Hodel, Sec. of the Interior v. Irving

In the late 19th century, Congress enacted a series of laws dividing the ownership of Indian reservations. Under those laws, portions of the reservations were allotted to individual tribe members with restrictions on how they could dispose of the property: the tribe members could dispose of their property interests by will in accordance with regulations promulgated by the Secretary of the Interior (Defendant); otherwise the interests would pass to the tribe members’ descendants. The laws did not work as Congress had intended. The property ownership interests became divided among increasing numbers of heirs in increasingly complex ways. Because most of the properties were rented out and the rent needed to be divided proportionally among the owners, the administrative costs skyrocketed. For example, one Sioux tribe averaged 196 owners per allotted tract of land, and many owners received only pennies per year in rent because their shares were so small. In 1983, Congress passed the Indian Land Consolidation Act, which provided that all ownership interests constituting less than two percent of the area of a tract or earning less than $100 in the previous year would escheat (pass) to the tribe when the owner died. Several members of the Oglala Sioux tribe (Plaintiffs) sued the Defendant, claiming that the statute effected takings without just compensation, in violation of the Fifth Amendment. The district court ruled the Act constitutional. This was reversed by the court of appeals on the grounds that controlling disposition of the property at death represented a taking. The Secretary appealed to the Supreme Court.