No IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT. UTE DISTRIBUTION CORPORATION, a Utah corporation, Plaintiff - Appellant,

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 1 No. 08-4147 IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT UTE DISTRIBUTION CORPORATION, a Utah corporation, Plaintiff - Appellant, RED ROCK CORPORATION, a Utah corporation, Plaintiff - Intervenor, v. SECRETARY OF THE INTERIOR OF THE UNITED STATES, in his official capacity; UTE INDIAN TRIBE, Defendants - Appellees. ORAL ARGUMENT IS REQUESTED On Appeal from the United States District Court for the District of Utah (Hon. Dee Benson) BRIEF OF SECRETARY OF THE INTERIOR OF COUNSEL: JASON HARTZ Office of the Solicitor U.S. Department of the Interior Washington, DC 20240 JOHN C. CRUDEN Acting Assistant Attorney General JOHN K. MANGUM Assistant U.S. Attorney Salt Lake City, UT 84111 ELIZABETH A. PETERSON KATHERINE J. BARTON U.S. Department of Justice Environment & Natural Resources Division, Appellate Section P.O. Box 23795 L Enfant Plaza Sta. Washington, DC 20026 (202) 353-7712 katherine.barton@usdoj.gov

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 2 TABLE OF CONTENTS PAGE STATEMENT OF RELATED CASES...ii STATEMENT OF JURISDICTION...1 STATEMENT OF THE ISSUES...2 STATEMENT OF THE CASE...3 STATEMENT OF FACTS...6 A. Legal Background: Winters Water Rights...6 B. Factual Background...9 1. The UPA...9 2. Division of Assets Between the Full-Bloods and Mixed-Bloods...11 3. Distribution of Assets Among the Mixed-Bloods......... 13 4. Non-UPA Actions Related to Tribal Water Rights........ 16 a. The Decker Report...16 b. The Deferral Agreement...17 c. Court of Claims Litigation...................... 17 d. 1980 and 1990 Proposed Compacts............... 18 C. Procedural History and Administrative Decisions.............. 19 i

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 3 PAGE 1. Motions to Dismiss the Initial Complaint............... 19 2. The Secretary s 1998 Decision........................ 20 3. Motions to Dismiss the Amended Complaint............ 21 4. The Secretary s 2004 Decision........................ 22 5. Motions to Dismiss the Second Amended Complaint...... 23 D. District Court Decision...24 SUMMARY OF THE ARGUMENT...26 ARGUMENT...29 Standard of Review...29 I. This suit is barred by the statute of limitations...................... 30 II. Assuming this action is not time-barred, UDC s declaratory judgment claim must nevertheless be dismissed because, with respect to that claim, the government is immune to suit and UDC has no private right of action...36 A. The APA does not provide a waiver of sovereign immunity with respect to UDC s declaratory judgment action............ 37 B. UDC has no cause of action on which to base the declaratory judgment it seeks...39 III. The district court, under de novo review, correctly held that the Tribe s water rights, including unquantified Winters water rights, were capable of division and were divided......................... 41 ii

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 4 PAGE A. The UPA contemplated that water rights would be divided between the two groups...41 B. The Plan for Division expressly provided for the division of water rights between the two groups........................ 42 C. The Plan for Distribution, which provided for the distribution of assets among the mixed-bloods, expressly provided for the handling of water rights...46 D. Events occurring after division and distribution further demonstrated AUC s and UDC s understanding that unquantified Winters rights were not divided................. 47 E. The district court s ruling is consistent with the case law........ 49 F. The unquantified water rights on the tribal range lands were susceptible of equitable division and distribution.............. 52 G. First Security does not estop the Secretary from concluding the water rights were divided...55 IV. The district court correctly held, in the alternative, that the Secretary s 1998 and 2004 decisions were not arbitrary and capricious........... 57 V. UDC s claim for Title V monies is not properly raised on appeal....... 61 CONCLUSION...62 STATEMENT REGARDING ORAL ARGUMENT...................... 62 CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE iii

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 5 CASES : TABLE OF AUTHORITIES PAGE Affiliated Ute Citizens v. United States, 199 Ct. Cl. 1004 (1972)...17,18,31 Affiliated Ute Citizens v. United States, 215 Ct. Cl. 935 (1977)... 18,31,32,33 Affiliated Ute Citizens v. United States, 406 U.S. 128 (1972)... 10,14,15,16 Affiliated Ute Citizens v. United State, No. 156-69 (Ct. Cl.) (1970)... 32,59 American Colloid Co. v. Babbitt, 145 F.3d 152 (10th Cir. 1998)...30 American Wildlands v. Browner, 260 F.3d 1192 (10th Cir. 2001)...29 Arizona v. California (Arizona I), 373 U.S. 546 (1963)... 6,8,49,50 Arizona v. California, 460 U.S. 605 (1983)...6 Bowen v. Massachusetts, 487 U.S. 879 (1988)...38 Cannon v. United States, 338 F.3d 1183 (10th Cir. 2003)...34 Center for Biological Diversity v. Hamilton, 453 F.3d 1331 (11th Cir. 2006)...35 iv

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 6 Colville Confederated Tribes v. Walton (Walton I), 647 F.2d 42 (9th Cir. 1981)...7,8,52 Colville Confederated Tribes v. Walton (Walton III), 752 F.2d 397 (9th Cir. 1985)...6 Conrad Inv. Co. v. United States, 161 F. 829 (9th Cir. 1908)...7 Cuba Soil and Water Conservation Dist. v. Lewis, 527 F.3d 1061 (10th Cir. 2008)...40 Davidson v. America Online, Inc., 337 F.3d 1179 (10th Cir. 2003)...34 Department of Army v. Blue Fox, Inc., 525 U.S. 255 (1999)...38 Felter v. Norton, 412 F. Supp. 2d 118 (D.D.C. 2006), affirmed in principle, remanded on other grounds, Felter v. Kempthorne, 473 F.3d 1255 (D.C. Cir. 2007)...31 Hackford v. Babbitt, 14 F.3d 1457 (10th Cir. 1994)...................... 4,6,7,16,45 Hackford v. First Security, 521 F. Supp. 541 (D. Utah 1981), aff d, 1983 WL 20180 (10th Cir. 1983)... 14,49,55,56 Hanson v. Wyatt, 552 F.3d 1148 (10th Cir. 2008)...39 Hart v. Dept. of Labor, 116 F.3d 1338 (10th Cir. 1997)......................... 29,30 v

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 7 Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990)...30 Kellogg v. Metropolitan Life Ins. Co., 549 F.3d 818 (10th Cir. 2008)...40 Keys Youth Servs., Inc. v. City of Olathe, Kan., 248 F.3d 1267 (10th Cir.2001)...29 National Adver. Co. v. City of Raleigh, 947 F.2d 1158 (4th Cir.1991)...34 P & V Enters. v. U.S. Army Corps of Eng rs, 516 F.3d 1021 (D.C. Cir. 2008)...30 Phillips Petroleum Co. v. Lujan, 4 F.3d 858 (10th Cir. 1993)...31 Rattlesnake Coalition v. U.S. EPA, 509 F.3d 1095 (9th Cir. 2007)...38 Reed v. McKune, 298 F.3d 946 (10th Cir. 2002)...56 Simmat v. U.S. Bureau of Prisons, 413 F.3d 1225 (10th Cir. 2005)...38 Skeem v. United States, 273 F. 93 (9th Cir. 1921)... 7,8 Thomas v. Denny s, Inc., 111 F.3d 1506 (10th Cir. 1997)...34 Tiberi v. Cigna Corp., 89 F.3d 1423 (10th Cir. 1996)...34 vi

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 8 Winters v. United States, 207 U.S. 564 (1908)... 6,7,8,16,18,23,28,47,50,51 United States v. Adair, 723 F.2d 1394 (9th Cir. 1983)... 6,49 United States v. Ahtanum Irr. Dist., 236 F.2d 321 (9th Cir. 1956)...8 United States v. Chee, 514 F.3d 1106 (10th Cir. 2008)...55 United States v. Sams, 521 F.2d 421 (3d Cir.1975)...31 United States ex rel. Ray v. Hibner, 27 F.2d 909 (D. Idaho 1928)... 7,8 United States v. Powers, 305 U.S. 527 (1939)...8,42,50 United Tribes of Shawnee Indians v. United States, 253 F.3d 543 (10th Cir. 2001)...39 Ute Distribution Corp. v. Norton, 43 Fed. Appx. 272 (10th Cir. 2002)..................... ii,21,22 Ute Distribution Corp. v. Secretary, 934 F. Supp. 1302 (D. Utah 1996), rev d in part, UDC v. Ute Indian Tribe, 149 F.3d 1260 (10th Cir. 1998)......................... 19,33 Ute Distribution Corp. v. Ute Indian Tribe, 149 F.3d 1260 (10th Cir. 1998)... ii,37 Urabazo v. United States, 947 F.2d 955, 1991 WL 213406 (10th Cir. 1991).............. 31 vii

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 9 Ute Distribution Corp. v. Ute Indian Tribe, 149 F.3d 1260 (10th Cir. 1998)...ii Ute Distribution Corp. v. United States, 938 F.2d 1157 (10th Cir. 1991)...16 STATUTES, RULES AND REGULATIONS: Administrative Procedure Act: 5 U.S.C. 701 et seq...1 5 U.S.C. 702...38 5 U.S.C. 704...38 The Ute Partition and Termination Act of 1954, ch 1009, 68 Stat. 868: 25 U.S.C. 677-677aa...2,9,20,37,40 25 U.S.C. 677d... 9,10 25 U.S.C. 677e...11 25 U.S.C. 677i... 9,10,15,37,40-41,54 25 U.S.C. 677l... 3,9,10,41 25 U.S.C. 677l(2)...10,14,42 25 U.S.C. 677l(3)... 11,13 25 U.S.C. 677m...40 25 U.S.C. 677o... 9,41 25 U.S.C. 677p...41 25 U.S.C. 677v... 9,11 Reclamation Projects Authorization and Adjustment Act of 1992, Title V, Pub. L. No. 102-575, 43 U.S.C. 371................ 61 28 U.S.C. 1291...2 28 U.S.C. 1331...1 28 U.S.C. 2201...1 28 U.S.C. 2401...1,2,35 28 U.S.C. 2401(a)... 30,31 28 U.S.C. 2401(b)...30 viii

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 10 28 U.S.C. 2410(a)...26 25 C.F.R. 217.4...20 Fed. R. App. P. 4(a)(1)(B)...2 rd H.R. Rep. No. 83-2493, 83 Cong., 2d Sess. (1954), 1954 U.S.C.C.A.N. 3355... 9,42 MISCELLANEOUS: Cohen s Handbook of Federal Indian Law, 1.06 (2005 ed.).......... 9 ix

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 11 STATEMENT OF RELATED CASES This Court decided prior appeals in this case in Ute Distribution Corp. v. Ute Indian Tribe, 149 F.3d 1260 (10th Cir. 1998) and Ute Distribution Corp. v. Norton, 43 Fed. Appx. 272 (10th Cir. 2002). Counsel for the United States is unaware of any other case that is related to this appeal within the meaning of 10th Circuit Rule 28.2(c). x

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 12 STATEMENT OF JURISDICTION The district court s jurisdiction is in dispute. At issue in this appeal are Claims 1 and 2 of the Second Amended Complaint of Plaintiff Ute Distribution Corporation (UDC). Those claims seek judicial review of final agency action under the Administrative Procedure Act (APA), 5 U.S.C. 701 et seq. (Claim 1), and a declaratory judgment under 28 U.S.C. 2201 (Claim 2), with no cause of action specified. UDC alleged that jurisdiction exists over both actions under 28 U.S.C. 1331 (federal question jurisdiction) and APA 702 (waiver of government s sovereign immunity). The district court exercised jurisdiction only over the APA claim. Docket No. (DN) 148, 206 (see Supplemental Appendix (SA) 27, 50). The district court s jurisdiction over both claims is barred by the six-year statute of limitations in 28 U.S.C. 2401. See infra, Part I. Even assuming the district court had jurisdiction over UDC s APA claim, UDC s declaratory judgment claim is jurisdictionally barred because the APA does not waive the government s immunity to suit with respect to that claim. 1/ See infra, Part II.A. 1/ UDC s declaratory judgment claim also fails on threshold non-jurisdictional grounds because UDC lacks a cause of action on which to base that claim. See infra, Part II.B.

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 13 The district court entered final judgment on July 22, 2008. DN292. UDC filed a timely notice of appeal on July 30, 2008. DN293, 294; see Fed. R. App. P. 4(a)(1)(B). This Court has jurisdiction under 28 U.S.C. 1291. 2/ STATEMENT OF THE ISSUES The Ute Partition and Termination Act of 1954, ch. 1009, 68 Stat. 868, codified at 25 U.S.C. 677-677aa (UPA), established a process for the termination of federal supervision over mixed-blood members of the Ute Indian Tribe of the Uintah and Ouray Reservation (Ute Tribe or Tribe). As part of this process, the statute established a process for the division and distribution of tribal assets then susceptible to equitable and practicable distribution between the fullblood group, for whom federal supervision would continue, and the mixed-blood group, 3/ appeal are: for whom such supervision would end. 25 U.S.C. 677. The issues on 1. Whether the district court s jurisdiction over this action was barred by the six-year statute of limitations in 28 U.S.C. 2401. 2/ UDC is incorrect (Br. xi) that this action falls under FRAP 15. 3/ No disrespect is intended by use of these terms, which are used here for consistency with their use in the UPA and subsequent court decisions and administrative actions. 2

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 14 2. Assuming the case is not time-barred, whether UDC s declaratory judgment claim is precluded because, with respect to that claim: (1) the Secretary is immune to suit; or (2) UDC has no cause of action. 3. If the Court reaches the merits, whether, in 1961, Ute tribal water rights were assets susceptible to equitable and practicable distribution within the meaning of the UPA and whether those water rights were, in fact, divided by agreement of the full-blood and mixed-blood groups. STATEMENT OF THE CASE The UPA was enacted in 1954. In 1956, pursuant to the UPA termination process, the full-blood Ute Tribe and the mixed-bloods created and agreed to a plan for the division of specified tribal assets. The plan divided, inter alia, tribal lands and [a]ll water and water rights pertinent to the lands involved as well as all potential water rights that may subsequently attach to the lands to be divided. AR135 (SA103). Both groups approved the plan as fair and equitable. The mixed-bloods also prepared and approved a plan to distribute their proportional share of the divided assets among themselves that repeating language from the UPA itself made provision for the handling of water rights. AR159 (SA125); 25 U.S.C. 677l. 3

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 15 The Secretary of the Interior approved both plans and, in August 1961, after the division of assets was complete, the Secretary proclaimed that the federal trust relationship to the mixed bloods was terminated. 4/ Tribal assets that were not susceptible to equitable and practicable distribution and that were not divided pursuant to the UPA including oil, gas, and mineral rights were to be managed jointly by the Tribe and an authorized representative of the mixed-bloods. The mixed-bloods share of net proceeds from those assets are paid to UDC, a Utah corporation formed by the mixed-bloods, whose shareholders today include non- Indians, the Tribe, and mixed-bloods. On April 24, 1995, more than 33 years after the termination proclamation, UDC filed a complaint against the Tribe and the Secretary seeking a declaratory judgment that certain of the Tribe s water rights were not susceptible of equitable and practicable division in 1961 and had not been divided under the UPA. UDC thus contended that the water rights were subject to joint management by the Tribe and UDC. The complex procedural history of this case is discussed in detail below. See infra, pp. 19-24. In summary, the district court after denying the Tribe s motion to dismiss and without acting on the Secretary s motion to dismiss 4/ The termination of the mixed-blood Utes and the distribution and management of tribal assets under the UPA's provisions has led to extensive litigation. See Hackford v. Babbitt, 14 F.3d 1457, 1464 (10th Cir. 1994) (citing cases). 4

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 16 determined that the Secretary had the authority under the UPA to address in the first instance disputes between the Tribe and UDC stemming from the division and distribution process. Accordingly, on March 5, 1997, the district court remanded the question whether the water rights were susceptible of equitable division and had in fact been divided to the Secretary, while retaining jurisdiction over the case. On October 5, 1998, the Secretary issued a decision concluding, based on the language of the UPA, documents pertaining to the division process, the conduct of the parties subsequent to division, and case law, that the tribal water rights were susceptible of division and had been divided. On February 3, 2004, pursuant to further administrative proceedings directed by the district court, the Secretary issued a second decision reaffirming the 1998 decision. On June 2, 2008, the district court entered a decision holding that under either a de novo review of the record or an arbitrary and capricious review of the Secretary s decisions tribal water rights were susceptible of equitable and practicable division in 1961 and that the Tribe and the mixed-bloods had agreed to the division in the Plan for Division and had distributed the water rights pursuant to the Plan for Distribution. On July 22, 2008, the district court amended the judgment to clarify that it had disposed of all claims and entered final judgment affirming the Secretary s decisions and dismissing the complaint with prejudice. 5

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 17 STATEMENT OF FACTS A. Legal Background: Winters Water Rights This case involves the question of the disposition of the Tribe s Indian reserved water rights in the UPA termination process. Indian reserved water rights were first recognized by the Supreme Court in Winters v. United States, 207 U.S. 564 (1908), in which the Court held that, when an Indian reservation is established, sufficient water to meet the purposes for which the reservation was established is impliedly reserved. Id. at 576-577. Such water rights, often called Winters rights, are federal common-law-based rights, and are not dependent upon state law or state procedures. Colville Confederated Tribes v. Walton, 752 F.2d 397, 400 (9th Cir. 1985) (Walton III); see also United States v. Adair, 723 F.2d 1394, 1411 n.19 (9th Cir. 1983). Winters water rights have three important features that are relevant here. First, as Winters itself established, Indian reserved water rights exist upon the creation of a federal reservation, thus becoming vested upon the date of a reservation s establishment. 207 U.S. at 577; see also Arizona v. California, 373 U.S. 546, 600 (1963) (Arizona I); Hackford v. Babbitt, 14 F.3d at 1461 n.3. 5/ 5/ Winters water rights have a priority date, against other water rights, no later than the date the reservation was established. Arizona v. California, 460 U.S. 605, 609 (1983). 6

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 18 Winters rights exist and may be enforced without an adjudication or settlement agreement that formally quantifies the rights. Id. The rights exist as vested rights even though the amount of water required for the reservation s purposes may not be determined with absolute accuracy at a given time. Conrad Inv. Co. v. United States, 161 F. 829, 832 (9th Cir. 1908); see also Skeem v. United States, 273 F. 93, 95 (9th Cir. 1921). In addition, the rights exist and are protected even if the water is not put to beneficial use; thus, unlike state-law-based water rights, Winters rights are not lost by forfeiture or other non-use of water. See Hackford v. Babbitt, 14 F.3d at 1461 n.3; Colville Confederated Tribes v. Walton, 647 F.2d 42, 51 (9th Cir. 1981) (Walton I). Second, the United States asserted early on, and early cases affirmed that, for reservations with a largely agricultural purpose, water is reserved for irrigation of all of the reservation s arable lands and related uses such as stockwatering and domestic uses. See Conrad Inv., 161 F. at 832 (water reserved to make the reservation lands productive and suitable for agricultural, stock raising, and domestic purposes ); Skeem, 273 F. at 95 (Congress reserved water to enable the Indians to cultivate eventually the whole of their lands so reserved to their use ); United States ex rel. Ray v. Hibner, 27 F.2d 909, 911 (D. Idaho 1928) (government reserved water for the irrigation of that portion of their [reservation] 7

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 19 lands which the evidence discloses is susceptible to irrigation ). In 1963, Arizona v. California, the Supreme Court approved the special master s quantification of Indian reserved water rights for several reservations based on the Practicably Irrigable Acreage (PIA) standard, which calculates the amount of water sufficient to irrigate all the practicably irrigable acreage on a reservation. Arizona I, 373 U.S. at 600. Third, Winters water rights attach not only to tribally held land in a reservation, but remain with that land even if it is subsequently allotted to individual Indians. See United States v. Powers, 305 U.S. 527 (1939); United States ex rel. Ray Hibner, 27 F.2d 909 (D. Idaho 1928). Furthermore, non-indian successors to lands with Indian reserved water rights initially acquire the same right and title to the water, although upon the lands transfer to non-indians, the water rights become subject to state law requirements. See Walton II, 647 F.2d at 50-51; United States v. Ahtanum Irr. Dist., 236 F.2d 321, 342 (9th Cir. 1956) (non-indian purchasers of allotted lands are entitled to participate ratably with Indian allottees); Skeem, 273 F. at 95 (reserved water rights required for allotted lands not lost when Indian allottees leased those lands to non-indians). 8

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 20 B. Factual Background 1. The UPA In the 1950s, Congress initiated a policy of terminating federal recognition of Indian tribes and assimilating tribal members into the general populace. See generally, Cohen s Handbook of Federal Indian Law, 1.06 (2005 ed.). At the same time, the members of the Tribe were in conflict: the mixed-blood members wished to pursue termination of federal supervision, while the full-bloods wished supervision to continue. H. Rep. 83-2493, 1954 U.S.C.C.A.N. 3356, 3357. The members of the Tribe thus agreed to divide the tribal assets between the two groups and to seek termination for the mixed-blood group. The tribal members drafted legislation to achieve these goals, which was introduced in Congress at their request and enacted as the UPA. Id. The UPA established a process for the termination of federal supervision over mixed-blood members of the Ute Indian Tribe and provided for the partition and distribution of the Tribe s assets between the full-blood group, for whom federal supervision would continue, and the mixed-blood group, for whom such supervision would end. 25 U.S.C. 677; see also id. 677d, 677i, 677l, 677o, 677v. An early step in this process was the creation of a final roll dividing the two groups. AR1275-87. It listed 1,314 full bloods (72.83814 percent of the total 9

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 21 group being divided) and 490 mixed bloods (27.16186 percent). Affiliated Ute Citizens v. United States, 406 U.S. 128, 135 n.5 (1972) (AUC I). Upon the roll s publication on April 2, 1956, the Tribe consisted exclusively of the full-blood members. See 25 U.S.C. 677d. Section 10 of the UPA, id. 677i, directed the two groups to divide tribal assets they agreed were then susceptible to equitable and practicable distribution based upon the relative number of persons comprising each group. This section further provided that all assets not susceptible to equitable and practicable distribution categorized as [a]ll unadjudicated or unliquidated claims against the United States; all gas, oil, and mineral rights of every kind; and all other assets not susceptible to distribution were to be managed jointly by the Tribal Business Committee (representing the full-blood members) and the authorized representative of the mixed-blood group. Following the division of assets, section 13 of the UPA, id. 677l, directed the mixed-blood group to distribute its share to the individual mixed-bloods. This section provided for the distribution of the divided lands excepting all gas, oil, and mineral rights, to corporations, partnerships, or other legal entities, and to trustees, and the individual members of said groups. Id. 677l(2). It also authorized the organization of corporations for the grazing of livestock, [and] 10

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 22 handling of water and water rights. Id. 677l(3). Once the division and distribution process was complete, the UPA directed the Secretary to publish a proclamation declaring that the federal trust relationship to each mixed-blood individual was terminated. Id. 677v. Thereafter, such individuals would be entitled to none of the services performed for Indians because of their status as Indians, and would be subject to the same state and federal laws that apply to other citizens. Id. 2. Division of Assets Between the Full-Bloods and Mixed-Bloods In 1956, the mixed-bloods created the Affiliated Ute Citizens of Utah (AUC) to act as their authorized representative to take any action that is required by [the UPA] to be taken by the mixed-blood members as a group. Id. 677e; AUC I, 406 U.S. at 135-36. In October 1956, the AUC and the Tribal Business Committee agreed upon a Plan for Division of Assets (Plan for Division). AR127-141 (SA95-109). Section X of the Plan for Division provided for division of land. AR133-135 (SA101-103). It identified five categories of land and made specific provision for each. Consistent with the statute s requirement that oil, gas, and minerals remain undivided, section X made no provision for these land-based resources. 11

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 23 Subsection X.F. of the Plan, however, specifically addressed the division of water rights, stating: All water and water rights pertinent to the lands involved or generally used in connection therewith whether represented by shares of stock in a corporation or otherwise and all potential water rights that may subsequently attach to the lands to be divided shall be considered in arriving at the fair value of the lands divided and shall be considered as running with the lands. AR135 (SA103) (emphasis added). The Plan for Division also provided for the division of range lands, with value determined based on Animal Unit Months (AUMs), considering improvements, ease of fencing, location to markets, relation of summer and winter range and water. AR134 (SA102) (emphasis added). Timber lands were to be divided unless a management plan demonstrated that conservation or timber utilization practices would be violated, in which case the parties would seek authority, legislative if necessary to allow for their joint management as in the case of gas, oil, minerals and other assets not susceptible to equitable and practicable distribution. AR135 (SA103). Both groups agreed that the division of lands need not necessarily be upon market value but may be made upon equitable and relative values of the divided assets in direct relation to the established ratio. AR133 (SA101). 12

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 24 In November 1956, the Secretary, through the Acting Commissioner of the Bureau of Indian Affairs (BIA), approved the Plan for Division. AR142-44 (SA110-112). The two groups proceeded to divide the Tribe s assets, including the land and water rights, in accordance with section X of the Plan. They agreed upon a division of the range lands in 1957, which they confirmed was fair, equitable, and practicable. AR1162-64, 1166. In 1957 and 1958, the Tribal Business Committee, AUC board, and AUC membership adopted resolutions approving the division of assets and attesting that the division was equitable and practicable. AR1162-1179. 3. Distribution of Assets Among the Mixed-Bloods Also in 1956, the AUC prepared a Plan for Distribution of the divided assets among its members. AR147-166 (SA113-132). The plan provided that a valuation should be made of all land, exclusive of mineral right. AR158 (SA124). Reflecting the language of the UPA, 25 U.S.C. 677l(3), section VIII of the Plan for Distribution provided that if the distributed property requires the organization of irrigation companies in order to provide for an equitable or advantageous distribution of water, such companies shall be organized prior to the transfer of the water rights and the land to be irrigated. AR161 (SA127). 13

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 25 The mixed-bloods share of divided assets included 230,666 acres of range land. AR221, 3932. Pursuant to section 677l(2) of the UPA and section VIII of the Plan for Distribution, the mixed-bloods distributed most of those lands to two Range Corporations created by the AUC. AR171-93, 196-216; see Hackford v. First Security, 521 F. Supp. 541, 543-49 (D. Utah 1981), aff d, 1983 WL 20180 (10th Cir. 1983); AUC I, 406 U.S. at 136-38. They hired Charles Moore to appraise their range lands and distribute them between the two Corporations. Pursuant to Moore s appraisal, 44,054 acres valued at $246,000 were distributed to the Rock Creek Cattle Range Company (AR131) and 128,408 acres also valued at $246,000 were distributed to the Antelope Sheep Range Company (AR214). 6/ The remaining 58,204 acres were distributed to individual mixed bloods or sold. See, e.g., AR5872. In exchange for surrendering their undivided interests in the 172,000 acres distributed to the Range Corporations, each individual mixed-blood received one share of stock in each of the corporations. First Security, 521 F. Supp. at 544. 6/ By May 1963, the Tribe had purchased over 90 percent of the stock in the two Range Corporations and dissolved them pursuant to state law. First Security, 521 F. Supp. at 548. The land associated with the purchased shares was placed in trust for the Tribe. Non-selling mixed-bloods retained ownership of over 15,000 acres of former Tribal range land, most of which is owned today by Intervenor Red Rock Corporation. 14

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 26 Fee patents were issued conveying the land to the Range Corporations together with all the rights, privileges, immunities, and appurtenances, of whatsoever nature, thereunto belonging. AR1256-74. Only minerals and mineral rights, including all oil and gas together with the right to lease, extract and retain the same pursuant to said [UPA], were reserved from the conveyance as indivisible assets. Id. Fee patents issued to individual mixed-bloods contained the same terms of conveyance and the same reservation of mineral rights. See, e,g., AR5872. With respect to indivisible assets, section VII of the Plan for Distribution proposed forming a corporation to receive all income belonging to the mixed-blood group from the theretofore unadjudicated or unliquidated claims against the United States, all income from oil, gas and mineral rights of every kind and from all other assets not susceptible to equitable or practicable distribution. AR156-157 (SA122-123). The major purpose of such corporation was the distribution to its shareholders the net revenues from such sources. AR157 (SA123). As a result, in 1958, the AUC created the UDC to manage jointly with the Tribal Business Committee the indivisible assets and to receive the proceeds therefrom and to distribute the same to the stockholders of the corporation. AR654; see also 25 U.S.C. 677i; AUC I, 406 U.S. at 136. Each mixed-blood 15

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 27 received 10 shares of stock in the UDC. AUC I, 406 U.S. at 136. Many of the mixed-bloods have sold their shares in UDC, and today the majority of shareholders are not mixed-bloods. See Hackford v. Babbitt, 14 F.3d 1457, 1463 n.4 (10th Cir. 1994); Ute Distribution Corp. v. United States, 938 F.2d 1157, 1160 (10th Cir. 1991). In 1961, after the tribal assets were divided and distributed, the Secretary completed the termination process, proclaiming that the federal trust relationship to the individual mixed bloods was terminated and effective August 27, 1961. AR1432. 4. Non-UPA Actions Related to Tribal Water Rights Between the late 1950s and the time UDC filed this suit, several actions occurred with respect to tribal water rights that are pertinent here. a. The Decker Report In 1956, the State of Utah ordered a general adjudication of all water rights in the Uintah Basin. In 1958, the AUC, which managed the mixed-bloods divided assets, and Tribe jointly hired E.L. Decker to investigate and make reports to the Tribe looking toward full protection to Tribal and Affiliated Ute water rights. AR2724. Decker completed his report on December 12, 1960, categorizing 129,201 acres of practicably irrigable acreage (PIA) into seven 16

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 28 groups. AR693-831. The report claimed Winters reserved water rights appurtenant to the land tabulated as PIA, whether previously quantified, or unquantified potential water rights. Regarding one category of land, Group 5, Decker recommended that the Tribe forgo its right to divert water from the streams running through that land, and accept substitute water delivered from the Green River through Central Utah Project (CUP) facilities authorized by Congress in 1956. AR 697-98. b. The Deferral Agreement In 1965, four years after termination of the mixed-bloods, the Tribe followed Decker s recommendations and entered into a Deferral Agreement with the United States and the Central Utah Water Conservancy District. AR1067-86. Under that agreement, the Tribe deferred development of water for use on 15,242 acres of its Group 5 land. The deferral assured congressional funding for construction of the CUP s Bonneville Unit. AR 1070. In return, proposed CUP projects were to deliver a substitute water supply from the Green River for use on the Tribe s deferred lands. c. Court of Claims Litigation In 1969, eight years after the mixed-bloods were terminated, the AUC filed suit against the United States in the Court of Claims. See Affiliated Ute Citizens v. 17

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 29 United States, 199 Ct. Cl. 1004 (1972). The AUC sought compensation from the government alleging that it had not received its fair share of assets that were divided between the full-bloods and mixed-bloods, including mineral rights, timber rights, judgment funds, land, and water rights. Id. In the course of litigation, the AUC stipulated that it and the Tribe had agreed to the 48-page summary of the division of land, timber, and water rights as set out in section X of the Plan for Division. Ultimately, the court held that the AUC s claims were barred by the statute of limitations: The division and distribution of assets of which plaintiffs complain were effected by 1961, all intangible assets being conveyed either in the form of shares in the [UDC] or as appurtenant to land; whatever claims plaintiffs may have had matured then and became barred by the statute of limitations in 1967. Affiliated Ute Citizens v. United States, 215 Ct. Cl. 935 (1977). d. 1980 and 1990 Proposed Compacts The Tribe has negotiated two proposed compacts with the State of Utah confirming the practicably irrigable acreage on the reservation and quantifying the Winters reserved water rights for that land. Neither compact has been fully approved. The 1980 Compact was ratified by Utah and codified in Chapter 21, Title 73 of the Utah Code. The 1990 Compact was ratified and approved by Congress in 1992 (AR 836), but has not been approved by the State or the Tribe. 18

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 30 C. Procedural History and Administrative Decisions On April 24, 1995, more than 33 years after the termination proclamation, UDC filed a complaint against the Tribe and the Secretary seeking a declaratory judgment that the Tribe and the mixed-bloods had not agreed to partition certain water rights in the Plans for Division and Distribution. DN1, p. 14. UDC thus alleged that the water rights were subject to joint management by the Tribe and UDC. Id. 1. Motions to Dismiss the Initial Complaint The Tribe and the Secretary each filed a motion to dismiss on grounds that (1) the claims were time-barred; (2) the Tribe and the Secretary were immune to suit; and (3) the Tribe was an indispensable party. DN7, 31. The district court denied the Tribe s motion, holding that the UPA waived the Tribe s immunity to suit and that the action was not time-barred. UDC v. Secretary, 934 F. Supp. 1302, 1305 (D. Utah 1996), rev d in part, UDC v. Ute Indian Tribe, 149 F.3d 1260 (10th Cir. 1998). 7/ The district court did not rule on the Secretary s motion. It allowed UDC to 7/ On interlocutory appeal on the sovereign immunity question, this Court reversed, but not until after the matter was remanded to the Secretary, as discussed below. 19

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 31 file an amended complaint, which for the first time alleged that the APA provided the necessary sovereign immunity waiver. DN47 (AR56-71). In the face of the district court s rulings on the Tribe s motion to dismiss, the Secretary did not press for action on the government s dismissal motion. Rather, the Secretary argued that, if the case were to proceed, the dispute between the Tribe and UDC over whether tribal water rights had been divided should be submitted to the Secretary pursuant to his authority to resolve disputes between the parties. See 25 U.S.C. 677aa; 25 C.F.R. 217.4. On March 5, 1997, the district court ordered a remand to the Secretary for final action and decision on the issue raised by UDC in its amended complaint. DN61 (SA1-3). The district court retained jurisdiction and stayed proceedings. 2. The Secretary s 1998 Decision Upon the district court s remand, Interior set forth procedures for the Secretary s determination, which required UDC to file a Statement of Complaint delineating and analyzing each issue raised by UDC in district court and to include all supporting documentary evidence. UDC filed a seven-page Statement of Complaint, containing three pages of argument and raising two theories in addition to the specific issue remanded by the district court. AR93-99; see also AR23-24 (SA6-7) (discussion of complaint in 1998 decision). 20

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 32 On October 2, 1998, the Secretary issued a decision (the 1998 decision) concluding based on the language of the UPA, the Plan for Division and Plan for Distribution and related documents, other actions of the parties, and relevant case law that the tribal water rights of the Ute Indian Tribe were an asset susceptible to equitable and practicable distribution and that this asset was in fact divided and distributed. AR42 (SA25). The Secretary also addressed and rejected the two new theories advanced by UDC: that tribal water rights constituted unadjudicated or unliquidated claims against the United States within the meaning of the UPA; and that water rights for hunting, fishing, natural resources development, and other uses suggested by UDC were required to be and had not been partitioned. AR33-42 (SA16-25). UDC pursues neither of those theories on appeal. 3. Motions to Dismiss the Amended Complaint Upon issuance of the 1998 decision, jurisdiction returned to the district court. The Tribe, which had been dismissed with respect to the original complaint, intervened solely with respect to UDC s APA challenge to the Secretary s decision. DN94; Ute Distribution Corp. v. Norton, 43 Fed. Appx. 272, 274 (10th Cir. 2002). The United States and the Tribe moved to dismiss UDC s amended complaint for failure to challenge final agency action. DN122, 143. 21

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 33 In the meantime, however, UDC asserted that the Secretary had failed to provide UDC with relevant documents within Interior s exclusive control. As a result, on March 24, 2001, the district court ordered the parties to complete document review, directed UDC and the Tribe to submit resulting additional evidence to the Secretary, and permitted the Secretary to respond to such evidence. DN148 (SA26-31). The court also held that the Secretary had authority under the UPA to address the matters remanded, and that the case would proceed solely under the APA provisions applicable to review of final agency action. DN148 at 1-2 (SA27-18); see also UDC v. Norton, 43 Fed. Appx. at 275. 4. The Secretary s 2004 Decision On February 3, 2004, after conducting proceedings to allow arguments based on any new documentation, the Secretary issued a second decision. AR1311-1326 (SA32-47). The Secretary first found that the vast majority of the four, four-inch binders of documents submitted by UDC came from sources within the public domain that were available at the time of the 1998 decision, which the Secretary deemed to be grounds for denying reconsideration outright. AR1312 (SA33). Nevertheless, the Secretary evaluated each document and determined that UDC failed to provide any evidence or argument that warranted changing the 1998 22

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 34 decision. The Secretary rejected UDC s argument that the Tribe s unquantified Winters water rights were water rights claims not susceptible of division, concluding that such water rights were vested rights, established when the reservation was created, and that they were capable of being partitioned in a reasonable manner based on the division and distribution of the reservation s lands. AR1315-16 (SA36-37). The Secretary also addressed 56 BIA documents, the only new documents submitted by UDC, and found that all but two either supported the 1998 decision (AR1320-21 (SA41-42)); had no relevance to the issues before the Secretary (AR1321-23 (SA42-44)); were of questionable reliability (AR1323 (SA44)); and/or had been mischaracterized by UDC. The Secretary addressed the two documents that contained statements potentially inconsistent with the 1998 decision and found they did not warrant changing that decision. AR1323-24 (SA44-45). Accordingly, the Secretary reaffirmed the 1998 Decision. AR1326 (SA47). 5. Motions to Dismiss the Second Amended Complaint On June 1, 2004, UDC filed a second amended complaint adding to its declaratory judgment claim an APA claim challenging the Secretary s decisions as final agency action, and four other claims dependent on prevailing on its APA or 23

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 35 declaratory judgment claim. DN177. The United States and the Tribe jointly moved to dismiss all six claims. DN184, 185. In orders issued on June 2, 2005, and April 19, 2006, the district court determined to proceed only on Claim 1, challenging the Secretary s decision, taking under advisement the motion to dismiss that claim; allowed the defendants to withdraw their motion to dismiss Claims 2 through 6 without prejudice, and ordered briefing on whether the Secretary s 1998 and 2004 decisions were arbitrary and capricious under the APA. DN206, 211 (SA48-55). D. District Court Decision On June 2, 2008, the district court entered a decision holding that the tribal reserved water rights were susceptible of equitable and practicable division in 1961 and were in fact divided. DN283, 284 (SA 56-78). As a threshold matter, the district court declined to dismiss the action on statute of limitations grounds even though it found the arguments of the Secretary and the Tribe on this issue compelling because it concluded that the rejection of this argument by a prior presiding judge in ruling on the Tribe s motion to dismiss constituted the law of the case. Op. 21-22. The court also rejected UDC s contention that the Secretary could not adjudicate the division of water rights question, concluding that the UPA provided the Secretary with the authority to resolve disputes between the 24

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 36 full-bloods and mixed-bloods over the division of assets even after the assets were divided. Op. 13. The district court thus held that the court could properly review the Secretary s decision as a final agency action subject to arbitrary and capricious review under the APA. Op. 14. Nevertheless, in an abundance of caution, the district court addressed the question under a de novo standard as well. Beginning with the de novo review, the district court concluded that [t]he overwhelming evidence supports the conclusion that the tribal reserved water rights were an asset susceptible to equitable and practicable distribution and were distributed in 1961. Op. 19. The court found that [t]he plain language of the UPA and the terms of the implementing document demonstrate the parties intent to so distribute the tribal water asset and the case law as it existed at the time supports the idea that reserved water rights could be equitably divided. Id. The court concluded further that, after termination, both groups have acted consistent with the understanding that the tribal water rights were divisible assets that ran with the land previously divided. Op. 20. Thus, applying de novo review, the court rejected UDC s claims. Turning to APA review, the court concluded that the Secretary s decision is easily upheld under th[e] deferential arbitrary and capricious standard. Op. 20. The court found that the Secretary referenced throughout his decisions the most 25

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 37 relevant data pertaining to the UPA and its implementation and clearly articulated the reason for his findings. The court thus concluded that [t]he Secretary s Decision is supported by substantial evidence and, therefore, must be upheld. Id. SUMMARY OF THE ARGUMENT 1. This suit, filed more than 33 years after the UPA termination process was complete, is barred by the six-year statue of limitations mandated by 28 U.S.C. 2410(a). UDC s claim that tribal water rights were not susceptible of division and had not been divided accrued no later than 1961, when the mixedbloods and full-bloods completed the division and distribution of assets as they had agreed and the Secretary terminated federal supervision over the mixedbloods. The language of the UPA and the plans for division and distribution, by plainly addressing water rights, provided ample notice that the water rights had been divided. And subsequent events in the 1960s, 70s, and 80s including the Tribe s agreement with the United States to defer use of some of its water rights, its negotiation with the State of a compact defining the water rights, and the United States litigating position in the AUC case that the water rights had been partitioned put UDC on notice that the Tribe and the United States did not view UDC as holding an interest in the water rights. 26

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 38 2. Assuming the suit is not time-barred, UDC s declaratory judgment action (Claim 2) must nevertheless be dismissed for two, alternative reasons. First, contrary to UDC s allegations, the declaratory judgment claim is not encompassed in the APA s waiver of sovereign immunity, because the declaratory judgment claim does not seek review of any action by the Secretary. And second, UDC has identified no cause of action on which to base its claim for declaratory judgment relief, and the UPA evidences no congressional intent to afford a private right of action. UDC argues that only its declaratory judgment action may proceed, on the theory that remand to the Secretary was improper and that the Secretary s 1998 and 2004 decisions do not provide a basis for review of its claims. Thus, under UDC s own argument, if the declaratory judgment claim is dismissed, UDC has no viable claim for relief and its complaint must be dismissed in its entirety. 3. On the merits, the district court correctly held that, under either a de novo or an arbitrary and capricious standard of review, the record, and the Secretary s review of that record, shows that the tribal water rights were susceptible of equitable and practicable distribution and were in fact divided and distributed. The UPA, the Plan for Division, and the Plan for Distribution each expressly provide for the partitioning of the tribal water rights. The Plan for 27

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 39 Division specifically calls for the division of [a]ll water and water rights pertinent to the lands involved or generally used in connection therewith * * * and all potential water rights that may subsequently attach to the lands. As the district court found, [a] clearer statement of intent to divide the reserved water rights with the lands to be divided can hardly be imagined. Op. 11. The subsequent actions of the Tribe, the AUC, and UDC all confirm the two groups understanding that all of the tribal water rights were partitioned pursuant to the UPA. The record does not support UDC s contention that the unquantified Winters rights on the tribal range lands were not susceptible of division and were not divided. Rather, it shows that, at the time of division and distribution, the parties were aware that the unquantified water rights could be quantified based on irrigable acreage and thus would convey with the land. The record further demonstrates that the parties understood the value of water on the range lands and took that value into account in making an equitable distribution. The two groups each adopted resolutions approving the division of the tribal assets, including specifically the range lands, as fair and equitable. Nothing in the UPA allows a court to second-guess the parties agreement on what constituted an equitable division of the tribal assets at the time. Moreover, UDC s theory leads to the 28

Case: 08-4147 Document: 01017632161 Date Filed: 02/24/2009 Page: 40 nonsensical conclusion that the tribal water assets were severed from the partitioned range lands and retained by the Tribe, leaving the owners of those lands without a right to the use of water on their lands. Accordingly, the district court s decision should be affirmed. ARGUMENT Standard of Review The district court s decision on the statute of limitations goes to the court s jurisdiction and is reviewed de novo. Hart v. Dept. of Labor, 116 F.3d 1338, 1339 (10th Cir. 1997). The district court ruled on the merits based on two alternative standards of review: (1) a de novo review of the record; and (2) a review of the Secretary s decision under the arbitrary and capricious standard of review. In reviewing the district court s decision rendered without deference to the Secretary, this Court reviews the district court's factual findings for clear error and its legal conclusions de novo. Keys Youth Servs., Inc. v. City of Olathe, Kan., 248 F.3d 1267, 1274 (10th Cir. 2001). The district court s decision reviewing the Secretary s decisions under the APA is reviewed de novo, but this Court applies the same arbitrary and capricious standard to review of the agency action as the district court. American Wildlands v. Browner, 260 F.3d 1192, 1196-97 (10th Cir. 2001). Agency action may be set aside only if it is arbitrary, capricious, 29