Fidelity Exploration and Production Company v. United States of America, et al.

Fidelity Exploration & Production Co. seeks to quiet title
to a portion of the bed of the Tongue River on which it holds
oil and gas leases issued by the State of Montana, but to
which the United States lays claim as trustee for the Northern
Cheyenne Indian Tribe. The district court dismissed the
action, brought under the Quiet Title Act (QTA), 28 U.S.C.
§ 2409a, for lack of jurisdiction because the United States has a colorable claim to the western submerged riverbed such that
the action is within the "Indian lands" exception to the government's
waiver of sovereign immunity;1 and because Fidelity's
suit is barred by the QTA's twelve-year statute of
limitations, 28 U.S.C. § 2409a(g). We conclude that Fidelity's
predecessor in interest knew, or should have known, of the
claim of the United States no later than 1926, when an Act of
Congress recognized the "middle channel of the Tongue
River" as the eastern boundary of the Northern Cheyenne
Reservation. Accordingly, the statute of limitations had
expired by the time Fidelity filed suit in 2004. We affirm on
this basis, without addressing the "Indian lands" exception.

I

The Northern Cheyenne Reservation was established within
the Montana Territory by Executive Order of President Chester
Arthur on November 26, 1884. The original eastern
boundary of the Reservation was roughly 12 miles east of the
Rosebud River and 10 miles west of the Tongue River. The
reservation soon proved to be too small, and tensions developed
between Cheyenne Indians living to the east of the reservation
and white settlers moving into the territory. In 1886,
the Secretary of the Interior withdrew sufficient lands on the
Rosebud and Tongue Rivers for Indian homesteads, and
ordered that unoccupied lands on both banks of the Tongue
not be located or filed until the Reservation's needs were
determined. This action was reported to Congress in 1887.
House Ex. Doc. No. 1, Pt. 5 at 229, 50th Cong., 1st Sess.
(1887), Vol. 2.

Montana joined the Union in 1889. By virtue of the
Enabling Act of Feb. 22, 1889, 25 Stat. 676, it did so "on an equal footing with the original States . . . ." Id. at 679.
Accordingly, Montana along with all new states held title to
the land that lay under navigable waters at the time of statehood;
this title could, however, be defeated by a "prestatehood
conveyance of the land to a private party for a public
purpose appropriate to the Territory[,]" Utah Div. Of State
Lands v. United States, 482 U.S. 193, 197 (1987), or by a reservation
of submerged lands to keep them "under federal control
for an appropriate public purpose," United States v.
Alaska, 521 U.S. 1, 33-34 (1997).

In 1891, Congress established a Commission to investigate
Northern Cheyenne boundary issues. The Commission recommended
that the Reservation's eastern boundary be fixed at
"the west meandering line of the Tongue River." The next
year the Department of the Interior proposed a bill to expand
the Reservation to the east side of the Tongue, but it didn't
pass. Another effort to adjust boundaries was made in 1898;
it resulted in a recommendation by U.S. Indian Inspector
James McLaughlin, reported to Congress and adopted in a
March 19, 1900 Executive Order by President William
McKinley, that set the Reservation's boundary "in the middle
of the channel of Tongue River." Finally, Congress confirmed
the Executive Order in the Northern Cheyenne Allotment Act
of 1926, 44 Stat. 690. The Act states:

That the Northern Cheyenne Indian Reservation
heretofore set apart by Executive order dated the
19th day of March, 1900, for the permanent use and
occupation of the Northern Cheyenne Indians, in
Montana, be, and the same is hereby, declared to be
the property of said Indians, subject to such control
and management of said property as the Congress of
the United States may direct.

. . . .

That the timber, coal or other minerals, including oil,
gas, and other natural deposits, on said reservation
are hereby reserved for the benefit of the tribe.

Id. §§ 1, 3.

In 2002, Fidelity Exploration and Production Co. obtained
from the State of Montana seven oil and gas leases in a fivemile
stretch of the Tongue riverbed, "subject to any incursion
by the Northern Cheyenne Reservation." The lease area's
five-mile stretch overlaps with the 26-mile stretch where the
Reservation is bounded by the middle channel of the Tongue
River pursuant to President McKinley's Executive Order and
the 1926 Act. On July 27, 2004, Fidelity filed a complaint in
the district court for the District of Montana against the
United States and related parties, seeking to quiet title to the
overlapping area of the riverbed.

The government moved to dismiss for lack of subject matter
jurisdiction, lack of third party standing, and failure to join
an indispensable party.2 The district court concluded that
Fidelity's action is time-barred, and that the action falls within
the "Indian lands" exception to waiver of sovereign immunity.

Fidelity timely appeals both rulings, but as each is jurisdictional,
and we conclude that the action is time-barred, we do
not reach other issues raised by either party.

* * *

[3] Section 2409a(g) specifically exempts "an action
brought by a State" from the limitations period. 28 U.S.C.
§ 2409a(g) (emphasis added). This language does not encompass
an action brought by a State's successor in interest, such
as Fidelity's action here. See California v. Yuba Goldfields,
Inc., 752 F.2d 393, 396-97 (9th Cir. 1985) ("[W]e rely on the
precise wording of the [QTA]'s text to determine when a
cause of action accrues."). In contrast, according to the statute's
notice provision, "[a]ny civil action under this section
. . . shall be deemed to have accrued on the date the plaintiff
or his predecessor in interest knew or should have known of
the claim of the United States." 28 U.S.C. § 2409a(g) (emphasis
added). This language makes it clear that Fidelity's action
must be deemed to have accrued on the date that Montana -
Fidelity's "predecessor in interest" - knew or should have
known of the claim of the United States. Fidelity does not dispute
that Montana knew or should have known of the United
States' claim to the western Tongue River bed at least as of
1926 when the Northern Cheyenne Allotment Act of 1926
was enacted. Consequently, the statute of limitations on Fidelity's
claim has long since expired. Cf. Saylor v. United States,
315 F.3d 664, 670 (6th Cir. 2003) (rejecting the argument that
the plaintiff's statute of limitations should start to run from
the date the plaintiff became aware of its claim). This being
so, its action was properly dismissed.

* * *

For more information about this case go to: http://www.ca9.uscourts.gov/ca9/newopinions.nsf/7E8B93FB18DF2A788825738B000E501E/$file/0635307.pdf?openelement