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Youpee v. Babbitt

 

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In Hodel v. Irving,[1] the U.S. Supreme Court declared section 207 of the Indian Land Consolidation Act (ILCA)[2] constituted an unconstitutional taking. Congress enacted the ILCA to prevent the splintering of land allotments as successive generations came to hold the land. Section 207, the escheat provision, provided that undivided fractional interests in land escheat to the tribe if the interest was two percent or less of the total tract and had earned the owner less than one hundred dollars in the year preceding the disposition. The U.S. Supreme Court held this provision unconstitutional because the value of the land itself may not be de minimus, even if the interest is. Abrogating a decedent’s right to transfer land destroyed the essential and valuable rights to exclude others and to pass property to one’s heirs.

While Hodel was pending remand, Congress amended section 207 in three ways: 1) the definition of “fractional interest” was narrowed to two percent or less of a parcel that did not earn one hundred dollars in any of the five years preceding the decedent’s death; 2) landowners may devise their interest to any owner of an undivided fractional interest in the same land; and 3) subject to approval by the Secretary of the Interior, the tribe may adopt its own laws to govern dispositions of interests in danger of escheating.

William Youpee died testate in 1990. He possessed undivided interests of two percent or less in allotted trust lands covered by the ILCA. The plaintiffs were Mr. Youpee’s potential heirs. The Department of the Interior Administrative Law Judge found Mr. Youpee’s interests should escheat to the tribe because the designated devisees were not owners of existing undivided shares of the allotted lands.

The potential heirs appealed to the district court, arguing that the amended section 207 of the ILCA is unconstitutional. The district court granted the potential heirs’ motion for summary judgment, stating that section 207 violates the Takings Clause of the Fifth Amendment. The government appealed.

The government argued the amended section 207 does not violate the Takings Clause because it only partially abrogates an individual’s right to devise land. However, the plaintiffs claimed that limiting the class of devisees who can take prohibits Native American landowners from conveying their land by descent and devise.

The Ninth Circuit applied the U.S. Supreme Court’s Hodel test, looking at 1) the economic impact of the statute; 2) the statute’s interference with reasonable investment-backed expectations; and 3) the character of the governmental action. The court determined the amended statute would still have a significant economic impact because the statute takes into account only the income generated from the land, not the value of the land itself. The decedent’s investment-backed expectations are not implicated by the ILCA. In Hodel dicta, the U.S. Supreme Court indicated that some restrictions on the class of devisees could be constitutional. However, the amended section 207 restricts the eligible devisees so much that it may not even include a lineal descendant. Therefore, many decedents will be unable to devise land to their heirs. Because of this, the Ninth Circuit ruled the amended section unconstitutional.


[1]481 U.S. 704 (1987).

[2]25 U.S.C. § 2206 (1994).

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