Navajo Nation President Russell Begaye during a July 4 celebration the reservation. Photo: Navajo Nation OPVP Russell Begaye And Jonathan Nez
Business | Law | National | Politics

Battle brews as utility company takes sovereignty dispute to Supreme Court

• A utility company is seeking to turn a dispute over one power line on one reservation into a national issue.
• The wealthy backers of the Dakota Access Pipeline have already taken sides.
• The Navajo citizens who own the land at issue haven't been paid since negotiations broke down in 2010.
A closely-watched sovereignty dispute is about to get even more heated as a utility company asks the highest court in the United States for permission to take over lands on the Navajo Nation.

Navajo leaders cheered when the 10th Circuit Court of Appeals barred the condemnation of allotments in which the tribe holds an interest. President Russell Begaye called it a "victory" for his people's sovereign rights, enabling them to stay at the bargaining table for a power line on the New Mexico portion of the reservation.

But the Public Service Company of New Mexico isn't accepting defeat. Even though the 60-mile power line at issue continues to operate without hindrance, the firm plans to ask the U.S. Supreme Court to overturn the tribe's victory.

In doing so, the utility is presenting the dispute as one of significant, national interest. Although a petition has yet to be submitted to America's highest court, papers filed with the 10th Circuit speak of a strategy that is sure to draw in non-Indian interests and maybe even spark a change in course from Washington, D.C., where a new president is very eager to portray himself as business and infrastructure friendly.

"Corporations have NEVER made as much money as they are making now," President Donald Trump wrote on Twitter on Tuesday, clearly believing that his administration had something to do with it.

PNM's thinking was revealed on July 28, after the company's request to get the 10th Circuit to rehear the dispute was rejected a week prior. In a motion, the utility asked for a stay -- in effect, a delay -- while an appeal to the Supreme Court is pursued.

Even though the case affects just one power line on one reservation in one state, PNM's attorneys warned of "potential effects on portions of the national power grid" -- words that send a strong signal to corporate interests far beyond New Mexico's borders.

"All of these questions involve the ability of an Indian tribe to block the acquisition of an easement by eminent domain simply by obtaining a fractional interest in allotted land where the easement would run," the attorneys wrote in their motion. "As such, they affect not just the parties before the court, but all utilities and all state and local governments in the six states of the Tenth Circuit, insofar as they seek to exercise eminent domain over allotted land for an array of vital public purposes, including electric utility lines, natural gas and petroleum pipelines, bridges and roads."

But the 10th Circuit, which hears cases affecting tribal interests in those six Western states, wasn't swayed by the dramatics. This Monday, the court rejected PNM's request, which had been opposed by Navajo citizens who said they haven't been paid for the use of their allotments since the dispute formally began in 2010.

"The last time defendants received any compensation for the right of way was more than 50 years ago, when it was originally granted," the Navajo landowners who are defending their allotments from condemnation wrote in their brief.

The denial of a rehearing, as well as the denial of the motion for a stay, sets the stage for PNM to pursue its appeal to the Supreme Court. The process typically takes several months to resolve, putting off a potential agreement for a longer period of time. If the case is accepted, the tribal defendants can expect further delays.

The lawsuit arose when PNM was unable to reach an agreement regarding the continued operation of the "AY Line," which was installed in 1960. So the utility asked the courts to condemn two particular allotments on the reservation.

Federal law indeed allows allotments to be condemned, so long as the owners are compensated for "damages," according to 25 U.S.C. § 357. But this situation was different because, over the years, the Navajo Nation acquired interests in the two allotments through land consolidation programs that Congress authorized to address the harmful effects of the allotment era.

As a result, the allotments became "tribal," the 10th Circuit concluded in its May 26 decision. Federal law does not authorize condemnation of tribal lands without the tribe's consent.

"Absent explicit authorization, tribal sovereignty prevails," Judge Gregory A. Phillips wrote in the 27-page decision.

The ruling was a major reprieve not just for the Navajo Nation but for other tribes that were watching the case. The National Congress of American Indians, the Confederated Tribes of the Umatilla Indian Reservation, the Pueblo of Laguna and the Ute Mountain Ute Tribe submitted a brief to the 10th Circuit, calling on PNM to respect sovereignty and negotiate.

"The practice of taking tribal lands and handing them out has been rightly abandoned, and it will do PNM and other utility companies no harm to be required to work with tribal governments and to obtain their consent while building and maintaining utilities on the reservation," their brief stated.

The two allotments at issue were removed from tribal ownership and parceled out to Navajo citizens in the early 1900s. They are now owned by dozens more citizens as a result of fractionation, one of the negative affects of allotment that the federal government is still struggling to address.

Federal policy now encourages tribes to reclaim ownership and consolidate fractionated allotments. But it's a slow-moving affair -- the Navajo Nation owns just 13.6 percent of one allotment and barely 0.14 percent of the second. Consolidation is hindered by inadequate federal and tribal resources.

“Throughout our nation’s history, tribes have suffered abuse and indignity at the hands of the federal government,” Rep. Norma Torres (D-California), the top Democrat on the House Subcommittee on Indian, Insular and Alaska Native Affairs, said at a hearing on land consolidation efforts in May. “While we can never fully make up for the past, there is no question that the return of land to the tribes was and continues to be critical to restoring the tribal way of life."

Once PNM starts the Supreme Court appeal process, other utilities and non-Indian interests are likely to take notice. One already entered the debate by submitting a brief in support of PNM's request for a rehearing.

The brief was filed by Transwestern Pipeline Company, a name that might not sound familiar in Indian Country. But the company's owner definitely rings alarms -- it's Energy Transfer Partners, the wealthy backer of the Dakota Access Pipeline.

Energy Transfer's chief executive officer is a billionaire who was one of the largest individual donor's to Trump's presidential campaign, according to Capital Research Center. Trump himself owned stock in the company -- his team has said he divested after the election, though no documentation has ever been offered.

But the pipeline was definitely on the new president's radar. Just four days after taking office, Trump ordered his administration to "expedite" the controversial crude oil pipeline. Two weeks after that, the final portion was approved over widespread objections in Indian Country.

"Nobody thought any politician would have the guts to approve that final leg and I just closed my eyes and said 'Do It,'" Trump said in June as he congratulated himself on the achievement.

Thanks to Trump, the $3.8 billion pipeline is shipping oil even though a federal judge said his administration took action without addressing treaty rights and other issues raised by the Standing Rock Sioux Tribe and the Cheyenne River Sioux Tribe. Since January 20, the Department of Justice has taken a different stance in responding to their lawsuit, raising speculation that it may do the same in the Navajo Nation case.

"Trump Admin. May Change Position on Case to Appease Pipeline Company," a posting on the influential Turtle Talk blog read.

10th Circuit Court of Appeals Decision:
Public Service Company of NM v. Barboan (May 26, 2017)

Related Stories:
Navajo Nation welcomes victory for 'sovereignty' in land dispute (May 30, 2017)
Federal court blocks attempt to condemn lands on Navajo Nation (May 26, 2017)