519 U.S. 234 (1997)
In the late Nineteenth Century, Congress initiated an Indian land program that authorized the division of communal Indian property.1 Pursuant to this allotment policy, some Indian land was parcelled out to individual tribal members.2 Lands not allotted to individual Indians were opened to nonIndians for settlement.3 Allotted lands were held in trust by the United States or owned by the allottee subject to restrictions on alienation.4 On the death of the allottee, the land descended according to the laws of the State or Territory in which the land was located.5 In 1910, Congress also provided that allottees could devise their interests in allotted land.6
The allotment policy quickly proved disastrous for the Indians.7 The program produced a dramatic decline in the amount of land in Indian hands.8 As allottees passed their interests on to multiple heirs, ownership of allotments became increasingly fractionated, with some parcels held by dozens of owners.9 Several factors augmented the problem.10 Indians often died without wills, so many interests passed to multiple heirs.11 Congress' allotment Acts subjected trust lands to alienation restrictions that impeded holders of small interests from transferring those interests.12 Indian lands were not subject to state real estate taxes, which ordinarily serve as a strong disincentive to retaining small fractional interests in land.13 The fractionation problem proliferated with each succeeding generation as multiple heirs took undivided interests in allotments.14
In 1983, Congress adopted the ILCA in part to reduce fractionated ownership of allotted lands.15 Section 207 of the ILCA prohibited the descent or devise of small fractional interests in allotments.16 Instead of passing to heirs, such fractional interests would escheat to the tribe.17 Congress defined the targeted fractional interest as one that both constituted 2 percent or less of the total acreage in an allotted tract and had earned less than $100 in the preceding year.18 Section 207 made no provision for the payment of compensation to those who held such interests.19
In 1984, Congress amended section 207 while Irving was still pending.20 Amended section 207 looks back five years instead of one to determine the income produced from a small interest.21 It creates a rebuttable presumption that the income stream will continue.22 Amended section 207 permits devise of an otherwise escheatable interest to any other owner of an undivided fractional interest in the same parcel.23 Tribes are authorized to override the provisions through adoption of their own codes governing disposition of fractional interests, subject to approval by the Secretary of the Interior.24
William Youpee, an enrolled member of the Sioux and Assiniboine Tribes of the Fort Peck Reservation in Montana, died testate in October 1990.25 His will devised his several undivided interests in allotted trust lands on the Fort Peck, Standing Rock, and Devils Lake Sioux Reservations in Montana and North Dakota to respondents, all enrolled tribal members.26 The interests were valued together at $1,239.27 Each interest was devised to a single descendant.28 Youpee's will thus perpetuated existing fractionation but did not splinter ownership further.29 In 1992, an Administrative Law Judge in the Department of the Interior found that interests devised to each of the respondents fell within amended section 207 and should escheat to the tribal governments.30 Respondents appealed the order to the Department of the Interior Board of Indian Appeals.31 The Board dismissed the appeal because it lacked jurisdiction over the constitutional claim.32 Respondents then filed suit in the United States District Court for the District of Montana, naming the Secretary of the Interior as defendant.33 The District Court granted declaratory and injunctive relief.34 The Court of Appeals for the Ninth Circuit affirmed.35 The Supreme Court granted certiorari on the petition of the United States.36
Whether amended section 207 of the Indian Land Consolidation Act effects a taking of private property without just compensation in violation of the Fifth Amendment?37
A regulation effects a taking under the Fifth Amendment when it works a complete abrogation of the rights of descent and devise, as determined by considering its economic impact, effect on investment-backed expectations, and the character of the governmental action under the Penn Central test applied in Hodel v. Irving.38
Yes. Amended section 207 of the Indian Land Consolidation Act effects a taking of private property without just compensation. The provision continues to severely restrict the right of an individual to direct the descent of his property.39 Devise is allowed only to a very limited group of current owners of an undivided fractional interest in the same parcel.40
William Youpee's will devised each fractional interest to a single descendant without further splintering ownership.41 The economic impact remains significant because the provision assesses income generation rather than the value of the land itself.42 The interests at issue were valued at $1,239.43 The character of the regulation is extraordinary because it abolishes descent and devise even when the transfer would not increase fractionation.44
This mirrors the infirmity identified in the original provision.45
Amended section 207 effects a taking of private property without just compensation in violation of the Fifth Amendment.46
Related opinions on this issue
Section 207 of the Indian Land Consolidation Act did not effect an unconstitutional taking of William Youpee's right to make a testamentary disposition of his property.47 The federal government has a valid interest in removing legal impediments to the productive development of real estate.48 Congress has ample power to require the owners of fractional interests in allotted lands to consolidate their holdings during their lifetimes or to face the risk that their interests will be deemed to be abandoned.49
Youpee had notice of the requirements of section 207 because they are set forth in the United States Code.50 Youpee also had adequate opportunity to comply over more than six years before his death.51 His failure to pass on his property resulted from inadequate legal advice rather than any constitutional defect in the statute.52