In Big Lagoon Rancheria v. California, 2014 WL 211763 (9th Cir. 2014), the Big Lagoon Rancheria (Tribe) had sued in federal court under the Indian Gaming Regulatory Act (IGRA) to force the State to negotiate a Class III gaming compact that would permit gaming operations on fee land that the Department of the Interior had taken into trust for the Tribe in 1994 pursuant to Section 5 of the Indian Reorganization Act (IRA). The State argued that it had no obligation to negotiate with the Tribe because the Tribe was not under federal jurisdiction in 1934 and was, therefore, ineligible to have land taken into trust under the IRA. The Ninth Circuit Court of Appeals agreed, holding that (1) the Tribe had not come under federal jurisdiction until 1979 and (2) there was no time limitation to a collateral attack on a trust acquisition by the federal government. The court cited "the well-worn rule that administrative actions taken in violation of statutory authorization or requirement are of no effect. … Other courts have used different language, … but the upshot is the same: The law treats an unauthorized agency action as if it never existed."

The Court’s decision, if it stands, would be the third successive blow in recent years to tribes’ ability to acquire land in trust under Section 5 of the IRA. First, the Supreme Court ruled in 2009 in Carcieri that only tribes "under federal jurisdiction" in 1934 were eligible to acquire land in trust under the IRA. Second, in 2012, in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak (Patchak), the Supreme Court held that a private party was not barred by the Quiet Title Act from challenging the Secretary’s decision to take land into trust, provided the challenger was not seeking to establish his or her own title.

It had been widely assumed after Patchak that anyone challenging a secretarial acquisition would need to sue within six years, the limitations period for suit under the federal Administrative Procedure Act. According to the Big Lagoon decision, however, a plaintiff could potentially seek a ruling invalidating a trust acquisition at any time.

In addition to inviting challenges to ancient decisions by the Secretary to acquire land for tribes in trust, the Ninth Circuit ignored the U.S. Department of Interior (DOI) standard for determining whether a tribe was "under federal jurisdiction" in 1934. Under the DOI standard, services provided to tribal members before 1934 and a variety of other factors would have been relevant. According to the Ninth Circuit, the Tribe was not under jurisdiction in 1934 simply because (1) it did not appear on a DOI list prepared shortly after the IRA was enacted and (2) there were no members living at the site of the Rancheria in 1934: "Since no one resided on what is now the rancheria, there was no group to organize. The absence of Big Lagoon from the 258–tribe list was not an intentional or inadvertent omission; it was a reflection of reality."

Because of the potential harm that the decision may cause, a request for rehearing by the full Ninth Circuit is expected.