Fidelity Exploration v. United States ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FIDELITY EXPLORATION AND 
PRODUCTION COMPANY,
Plaintiff-Appellant,
v.
UNITED STATES OF AMERICA; No. 06-35307
UNITED STATES DEPARTMENT OF THE
D.C. No.
INTERIOR; GALE NORTON, in her
official capacity as United States  CV-04-00100-
Secretary of the Interior; RFC/RWA
BUREAU OF INDIANS AFFAIRS, U.S. OPINION
DEPARTMENT OF INTERIOR; DAVID
ANDERSON, in his official capacity
as Assistant Secretary, Bureau of
Indian Affairs,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Montana
Richard F. Cebull, District Judge, Presiding
Argued and Submitted
October 15, 2007—Seattle, Washington
Filed November 6, 2007
Before: Betty B. Fletcher, Arlen C. Beam,* and
Pamela Ann Rymer, Circuit Judges.
Opinion by Judge Rymer
*The Honorable Arlen C. Beam, Senior United States Circuit Judge for
the Eighth Circuit, sitting by designation.
14665
FIDELITY EXPLORATION v. UNITED STATES 14667
COUNSEL
Jon Metropoulos and Dana L. Hupp, Helena, Montana, for
plaintiff-appellant Fidelity Exploration & Production Co.
Sue Ellen Wooldridge, Assistant Attorney General, and Patri-
cia Miller, Todd Aagaard, Amber Blaha, and James O. Payne,
Jr., Environment and Natural Resources Division, U.S.
Department of Justice, Washington, DC, for defendant-
appellee the United States.
OPINION
RYMER, Circuit Judge:
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
14668 FIDELITY EXPLORATION v. UNITED STATES
a colorable claim to the western submerged riverbed such that
the action is within the “Indian lands” exception to the gov-
ernment’s waiver of sovereign immunity;1 and because Fideli-
ty’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 Ches-
ter 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 devel-
oped between Cheyenne Indians living to the east of the reser-
vation 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
1
The QTA waives the government’s sovereign immunity for “a civil
action . . . to adjudicate a disputed title to real property in which the
United States claims an interest,” but excepts “trust or restricted Indian
lands.” 28 U.S.C. § 2409a.
FIDELITY EXPLORATION v. UNITED STATES 14669
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 state-
hood; this title could, however, be defeated by a “prestate-
hood 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 res-
ervation of submerged lands to keep them “under federal con-
trol 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 recom-
mended 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.
...
14670 FIDELITY EXPLORATION v. UNITED STATES
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 five-
mile 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 mat-
ter 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 immu-
nity.
Fidelity timely appeals both rulings, but as each is jurisdic-
tional, and we conclude that the action is time-barred, we do
not reach other issues raised by either party.
II
[1] The QTA statute of limitations provides as follows:
Any civil action under this section, except for an
action brought by a State, shall be barred unless it is
2
The State of Montana moved to intervene but later withdraw its
request.
FIDELITY EXPLORATION v. UNITED STATES 14671
commenced within twelve years of the date upon
which it accrued. Such action shall be deemed to
have accrued on the date the plaintiff or his pre-
decessor in interest knew or should have known of
the claim of the United States.
28 U.S.C. § 2409a(g). The Supreme Court has held that this
limitations period is “a central condition of the consent given
by the Act.” United States v. Mottaz, 476 U.S. 834, 843
(1986). It is therefore subject to the rule that “when Congress
attaches conditions to legislation waiving the sovereign
immunity of the United States, those conditions must be
strictly observed, and exceptions thereto are not to be lightly
implied.” Block v. North Dakota, 461 U.S. 273, 287 (1983).
Although a court “should not construe such a time-bar provi-
sion unduly restrictively,” it must “be careful not to interpret
it in a manner that would extend the waiver beyond that
which Congress intended.” Id. (internal quotation marks and
citation omitted).
[2] Fidelity first submits that Block is no longer good law
given the Court’s later decision in Irwin v. Department of Vet-
erans Affairs, 498 U.S. 89 (1990), that equitable tolling may
apply to suits against the government. Fidelity points out that
we have interpreted Irwin as indicating that “federal statutory
time limitations on suits against the government are not juris-
dictional in nature.” Washington v. Garrett, 10 F.3d 1421,
1437 (9th Cir. 1993). However, Irwin never purported to
overrule Block. Compare Irwin, 498 U.S. at 95, with Block,
461 U.S. at 292. And we must follow the Supreme Court pre-
cedent that directly controls, leaving to the Court the preroga-
tive of overruling its own prior decisions. Rodriquez de
Quijas v. Shearson/American Exp., Inc., 490 U.S.477, 484
(1989). Accordingly, as our court has continued to do, we
treat the statute of limitations in the QTA as jurisdictional.
See Skranak v. Castaneda, 425 F.3d 1213, 1216 (9th Cir.
2005); Adams v. United States, 255 F.3d 787, 796 (9th Cir.
2001).
14672 FIDELITY EXPLORATION v. UNITED STATES
On the merits, Fidelity argues that the twelve-year clock
should start when Fidelity knew of its own claim, not when
Montana — its predecessor in interest — knew of the United
States’ claim. Fidelity maintains that it makes no sense to
hold that it stands in Montana’s shoes with regard to notice,
but not with regard to the period of limitations. In particular,
it suggests that doing so would reduce the marketability of the
State’s property interest and thereby devalue it. However,
Fidelity’s position, and the policy arguments that it offers in
support, are inconsistent with the plain text of the statute.
[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 encom-
pass 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 stat-
ute’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) (empha-
sis 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 dis-
pute 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 Fidel-
ity’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.
AFFIRMED.