Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 1 of 34

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1 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 1 of 34 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA PAWNEE NATION OF OKLAHOMA, et al., ) ) ) Plaintiffs, ) ) Case No. 16-cv-697-JHP-TLW v. ) ) ) RYAN ZINKE, in his official capacity as ) Secretary of the United States Department of ) the Interior, et al., ) ) ) Defendants. ) PLAINTIFFS RESPONSE IN OPPOSITION TO FEDERAL RESPONDENTS MOTION TO DISMISS Michael S. Freeman (Admitted Pro Hac Vice) mfreeman@earthjustice.org Yuting Chi (Admitted Pro Hac Vice) ychi@earthjustice.org Earthjustice th Street, # 1600 Denver, CO Telephone: (303) Attorneys for Plaintiffs Pawnee Nation of Oklahoma, et al. Don Mason, Bar No dmason@pawneenation.org Attorney General Pawnee Nation of Oklahoma P.O. Box 470, Pawnee, OK Telephone: (918) Attorney for Plaintiff Pawnee Nation of Oklahoma June 29, 2017

2 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 2 of 34 TABLE OF CONTENTS TABLE OF AUTHORITIES... ii INTRODUCTION...1 DISCUSSION...2 I. PLAINTIFFS AIARMA CLAIM SHOULD NOT BE DISMISSED...2 A. The Agencies Argument Conflicts with the Statutory Language...4 B. AIARMA s Legislative History Does Not Support the Agencies Argument...7 C. The Agencies Argument Conflicts with the 2010 Management Plan...8 II. III. THE PAWNEE S TRUST CLAIM SHOULD NOT BE DISMISSED BECAUSE IT ALLEGES THE AGENCIES VIOLATED GENERALLY-APPLICABLE STATUTORY REQUIREMENTS...9 PLAINTIFFS CHALLENGE TO APPROVAL OF THE PAWNEE LEASES SHOULD NOT BE DISMISSED FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES...10 A. The United States Has Waived Sovereign Immunity for the Pawnee s Challenge to the Lease Approvals...11 B. Exhaustion Is Not Required Under Darby v. Cisneros...15 C. Several Exceptions Apply that Excuse Plaintiffs from Exhausting Administrative Remedies Claim One Involves a Purely Legal Issue Challenging BIA Decisions that Followed a General Agency Practice Exhaustion Should Be Excused Because BIA Failed to Notify the Pawnee of the Lease Approvals, and the Tribe Could Be Unduly Prejudiced by the Denial of Judicial Review The Equities Strongly Favor Excusing Exhaustion in this Case...24 CONCLUSION...25 i

3 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 3 of 34 TABLE OF AUTHORITIES Page(s) Cases Alabama-Quassarte Tribal Town v. United States, No. CIV RAW, 2010 WL (E.D. Okla. 2010)...17, 19, 20 Bennett v. Spear, 520 U.S. 154 (1997)...24 Bloate v. United States, 559 U.S. 196 (2010)...6 Chance v. Zinke, No. 16-CV-549-JHP-PJC, 2017 WL (N.D. Okla. Apr. 18, 2017)...11, 23 Cheyenne-Arapaho Tribes Okla. v. United States, 966 F.2d 583 (10th Cir. 1992)...23 Christopher v. SmithKline Beecham Corp., 567 U.S 142 (2012)...4, 9 City of Arlington, Tex. v. F.C.C., 133 S. Ct (2013)...8 Cody Labs., Inc. v. Sebelius, 446 F. App x 964 (10th Cir. 2011)...16 Conner v. Burford, 605 F. Supp. 107 (1985)...19 Coosewoon v. Meridian Oil Co., 25 F.3d 920 (10th Cir. 1994)...16 Cty. of Oakland v. Fed. Hous. Fin. Agency, 716 F.3d 935 (6th Cir. 2013)...6 Cty. of Sauk v. Midwest Reg l Dir., 45 IBIA 201 (2007)...23 Cure Land, LLC v. U.S. Dep t of Agric., 833 F.3d 1223 (10th Cir. 2016)...24 Darby v. Cisneros, 509 U.S. 137 (1993)...12, 15 ii

4 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 4 of 34 Davis v. Morton, 469 F.2d 593 (10th Cir. 1972) , 18 Dine Citizens Against Ruining Our Env t v. Klein, 676 F. Supp. 2d 1198 (D. Colo. 2009)... passim F.T.C. v. Accusearch Inc., 570 F.3d 1187 (10th Cir. 2009)...5 Gilmore v. Salazar, 748 F. Supp. 2d 1299 (N.D. Okla. 2010)...16 Gilmore v. Weatherford, 694 F.3d 1160 (10th Cir. 2012)...13, 18 Glisson v. U.S. Forest Serv., 55 F.3d 1325 (7th Cir. 1995)...17, 19 Hanson v. Wyatt, 552 F.3d 1148 (10th Cir. 2008)...13 Hayes v. Chaparral Energy, LLC, 180 F. Supp. 3d 902 (N.D. Okla. 2016)...19 Herr v. U.S. Forest Serv., 803 F.3d 809 (6th Cir. 2015)...16, 20 HRI, Inc. v. EPA, 198 F.3d 1224 (10th Cir. 2000)...4 Kobach v. U.S. Election Assistance Comm n, 772 F.3d 1183 (10th Cir. 2014)...24 Lenker v. Haugrud, No. 16-CV-0532-CVE-PJC, 2017 WL (N.D. Okla. Feb. 9, 2017)...23 Lujan v. Nat l Wildlife Fed n, 497 U.S. 871 (1990)...14 McCarthy v. Madigan, 503 U.S. 140 (1992)...16, 21, 23 McKart v. United States, 395 U.S. 185 (1969)...17 Michigan v. U.S. Army Corps of Eng rs, 667 F.3d 765 (7th Cir. 2011)...12, 13, 14 iii

5 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 5 of 34 Muniz-Muniz v. U.S. Border Patrol, 741 F.3d 668 (6th Cir. 2013)...13, 14 Norton v. S. Utah Wilderness All., 542 U.S. 55 (2004)...16 Nulankeyutmonen Nkihtaqmikon v. Impson, 503 F.3d 18 (1st Cir. 2007)...14, 22 Nulankeyutmonen Nkihtaqmikon v. Impson, 573 F. Supp. 2d 311 (D. Me. 2008)... passim Nulankeyutmonen Nkihtaqmikon v. Impson, 585 F.3d 495 (1st Cir. 2009)... 23, Oglala Sioux Tribe of Indians v. Andrus, 603 F.2d 707 (8th Cir. 1979)...10 Okanogan Cty. v. Acting Portland Area Director, 30 IBIA 42 (1996)...22 Osage Producers Ass n v. Jewell, 191 F. Supp. 3d 1243 (N.D. Okla. 2016)...16 Presbyterian Church (U.S.A.) v. United States, 870 F.2d 518 (9th Cir. 1989)...14, 15 Pub. Serv. Co. of N.M. v. Barboan, 857 F.3d 1101 (10th Cir. 2017)...4, 6, 8 Ramah Navajo Chapter v. Lujan, 112 F.3d 1455 (10th Cir. 1997)...9 Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989)...10 Rocky Mountain Oil & Gas Ass n v. Watt, 696 F.2d 734 (10th Cir. 1982)...17, 20 S. Utah Wilderness All. v. Dabney, 222 F.3d 819 (10th Cir. 2000)...9 San Juan Citizens All. v. Babbitt, 228 F. Supp. 2d 1224 (D. Colo. 2002)...15, 16 Shikles v. Sprint/United Mgmt., 426 F.3d 1304 (10th Cir. 2005)...4 iv

6 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 6 of 34 Shoshone Indian Tribe v. United States, 56 Fed. Cl. 639 (Ct. Cl. 2003)...10 Simmat v. U.S. Bureau of Prisons, 413 F.3d 1225 (10th Cir. 2005) South Dakota v. Aberdeen Area Dir., 35 IBIA 16 (2000)...22 Toone v. Wells Fargo Bank, NA, 716 F.3d 516 (10th Cir. 2013)...3 Treasurer of N.J. v. U.S. Dep t of Treasury, 684 F.3d 382 (3d Cir. 2012)...13, 14, 15 Trudeau v. F.T.C., 456 F.3d 178 (D.C. Cir. 2006)...13, 15 United States v. Mitchell, 463 U.S. 206 (1983)...10 United States v. Osage Wind, LLC, No. 14-CV-704-JHP-TLW, 2015 WL (N.D. Okla. Sept. 30, 2015) United States v. Pauler, 857 F.3d 1073 (10th Cir. 2017)...23 United Tribe of Shawnee Indians v. United States, 253 F.3d 543 (10th Cir. 2001)...14, 16 Urban v. Jefferson Cty. Sch. Dist. R-1, 89 F.3d 720 (10th Cir. 1996)...17 U.S. ex rel. Homes v. Consumer Ins. Grp., 318 F.3d 1199 (10th Cir. 2003)...6 Veterans for Common Sense v. Shinseki, 644 F.3d 845 (9th Cir. 2011)...12 Vill. of Logan v. U.S. Dep t of Interior, 577 F. App x 760 (10th Cir. 2014)...21 White Mountain Apache Tribe v. Hodel, 840 F.2d 675 (9th Cir. 1988)...14 v

7 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 7 of 34 Statutes 5 U.S.C , 12, 13 5 U.S.C , U.S.C. 3703(1) U.S.C. 3703(12)...6, 8 25 U.S.C passim 25 U.S.C. 3712(a) U.S.C. 3712(b)...3, 5, 6 Other Authorities 25 C.F.R , C.F.R. 2.3(a) C.F.R. 2.6(a) C.F.R. 2.7(a) C.F.R. 2.7(b)...23, C.F.R. 2.7(c)...15, 21, C.F.R C.F.R. 2.8(a) C.F.R C.F.R C.F.R C.F.R (a)...11, C.F.R , C.F.R (d)(2) Cong. Rec. S (Oct. 8, 1992)...7, 8 vi

8 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 8 of 34 H.R. Rep. No , 1993 WL (1993)...7 H.R. Rep. No (1976)...15 Pawnee Nation Nat. Res. Prot. Act 415, Tit. XII of Law and Order Code...22 S. Rep. No (1992)...8 S. Rep. No (1976)...15 S. Rep. No , 1993 WL (1993)...8 vii

9 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 9 of 34 INTRODUCTION In recent years, Defendants Bureau of Indian Affairs (BIA) and Bureau of Land Management (BLM) (collectively, the Agencies) have run roughshod over Plaintiff Pawnee Nation of Oklahoma (the Tribe) and its members when managing Indian-owned oil and gas on lands under Pawnee jurisdiction (Pawnee lands). The Agencies approved numerous oil and gas leases on Pawnee lands without consulting with the Tribe or even giving them notice of those approvals. See Am. Compl. 55, ECF No. 12. In approving the leases, the Agencies also took shortcuts that the Interior Department s own Inspector General criticized as inconsistent with the National Environmental Policy Act (NEPA). Id. 52 & n.5. Moreover, the Agencies in 2010 adopted a management plan for Pawnee lands (the Management Plan) pursuant to the American Indian Agricultural Resource Management Act (AIARMA) that requires consultation and compliance with tribal laws regarding oil and gas operations. The Agencies then violated that plan repeatedly when approving leases and drilling permits. Id And the Agencies did all this despite an unprecedented rash of earthquakes linked to oil and gas operations that have damaged Pawnee lands. Id. 3, The Agencies do not seriously dispute this history. See Am. Ans. 3, 45-49, 52, 55, 68-71, ECF No. 13. Instead, they offer several meritless defenses in an attempt to avoid being held accountable for their failures. First, their Motion to Dismiss attacks Plaintiffs AIARMA claim on the theory that the statute does not apply to oil and gas operations on Indian agricultural lands. Mot. at 9-12, ECF No. 19. This argument is not only inconsistent with AIARMA s plain language, but also contradicts the Agencies own interpretation of the statute. The Agencies completely ignore their commitment in the 2010 Management Plan to consult with the Tribe and comply with tribal law when approving oil and gas operations. In effect, the Agencies are 1

10 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 10 of 34 attempting to renege on commitments they made to the Pawnee in that plan. Second, the Agencies request dismissal of Plaintiffs (collectively, the Pawnee) claim for breach of the government s trust obligations, on the theory that those duties do not extend beyond compliance with generally applicable statutes and regulations. Mot. at This argument fails because the Pawnee s breach of trust claim is based in part on the Agencies violation of generally applicable laws such as NEPA, AIARMA, the National Historic Preservation Act (NHPA), and Executive Order By violating those generally-applicable laws, the Agencies also failed to meet their trust responsibilities to the Pawnee. Third, the Agencies err in claiming that the Pawnee s challenge to the lease approvals should be dismissed for failure to exhaust administrative remedies. Mot. at 5-9. Many cases from the Tenth Circuit and other appeals courts have rejected the Agencies theory that exhaustion is required to waive sovereign immunity under the Administrative Procedure Act (APA). In cases like this one, moreover, courts have excused plaintiffs from filing administrative appeals. The Agencies were well aware of their legal violations, which had been criticized by the Department s Inspector General. Moreover, BIA violated its own regulations by failing to provide notice of the lease approvals. Having kept the Pawnee in the dark, the Agencies cannot now penalize the Tribe for failing to pursue such appeals. The Court should deny the motion to dismiss and require the Agencies to produce the administrative record. That fact record will allow the Court to evaluate the merits and decide whether the Agencies have complied with the law and their trust obligations to the Pawnee. DISCUSSION I. PLAINTIFFS AIARMA CLAIM SHOULD NOT BE DISMISSED. The Pawnee s Fourth Cause of Action challenges the Agencies violations of AIARMA. 2

11 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 11 of 34 Am. Compl The leases and drilling permits challenged in this case cover Indian agricultural lands. Id. 66. AIARMA directs the Agencies to follow tribal laws pertaining to such lands, including laws regulating the environment and historic or cultural preservation, and laws or ordinances adopted by the tribal government to regulate land use or other activities under tribal jurisdiction. 25 U.S.C. 3712(b); Am. Compl. 33. AIARMA also requires BIA to develop, in close consultation with the affected tribe, management plans for Indian agricultural lands to support their development and protect... wildlife, fisheries, cultural resources, recreation and to regulate water runoff and minimize soil erosion, among other goals. 25 U.S.C Such plans are binding: AIARMA directs that they shall govern the management and administration of Indian agricultural resources and Indian agricultural lands by BIA and the tribe. Id. 3711(b)(2); Am. Compl. 34. In 2010, the Agencies adopted an AIARMA management plan that governs oil and gas development on Pawnee lands. The plan explains that oil and gas provisions were necessary: because many times proposed oil and gas activity involves prime agriculture land and/or water resources. Many times oil and gas locations are placed within existing crop fields, constructed on pasture land, or near water resources.... While agricultural use of the land has minimal impact upon oil and gas production, any release or spillage [from oil and gas operations] can result in extensive impairment to the agricultural uses of the land Pawnee Nation Agric. Res. Mgt Plan (ARMP) 6.0, 6.1, attached as Ex This plan imposes various requirements on the Agencies when approving oil and gas development, such as consulting with the Tribe, getting its consent for drilling permits, and complying with Pawnee laws in developing surface stipulations for proposed drilling sites. Id Furthermore, the plan directs that [a]ll land use and mineral leases and permits issued by the federal government 1 The plan, which is discussed in the Complaint, may be considered in reviewing the Agencies Rule 12(b)(6) motion. Toone v. Wells Fargo Bank, NA, 716 F.3d 516, 521 (10th Cir. 2013); Am. Compl

12 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 12 of 34 require[] compliance with Pawnee Nation Laws and Regulations. Id The oil and gas approvals at issue in this case conflict with the Management Plan and applicable Pawnee laws in numerous ways. For example, the Agencies approved at least one well pad in the Cimarron River floodplain, violating a tribal law requiring such operations to be at least 1,000 feet from the river. Am. Compl. 67. The Agencies also disregarded a Pawnee resolution calling for a temporary time-out on new oil and gas approvals while earthquakes and other concerns were addressed. Id. 47, 67; see Mot. at 4. The Agencies, however, contend that AIARMA does not apply because oil and gas development is not an agricultural land management activity within the meaning of the statute. Mot. at This theory is inconsistent with the statutory language and AIARMA s legislative history, not to mention the Agencies own Management Plan. In fact, the Agencies do not even mention that plan, much less attempt to reconcile their current interpretation with it. See id. A litigation position that is inconsistent with an agency s past practice receives no deference from this Court. See Christopher v. SmithKline Beecham Corp., 567 U.S 142, 154 (2012); Shikles v. Sprint/United Mgmt., 426 F.3d 1304, 1315 (10th Cir. 2005). Moreover, because of the special relationship between the federal government and Indian tribes, it is wellestablished [that] statutes are to be construed liberally in favor of the Indians, with ambiguous provisions interpreted to their benefit. Pub. Serv. Co. of N.M. v. Barboan, 857 F.3d 1101, 1108 (10th Cir. 2017); HRI, Inc. v. EPA, 198 F.3d 1224, & n.13 (10th Cir. 2000). Under that standard of review, the Agencies attempt to abandon their AIARMA commitments must fail. A. The Agencies Argument Conflicts with the Statutory Language. First, the Agencies theory fails under the plain language of the statute. See Barboan, 857 F.3d at 1108 (noting court must begin with the language employed by Congress ). The 4

13 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 13 of 34 Agencies focus on one provision of AIARMA that requires them to conduct all land management activities in accordance with agricultural management plans and tribal laws and ordinances. 25 U.S.C. 3712(a); Mot. at The Agencies contend that oil and gas development falls outside the definition of land management activities. Mot. at This theory ignores several other AIARMA provisions that are not limited to land management activities. For example, another subsection of Section 3712 requires [u]nless otherwise prohibited by Federal law, the [Interior Department] shall comply with tribal laws and ordinances pertaining to Indian agricultural lands, including laws regulating the environment and historic or cultural preservation, and laws or ordinances adopted by the tribal government to regulate land use or other activities under tribal jurisdiction. 25 U.S.C. 3712(b). And a different AIARMA provision makes management plans binding without reference to land management activities. Section 3711(b)(2) provides that the plans shall govern the management and administration of Indian agricultural resources and Indian agricultural lands by the Bureau and the Indian tribal government. Id. 3711(b)(2) (emphasis added). Neither of these provisions even mentions land management activities or limits their requirements to such activities. In fact, these provisions would be redundant if the Agencies interpretation of AIARMA were correct because the section cited by the Agencies, id. 3712(a), already imposes very similar requirements for land management activities. Compare id. 3712(a), (b) with id. 3711(b)(2). The Court should reject an interpretation of AIARMA that renders these provisions surplusage. See F.T.C. v. Accusearch Inc., 570 F.3d 1187, 1198 (10th Cir. 2009) ( Under a long-standing canon of statutory interpretation, one should avoid construing a statute so as to render statutory language superfluous. ). The plain language of AIARMA shows that its mandates extend beyond land management activities. 5

14 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 14 of 34 Contrary to the Agencies position, Sections 3711(b)(2) and 3712(b) do not exempt oil and gas development from their requirements. Instead they apply broadly to the management and administration of... Indian agricultural lands, and require compliance with tribal laws without reference to any particular industries. 25 U.S.C. 3711(b)(2), 3712(b). Congress knew how to carve out exceptions from AIARMA, see id. 3703(1) (excluding Indian forest lands from definition of Indian agricultural lands), but nothing in the statute suggests that it intended to exclude the oil and gas industry from these requirements. See U.S. ex rel. Homes v. Consumer Ins. Grp., 318 F.3d 1199, (10th Cir. 2003) (declining to imply exception from coverage in one provision of statute if similar exception was explicitly made in different provision of same statute); see also, Barboan, 857 F.3d at 1108 (statutes must be construed in favor of Indians). Even as to the definition of land management activities, the Agencies argument fails. AIARMA defines that term to include: all activities, accomplished in support of the management of Indian agricultural land, including (but not limited to) a list of examples such as agricultural leasing and educational assistance in agricultural and natural resource fields. 25 U.S.C. 3703(12)(A)-(F) (emphasis added). The Agencies place great weight on what they view as the clear topical focus of the examples listed, Mot. at 10, but they ignore the overarching definition that extends well beyond those examples. The term [a]ll activities encompasses any activities occurring as part of managing those lands. See Cty. of Oakland v. Fed. Hous. Fin. Agency, 716 F.3d 935, 940 (6th Cir. 2013) ( [W]hen Congress said all taxation, it meant all taxation. (emphasis original)). 2 The Agencies recognized in adopting the 2 The Agencies citation to Bloate v. United States does not help their argument. Bloate interpreted the meaning of a listed example in a statutory definition, but it did not hold that the examples limited the scope of the overarching definition. 559 U.S. 196, (2010). United 6

15 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 15 of 34 Pawnee Management Plan that oil and gas operations can result in extensive impairment to the agricultural uses of the land, ARMP 6.1, and the Agencies impose conditions on oil and gas development as part of managing those agricultural lands. Those conditions are subject to AIARMA s mandate to follow tribal laws and regulations. Am. Compl. 69. The Agencies contrary argument has no support in the statutory language. B. AIARMA s Legislative History Does Not Support the Agencies Argument. AIARMA s legislative history further undercuts the Agencies position. A central purpose of Congress in enacting AIARMA was to provide a mechanism for tribal priorities and objectives to govern the management on Indian agricultural lands. H.R. Rep. No , 1993 WL , at *16 (1993). In passing AIARMA, the House Committee expressly stated that it intends the language in section [3712(b)] to make clear that tribal laws and ordinances apply to Federal officials. The Committee expects all officials to comply with tribal laws and ordinances pertaining to Indian agricultural lands. Id. at *14. The legislative history also shows that Congress intended the requirements of AIARMA to apply broadly, rather than narrowing their scope to specific industries or activities. In fact, Congress rejected objections by BIA and the Justice Department that echo the concerns the Agencies raise here. During consideration of the legislation, the Justice Department objected that the term land management activity was defined very sweepingly, thus imposing very significant management burdens on the Secretary that would inevitably breed litigation. 138 Cong. Rec. S , 1992 WL , at S18206 (Oct. 8, 1992); see Mot. at 12 (arguing that if AIARMA applies to oil and gas leasing and development, numerous other activities would States v. Osage Wind, LLC, also cited by the Agencies, actually undercuts their argument because it rejected an agency s statutory interpretation that focused only on the examples listed while ignoring the overarching definitional language. No. 14-CV-704-JHP-TLW, 2015 WL , at *5-6 (N.D. Okla. Sept. 30, 2015). The Agencies make a similar mistake here. 7

16 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 16 of 34 also be covered). But Congress declined to narrow the definition of land management activity in the final version of AIARMA. Compare 138 Cong. Rec. at S18208 (definition objected to by Justice Department) with 25 U.S.C. 3703(12) (definition as enacted). Similarly, BIA and the Justice Department objected to AIARMA s radical departure from existing law in requiring the Interior Department to comply with tribal laws. 138 Cong. Rec. at S18206; S. Rep. No at *28 (1992). But the Senate Committee strongly disagreed with their view and forcefully rejected this objection, 138 Cong. Rec. at S18207; S. Rep. No , 1993 WL , at *15 (1993), explaining that as a policy cut, it supports recognition of tribal authority in the management of natural resources, particularly agricultural resources, on lands within their jurisdiction, S. Rep. No at *29. Because Congress has already rejected the Agencies policy concerns about AIARMA s scope, those objections should go to the legislature, not this Court. Meanwhile, the Agencies must comply with Congress s direction to consult with tribes and comply with tribal law when approving activities on Indian agricultural land, regardless of the industry involved. See id. As the Tenth Circuit recently observed, [w]hatever negative policy effects it claims may follow, [BIA s] remedy lies elsewhere. Barboan, 857 F.3d at C. The Agencies Argument Conflicts with the 2010 Management Plan. Because the intent of Congress is clear in the text and history of AIARMA, that is the end of the matter. See City of Arlington, Tex. v. F.C.C., 133 S. Ct. 1863, 1868 (2013). But the Agencies 2010 Pawnee Management Plan also demonstrates that their current interpretation represents nothing more than an ad hoc litigation position that must be rejected. First, regardless of the scope of AIARMA generally, the inclusion of the oil and gas requirements in the Management Plan makes them mandatory. 25 U.S.C. 3711(b)(2). Nothing 8

17 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 17 of 34 in AIARMA lets the Agencies pick and choose which provisions of agricultural management plans they want to comply with. Id. Nor do the Agencies claim they lack authority to implement any of the Management Plan requirements. Having approved a plan that imposes requirements for oil and gas approvals, BIA cannot simply walk away from those commitments. Id. Moreover, because the Management Plan is legally binding, its interpretation of AIARMA as applying to oil and gas operations is entitled to deference. See S. Utah Wilderness All. v. Dabney, 222 F.3d 819, 829 (10th Cir. 2000) (applying Chevron deference to agency interpretation of statute applied in land management plan). That reading is reinforced by BIA regulations which, contrary to the Agencies claim, Mot. at 11-12, do cover non-agricultural activities. See, e.g., 25 C.F.R , (business leases), (management plans). The Agencies argument to this Court is nothing more than a convenient litigation position that deserves no deference. Christopher, 567 U.S at 154; see also Ramah Navajo Chapter v. Lujan, 112 F.3d 1455, 1462 (10th Cir. 1997) (canon of construction favoring Indians controls over more general rule of deference to agency interpretations ). This Court should reject the Agencies attempt to escape their commitments under AIARMA. II. THE PAWNEE S TRUST CLAIM SHOULD NOT BE DISMISSED BECAUSE IT ALLEGES THE AGENCIES VIOLATED GENERALLY-APPLICABLE STATUTORY REQUIREMENTS. Plaintiffs sixth cause of action challenges the Agencies failure to comply with their trust responsibilities to the Pawnee. Am. Compl The Agencies recognize that a general trust relationship exists, but seek dismissal of this claim on the theory that the trust obligation does not require them to take action beyond complying with generally applicable statutes and regulations. Mot. at 14 (citing cases). Regardless of the merit of the Agencies legal theory, it does not support dismissal of Claim Six because the Pawnee s breach of trust claim is based in 9

18 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 18 of 34 part on the Agencies statutory violations. 3 The Pawnee allege that by violating NEPA, Executive Order 11988, NHPA and the AIARMA, the [A]gencies did not meet their trust responsibilities. Am. Compl. 93; see United States v. Mitchell, 463 U.S. 206, 224 (1983); Oglala Sioux Tribe of Indians v. Andrus, 603 F.2d 707, 721 (8th Cir. 1979) (holding the government violates its trust obligation upon failing to comply with applicable statute or regulation). With the exception of AIARMA, the Agencies motion to dismiss does not contest any of the Pawnee s allegations that these statutes were violated. Thus, even under the Agencies own view of their trust obligations, the Pawnee have stated a claim for relief. 4 The motion to dismiss Claim Six must be denied. III. PLAINTIFFS CHALLENGE TO APPROVAL OF THE PAWNEE LEASES SHOULD NOT BE DISMISSED FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES. The Pawnee challenge BIA s approval of seventeen oil and gas leases on Pawnee lands (the Pawnee Leases) without complying with NEPA. NEPA is a government in the sunshine law that requires all federal agencies to take a hard look at the environmental consequences of their decisions and disclose those impacts to the public. Am. Compl These steps lead to better outcomes by ensuring that important effects will not be overlooked or underestimated during agency decision-making. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989). BIA regulations and Tenth Circuit precedent make clear that approval of a lease on Indian lands represents a federal action subject to NEPA. See Davis v. Morton, 469 F.2d 593, 3 Plaintiffs dispute the Agencies crabbed view of their trust obligations. See, e.g., Shoshone Indian Tribe v. United States, 56 Fed. Cl. 639, (Ct. Cl. 2003) (discussing fiduciary duty relating to oil and gas leases). The Court, however, does not need to resolve that issue here. 4 In addition to the violations of generally-applicable statutes listed above, the Pawnee s trust claim alleges that the Agencies failed to engage in required government-to-government consultation with the Tribe prior to approving the Pawnee Leases and drilling permits. Am. Compl. 94; id (citing sources of authority for duty to consult); see also, 40 C.F.R (d)(2) (directing federal agencies to consult with tribes as part of NEPA process). 10

19 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 19 of (10th Cir. 1972); 25 C.F.R (a), Nevertheless, BIA failed to prepare any NEPA analysis for the Pawnee Leases. Instead it treated them all as subject to a categorical exclusion from NEPA. Am. Compl. 32, The Agencies contend the leasing challenge must be dismissed for failure to exhaust administrative remedies. Mot. at 5-9. This defense even if successful would result in dismissal of just one of the six claims in this case (Claim One). 5 But even as to Claim One, the Agencies argument fails. A. The United States Has Waived Sovereign Immunity for the Pawnee s Challenge to the Lease Approvals. First, the Agencies try to elevate their exhaustion argument into a jurisdictional defense that would completely bar Plaintiffs from the courthouse on this claim. Mot. at 5-6. The Agencies claim that without exhausting administrative remedies, the lease approvals did not represent final agency action, and thus the waiver of sovereign immunity in the APA does not apply. Id.; 5 U.S.C This position misreads the statute and disregards well-established case law holding that the APA s waiver is not limited to cases challenging final agency actions. The Pawnee recognize that the BIA recently made the same argument successfully before this Court. See Chance v. Zinke, No. 16-CV-549-JHP-PJC, 2017 WL , at *7 (N.D. Okla. Apr. 18, 2017) (unpublished). In both Chance and this case, however, the Agencies failed to inform the Court of the extensive precedent from the Tenth Circuit and other courts rejecting their position, or of the relevant legislative history. 6 The Pawnee respectfully submit that a 5 This is because the Motion attacks only the Pawnee s challenge to approval of the Pawnee Leases not the subsequent permits that authorized drilling and other activities on those leases. Mot. at 7 n.4. Those post-leasing approvals are targeted in five of the Complaint s six claims (Claims 2-6). Am. Compl As a result, the Agencies exhaustion argument provides no basis to dismiss those claims. 6 See Chance ECF Nos. 25 at 19, 36 at 21-23, 40 at 8-9 (motion to dismiss briefing); Mot. at

20 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 20 of 34 review of that law shows the federal government has waived its sovereign immunity, regardless of whether the Lease approvals are considered final agency actions. 7 The Agencies err by focusing on the wrong language in the APA. The statute s sovereign immunity waiver is found in the second sentence of 5 U.S.C. 702, which provides that: An action in a court of the United States seeking relief other than money damages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal authority shall not be dismissed nor relief therein be denied on the ground that it is against the United States or that the United States is an indispensable party. On its face, this broad waiver makes no reference to final agency actions. The Agencies ignore the relevant language and instead discuss two different APA provisions: (a) the first sentence of Section 702, and (b) 5 U.S.C Mot. at 5-6 (quoting first sentence of Section 702, rather than second sentence, and citing Section 704). Section 704, and Section 702 s first sentence, refer to final agency action and agency action, but they do not address the APA waiver of sovereign immunity or limit its scope. The first and second sentences of 702 play quite different roles. Michigan v. U.S. Army Corps of Eng rs, 667 F.3d 765, 774 (7th Cir. 2011) (quoting Veterans for Common Sense v. Shinseki, 644 F.3d 845, 866 (9th Cir. 2011)). Section 702 s first sentence, using much different language than the second sentence, provides a cause of action to challenge an agency action. See 5 U.S.C. 702 ( A 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. ). That cause of action, however, is distinct from the waiver 7 The Agencies also miss the mark in asserting that, because administrative appeals were not filed, the Pawnee Leases are not final agency actions. Mot. at 6. The question of exhaustion of administrative remedies is conceptually distinct from the doctrine of finality. Darby v. Cisneros, 509 U.S. 137, 144 (1993). The approved leases plainly represented final agency actions. P. 24, infra. 12

21 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 21 of 34 of sovereign immunity in the second sentence of Section 702. Michigan, 667 F.3d at 774 (noting that first sentence supplies a right to seek review of agency action separate from waiver of sovereign immunity in second sentence). Similarly, Section 704 provides a cause of action to challenge final agency action[s], Mot. at 6, but it does not limit the waiver of sovereign immunity in the second sentence of Section 702. As the Seventh Circuit explained, the conditions of 704 affect the right of action contained in the first sentence of 702, but they do not limit the waiver of immunity in 702 s second sentence. Michigan, 667 F.3d at 775; see also Muniz-Muniz v. U.S. Border Patrol, 741 F.3d 668, (6th Cir. 2013) (collecting cases and noting that circuit courts are unanimous in their conclusion that Section 704 does not limit the waiver in Section 702); Hanson v. Wyatt, 552 F.3d 1148, 1173 n.11 (10th Cir. 2008) (Gorsuch, J., concurring) (noting that we have not treated Section 704 as a limit on th[e] waiver of sovereign immunity in Section 702). The Court should reject the Agencies attempt to conflate the distinct requirements of Sections 702 and 704. Trudeau v. F.T.C., 456 F.3d 178, (D.C. Cir. 2006); Michigan, 667 F.3d at ; Treasurer of N.J. v. U.S. Dep t of Treasury, 684 F.3d 382, (3d Cir. 2012). Addressing the correct statutory language, numerous appeals courts have held that Section 702 s waiver of sovereign immunity is not limited to claims challenging final agency actions under the APA. As the D.C. Circuit explained, the statute (quoted above) refer[s] to a claim against an agency... [but] it does not use either the term final agency action or the term agency action. Trudeau, 456 F.3d at 187. Going even further, the Tenth Circuit has ruled that the waiver extends to claims not brought under the APA at all. See Gilmore v. Weatherford, 694 F.3d 1160, 1166 n.1 (10th Cir. 2012) (waiver extends to common law claims against agency inaction); Simmat v. U.S. Bureau of Prisons, 413 F.3d 1225, 1233 (10th Cir. 13

22 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 22 of ) (sovereign immunity waived for constitutional claim not involving final agency action); see also United Tribe of Shawnee Indians v. United States, 253 F.3d 543, (10th Cir. 2001) (recognizing case law and assuming that Section 702 sovereign immunity waiver is not limited to cases challenging final agency action). Many other circuits have roundly rejected federal agency attempts to limit Section 702 s waiver in such a manner. See Muniz, 741 F.3d at 672 ( [W]e now join all of our sister circuits who have [considered the question] in holding that 702 s waiver of sovereign immunity [applies]... regardless of whether plaintiff seeks review of agency action or final agency action as set forth in [the APA]. ); Treasurer, 684 F.3d at (surveying case law); see also, Nulankeyutmonen Nkihtaqmikon v. Impson, 503 F.3d 18, 33 (1st Cir. 2007) (NN-2007) (recognizing that the APA s finality requirement is not jurisdictional in nature ). The Agencies mention none of this case law in their motion, or in their Chance briefing. And tellingly, they fail to cite a single case that supports their argument. 8 The APA s legislative history confirms that the Agencies are wrong on sovereign immunity. The second sentence of Section 702 was adopted in 1976 decades after Congress enacted the right of review in the first sentence. Michigan, 667 F.3d at 774. [N]othing in the legislative history of the 1976 amendment of 702 suggests that Congress intended to limit the waiver of sovereign immunity to the specific forms of agency action enumerated elsewhere in the APA. Presbyterian Church (U.S.A.) v. United States, 870 F.2d 518, (9th Cir. 1989) 8 The Agencies reliance on a footnote in Simmat, 413 F.3d at 1233 n.9 (see Mot. at 6), is especially misplaced because that case actually holds that Section 702 s waiver of sovereign immunity is not limited to APA claims. Pp , supra. The other two cases cited by the Agencies do not address sovereign immunity. Instead, they discuss the separate issues of whether a cause of action exists under Section 704 of the APA, or whether exhaustion is required. See Mot. at 6 (citing Lujan v. Nat l Wildlife Fed n, 497 U.S. 871, 882 (1990); White Mountain Apache Tribe v. Hodel, 840 F.2d 675, 677 (9th Cir. 1988)). 14

23 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 23 of 34 (detailing legislative history). To the contrary, the legislative history contains repeated declarations that Congress intended to waive immunity for any and all non-monetary actions against an agency. Trudeau, 456 F.3d at 187 (citing H.R. Rep , at 3 & 9 (1976); S. Rep , at 8 (1976)); Treasurer, 684 F.3d at , 400. Congress also concluded the need to channel and restrict judicial control over administrative agencies... could be better achieved through doctrines other than sovereign immunity. Presbyterian Church, 870 F.2d at 524. In short, the Agencies attempt to limit the APA s waiver of sovereign immunity to final agency actions conflicts with the plain language and legislative history of the statute and has been repeatedly rejected by the courts. This Court should dismiss it as well. B. Exhaustion Is Not Required Under Darby v. Cisneros. The Agencies exhaustion argument also fails on the merits. A party can be required to exhaust administrative remedies under the APA only when doing so is: (a) expressly required by statute or an agency rule and (b) the administrative action is made inoperative pending that review. Darby v. Cisneros, 509 U.S. 137, 154 (1993). The Pawnee respectfully submit that BIA s leasing decisions do not satisfy the Darby test for requiring exhaustion. BIA regulations make decisions inoperative pending an administrative appeal the second Darby requirement. 25 C.F.R. 2.6(a), (b) (decisions final and effective when no longer subject to appeal); see also Mot. at 8 (appeals governed by 25 C.F.R. Part 2). But the first Darby prong is not met because no statute or regulation mandates exhaustion prior to challenging a BIA decision. The applicable BIA regulation provides that a decision may be appealed. 25 C.F.R. 2.7(c) (emphasis added). Darby and other courts have held that similar may appeal language is non-mandatory. Darby, 509 U.S. at 142, 144; Dine Citizens Against Ruining Our Env t v. Klein, 676 F. Supp. 2d 1198, (D. Colo. 2009); San Juan Citizens 15

24 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 24 of 34 All. v. Babbitt, 228 F. Supp. 2d 1224, (D. Colo. 2002). 9 C. Several Exceptions Apply that Excuse Plaintiffs from Exhausting Administrative Remedies. Even where required under Darby, courts can excuse exhaustion in appropriate cases unless Congress specifically mandates it by statute. See McCarthy v. Madigan, 503 U.S. 140, 144 (1992). Because the Agencies contend that exhaustion is mandated by [Interior Department] regulations governing the Pawnee leases rather than a statute, Mot. at 8, this Court has discretion to waive the exhaustion requirement. Cody Labs., Inc. v. Sebelius, 446 F. App x 964, 969 (10th Cir. 2011) (analyzing exhaustion exceptions in APA challenge to agency decision); Gilmore v. Salazar, 748 F. Supp. 2d 1299, 1312 (N.D. Okla. 2010) ( Although the APA requires exhaustion of administrative remedies, courts have created exceptions to this requirement ); see, e.g., Herr v. U.S. Forest Serv., 803 F.3d 809, (6th Cir. 2015) (excusing exhaustion in APA case). In considering the exceptions, courts must balance the interest of the [plaintiff] in retaining prompt access to a federal judicial forum against countervailing institutional interests favoring exhaustion. Cody Labs., 446 F. App x at 969. The interests underlying the exhaustion requirement include conserving judicial resources by allowing agencies to correct their own 9 The Agencies rely on a Tenth Circuit case, Coosewoon v. Meridian Oil Co., that addressed an agency failure to act not an affirmative BIA decision. 25 F.3d 920, (10th Cir. 1994); Mot. at 8-9. Coosewoon is inapposite because APA review of an agency s failure to act is very limited. See Norton v. S. Utah Wilderness All., 542 U.S. 55, (2004). Review of BIA s failure to act was more broadly available only because the agency s regulations provide for inaction to be treated as a final agency action after following a specific administrative procedure, which was at issue in Coosewoon. 25 C.F.R. 2.8; see also United Tribe of Shawnee Indians, 253 F.3d at (requiring exhaustion in failure to act case without analyzing BIA regulations). That unusual process is not at issue in this case, which challenges lease approvals by BIA. See, e.g., Osage Producers Ass n v. Jewell, 191 F. Supp. 3d 1243, & n.8 (N.D. Okla. 2016) (dismissing failure to act claims, but noting that exhaustion argument did not cover permitting decisions). 16

25 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 25 of 34 errors, McKart v. United States, 395 U.S. 185, (1969), and ensuring that courts review the mature, considered, and final articulation of the agency s action. Glisson v. U.S. Forest Serv., 55 F.3d 1325, 1327 (7th Cir. 1995); Dine CARE, 676 F. Supp. 2d at Where the purposes of exhausting administrative remedies are not served, courts have excused plaintiffs from doing so. That is the situation here, for several reasons Claim One Involves a Purely Legal Issue Challenging BIA Decisions that Followed a General Agency Practice. Exhaustion is not required when an agency has adopted a policy or pursued a practice of general[] applicability that is contrary to law. Alabama-Quassarte Tribal Town v. United States, No. CIV RAW, 2010 WL , at *8 (E.D. Okla. 2010) (quoting Urban by Urban v. Jefferson Cty. Sch. Dist. R 1, 89 F.3d 720, 724 (10th Cir.1996)). This exception follows from the purposes of the exhaustion requirement: when the agency is following a policy or generally-applicable practice, that policy already reflects the agency s considered and final articulation of its position. Glisson, 55 F.3d at Moreover, where a claim presents a purely legal question that does not require further fact development or application of agency expertise, exhaustion has been excused. Rocky Mountain Oil & Gas Ass n v. Watt, 696 F.2d 734, (10th Cir. 1982) (RMOGA). This exception also is rooted in the purposes of exhaustion: for questions of statutory construction, the court does not need the agency to apply its expertise regarding technical or fact issues. Id. 10 Plaintiffs also renew their request that the Agencies file the administrative record before this Court resolves the motion to dismiss. See ECF No. 15 at 4 (proposed case management order). The facts cited below reflect only what the Pawnee could develop without the benefit of that record. Before this Court decides whether to dismiss the leasing challenge, the Pawnee should have an opportunity to present a fully-supported factual case for excusing exhaustion. See, e.g., Nulankeyutmonen Nkihtaqmikon v. Impson, 573 F. Supp. 2d 311, 318 (D. Me. 2008) (NN-2008) (considering administrative record in evaluating motion to dismiss on exhaustion grounds). Doing so will not prejudice the Agencies, given that they must prepare an administrative record in any event. See p. 11, supra (noting limited scope of motion to dismiss). 17

26 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 26 of 34 Further, courts have excused plaintiffs from exhausting administrative remedies where doing so would be futile. Weatherford, 694 F.3d at All three of these exceptions apply, for similar reasons. BIA was well aware of the legal objections to its decision not to prepare a NEPA analysis on the leases. But as described below, it took that approach as part of a regular practice that reflected a legal determination the agency made after careful consideration of the law. First, BIA s error in failing to comply with NEPA was obvious when it approved the leases in The Tenth Circuit had ruled more than 40 years earlier that a BIA lease approval on Indian lands constitutes major federal action and thus must be approved according to NEPA mandates. Davis, 469 F.2d at Moreover, BIA s leasing regulations expressly require it to ensure that all environmental studies are prepared as required by NEPA. See 25 C.F.R (a) (covering tribal minerals); id (Section applies to leases for allotted minerals). Just the year before the Pawnee Lease approvals, the Interior Department s Inspector General issued a 2012 report addressing this very question and criticizing BIA s use of categorical exclusions from NEPA when approving oil and gas leases. The Inspector General explained that NEPA broadly applies to all BIA approvals of tribal leases, and stated that oil and gas lease approvals on Indian lands constitute[ ] a major Federal action subject to NEPA. 11 Nevertheless, BIA heedlessly went ahead the following year and approved all seventeen of the Pawnee Leases using the same practice criticized by the Department s Inspector General. A review of the categorical exclusion documents themselves eliminates any doubt that BIA was well aware of the law it was violating. BIA appears to have used an identical Oil and 11 DOI Office of Inspector General, Oil And Gas Leasing In Indian Country: An Opportunity For Economic Development at 7-8, attached as Ex. 3 (the 2012 Inspector General Report). 18

27 Case 4:16-cv JHP-JFJ Document 20 Filed in USDC ND/OK on 06/29/17 Page 27 of 34 Gas Categorical Exclusion Statement form to approve each of the seventeen Pawnee Leases. In that statement, the agency acknowledged that certain oil and gas leasing actions have been held to require the preparation of an Environmental Impact Statement (EIS). Conner v. Burford, 605 F. Supp. 107 (1985). Ex. 2 at 1, attached (emphasis original). Despite that well-established law BIA concluded that [a]fter careful review of the [facts] and related case law and Bureau of Indian Affairs National Environmental Policy Act guidance... we have decided to prepare neither an environmental assessment nor an environmental impact statement. Id. at 1-2. This history shows that BIA declined to prepare a NEPA analysis based on a standard practice that reflected agency s considered and final articulation of its position. Glisson, 55 F.3d at 1327; Alabama-Quassarte, 2010 WL , at *8; see also 2012 Inspector General Report at 7 (noting that some BIA offices used that practice). Having made its decision [a]fter careful review of the law, BIA should be prepared to defend the merits of that decision rather than offering procedural hurdles in an effort to avoid judicial review. Moreover, BIA s error presents a purely legal question: whether a NEPA analysis is required before approving Indian leases. There is no factual dispute that BIA used a categorical exclusion in approving the leases rather than preparing an environmental assessment or EIS, see Am. Compl. 51; Am. Ans. 51, and Claim One merely asks for a legal ruling on whether that approach complied with the law. Am. Compl Last year, Judge Frizzell of this Court resolved a virtually identical NEPA claim as a straightforward legal question and without requiring the plaintiff to exhaust administrative remedies. See Hayes v. Chaparral Energy, LLC, 180 F. Supp. 3d 902, (N.D. Okla. 2016) (relying on plain language of BIA categorical exclusion to rule that agency violated NEPA by using it for approval of oil and gas lease). This case raises the same type of purely legal question. 19