## Facts

- Hydro Resources, Inc. (HRI) sought to develop an in-situ uranium mine on a fee-owned parcel (“Section 8”) in a checkerboard region of northwestern New Mexico.
- Section 8 was outside any reservation boundary, had no residents, had not been set aside for Indian use, and was not subject to federal guardianship over the land.
- Under the Safe Drinking Water Act (SDWA), EPA may delegate Underground Injection Control (UIC) permitting to a state but retains authority for “Indian lands.”
- EPA had delegated SDWA UIC primacy to New Mexico for non-Indian lands; HRI obtained a UIC permit from the New Mexico Environment Department.
- EPA later issued a final land status determination concluding Section 8 was “Indian country” as part of a “dependent Indian community” under 18 U.S.C. § 1151(b), requiring HRI to obtain a federal permit instead.
- HRI petitioned for judicial review; a panel initially upheld EPA, but the court reheard the case en banc and reconsidered the determination under Supreme Court precedent.

## Issues

1. Whether fee-owned, non-reservation land qualifies as “Indian country” as a “dependent Indian community” under 18 U.S.C. § 1151(b).
2. Whether EPA’s interpretation of § 1151(b), as incorporated into SDWA “Indian lands” regulations, receives deference when inconsistent with the Supreme Court’s construction of § 1151(b).

## Decision

- The en banc court granted the petition for review and set aside EPA’s land status determination.
- The court held Section 8 was not “Indian country” under § 1151(b) because it was neither federally set aside for Indian use nor under federal superintendence.
- Because the land was not “Indian country,” EPA could not treat it as “Indian lands” for SDWA UIC permitting; New Mexico’s delegated authority applied.
- The court declined to defer to EPA’s broader interpretation because Supreme Court precedent supplied the controlling statutory meaning.

## Legal Principles

- Under 18 U.S.C. § 1151(b), land is a “dependent Indian community” only if it satisfies both requirements identified by the Supreme Court: (1) federal set-aside for Indian use as such, and (2) federal superintendence.
- Fee ownership by a private party, absence of reservation status, and lack of a federal action dedicating the land for Indian use weigh against any finding of a federal “set-aside.”
- General federal regulatory authority (including environmental and mining regulation) does not constitute the Indian-specific federal superintendence required for § 1151(b).
- When the Supreme Court has definitively construed a statutory term, an agency cannot adopt a conflicting construction and courts do not defer to the agency’s contrary interpretation.
- SDWA permitting jurisdiction follows the “Indian lands” boundary: state primacy applies unless the land qualifies as Indian country (or otherwise meets the regulatory definition tied to § 1151).

## Conclusion

The Tenth Circuit held that EPA lacked a lawful basis to classify HRI’s fee-owned parcel as a “dependent Indian community” because the parcel was neither federally set aside for Indian use nor subject to federal superintendence; accordingly, EPA’s SDWA permitting claim was set aside and New Mexico retained permitting authority.


Hydro Res., Inc. v. Env't Prot. Agency, 608 F.3d 1131 (10th Cir. 2010) (en banc)