Rosebud Sioux Tribe v. Sun Prairie

This case arises from the Rosebud Sioux Tribe's lease of land to Sun Prairie for
construction of a pork production facility. Because the lease covers land included
within the Rosebud Indian Reservation, the Bureau of Indian Affairs (BIA) had to
review and approve the lease. Prior to approval, and because such constitutes federal
action, the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-4370d,
mandated preparation of an environmental impact statement (EIS) if the project
would result in any significant environmental impact. Accordingly, BIA engaged a
contractor to prepare an Environmental Assessment (EA), to predict the likely
environmental impact. Based on the EA, BIA determined the project would cause no
significant impact which would require the preparation of an EIS. Thereafter, BIA issued a Finding of No Significant Impact (FONSI) and approved the lease, which the
Tribe and Sun Prairie executed.

Almost five months later, the former Assistant Secretary for Indian Affairs at
the Department of Interior, Kevin Gover (Assistant Secretary), voided the lease
saying the FONSI was issued in violation of NEPA. Sun Prairie and the Tribe filed
suit against Gover and requested a preliminary and permanent injunction. Several
environmental and public interest groups (collectively, the Intervenors) intervened
as defendants. The district court granted a preliminary injunction and, after a hearing,
a permanent injunction. Rosebud Sioux Tribe v. Gover, 104 F. Supp. 2d 1194
(D.S.D. 2000). The defendants and the Tribe now appeal. Because we find Sun
Prairie lacks standing to pursue its claims, we vacate the district court's order granting
a permanent injunction, and remand with instructions to dismiss the complaint for
lack of jurisdiction.

I. BACKGROUND

In the spring of 1998, the Tribe and Sun Prairie agreed to negotiate a land lease
for the development of a multi-site hog production facility on tribal trust land. The
BIA office in South Dakota arranged for the preparation of a project EA which was
finalized in August, 1998. Based upon the EA, the BIA Superintendent issued a
FONSI and authorized the Tribe to sign the lease. The lease between the Tribe and
Sun Prairie was executed on September 8, 1998, and approved by the Aberdeen Area
Director for the BIA on September 16, 1998. Construction on the project began on
or about September 21, 1998.

The project consists of two phases. Phase I consists of three finishing sites to
be used to fatten hogs for market. Phase II consists of five sow sites and five
additional finishing sites. As of the date of the hearing on Sun Prairie's application for a preliminary injunction, the Tribe, to some extent, and Sun Prairie to a great
extent, had expended approximately $5,000,000 on construction.

On November 23, 1998, the intervenors in this action sued the federal
government in the United States District Court for the District of Columbia, seeking
to suspend or enjoin BIA's approval of the lease. Concerned Rosebud Area Citizens
v. Babbitt, 34 F. Supp. 2d 775 (D.D.C. 1999). On January 27, 1999, Assistant
Secretary Gover sent a letter to the Tribe voiding the lease because the FONSI did not
fully comply with NEPA. The parties to the D.C. litigation then entered into a joint
stipulation of dismissal and the case was dismissed without prejudice.

The Tribe and Sun Prairie initiated the present action challenging the Assistant
Secretary's authority and decision to void the lease. The district court issued a
temporary restraining order on February 11, 1999, which was later extended.
Eventually, the district court granted a permanent injunction restraining defendants
from "taking any actions, other than seeking relief by appeal or other appropriate
judicial relief, which actions would have the purpose or consequence of interfering
or attempting to interfere with the construction or operation of the project that is the
subject of this action." Rosebud Sioux Tribe, 104 F. Supp. 2d at 1213-14. The
Government and Intervenors have appealed from the permanent injunction.

Subsequent to entry of the permanent injunction, the Tribe held general tribal
elections and the composition of the tribal council changed. The reconstituted tribal
council no longer favored the hog production project, and determined the Assistant
Secretary's decision to void the lease should be upheld. The Tribe requested, and we
granted, permission to realign itself as an appellant.

II. DISCUSSION

Sun Prairie claims the Assistant Secretary's decision to void the lease was taken
in violation of (1) 25 U.S.C. §§ 1(a), 81 & 415; (2) NEPA, and its enabling
regulations, 40 C.F.R. §§ 1500-1508; and (3) the National Historic Preservation Act
(NHPA), 16 U.S.C. §§ 470-470x-6. The Intervenors contend Sun Prairie lacks
standing to assert these claims. Specifically, the Intervenors argue the interests which
Sun Prairie seeks to protect do not fall within the zone of interests intended to be
protected or regulated by the statutes in question. The Intervenors characterize Sun
Prairie's interests as solely economic, while Sun Prairie characterizes its interests as
economic and procedural.

"The question of standing 'involves . . . constitutional limitations on federalcourt
jurisdiction.'" Bennett v. Spear, 520 U.S. 154, 162 (1997) (quoting Warth v.
Seldin, 422 U.S. 490, 498 (1975)). "To satisfy the case or controversy requirement
of Article III, which is the irreducible constitutional minimum of standing, a plaintiff
must, generally speaking, demonstrate that he has suffered injury in fact, that the
injury is fairly traceable to the actions of the defendant, and that the injury will likely
be redressed by a favorable decision." Id. (internal quotations omitted). The
Intervenors concede Sun Prairie has satisfied the constitutionally-mandated elements
of standing.

In addition to constitutional requirements, standing also involves prudential
limits on the exercise of federal jurisdiction. Bennett, 520 U.S. at 162. Prudential
limits require a plaintiff to show the grievance arguably falls within the zone of
interests protected or regulated by the statutory provision invoked in the suit. Id.

Sun Prairie brought its suit under the Administrative Procedure Act (APA), 5
U.S.C. §§ 701-706, which provides for judicial review of federal agency action.
Cent. S. D. Coop. Grazing Dist. v. Sec'y of the U.S. Dep't of Agric., 266 F.3d 889, 894 (8th Cir. 2001) (hereafter Grazing). The APA is a procedural statute and
provides only the "framework for judicial review of agency action." Preferred Risk
Mut. Ins. Co. v. United States, 86 F.3d 789, 792 (8th Cir. 1996) (citing Defenders of
Wildlife v. Adm'r, EPA, 882 F.2d 1294, 1303 (8th Cir. 1989)). A suit brought under
the APA must be based upon the violation of a separate statute whose violation forms
the basis for the complaint. Preferred Risk Mut. Ins. Co., 86 F.3d at 792. Thus, in
order to establish standing, a plaintiff seeking judicial review must also show the
injury complained of falls within the zone of interests sought to be protected by the
statutory provision. Bennett, 520 U.S. at 162-63.

In cases where the plaintiff is not itself the subject of the contested
regulatory action, the test denies a right of review if the plaintiff's
interests are so marginally related to or inconsistent with the purposes
implicit in the statute that it cannot reasonably be assumed that Congress
intended to permit the suit.

Clarke v. Sec. Indus. Ass'n, 479 U.S. 388, 399 (1987).

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Click the case caption above for the full text of the Court's opinion.

The order of the district court granting a permanent injunction is vacated. The
case is remanded to the district court with instructions to dismiss the complaint for
lack of jurisdiction.

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Editorial Note: This case is indicative of the problems associated with commercial dealings with Indian tribes.