Berry v. United States ( 2022 )

IN THE UNITED STATES COURT OF FEDERAL CLAIMS
______________________________________
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HOLLY BERRY, )
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Plaintiff, ) No. 21-1017L
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v. ) Filed: May 18, 2022
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THE UNITED STATES, )
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Defendant. )
______________________________________ )
OPINION AND ORDER
Plaintiff Holly Berry, a landowner in Oklahoma, brings this Fifth Amendment takings
claim related to a gaming facility built by the Cherokee Nation (“Nation”) on land held in trust by
Defendant. This trust land is located next to Plaintiff’s property, and, according to Plaintiff, its
development caused repeated flooding, erosion, and impoundment of water on her land.
Defendant moved to dismiss the Amended Complaint for failure to state a claim under Rule
12(b)(6) of the Rules of the United States Court of Federal Claims (“RCFC”). As explained below,
because Plaintiff has failed to state a viable takings claim, Defendant’s motion to dismiss is
GRANTED and its previous motion to dismiss is DENIED AS MOOT.
I. BACKGROUND
Plaintiff owns land in Tahlequah, Oklahoma. Pl.’s Am. Compl. ¶¶ 7, 15, ECF No. 7; Ex.
A to Pl.’s Am. Compl., ECF No. 7-1; Ex. B to Def.’s Mot. to Dismiss Pl.’s Am. Compl., ECF No.
9-2. Plaintiff alleges that Defendant, utilizing its statutory authority under 25 U.S.C. § 5108 (the
Indian Reorganization Act or “IRA”), took land adjacent to Plaintiff’s property (“the Site”) into
trust for the Nation, which had proposed to develop and operate a gaming facility. ECF No. 7 ¶ 8.
On January 19, 2017, Defendant issued a letter approving the Nation’s application for
Defendant to acquire the Site in trust. Id. ¶ 11; Ex. A to Def.’s Mot. to Dismiss Pl.’s Am. Compl.,
ECF No. 9-1. The letter explained that “[t]hrough the exercise of tribal governmental authority,
the Site will be subject to the Nation’s management, protection, and conservation after it is
acquired in trust.” ECF No. 9-1 at 4. The letter also referenced an Environmental Assessment
(“EA”) conducted as part of Defendant’s evaluation of the Nation’s application. The EA
concluded that development would “result in changes to the existing topography” and “create a
greater area of impervious surfaces than currently exists on the project site, potentially increasing
surface flow rates,” but that a grading plan and a stormwater prevention plan would minimize
impacts to the topography and stormwater flow. Id. at 14. The letter further explained that a
Finding of No Significant Impact (“FONSI”) was appropriate, requiring no Environmental Impact
Statement. Id. Defendant published notice of the land acquisition in the Federal Register on
August 11, 2017. Ex. B to Pl.’s Am. Compl., ECF No. 7-2.
Plaintiff alleges that the Nation’s subsequent development of the gaming facility
“significantly altered both the elevation and existing drainage patterns” of the Site and
“substantially increased [its] impervious surfaces.” ECF No. 7 ¶ 12. According to Plaintiff, due
to these changes and “the failure to properly design and construct water runoff measures, Plaintiff’s
real property has suffered repeated severe flooding, erosion, and impoundment of water.” Id. ¶
13. Plaintiff also alleges that the Nation, to divert its own water runoff, entered Plaintiff’s land,
removed vegetation and soil, and dug a drainage ditch—all without her permission. Id. ¶¶ 14, 21.
Plaintiff contends that Defendant’s trust relationship with the Nation as to the Site imposes
duties and obligations on Defendant as trustee. Id. ¶ 18. Because the Site is used by the Nation
for gaming, she alleges that Defendant’s duties are expanded consistent with its regulatory role
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under the Indian Gaming Regulatory Act (“IGRA”), which (among other things) gives Defendant
the authority to order the temporary closure of a gaming facility that “is constructed, maintained,
or operated in a manner that threatens the environment or the public health and safety, in violation
of a tribal ordinance or resolution approved by the [National Indian Gaming Commission
(“NIGC”)] Chair.” Id. ¶ 19 (internal quotation marks omitted) (quoting 25 C.F.R. § 573.4(a)(12)).
Plaintiff asserts that “increased flooding, caused by Defendant’s action and inactions, constitutes
a taking of a flowage easement and detention pond upon the Plaintiff’s property pursuant to the
[Fifth] Amendment of the U.S. Constitution.” Id. ¶ 22. Plaintiff seeks “just compensation in an
amount equal to the value of the real property taken.” Id. ¶ 23.
Plaintiff filed her Complaint on March 2, 2021. Pl.’s Compl., ECF No. 1. After Defendant
moved to dismiss under RCFC 12(b)(1) and 12(b)(6) on June 2, 2021, Plaintiff filed an Amended
Complaint on June 21, 2021. 1 ECF No. 7. On July 22, 2021, Defendant moved to dismiss the
Amended Complaint under RCFC 12(b)(6), arguing that Plaintiff failed to state a takings claim
upon which relief may be granted. Def.’s Mot. to Dismiss Pl.’s Am. Compl., ECF No. 9.
Defendant contends that all of the acts alleged to have caused flooding on Plaintiff’s property were
taken by the Nation—not the United States, which cannot be liable under a takings theory for an
alleged failure to act. Id. at 6–7. The parties completed briefing on September 10, 2021, and the
Court heard oral argument on March 4, 2022.
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When Plaintiff filed the Amended Complaint, it superseded the original complaint and
became the controlling pleading. See Smith v. United States, 120 Fed. Cl. 455, 460 (2015). As a
result, Defendant’s Motion to Dismiss Plaintiff’s Complaint, ECF No. 6, is moot. Id.3
II. LEGAL STANDARDS
A. Jurisdiction of the Court of Federal Claims
The Court has jurisdiction under the Tucker Act to consider “any claim against the United
States founded either upon the Constitution, or any Act of Congress or any regulation of an
executive department, or upon any express or implied contract with the United States, or for
liquidated or unliquidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). This
jurisdiction encompasses takings claims under the Fifth Amendment. Hammitt v. United States,
69 Fed. Cl. 165, 168 (2005) (citing Murray v. United States, 817 F.2d 1580, 1583 (Fed. Cir. 1987)),
aff’d, 209 F. App’x 986 (Fed. Cir. 2006).
B. Standard of Review for Rule 12(b)(6) Motion
To avoid dismissal under Rule 12(b)(6), a complaint must “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see Steffen v. United
States, 995 F.3d 1377, 1379 (Fed. Cir. 2021). “A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly,
550 U.S. at 556). When reviewing a motion under RCFC 12(b)(6), the Court “assume[s] all well-
pled factual allegations are true” and makes “all reasonable inferences in favor of the nonmovant.”
United Pac. Ins. Co. v. United States, 464 F.3d 1325, 1327–28 (Fed. Cir. 2006). However, the
Court is “not bound to accept as true a legal conclusion couched as a factual allegation.”
Acceptance Ins. Co. v. United States, 583 F.3d 849, 853 (Fed. Cir. 2009) (internal quotation marks
omitted) (quoting Twombly, 550 U.S. at 555).
In deciding a motion under RCFC 12(b)(6), the Court may consider the complaint itself,
“the written instruments attached to it as exhibits, ‘documents incorporated into the complaint by
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reference, and matters of which a court may take judicial notice.’” Todd Constr., L.P. v. United
States, 94 Fed. Cl. 100, 114 (2010) (quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S.
308, 322 (2007)), aff’d, 656 F.3d 1306 (Fed. Cir. 2011). This includes the contents of public
documents and matters of public record. Bristol Bay Area Health Corp. v. United States, 110 Fed.
Cl. 251, 262 (2013) (citing Sebastian v. United States, 185 F.3d 1368, 1374 (Fed. Cir. 1999)).
III. DISCUSSION
Plaintiff’s Amended Complaint must be dismissed because it fails to plausibly allege a
takings claim. As Defendant correctly argues, Plaintiff’s allegations against the United States are
founded on its alleged failure to prevent a third party (the Nation) from causing harm to Plaintiff’s
property, which is insufficient to constitute a taking. Nor does Plaintiff plead an actionable claim
(either under a takings theory or otherwise) for Defendant’s alleged breach of fiduciary duty.
A. Plaintiff Fails to Allege a Cognizable Taking.
“A taking occurs when governmental action deprives [an] owner of all or most of its
property interest.” Nw. La. Fish & Game Pres. Comm’n v. United States, 446 F.3d 1285, 1289
(Fed. Cir. 2006) (citing United States v. Gen. Motors Corp., 323 U.S. 373, 378 (1945)). This may
include government projects that result in the flooding of an individual’s land. See id. at 1289–90
(citing Pumpelly v. Green Bay & Miss. Canal Co., 80 U.S. 166, 172 (1871)). Such a claim usually
“must be predicated on actions undertaken by the United States,” not third parties such as a tribe,
a foreign sovereign, or a local government. Navajo Nation v. United States, 631 F.3d 1268, 1274
(Fed. Cir. 2011); see All. of Descendants of Tex. Land Grants v. United States, 37 F.3d 1478, 1482
(Fed. Cir. 1994); see also Griggs v. Allegheny Cnty., 369 U.S. 84, 89–90 (1962). Courts have
occasionally recognized third-party takings claims, but only where the United States induces a
third party to “act[] as the government’s agent or the government’s influence over the third party
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was coercive rather than merely persuasive.” A & D Auto Sales, Inc. v. United States, 748 F.3d
1142, 1154 (Fed. Cir. 2014) (collecting cases). “[T]akings liability does not arise from government
inaction or failure to act.” St. Bernard Par. Gov’t v. United States, 887 F.3d 1354, 1361 (Fed. Cir.
2018).
Defendant argues that Plaintiff’s Amended Complaint fails to state a takings claim because
Plaintiff’s allegations against Defendant are based on Defendant’s inaction—specifically, the
Government’s alleged failure to prevent actions by the Nation (an independent third party) that
caused her injuries. ECF No. 9 at 16–17. Defendant further claims that Plaintiff cannot impute
the Nation’s harmful actions to Defendant because she fails to allege that the Nation acted as
Defendant’s agent or under Defendant’s coercive influence on a third-party takings theory. 2 Id. at
17–20.
The Court agrees with Defendant. As explained above, a taking necessarily involves
governmental action. But Plaintiff fails to allege any governmental action that caused the injuries
raised in her takings claim. Beyond conclusory assertions of liability, the Amended Complaint
alleges only that Defendant acquired and held the Site in trust, not that that Defendant itself
developed the Site and therefore caused the flooding on her land. See ECF No. 7 ¶¶ 18, 20–21.
Instead, the Nation developed and operated the gaming facility on the Site, as permitted under the
IRA and IGRA. Id. ¶ 8; see ECF No. 9-1. Indeed, the Amended Complaint alleges that the Nation,
not Defendant, “commenced construction in 2016,” ECF No. 7 ¶ 20, and “unlawfully entered upon
2
At oral argument, Plaintiff conceded that the Nation did not act to develop the Site in the
capacity of Defendant’s agent or through a coercive relationship with Defendant. As such, the
Court will not address this aspect of the motion other than to note its agreement with Defendant.
See Goodrich v. United States, 434 F.3d 1329, 1334 (Fed. Cir. 2006) (“Whereas an agent is acting
on behalf of, and usually at the direction of, his principal, a permittee is granted the option, but not
the obligation, to engage in certain activities.”).
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[her] real property, removed vegetation, and dug a drainage ditch” without her permission, id. ¶
21. These allegations do not state a plausible claim for relief, however, because “[t]he actor in a
Fifth Amendment takings claim against the United States must be the United States.” L & W
Constr. LLC v. United States, 148 Fed. Cl. 417, 424 (2020) (emphasis added); see, e.g., Alves v.
United States, 133 F.3d 1454, 1458 (Fed. Cir. 1998). “In the flooding context, in particular, both
Supreme Court precedent and [Federal Circuit] precedent have uniformly based potential takings
claims on affirmative government acts.” St. Bernard Par., 887 F.3d at 1361 (rejecting takings
claim based on flooding allegedly caused by the Government’s failure to properly construct and
maintain a navigation channel).
At oral argument, Plaintiff asserted that the “action” taken by Defendant here was its
approval of the Nation’s application, evaluation of which involved Defendant issuing the EA and
FONSI, and Defendant’s subsequent acquisition of the land in trust. See ECF No. 9-1 at 13–14.
Plaintiff emphasized that these acts were the “proximate cause” of the damage to Plaintiff’s land,
as the Nation would not have developed the gaming facility had Defendant not approved the
Nation’s application and taken the Site into trust. Even with this framing, Plaintiff’s takings claim
fails. What Plaintiff points to is not direct governmental action effecting a taking, but rather agency
decision-making that permitted the Nation’s actions. While such agency decision-making may
give rise to a claim in federal district court under the Administrative Procedure Act, see Springfield
Parcel C, LLC v. United States, 124 Fed. Cl. 163, 176 n.11 (2015), such a challenge is not
actionable in this Court as a taking under the Fifth Amendment.
The Federal Circuit and other judges of this court have recognized as much, rejecting
takings claims based on the Government’s alleged failure to exercise (or properly exercise) its
regulatory authority. See, e.g., Alves, 133 F.3d at 1458; L & W Constr., 148 Fed. Cl. at 422. For
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example, in Alves, a landowner asserted a takings claim against the Bureau of Land Management
(“BLM”), alleging that the BLM’s failure to prevent the cattle of a neighboring landowner (the
Danns) from grazing on Alves’ land constituted a Fifth Amendment taking. Alves, 133 F.3d at1455–56. The Alves property included public lands for which Alves held BLM grazing permits,
and the BLM had previously secured an injunction against the trespass by the Danns’ cattle. Id.
at 1455. The Federal Circuit explained that the Government’s ability to regulate the Danns’
livestock did not “change the fact that the livestock are properly controlled in the first instance by
the Danns, and that Alves’ complaint is with the Danns, not the government.” Id. at 1458 (“The
government is not an insurer that private citizens will act lawfully with respect to property subject
to governmental regulation merely because the government has chosen to regulate.”).
Likewise, Plaintiff’s characterization of Defendant’s acts as the “proximate cause” of her
injuries, in the absence of any direct governmental action or an agency-coercion theory, further
shows that Defendant’s involvement is simply too attenuated to support a takings claim. See L &
W Constr., 148 Fed. Cl. at 424 (“A mere causal link through the agency of a third force, perhaps
appropriate in a tort context, is not sufficient to allege a taking.”). Indeed, to the extent the
Amended Complaint raises a tort claim against the Government for its alleged failure or refusal to
stop the Nation from causing damage to Plaintiff’s land, the Court would lack jurisdiction. Bench
Creek Ranch, LLC v. United States, 149 Fed. Cl. 222, 226 (2020) (citing St. Bernard Par., 887
F.3d at 1360–61), aff’d, 855 F. App’x 726 (Fed. Cir. 2021).
B. Plaintiff Fails to Allege Defendant Owes Her an Actionable Fiduciary Duty.
In an attempt to sidestep the requirement of affirmative governmental action to support her
takings claim, Plaintiff alleges that Defendant—as trustee of the Site—is subject to liability for its
failure to perform fiduciary duties. The Court, however, agrees with Defendant that IGRA does
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not create an enhanced trust duty with respect to the Site, nor could Plaintiff—who is not a
beneficiary of the trust land—enforce any such duty. ECF No. 9 at 20–22. Such a claim, to the
extent Plaintiff raises one, also fails.
In her response brief, Plaintiff asserts that Defendant and the Nation have more than a “bare
trust” relationship with respect to the Site and that Defendant “very clearly ‘has control or
supervision over tribal monies and properties.’” Pl.’s Opp’n to Def.’s Mot. to Dismiss at 5, ECF
No. 11 (quoting Navajo Tribe of Indians v. United States, 224 Ct. Cl. 171, 183 (1980)). She refers
to multiple regulations implementing IGRA in support of this point, id. (citing 25 C.F.R. §§
522.4(b)(3), 571.1, 571.5), including the class II gaming ordinance approval requirements and the
NIGC’s temporary closure authority, id. (citing 25 C.F.R. §§ 522.4(b)(7), 3 573.4(a)(12)), as well
as Supreme Court breach of trust cases, id. at 6 (citing United States v. Mitchell, 463 U.S. 206(1983), and United States v. White Mountain Apache Tribe, 537 U.S. 465 (2003)). Plaintiff asserts
that this constellation of authorities necessarily implies a generalized duty of Defendant to protect
the public from the actions of the Nation, which includes protecting Plaintiff from the alleged
flooding, erosion, and impoundment of water on her property. See id. at 7–8 (citing Cherokee
Nation v. Georgia, 30 U.S. 1 (1831)). This argument, however, has no legal grounding.
While there exists a limited trust relationship between the United States and Indian tribes,
this relationship alone does not “impose duties upon the United States such as those applicable to
private trustees.” Pueblo of Santa Ana v. Kelly, 932 F. Supp. 1284, 1297 (D.N.M. 1996) (citing
Mont. Bank of Circle, N.A. v. United States, 7 Cl. Ct. 601, 613–14 (1985)), aff’d, 104 F.3d 15463
Plaintiff’s brief erroneously cites 25 C.F.R. § 522.4(b)(3). ECF No. 11 at 6–7. The
quoted approval criteria requiring tribes to “construct, maintain and operate a gaming facility in a
manner that adequately protects the environment and the public health and safety” is found at §
522.4(b)(7).
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(10th Cir. 1997). “To impose such obligations, the substantive law at issue must unambiguously
impose upon the United States detailed, comprehensive duties over Indian affairs.” Id. (citing
Mont. Bank, 7 Cl. Ct. at 614).
In United States v. Mitchell, for example, the Supreme Court found that federal statutes
and regulations imposed fiduciary duties upon the United States as to certain tribal land upon
which forest resources had “long been managed by the Department of the Interior, which
exercise[d] ‘comprehensive’ control over the harvesting of Indian timber.” 463 U.S. at 209 (citing
White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 145 (1980)). Specifically, these
authorities tasked the Government with “daily supervision over the harvesting and management of
tribal timber,” id. at 222 (internal quotation marks omitted) (quoting Bracker, 448 U.S. at 147),
and authorized the Secretary of the Interior “to invest tribal and individual Indian funds held in
trust . . . if deemed advisable and for the best interest of the Indians,” id. at 222, n.24 (citing 25
U.S.C. § 162a). In sum, “[v]irtually every stage of the process [was] under federal control.” Id.
at 222. 4
As Plaintiff conceded at oral argument, none of the cases she relies on involved a takings
claim, but rather claims that the Government breached a fiduciary duty owed to a tribe or individual
tribal member. Plaintiff fails to allege that she is a similarly situated beneficiary. And even if she
were such a beneficiary, Plaintiff also fails to allege anywhere near the same level of pervasive
governmental control over the development of the Site or funds derived from the Nation’s gaming
4
The other breach of trust cases Plaintiff cites are likewise inapposite. In White Mountain
Apache Tribe, the Supreme Court held that the United States possessed a duty to manage land and
improvements on land held in trust for a tribe because the Government was statutorily authorized
to and did in fact occupy a portion of the trust corpus. 537 U.S. at 475. Navajo Tribe of Indians
involved trust fund accounting claims against the Government brought by a tribe, not an unrelated
third party like Plaintiff. 224 Ct. Cl. at 190.
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operation on the Site as in Mitchell, White Mountain Apache Tribe, or Navajo Tribe of Indians.
This is because, as numerous other courts have found, IGRA does not allow the Government to
exercise such elaborate, comprehensive control over tribal gaming operations necessary to create
a fiduciary duty. See, e.g., Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wis.
v. United States, 259 F. Supp. 2d 783, 791 (W.D. Wis. 2003) (“Nothing in [IGRA] indicates any
intention by Congress to recognize or create a fiduciary duty.”), aff’d, 367 F.3d 650 (7th Cir. 2004);
Vizenor v. Babbitt, 927 F. Supp. 1193, 1201–02 (D. Minn. 1996); Pueblo of Santa Ana, 932 F.
Supp. at 1297–98; Redding Rancheria v. Salazar, 881 F. Supp. 2d 1104, 1122 (N.D. Cal. 2012),
aff’d in part, rev’d in part on other grounds sub nom. Rancheria v. Jewell, 776 F.3d 706 (9th Cir.
2015). Indeed, the regulatory provisions that Plaintiff cites, see ECF No. 11 at 5–6, merely reflect
Defendant’s oversight and enforcement authority—not direct governmental control and hands-on
management of tribal gaming. See 25 U.S.C. § 2702(2)–(3) (declaring the policy of IGRA,
including to “ensure that the Indian tribe is the primary beneficiary of the gaming operation” and
to establish federal regulatory authority and federal standards for Indian gaming).
Finally, the Court finds no authority for Plaintiff’s novel argument that Defendant has a
generalized duty to protect the public from the Nation’s actions. Plaintiff describes a “guardian”-
“ward” relationship between Defendant and the Nation, respectively, and complains of a lack of
alternative judicial remedies against the Nation. See ECF No. 11 at 6–8. But such a description
of the Government’s relationship with Indian tribes is inconsistent with IGRA’s stated policy that
tribal gaming be authorized “as a means of promoting tribal economic development, self-
sufficiency, and strong tribal governments,” 25 U.S.C. § 2702(1), and it does not reflect the
development of federal Indian law over the last century, see McGirt v. Oklahoma, --- U.S. ---, 140
S. Ct. 2452, 2467 (2020). To the extent that Plaintiff alleges that this guardian-ward formulation
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creates an agency relationship within the takings context or otherwise makes the Nation’s conduct
actionable, any such theory is unsupported by existing authority. Likewise, as Defendant correctly
notes, a lack of available judicial remedies against the Nation, either in a tribal court or in federal
court, does not imply the existence of a remedy against Defendant, expand Defendant’s waiver of
sovereign immunity, or otherwise bolster the validity of Plaintiff’s claim.
IV. CONCLUSION
For these reasons, Defendant’s Motion to Dismiss (ECF No. 9) is GRANTED and
Plaintiff’s Amended Complaint is DISMISSED with prejudice for failure to state a claim pursuant
to RCFC 12(b)(6). The Court further ORDERS that Defendant’s prior Motion to Dismiss (ECF
No. 6) is DENIED AS MOOT. The Clerk is directed to enter judgment accordingly.
SO ORDERED.
Dated: May 18, 2022 /s/ Kathryn C. Davis
KATHRYN C. DAVIS
Judge
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