Gwitchyaa Zhee Corp. v. Alexander

          ORDER DEFENDANTS/THIRD-PARTY PLAINTIFFS' MOTION TO AMEND

          H. Russel Holland United States District Judge.

         Defendants/third-party plaintiffs Clarence and Demetrie Alexander move to amend their answer, counterclaim, and third-party complaint.^[1] This motion is unopposed by plaintiffs Gwichyaa Zhee Gwich'in Tribal Government and Gwitchyaa Zhee Corporation, ^[2] presumably because the Alexanders are in fact only seeking leave to amend their third-party complaint. The Alexanders' motion to amend is opposed by third-party defendant David Bernhardt, Acting Secretary of the Interior.^[3] Oral argument was not requested and is not deemed necessary.

         Concurrent with this order, the court is entering an order granting plaintiffs' motion to amend their complaint. The Alexanders have stated that they will file another motion to amend their third-party complaint if the court grants plaintiffs' motion to amend. While it struck the court that it might be more efficient to summarily deny the instant motion, because the Alexanders' proposed third-party amended complaint is poorly drafted, the court offers the following in the hope of narrowing the problems with any future motion by the Alexanders to amend their third-party complaint.

         Background

         This case currently involves a dispute over a parcel of land known as Tract 19A which was part of an ANCSA conveyance of land from the United States to plaintiff GZ Corporation. Plaintiffs allege that in 2008, in order to comply with their obligations under § 14(c)(1) of ANCSA, they submitted a “Map of Boundaries” to the Bureau of Land Management (BLM) “that identified . . . 14(c)(1) Claims . . . encompassing Fort Yukon and its nearby surroundings. . . .”^[4] Plaintiffs allege that the Fort Yukon Map of Boundaries created Tracts 19 and 19A.^[5] Plaintiffs allege that survey drawings were done after the Fort Yukon Map of Boundaries was submitted to the BLM but that the drawings for Tracts 19 and 19A were originally incorrect because defendants “convinced the surveyor to include more acreage in their § 14(c)(1) Claim than identified on the Fort Yukon Map of Boundaries.”^[6] Plaintiffs allege that the survey drawings were corrected in 2014 “to provide the appropriate boundary for Tracts 19 and 19A.”^[7] Plaintiffs allege that after they received the final survey drawings, “GZ Corporation began to execute deeds to provide formal documentation of the § 14(c)(1) Claims.”^[8] Plaintiffs allege that they quitclaimed Tract 19 to Clarence Alexander in 2016 but that they retain title to Tract 19A.^[9]

         The Alexanders, however, contend that the boundaries on the Fort Yukon Map of Boundaries are incorrect and that Clarence Alexander's § 14(c)(1) claim includes some or all of Tract 19A.^[10] The Alexanders also contend that there are issues as to whether plaintiffs complied with the regulatory requirements for § 14(c)(1) claims. In addition, the Alexanders contend that they have obtained documents via FOIA requests that show that the acreage of Tract 19 was reduced sometime between 2011 and 2014, that the BLM permitted GZ Corporation to “replat” Tract 19 in 2013-2014, and that this replatting resulted in the reduction of Tract 19, the relocation of Tract 9, ^[11] and the creation of Tract 19A.

         Plaintiffs have brought an ejectment claim against the Alexanders; and the Alexanders have asserted four counterclaims against plaintiffs. The Alexanders have also filed a third-party complaint against the Secretary. The third-party complaint asserts an APA claim against the Secretary. The Alexanders seek review of the 2008 decision by the BLM to accept GZ Corporation's Fort Yukon Map of Boundaries.^[12] The Alexanders also may be attempting to assert a separate due process claim.^[13]

         Pursuant to Rule 15(a)(2), Federal Rules of Civil Procedure, the Alexanders now move to amend their third-party complaint. The Alexanders seek to add third-party defendants, add claims, and amend their existing claims asserted against the Secretary. Specifically, the Alexanders seek to add as defendants the Department of Interior, the BLM, and the BLM's Chief Cadastral Surveyor for Alaska. The proposed amended third-party complaint, while far from a model of clarity, appears to assert four separate causes of action. First, the Alexanders propose to assert an APA claim seeking review of the 2008 acceptance of GZ Corporation's Fort Yukon Map of Boundaries and the 2014 approval of GZ Corporation's plan of survey.^[14]Second, the Alexanders propose to assert an APA claim based on allegations that the third-party defendants failed to give the Alexanders adequate notice before accepting the Map of Boundaries in 2008 and approving the plan of survey in 2014.^[15] Third, the Alexanders propose to assert claims that 43 U.S.C. § 1624, Part 2650, and 43 U.S.C. § 1632(b) are unconstitutional as applied to them.^[16] Fourth, the Alexanders propose to assert an APA claim based on allegations that the third-party defendants have failed to act on a request for relief that the Alexanders submitted on August 23, 2018.^[17]

         Discussion

         “Rule 15(a) is very liberal and leave to amend ‘shall be freely given when justice so requires.'” AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006) (quoting Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999)). “But a district court need not grant leave to amend where the amendment: (1) prejudices the opposing party; (2) is sought in bad faith; (3) produces an undue delay in litigation; or (4) is futile.” Id. The Secretary only argues that amendment would be futile. “Futility of amendment can, by itself, justify the denial of a motion for leave to amend.” Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995). “The test for futility ‘is identical to the one used when considering the sufficiency of a pleading challenged under Rule 12(b)(6).'” Fresno Unified School Dist. v. K.U. ex rel. A.D.U., 980 F.Supp.2d 1160, 1179 (E.D. Cal. 2013) (quoting Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988)). “‘[T]o survive a motion to dismiss, a complaint must contain sufficient factual matter to state a facially plausible claim to relief.'” Id. (quoting Shroyer v. New Cingular Wireless Serv., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010)). Futility may also “include[] the inevitability of a claim's defeat on summary judgment.'” Calif. ex rel. Calif. Dep't of Toxic Substances Control v. Neville Chemical Co., 358 F.3d 661, 673-74 (9th Cir. 2004) (quoting Johnson v. Am. Airlines, Inc., 834 F.2d 721, 724 (9th Cir. 1987)).

         The Secretary first argues that it would be futile to allow the Alexanders to amend as to their proposed APA claim based on allegations that the BLM's acceptance of the 2008 Map of Boundaries and approval of the 2014 plan of survey were arbitrary and capricious. The Secretary argues that amendment as to this claim would be futile because ANCSA gave the Secretary very limited duties with regards to the conveyance of lands. The Secretary contends that the Alexanders want him to determine that they are entitled to Tract 19A, but he argues that he has no duty or authority to determine entitlement to any Section 14(c) reconveyances.

         “ANCSA extinguished all aboriginal title and claims of aboriginal title to lands in Alaska in exchange for the distribution of $962, 500, 000 and over forty million acres of land to Alaska Natives.” Chickaloon-Moose Creek Native Ass'n, Inc. v. Norton, 360 F.3d 972, 974 (9th Cir. 2004). “ANCSA did not convey lands directly to village or regional corporations, but provided a method for accomplishing transfer.” Id. Pursuant to ANCSA, public lands were withdrawn and then village and regional native corporations could select the lands to which they were entitled. After a selection was made by a village corporation, the Secretary was directed to determine how many acres the corporation was entitled to and then issue “a patent to the surface estate. . . .” 43 U.S.C. § 1613(a). If, however, the lands had not been surveyed, the Secretary was to convey lands to Native corporations by an “interim conveyance.” 43 U.S.C. § 1621(j)(i). A patent would be issued once the lands in question had been surveyed. Id.

         Section 14(c)(1) of ANCSA provided that once a village corporation received a patent, the corporation was to

convey to any Native or non-Native occupant, without consideration, title to the surface estate in the tract occupied as of December 18, 1971 . . . as a primary place of residence, or as a primary place of business, or as a subsistence campsite, or as headquarters for reindeer husbandry[.]

43 U.S.C. § 1613(c)(1). Section 14(c) made provision for “such sums as may be necessary for the purpose of providing technical assistance to Village Corporations established pursuant to this chapter in order that they may fulfill the reconveyance requirements of this subsection.” 43 U.S.C. § 1613(c). Section 14(c) authorized “[t]he Secretary [to] make funds available as grants to ANCSA or nonprofit corporations that maintain in-house land planning and management capabilities.” Id.

         The Secretary argues that he has limited authority under Section 14(c) and that he does not have the authority to make any determinations as to Section 14(c) reconveyances. Moreover, the Secretary contends that once a village corporation has received a patent, the corporation has full legal title to the land and that he no longer has jurisdiction over the land. See West v. Standard Oil Co., 278 U.S. 200, 211-12 (1929) (“[t]he issue of the patent terminates the jurisdiction of the Department [of Interior] over the land”).

         The Secretary acknowledges that he has a duty to survey ANCSA land selections. Specifically, 43 U.S.C. § 1612(a) provides:

The Secretary shall survey the areas selected or designated for conveyance to Village Corporations pursuant to the provisions of this chapter. He shall monument only exterior boundaries of the selected or designated areas at angle points and at intervals of approximately two miles on straight lines. No. ground survey or monumentation will be required along meanderable water boundaries. He shall survey within the areas selected or designated land occupied as a primary place of residence, as a primary place of business, and for other purposes, and any other land to be patented under this chapter.

         But, the Secretary argues that nothing in Section 1612(a) creates any duty to determine entitlement to any Section 14(c) reconveyance.

         The Secretary also argues that there are no regulations that create a duty to determine the entitlement to a Section 14(c) reconveyance. The regulation governing village surveys can be found at 43 C.F.R. § 2650.5-4. Section 2650.5-4(b) provides that “[s]urveys will be made within the village corporation selections to delineate those tracts required by law to be conveyed by the village corporations pursuant to section 14(c). . . .” Section 2650.5-4(c)(1) provides that

[t]he boundaries of the tracts described in paragraph (b) of this section shall be posted on the ground and shown on a map which has been approved in writing by the affected village corporation and submitted to the Bureau of Land Management. Conflicts arising among potential transferees identified in section 14(c) of the Act, or between the village ...