## Facts

- Sangre De Cristo Development Company, Inc. (Sangre) formed to develop approximately 5,000 acres of Tesuque Indian Pueblo trust land near Santa Fe, New Mexico.
- In 1970, Sangre and the Tesuque Pueblo executed a long-term lease for the trust land; the Secretary of the Interior approved the lease under federal law governing leases of Indian trust lands.
- After approval, third parties sued to require compliance with the National Environmental Policy Act (NEPA), leading to preparation of an environmental impact statement (EIS) and years of delay.
- Tribal leadership changed, and the Pueblo asked the Department of the Interior to rescind or withdraw federal approval/support for the lease.
- Interior rescinded approval or otherwise withdrew support for the lease, citing environmental considerations and the Pueblo’s request, preventing the project from proceeding as planned.
- Sangre later entered involuntary bankruptcy; the bankruptcy trustee and Sangre sued the United States asserting: (i) a Fifth Amendment takings claim for loss of lease rights, (ii) contract and trust-based liability, (iii) related claims requiring a waiver of sovereign immunity, and (iv) an FTCA negligence claim based on allegedly negligent EIS preparation.
- The district court entered judgment for the United States on all claims, and Sangre and the trustee appealed.

## Issues

1. Whether rescission/withdrawal of federal approval for a lease of Indian trust land deprived Sangre of a vested property interest compensable as a taking under the Fifth Amendment.
2. Whether contract and trust-based claims against the United States could proceed given sovereign immunity and the asserted jurisdictional bases.
3. Whether the United States could be liable under the Federal Tort Claims Act for allegedly negligent preparation of an EIS related to the lease.

## Decision

- The Tenth Circuit affirmed the judgment for the United States on all claims.
- The court held that the challenged federal actions did not take a vested property interest; the takings claim failed.
- The court held the contract and trust-based claims were barred because no applicable waiver of sovereign immunity permitted them in this forum on these theories.
- The court rejected the EIS negligence claim, concluding FTCA liability was unavailable, including because the alleged conduct fell within FTCA limits such as the discretionary function exception.

## Legal Principles

- A Fifth Amendment takings claim requires a cognizable, vested property interest; expectations arising from a lease of Indian trust land approved by Interior may be qualified by the federal trust relationship and applicable statutory duties.
- Federal approval and oversight of transactions involving Indian trust lands reflect trust and regulatory responsibilities and do not necessarily confer irrevocable private rights immune from later federal action consistent with those responsibilities.
- The United States is immune from suit absent an express waiver; plaintiffs must identify a statutory waiver that clearly authorizes the particular claim and forum.
- Under the FTCA, claims challenging policy-laden governmental judgments, including aspects of EIS preparation, may be barred by the discretionary function exception or other limits on the government’s consent to be sued.

## Conclusion

The Tenth Circuit held that Interior’s withdrawal of approval/support for a lease of Pueblo trust land did not effect a compensable taking because Sangre lacked a vested property interest for Fifth Amendment purposes, and it further concluded that sovereign immunity and FTCA limitations foreclosed Sangre’s contract/trust and EIS-based negligence claims.


Sangre De Cristo Dev. Co. v. United States, 932 F.2d 891 (10th Cir. 1991)