Opinion ID: 1033265
Heading Depth: 2
Heading Rank: 2

Heading: the corporate limits restriction in section

Text: 6(D ) Section 6(d) of the Gila Bend Act prohibits the Secretary of the Interior from taking land into trust “if it is outside the counties of Maricopa, Pinal, and Pima, Arizona, or within the corporate limits of any city or town.” (emphasis added). It GILA RIVER INDIAN CMTY . V . UNITED STATES 21 is undisputed that Parcel 2 is in Maricopa county; the issue is whether Parcel 2, located on a county island fully surrounded by city land, is within the City of Glendale’s corporate limits. The Secretary, invoking plain meaning, interpreted the phrase “within the corporate limits” as “show[ing] a clear intent to make a given piece of property eligible under the Act if it is on the unincorporated side of a city’s boundary line,” and concluded Parcel 2 therefore could be taken into trust. Similarly, the government and the Nation argue for a jurisdictional meaning: Any land not subject to a city’s corporate jurisdiction is not “within” the city.9 The Arizona appellants contend the phrase should have a geographical meaning: Any land entirely surrounded by a city’s corporate limits is “within” the city. Who knew that such a straightforward sounding phrase, “within the corporate limits,” could generate such competing views. As explained below, we conclude the statute is ambiguous. The Secretary’s decision reflects a failure to grapple with the ambiguity and prompts us to remand for the Secretary to bring his expertise to bear to interpret the provision anew. See Negusie v. Holder, 555 U.S. 511, 523 (2009) (“[I]f an agency erroneously contends that Congress’ intent has been clearly expressed and has rested on that ground, we remand to require the agency to consider the question afresh in light of the ambiguity we see.”) (internal quotation marks omitted). 9 The dissent’s suggestion that the government took a differing view in prior litigation is not borne out by the record. In totally unrelated litigation, the government made passing reference to geographical restrictions on trust land. But, in doing so, the brief did not consider the distinction under § 6(d) nor was this section at issue in the litigation. 22 GILA RIVER INDIAN CMTY . V . UNITED STATES The Department of the Interior’s treatment of the provision is telling. The Department’s Office of the Solicitor prepared a memorandum for the Secretary on the meaning of “corporate limits” and concluded the term was ambiguous. The Field Solicitor, considering submissions from both the Nation and the City, explained: “A close review of the statutes and case law of the State of Arizona reveals that this question has no clear or dispositive answer, and that there is ambiguity about it, even to the point of one of the Justices of the Arizona Supreme Court admitting as much.” Although the Field Solicitor was inclined to accord the term a jurisdictional meaning in reliance on Speros v. Yu, 83 P.3d 1094 (Ariz. Ct. App. 2004), he emphasized that such a position was “reached with some degree of caution, since the concepts of ‘exterior boundaries’ and ‘corporate limits’ are neither expressly defined nor used with any real consistency under Arizona law.” Ultimately, the Field Solicitor determined that to resolve the inconsistency he was “obliged to invoke the rule regarding canons of construction regarding Federal Indian law and Indian jurisprudence,” which counsels that ambiguous statutes are to be construed in favor of Indians. See Cnty. of Yakima v. Confederated Tribes and Bands of Yakima Nation, 502 U.S. 251, 269 (1992). Applying that canon, the Field Solicitor interpreted the term to have a jurisdictional meaning. In the trust decision, the Secretary referenced but parted ways with the Field Solicitor’s report and concluded that the term “corporate limits” was not ambiguous. The Secretary determined the term had the plain meaning of indicating the jurisdictional status of fee land: “The use of ‘corporate limits’ shows a clear intent to make a given piece of property eligible under the [Gila Bend] Act if it is on the unincorporated side of the city’s boundary line.” (emphasis GILA RIVER INDIAN CMTY . V . UNITED STATES 23 added). The Secretary reasoned that, had Congress intended to exclude county islands from possible trust acquisition, it could have done so by using language such as “exterior boundary,” “within one mile of any city” or “city limits.” See, e.g., 16 U.S.C. § 485 (Secretary of Agriculture may accept “title to any lands within the exterior boundaries of the national forests”); 25 U.S.C. § 465 (certain funds may not be “used to acquire additional land outside of the exterior boundaries of Navajo Indian Reservation”). In a footnote of the trust decision, the Secretary added, in the alternative, that “[e]ven if Congress’s intent was less clear. . . we interpret the term not to support a conclusion that Parcel 2 is ineligible under the Act, with or without consideration of the [Indian] canon.” We hold that the Secretary was mistaken in concluding that the term has a plain meaning.10 Giving the key phrase “within the corporate limits” its plain, natural, and common meaning does not resolve the ambiguity. United States v. Romo-Romo, 246 F.3d 1272, 1275 (9th Cir. 2001) (“[W]e should usually give words their plain, natural, ordinary and commonly understood meanings.”). Here, either reading of the term as used in the statute is plausible. Further, we agree with the Field Solicitor’s conclusion that Arizona law does not conclusively solve the dilemma. The history of Arizona’s treatment of county islands underscores the lack of uniformity of interpretation and uncertainty that carries over to the Gila Bend Act’s use of the 10 Curiously, the dissent takes the view that the text of § 6(d) has a plain meaning but then surprisingly comes to an interpretation at odds with the Secretary. Even the division within our panel underscores the lack of clarity in the statute. 24 GILA RIVER INDIAN CMTY . V . UNITED STATES “within the corporate limits” designation. In past ordinances, the City of Glendale has characterized county islands as lying outside its corporate limits and requiring annexation to be included within the City’s limits. For example, when the City of Glendale incorporated a strip of land that surrounds Parcel 2 and other unincorporated territory, the annexation ordinance provided that “the present corporate limits [are] extended and increased to include” only the strip of land precisely described with metes and bounds. City of Glendale, AZ, Ordinance 986 New Series, (July 26, 1977). Similarly, numerous City of Glendale annexation ordinances address land “located within an existing county island” and confirm that as a result of the annexation, the newly annexed county island will “be included within the corporate limits of the City of Glendale.” See, e.g., City of Glendale, AZ, Ordinance 2693 New Series, (Sept. 23, 2009); City of Glendale, AZ, Ordinance 2674 New Series, (Mar. 18, 2009); City of Glendale, AZ, Ordinance 2668 New Series, (Mar. 11, 2009). Some Arizona statutes also refer to county islands as falling outside corporate limits. See, e.g., Ariz. Rev. Stat. Ann. § 9- 500.23 (authorizing a city to “provide fire and emergency medical services outside its corporate limits to a county island”). However, Arizona statutes do not explicitly define the term and Arizona courts have used “corporate limits” and “exterior boundaries” interchangeably. See, e.g., Flagstaff Vending Co. v. City of Flagstaff, 578 P.2d 985, 987 (Ariz. 1978) (holding that a state-owned university campus was “within” city limits for purposes of local tax ordinances). Having resolved that the statute is ambiguous, the question is how to treat the Secretary’s decision under Chevron. We conclude that the Secretary’s interpretation warrants no deference because it rests on a mistaken conclusion that the language has a plain meaning. GILA RIVER INDIAN CMTY . V . UNITED STATES 25 Were the statute clear, we would simply “stop the music at step one,” as we did with § 6(c), supra, in order to “give effect to [Congress’s] unambiguously expressed intent.” Northpoint Tech., Ltd. v. FCC, 412 F.3d 145, 151 (D.C. Cir. 2005) (internal quotation marks omitted). Here, we must move to step two because Congress’s intent is not clear. At this stage, normally we would defer as a matter of course to the agency’s expertise and discretion in interpreting the statute. However, because the agency misapprehended the clarity of the statute, such deference is not in order. “[D]eference to an agency’s interpretation of a statute is not appropriate when the agency wrongly ‘believes that interpretation is compelled by Congress.’” PDK Labs. Inc. v. DEA, 362 F.3d 786, 798 (D.C. Cir. 2004) (quoting Arizona v. Thompson, 281 F.3d 248, 254 (D.C. Cir. 2002)). The principle that Chevron deference does not apply where an agency mistakenly determines that its interpretation is mandated by plain meaning, or some other binding rule, is best illustrated by the Supreme Court’s decision in Negusie. There, the Court declined to uphold the BIA’s interpretation of an ambiguous provision of the Immigration and Nationality Act where the BIA mistakenly thought itself bound by Supreme Court precedent construing similar language in a different statute. Negusie, 555 U.S. at 518–19. Although the Court explained that the chosen interpretation might ultimately be reasonable, it declined to apply Chevron deference and remanded because the agency “deemed its interpretation to be mandated by [precedent], and that error prevented it from a full consideration of the statutory 26 GILA RIVER INDIAN CMTY . V . UNITED STATES question here presented.” Id. at 521 (emphasis added);11 see also Delgado v. Holder, 648 F.3d 1095, 1103 & n.12 (9th Cir. 2011) (en banc) (upholding BIA interpretation of ambiguous statute despite its reliance on plain text because the BIA’s decision “did not rely on plain text alone” but also “emphasized that its interpretation is supported by the history and background” of the statute) (internal quotation marks omitted). The present case has a twist that bears further consideration. Unlike in Negusie, the agency here did not rest entirely on the purportedly clear congressional intent, but added that it would reach the same conclusion “[e]ven if Congress’s intent was less clear.” This one-sentence caveat in a footnote is not entitled to Chevron deference, because the Secretary did not provide any explanation for this decision. In short, the passing footnote reflects “that the [Department of the Interior] has not yet exercised its Chevron discretion to interpret the statute in question” and thus “the proper course . . . is to remand to the agency for additional investigation or explanation.” Negusie, 555 U.S. at 523 (internal question marks omitted). The essence of Chevron deference at step two is to give meaning to the “delegation[] of authority to the agency to fill the statutory gap in reasonable fashion” through resolution of “difficult policy choices that agencies are better equipped to 11 The Nation and the government view Negusie as inapposite because the Secretary here only believed himself bound by plain meaning rather than by precedent. This is a distinction without a difference. If the agency fails to bring its expertise to bear because it believes itself constrained for whatever reason from fully considering policy and practical considerations, the rationale for Chevron— agency expertise— is absent. GILA RIVER INDIAN CMTY . V . UNITED STATES 27 make than courts.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980 (2005). Without an explanation of the agency’s reasons, it is impossible to know whether the agency employed its expertise or “simply pick[ed] a permissible interpretation out of a hat.” Vill. of Barrington v. Surface Transp. Bd., 636 F.3d 650, 660 (D.C. Cir. 2011) (holding that an agency warrants deference at Chevron step two “only if the agency has offered a reasoned explanation for why it chose that interpretation” judged according to “only the rationales the [agency] actually offered in its decision”) (emphasis added); see also Local Union 1261, United Mine Workers of Am. v. FMSHRC, 917 F.2d 42, 43 (D.C. Cir.1990) (upholding agency’s interpretation at Chevron step two even where the court disagreed with the agency’s conclusion that the meaning of the statute was “plain” because the court concluded that the agency’s decision “adequately stated the practical and policy considerations ultimately motivating its interpretation”) (emphasis added). The Secretary’s discussion focuses on why the statutory text is clear and does not articulate any other factors counseling in favor of adopting the alternative position dropped into the footnote. The government argues that the Field Solicitor’s report suffices to show that the Secretary grappled with the ambiguity of the statute. But the Secretary’s decision merely referenced the Field Solicitor’s determination that (some) Arizona law supports the conclusion that Parcel 2 is not within the corporate limits in support of the proposition that the statutory text was plain. The Secretary’s decision goes out of its way to disclaim the ambiguity that the Field Solicitor highlighted, asserting repeatedly that the meaning is “plain” and that the language shows a “clear intent” to adopt a jurisdictional meaning. The 28 GILA RIVER INDIAN CMTY . V . UNITED STATES Secretary declined to consider the impact of the Indian canon—even though the Field Solicitor concluded application of the canon was necessary because Arizona law was too unsettled on the issue to yield a straightforward answer—and mentioned no policy or practical concerns. The Supreme Court has explained that, although the “scope of review under the arbitrary and capricious standard is narrow,” “the agency must . . . articulate a satisfactory explanation for its action.” Motor Veh. Mfrs. Ass’n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983) (internal quotation marks and citation omitted). In this situation, deferring to the Secretary’s unexplained caveat would permit the agency to sidestep its duty to bring its expertise to bear on the “difficult policy choices” it is tasked with making. Negusie, 555 U.S. at 523. Because the Secretary relied on the text alone, we “remand to require the agency to consider the question afresh in light of the ambiguity we see.” Delgado, 648 F.3d at 1103 n.12 (quoting Negusie, 555 U.S. at 523); see also PDK Labs., Inc., 362 F.3d at 797–98 (holding that where there is ambiguity in the statutory text “it is incumbent upon the agency not to rest simply on its parsing of the statutory language. It must bring its experience and expertise to bear in light of competing interests at stake.”) (footnote and citation omitted).12 12 Aside from the issue of Chevron deference, the Nation argues that the Department of the Interior’s trust decision is compelled by the Indian canon’s requirement that when there is doubt as to the proper interpretation of an ambiguous provision in a federal statute enacted for the benefit of an Indian tribe, “the doubt [will] benefit the Tribe.” GILA RIVER INDIAN CMTY . V . UNITED STATES 29 We are puzzled by the dissent’s invocation of the clear statement or “federalism” canon. The clear statement rule, which is a canon of statutory construction, not a rule of constitutional law, applies where courts “confront[] a statute susceptible of two plausible interpretations, one of which . . . alter[s] the existing balance of federal and state powers.” Salinas v. United States, 522 U.S. 52, 59 (1997); see also Hilton v. South Carolina Pub. Rys. Comm’n, 502 U.S. 197, 205–06 (1991) (distinguishing between a rule of constitutional law and a rule of statutory construction and using the plain statement rule as an example of a rule of statutory construction). The rule counsels that “absent a clear indication of Congress’ intent to change the balance, the proper course [is] to adopt a construction which maintains the existing balance.” Salinas, 522 U.S. at 59. (quoting Artichoke Joe’s Cal. Grand Casino v. Norton, 353 F.3d 712, 729 (9th Cir. 2003)). The Gila River Indian Community counters that the canon is inapplicable when there are competing tribal interests. If by application of canons, or other “traditional tools of statutory construction,” we could “ascertain[] that Congress had an intention on the precise question at issue,” we would resolve the ambiguity at step one. Chevron, 467 U.S. at 843 n.9. However, the application of the Indian canon in these circumstances is unsettled. W e therefore leave it to the Secretary to consider application of the Indian canon, and other relevant canons of statutory construction, in the first instance on remand. “The canons of construction applicable in Indian law are rooted in the unique trust relationship between the United States and the Indians.” Oneida County v. Oneida Indian Nation, 470 U.S. 226, 247 (1985). The Secretary is best positioned to take stock initially of whether and how to weigh the competing interests. At this stage, the job of considering the statutory ambiguity in light of the conflicting interests “is not a task we ought to undertake on the agency’s behalf.” Dep’t of Treasury, IRS v. Fed. Labor Relations Auth., 494 U.S. 922, 933 (1990). 30 GILA RIVER INDIAN CMTY . V . UNITED STATES To begin, in the nine briefs filed with the court, it is no surprise that not a single brief referenced this argument.13 It is also telling that no party argued that the Secretary’s construction of § 6(d), in particular, raised serious constitutional problems or implicated state sovereignty. The Arizona appellants’ effort at oral argument to reframe the rule to one of constitutional avoidance is unavailing because § 6(d) does not implicate constitutional sovereignty concerns. Not only is this recharacterization of the claim an eleventh hour effort to change gears, but this canon of construction does not bear on our interpretation of the Gila Bend Act. Neither the dissent nor the Arizona appellants have articulated a state sovereignty or constitutional interest vis-a- vis § 6(d). Whatever our interpretation of the phrase “within the corporate limits of any city or town,” it does not raise a question of federal encroachment on state power. In short, the Gila Bend Act does not implicate an “existing balance of federal and state powers.” In Gregory v. Ashcroft, 501 U.S. 452 (1991), the Court does not indicate that the clear statement rule applies to any and all regulation of state governmental functions. Justice White, in his partial concurrence, partial dissent in Gregory raises this issue explicitly: “The majority’s approach is also unsound because it will serve only to confuse the law. First, the majority fails to explain the scope of its rule. . . . Second, the majority does not explain its requirement that Congress’ intent to regulate a particular state activity be ‘plain to anyone reading [the federal statute].’” Id. at 478. Virtually any federal legislation could be construed to have at least minor, derivative implications for traditional state functions. For example, 13 In an order from the panel after briefing and just before argument, the parties were asked to discuss the clear statement rule at oral argument. GILA RIVER INDIAN CMTY . V . UNITED STATES 31 does federal legislation appropriating funds for building and maintaining interstate highways require a plain statement of congressional intent to interfere with the traditional state functions of zoning and land use that the dissent flags in this case? The plain statement rule should not be applied in a way that makes it into a useless tautology. To the extent one is searching for a clear statement, Congress was clear: The Nation is entitled to swap out 9,880 acres of trust land ceded to the federal government for land of equivalent total acreage. This swap does not implicate state interests nor can the Arizona appellants seriously argue that state sovereign interests restrict the Secretary from establishing a reservation on trust land.14 As we know, “[s]tate sovereignty does not end at a reservation’s border.” Nevada v. Hicks, 533 U.S. 353, 361 (2001); see also Surplus Trading Co. v. Cook, 281 U.S. 647, 651 (1930) (citing Indian reservations as examples of federally managed land within state territory). Even under the dissent’s reading of the statute, nothing would prevent the Nation from acquiring land in trust immediately adjacent to a city’s outermost boundary or even land that was almost, but not entirely encircled by corporate land. This circumstance is not one in which “an administrative interpretation of a statute invokes the outer limits of Congress’ power.” Solid Waste Agency of N. Cook 14 To the extent the Arizona appellants argue that the Gila Bend Act impermissibly interferes with the state’s interest in maintaining its taxable land base, the text of the Act provides a definitive answer: “W ith respect to any private land acquired by the Tribe under section 6 and held in trust by the Secretary, the Secretary shall make payments to the State of Arizona and its political subdivisions in lieu of real property taxes.” § 7(a). 32 GILA RIVER INDIAN CMTY . V . UNITED STATES County v. U.S. Army Corps of Engineers, 531 U.S. 159, 172 (2001). Neither plausible construction of the statute “raise[s] serious constitutional problems” that counsel invocation of the clear statement rule. Id. The dissent’s real concern about a casino abutting the City of Glendale is revealed in its effort to transform statutory interpretation of a federal trust land provision into a blocking effort by the city. At this stage, no one knows whether a casino will be approved. The Nation faces regulatory and court battles that are beyond the scope of this appeal. To convert this issue from one of Chevron deference to a sovereignty battle over regulation of Indian gaming distorts the clear statement rule. Although we disagree with the dissent’s position that the clear statement rule is dispositive here, the agency is free on remand to consider the rule, along with the Indian canon and other canons of statutory construction, to assist it in dispatching its duty to bring its policy and practical expertise to bear in interpreting § 6(d). Because we do not consider a jurisdictional interpretation of the provision to be foreclosed, “the agency has the option of adhering to its decision” on remand. Negusie, 555 U.S. at 525 (Scalia, J., concurring).