State lawyers say it wasn’t racist to suspend Tabby Mountain sale — even if it blocked the Ute Tribe from buying the land

The Ute Tribe offered the highest bid, at $47 million, for the coveted property that was once part of its reservation. But SITLA says it had “no duty” to go through with a sale.

(Rick Egan | The Salt Lake Tribune) Utah’s Tabby Mountain is seen in this photo from Thursday, Sept. 22, 2022. The Ute Indian Tribe tried to bid on the land when it was put up for sale by the Utah School and Institutional Trust Lands Administration in 2018; SITLA suspended the sale, and now the tribe is suing. Lawyers for the state responded on Monday, Aug. 28, 2023, saying SITLA has the right to cancel the bidding process at any time before a contract is signed.

Rising above a quiet east-central Utah town, there’s a plot of 28,500 acres that has become the center of a debate over tribal sovereignty, discrimination and whether a state trust has the authority to handpick a buyer when selling off valuable land.

The parcel surrounds and includes Tabby Mountain, a coveted hunting spot and once part of the Ute Indian Tribe’s reservation, before it was taken by the federal government roughly a century ago. The state acquired it in a 1970s land swap, and when the tribe saw an opportunity in 2018 to buy the property back, it seized it by placing the highest bid. But the Utah agency then quickly pulled the parcel off the market and it was not sold to anyone.

The question now being raised is: Was racism the motivation behind suspending the sale?

The Utes say yes and have filed a lawsuit alleging that state officials conspired to effectively block the tribe from regaining control of part of its ancestral homelands.

But lawyers for the state responded this week for the first time in the high-profile court case, arguing that any claims of racial bias as the reason for the sale’s suspension are “unfounded.”

Three separate requests to dismiss the case were filed Monday on behalf of the Utah agency and officials being sued by the tribe. Attorneys representing them say that the Utah School and Institutional Trust Lands Administration, or SITLA, has authority expressly written in state rules that allows it to cancel the sale of its lands at any point before a contract is signed — without explanation.

It’s only “duty” is to sell land at the best price it can to benefit schools and Utah’s schoolchildren, they say, as it feeds into a now $3.2 billion endowment.

In this case, the attorneys argue that SITLA suspended the bids on the Tabby Mountain property near Tabiona because beneficiaries of the trust were concerned that the property’s appraisal was too low and that it hadn’t been advertised for sale for long enough to fetch the best possible deal.

“The tribe cannot overcome that by making conclusory allegations that the sale was suspended based on its perception of a history of general government discrimination,” one of the filings from the state said.

That repeats what agency officials have said since The Salt Lake Tribune broke the story last year about the controversial bid process and the suspension, which had been keep quiet until whistleblower Tim Donaldson came forward.

Donaldson was the official in charge of the Tabby sale in late 2018 and early 2019; he has since been fired from his position with the state.

He alleged in a complaint filed in August 2022 with State Auditor John Dougall that SITLA’s then-director David Ure rigged the sales process with the aim of getting the land into the control of the Utah Department of Natural Resources. That state agency had long been eyeing the property for a nature preserve and haven for hunters looking to bag the region’s prize elk and mule deer.

Donaldson said the trust was being pressured by Utah lawmakers to ensure that DNR would win — and at a price legislators were willing to pay — or SITLA would face legislation that would rein in its independence. Letting it go to the tribe, he said, was painted as the worst option because the land would become private, controlled by the Utes, and the state wouldn’t be able to capitalize off of it as planned.

In the court filings, attorneys for SITLA (recently renamed the Utah Trust Lands Administration) maintain that doesn’t amount to racism. The agency contends that it simply “had no duty to convey the property” to the tribe — or to anyone else.

How it started

As a matter of policy, SITLA keeps private the identity of bidders and their bids, so Donaldson’s complaint was the first time information about what occurred became public.

He said the agency tried to keep the sale of Tabby Mountain off the radar of other bidders — by selling in the middle of winter, in December 2018, in a rushed process. The hope was to ensure DNR would be the only bidding party, Donaldson alleged, which also would keep the price lower without wealthy individuals coming in with offers.

But the Ute Tribe learned of the sale and placed a $47 million bid, with $1 million in an earnest deposit, for the culturally significant land at the western edge of the Uinta Basin. Meanwhile, DNR’s offer was for $41 million, just above the appraisal price.

Those were the only bids.

According to Donaldson’s complaint, SITLA pressured DNR to respond by counter-offering $50 million so the trust could reject the tribe’s higher bid. With DNR unable to secure the additional money, though, the accusation is that SITLA killed the sale so the land wouldn’t go to the Utes.

SITLA’s board voted to suspend the sale on Feb. 22, 2019. Notice of the cancelation was sent to the tribe on Feb. 26, 2019.

The Utes accused the state of “back-room shenanigans” and filed suit in May 2023, alleging breach of contract, conspiracy and racial discrimination. They have asked for the land to be sold to them under the original $47 million they offered and to be awarded punitive damages.

The tribe names as defendants SITLA and Ure, who has since stepped down as director of the agency, as well as Michelle McConkie, the current director. Utah Gov. Spencer Cox and former DNR director Mike Styler are also named.

Each is represented, at least in part, by a lawyer from the Utah Office of the Attorney General. The three filings this week all make the same arguments.

They also ask that Cox, who was not governor at the time, be removed as a defendant, as well as McConkie, who was not the SITLA director at the time. All of them, the attorneys add, also have immunity as government officials or government agencies. The attorneys also say the Ute Tribe missed the legal deadline to file its claims.

No contract to breach

A Utah administrative rule says SITLA “may terminate a negotiated sale for any reason prior to finalization of the certificate of sale.”

The state’s attorneys are largely relying on that provision for their arguments.

Even though the tribe placed a deposit, they say, a contract was never officially signed by the agency’s director transferring the land. That means, according to their filings, that SITLA didn’t breach a contract, and the trust had every right to stop the process when it did.

“The tribe cannot show an unlawful act,” the attorneys wrote.

And without a contract, the attorneys add, the tribe also cannot prove any harm was suffered — and certainly no harm was caused because its members are Indigenous, they say.

The Ute Tribe continues to hold the mineral rights to Tabby Mountain, which means no one can mine or drill there without the tribe’s permission. “And its members, were, and still are, allowed to recreate on the land,” the attorneys argue.

Meanwhile, SITLA continues to own the surface of Tabby Mountain. The agency derives $250,000 a year from the land through livestock grazing, telecommunications leases, timber sales, wilderness therapy programs, water leases and hunter access. It’s technically a “nonperforming asset” because that amount is not considered a large annual earning.

The attorneys add: “The only thing the tribe lost as a result of not purchasing the property is the right to exclude the public from enjoying the benefits of the land.”

But the tribe has said it wants to protect the land, to use it for spiritual purposes and to also possibly reap its own financial benefits, as the state trust has been for years — which the tribe doesn’t consider immaterial.

And, the Utes say, the state’s acts are part of a pattern of attacks on their land that started when Tabby Mountain was taken from them 115 years ago. And that is inherently based on race, they noted.

Tabby Mountain was once part of what was originally called the Uintah Valley Reservation — now named the Uintah and Ouray Reservation — created in 1861 by President Abraham Lincoln. Utes from Colorado and Utah where pushed off their ancestral lands and onto the reservation.

Then the land around Tabby Mountain, which is named for the late Ute Chief Tabby-To-Kwanah, was pried out when the federal government wanted to create the forested preserve that is Ashley National Forest in the early 1900s.

The tribe argues the harm has lasted more than a century, and that the alleged conspiracy to defraud the Utes from regaining Tabby Mountain is just the most recent part of a nonstop land grab that has cost them significant earnings.

“The state is picking our land apart,” the tribe’s newly appointed Chairman Julius T. Murray III told The Tribune.

The attorneys for SITLA say the agency wasn’t targeting the tribe in the decision to suspend the sale. It also rejected a $40 million offer for the same property from the state in 2007, not feeling that was a fair price then either.

Can a tribe sue for civil rights?

But even if there was racism involved in the halted transaction — which the state’s attorneys say there wasn’t — the tribe wouldn’t qualify for protection against discrimination under the law, according to the state’s filings.

Federal laws, they argue, grant equal treatment to “persons” and “citizens” as individuals, and provide them an avenue for recourse if they are discriminated against.

Sovereign nations, such as the Ute Tribe, aren’t entitled to collectively sue for civil rights, they say.

The state’s attorneys cite previous cases where other tribes, including the Muscogee (Creek) Nation in Oklahoma and the Lone Pine Paiute Shoshone Indians Tribe in California also had civil rights cases dismissed for that reason.

Members of tribes are both members of their nations and U.S. citizens. But they would have to sue individually, the attorneys say, and show personal harm.

Meanwhile, unlike tribes, corporations in the United States are considered to have some personal rights.

The Ute Indian Tribe — which is the namesake for the state of Utah — is a sovereign nation with 3,000 members and 4.5 million acres of land, the second largest reservation in the country behind the Navajo Nation.

The tribe says the case has the potential to reopen the discussion about sovereignty and the rights of nations — and hopes it will.

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