Supreme Court of the United States
DONALD P. HODEL
MARY IRVING, et al.
Decided May 18, 1987
Justice O’Connor, For the Court
Hodel v. Irving, 481 U.S. 704 (1987), is a case in which the U.S. Supreme Court held that a statute ordering the escheat of fractional interests in real property which had been bequeathed to members of the Oglala Sioux tribe was an unconstitutional taking which required just compensation.
|Topic: Due Process*||Court vote: 9–0|
Click any Justice for detailJoining O'Connor opinion: Justice BLACKMUN Justice BRENNAN Justice MARSHALL Justice POWELL Chief Justice REHNQUIST Justice SCALIA
|Holding: “The original version of § 207 of the Indian Land Consolidation Act effected a 'taking' of appellees' decedents' property without just compensation.”|
|Citation: 481 U.S. 704||Docket: 85–637||Audio: Listen to this case's oral arguments at Oyez|
* As categorized by the Washington University Law Supreme Court Database
DISCLAIMER: Only United States Reports are legally valid sources for Supreme Court opinions. The text below is provided for ease of access only. If you need to cite the exact text of this opinion or if you would like to view the opinions of the other Justices in this case, please view the original United States Report at the Library of Congress or Justia. The Sandra Day O'Connor Institute does not in any way represent, warrant, or guarantee that the text below is accurate."
JUSTICE O'CONNOR delivered the opinion of the Court.
The question presented is whether the original version of the "escheat" provision of the Indian Land Consolidation Act of 1983, Pub.L. 97-459, Tit. II, 96 Stat. 2519, effected a "taking" of appellees' decedents' property without just compensation.
Towards the end of the 19th century, Congress enacted a series of land Acts which divided the communal reservations of Indian tribes into individual allotments for Indians and unallotted lands for non-Indian settlement. This legislation seems to have been in part animated by a desire to force Indians to abandon their nomadic ways in order to "speed the Indians' assimilation into American society," Solem v. Bartlett, 465 U. S. 463, 465 U. S. 466 (1984), and in part a result of pressure to free new lands for further white settlement. Ibid. Two years after the enactment of the General Allotment Act of 1887, ch. 119, 24 Stat. 388, Congress adopted a specific statute authorizing the division of the Great Reservation of the Sioux Nation into separate reservations and the allotment of specific tracts of reservation land to individual Indians, conditioned on the consent of three-fourths of the adult male Sioux. Act of Mar. 2, 1889, ch. 405, 25 Stat. 888. Under the Act, each male Sioux head of household took 320 acres of land, and most other individuals 160 acres. 25 Stat. 890. In order to protect the allottees from the improvident disposition of their lands to white settlers, the Sioux allotment statute provided that the allotted lands were to be held in trust by the United States. Id. at 891. Until 1910, the lands of deceased allottees passed to their heirs "according to the laws of the State or Territory" where the land was located, ibid., and after 1910, allottees were permitted to dispose of their interests by will in accordance with regulations promulgated by the Secretary of the Interior. 36 Stat. 856, 25 U.S.C. § 373. Those regulations generally served to protect Indian ownership of the allotted lands.
The policy of allotment of Indian lands quickly proved disastrous for the Indians. Cash generated by land sales to whites was quickly dissipated, and the Indians, rather than farming the land themselves, evolved into petty landlords, leasing their allotted lands to white ranchers and farmers and living off the meager rentals. Lawson, Heirship: The Indian Amoeba, reprinted in Hearing on S. 2480 and S. 2663 before the Senate Select Committee on Indian Affairs, 98th Cong., 2d Sess., 82-83 (1984). The failure of the allotment program became even clearer as successive generations came to hold the allotted lands. Thus 40-, 80-, and 160-acre parcels became splintered into multiple undivided interests in land, with some parcels having hundreds, and many parcels having dozens, of owners. Because the land was held in trust, and often could not be alienated or partitioned, the fractionation problem grew and grew over time.
A 1928 report commissioned by the Congress found the situation administratively unworkable and economically wasteful. L. Meriam, Institute for Government Research, The Problem of Indian Administration 40-41. Good, potentially productive, land was allowed to lie fallow, amidst great poverty, because of the difficulties of managing property held in this manner. Hearings on H.R. 11113 before the Subcommittee on Indian Affairs of the House Committee on Interior and Insular Affairs, 89th Cong., 2d Sess., 10 (1966) (remarks of Rep. Aspinall). In discussing the Indian Reorganization Act of 1934, Representative Howard said:
It is in the case of the inherited allotments, however, that the administrative costs become incredible.... On allotted reservations, numerous cases exist where the shares of each individual heir from lease money may be 1 cent a month. Or one heir may own minute fractional shares in 30 or 40 different allotments. The cost of leasing, bookkeeping, and distributing the proceeds in many cases far exceeds the total income. The Indians and the Indian Service personnel are thus trapped in a meaningless system of minute partition in which all thought of the possible use of land to satisfy human needs is lost in a mathematical haze of bookkeeping.
78 Cong.Rec. 11728 (1934). In 1934, in response to arguments such as these, the Congress acknowledged the failure of its policy and ended further allotment of Indian lands. Indian Reorganization Act of 1934, ch. 576, 48 Stat. 984, 25 U.S.C. § 461 et seq.
But the end of future allotment by itself could not prevent the further compounding of the existing problem caused by the passage of time. Ownership continued to fragment as succeeding generations came to hold the property, since, in the order of things, each property owner was apt to have more than one heir. In 1960, both the House and the Senate undertook comprehensive studies of the problem. See House Committee on Interior and Insular Affairs, Indian Heirship Land Study, 86th Cong., 2d Sess. (Comm. Print 1961); Senate Committee on Interior and Insular Affairs, Indian Heirship Land Survey, 86th Cong., 2d Sess. (Comm. Print 1960-1961). These studies indicated that one-half of the approximately 12 million acres of allotted trust lands were held in fractionated ownership, with over 3 million acres held by more than six heirs to a parcel. Id. at pt. 2, p. x. Further hearings were held in 1966, Hearings on H.R. 11113, supra, but not until the Indian Land Consolidation Act of 1983 did the Congress take action to ameliorate the problem of fractionated ownership of Indian lands.
Section 207 of the Indian Land Consolidation Act -the escheat provision at issue in this case -provided:
No undivided fractional interest in any tract of trust or restricted land within a tribe's reservation or otherwise subjected to a tribe's jurisdiction shall descedent [ sic ] by intestacy or devise but shall escheat to that tribe if such interest represents 2 percentum or less of the total acreage in such tract and has earned to its owner less than $100 in the preceding year before it is due to escheat.
96 Stat. 2519. Congress made no provision for the payment of compensation to the owners of the interests covered by § 207. The statute was signed into law on January 12, 1983, and became effective immediately.
The three appellees -Mary Irving, Patrick Pumpkin Seed, and Eileen Bissonette -are enrolled members of the Oglala Sioux Tribe. They are, or represent, heirs or devisees of members of the Tribe who died in March, April, and June, 1983. Eileen Bissonette's decedent, Mary Poor Bear-Little Hoop Cross, purported to will all her property, including property subject to § 207, to her five minor children in whose name Bissonette claims the property. Chester Irving, Charles Leroy Pumpkin Seed, and Edgar Pumpkin Seed all died intestate. At the time of their deaths, the four decedents owned 41 fractional interests subject to the provisions of § 207. App. 20, 22-28, 32-33, 37-39. The Irving estate lost two interests whose value together was approximately $100; the Bureau of Indian Affairs placed total values of approximately $2,700 on the 26 escheatable interests in the Cross estate and $1,816 on the 13 escheatable interests in the Pumpkin Seed estates. But for § 207, this property would have passed, in the ordinary course, to appellees or those they represent.
Appellees filed suit in the United States District Court for the District of South Dakota, claiming that § 207 resulted in a taking of property without just compensation in violation of the Fifth Amendment. The District Court concluded that the statute was constitutional. It held that appellees had no vested interest in the property of the decedents prior to their deaths, and that Congress had plenary authority to abolish the power of testamentary disposition of Indian property, and to alter the rules of intestate succession. App. to Juris. Statement 21a-26a.
The Court of Appeals for the Eighth Circuit reversed. Irving v. Clark, 758 F.2d 1260 (1985). Although it agreed that appellees had no vested rights in the decedents' property, it concluded that their decedents had a right, derived from the original Sioux allotment statute, to control disposition of their property at death. The Court of Appeals held that appellees had standing to invoke that right, and that the taking of that right without compensation to decedents' estates violated the Fifth Amendment. [ Footnote 1 ]
The Court of Appeals concluded that appellees have standing to challenge § 207. 758 F.2d at 1267-1268. The Government does not contest this ruling. As the Court of Appeals recognized, however, the existence of a case or controversy is a jurisdictional prerequisite to a federal court's deliberations. Id. at 1267, n. 12. We are satisfied that the necessary case or controversy exists in this case. Section 207 has deprived appellees of the fractional interests they otherwise would have inherited. This is sufficient injury-in-fact to satisfy Article III of the Constitution. See Singleton v. Wulff, 428 U. S. 106, 428 U. S. 112 (1976).
In addition to the constitutional standing requirements, we have recognized prudential standing limitations. As the court below recognized, one of these prudential principles is that the plaintiff generally must assert his own legal rights and interests. 758 F.2d at 1267-1268. That general principle, however, is subject to exceptions. Appellees here do not assert that their own property rights have been taken unconstitutionally, but rather that their decedents' right to pass the property at death has been taken. Nevertheless, we have no difficulty in finding the concerns of the prudential standing doctrine met here.
For obvious reasons, it has long been recognized that the surviving claims of a decedent must be pursued by a third party. At common law, a decedent's surviving claims were prosecuted by the executor or administrator of the estate. For Indians with trust property, statutes require the Secretary of the Interior to assume that general role. 25 U.S.C. §§ 371-380. The Secretary's responsibilities in that capacity, however, include the administration of the statute that the appellees claim is unconstitutional, see 25 U.S.C. §§ 2202, 2209, so that he can hardly be expected to assert appellees' decedents' rights to the extent that they turn on that point. Under these circumstances, appellees can appropriately serve as their decedents' representatives for purposes of asserting the latters' Fifth Amendment rights. They are situated to pursue the claims vigorously, since their interest in receiving the property is indissolubly linked to the decedents' right to dispose of it by will or intestacy. A vindication of decedents' rights would ensure that the fractional interests pass to appellees; pressing these rights unsuccessfully would equally guarantee that appellees take nothing. In short, permitting appellees to raise their decedents' claims is merely an extension of the common law's provision for appointment of a decedent's representative. It is therefore a "settled practice of the courts" not open to objection on the ground that it permits a litigant to raise third parties' rights. Tyler v. Judges of Court of Registration, 179 U. S. 405, 179 U. S. 406 (1900).
The Congress, acting pursuant to its broad authority to regulate the descent and devise of Indian trust lands, Jefferson v. Fink, 247 U. S. 288, 247 U. S. 294 (1918), enacted § 207 as a means of ameliorating, over time, the problem of extreme fractionation of certain Indian lands. By forbidding the passing on at death of small, undivided interests in Indian lands, Congress hoped that future generations of Indians would be able to make more productive use of the Indians' ancestral lands. We agree with the Government that encouraging the consolidation of Indian lands is a public purpose of high order. The fractionation problem on Indian reservations is extraordinary, and may call for dramatic action to encourage consolidation. The Sisseton-Wahpeton Sioux Tribe, appearing as amicus curiae in support of the Secretary of the Interior, is a quintessential victim of fractionation. Forty-acre tracts on the Sisseton-Wahpeton Lake Traverse Reservation, leasing for about $1,000 annually, are commonly subdivided into hundreds of undivided interests, many of which generate only pennies a year in rent. The average tract has 196 owners, and the average owner undivided interests in 14 tracts. The administrative headache this represents can be fathomed by examining Tract 1305, dubbed "one of the most fractionated parcels of land in the world." Lawson, Heirship: The Indian Amoeba, reprinted in Hearing on S. 2480 and S. 2663 before the Senate Select Committee on Indian Affairs, 98th Cong., 2d Sess., 85 (1984). Tract 1305 is 40 acres, and produces $1,080 in income annually. It is valued at $8,000. It has 439 owners, one-third of whom receive less than $.05 in annual rent and two-thirds of whom receive less than $1. The largest interest holder receives $82.85 annually. The common denominator used to compute fractional interests in the property is 3,394,923,840,000. The smallest heir receives $.01 every 177 years. If the tract were sold (assuming the 439 owners could agree) for its estimated $8,000 value, he would be entitled to $.000418. The administrative costs of handling this tract are estimated by the Bureau of Indian Affairs at $17,560 annually. Id. at 86, 87. See also Comment, Too Little Land, Too Many Heirs -The Indian Heirship Land Problem, 46 Wash.L.Rev. 709, 711-713 (1971).
This Court has held that the Government has considerable latitude in regulating property rights in ways that may adversely affect the owners. See Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 480 U. S. 491 -492 (1987); Penn Central Transportation Co. v. New York City, 438 U. S. 104, 438 U. S. 125 -127 (1978); Goldblatt v. Hempstead, 369 U. S. 590, 369 U. S. 592 -593 (1962). The framework for examining the question whether a regulation of property amounts to a taking requiring just compensation is firmly established, and has been regularly and recently reaffirmed. See, e.g., Keystone Bituminous Coal Assn. v. DeBenedictis, supra, at 480 U. S. 485 ; Ruckelshaus v. Monsanto Co., 467 U. S. 986, 467 U. S. 1004 -1005 (1984); Hodel v. Virginia Surface Mining and Reclamation Assn., Inc., 452 U. S. 264, 452 U. S. 295 (1981); Agins v. Tiburon, 447 U. S. 255, 447 U. S. 260 -261 (1980); Kaiser Aetna v. United States, 444 U. S. 164, 444 U. S. 174 -175 (1979); Penn Central Transportation Co. v. New York City, supra, at 438 U. S. 124. As THE CHIEF JUSTICE has written:
[T]his Court has generally been unable to develop any 'set formula' for determining when 'justice and fairness' require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons. [Penn Central Transportation Co. v. New York City, 438 U.S.] at 438 U. S. 124. Rather, it has examined the 'taking' question by engaging in essentially ad hoc, factual inquiries that have identified several factors -such as the economic impact of the regulation, its interference with reasonable investment-backed expectations, and the character of the governmental action -that have particular significance. Ibid.
Kaiser-Aetna v. United States, supra, at 444 U. S. 175.
There is no question that the relative economic impact of § 207 upon the owners of these property rights can be substantial. Section 207 provides for the escheat of small undivided property interests that are unproductive during the year preceding the owner's death. Even if we accept the Government's assertion that the income generated by such parcels may be properly thought of as de minimis, their value may not be. While the Irving estate lost two interests whose value together was only approximately $100, the Bureau of Indian Affairs placed total values of approximately $2,700 and $1,816 on the escheatable interests in the Cross and Pumpkin Seed estates. See App. 20, 21-28, 29-39. These are not trivial sums. There are suggestions in the legislative history regarding the 1984 amendments to § 207 that the failure to "look back" more than one year at the income generated by the property had caused the escheat of potentially valuable timber and mineral interests. S.Rep. No. 98-632, p. 12 (1984); Hearing on H.J.Res. 158 before the Senate Select Committee on Indian Affairs, 98th Cong., 2d Sess., 20, 26, 32, 75 (1984); Amendments to the Indian Land Consolidation Act: Hearing on H.J.Res. 158 before the Senate Select Committee on Indian Affairs, 98th Cong., 1st Sess., 8, 29 (1983). Of course, the whole of appellees' decedents' property interests were not taken by § 207. Appellees' decedents retained full beneficial use of the property during their lifetimes, as well as the right to convey it inter vivos. There is no question, however, that the right to pass on valuable property to one's heirs is itself a valuable right. Depending on the age of the owner, much or most of the value of the parcel may inhere in this "remainder" interest. See 26 CFR § 20.2031-7(f) (Table A) (1986) (value of remainder interest when life tenant is age 65 is approximately 32% of the whole).
The extent to which any of appellees' decedents had "investment-backed expectations" in passing on the property is dubious. Though it is conceivable that some of these interests were purchased with the expectation that the owners might pass on the remainder to their heirs at death, the property has been held in trust for the Indians for 100 years, and is overwhelmingly acquired by gift, descent, or devise. Because of the highly fractionated ownership, the property is generally held for lease, rather than improved and used by the owners. None of the appellees here can point to any specific investment-backed expectations beyond the fact that their ancestors agreed to accept allotment only after ceding to the United States large parts of the original Great Sioux Reservation.
Also weighing weakly in favor of the statute is the fact that there is something of an "average reciprocity of advantage," Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 260 U. S. 415 (1922), to the extent that owners of escheatable interests maintain a nexus to the Tribe. Consolidation of Indian lands in the Tribe benefits the members of the Tribe. All members do not own escheatable interests, nor do all owners belong to the Tribe. Nevertheless, there is substantial overlap between the two groups. The owners of escheatable interests often benefit from the escheat of others' fractional interests. Moreover, the whole benefit gained is greater than the sum of the burdens imposed, since consolidated lands are more productive than fractionated lands.
If we were to stop our analysis at this point, we might well find § 207 constitutional. But the character of the Government regulation here is extraordinary. In Kaiser Aetna v. United States, 444 U.S. at 444 U. S. 176, we emphasized that the regulation destroyed "one of the most essential sticks in the bundle of rights that are commonly characterized as property -the right to exclude others." Similarly, the regulation here amounts to virtually the abrogation of the right to pass on a certain type of property -the small undivided interest -to one's heirs. In one form or another, the right to pass on property -to one's family in particular -has been part of the Anglo-American legal system since feudal times. See United States v. Perkins, 163 U. S. 625, 163 U. S. 627 -628 (1896). The fact that it may be possible for the owners of these interests to effectively control disposition upon death through complex inter vivos transactions such as revocable trusts is simply not an adequate substitute for the rights taken, given the nature of the property. Even the United States concedes that total abrogation of the right to pass property is unprecedented, and likely unconstitutional. Tr. of Oral Arg. 12-14. Moreover, this statute effectively abolishes both descent and devise of these property interests even when the passing of the property to the heir might result in consolidation of property -as for instance when the heir already owns another undivided interest in the property. [ Footnote 2 ] Cf. 25 U.S.C. § 2206(b) (1982 ed., Supp. III). Since the escheatable interests are not, as the United States argues, necessarily de minimis, nor, as it also argues, does the availability of inter vivos transfer obviate the need for descent and devise, a total abrogation of these rights cannot be upheld. But cf. Andrus v. Allard, 444 U. S. 51 (1979) (upholding abrogation of the right to sell endangered eagles' parts as necessary to environmental protection regulatory scheme).
In holding that complete abolition of both the descent and devise of a particular class of property may be a taking, we reaffirm the continuing vitality of the long line of cases recognizing the States', and where appropriate, the United States', broad authority to adjust the rules governing the descent and devise of property without implicating the guarantees of the Just Compensation Clause. See, e.g., Irving Trust Co. v. Day, 314 U. S. 556, 314 U. S. 562 (1942); Jefferson v. Fink, 247 U.S. at 247 U. S. 294. The difference in this case is the fact that both descent and devise are completely abolished; indeed they are abolished even in circumstances when the governmental purpose sought to be advanced, consolidation of ownership of Indian lands, does not conflict with the further descent of the property.
There is little doubt that the extreme fractionation of Indian lands is a serious public problem. It may well be appropriate for the United States to ameliorate fractionation by means of regulating the descent and devise of Indian lands. Surely it is permissible for the United States to prevent the owners of such interests from further subdividing them among future heirs on pain of escheat. See Texaco, Inc. v. Short, 454 U. S. 516, 454 U. S. 542 (1982) (BRENNAN, J., dissenting). It may be appropriate to minimize further compounding of the problem by abolishing the descent of such interests by rules of intestacy, thereby forcing the owners to formally designate an heir to prevent escheat to the Tribe. What is certainly not appropriate is to take the extraordinary step of abolishing both descent and devise of these property interests even when the passing of the property to the heir might result in consolidation of property. Accordingly, we find that this regulation, in the words of Justice Holmes, "goes too far." Pennsylvania Coal Co. v. Mahon, 260 U.S. at 260 U. S. 415. The judgment of the Court of Appeals is
[ Footnote 1 ]
The Court of Appeals, without explanation, went on to "declare" that not only the original version of § 207, but also the amended version not before it, 25 U.S.C. § 2206 (1982 ed., Supp. III), unconstitutionally took property without compensation. Since none of the property which escheated in this case did so pursuant to the amended version of the statute, this "declaration" is, at best, dicta. We express no opinion on the constitutionality of § 207 as amended.
[ Footnote 2 ]
JUSTICE STEVENS argues that weighing in the balance the fact that § 207 takes the right to pass property even when descent or devise results in consolidation of Indian lands amounts to an unprecedented importation of overbreadth analysis into our Fifth Amendment jurisprudence. Post at 481 U. S. 724 -726. The basis for this argument is his assertion that none of appellees' decedents actually attempted to pass the property in a way that might have resulted in consolidation. But the fact of the matter remains that, before § 207 was enacted, appellees' decedents had the power to pass on their property at death to those who already owned an interest in the subject property. This right too was abrogated by § 207; each of the appellees' decedents lost this stick in their bundles of property rights upon the enactment of § 207. It is entirely proper to note the extent of the rights taken from appellees' decedents in assessing whether the statute passes constitutional muster under the Penn Central balancing test. This is neither overbreadth analysis nor novel. See, e.g., Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 480 U. S. 493 -502 (1987) (discussing, in general terms, the extent of the abrogation of coal extraction rights caused by the Subsidence Act); Penn Central Transportation Co. v. New York City, 438 U. S. 104, 438 U. S. 136 -137 (1978) (discussing extent to which air rights abrogated by the designation of Grand Central Station as a landmark, noting that not all new construction prohibited, and noting the availability of transferable development rights).
JUSTICE STEVENS' objections are perhaps better directed at the question whether there is third-party standing to challenge this statute under the Fifth Amendment's Just Compensation Clause. But as we have shown, there is certainly no Article III bar to permitting appellees to raise their decedents' claims, supra, at 481 U. S. 711, and JUSTICE STEVENS himself concedes that prudential considerations do not bar consideration of the Fifth Amendment claim. Post at 481 U. S. 724.
Header photo: United States Supreme Court. Credit: Patrick McKay / Flickr - CC.