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MASAYESVA V. HALE 9417031 9515915 9417032 9515029 , Docket No. 94-17022
     Filed 08 July 1997: Az: [TEXT] [FAX]


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the Hopi Tribal Council of the
Hopi Indian Tribe, for and on
                                                      No. 94-17022
behalf of the Hopi Indian Tribe,
                                                      D.C. No.
ALBERT HALE, President of the
Navajo Nation; NAVAJO NATION,

the Hopi Tribal Council of the
Hopi Indian Tribe,
                                                      Nos. 94-17031
                                                      D.C. No.
ALBERT HALE, President of the
Navajo Nation; NAVAJO NATION;


the Hopi Tribal Council of the
Hopi Indian Tribe,
                                                      Nos. 94-17032
                                                      D.C. No.
ALBERT HALE, President of the
Navajo Nation; NAVAJO NATION;

Appeals from the United States District Court
for the District of Arizona
Earl H. Carroll, District Judge, Presiding

Argued and Submitted
October 17, 1995--San Francisco, California

Filed July 8, 1997

Before: Mary M. Schroeder, Betty B. Fletcher, and
Pamela Ann Rymer, Circuit Judges.

Opinion by Judge Schroeder; Partial Concurrence and
Partial Dissent by Judge Fletcher



[blank pages]







Tim Atkeson, Arnold & Porter, Denver, Colorado, for appellant Hopi Tribe.

James M. Balogh and Dale S. Zeitlin, Zeitlin & Balogh, Phoenix, Arizona, for appellees Hale and Navajo Tribe.

Lois J. Schiffer and Katherine W. Hazard, Assistant Attorneys General, United States Department of Justice, Washington, D.C., for intervenor United States.



SCHROEDER, Circuit Judge:


These appeals are part of the long running and emotion scarring controversy between the Navajo Nation and the Hopi Tribe, in which the legislative, executive and judicial branches of the United States have all figured prominently.
The dispute has centered on the ownership, control and use of nearly 2 million acres of the Native American reservation land occupying the northeast portion of Arizona and neighboring portions of Utah and New Mexico.

These particular cases arise out of specific remedial provisions of the Navajo-Hopi Settlement Act of 1974, 25 U.S.C. S 640d, et seq. (1980) (the "Settlement Act"). The Settlement Act allows partition of reservation land that the courts had declared jointly shared by both tribes, but which had been used for grazing exclusively, and excessively, by the Navajo. The Navajo overgrazing was fostered, in large part, by the Department of Interior, which refused to grant the Hopi grazing permits while simultaneously providing the Navajo with
permits for more grazing than the land could reasonably support. Hamilton v. MacDonald, 503 F.2d 1138, 1146 n.10 (9th Cir. 1974) (explicitly affirming the district court's factual findings regarding the government's responsibility for Navajo overgrazing). In the 1974 Act, Congress expressly authorized litigation between the Hopi and the Navajo for enumerated damages; Congress intended for money to leaven the land related inequalities between the Hopi and the Navajo.

The background of this litigation has been recited in nearly 35 years of court decisions and in numerous books and periodicals.1 We provide only a summary here.

In 1882, President Chester Arthur by executive order created a 2.5 million acre reservation for the Hopi and "such other Indians as the Secretary of Interior saw fit to settle thereon." Exec. Order of Dec. 16, 1882, reprinted in, Healing v. Jones, 210 F.Supp. 125, 129 n.1 (D. Ariz. 1962), aff'd, 373 U.S. 758 (1963). Under this executive order, the Hopi Tribe enjoyed the right to use and occupy the entire reservation. By contrast, the Navajo who had already settled in the reservation did not gain any immediate rights to the land. Nevertheless, the Navajo continued to use and occupy parts of the 1882 reservation. By 1900, the Navajo population had increased to 1,826. Healing, 210 F.Supp. at 145. In 1920, it reached approximately 2,600, and by 1958, it exceeded 8,800. Id. Despite the Navajo's continued use of the reservation, their right to use the land during this period was unclear, and this caused an ongoing and bitter dispute.
1 See, e.g., Emily Benedek, The Wind Won't Know Me: A History of the Navajo-Hopi Land Dispute (1992); Jerry Kammer, The Second Long Walk: The Navajo-Hopi Land Dispute (1980); Charles Miller, The Navajo Hopi Relocation and the First Amendment Free Exercise Clause, 23 U.C.S.F. L. Rev. 97 (Fall, 1988); Healing v. Jones, 210 F.Supp. 125, 129 n.1 (D. Ariz. 1962), aff'd, 373 U.S. 758 (1963); Hopi Tribe v. Navajo Tribe, 46 F.3d 908 (9th Cir.), cert. denied, 116 S.Ct. 337 (1995); Hamilton v. MacDonald, 503 F.2d 1138 (9th Cir. 1974).


In 1958, Congress authorized litigation to settle title to the 1882 reservation. Id. at 130. A three-judge district court thus examined the question in Healing and found that the Navajo had no right to use the land until 1931, when the Interior Secretary impliedly exercised his authority under the executive order to "settle" the Navajo on the reservation. Id. at 157. The Healing court further observed that all Navajo who immigrated to the reservation between 1931 and 1958 were also impliedly "settled" in the reservation. Id. at 169. Healing held that the Hopi occupied the area known as "land district 6" exclusively, but that the two Tribes held a joint, undivided and equal interest in the remainder, known as the Joint Use Area (JUA). Id. District 6 is 600,000 acres. The JUA is greater than 1.8 million acres.

Unfortunately, the 1962 order did not resolve the dispute.
Between 1962 and 1972, the federal government continued to grant grazing permits to the Navajo, while rejecting all Hopi applications. Hamilton, 503 F.2d at 1146 n.10. At the same time, the Navajo intimidated the Hopi and mutilated their cattle. Id. Together, the federal government and the Navajo excluded the Hopi from what Healing had declared a "joint use area."

The Hopi thus brought a supplemental action in which they obtained an order of compliance and a writ of assistance enforcing the Healing decision. Our decision affirming the order and the writ, Hamilton, 503 F.2d 1138, documents in greater detail the exclusion of the Hopi from the JUA. In Hamilton, we noted that although the permits enabled the Navajo only to eke out an existence, terrible and destructive overgrazing occurred nonetheless; the carrying capacity of the range was simply insufficient. Id. at 1145 (JUA is "an overgrazed, harsh and inhospitable area which yields little above a subsistence living").

The Hamilton order required the Navajo to, among other things, reduce its livestock and to allow the Hopi to share the

land. Id. at 1142 n.2. It also required the federal government to cancel all grazing permits and issue new ones, without giving either the Hopi or the Navajo permits for more than their half of the land's carrying capacity. Id. Additionally, the order required the government to adopt a plan to achieve the broad goals of the compliance order, including restoration of the range, within 90 days. Id. Both the government and the Navajo failed to do as ordered. In 1974, the Navajo were held in contempt of court. Sekaquaptewa v. MacDonald, No. Civ. 579 PCT (JAW) (D. Ariz. May 29, 1974), aff'd, 544 F.2d 396 (9th Cir. 1976), cert. denied, 430 U.S. 931 (1977). At that time, the Navajo's livestock exceeded, by approximately seven times, the JUA's carrying capacity. Id. at 3-4.

Against this background, Congress in 1974 passed the Settlement Act, authorizing partition by court order in the event mediation failed, which it did. A court order of partition was entered, and after appeal and remand, see Sekaquaptewa v. MacDonald, 575 F.2d 239 (9th Cir. 1978), was reconfirmed.

The Settlement Act itself called for partition to achieve as equal a division as was practicable, 25 U.S.C. S 640d-5(d), while at the same time expressly directing that population centers should not be divided, 25 U.S.C. S 640d-5(b). The legislation also called for measuring the value of the land, for purposes of division, as if the grazing capacity were restored.
25 U.S.C. S 640d-5(d). In an effort to adjust any imbalance that might result from an unequal division, and to compensate the Hopi for both past exclusion from grazing the land and damage done to the land by Navajo overgrazing, Congress authorized several actions for money damages. So that the Hopi and the Navajo could sue one another and join the United States as a party, Congress waived immunity for all three sovereigns. 25 U.S.C. S 640d-5.

In Hopi Tribe v. Navajo Tribe, 46 F.3d 908 (9th Cir.) (the "rent case"), cert. denied, 116 S.Ct. 337 (1995), we affirmed a judgment awarding the Hopi rent, pursuant to S 640d-15(a)


of the Settlement Act, for the post-partition presence of Navajo homesites on the Hopi half of the partitioned land. We also remanded the Hopi's award of rent for the post-partition (1979 to 1984) grazing of Navajo cattle and sheep on the Hopi half of the partitioned land, so that the district court could review the merits of the Navajo challenge to the award.

We now have three Settlement Act cases before us on appeal. We review first a judgment entered in favor of the Hopi, pursuant to S 640d-17(a)(2), for the "fair value of the grazing and agricultural use" by the Navajo of the Hopi's one-half interest in the JUA from 1962 to 1979; this is known as the "use case." The second appeal, known as the "owelty case", arises under S 640d-5(d), in which Congress authorized an action for the difference in value between the land awarded to the Hopi Tribe (the HPL) and the land awarded to the Navajo Nation (the NPL). The district court ruled the division was roughly equal and entered judgment denying any relief. In the third appeal, we consider an action pursuant toS 640d-17(a) (3) by the Hopi against both the United States and the Navajo to recover damage to the JUA caused prior to partition (the "damage case"). In the damage case, the district court entered judgment against the Navajo but refused to hold the federal government liable, finding that the United States had not acted unreasonably in its efforts to protect the JUA from damage.

The Navajo appeal the judgment in the use case and the Navajo and the Hopi both appeal the judgments in the owelty and damages cases. We affirm the use case in its entirety, and in large part, we affirm the owelty and damages cases as well.
We discuss each case separately.


II. THE USE CASE, No. 94-17022

A. Background

The district court awarded the Hopi $18,187,132 for the Navajo's combined grazing and agricultural use of the Tribe's one-half interest in the JUA from 1962 to 1979. The case was litigated pursuant to 25 U.S.C. S 640d-17(a)(2), which allowed the Hopi to recover one-half the "fair value of the [Navajo] grazing and agricultural use" between the time of the JUA's creation (Healing decision of September 28, 1962) and the partition of the JUA on April 18, 1979. 2

In this appeal, the Navajo's principal contention is that the Settlement Act itself is unconstitutional because it divests the Navajo of a vested property right to graze animals on the entire JUA. Additionally, the Navajo, for the first time on appeal, contend that the district court lacked jurisdiction because the determination of the fair value in this case constitutes a non-justiciable political question. The Navajo also
2 S 640d-17. Actions for accounting, fair value of grazing, and claims for damages to land

       (a) Authorization to commence and defend actions in District Court

Either tribe, acting through the chairman of its tribal council, for and on behalf of the tribe, including all villages, clans, and individual members thereof, is hereby authorized to commence or defend in the District Court an action or actions against the other tribe for the following purposes if such action or actions are not settled pursuant to section 640d-2 or 640d-3 of this title:

       . . .

(2) for the determination and recovery of the fair value of the grazing and agricultural use by either tribe and its individual members since the 28th day of September 1962 of the undivided one-half interest of the other tribe in the lands within the joint use area, together with interest at the rate of 6 per centum per annum compounded annually, notwithstanding the fact that the tribes are tenants in common of such lands . . .


challenge several evidentiary rulings and factual findings concerning the valuation of their grazing and agricultural use. We affirm the judgment.

B. Constitutional Challenges

Relying on the due process clause of the Fifth Amendment, the Navajo argue that the Settlement Act undermines their property rights, as secured by the judgment in Healing. The Navajo also suggest that the statute is a retroactive impairment of their rights under the Contracts Clause of Article I.
Whether the statute is constitutional is a question of law reviewed de novo, and as we have recently said, a court should invalidate a statutory provision "only for the most compelling reasons." Gray v. First Winthrope Corp., 989 F.2d 1564, 1567 (9th Cir. 1993) (internal quotations omitted).

[1] The common flaw in all of the Navajo's constitutional arguments is that the Navajo never had, either by court decree or contractual promise, an unfettered right to use the JUA to the exclusion of the Hopi. Rather, the Healing decision granted the Hopi and the Navajo joint and undivided interests in the JUA. Therefore the statute is a legitimate effort by Congress to implement the Healing decree, and to rectify wrongful conduct that has occurred in the wake of Healing.

[2] The Navajo next argue, for the first time on appeal, that the district court lacks jurisdiction to determine the "fair value" of "grazing and agricultural use" because this is a non-justiciable political question. Assuming the Navajo did not waive the political question issue, their contention is without merit. The Navajo position boils down to an assertion that the determination of "fair value" is not an issue that courts are capable of resolving. See Baker v. Carr, 369 U.S. 186, 217, 82 S.Ct. 691, 710 (1962) (issue may be a non-justiciable political question if it lacks judicially discoverable and manageable standards for resolution). The Navajo, however, recognize that courts frequently address the concept of "fair


market value." See, e.g., Eales v. Environmental Lifestyles, Inc., 958 F.2d 876, 880 (9th Cir. 1992), (calculating "fair market value" of architectural plans); cert. denied, 113 S.Ct. 605 (1992) Doherty v. C.I.R., 16 F.3d 338 (9th Cir. 1994) (calculating "fair market value" of painting); Seravalli v. U.S., 845 F.2d 1571 (Fed. Cir. 1988) (estimating "fair market value" of real property). We see no material difference between evaluating "fair value," as set forth in the Settlement Act, and evaluating "fair market value," the more common standard. See also Koohi v. United States, 976 F.2d 1328, 1332 (9th Cir. 1992) ("damage actions are particularly judicially manageable"), cert. denied, 508 U.S. 960 (1993).

[3] For similar reasons, we are not swayed by the argument that the "fair value" determination is non-justiciable because it calls for a "policy determination of a kind clearly for non-judicial discretion." See Baker, 369 U.S. at 217, 82 S.Ct. at 710. Congress already made the policy decision that the Navajo should compensate the Hopi for excluding them from the JUA. What Congress left for the courts, calculating "fair value," is within the expertise of the judiciary.

[4] Finally, the Navajo, again citing Baker, maintain that "the determination [of fair value] is impossible without expressing a lack of `respect' due" the Executive Branch because the Secretary of the Interior decided not to charge the Navajo for grazing privileges. This argument is misplaced. As the Hopi point out, there is no indication that the Executive Branch ever took the position that the Navajo need not pay the Hopi for their extraordinary overgrazing of the JUA. The Executive Branch's decision that the Navajo need not pay the federal government for grazing permits is consistent with the Congressional mandate that the Navajo compensate the Hopi for overgrazing. In sum, we reject each of the Navajo's constitutional challenges.

C. Evidentiary challenges to expert testimony

The Navajo contest the district court's admission of Hopi expert Dr. John Workman's testimony regarding the fair value

of Navajo grazing (as opposed to agricultural growth) on the JUA. They argue that Workman lacked sufficient foundation to support his testimony, since he is not a real estate appraiser but an economist. They further contend that his methodology did not satisfy the test for expert scientific testimony in Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786 (1993). We review a decision to admit expert testimony for abuse of discretion. Dang Vang v. Vang Xiong X. Toyed, 944 F.2d 476, 480 (9th Cir. 1991)."A trial court has broad discretion to admit and exclude expert testimony [under Fed. R. Evid. 702] and its decision will be sustained unless it is `manifestly erroneous.' " Id. (citation omitted).

[5] The court was well within its discretion to conclude that Dr. Workman is qualified to offer an opinion regarding the fair value of Navajo grazing. Dr. Workman has been a professor of Range Economics for twenty-five years, teaching courses in "rangeland appraisal" and "range economic analysis." He has written a textbook on range economics and dozens of peer-reviewed publications on subjects related to his testimony. He has been qualified as an expert on range economics in a case where he gave similar valuation testimony. See White Mountain Apache Tribe v. United States, 11 Cl. Ct. 614, 665-66 (1987) (qualifying Dr. Workman as "an expert in appraisal and range management" and characterizing his proposed measure of damages as "especially persuasive"), aff'd, 5 F.3d 1506 (Fed. Cir. 1993), cert. denied, 114 S. Ct. 1538 (1994).

[6] The district court thoughtfully examined the methodology and opinion of each expert, and accepted Dr. Workman's measure of damages only after making appropriate downward adjustments. The Navajo's reliance on Daubert is misplaced because Dr. Workman's testimony derives from his relatively straightforward application of range economics, rather than on a novel scientific theory. See Dang Vang, 944 F.2d at 482.

[7] The Navajo also challenge the district court's decision to admit testimony from Hopi expert Robert Francy, an


appraiser, on the value of corn grown on the JUA. Francy formulated his opinion from what others told him about corn prices. The Navajo argue that this constituted an improper use of inadmissible hearsay. However, the Navajo failed to raise any timely, specific hearsay objection to the expert's testimony and thus waived their right to assign error on appeal. See Fed. R. Evid. 103. The record, moreover, reveals that no statements from third parties were admitted for their truth. The third party statements only provided the Hopi expert with background information about corn sales, from which he fashioned his testimony. Such reliance is permissible, since experts in the field, i.e. appraisers, regularly go to third parties for sales figures, as the Hopi expert did here. See Fed. R. Evid. 703.

D. Challenges to the district court's valuation calculations

The district court separately valued Navajo "agricultural" use and "grazing" use, as contemplated by the statute. 25 U.S.C. S 640d-17(a)(2). The Navajo challenge the agricultural use valuation on two grounds. First, they argue that the district court clearly erred when it adopted Hopi expert Robert Francy's conclusion that the Navajo had actually farmed the JUA between 1962 and 1979. They contend that Francy's conclusion was based only on speculation. However, the record shows that Francy's conclusion was premised on two reports from the Bureau of Indian Affairs (BIA), aerial photographs, maps, documents, and personal spot checks. The court did not clearly err. Second, the Navajo contend that there was insufficient evidence to support a finding that there was a commercial market for the approximately 200,000 pounds per year of corn attributable to Navajo farming. This argument, however, spuriously assumes that the corn consumed by the Navajo themselves lacks value. The evidence clearly established that the market for most of the corn was in the nature of personal consumption, and only a small percentage of the


crops were sold commercially. Thus, the evidence supported a finding that there was a market for the corn.

[8] The Navajo challenge to the district court's calculation of the value of Navajo grazing on the JUA is slightly more complicated than their other contentions, but no more valid.
First, the Navajo contend that the value of their grazing on the JUA should be computed from the land's carrying capacity, i.e., the amount of grazing the land can sustain without irreparable damage. This is how ranch land is typically valued for leasing purposes. Because longtime Navajo overgrazing drastically decreased the carrying capacity of the JUA, the rental value of the land between 1962 and 1979 was only one-fifth the typical rate in Arizona. The district court thus rejected the Navajo's approach and estimated the actual amount of grazing from the number of Navajo animals on the JUA. At times, actual grazing by Navajo livestock exceeded the carrying capacity by approximately seven-fold. The district court then valued the Navajo's use of the land by reference to the actual amount of Navajo grazing. The Navajo argue that in so doing, the district court improperly charged them more than they would have paid on the open market, as the open market rate is pegged to carrying capacity, a lower figure. As the Hopi point out, consumption beyond the carrying capacity should exact a premium charge. The district court did not clearly err when it charged the Navajo for this excessive use.

[9] Second, the Navajo argue that the court overestimated the number of animals on the JUA. The district court counted the number of animals in units of cattle. For most years, the court converted sheep to cattle using a ratio of five sheep per one head of cattle, and adjusted downward for low animal weight. The court did not make these adjustments for 1966, 1968 through 1971 and 1974, because it lacked information about the number of sheep and the weight of cattle on the range. The Navajo contend that the district court should have made the 5:1 conversion and the weight adjustment during these years because it had sufficient information. The record,


however, reveals that the court did not have precise sheep counts during those years, and therefore could not make an accurate conversion. In addition, the court had information on only three cattle sales for those years, and therefore could not accurately adjust downward for low animal weight. The court's estimates of the number of animals on the JUA were not clearly erroneous.

[10] Third, the Navajo argue that the district court erroneously valued grazing by using adjusted private Arizona lease rates instead of federal land lease rates. There were, however, no federal rates between 1962 and 1972; therefore, rates for those years could be estimated only through statistical projections. Moreover, federal rates reflect policy decisions, not market dynamics. The district court's use of private Arizona rates was not clearly erroneous. We affirm the district court's award to the Hopi in the use case.

III. THE OWELTY CASE, Appeal Nos. 94-17031,

A. Background

Owelty is a sum of money paid by one former joint tenant to another after a partition results in an unequal division of their land; the owelty compensates the former tenant who received the lesser value for the disparity. See Black's Law Dictionary (4th Ed.); 68 C.J.S. Partition S 142 at 232-3 (1950 & 1988 Supp.); 59A Am.Jur.2d Partition SS 2, 253 (1987). In this owelty case, the district court held that after partition there was no statistically meaningful difference in value between the Hopi half of the land and the Navajo half. Thus, it ordered no owelty award.

[11] The owelty action was brought pursuant to S 640d-
5(d) of the Settlement Act, which authorizes the district court to award damages for any difference in value between the halves of the partitioned land with "improvements and graz-


ing capacity fully restored."3 The Hopi appeal from the judgment, arguing that the district court undervalued the Navajo land because it misinterpreted the owelty statute. The Hopi also contend that they are entitled to prejudgment interest, if they succeed on their claim for owelty.

In the cross-appeal, the Navajo assert that the Hopi should be judicially estopped from seeking owelty. Moreover, the Navajo want an owelty payment from the Hopi, and argue that the Hopi got the better land. We hold that the district court erred in its interpretation of the statute and remand for a determination of the amount of owelty due the Hopi. We affirm the district court's denial of owelty to the Navajo. We further hold that the Hopi are not judicially estopped from seeking owelty, and that they must receive prejudgment interest on it.

B. Improvements

The principal legal contention we must resolve is the Hopi's argument that the district court misconstrued the statutory language directing that the value of the partitioned land "shall be based on not less than its value with improvements
to be continued
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