## Facts

- Federal allotment policy converted tribal lands into individually held allotments, which became highly fractionated through repeated descent and devise.
- Congress enacted the Indian Land Consolidation Act of 1983 (ILCA) to reduce fractionation; § 207 required certain very small, low-income undivided interests to escheat to the tribe at the owner’s death without compensation.
- The Supreme Court previously held the original § 207 unconstitutional under the Fifth Amendment because it effectively eliminated the rights of descent and devise without just compensation.
- Congress amended § 207 to (1) use a five-year income lookback with a rebuttable presumption, (2) permit devise of otherwise escheatable interests to existing co-owners of the same parcel, and (3) allow tribes to adopt their own disposition codes.
- William Youpee, an enrolled tribal member, owned several fractional interests in allotted reservation lands and devised each interest to a single descendant; the will did not further split any individual interest.
- An Interior Department administrative law judge ruled that certain devised interests met the amended § 207 criteria and therefore escheated to the tribe; the Interior Board of Indian Appeals did not decide the constitutional claim.
- The devisees sued in federal court alleging that amended § 207 still caused an uncompensated taking.

## Issues

1. Whether amended ILCA § 207, which mandates uncompensated escheat of certain small, low-income fractional allotment interests at death (subject to a limited co-owner devise exception), effects a taking in violation of the Fifth Amendment’s Just Compensation Clause.

## Decision

- The Supreme Court affirmed the judgment invalidating amended § 207 as applied to covered fractional interests.
- The Court held that amended § 207 still worked an unconstitutional taking because it continued to largely extinguish the rights of descent and devise for a defined class of property interests without compensation.
- The Court concluded that the amendments were modest adjustments that did not cure the central constitutional defect identified in the prior decision striking down the original provision.
- Justice Stevens dissented, viewing the amended scheme as a permissible regulatory response to severe fractionation in Indian allotment lands.

## Legal Principles

- The right to direct the disposition of property at death is a significant attribute of ownership protected by the Fifth Amendment.
- A statute that effectively eliminates descent and devise for a class of property interests and transfers those interests to another owner at death, without compensation, can constitute a taking.
- Refinements to an income-based eligibility test do not resolve a takings problem where the test may fail to reflect actual value and the statute still mandates uncompensated transfer.
- A narrow exception allowing devise only to existing co-owners does not cure a taking where the rule still invalidates many ordinary testamentary transfers (including to close relatives) and triggers automatic escheat.
- Allowing tribes to enact alternative disposition codes does not eliminate the federal constitutional defect when federal law remains operative as the default and requires uncompensated escheat.

## Conclusion

The Court held that amended ILCA § 207 remained unconstitutional because it continued to impose an uncompensated, largely mandatory escheat of certain fractional allotment interests at an owner’s death, thereby substantially eliminating the rights of descent and devise in violation of the Fifth Amendment’s Just Compensation Clause.


Babbitt v. Youpee, 519 U.S. 234 (1997)