for correction in order to raise issues
reviewable by the courts.” United States v. v. L. A. Tucker Truck Lines, Inc., 344 U.S. 33, 37
(1952); see also Ester v. Principi, 250 F.3d 1068, 1072 (7th Cir. 2001) (“[A]ny objections not
made before the administrative agency are subsequently waived before the courts.”). Just as
appellate courts do not entertain arguments which could have been, but were not, raised in the trial
court, a court reviewing a decision by an administrative agency should decline to consider
arguments that were never presented to the agency whose decision it is called upon to review.
Massachusetts, Dep’t of Pub. Welfare v. Sec’y of Agric., 984 F.2d 514, 523 (1st Cir. 1993).
Applying these principles to the facts of this case, it follows that the Village has waived its
right to review and supplement the record before this court with the sealed documents by failing
to raise the issue before the IBIA. Had it done so, the IBIA could have addressed its argument that
the documents should be disclosed as evidence of bias on the part of the Regional Director, just as
the IBIA did in its earlier decision remanding the case to the Regional Director for consideration
of the Village’s claim of bias due to the MOU with the Tribes. But no such argument was made
to the IBIA, even though the Village knew that the documents were submitted to it under seal.
Having failed to raise the issue before the IBIA, the Village is precluded from doing so before the
court.
The Village contends that waiver aside, it is entitled to access to the sealed documents
because they are part of the record before the IBIA. But the documents are not in any real sense
part of the administrative record. The documents the Village asks the court to disclose remained
under seal throughout the IBIA review and the IBIA states that it did not consider them in arriving
at its decision. See Hobart II, 2023 WL 6458987, at *111 n.24 (“The Board has not reviewed the
5
contents of those withheld documents.”). Thus, they do not form any part of the basis for the
IBIA’s decision which the court is called upon to review.
In reviewing an agency’s decision, the APA instructs courts to “review the whole record
or those parts of it cited by a party.” 5 U.S.C. § 706; see Citizens to Preserve Overton Park, Inc.
v. Volpe, 401 U.S. 402, 420 (1971) (judicial review must be “based on the full administrative
record” before the agency), abrogated on other grounds, Califano v. Sanders, 430 U.S. 99 (1977).
This means “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). “The complete administrative
record consists of all documents and materials directly or indirectly considered by the agency.”
Miami Nation of Indians of Ind. v. Babbitt, 979 F. Supp. 771, 775 (N.D. Ind. 1996). The agency
is responsible for compiling the administrative record, and there is a strong presumption that the
administrative record as furnished by the agency is complete. Univ. of Colo. Health at Mem’l
Hosp. v. Burwell, 151 F. Supp. 3d 1, 12–13 (D.D.C. 2015). Plaintiffs may overcome this
presumption by “identifying reasonable, non-speculative grounds for their belief that the
documents” they seek to add to the administrative record “were considered by the agency and not
included in the record.” Id. at 13 (cleaned up).
Because the Board did not consider the withheld documents, they are not considered part
of the record in this case. Since they were not viewed by the Board and neither party cited them
in the respective submissions to the Board, in no sense could they have formed any part of the
IBIA’s decision in this case. Because they were not part of the record considered by the IBIA, the
Village’s motion to supplement the record is denied. And since the undisclosed documents are
not part of the administrative record, the court need not decide whether they fall within the
deliberative process or attorney-client privileges.
6
B. Motion to Engage in Discovery
The Village also asks to engage in discovery on its constitutional claims. In particular, the
Village seeks to take the following discovery: requests for admission; interrogatories; requests for
production of documents; and depositions of certain agency employees, such as the Regional
Director, BIA employees involved in drafting and processing fee-to-trust applications, and certain
employees or members of the Nation who communicated directly with the BIA employees
responsible for drafting and processing the fee-to-trust applications.
“Discovery is generally not appropriate for claims brought under the APA.” Fla. Power
& Light Co. v. Lorion, 470 U.S. 729, 743–44 (1985). This rule reflects the recognition that “the
focal point for judicial review should be the administrative record already in existence, not some
new record made initially in the reviewing court.” Camp, 411 U.S. at 142; see also Citizens for
Appropriate Rural Roads v. Foxx, 815 F.3d 1068, 1081–82 (7th Cir. 2016) (“Generally, discovery
is not appropriate for claims brought under the APA since review of an agency’s decision is
confined to the administrative record.”). Only under rare circumstances, where a plaintiff can
make a “strong showing of bad faith or improper behavior,” may a court permit extra-record
discovery. Dep’t of Commerce v. New York, 588 U.S. 752, 781 (2019) (citation omitted). A
“strong showing of bad faith or improper behavior” is necessary to venture beyond the agency’s
“administrative findings” and inquire into “the mental processes of administrative
decisionmakers.” Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971).
“Bad faith requires a strong showing of evidence suggesting improprieties; ‘mere assertions’ will
not suffice.” Doe v. United States Citizenship & Immigration Servs., No. 15-C-10958, 2016 WL
3640687, at *5 (N.D. Ill. June 29, 2016) (citation omitted). The Village has not met that burden
here.
7
The Village contends that the defendants’ failure to include the sealed documents in the
administrative record they filed with the court constitutes the bad faith needed to justify extrarecord discovery. But for the reasons already set forth, the court has concluded that the sealed
documents are not part of the administrative record since they were not considered by the IBIA
and played no part in its decision. The defendants contend that the sealed documents fall within
the attorney-client privilege or the deliberative process privilege. Having waived any objection it
may have had to the defendants’ refusal to disclose these documents by failing to raise the issue
before the IBIA, the Village cannot claim now that the defendants’ assertion of privilege
constitutes the level of bad faith that opens the door to discovery of all aspects of the internal
decision-making process by the Regional Director. This is not a case where the agency hid or
denied the existence of evidence that the claimant later acquired from other sources. The
documents the Village only now seeks access to were included in the record before the IBIA, albeit
under seal. As noted above, if the Village believed these documents were relevant to its appeal, it
should have raised that issue before the IBIA. It is not bad faith to oppose the Village’s current
request on grounds of waiver.
The Village also argues that “the Defendants’ bad faith or improper behavior is
demonstrated under the very terms of the MOU that the Village challenges in this matter.” Dkt.
No. 40 at 15. Under the MOU, the Village argues, the Nation is funding the salaries of the same
employees who act as liaisons with the Nation, who prepare the draft notices of decision, and who
prepared the record for appeal. Id. In support of its argument of bias, the Village has cited the
final report of the Inspector General (IG) of the Department of Interior that focused primarily on
an MOU between a consortium of California tribes and the BIA’s Pacific Regional Office under
which the tribes reprogramed federal funds to the Regional Office to hire additional employees to
8
facilitate fee-to-trust applications and eliminate the backlog caused by limited BIA funding.
Although the IG found no instances of actual bias under either the Pacific MOU or the Midwest
Region MOU, it acknowledged the possibility of the appearance of unfairness of the fee-to-trust
application process. The MOU between the tribes and the Midwest Regional Office in effect when
the Regional Director approved the Nation’s applications, however, was a revised version of the
MOU that was reviewed by the IG. The revised agreement clarified that BIA employees funded
through the consortium are federal employees subject to Title 5 of the United States Code and
supervised by BIA staff outside the Division of Fee-to-Trust.
The mere existence of the MOU under which tribes redirect funds to regional BIA offices
to assist in processing fee-to-trust applications is not enough to justify allowing the Village to
engage in extra-record discovery. The MOU itself is a part of the record and it is undisputed that
the procedures and framework it established were in place at the time the challenged decisions
were entered.
The Village’s argument that those procedures and framework violate the
Constitution or the APA can be addressed based on the administrative record.
Finally, the Village argues that it is entitled to discovery on its constitutional claims. But
the Village’s constitutional challenges, for the most part, raise only legal questions. The Village
alleges, for example, that the power granted to the Department of Interior to grant fee-to-trust
applications constitutes an unconstitutional delegation of legislative power to the executive branch
(Count I), that it exceeds Congress’s power under the Commerce Clause (Count II), that it violates
the Enclave Clause (Count III), that it violates the Tenth Amendment (Count IV), that it violates
the privileges and immunities of non-Indians under the Fifth and Fourteenth Amendments (Count
V), that it violates the guarantee of a republican form of government to every State set forth in
Article IV, section 4 of the Constitution (Count VI), and that 25 C.F.R. § 1.4 unconstitutionally
9
exceeds the scope and authority of the IRA (Count VII). These claims rest on legal arguments that
are not dependent on any amount of discovery beyond what the administrative record contains.
Only as to Count VIII, the Village’s claim that its due process rights were violated by an
allegedly biased fee-to-trust application process, could extra-record discovery conceivably be
relevant. But the conclusory allegation that the Regional Director was biased does not constitute
the strong showing of bad faith or improper behavior needed to permit extra-record discovery.
And for the reasons set forth above, the fact that various tribes redirected funds to the BIA in an
effort to eliminate the backlog on fee-to-trust applications does not give rise to a presumption of
bias. Like the court in Morrison County v. United States Department of Interior, No. 24-cv-23 (D.
Minn. Dec. 3, 2024), this court “does not find this widely adopted practice commensurate with
strong evidence of improper bias because the MOUs pertain to the salaries of only some staff
personnel at the BIA and not the ultimate decision maker—the Regional Director.” Dkt. No. 501 at 9–10 (underline in original).
CONCLUSION
For these reasons, the Village’s motion to supplement and complete the administrative
record and to engage in discovery (Dkt. No. 39) is DENIED. The clerk is directed to set the matter
on the court’s calendar to address further scheduling.
SO ORDERED at Green Bay, Wisconsin this 28th day of January, 22025.
0 5.
02
William
illiam C. Griesbach
United States District Judge
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?