## Facts

- The Pueblo of Tesuque executed a 99-year lease of restricted Indian land to Sangre de Cristo Development Co. to develop a residential, recreational, and commercial project ultimately planned as a small city of about 15,000 people.
- The lease covered a 1,300-acre tract and included options on additional tracts, placing roughly 5,400 acres within the lease’s scope.
- A Bureau of Indian Affairs (BIA) area supervisor approved the lease in May 1970 under delegated authority pursuant to 25 U.S.C. § 415.
- After the lease approval, federal officials approved or supervised key development components, including a master plan, a plat plan for the first phase, deed restrictions, an architectural and engineering review board, and a condominium plan.
- Nearby landowners and environmental organizations sued federal officials in October 1971 seeking to halt further work, alleging NEPA required an environmental impact statement (EIS) and that approval violated 25 U.S.C. § 415(a).
- The district court dismissed, reasoning the lease approval was not a “major Federal action” under NEPA and that no relief was available under § 415; plaintiffs appealed.

## Issues

1. Whether the Department of the Interior’s approval and continuing supervision of a long-term lease of restricted Indian land for large-scale development is a “major Federal action significantly affecting the quality of the human environment” requiring an EIS under NEPA § 102(2)(C).
2. Whether NEPA applies where the lease and federal approvals occurred after NEPA’s effective date, even if planning began earlier.
3. Whether plaintiffs stated a cognizable claim for relief based on alleged noncompliance with 25 U.S.C. § 415(a).

## Decision

- The Tenth Circuit reversed the dismissal insofar as it held NEPA did not apply and that an EIS was not required.
- The court held the lease approval and related federal approvals constituted “major Federal action” because federal approval was required for the trust/restricted land lease and the federal government exercised continuing control over development decisions.
- The court rejected the argument that the project was “private” merely because the United States was not a formal party and did not fund the development.
- The court held NEPA applied because the lease approval and subsequent federal actions occurred after NEPA became effective and the federal role was ongoing.
- The case was remanded for further proceedings consistent with the requirement that NEPA procedures be followed.
- The court did not invalidate the lease independently on § 415 grounds, treating NEPA noncompliance as the operative defect requiring further proceedings.

## Legal Principles

- NEPA applies when federal approval and ongoing supervisory control place the federal government in a position of responsibility over a project’s environmental consequences, even if the project is carried out by non-federal actors and lacks federal funding.
- “Major Federal action” turns on substantial federal involvement and control, not on formal labels such as whether the government is a signatory to private agreements.
- NEPA § 102(2)(C) requires a detailed EIS addressing environmental impacts, unavoidable adverse effects, and alternatives before the agency proceeds with covered actions.
- NEPA’s EIS obligation is procedural: agencies must consider environmental consequences and disclose them as part of informed decision-making.
- Post-NEPA approvals and continuing federal decision-making are subject to NEPA even if some planning predated NEPA’s effective date.

## Conclusion

Because federal approval and continuing oversight of the long-term lease of restricted Indian lands made the development a major federal action, NEPA required an environmental impact statement before approval; the appellate court reversed the dismissal on that ground and remanded for further proceedings.


Davis v. Morton, 469 F.2d 593 (10th Cir. 1972)