Opinion ID: 612876
Heading Depth: 1
Heading Rank: 4

Heading: Fractionation

Text: The BIA's second reason for denying the gift, dovetailing with its best interests conclusion, was that it conflicted with the federal government's policy opposing the creation of additional fractional interests in Indian lands. Fractionation of Indian lands is an unintended consequence of the federal government's allotment policy, which allotted parcels of land to tribal members. As those members died, the land passed to their descendants and soon multiple owners took the place of the original allottee. See Babbitt v. Youpee, 519 U.S. 234, 237-39, 117 S.Ct. 727, 136 L.Ed.2d 696 (1997) (discussing the fractionation problem). Even though the allotment policy ended in 1934, the consequences of that policy  fractional property interests  persists, and make a substantial amount of Indian land uneconomic. CONFERENCE OF WESTERN ATTORNEYS GENERAL, AMERICAN INDIAN LAW DESKBOOK 120 (4th ed.2008); see generally Jessica A. Shoemaker, Comment, Like Snow in the Spring Time: Allotment, Fractionation, and the Indian Land Tenure Problem, 2003 WIS. L.REV. 729 (2003); DAVID H. GETCHES, ET. AL., FEDERAL INDIAN LAW 174-75 (5th ed.2005). [19] In 2000, Congress amended the ILCA to slow future fractionation and to consolidate existing fractional interests. CONFERENCE OF WESTERN ATTORNEYS GENERAL, supra, at 123. The amendments reiterated its concerns regarding fractionation and stated It is the policy of the United States  (1) to prevent the further fractionation of trust allotments made to Indians; (2) to consolidate fractional interests and ownership of those interests into usable parcels; (3) to consolidate fractional interests in a manner that enhances tribal sovereignty; (4) to promote tribal self-sufficiency and self-determination; and (5) to reverse the effects of the allotment policy on Indian tribes. Indian Land Consolidation Act Amendments of 2000, Pub.L. No. 106-462, § 102, 114 Stat.1991, 1992 (2000) (codified at 25 U.S.C. § 2201 note) (emphasis added). One goal of the ILCA was to promote consolidation of existing fractional interests, not to create new fractional interests for tribes to purchase. Downs, 29 IBIA at 98. It is against this background that the BIA considered what effect Smith's gift would have on fractionation of the Reserve. At the time of the BIA's decision, it was not seriously contestable that Smith's gift of only 1/3 of his interest would further contribute to the fractionation of the Reserve. [20] If approved, the gift would have divided Smith's interest and made the tribe an additional landowner in the Reserve. [21] The BIA recognized that, in its experience, highly fractionated ownership interests greatly complicate the [BIA's] land management efforts and the successful discharge of the federal Government's trust responsibility. Aplt.App. at 133. When considering Smith's application, the BIA relied on its analysis in Downs v. Acting Muskogee Area Director, 29 IBIA 94 (1996), [22] where the BIA had previously denied a request to give an interest in the Reserve to Miami Tribe. The BIA found Smith's gift presented the same issues as presented in Downs. [23] In Downs, the BIA denied the gift transfer because there was no special relationship  Downs was not a member of Miami Tribe  and, like here, the conveyance was not in Downs's or the other landowners' best interests from a practical land management standpoint, nor as a sound estate planning strategy. Id. at 96. The BIA determined the continued fractionation of the Reserve, and injection of a tribal ownership interest, would present very significant tract management issues which would affect not only [Downs], but the other owners as well. [24] Id. Despite being framed as a gift, the BIA also found Downs's proposed conveyance was obviously not a conveyance without compensation, and expressed its concern over the propriety of the proposed transaction. Id. As in Downs, here, the BIA found [c]onveying only 1/3 of [Smith's] undivided interest in the allotment would add to, rather than eliminate, the further fractionation of individually-owned Indian lands. Aplt.App. at 133-34. The transfer of only a portion of Smith's interest (1) would not serve to consolidate fractional interests and the ownership of those interest [ sic ] into usable parcels, (2) would not enhance tribal sovereignty or promote tribal self-sufficiency and self-determination over what can be accomplished through the lease, and (3) does not reverse the effects of the allotment policy on the Miami Tribe due to the off-reservation, out-of-state location of the tract. Id. at 133. For these reasons, the BIA concluded Smith's gift conveyance should be denied because it would conflict with federal government policy on fractionation. The district court concluded the BIA's decision was based upon the immediate, short-term effect of the proposed transfer and failed to consider Smith's proposed transfer based upon the long-term impact on fractionation. Miami Tribe of Okla., 374 F.Supp.2d 934, 941-42 (D.Kan.2005). The tribe had included the Reserve in its land consolidation plan approved by the BIA and was actively involved with the Reserve. The BIA's exclusive focus on the short-term impact of Smith's gift transfer on further fractionation of individually-owned Indian lands  in light of Miami Tribe's connections and ties with the Reserve  convinced the court that the BIA failed to consider an important aspect of a factor upon which it relied in making its decision. Id. at 942. We disagree. The BIA gave proper consideration to the potential for additional fractionation of the Reserve. Specifically, it was concerned about highly fractionated ownership interest greatly complicat[ing] the Bureau's land management efforts ... [and] tract management, competing interests between the Tribe and the individual Indian landowners, and the potential for land use conflicts. Aplt.App. at 133. And nothing suggests the BIA's focus was solely on any short-term effects. The agency could conclude Smith's gift did not further any of the goals listed in the United States' policy on fractionation  enhancing tribal sovereignty, or promoting tribal self-sufficiency and self-determination, see 25 U.S.C. § 2201 note  because the Reserve is outside of Miami Tribe's territory in Oklahoma and the tribe has no jurisdiction over the Reserve. The BIA properly determined Smith's gift would cause further fractionation of the Reserve by splitting Smith's ownership interest and adding Miami Tribe as a partial landowner. [25] In sum, the BIA's conclusion that Smith's transfer would increase fractionation of the Reserve was not arbitrary and capricious, or contrary to law.