United States District Court, D. Arizona
ORDER GRANTING DEFENDANTS MOTION TO DISMISS COUNT
Honorable Susan M. Brnovich United States District Judge
issue is Defendant Office of Navajo and Hopi Indian
Relocation's (“ONHIR”) Motion to Dismiss
Count II of the Complaint (Doc. 12, “Mot.”), to
which Plaintiff Esther Kirk Responded (Doc. 14,
“Resp.”), and ONHIR replied (Doc. 16,
“Reply”). ONHIR has also filed the administrative
record. (Doc. 13, the “AR”). Neither party
requested oral argument on the motion, and the Court does not
believe it is necessary to resolve the motion.
a Navajo-Hopi Land Settlement Act (the “Settlement
Act”) case. 25 U.S. §§ 640d-640d-31 (repealed
1974); see also Bedoni v. Navajo-Hopi Indian Relocation
Comm'n, 878 F.2d 1119, 1121-22 (9th Cir. 1989)
(explaining the history leading up to the Settlement Act);
Herbert v. Office of Navajo and Hopi Indian
Relocation, CV06-03014-PCT-NVW, 2008 WL 11338896, at *1
(D. Ariz. Feb. 27, 2008) (same). ONHIR denied Ms. Kirk
relocation benefits in December 2011. (AR 378). Ms.
Kirk's Complaint alleges two counts: (1) ONHIR's
final decision denying eligibility was “unsupported by
evidence or arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law[.]” (citing 5
U.S.C. § 706 (2)(A), (E)); and (2) ONHIR breached its
“fiduciary obligation” to her by failing to
inform her of relocation benefits and delaying its decision.
(Doc. 1, “Complaint”). She brings both claims
under the Administrative Procedure Act (“APA”), 5
U.S.C. §§ 701-706. (Complaint at ¶¶ 39,
45). In the Motion, ONHIR argues that this Court does not
have jurisdiction over Ms. Kirk's second count because
she did not raise it in the administrative proceeding and,
therefore, there is no “final agency action” to
relevant facts from the AR and the pleadings are as follows.
Ms. Kirk was born July 6, 1969. (AR 337). She is a member of
the Navajo Nation who relocated from Hopi Partition Land
(“HPL”) to Navajo Partition Land
(“NPL”) on June 2, 1986. (Complaint ¶ 15; AR
239, 337). She did not apply for relocation benefits prior to
the July 7, 1986 deadline. (AR 23; Resp. at 2). She first
contacted ONHIR for relocation benefits in February 1991, but
she was turned away. (AR 7-12; Resp. at 2). In 2005, ONHIR
contacted her to inform her that the Office would begin
accepting late applicants. (AR 18). Ms. Kirk timely applied
for Relocation benefits at that time, and ONHIR denied her
application on December 19, 2005. (AR 36-40; AR 61-64). She
then appealed on January 9, 2006. (AR 66-69; Complaint ¶
26). On appeal, ONHIR waived the time limits for holding
hearings and taking final agency action pursuant to 25 C.F.R.
§ 700.13(b). (AR 73).
Kirk's appeal was heard by the Independent Hearing
Officer (“IHO”) on June 17, 2011. (AR 238). The
IHO denied her appeal in August 2011, concluding that Ms.
Kirk was unable to prove she was a self-supporting head of
household when she relocated to the NPL. (AR 336-343). She
asked the IHO to reconsider his ruling, which he denied on
September 23, 2011. (AR 372-73). The Executive Director of
ONHIR issued a letter on December 9, 2011, affirming the
denial of benefits. (AR 378). Included in the letter was that
the Director determined the IHO recommended decision was
correct and that the letter constituted final agency action
in the matter. (AR. 378).
Response, Ms. Kirk argues she was not required to exhaust
administrative remedies in order to bring this claim, ONHIR
cannot rule on its breach of trust, ONHIR is biased, and she
raised fiduciary issue before the agency resulting in final
agency action. In alleging she raised the issue, she points
to the IHO's decision explaining there was no written
evidence of her 1985 summer employment. (Resp. at 15; AR
342). She also says her request for reconsideration raised
the delay claim but does not specifically cite to where in
the request. (Resp. at 15). There is nothing in the IHO's
Findings of Fact, Conclusions of Law, and Decision addressing
an alleged breach of obligation. (AR 336-343). The same goes
for his Order denying her request for reconsideration. (AR.
Standard of Review
Federal Rule of Civil Procedure 12(b)(1), a party may move to
dismiss a claim for lack of subject-matter jurisdiction.
“Federal courts are courts of limited
jurisdiction” and may only hear cases as authorized by
the Constitution or Congress. Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994). Because our
jurisdiction is limited, it is to be presumed that a cause
lies outside of it, and the burden of establishing
jurisdiction is on the party asserting it. Kokkonen,
511 U.S. at 377. “A motion to dismiss for lack of
subject mater jurisdiction under Rule 12(b)(1) may attack
either the allegations of the complaint as insufficient to
confer upon the court subject matter jurisdiction, or the
existence of subject matter jurisdiction in fact.”
Renteria v. United States, 452 F.Supp.2d 910, 919
(D. Ariz. 2006). “With a 12(b)(1) motion, a court may
weigh the evidence to determine whether it has
jurisdiction.” Autery v. United States, 424
F.3d 944, 956 (9th Cir. 2005). The burden of proof is on the
party asserting jurisdiction to show that the court has
subject matter jurisdiction. See Indus. Tectonics, Inc.
v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990).
“[B]ecause it involves a court's power to hear a
case, ” subject matter jurisdiction “can never be
forfeited or waived.” United States v. Cotton,
535 U.S. 625, 630 (2002).
Congress specifies otherwise, we review agency action under
the APA, 5 U.S.C. § 706(2)(A). Hopi Tribe v. Navajo
Tribe, 46 F.3d 908, 914 (9th Cir. 1995). A reviewing
court can reverse an ONHIR decision if the decision is
“arbitrary, capricious, an abuse of discretion, not in
accordance with law, or unsupported by substantial
evidence.” Bedoni, 878 F.2d at 1122. The court
can only review “final agency action[s].” 5
U.S.C. § 704 (providing for judicial review of
“final agency actions”); 25 C.F.R. § 700.303
(“No decision . . . subject to appeal to the Commission
shall be considered final agency action subject to judicial
review . . . .”). Generally, an agency action is final
when it meets two conditions: (1) the action is the
“consummation of the agency's decisionmaking
process” and not “merely tentative or
interlocutory” in nature; and (2) it is an action by
which “rights or obligations have been determined, or
from which legal consequences will flow.” Bennett
v. Spear, 520 U.S. 154, 177-78 (1997) (internal
quotation marks and citations omitted).
will also generally decline to review issues not raised in
administrative proceedings. Reid v. Engen, 765 F.2d
1457, 1460 (9th Cir. 2004). When a statute requires issue
exhaustion in administrative proceedings, failure to raise an
issue there prevents judicial review of that issue. Sims
v. Apfel, 530 U.S. 103, 108 (2000); See also Darby
v. Cisneros, 509 U.S. 137, 147 (1993) (The APA
“explicitly requires exhaustion of all intra-agency
appeals mandated either by statute or by agency
rule[.]”). Courts will also “regularly”
decline to hear issues not raised in the administrative
proceedings when an agency's regulations require issue
exhaustion in administrative appeals. Id. Requiring
issue exhaustion prevents plaintiffs from bypassing the
administrative scheme. Id.; Gonzalez v.
Dep't of Homeland Security, 508 F.3d 1227, 1234 (9th
Cir. 2007). Courts have also required issue exhaustion in the
absence of a statute or regulation. Sims, 530 U.S.
at 108. As Sims explains, judicially-imposed issue
exhaustion is analogous to the rule that appellate courts
will not consider arguments not raised before trial courts,
because it allows all parties to offer all the evidence
without being surprised on appeal by a final decision based
on issues for which they have had no opportunity to introduce
evidence. Id. at 108- 09 (quoting Hormel v.
Helvering, 312 U.S. 552, 556 (1941)). Exhaustion also
“serves the twin purposes of protecting administrative
agency authority and promoting judicial efficiency.
McCarthy v. Madigan, 503 U.S. 140, 145 (1992),
superseded by statute on other grounds, as recognized in
Booth v. Churner, 532 U.S. 731, 740 (2001).
recognizes that agencies “ought to have primary
responsibility for the programs that Congress has charged
them to administer, ” and allows agencies “the
opportunity to correct [their] own errors.”
Id. “Exhaustion concerns apply with particular
force when the action under review involves exercise of the
agency's discretionary power or when the agency
proceedings in question allow the agency to apply its special
expertise.” Id. Exhaustion principles are also
of special concern when flouting of administrative process
would “weaken an agency's effectiveness by
encouraging disregard of its procedures.” Id.
are instances where issue exhaustion is not desirable, but
“[e]xceptions to exhaustion requirements are usually
limited, and apply only in extraordinary circumstances, such
as, when the arbitral process would be futile or would cause
the plaintiff irreparable injury.” Bd. of Trustees
of the Const. Laborers' Pension Trust for So. Ca. v. M.M.
Sundt Const. Co., 37 F.3d 1419, 1420-21 (9th Cir. 1994).
Another such instance is when administrative proceedings are
not adversarial in nature. Sims, 530 U.S. at 109-10
(“Where the parties are expected to develop the issues
in an adversarial administrative proceeding, it seems to us
that the rationale for requiring issue exhaustion is at its
greatest.”). Courts have also found exceptions when
requiring resort to the administrative remedy would cause
undue prejudice to subsequent court actions, when there is
doubt the agency can grant effective relief, and when an
administrative body is “biased or has otherwise
predetermined the issue before it.” McCart ...