HODEL v. IRVING
Legal provision: Article 3, Section 2, Paragraph 1: Case or Controversy Requirement
Argument of Edwin S. Kneedler
Chief Justice Rehnquist: We will hear arguments first this morning in Number 85-637, Donald P. Hodel versus Mary Irving.
Mr. Kneedler, you may proceed when you are ready.
Mr. Kneedler: Thank you, Mr. Chief Justice, and may it please the Court, this case is here on direct appeal from the United States Court of Appeals for the Eighth Circuit.
That Court held unconstitutional an Act of Congress that was passed in 1983 to address what Congress perceived to be the serious adverse consequences for Indian reservations resulting from the increasingly fragmented ownership of Indian allotments.
The statutory provision involved, Section 207 of the Indian Land Consolidation Act of 1983, provides for the escheat to the tribe concerned of certain de minimis fractional undivided interests--
Unknown Speaker: Is that a very accurate term, "escheat" to the tribe?
Mr. Kneedler: --Yes, I think escheat is an accurate term.
Escheat is typically defined to mean the reversion to the state of interests in property where there is no heir qualified to receive it, and in this instance Congress has determined by reference to the size of the property interest involved that no heir should be qualified to receive the property at the time--
Unknown Speaker: Well, is the tribe regarded as the state?
Mr. Kneedler: --The tribe is not guardian of the individual Indians' estate.
The United States is trustee for the particular property.
Unknown Speaker: No, is the tribe for purposes of escheat regarded as the state?
Mr. Kneedler: Oh, I am sorry.
That is what the analogy would be, yes, that the tribe is the local unit of government; in addition to being the membership organization is also the local unit of government and the responsible entity on the Indian reservation, and Congress, I am sure, believed that it was better to have the property interest escheat to the tribe, the unit of government closest to the Indian, and the unit of government from which the land first came, and which has the responsibility for the Indian rather than to the United States government in fee.
Unknown Speaker: You wouldn't care if we just called it a reversion?
Mr. Kneedler: I don't think the label is important.
Unknown Speaker: But the statute calls it escheat?
Mr. Kneedler: The statute does call it escheat.
It would also be possible to characterize it as Congress having designated the tribe as the heir, the statutory heir of the interests when the Indian dies.
However it is characterized, Congress has chosen to keep the property in Indian hands rather than to have it continue to descend to individual Indians in very small portions.
The Court of Appeals--
Unknown Speaker: Incidentally, how big are the portions generally?
Mr. Kneedler: --Under the Act the only thing that escheats is an interest that represents 2 percent or less of the overall allotment and has earned less than $100, or in fact under the amended Act is incapable of earning in the next five years more than $100.
Unknown Speaker: Does that suggest that the acreage in each instance is very small?
Mr. Kneedler: Well, the allotments, yes.
Well, it depends again how one would define as small.
The allotments under the General Allotment Act were typically 160 acres for a head of a family, smaller amounts to others.
Under the Sioux Allotment Act at issue here the allotments were 320 acres for heads of families, so 2 percent of a 160 acre allotment would be two or three acres.
Unknown Speaker: Are these undivided interests?
Mr. Kneedler: These are undivided interests.
These are not interests that have been partitioned.
There are provisions under the regulations for partition of Indian allotments in certain circumstances, but the ones we have here are undivided interests.
The Court of Appeals held that this escheat provision effects a taking of property in violation of the Fifth Amendment to the Constitution because of the absence of compensation.
We submit that it does not, and that Section 207 is in fact an exercise by Congress of the traditional power of the sovereign that has been repeatedly recognized by this Court to regulate the devolution of property upon the death of the owner, and beyond that we submit that it represents a reasonable exercise by Congress of its unique responsibilities on behalf of Indians to prevent a fragmentation policy that has inhibited the economic development of Indian reservations.
This problem arose by virtue of provisions in the original allotment Acts, the General Allotment Act having been passed 100 years ago, in 1887, and the Sioux statute in 1889.
To prevent improvident alienation of the allotments and to protect its tax-exempt status, Congress provided for the allotments to be retained in trust status by the United States for 25 years subject to extension for ten years by the President, but because of this period of trust status in the beginning Congress provided for the disposition of the property at death, even in the original Acts, by stating that the property would pass to the allottee's heirs in accordance with the laws of the state where the property is situated.
This had the effect of incorporating the state law of intestate succession into Federal law.
Then in 1910 Congress enacted a statute that for the first time authorized allottees to dispose of their property by will.
Thereafter the allotment policy was repudiated most profoundly in the Indian Reorganization Act of 1934, and for tribes that chose to come under the IRA and the Allalla Sioux tribe in this case was one such tribe, the Act had the effect of extending indefinitely the trust period for Indian allotments, and also preventing further allotment of the lands, although Congress did enact 25 USC 483, which permits an individual who owns an interest in an allotment to apply to get a fee patent to the land and have it partitioned or to sell it, so it has not been frozen in trust status irrevocably.
The heirship provisions, though, had the effect of causing the breakup or the fractionation of the interests from generation to generation.
Typically what happened either under the heirship statute or the provision for disposition by will is that the original allottee's interests was divided among his heirs or devisees in undivided interests, and then when each of those heirs or devisees died his interest in turn was subdivided, so that over the course of l00 years, with each passing generation these interests become further divided, and that is vividly illustrated by the facts of this case.
The interests that escheated by appellee's decedents in this case, in one instance the de minimis interests would subdivide among seven heirs, that is in the case of the named appellee here, Irving, thirteen heirs in the case of appellee Pumpkin Seed.
So, this shows that today if... in the absence of this statute these interests would continue to further subdivide.
Unknown Speaker: Mr. Kneedler, can I just ask one question about the authority to dispose of property by will?
Could an owner of one of these shares or pieces of real estate will it to anyone he chose?
Is there any restriction on the--
Mr. Kneedler: There are several restrictions.
Under the 1984 amendments to the Indian Land Consolidation Act, one of these de minimis interests may be willed only to another person who owns a fractional interest in the particular allotment.
This was designed to be consistent--
Unknown Speaker: --Before the Act was passed, what was the restriction, if any?
Mr. Kneedler: --The principal restriction derived from Section 4 of the Indian Reorganization Act, which has recently been amended, but in general provided for the property to remain in Indian hands.
It could descend only to a member of the tribe, to the tribe itself, and it has been amended to provide for heirs under state law.
Unknown Speaker: But could an owner, for example, give all of his interest to his oldest child, or something like that, in order to try and prevent the division into very small interests?
Mr. Kneedler: Yes, he could do that.
And there also are some special statutes on some reservations.
On the Yakima Reservation there was a statute that was involved in Simmons versus Seletze, which was unanimously affirmed by this Court.
That was an instance where the Yakima Tribe, there was a special statute to prohibit the passage of any land to anyone with less than one-quarter Yakima blood, and in that case because the heirs at law, the children and grandchildren did not possess that qualification, the land in question escheated to the Yakima Tribe, so the operation of that... in that particular case was very much like that one here.
It escheated pursuant to a statute enacted by Congress back in 1942 that provided where an Indian dies intestate, without heirs, that the property escheats to the tribe, so this is not the first instance in which Congress has chosen that way of disposing of property.
Unknown Speaker: May I ask about that statute, because there is one thing that puzzles me on it.
What kind of notice did the members of the tribe get about the impending change in the law that would affect their ability to transfer their--
Mr. Kneedler: --In this case?
Unknown Speaker: --Well, both in this one and the earlier statutes you just referred to.
Mr. Kneedler: The 1942 one?
Unknown Speaker: Yes.
Mr. Kneedler: The 1942 one I don't know.
It has been on the books for a long time, and people are presumed to know the existence of a statute such as that.
Unknown Speaker: Then what about this one?
What kind of--
Mr. Kneedler: In this one soon after the Act was passed the Bureau of Indian Affairs sent out to all area supervisors and to all superintendents, there are, I don't know, 12 or 13 BIA areas, and then superintendents are responsible for particular reservations, instructions explaining the way this would work and some of the alternatives that could be pursued by individuals to avoid escheat, and then the instructions encouraged the area superintendents... or the superintendents and the area directors to notify people on the reservations of the consequences of the Act.
Unknown Speaker: --If someone died in the interval between the instructions were out, the Act would have become effective immediately?
Mr. Kneedler: Yes, the Act was effective on its effective date, but that is not unusual with respect to laws governing the distribution of property at death.
They typically take effect immediately, and the potential heirs of someone have no vested right to receive property and the property passes according to the law that is in effect at the time of death.
This is unlike the situation of Texaco versus Short or United States versus Lock, which was not dealing with a situation where there was death and property had to pass.
It was dealing with another type of situation where a person or the owner during his lifetime would take some voluntary action and may have needed notice, but the Court has not suggested that the same sort of situation arises with respect to the distribution of property.
Unknown Speaker: Mr. Kneedler, are there any limits in your view as to what the government can do or change concerning the descent of property belonging to Indians?
Do you think the government has plenary power to really make any kind of a regulation?
Mr. Kneedler: No, our submission does not go nearly that far.
The Court has described the power of the legislature over the descent of property in very broad terms, suggesting that the right to pass property and to receive it by descent or by will is creation of statute and not a natural right, it is a privilege that can be conditioned or even abolished, but the Court has never been confronted with a situation where it had to address that, and it isn't here.
Unknown Speaker: Well, do you take the position that it can be abolished?
Mr. Kneedler: That is not part of our submission here, no.
What we have here is a situation where Congress is really dealing at the margin.
The basic allotment that was made under the Allotment Act substantial sort of interest, something approaching 160 acres or even something far smaller than that continues to pass, so the original understanding of the Allotment Act remains.
This statute deals with consequences that were not contemplated when the Allotment Act passed.
The interest had become--
Unknown Speaker: May I follow up on the question asked by Justice O'Connor?
On Page 17 of your opening brief, Page 17, I think-it is the third sentence in the second paragraph, the brief states,
"Every sovereign possesses the power to regulate the manner and terms upon which property may be transmitted at death as well as the authority to prescribe who shall and who shall not be capable of taking it. "
Doesn't that say that the government may disinherit anyone it wishes to disinherit?
You do cite Berwin Trust against Day, which seems on its face to go rather far, but I am surprised that the Solicitor General would--
Mr. Kneedler: --I don't... we did not intend for that language to be taken to its full implications.
Unknown Speaker: --You didn't intend for it to be taken the way it reads?
Mr. Kneedler: Well, this is... Congress obviously can... I think there is an element of reasonableness in anything Congress does in a situation such as this in terms of defining who may be qualified to take property, what sort of property can pass, and within reasonable limitations.
The Court has taken the same approach with respect to the taxing of estates, and because the legislatures have typically responded in a reasonable fashion and a responsible fashion, and it is our submission that Congress did here as well, we are not suggesting here that Congress could simply pass a statute providing for all property to escheat to the government after one generation.
Unknown Speaker: Mr. Kneedler, does it make some difference in your submission that the statute here did not provide for it to escheat or whatever you want to call it to the United States but to the tribe?
Mr. Kneedler: Yes, we think that is an important element of it.
For one thing, that distinguishes this case from, for example, the Sioux Nation case that this Court had four or five years ago where the property was actually taken effectively by the United States.
Here the fact that the property passes to the tribe we think serves to show that this is an aspect of the reasonable regulation and adjustment of benefits and burdens on the reservation by having the property pass.
It is not as if the United States has invaded the property in some sense and taken it for itself.
Unknown Speaker: Mr. Kneedler, the property goes to the tribe.
What can the tribe do with that property without the express permission of the Federal Government?
Mr. Kneedler: The tribe, just as the individual who owned it, would need the consent of the United States to either sell it or to lease it, so that the property remains restricted whether it is in individual hands or tribal hands.
Unknown Speaker: Well, it wasn't given to the tribe outright.
Mr. Kneedler: Not outright, no.
It remains in trust status.
Unknown Speaker: You said a little bit earlier that, and your briefs maintain this position, that the prospective heir has no property right--
Mr. Kneedler: Yes.
Unknown Speaker: --which could form the basis of an action for taking by the United States.
Therefore the claims here which are pressed by prospective heirs after the death rest upon the rights of the decedent rather than the heirs themselves.
What is the basis on which these heirs are allowed to have standing for assertion of the rights of other individuals?
Mr. Kneedler: Well, this... there is some question about that.
It arose in part because the case was not brought as assertion of the rights of the decedent.
It was brought as an assertion of the rights by the appellees to have a vested right.
Both the District Court and Court of Appeals rejected that, and the appellees aren't pressing that here, but even though they are asserting the rights of the decedents, it is true that but for the statute or some other action by the decedent, property would pass to the heir.
Unknown Speaker: But they are contending that the unconstitutional taking occurred when the statute was passed.
If it occurred at all, that is when it occurred, right, and at that time no property was taken from them.
Mr. Kneedler: Well, the taking-I think they would say occurred when the property escheated, not because the land might have... the decedent might have done something between the time of the passage of the Act and the time of death to provide for an alternative disposition of the property.
Unknown Speaker: The taking occurred at the time of the escheat?
Mr. Kneedler: Because it could be avoided between the time of the passage of the Act.
The Act does not affect the right of the owner of the fractional interest to sell it during his lifetime, to give it away, to purchase other interests that would bring his ownership above the 2 percent level to avoid escheat, so the... it wasn't until the time of escheat--
Unknown Speaker: Well, you are saying then they do have standing in their own capacity.
Mr. Kneedler: --No, they are still asserting the rights of the decedent to dispose of the property in the way that he chooses, but their claim is, because the decedent is not alive any longer to assert his interest in doing that that they should be permitted to assert that right on his behalf.
Unknown Speaker: And the government accepts that.
Is that the general proposition of third party standing?
You can always assert the standing of a third party who is now deceased?
Mr. Kneedler: Well, I am not sure that I would... I am not sure what the full ramifications of that--
Unknown Speaker: I'm not either.
Mr. Kneedler: --but in this case where the property would... where the person asserting the right would receive the property but for the operation of the statute, it was our view that at least--
Unknown Speaker: Why, because that party should have standing?
That party has been deprived of something?
But you have just said that party hasn't been deprived of anything, that that party had no property right.
Mr. Kneedler: --He didn't have a property right but he had an interest.
He was injured.
He was injured in fact, the argument would be, by the operation of the statute.
Now, I acknowledge that there is an additional problem, and that is that the appellee can't be sure that the decedent wasn't content to have his property escheat, and that you can't be sure that it was actually the statute rather than the decedent's choice to abide by the statute that resulted in the loss of the property.
Unknown Speaker: I am still trying to find out what it is that distinguishes this case from other third party standing cases which, you know, pose a real problem.
It surely is not the fact that there is injury in fact.
I mean, there is always, virtually always in these suits some injury in fact.
Mr. Kneedler: But beyond injury in fact there is a nexus between the decedent and the plaintiffs in this case.
They are either the heirs at law or the devisees of the decedent, so there is a relationship established by law or will between the decedent and the--
Unknown Speaker: That relationship being that some of them would have been the intestate heirs but for the statute.
Mr. Kneedler: --Or devisees but for the statute.
Unknown Speaker: And some of them would have been devisees but for the statute.
Mr. Kneedler: That's right, but it does--
Unknown Speaker: Mr. Kneedler, isn't there some tension between your suggestion that presumably the decedents would have wanted to do something different and your suggestion that the decedents presumably understood the statute, because part of your argument was that if they wanted to do something different they have got every right to do so, but you must be assuming there were a lot of decedents who didn't really have notice of what the statute was going to do to their interests.
Mr. Kneedler: --No, I didn't mean to suggest that.
It is possible that in the first weeks or months after the statute was passed there were some who didn't know, but this became a widely publicized, widely known provision within several months after--
Unknown Speaker: If you presume they knew, and say we are talking about people who wanted to do something six months later, what is the injury then?
How are they injured if they just went ahead and let the statute go into effect which is what... they probably would be happy to have the tribe have their property.
Mr. Kneedler: --Well, if not happy, at least not concerned enough to do something about it, yes.
That is the contingent element of that may well... could be viewed as an ingredient of the standing problem or could be viewed as a problem on the merits.
I mean, I think it may well go to both.
It certainly undermines the suggestion that there is some automatic acquisition of the property or deprivation without any opportunity for the individual landowner to--
Unknown Speaker: But your willingness to recognize standing would treat the strongest case as the Indian who did not realize that such a statute had perhaps affected his property rights.
He's the one who might well have done something different, and therefore didn't carry out his own desires.
That is the one I suppose you have the most difficult time defending the statute on its merits because it might not give him adequate notice of what was happening.
Mr. Kneedler: --As we have submitted, we don't believe that notice is an element with respect to a statute of this sort.
I think we should acknowledge that this is sort of an awkward position or situation that arose in the Court of Appeals because the Court of Appeals held the statute unconstitutional on grounds that were not... was not really the subject of litigation.
Unknown Speaker: Well, Mr. Kneedler, do you think that the lack of notice problem might somehow enter into the balance that the Court has to employ in determining the validity of this provision?
Mr. Kneedler: It might be an element, yes, and certainly in a case like Lock and Texaco versus Short it was an element, but again, in a situation where you have property passing at death, the ownership of the property passes anyway, and it is a particular transaction that is traditionally the subject of the sovereign's power, and the idea of notice, I think, is a less important element in that setting.
Unknown Speaker: Has this Court ever held that lack of notice was a defense on the part of someone challenging the constitutionality of a statute governing the descent of property upon death?
Mr. Kneedler: Not to my... not to my knowledge.
Unknown Speaker: Mr. Kneedler, I hate to come back to the same thing, but I am still hung up on the standing point.
You say that the connection between decedent and potential heir is what is different here.
Now, we have before us a takings claim.
The taking could be rendered... the problem could be solved either of two ways, striking down the taking or requiring compensation for the taking.
Mr. Kneedler: Right.
Unknown Speaker: Now, there are some particular problems in this case as to whether Congress has prescribed compensation, but let's assume that it hasn't.
If compensation were awarded for the decedent's injury, I presume that compensation would be awarded to the decedents.
Mr. Kneedler: But then that compensation--
Unknown Speaker: To their estate, and not to these plaintiffs.
Mr. Kneedler: --But it would pass through the estate.
Unknown Speaker: No, it wouldn't, because you validate the statute by awarding compensation for the statute, right?
Mr. Kneedler: Yes.
Unknown Speaker: So the compensation would go to the decedent's estate.
Mr. Kneedler: Yes.
Unknown Speaker: Whereupon it would pass pursuant to the statute.
Mr. Kneedler: The compensation would pass pursuant to the heirship statutes or pursuant to the will.
Unknown Speaker: My point is, the compensation would go to the decedent and would not necessarily reach these plaintiffs, which makes it very--
Mr. Kneedler: It may not necessarily, but the premise of the argument as I understand it is that heirs and devisees they would receive the real property, so I believe it would be part of their claim that they would receive the substitute for the real property in the form of compensation.
Unknown Speaker: --Yes, if they were asserting their rights, but they are not asserting their rights.
They are asserting the rights of the decedent, and to compensate for the rights of the decedent you compensate the decedent's estate.
Mr. Kneedler: Yes.
Unknown Speaker: Not these plaintiffs.
So you are allowing these plaintiffs to sue to compel the government to give compensation to somebody else, and that does not strike you as strange?
Mr. Kneedler: It is unusual, but then the operation of the statute is unusual, and we are not urging a broad theory of third party standing here, and we have... Congress enacted a statute whose constitutionality we believe should be sustained by the Court, and it has been our... the Court of Appeals reached the merits.
We have decided to principally address the merits in our submission.
If there are no further questions at this time, I would like to reserve the balance of my time for rebuttal.
Argument of Yvette Hall War Bonnett
Chief Justice Rehnquist: Thank you, Mr. Kneedler.
Ms. War Bonnett, we will hear from you at this time.
Mr. Bonnett: Mr. Chief Justice, and may it please the Court, what I first want to place before the Court today is the significance of these property interests in terms of the decedents, Charles Pumpkin Seed, Chester Irving, Edgard Pumpkin Seed, and Geraldine Cross, and then also in terms of the appellees who, but for Section 207 of the Indian Land Consolidation Act, would have inherited these interests.
When you translate the percentage figures and the dollar limitations of the Indian Land Consolidation Act into everyday terms and in terms of the values of the decedents, and you take, for example, Charles Pumpkin Seed, who had nine interests which were subject to transfer to the tribe under this Act, those interests, this 2 percent or less interest amounted to one-third of an acre all the way up to, one of his interests was the size of four and a half acres.
The other decedents had similar ranges in terms of the size of the interests that they were... that were subject to transfer to the tribe under the law.
Unknown Speaker: Are you saying, then, Ms. War Bonnett, that these were not undivided interests, that they had been partitioned?
Mr. Bonnett: No, I am suggesting that.
These are undivided interests, but their share of the interest was four and a half acres, and if you look at the history of Indian land policy, the reason that these people had undivided interest was not actually their doing, but actually government policy which set up the allotment scheme and then determined that these interests would pass in an undivided status.
So the fact that they did not, could not go, Charles Pumpkin Seed could not go to the John Shot allotment and say this four and a half acres is mine and I have trees and whatever.
He still had an interest which translates into four and a half acres of land, which is a significant amount of land, certainly enough land to put a house, certainly enough land to put a garden, and to characterize these interests as insignificant and de minimis is not correct in terms of the Indian people and how they viewed these interests.
It is also important to look at the dollar figures.
The law provides that if you have not... if these interests had not earned $100 within the year preceding death then these interests would go to the tribe.
Again, the total... it is true, Geraldine Cross only received $135 in the year preceding death for all of her 26 interests, but the factual record below was not really developed in terms of the poverty of the Oglala Sioux Indian Reservation or the clients here, but I think the Court could take judicial notice of the fact that Bureau of Census figures put the Oglala Sioux Indian Reservation as one of the poorest counties... Shannon County, South Dakota, is one of the poorest counties in the nation.
To say that to Geraldine Cross or to the other decedents that $135 did not increase their spending power, did not allow them to buy things for the family, and is insignificant is not correct when you look at the interests of the individuals who had these property interests taken.
Unknown Speaker: Is there anything in the record that shows the dollar value of this land?
Mr. Bonnett: There is.
In the joint appendix, beginning at Page 18 of the joint appendix there is listed the inventory for each of the four decedents here, and it shows the dollar value of these property interests as well as the money that they earned in the year preceding and then the land description and so forth.
And so there are dollar figures attached in terms of value in the record.
Unknown Speaker: The four and a half acres you were talking about, what is the value of that?
Mr. Bonnett: --Okay, that would have been Charles Pumpkin Seed on Page 34, it is the John Shot allotment.
Unknown Speaker: Why don't you come back to the microphone when you reply?
Mr. Bonnett: Oh, I am sorry, Your Honor.
Unknown Speaker: Taxable value was 432 million.
I don't consider that very low.
That is not what you are talking about.
Mr. Bonnett: Okay.
It is on Page 38, and it says the estimated value is $266.66.
It is the second allotment listed on Page 38.
This is the interest that is 1/72nd of 320 acres, which is approximately four and a half acres in size.
It is the size of the interest he had, undivided, in this allotment, and it is valued at $266.66.
There are two crucial legal questions presented here.
One is whether there are vested property interests here which are protected by the Fifth Amendment, and the second is whether or not these property interests have actually been taken by Section 207 of the Indian Land Consolidation Act.
The Court of Appeals correctly found that the decedents here had vested property rights and that they included the right to pass, and the Court of Appeals based its holding on the finding of this Court in Choate v. Trapp in 1912 which looked at the fact that the Indian people receiving allotments were required to give valuable consideration.
Their allotments were conditioned upon them relinquishing title to thousands of acres of land which they formerly had held in common as tribal lands.
The only way that the individual allottees under the Sioux Allotment Act received their property interests was if they relinquished title.
They gave consideration for the benefits that they received under the Sioux Allotment Act.
The Court of Appeals also correctly found that included in the rights that went to the allottee was the right to pass this property upon death to their children and their children's children.
Unknown Speaker: That right didn't arise in 1889.
That arose in 1910, didn't it?
Mr. Bonnett: I think looking at the historical record the decedents... I mean the allottees were in the process of gaining their approval because this statute, the Sioux Allotment Act of March 2nd, 1889, only went into effect if the Sioux agreed to allotment.
If you look at the Commission--
Unknown Speaker: It went into effect long before 1910, didn't it?
And there was a period of ten or twenty years when they could not will the property.
Mr. Bonnett: --Right, though talking in terms of the Sioux people and what they understood and what benefit or what the terms of the bargain should be with the Federal Government now, it is clear that the Indian people understood that what they were doing was protecting a land base.
They were even chided by the Commissioners who came out that if they did not approve this statute that they were not thinking about their family, they were not thinking about their children, but the Indian people did not understand maybe the technical distinctions between being able to make a will and provide for inheritance or being able to simply pass this property upon death.
I think it is an invalid technicality that the Sioux people did not understand in 1889 and shouldn't be held to here now.
There also is some--
Unknown Speaker: Are you in effect claiming a breach of contract?
Mr. Bonnett: --What I am saying--
Unknown Speaker: A breach of the 1889 treaty, in effect?
Mr. Bonnett: --is basically not the 1889 treaty, but the 1889 statute--
Unknown Speaker: Yes.
Mr. Bonnett: --in terms of relying on the holding of Choate v. Trapp, which was a similar situation in which the Indians were allotted, and it is true that in the case of Choate v. Wright what was before the Court was a tax exemption for a period of 25 years which was only to the allottee, but it is our submission that the same principles apply here where you have individual Indians who, to acquire this allotment, gave consideration.
That was what the Eighth Circuit said.
There was valuable consideration given here.
That is what this Court said in Choate.
Unknown Speaker: But, Ms. War Bonnett, there is no question here, is there, that Congress intended the result which it produced in this most recent statute?
Mr. Bonnett: No.
That they intended for these interests--
Unknown Speaker: Yes.
Mr. Bonnett: --to escheat and not to go to either the heirs or devisees of--
Unknown Speaker: Yes, so there is no way by interpretation that we can say that whatever inconsistency there was between this statute and the 1889 statute and 1910 statute can be somehow read favorably to the Indians.
Your claim has to be a constitutional one.
Mr. Bonnett: --My claim is a constitutional one.
My claim is also one that is tied to the Sioux allotment procedure.
I don't believe that Congress when they enacted this statute necessarily had before it the historical circumstances and the bargaining that went on.
As counsel for the Justice has indicated, the Sioux received for heads of household twice the amount of property that other people did in terms of the General Allotment Act.
That was because there was a statute passed the year before in which they could not get the approval of the Sioux people.
Unknown Speaker: But I was interested in getting your answer to one of Justice Stevens' questions where he asked you, do you claim a breach of the 1889 statute or treaty, and you said yes.
Well, Congress can breach a statute or a treaty by a subsequent statute unless it effects a taking, can't it?
Mr. Bonnett: Right.
In terms of the rights, though, if it effects a taking, then there has to be compensation for the interests--
Unknown Speaker: Right.
Mr. Bonnett: --and it is our position here today that the interests here taken should be compensated.
We do not dispute the fact that the Federal Government has the authority to enact legislation such as this, but what we do contest is that they are able to take these property interests without any compensation to the individual Indians.
Unknown Speaker: Ms. War Bonnett, do you ask for compensation as opposed to striking down the statute?
Mr. Bonnett: We are asking that this be recognized as a Fifth Amendment taking which would hold this provision unconstitutional and that if Congress attempted this type of legislation again, that it would take from--
Unknown Speaker: No, but in this case do you want compensation or do you want the statute struck down?
Mr. Bonnett: --We--
Unknown Speaker: And my next question is going to be, if you want compensation, who ought to be compensated, because you are asserting before us the rights of the decedents--
Mr. Bonnett: --That's correct.
Unknown Speaker: --not the rights of your clients.
Mr. Bonnett: But we feel that in terms of the standing analysis, that in looking at the decisions of this Court there is a two-pronged test.
One is the ability of the person's constitutional rights to be brought to the Court itself.
In this particular case--
Unknown Speaker: Well, never mind the standing analysis for the moment.
Just answer my narrow question.
To whom should the compensation go if we award compensation?
Why should it go to your client?
Mr. Bonnett: --To the decedents' estates, and then based upon the procedure that is in place through the Bureau of Indian Affairs, the estate, that will be another element of the estate, just as these particular--
Unknown Speaker: To be distributed under the valid statute.
Mr. Bonnett: --No, to be distributed under the terms of either the will, as Geraldine Cross had, or under the intestate succession scheme which is the laws of the State of South Dakota for Sioux Indians.
Unknown Speaker: Well, you can't have both.
You can't both strike down the statute and get compensation for the taking that the statute effects.
Surely you can't do both.
If you get compensation, you have to let the statute stay in effect.
Mr. Bonnett: That's correct, but if you get compensation then the Court is recognizing that the statute as it was originally enacted was unconstitutional because it took an interest without paying compensation.
Unknown Speaker: But the tribe would get the property.
Mr. Bonnett: Right, but the tribe--
Unknown Speaker: And the heirs would get the money.
Mr. Bonnett: --Right.
It would go to the estates, and then the heirs or devisees--
Unknown Speaker: But the property would--
Mr. Bonnett: --Would escheat--
Unknown Speaker: --escheat to the tribe.
Mr. Bonnett: --Right.
Unknown Speaker: Like the statute says.
Mr. Bonnett: And that is one of--
Unknown Speaker: Like the statute says.
Mr. Bonnett: --Right, and that is one of the... I mean, obviously one of the goals of this legislation was to reduce a fractionated heirship problem which does exist on Indian lands today.
But to do ti at the expense of individual Indians and making them bear the cost of undoing Federal Indian land policy which has resulted in the fractionated heirship problem is to unfairly place the burden and not to fairly distribute the benefits and burdens on the Indian reservation.
Unknown Speaker: Ms. War Bonnett, may I ask, prior to this Act, I think it's agreed that the heirs had the right to sell these fractional interest.
Does the record show whether in fact there was any selling of the interest actually occurring?
Mr. Bonnett: One of the problems of selling interests is, as we have discussed, is that these are undivided interests.
Unknown Speaker: Yes.
Mr. Bonnett: And it is difficult to interest probably anyone but other people holding interests in the allotment or the tribe.
Now, the amicus brief for the Yakima Nation has explained that their tribe has developed a fund system so that they are purchasing these types of interests.
The other tribes have had to rely on a Farmers Home Administration loan program where the tribes get loans and then purchase.
There is nothing in the record here because this case went through the District Court on a request for preliminary relief which was consolidated on a permanent relief, and there is not really a factual record here in terms of what happened with these individuals, but I think the Court can note that with undivided interests on the middle of an Indian reservation in trust status that this is not the normal type of property that would have been easy to sell.
Unknown Speaker: So there is nothing in the record that tells us whether in fact these interests could be sold?
Mr. Bonnett: Certainly they could be sold, but the question would be where the buyer would come from.
Unknown Speaker: Yes, in theory, but economically I suppose the record is simply silent with respect to whether or not they could in fact be sold as you find buyers who were willing to buy fractional interests.
Mr. Bonnett: Right.
Certainly the tribe is the most logical buyer of those types of interests, and it depends upon whether the tribes have the funds to do it.
Unknown Speaker: May I ask if the tribe has ever participated in this litigation and taken a position on this issue?
Mr. Bonnett: The Oglala Sioux Tribe filed an amicus brief in the Eighth Circuit, and they did not participate at this level.
Unknown Speaker: What position did they take in the Eighth Circuit?
Were they in favor of getting the property or against it?
Mr. Bonnett: --They were... I don't think that they are against getting the property, but they are against this matter, the way that this statute does it because they view it as inherently unfair in terms of taking property from individual Indians without any compensation.
Clearly, and it has not been disputed here, Indian individual property has the same protections under the Fifth Amendment.
Unknown Speaker: Well, if they don't want the property why couldn't they just reallocate it in accordance with the desires of the former owners then?
Mr. Bonnett: There is a statute which requires the Secretary of Interior and regulations which require the Secretary of Interior to approve transfers of the tribe... of tribal property, so you would get back to the--
Unknown Speaker: I know, but if there are transfers that would produce property interests of more than 2 percent the Secretary presumably would approve--
Mr. Bonnett: --But the tribe and what they would propose to do and indicated at the Eight Circuit was to basically give these people their property back so that they would not be consolidating, and I doubt seriously that they would have gotten the approval of the Secretary of Interior to transfer back to exactly where they were--
Unknown Speaker: --I see.
Mr. Bonnett: --ahead of time.
Unknown Speaker: Of disposing of this undivided property before death?
Mr. Bonnett: Excuse me, Your Honor?
Unknown Speaker: Before death.
Mr. Bonnett: Uh-huh.
Unknown Speaker: What did you do with the undivided interests?
Mr. Bonnett: Before death what did these individuals do?
Unknown Speaker: Yes.
Mr. Bonnett: They basically held them as undivided interests and got lease income each month... each year from them.
Unknown Speaker: Could they be disposed of?
Mr. Bonnett: There are... the government has repeatedly indicated in terms of the named decedents here that they had the opportunity to sell, they had the opportunity to partition their land, they had the opportunity to do gift conveyances.
It is important to realize they couldn't have done any of that without going through BIA procedures in terms of doing that and getting approval of the superintendent or the Secretary to do it.
It is also important to note factually here that this statute was passed January 12th, 1983.
The memorandum which went out to the agencies telling them that this Act has to be implemented was not received in the Pine Ridge Agency until March 7th.
Chester Irving died on March 18th.
Ans so I think that it is highly unlikely that... while we have no factual record here to indicate otherwise, I would submit that it is highly unlikely that Chester Irving has any notice in terms of the acquiesced to the goals of the Indian Land Consolidation Act and the idea that his tribe was--
Unknown Speaker: Ms. War Bonnett, you didn't make a due process attack on this statue in the courts below, did you?
Mr. Bonnett: --This was initially... the plaintiffs did not.
This was filed... people came into our Pine Ridge Legal Services Office and they had a hearing--
Unknown Speaker: Well, the parties that you now represent made no such claim in the courts below.
Isn't that correct?
Mr. Bonnett: --That is correct, and the reason that we have brought this factual record to your attention is to counter the fact that the government has repeatedly said that this statute offers a lot of... given the circumstances here there were a lot of other remedies that people had and they could have--
Unknown Speaker: Well, you are not suggesting that this Court should go off on some due process ground, are you?
Mr. Bonnett: --I don't.
We have not established the record for that and we have not raised it below.
Unknown Speaker: Counsel, may I ask about your assertion earlier that the outcome here should be affected by the fact that in 1889 the Indians weren't given the land for free, but in effect gave compensation for it.
But property is normally acquired in such a transaction for compensation.
Suppose an individual buys land from the State of New York.
Could the State of New York thereafter alter its inheritance laws so that the individual can't dispose of the property which he paid compensation for the way he previously could?
Mr. Bonnett: I would think that we view this situation as completely unique in terms of the contract and the consideration that was given here.
This was more than... for their 360 acres... I mean, 320 acres or 180 acres, whatever they received, they relinquished title to millions of land, millions of acres of land.
I would say that the situation here, the actual bargaining that went on, the unique situation of the Indian people in terms of the Federal Government, makes this a contractual type, bargain type relationship which is unique to anything in terms of everyday property law, and that the Court should... you know, that the Fifth Amendment taking is narrowed here to the circumstances of the Sioux Allotment Act.
Unknown Speaker: How do you distinguish Texaco, or do you?
Or do you think it's even relevant, Texaco against Indiana?
Mr. Bonnett: Justice Stevens, that particular case is different in that it does not deal with a devise situation.
In other words, it did not deal with someone who dies and what notice is to be given in terms of heirs protecting interests.
But certainly in Texaco versus Short, this Court said that it was all right, you know, to condition property rights and to require that they file these notices, and to fail to do that was basically that these people had abandoned their interests in the mining claims that they had.
The point here is that we don't have a factual situation where we could say that these people abandoned, the decedents abandoned, any interest or right that they had in terms of this property.
They in all likelihood had no notice and had no opportunity.
Even Geraldine Cross, who made a will March 26th, before... or I think it was maybe March--
Unknown Speaker: The net effect of the statute, the state statute in Texaco, was that the property interests were lost.
Mr. Bonnett: --That's correct.
But there was also a two-year period in which they had to file a claim to preserve those interests.
And as I read the case, the Court said that, because the owners had basically abandoned their interest and had not filed the claims as they were required to do, but they did have a two-year grace period in which they were able to take steps, affirmative steps to protect their property.
Unknown Speaker: Well, here the property owners could have saved their property by taking some steps.
Mr. Bonnett: There was no meaningful time period for those particular decedents, I would argue, because of the time period between the time that the statute was passed and the time of their death.
Unknown Speaker: That's the only real point of distinction between this case and Texaco?
Mr. Bonnett: Well, in Texaco I feel that, you know, there was a provision for a grace period, and there was none here in terms of people affirmatively protecting their rights.
Unknown Speaker: To the extent--
--to be unconstitutional as applied to these particular decedents, then, but constitutional as to those who have had an adequate time to adjust their affairs?
Mr. Bonnett: Certainly that's a factor that has to be balanced in determining the situation.
To argue that these people had other remedies I don't think is correct, but in terms of the situation at large, we still argue that there are protected interests here which should have been, even if people had notice... for instance, Geraldine Cross, she made a will, and under the Indian Land Consolidation Act as originally enacted her will was given no effect.
That would still be the case today because she would not have been able to pass her interest to her children, her minor children who she wanted to protect and try and provide for, because you have to... under the amendments, if you devise your property, the property interest must go to someone else who holds an interest in that allotment.
Unknown Speaker: But if your claim... you stress so much the lack of notice.
Certainly the government can't decide that it is going to take every tenth person's property and put out a notice to that effect saying we won't do it for a year and have that be sustained just because there was adequate notice of it.
A taking is a taking in a certain sense regardless of whether there is notice, and if it is not a taking, it seems to me the fact that you do not now make any due process claim and haven't one in the courts below makes the notice question pretty low on the totem pole.
Perhaps this is the wrong case to say that.
Mr. Bonnett: I would say that the notice provision is important only in response to the government saying that people could have... in their reply brief they seem to say that our people acquiesced, the decedents acquiesced in what happened.
I don't feel that is appropriate under the facts here.
Unknown Speaker: Counsel, the government in its primary brief didn't even cite Texaco.
Mr. Bonnett: That's correct.
Unknown Speaker: So are they relying on it?
They did cite it in the reply brief, not in the primary brief.
Mr. Bonnett: I think they are responding to my factual statement which I put forward in our brief that the circumstances here would prevent... would have in all likelihood prevented these people from availing themselves of the remedies that the government has always said individuals had under this to avoid the effects of the statute.
Unknown Speaker: Maybe I should ask the question of your opponent as to why they didn't cite it if, as Justice White indicates, there may be some precedent there.
I had the same reaction.
May I just ask this?
Supposing this statute had read... they use the word "escheat" in a rather... not a very precise way, the Congress did here.
Supposing they had used the word "abandoned" instead of "escheat", and they just said that after... if an owner of one of these interests does not convey it to another member of the tribe within such and such a period of time he shall as a matter of law be deemed to have abandoned it, and then it would come right within Texas against Short, wouldn't it?
Mr. Bonnett: That's correct.
I mean, if the term was set up that they were going to affirmatively say, if you don't do something your property interest is going to be abandoned, then we really do have a due process type of was there sufficient notice, and then again you would still, I think, in terms of the unique situation of the Sioux here, get into whether or not these property interests could have even been taken under that scheme because there was valuable consideration given for the interest, because, you know, these other property interests were relinquished, the Indians understood they were going to have--
Unknown Speaker: Well, they paid for the property in the Texaco case, too.
I mean, the fact they paid for the property I don't really think makes much difference.
Mr. Bonnett: --In terms of how they paid for it or what they relinquished, I think that this case presents distinguishable facts from someone who goes to the state of New York and pays the appraised value for a piece of property, but I will leave that decision up to the Court.
The government in their briefs has indicated that this is just a regulatory taking.
We disagree completely with that.
The whole purpose and the whole effect of Section 207 is to transfer ownership of property, it is to take the title of the property from Charles Pumpkin Seed and permanently give it to the Oglala Sioux Tribe.
We... as I previously stated, Indian people have the same protection for their individual property as non-Indians do, and that protection is the Fifth Amendment, and the facts here, the fact that the interests here are small or what the government terms de minimis is not relevant to the fact that if a property interest has been taken then compensation must be made.
It is also not relevant that the interest here is going to the tribes rather than to the Federal Government, because you still have individual Indians who are being asked to pay with their own property interest to effect a greater good, to consolidate Indian land.
And it is also significant here that these individuals are being asked to correct a failed Federal Government policy with no expense to the government but only to the individual Indians.
If there are no further questions, thank you.
Rebuttal of Edwin S. Kneedler
Chief Justice Rehnquist: Thank you, Ms. War Bonnett.
Mr. Kneedler, do you have anything more?
You have about five minutes.
Mr. Kneedler: Yes, I do have several points I would like to make.
In response to the question about Texaco, in retrospect we certainly should have cited Texaco.
The account in our opening brief of the operation of the statute and the alternatives available and the other factors correspond rather closely to Texaco.
I would like to--
Unknown Speaker: Let me ask, since you have mentioned Texaco, which probably is not one of the most widely read opinions that we have ever issued, by the way, that if your opponent did now rely on a due process rationale, trying to defend the judgment below, would that argument be open to your opponent, do you think?
Mr. Kneedler: --I think not.
It was not raised below.
It was not raised in the motion to affirm.
And in fact it is not really raised in the argument section of the brief here.
It is described in the statement, but not really in the argument section.
Unknown Speaker: Do you think it would be open to the Court to affirm on that ground if the Court thought there were merit to the argument?
Mr. Kneedler: I don't think the Court could affirm on that ground.
I think the most that the Court should do would be to remand for proceedings on that particular issue.
Unknown Speaker: Isn't the respondent entitled to support the judgment on any ground that is apparent from the record, or not?
Or is this apparent from the record?
Mr. Kneedler: I think it would not be apparent from the record, and it does come a bit late at this point.
As we have said, we don't--
Unknown Speaker: Well, I know.
It may be late, but that is the way a lot of these respondent cases are.
Mr. Kneedler: --As we say, this is not a situation like Texaco where notice is an important ingredient, we think, because laws regulating the descent of property typically happen automatically at the moment of death, and the legislature does not normally provide a grace period when it changes the rules of descent, even though they might substantially unsettle the decedent's expectations of where his property was going to go.
I would like to respond to several points that were made.
One is the filing by the tribe in the court below.
The tribe wanted or said that these... it should not receive these properties without compensation.
Well, nothing in this statutory scheme prohibits the tribe from making compensation to individual members if it chooses.
Another alternative that is open to the tribe under the 1984 amendments is to pass a statute providing for an alternative disposition of these interests rather than having them escheat.
One possibility would be to have them descend by intestate succession to other owners of fractional interests in the same parcel, which would prevent the further fragmentation of interest.
With respect to Justice Powell's questions about the possible sale of the property to others, there are alternatives other than sale.
One is to give it away, to exchange, which would require no monetary investment at all to assemble a more substantial interest, or to purchase ones from others, all of which could cause the interest to rise above the 2 percent level, and if there are obstacles to the sale of the land, for instance, that may well reflect nothing more than the problems created by the very fractionated ownership that this statute was designed to protect against.
One of the principal problems that Congress was responding to was the inability to sell these parcels of land and the fragmentation of ownership and the assembly of tracts that could be economically used, just as in Lock and in Texaco versus Short.
We think for the reasons stated in our opening brief and reply brief that appellees are quite wrong to say that the Sioux Allotment Act had some unique contractual element that the General Allotment Act, which it really mirrors, did not have.
The language was drawn directly from the General Allotment Act.
This Court in Jefferson versus Fink said that did not create any contractual rights, and there is no evidence from the background that Congress intended to contract away or that the Sioux understood that Congress was contracting away its right to regulate the descent of Indian property.
But it is important to point out that even vested rights, as this Court said in Texaco and Lock, the retention, the permanent retention of private ownership rights, the legislature can condition that retention on the performance of certain affirmative acts which, among other things, would negative any suggestion of abandonment.
And one of the characterizations Congress used of the fractionated ownership or fractionated interest when it enacted this statute was that there is an element of abandonment to them.
The individual owners don't occupy the land.
They receive a check.
It is an entirely passive relationship which is not conducive to a personal responsibility or nexus to the land, which is what Congress was hoping for when it passed the Allotment Act.
So this statute actually furthers the purpose of the General Allotment Act and the Sioux Allotment Act.
Chief Justice Rehnquist: Thank you, Mr. Kneedler.
The case is submitted.