DONALD P. HODEL, SECRETARY OF THE INTERIOR, APPELLANT V. MARY IRVING, ET AL. No. 85-687 In the Supreme Court of the United States October Term, 1985 On Appeal from the United States Court of Appeals for the Eighth Circuit Jurisdictional Statement PARTIES TO THE PROCEEDING The appellant is the Secretary of the Interior. The appellees are Mary Irving, Patrick Pumpkin Seed, and Eileen Bissonette, as guardian for Duane Cross, Miguel Cross, Hope Cross, Anthony Cross, and Faith Cross. The appellees sought to represent a class of all heirs and potential heirs affected by Section 207 of the Indian Lan Consolidation Act of 1983. TABLE OF CONTENTS Questions Presented Parties to the Proceeding Opinions below Jurisdiction Constitutional and statutory provisions involved A. Historical Background B. The statutory scheme C. The proceedings in this case The questions are substantial Conclusion Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I OPINIONS BELOW The opinion of the court of appeals (App., infra, 1a-17a) is reported at 758 F.2d 1260. The opinion of the district court (App., infra, 21a-25a) is unreported. JURISDICTION The judgment of the court of appeals (App., infra, 18a) was entered on March 29, 1985, and the petition for rehearing was denied on June 6, 1985 (App., infra, 19a). The notice of appeal to this Court was filed in the United States Court of Appeals for the Eighth Circuit on July 2, 1985 (App., infra, 20a). By order dated August 29, 1985, Justice Blackmun extended the time within which to docket the appeal to and including October 15, 1985. The jurisdiction of this Court is invoked under 28 U.S.C. 1252. CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED 1. The Just Compensation Clause of the Fifth Amendment to the United States Constitution provides in pertinent part: nor shall private property be taken for public use, without just compensation. 2. a. The whole of the Indian Land Consolidation Act of 1983, Pub. L. No. 97-459, Tit. II, 98 Stat. 2517-2519, 25 U.S.C. 2201 et seq., is reproduced at App., infra, 27a-31a, and the amendments to that Act made by Pub. L. No. 98-608, 98 Stat. 3171 et seq., are reproduced at App., infra, 32a-36a. b. Section 207 of the Indian Land Consolidation Act, as originally enacted and as codified at 25 U.S.C. 2206, provides: No undivided interest in any tract of trust or restricted land within a tribe's reservation or otherwise subject to a tribe's jurisdiction shall descendent /1/ by intestacy or devise but shall escheat to that tribe if such interest represents 2 per centum or less of the total acreage in such tract and has earned to its owner less than $100 in the preceding year before it is due to escheat. /1/ So in original. Probably should be "descend". Section 207 of the Indian Land Consolidation Act, 25 U.S.C. 2206, as amended by the Act of October 30, 1984, Pub. L. No. 98-608, Section 1, 98 Stat. 3173, provides: (a) No undivided interest in any tract of trust or Restricted land within a tribe's reservation or otherwise subject to a tribe's jurisdiction shall descend by intestacy or devise but shall escheat to that tribe if such interest represents 2 per centum or less of the total acreage in such tract and is incapable of earning $100 in any one of the five years from the decedent's death. Where the fractional interest has earned to its owner less than $100 in any one of the five years before the decedent's death, there shall be a rebuttable presumption that such interest is incapable of earning $100 in any one of the five years following the death of the decedent. (b) Nothing in this section shall prohibit the devise of such an escheatable fractional interest to any other owner of an undivided fractional interest in such parcel or tract of trust or restricted land. (c) Notwithstanding the provisions of subsection (a), any Indian tribe may, subject to the approval of the Secretary, adopt its own code of laws to govern the disposition of interests that are escheatable under this section, and such codes or laws shall take precedence over the escheat provisions of subsection (a), provided, the Secretary shall not approve any code or law that fails to accomplish the purpose of preventing further descent or fractionation of such escheatable interests. QUESTIONS PRESENTED 1. Whether Section 207 of the Indian Land Consolidation Act of 1983, 25 U.S.C. 2206, which provides that certain de minimis undivided fractional interests held by individual Indians in trust or restricted allotments shall not descend by intestacy or devise, but instead shall escheat to the tribe, results in a taking of private property without the payment of just compensation, in violation of the Fifth Amendment to the Constitution. 2. Whether the court of appeals erred in holding that Section 207 of the Indian Land Consolidation Act, as amended by Congress in 1984 (Pub. L. No. 98-608, 98 Stat. 3171 et seq.), also is unconstitutional, even though the amended version does not apply to any of the interests in allotments covered by appellee' decedents. STATEMENT This case concerns the constitutionality of Section 207 of the Indian Land Consolidation Act of 1983, 25 U.S.C. 2206, which was enacted to address the numerous problems created by the increasingly fractionated ownership of Indian allotments. Section 207 provides for the escheat to the tribe concerned of certain de minimis undivided interests in allotments upon the death of the owner of such an interest. Before stating the facts of the case, we shall first describe the historical background and explain the original and amended versions of Section 207. A. Historical Background 1. The allotment policy commenced on a broad scale with the General Allotment Act of 1887, ch. 119, 24 Stat. 388 et seq., which was followed by a number of statutes providing for the allotment of land on individual reservations. See Solem v. Bartlett, No. 82-1253 (Feb. 22, 1984), slip op. 3-5; Mattz v. Arnett, 412 U.S. 481, 496-497 (1973). The particular statute involved here, the Act of March 2, 1889, ch. 405, 25 Stat. 888 et seq., provided for the division of the Great Reservation of the Sioux Nation into separate reservations and the allotment of land on those reservations to individual Indians. Under the allotment acts, individual members of the tribe typically received an allotment of 160, 80, or 40 acres, depending upon their marital status and age and the type of land involved, and the remaining reservation land was to be opened for settlement by non-Indians. General Allotment Act, Section 1, 24 Stat. 388. This pattern was followed in the Sioux statute. Section 8, 25 Stat. 890. In order to protect the allottees against improvident alienation of their land and to preserve for a generation its tax-exempt status, Section 5 of the General Allotment Act and Section 11 of the Sioux allotment statute provided that the allotted parcel was to be held in trust by the United States for a period of 25 years or such further period as the President might prescribe. 24 Stat. 389; 25 Stat. 891. See United States v. Mitchell, 445 U.S. 535, 540-544 (1980). The allotment policy ultimately was repudiated by Congress in 1934 in the Indian Reorganization Act (IRA), ch. 576, 48 Stat. 984, 25 U.S.C. 461 et seq. See Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463, 479 (1979 ; Mattz v. Arnett, 412 U.S. at 496 n. 18. In the IRA, Congress prohibited any further allotment of reservation lands (Section 1, 25 U.S.C. 461), extended indefinitely the trust or restricted period of existing allotments (Section 2, 25 U.S.C. 462), and provided for the restoration of surplus unallotted lands to tribal ownership (Section 3(a), 25 U.S.C. 463(a)). 2. The length of the period during which allotments were to be held in trust made it necessary for Congress to provide for the disposition of an allotted parcel upon the death of the original allottee. Thus, Section 5 of the General Allotment Act and Section 11 of the Sioux allotment statute provided that, if the original allottee should die, the land would continue to be held in trust for "his heirs according to the laws of the State or Territory where such land is located" (24 Stat. 389, 25 U.S.C. 348; 25 Stat. 891). These statutory provisions had the effect, insofar as allotted lands were concerned, of preempting the inherent right of an Indian tribe to regulate the descent and distribution of the property of its members. Jones v. Meehan, 175 U.S. 1, 28-32 (1899). See F. Cohen, Handbook of Federal Indian Law 139 (1942). In Section 1 of the Act of June 25, 1910, ch. 431, 36 Stat. 855, Congress directed the Secretary of the Interior to ascertain the heirs of a person for whom an allotment is held in trust. 25 U.S.C. 372. In Section 2 of the same Act, Congress also authorized any person age 21 or older who has an interest in a trust or restricted allotment or other property held in trust by the United States to dispose of such property by will, in accordance with regulations prescribed by the Secretary of the Interior. 25 U.S.C. 373. As a matter of practice under these statutory provisions, when the original allottee died, each of his heirs or devisees received an undivided fractional interest in the whole allotment. Each such fractional interest in turn was further subdivided upon the death of the heir or devisee who owned it. As a result, after several generations, ownership or individual allotments often became extremely fragmented. The problems associated with this trend were explored at least as early as 1928, in the Meriam Report /1/ and by Felix Cohen in 1942 in his Handbook on Federal Indian Law (F. Cohen, supra, at 229-230). Comprehensive studies of the problem were conducted again in 1960 by the responsible committees in both the House and Senate. /2/ See generally S. Rep. 98-632, 98th Cong., 2d Sess. 3 (1984); Comment, Too Little Land, Too Many Heirs -- The Indian Heirship Land Problem, 46 Wash. L. Rev. 709, 712-719 (1971) (hereinafter cited as Too Little Land). By 1960, one-half of the approximately 12 million acres of trust or restricted allotments was held by more than one heir, and one-half of that total in turn was held by more than six heirs. There were numerous examples in which 20 or 30 heirs held undivided interests in a single tract, and instances of more than 100 co-owners were not unheard-of. See S. Rep. 98-632, supra, at 3; Too Little Land 712; Indian Fractionated Land Problems: Hearings on H.R. 11113 Before the Subcomm. on Indian Affairs of the House Comm. on Interior and Insular Affairs, 89th Cong., 2d Sess. 13-14 (1966) (hereinafter cited as 1966 Hearings). In 1984, the Senate Select Committee on Indian Affairs summarized the consequences of this land ownership pattern (S.Rep. 98-632, supra, at 3): (T)he consequences of this fractionation are (1) a complex mix of title interests to individual tracts of land, (2) limitations on the ability of individual owners to dispose of their interests in the land, (3) devaluation of individual interests because of inability to convey full title without consent of all of the heirs, (4) loss of control of rental of the property to the BIA because (of) the inability to secure agreement among all of the heirs or even to locate heirs, (5) erosion of interests of tribal members in individual tracts to non-Indians or non-member Indians, (6) inability to control the conduct of individual heirs with respect to the property due to inapplicability of laws against trespass or conversion to persons ow(n)ing any undivided interest in property. In addition, allotments owned by numerous heirs often cannot be put to their most economic use, and some tracts are left in a state of quasi-abandonment because of difficulties experienced by the Bureau of Indian Affairs (BIA) in obtaining agreement of the owners to lease the land. H.R. Rep. 97-908, 97th Cong., 2d Sess. 10-11, 13 (1982). By the same token, from the BIA's perspective, the fractionated ownership creates substantial administrative problems by increasing the number of recordings required to maintain official land records, the number of probate proceedings to be examined in determining current title status, and the amount of work involved in responding to inquiries concerning family histories in connection with the ownership of undivided interests. S.Rep. 98-632, supra, at 3. The computation of large common fractions for determining the ownership of undivided interests also has become far more complicated. Ibid. Indeed, the cost of maintaining such records often far exceeds the income realized from the fractional interest. See F. Cohen, supra, at 229; 1966 Hearings 12-16; Too Little Land 718 n.42; To Amend the Indian Land Consolidation Act of 1983: Hearings on H.J. Res. 158 Before the Senate Select Comm. on Indian Affairs, 98th Cong., 2d Sess. 6-8 (1984) (hereinafter cited as 1984 Hearings). B. The Statutory Scheme 1. Congress enacted Section 207 of the Indian Land Consolidation Act of 1983 to address the problems discussed above that are created by the increasingly fractioned ownership of allotments in heirship status. As originally enacted, Section 207 provided that an undivided interest in trust or restricted land within a tribe's reservation or subject to its jurisdiction that represents 2% or less of the total acreage of the tract and has earned its owner less than $100 in the preceding year shall not descend by intestacy or devise, but instead shall escheat to the tribe. 25 U.S.C. 2206. The purpose of this provision was to address the extremes of the problem by preventing the descent (and the resulting further fractionation of ownership) of interests in an allotment that already were "so small as to be financially meaningless" (H.R. Rep. 97-908, supra, at 11). Section 207 does not, however, affect the rights of the owner of such a de minimis interest, during his lifetime, to receive his share of the income from the property or to exercise any other incidents of ownership, such as the right to use the land in a manner consistent with the rights of other owners of undivided interests in the tract. The Secretary's instructions concerning the implementation of Section 207 (see App., infra, 37a-40a) also make clear that the owner of an interest that would be subject to escheat upon his death may avoid that consequence by purchasing sufficient additional interests in the allotment from other co-owners so that his ownership share in the overall tract will exceed the 2% level. See 25 C.F.R. 151.7. Similarly, the owner of a de minimis interest subject to escheat may convey that interest to co-owners or to his relatives pursuant to 25 C.F.R. 152.25, while reserving a life estate for himself. This would enable the owner to retain the benefits of the tract during his lifetime and to ensure that it will remain in individual ownership thereafter. /3/ A further option, if feasible, would be for the owner to apply for partition of the tract in such a way as to increase his ownership share. See 25 C.F.R. 152.33. See App., infra, 39a-40a. Moreover, Section 207 cannot be viewed in isolation. It is an integral part of a broader law that responds to a number of land ownership problems on Indian reservations. For example, Section 203 of the Act, 25 U.S.C. 2202, extends to non-IRA tribes the provisions of Section 5 of the IRA, 25 U.S.C. 465, which authorize the Secretary to acquire interests in land through purchase, relinquishment, gift, exchange, or assignment for the purpose of providing land for Indians. Section 203 therefore enables the Secretary to consolidate tribal or individual landholdings. The Act also contains three sections that grant new powers to tribes, subject to Secretarial oversight, to address land ownership problems. Under Section 204, 25 U.S.C. 2203, a tribe is authorized to adopt a land consolidation program for the elimination of the checkerboard pattern of tribal lands and tribal ownership of fractional interests in reservation lands, and the Secretary thereafter must approve any land transactions that are consistent with that plan. Section 205, 25 U.S.C. 2204, authorizes a tribe to purchase (at fair market value and subject to certain exceptions) all of the interests in a tract of reservation land with the consent of the owners of more than 50% of the total interests in that tract. Finally, in order to stem the passage of previously allotted land into non-Indian ownership, Section 206 of the Act permits a tribe, with the approval of the Secretary, to adopt an ordinance providing that non-members of the tribe or non-Indians shall not be permitted to receive an interest in trust or restricted lands by devise or descent, subject to special protections for non-member or non-Indian spouses or children. /4/ 2. In October 1984, Congress amended Section 207 as part of amendments intended to refine the operation of the Indian Land Consolidation Act in a number of respects. Pub. L. No. 95-608, 98 Stat. 3171 et seq.; App., infra, 32a-36a. The amendments to Section 207 provide still further alternatives to its escheat provisions. First, Congress relaxed the provision for automatic escheat that had been based on the income derived only in the year prior to the owner's death. The amended version of Section 207 instead provides that (i) an interest in an allotment will escheat to the tribe if it represents 2% or less of the total acreage and is incapable of earning $100 in any one of the five years after the decedent's death, and (ii) the failure of the interest to earn the decedent at least $100 in any one of the five years prior to his death gives rise to a rebuttable presumption that it is incapable of earning $100 in any one of the five years after his death. These changes were intended to account for the possibility that the income in the year immediately prior to the owner's death might have been abnormally low or that the receipt of little or no income did not accurately reflect the true value of the interest because the parcel contained valuable mineral or timber resources that were not exploited during the period in which income was measured. S. Rep. 98-632, supra, at 7, 12; 1984 Hearings 8, 17, 20, 26, 32, 33, 74-78; Amendments to the Indian Land Consolidation Act: Hearing on H.R. Res. 158 Before the Senate Select Comm. on Indian Affairs, 98th Cong., 2d Sess. 8, 29, 31, 37 (1983) (hereinafter cited as 1983 Hearings). Second, a new Subsection (b) provides that Section 207 does not prohibit the owner of an otherwise escheatable interest from devising that interest to any other owner of a fractional interest in the same tract. This exception serves the statutory goal of consolidation of fractional interests while at the same time permitting the owner of such an interest to ensure that it will remain in individual rather than tribal ownership. S. Rep. 98-632, supra, at 12. Third, a new Subsection (c) permits a tribe, with the approval of the Secretary, to adopt its own code to govern the disposition of interests that otherwise would be subject to escheat under Section 207, as long as the tribal code likewise accomplishes the purpose of preventing further descent or fractionation of escheatable interests. Such a tribal code might provide, for example, for an otherwise escheatable interest to descend by intestacy to another owner of a fractional interest in the same tract. c. The Proceedings In This Case 1.a Appellees filed this suit on October 20, 1983, in the United States District Court for the District of South Dakota challenging the constitutionality of Section 207 of the Indian Land Consolidation Act on the ground that it resulted in a taking of property without just compensation, in violation of the Fifth Amendment to the United States Constitution. The named plaintiffs, appellees herein, are Mary Irving, Patrick Pumpkin Seed, and Elaine Bissonette, as guardian for five minor children of Geraldine Poor Bear Cross. The named plaintiffs alleged that they are the potential heirs or devisees of parents (or, in one instance, an uncle) who died possessed of interests in tracts on the Pine Ridge or Rosebud Reservation that were subject to escheat under Section 207. They also sought to represent a class of all heirs and potential heirs of persons who died possessed of lands subject to escheat pursuant to Section 207. The district court held that Section 207 of the Act does not violate the Just Compensation Clause of the Fifth Amendment, and it accordingly denied appellees' motion for injunctive relief and denied as moot their motion for class certification (App., infra, 21a-26a). The district court explained that rights of succession to the property of a deceased, whether by will or by intestacy, are of statutory creation; that nothing in the Constitution prohibits a legislature from limiting, conditioning, or even abolishing the power of testamentary disposition; and that an expectation of succession to the property of a living person, whether by intestacy or devise, does not vest until the death of that person (App., infra, 22a-23a). Thus, the district court concluded that until the time of the death of their parents or uncle, appellees had only a mere expectancy of heirship, which was subject to being altered by Congress at any time, and they therefore had no vested property rights. For this reason, in the court's view, Section 207 did not result in a taking of appellees' property in violation of the Fifth Amendment. App., infra, 23a-25a. The district court also held that under the applicable standard of review enunciated by this Court in Delaware Tribal Business Committee v. Weeks, 430 U.S. 73, 85 (1977), Congress's treatment of the decedent Indians' undivided fractional interests in allotted lands was tied rationally to the fulfillment of Congress's unique obligation toward the Indians. App., infra, 24a-25a n.1. 2. The court of appeals reversed, holding Section 207 unconstitutional (App., infra, 1a-17a). a. The court of appeals first acknowledged that "Congress may alter and condition rights that have not yet vested in individual Indians" (id. at 3a-4a, citing Northern Cheyenne Tribe v. Hollowbreast, 425 U.S. 649 (1976), and United States v. Jim, 409 U.S. 80 (1972)) and that "the right to receive property by inheritance or devise does not attain the dignity of a property right entitled to the protection of the fifth amendment taking clause" (App., infra, 4a (footnote omitted)). The court therefore recognized that appellees could not claim that the mere interference with an expectancy of heirship resulted in a taking of any property rights that had become vested in them (ibid.). The court also rejected two theories by which appellees contended that they had acquired such vested rights. First, the court found "disingenuous and excessively technical" (App., infra, 5a) appellees' contention that Congress's use of the word "escheat" indicated an intent not to affect property rights that they allegedly received instantaneously upon the death of the decedent (id. at 5a-7a). In the court of appeals' view, the "sensible reading of (Section 207) is that the 1966 Congress, exercising its power as sovereign to control disposition of property at death, declared a limited class of property rights incapable of so passing" (id. at 5a (footnote omitted)). In these circumstances, the court reasoned, Congress's use of the term "escheat" is consistent with its established definition of "'(a) reversion of property to the state in consequence of a want of any individual competent to inherit'" (id. at 6a, quoting Black's Law Dictionary 488 (5th ed. 1979) (emphasis supplied by the court)). The court of appeals likewise rejected the notion that appellees gained some sort of vested interest through the language of the trust patents pursuant to which the United States originally allotted lands to individual Indians (App., infra, 7a-11a). Appellees relied on languages of the Sioux allotment statute providing that the land would be held in trust for the allottee or, in the case of his decease, for "his heirs according to the law of the State or Territory where such land is located" (id. at 8a, quoting Act of Mar. 2, 1889, Section 11, 25 Stat. 891). In the court's view, this language meant only that the trust status was to continue beyond the death of the original allottee, and it was not intended to grant a vested future interest in the heirs and subsequent generations of descendants of the original allottee (App., infra, 8a-9a). The court observed that to find such a vested future interest in the heirs of the original allottee and in their heirs would be inconsistent with the provision in the Sioux statute that state law (which is subject to change) was to govern the descent of an allotment by intestacy and with Congress's later recognition of a right in the owner of a trust or restricted allotment to devise his property to others (id. at 9a-10a, citing 25 U.S.C. 373, 464). Further, the court explained that creation of such a right would be inconsistent with the purpose of the allotment acts to convert Indian lands to the American system of individualized rather than tribal ownership (App., infra, 10a-11a). b. Although the court of appeals held that Section 207 does not interfere with any vested rights of the appellees, the court nevertheless held that it does interfere with what the court of appeals found to be a vested right in the original allottee and his successors to pass the lands upon death (App., infra, 15a-17a). The court so held even though it acknowledged that appellees had not directly rested their argument on any distinct right of their decedents. See id. at 12a-13a n.11. In the court of appeals' view, the Sioux allotment statute was in the nature of a bargain, under which the allottees received, inter alia, the right to control the disposition of their property in return for relinquishing their claims to tribal lands (id. at 16a). On this premise, the court held that governmental interference with that right would result in a taking of property, just as the Court held in Choate v. Trapp, 224 U.S. 665 (1912), that Congress's repeal of the tax exemption for an allotment during the initial trust period resulted in a taking (App., infra, 15a-16a). Because Section 207 does not provide for the payment of compensation to the estates of the decedents whose lands are subject to escheat, the court of appeals held that Section 207 violates the Just Compensation Clause of the Fifth Amendment. In addition, although none of the named appellees was affected by the amended version of Section 207, because the property in question escheated prior to the October 1984 amendments, the court of appeals, without further analysis, held that the amended version of Section 207 is unconstitutional as well (App., infra, 17a). THE QUESTIONS ARE SUBSTANTIAL The court of appeals has held unconstitutional a provision of an Act of Congress that is entended to stem the ever-increasing fractionation of ownership that has inhibited the use and development of allotted lands and rendered the administration of Indian land and estates both complex and unduly expensive. The provision in Section 207 of the Indian Land Consolidation Act for the escheat to the tribe of certain de minimis interests in Indian allotments upon the death of the owner constitutes a reasonable exercise by Congress of the inherent sovereign power to regulate the descent and distribution of property and to specify the disposition of property for which there are no heirs who qualify to receive it. This regulatory measure clearly furthers the United States' obligation to the Indians by providing for the gradual elimination of the most extreme aspects of the fractionated ownership problem, while at the same time retaining the interests affected in Indian ownership under the auspices of the tribe concerned. By the same token, Section 207 does not substantially interfere with private property rights. As the court of appeals recognized, the potential heirs of a person who owns a fractional undivided interest have no vested right to receive that interest, and Section 207 likewise does not interfere with the rights of the owner to retain such a fractional interest during his lifetime or to dispose of it to relatives or other owners of interests in the same tract. The decision below also is of substantial practical importance. In excess of 4,000 interests escheated to the tribe concerned during the period of less than two years that the original version of Section 207 was in effect. Moreover, although the amended version of Section 207 did not apply to any of the interests held by appellees' decedents, the court of appeals invalidated the amended version as well. The result has been to prevent the distribution of property in affected estates of deceased Indians in the Eighth Circuit and to cast a cloud over the administration of such estates and interests of other Indians. Review by this Court is plainly warranted. 1. The court of appeals recognized but then disregarded the firmly established legal principles that govern this case. Congress has plenary authority over Indian affairs and property -- particularly property held in trust by the United States or subject to restraints against alienation that long have characterized Indian tenure. See, e.g., County of Oneida v. Oneida Indian Nation, No. 83-1065 (Mar. 4, 1985); Tiger v. Western Investment Co., 221 U.S. 286, 310-317 (1911); Lone Wolf v. Hitchcock, 187 U.S. 553, 564-568 (1903); United States v. Kagama, 118 U.S. 375, 379-385 (1886). See also United States v. Sioux Nation, 448 U.S. 371, 408, 414-415 (1980). Accordingly, the congressional authority to regulate the disposition of interests in property upon the death of the Indian owner encompasses whatever sovereign powers a State has over such matters, plus the unique prerogatives of Congress attributable to the special relationship of the United States to the Indians. Section 207 of the Indian Land Consolidation Act is a valid exercise of Congress's plenary power in this regard. It is "nothing more than an exercise of the power, which every state and sovereignty possesses, of regulating the manner and term upon which property real or personal within its dominion may be transmitted by last will and testament, or by inheritance; and of prescribing who shall and who shall not be capable of taking it." Mager v. Grima, 49 U.S. (8 How.) 490, 493 (1850). This Court long has recognized this sovereign power and the corresponding principle that the right to dispose of and acquire property upon the death of the owner is dependent upon governing law. See, e.g., Irving Trust Co. v. Day, 314 U.S. 556, 562 (1942); Magoun v. Illinois Trust & Savings Bank, 170 U.S. 283, 288-291 (1898); United States v. Perkins, 163 U.S. 625, 628 (1896); United States v. Fox, 94 U.S. 315, 320-321 (1876); Randall v. Kreiger, 90 U.S. (23 Wall.) 137, 148 (1874); McCormick v. Sullivant, 23 U.S. (10 Wheat.), 192, 202 (1825). Thus, the Court has stressed that a statute permitting a person to dispose of property by will is an enabling act, and that a person may not devise his property in the absence of such authorization. See, e.g., Magoun v. Illinois Trust & Savings Bank, 170 U.S. at 289; United States v. Perkins, 163 U.S. at 627; United States v. Fox, 94 U.S. at 320. Similarly, where the sovereign has provided for the descent of property to heirs designated by law, the potential heirs have no vested rights, prior to the death of the owner, to receive the property. As a result, the law governing intestate succession may be revised by the legislature, and the revised laws may be applied to particular property without contravening the Fifth Amendment, so long as it has not become vested in the heirs under prior law by virtue of the death of the owner. See generally 5 G. Thompson, Commentaries on the Modern Law of Real Property Section 2405, at 199, 201, Section 2406, at 208-209, 211 (J. Grimes ed. 1979). These principles were summarized by the Court in Irving Trust Co. v. Day, 314 U.S. at 562 (citations omitted): Rights of succession to the property of a deceased, whether by will or intestacy, are of statutory creation, and the dead hand rules succession only by sufferance. Nothing in the Federal Constitution forbids the legislature of a state to limit, condition, or even abolish the power of testamentary disposition over property within its jurisdiction. Expectations or hopes of succession, whether testate or intestate, to the property of a living person, do not vest until the death of that person. The Court has applied the same rules to descent and distribution of Indian property, recognizing the power of Congress to amend the governing law as to an interest in an allotment that has not already passed to the heirs of the owner. See Jefferson v. Fink, 247 U.S. 288, 294 (1918). See also Simmons v. Eagle Seelatsee, 244 F.Supp. 808, 814 n.11 (E.D. Wash. 1965), aff'd, 384 U.S. 209 (1966). And, indeed, Congress on numerous occasions has amended the laws governing the disposition of the property of an Indian upon his death or subjected the distribution of such property to the operation of state or tribal law that is itself subject to change. See, e.g., 25 U.S.C. 372, 464, 2205; Jefferson v. Fink, supra; Simmons v. Eagle Seelatsee, supra. b. There is no need here to consider the limits of the foregoing principles or their application to a statute that declares the state or federal government to be the heir to everyone as to all property within its jurisdiction. Compare Magoun v. Illinois Trust & Savings Bank, 170 U.S. at 288-289. Section 207 of the Indian Land Consolidation Act is a carefully tailored measure that falls well within whatever limits the Fifth Amendment might be thought to impose on such a regulatory statute to ensure that it is not an unconstitutional taking of private property. See Penn Central Transp. Co. v. New York City, 438 U.S. 104, 123-126 (1978). A number of factors support this conclusion. First, Congress has not imposed a blanket prohibition against the passing of all interests in trust or restricted allotments by intestacy or devise. Section 207 applies only to what Congress reasonably determined to be de minimis undivided fractional interests in such allotments: those that represent less than 2% of the tract and that earned the owner less than $100 in the preceding year (or, under the amended version, are incapable of earning $100 annually). More substantial interests may continue to pass to devisees by will or to heirs in accordance with state law, just as they did before. Thus, as a general matter, Section 207 imposes only a marginal limitation on the ability of Indians to dispose of or receive interests in allotments. Second, Section 207 serves significant public purposes by addressing the problems associated with the increasingly fractionated ownership of Indian allotments. As we have explained above, that pattern of land ownership has greatly complicated the leasing or other use of such tracts, often preventing their most economic use; devalued the undivided interests because of the practical difficulties associated with use or sale of the land; greatly attenuated the relationship of the numerous individual owners to the land itself; and created substantial and costly administrative difficulties for the BIA in administering the land and the estates of deceased Indians. Section 207 is directed to the category of cases in which Congress determined that these problems are present in their most extreme form because of the presence of the most fractionated ownership. Third, and in a related vein, the impact on the ability of an Indian or his heirs or devisees to pass or receive an interest in the allotment is not the incidental and unfair consequence of a regulatory measure directed to other purposes. The fractionated ownership is itself the cause of the problem that Congress sought to remedy, because the existence of a de minimis ownership interest has adverse effects on other owners of the property and on the reservation community as a whole. A legislature has particular authority to address and eliminate such adverse consequences to other property owners. Penn Central, 438 U.S. at 125-127. See, e.g., Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962); Miller v. Schoene, 276 U.S. 272 (1928); Hadacheck v. Sebastian, 239 U.S. 394 (1915). Fourth, Congress did not provide that the de minimis interests involved would escheat to the United States; they instead pass to the Indian tribe on whose reservation the allotment is situated or to whose jurisdiction it is subject. This factor is significant for several reasons. In most cases, the tribe itself was the owner of the land prior to the allotment, and Section 207 has the effect in those circumstances of returning property to the original owner. When Congress formally abandoned the allotment policy in 1934, it sought to return the tribes and their reservations to their prior status to the degree possible by restoring surplus land to tribal ownership, providing for the consolidation of tribal lands, barring further allotments, and retaining existing allotments in trust or restricted status. See page 4, supra. Section 207 therefore is consistent with and furthers the policies of the IRA that have governed Indian land ownership on reservations for more than 50 years. Moreover, the fact that the interest does not pass to the United States serves to distinguish Section 207 from statutes that constitute a direct invasion of the property by the enacting government. This feature thus reinforces the role of Section 207 as a regulatory measure intended to adjust benefits and burdens in order to promote the common good of those in the community of the Indian reservation generally. See Penn Central, 438 U.S. at 124. The retention of the land in Indian ownership also serves to ensure that the measure is in furtherance of the United States' special relationship to the Indians, and not an act of expropriation by the government directed to other ends. Compare United States v. Sioux Nation, 448 U.S. at 414-417. Fifth, the Indian tribe to which the property passes has a special responsibility for its members and their families and for the land within its jurisdiction, and the members in turn have a special bond among themselves through the tribe and collectively own a beneficial interest in tribal property, including property that escheats pursuant to 25 U.S.C. 2206. The escheat to the tribal member therefore does not entirely sever the nexus of that member or his potential heirs to the property. It also is significant that Section 207 applies uniformly to all undivided interests that represent less than 2% of the total acreage and do not satisfy the $100 income test. Although the escheat of any particular parcel might adversely affect the deceased owner of that parcel or his potential heirs or devisees, those potential heirs and devisees, if they retain a nexus to the tribe or the reservation, presumably stand to benefit in some measure by the escheat of other interests to the tribe. As a result there is some "reciprocity of advantage" that undermines any taking argument in this setting. See Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922); Penn Central, 438 U.S. at 139-140 (Rehnquist, J., dissenting). Sixth, from the perspective of the owner of a fractional interest in a trust or restricted allotment, it is significant that Section 207 affects only one of the incidents of ownership: the ability to dispose of the property at death. "At least where an owner possesses a full 'bundle' of property rights, the destruction of one 'strand' of the bundle is not a taking, because the aggregate must be viewed in its entirety." Andrus v. Allard, 444 U.S. 51, 65-66 (1979). In Allard, the owner was barred from selling the particular property but could retain, donate, or devise it. The Court held that the restriction on this one means of disposing of the property did not constitute a taking. Id. at 66-68. In this case, under the original version of Section 207, the owner of a de minimus fractional interest in an allotment likewise retained his full right to all the incidents of ownership and was deprived of only one means of disposing of it -- by intestacy or devise upon his death. The owner still could dispose of the interest during his lifetime by selling it to other owners of an interest in the same parcel, by exchanging it for another interest of equal value, or by donating it to a relative. 25 C.F.R. 152.25. Similarly, he could acquire an additional interest in the tract in order to avoid escheat. 25 C.F.R. 151.7. And, in appropriate circumstances, he could apply for partition of the parcel in kind. 25 C.F.R. 152.33. Moreover, under the amended version of Section 207, an owner may dispose of an otherwise escheatable interest even by devise, provided that the devise is made to another owner of an interest in the same property. Accordingly here, as in Andrus v. Allard, supra, the statute does not significantly interfere with the incidents of ownership viewed in the aggregate. Finally, Section 207 does not undermine distinct investment-backed expectations. See Penn Central, 438 U.S. at 124. As explained above, a potential heir or devisee has no legally protected vested right in the property, and his bare expectancy of receiving the property is not protected by the Fifth Amendment. Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161 (1980). Nor is it likely that the deceased owner of the fractional interest would have made an investment in the property in anticipation of passing that interest. In most cases, the interest presumably passed to him by intestacy or devise, and in light of its insubstantial nature, his only association with it probably would have been the receipt of a share of its income. Moreover, even during the owner's lifetime, the interest was held subject to restraints that required the consent of the federal government for any alienation. Congress retained the right to alter these restrictions during the trust period in furtherance of its plenary control over Indian property (see, e.g., Tiger v. Western Investment Co., 221 U.S. at 316), or to alter the rules governing the distribution of the property at death (Jefferson v. Fink, 247 U.S. at 294) -- circumstances that further diminished any expectation of an unqualified right to dispose of even de minimis interests at death. The foregoing factors sufficiently demonstrate that Section 207 constitutes a reasonable exercise by Congress of the established sovereign power to establish reasonable rules for the distribution of property upon the death of the owner and does not, in the present circumstances, constitute a taking of property requiring the payment of compensation. /5/ c. The court of appeals did not disagree as a general matter with the governing principles, discussed above. In fact, it expressly concurred in the view that potential heirs or devises such as appellees have no vested interest in the receipt of property of a living person that is protected by the Fifth Amendment against intervening changes in the law (App., infra, 4a). The court of appeals also correctly held that appellees acquired no such vested rights under the Sioux allotment statute (id. at 11a). Instead, although the court appeared to recognize that appellee did not so argue (id. at 12a-13a n.11), the court held that "the decedents in this case had vested rights in being able to control the disposition of their property at death" (id. at 15a (emphasis added)), and that the effect of Section 207 on that right violated the Fifth Amendment (App., infra, 16a-17a). The court believed that the provision in the Sioux allotment statute for state law to govern inheritance reflected a bargain under which the individual Sioux obtained a right to dispose of the property at death in return for giving up their interests in tribal lands. This analysis is seriously flawed. As an initial matter, the court of appeals' notion that the original Sioux allottees or their descendants obtained a vested right to control the distribution of their interests in the allotment at death is refuted by the text of the Sioux statute itself. Section 11 of that act provides that the land will be held in trust for the allottee or, upon his death, for "his heirs according to the laws of the State or Territory where such land is located." The term "heirs" as used in this Section plainly refers to the allottee's heirs under the state law of intestate succession. See F Cohen, supra, at 230-231. It was not until the Act of June 25, 1910 than an Indian could dispose of his interest in a trust allotment by will. See id. at 231-232; Blanset v. Cardin, 256 U.S. 319, 323-327 (1921). In any event, the court of appeals was clearly wrong in construing the Sioux allotment statute as a form of contract in which Congress conferred on individual allottees and every succeeding generation of their descendants a permanent and vested right to be exempt from whatever amendments the legislature might adopt to govern the distribution of a decedent's property. This Court has recently reaffirmed the established principle that "absent some clear indication that the legislature intends to bind itself contractually, the presumption is that 'a law is not intended to create private contractual or vested rights but merely declare a policy to be pursued until the legislature shall ordain otherwise.'" National Railroad Passenger Corp. v. Atchison, T. & S.F. Ry., No. 83-1492 (Mar. 18, 1985), slip op. 14, quoting Dodge v. Board of Education, 302 U.S. 74, 79 (1937). Nothing in Section 11 of the Sioux allotment statute suggests, much less clearly indicates, that Congress conferred on Indian allottees and succeeding generations of their descendants such a vested right. To the contrary, Section 11 provides that the allotment would descend in conformity with state law, which was itself subject to change, as the court of appeals acknowledged (App., infra, 9a n.9). Moreover, in Jefferson v. Fink, supra, this Court applied the principle that statutes do not create vested rights in the very context of the inheritance of Indian Allotments. There, the Court rejected the argument that Congress's specification in a particular allotment that Congress's specification in a particular allotment statute that descent of allotments would be governed by Arkansas law did not create a vested or contractual right to have that law applied, and that Congress could later provide for another disposition of the property of a deceased allottee. 247 U.S. at 293-294. The Court relied in part on the language in Section 5 of the General Allotment Act providing for the allotment to continue to be held in trust for the original allottee's heirs according to state law (247 U.S. at 290). Because the relevant language in Section 11 of the Sioux allotment statute is identical to that in Section 5 of the General Allotment Act, there likewise is no reason to believe that Congress intended to confer on the Sioux allottees a vested right to be exempt from future statutory changes affecting the distribution of property. Finally, even if some right to pass an allotment at death was originally contemplated, that right cannot be thought to have been of permanent effect (compare Choate v. Trapp, 224 U.S. 665 (1912)) and to vest absolutely in each succeeding generation of the allottee's descendants, irrespective of intervening events and the pressing circumstances occasioned by the extreme fragmentation of ownership. It is far more likely that Congress would have intended an interest in an allotment to be subject to the reserved sovereign power to adopt reasonable rules, such as those in Section 207, to govern the descent and distribution of property. 2. The court of appeals invalidated not only the original version of Section 207, but also the amended version that became effective on October 30, 1984. App., infra, 17a. The court did so even though all of the interests of the decedents in this case escheated pursuant to the original version of Section 207 (see App., infra, 3a). And the court also did so without discussing any features of the latter provision -- such as the new Subsection (b), which permits the owner of an otherwise escheatable interest to devise it to another owner of an interest in the same tract -- that even more clearly establish that Section 207 does not impermissibly interfere with a supposed right to dispose of property at death. Because there was no case or controversy regarding the application of the amended Section 207 to the parties before the court of appeals, that court had no authority to invalidate that provision as well. Williams v. Zbaraz, 448 U.S. 358, 367 (1980). Accordingly, if this Court ultimately should affirm the judgment below insofar as it invalidates the original version of Section 207, the Court should vacate that judgment insofar as it invalidates the amended version of Section 207. 3. The questions presented are of substantial practical importance, We have been informed by the Department of the Interior that approximately 4,430 property interests escheated to the tribes concerned during the period that the original version of Section 207 was in effect. Moreover, in light of the decision of the court of appeals, the Department of the Interior has found it necessary to order that no final distribution be made of property in affected probate proceedings in the Eighth Circuit pending this Court's decision, and a cloud has been cast over probate proceedings elsewhere as well. /6/ In addition, if the judgment of the court of appeals is permitted to stand, the result will be a return to the increasingly fractionated ownership of Indian allotments that gave rise to the passage of Section 207. Review by this Court therefore is clearly warranted. CONCLUSION Probable jurisdiction should be noted. Respectfully submitted. CHARLES FRIED Acting Solicitor General F. HENRY HABICHT II Assistant Attorney General LOUIS F. CLAIBORNE Deputy Solicitor General EDWIN S. KNEEDLER Assistant to the Solicitor General ANNE S. ALMY BLAKE A. WATSON Attorneys OCTOBER 1985 /1/ L. Meriam, Institute for Government Research, The Problems of Indian Administration 40-41. (1928). /2/ Senate Comm. on Interior and Insular Affairs, 86th Cong., 2d Sess., Indian Heirship Land Survey (Comm. Print 1960); House Comm. on Interior and Insular Affairs, 86th Cong., 2d Sess., Indian Heirship Land Survey (Comm. Print 1960). /3/ Of course, if the transferee's total interests in the tract did not satisfy the 2% or $100 test upon his death, the transferee's interest would escheat to the tribe pursuant to 25 U.S.C. 2206, unless he took similar measures to avoid escheat. /4/ The descriptions of Sections 204, 205 and 206 in the text reflect the 1984 amendments to those Sections made by Pub. L. No. 98-608, 98 Stat. 3171 et seq., discussed infra. /5/ We agree with the court of appeals (App., infra, 17a) that compensation is not available from the United States for any taking that might have occurred. Section 207 itself does not provide for such compensation, and the legislative history is replete with references to the absence of compensation and the intention that the Act would not result in any cost to the United States. H.R. Rep. 97-908, supra, at 11; S. Rep. 98-632, supra, at 8; 1984 Hearings 19, 20, 23, 30-31, 33, 34, 35, 37, 38, 39, 40, 42, 46, 57, 76; 1983 Hearings 21, 38. Compare 25 U.S.C. 2205 (3). Moreover, the legislative history of the 1984 amendments reflects an awareness of the district court's holding in this case that Section 207 did not effect a taking of vested property rights. S. Rep. 98-632, supra, at 5; 1984 Hearings 26, 76. Against this background, we do not believe that Congress intended that compensation nevertheless should be available in a suit against the United States under the Tucker Act. Compare Ruckelshaus v. Monsanto Co., No. 83-196 (June 26, 1984), slip op. 28-30. /6/ A similar suit challenging Section 207 has been filed by enrolled members of the Nez Perce Tribe. Marsh v. Hodel, No. 85-3099 (D. Idaho.) APPENDIX