Opinion ID: 471358
Heading Depth: 2
Heading Rank: 3

Heading: unlawful delegation of authority

Text: 45 The district court reviewed the Cooperative Agreement and concluded that it involved no unlawful delegation of authority. 13 The court based its opinion on the Agreement's language that all Board decisions require BLM approval, from which the court concluded that the State Board acts only in a fact-gathering or advisory capacity. 46 The Tribes assert that the BLM's retention, under the Agreement, of the right to approve is in name only; that it allows the BLM unlawfully to rubber-stamp State Board decisions; and that, in fact, the BLM has proceeded to act as a rubber stamp. The Tribes further contend that even if the BLM were to exercise independent review over State Board actions, the initial fact-gathering and decision-making responsibilities performed by the State Board are critical parts of the BLM's functions that lawfully cannot be delegated to an entity that admittedly has no jurisdiction. 14 47 We review de novo the district court's dismissal, for failure to state a claim. Dooley v. Reiss, 736 F.2d 1392, 1394 (9th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 518, 83 L.Ed.2d 407 (1984). For purposes of evaluating a motion to dismiss, we treat the allegations stated in the complaint as true. Id. at 1393. The complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Id. at 1394 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). 48 The Indian Mineral Leasing Act of 1938, 25 U.S.C. Sec. 396a-396g, is a detailed and comprehensive act that imposes extensive responsibilities on the government in tribal mineral leasing matters for the benefit of Indians. See Blackfeet Tribe of Indians v. Montana, 729 F.2d 1192, 1199 & n. 18 (9th Cir.1984) (en banc), aff'd, --- U.S. ----, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985); Jicarilla Apache Tribe v. Supron Energy Corp., 728 F.2d 1555, 1564-65 (10th Cir.1984) (Seymour, J., concurring in part and dissenting in part), dissenting opinion adopted as the majority opinion as modified, 782 F.2d 855 (10th Cir.1986) (en banc). Taking into account these specific, congressionally-imposed duties, and the long-standing, general trust relationship between the government and the Indians, we conclude that a fiduciary relationship exists in the management of tribal mineral resources. 15 See Jicarilla, 728 F.2d at 1563-65 (statutes and regulations contain such explicit duties that it is clear Congress intended Secretary to act as trustee in managing leases for the Indians); cf. United States v. Mitchell, 463 U.S. 206, 224-26, 103 S.Ct. 2961, 2971-73, 77 L.Ed.2d 580 (1983) (statutes establish fiduciary duty in the management of Indian timber resources). 49 The United States, as the Tribes' fiduciary, is held to strict standards and is required to exercise the greatest care in administering its trust obligations. See Mitchell, 463 U.S. at 225-28, 103 S.Ct. at 2972-74; United States v. Mason, 412 U.S. 391, 398, 93 S.Ct. 2202, 2207, 37 L.Ed.2d 22 (1973); Nance, 645 F.2d at 710; F. Cohen, Handbook of Federal Indian Law 225-26 (1982 ed.). 50 Courts judging the actions of federal officials taken pursuant to their trust relationships with the Indians therefore should apply the same trust principles that govern the conduct of private fiduciaries. See Mitchell, 463 U.S. at 226, 103 S.Ct. at 2972; Seminole Nation v. United States, 316 U.S. 286, 297, 62 S.Ct. 1049, 1054, 86 L.Ed. 1480 (1942); American Indians Residing on Maricopa-AK Chin Reservation v. United States, 667 F.2d 980, 990, 229 Ct.Cl. 167 (1981), cert. denied, 456 U.S. 989, 102 S.Ct. 2269, 73 L.Ed.2d 1284 (1982). 51 Accepting as true the Tribes' allegations that the Secretary conducts no independent review of the applications, we find it impossible to reconcile this alleged rote approval of State Board orders with the strict standard of conduct expected of a trustee. 16 See In re Johnson, 518 F.2d 246, 253 (10th Cir.), cert. denied, 423 U.S. 893, 96 S.Ct. 191, 46 L.Ed.2d 125 (1975) (trustee may not delegate duties for which he is responsible); Restatement (Second) of Trusts Sec. 171 at 373-74 (1954). Therefore, if at trial, the Tribes could prove that the Cooperative Agreement has resulted in BLM approval of State Board orders without meaningful independent review, then its procedures would constitute an unlawful delegation of authority. Cf. Save our Wetlands v. Sands, 711 F.2d 634, 641-43 (5th Cir.1983) (construing the requirements imposed upon agencies under the National Environmental Policy Act to consider environmental consequences of their actions and holding that an agency does not satisfy those requirements if it reflexively rubber-stamps reports prepared by others); Sierra Club v. Lynn, 502 F.2d 43, 59 (5th Cir.1974), cert. denied, 421 U.S. 994, 95 S.Ct. 2001, 44 L.Ed.2d 484 (1975) (public or private entities may participate in preparation of environmental impact reports, as long as federal agency does not abdicate responsibilities and rubberstamp their work product); Friends of Endangered Species, Inc. v. Jantzen, 589 F.Supp. 113, 118-19 (N.D.Cal.1984), aff'd, 760 F.2d 976 (9th Cir.1985) (federal agency's delegation of environmental research to a third party is impermissible if agency fails to adequately review the work). 52 Moreover, on its face, the Cooperative Agreement raises grave questions concerning whether the State Board's responsibilities under its terms directly conflict with the Secretary's fiduciary obligations. 53 There is an obvious need for cooperation between adjacent landowners in resource development. See, e.g., 25 C.F.R. Sec. 211.21 (1985) (tribal leases are subject to Secretary's restrictions; Secretary may take into consideration, among other things, the Federal laws, state laws, regulations by competent Federal or State authorities, lawful agreements among operators regulating either drilling or production, or both, and any regulatory action desired by tribal authorities.). Thus, it is without question sound practice for the BLM in its deliberations, to be aware of the spacing and location requirements established by the State Board. We do not suggest that cooperation, including possibly limited subdelegation by the Secretary to the State Board of nondiscretionary activities such as compiling, hearing, and transmitting technical information might not be permissible and desirable. 54 Courts have previously held that subdelegation of administrative responsibilities to other sovereign entities is not per se improper. See, e.g., United States v. Mazurie, 419 U.S. 544, 556-57, 95 S.Ct. 710, 717-18, 42 L.Ed.2d 706 (1975) (Congress could delegate its regulatory power over sales of alcoholic beverages in Indian territory to Indian tribes); Southern Pacific Transportation Co. v. Watt, 700 F.2d 550, 556 (9th Cir.), cert. denied, 464 U.S. 960, 104 S.Ct. 393, 78 L.Ed.2d 336 (1983) (Secretary of the Interior could subdelegate aspects of its authority over granting railroad right-of-ways across Indian lands to the Tribe); United States v. Matherson, 367 F.Supp. 779, 781-84 (E.D.N.Y.1973) (Secretary of Interior could require persons seeking motor vehicle permits to first obtain a permit from local municipality), aff'd 493 F.2d 1399 (2d Cir.1974). 55 However, critical distinctions between these subdelegation cases and the Tribes' case exist. Subdelegations to a sovereign tribe permitting the tribe some measure of added control over its own lands, Mazurie, 419 U.S. at 556-57, 95 S.Ct. at 717-18; Southern Pacific, 700 F.2d at 556, differs from a subdelegation to an entity that has no independent jurisdiction, see Matherson, 367 F.Supp. at 783. Limitations on delegation are less stringent in cases where the entity exercising the delegated authority itself possesses independent authority over the subject matter. Mazurie, 419 U.S. at 556-57, 95 S.Ct. at 717-18; Southern Pacific, 700 F.2d at 556. 56 Without express congressional authorization for a subdelegation, we must look to the purpose of the statute to set its parameters. Rodriguez v. Compass Shipping Co., 617 F.2d 955, 959 (2d Cir.1980) aff'd, 451 U.S. 596, 101 S.Ct. 1945, 68 L.Ed.2d 472 (1981). Here, we deal with a statutory and regulatory scheme enacted with a threefold purpose in mind: to achieve uniformity in tribal leasing matters; to increase Indian authority in granting leases; and to protect the Indians' economic return on their property. See Blackfeet Tribe, 729 F.2d at 1199; Jicarilla, 728 F.2d at 1565. To achieve these purposes, Congress deliberately entrusted the Secretary with comprehensive responsibilities. Jicarilla, 728 F.2d at 1565. 57 We are reluctant to read broad authority to subdelegate into these statutes, absent clear proof of legislative intent to relieve the Secretary of a portion of his duties and proof that such a delegation would be in the Tribe's best interests. 17 See Montana v. Blackfeet Tribe, 105 S.Ct. 2399, 2403-04 (1985) (statutes are to be construed liberally in Indians' favor, with ambiguities interpreted to their benefit). Therefore, the Secretary's role as fidicuary, the Board's clear lack of jurisdiction over tribal leases, and the legislative silence about subdelegation all counsel in favor of very limited delegation of responsibilities in these circumstances. 58 In its order, the district court agreed that sections of the Agreement that govern procedures relating to State Board review of applications were poorly drafted and ... ambiguous. Nonetheless, the court concluded that the Agreement did not transfer any final authority to the State Board, but merely utiliz[ed] a state hearings mechanism to elucidate facts.... 59 We cannot agree that the delineation of responsibilities is so plainly set forth on the face of the Agreement that the district court could rule unequivocally that the Tribes had stated no possible claim for relief. 18 The Agreement's terms can easily be read to delegate to the State Board power to decide tribal lease issues, without the BLM's active intervention. The alternative interpretation suggested by the Secretary and adopted by the district court, i.e., that the use of the State Board hearing mechanismmerely serves as a convenient means to accumulate necessary facts, is possible. An examination of the four corners of the Agreement is inconclusive and contradictory. 60 The district court erred in deciding this question on a motion to dismiss, without first taking evidence to ascertain the true scope of the subdelegation. The Tribes should have been permitted the opportunity to prove their claim that the Agreement on its face, and in operation constitutes an unlawful delegation of the Secretary's trust obligations. The district court's judgment is REVERSED and REMANDED.