Facts
- Federal allotment policy placed Sioux allotments into United States trust status, limiting alienation and partition.
- Over generations, trust tracts became highly fractionated, leaving many owners with tiny undivided interests producing minimal annual income.
- Congress enacted the Indian Land Consolidation Act of 1983 to reduce fractionation.
- Section 207 required certain small fractional interests to escheat to the tribe, barring both intestate descent and devise if the interest was 2% or less of a tract and earned the owner less than $100 in the prior year.
- Section 207 provided no compensation to owners or their estates for interests that escheated.
- Several Oglala Sioux decedents died in 1983 owning interests meeting § 207’s criteria, and those interests escheated to the tribe rather than passing to heirs or devisees.
- Heirs alleged substantial aggregate losses across multiple interests in particular estates.
Issues
- Whether heirs/devisees had Article III and prudential standing to challenge § 207 based on an alleged taking of the decedents’ right to control disposition at death.
- Whether § 207’s uncompensated, mandatory escheat—eliminating descent and devise for a defined category of property interests—effected a taking without just compensation under the Fifth Amendment.
Decision
- The Supreme Court affirmed the court of appeals.
- The heirs/devisees had standing because they suffered concrete economic injury by losing interests they otherwise would have received, and the Secretary could not be expected to assert decedents’ rights while administering the challenged statute.
- The original version of § 207 effected a taking without just compensation by virtually abolishing the right to pass the covered property interests at death.
Legal Principles
- The right to direct the disposition of property at death is a significant property interest and a core incident of ownership.
- Government has broad authority to regulate descent and devise, but a measure that completely eliminates descent and devise for a defined class of property interests can “go too far” and require just compensation.
- A takings analysis may consider the character of the governmental action, including whether it mandates transfer to another owner without compensation and whether it is an extraordinary restriction rather than an adjustment of succession rules.
- Small size or low annual income of individual interests does not categorically defeat a takings claim, especially where aggregate losses are nontrivial and the statute abolishes a distinct property incident.
- An escheat rule that operates even when there are heirs or a valid will differs from traditional escheat and supports treatment as a compensable taking when uncompensated.
Conclusion
The Court held that § 207’s uncompensated, mandatory escheat of certain fractional Indian trust land interests—by categorically barring both descent and devise—worked a Fifth Amendment taking because it virtually eliminated a core property right: the ability to transfer property at death.