In the Tenth Circuit’s disposition in Hydro Resources, Inc. v. EPA, the majority interpreted the Supreme Court’s decision in Alaska v. Native Village of Venetie Tribal Government to resolve a land dispute centered on the classification of a tract of land as “Indian lands.” In doing so, the Tenth Circuit applied the two-prong test established by the Court in Venetie and abolished its previous standard. As noted by the dissent, the manner in which the Tenth Circuit applied Venetie effectively overrode decades of circuit level case law.
18 U.S.C. § 1151 and Venetie define “Indian Lands” as:
(a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation, (b) all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and (c) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same.
The section of the statute fundamentally at issue in both Hydro Resources and Venetie is the somewhat ambiguous portion that simply defines “Indian country” as “all dependent Indian communities.” In rendering its decision in Venetie, the Supreme Court setout to define this ambiguous section of the statute. It concluded that “Indian country” had two qualifying characteristics: “first, [the land] must have been set aside by the Federal Government for the use of the Indians as Indian land; second, they must be under federal superintendence.”
Prior to the Venetie decision, the Tenth Circuit developed a multi-variable balancing test, referred to as the Watchman test, to assist in identifying “dependent Indian communities” under § 1151 (b). The first step in applying the Watchman test is to identify an appropriate community of reference. Subsequent to identifying the community of reference, the court then had to determine whether the community qualified as a “dependant Indian community.” The court could then determine if land qualified as “dependent Indian land” based on the outcome of these tests.
The land disputed in Hydro Resources is located in region where there are alternating parcels of land owned by the Navajo Nation, the state, the federal government, individual Navajos, and private persons and entities. While no Natives currently occupy the land, it falls within the boundaries of the Navajo Church Rock Chapter (“NCRC”). The NCRC belongs to the Navajo Nation and functions as a social unit with both its boundaries and membership determined by the tribe.
Hydro Resources Inc. (“HRI”) intends to mine this property for uranium. In order to do so it must obtain a permit under the Safe Drinking Water Act (“SDWA” or the “Act”) from the Environmental Protection Agency (“EPA”). The EPA delegated its permit issuing authority to the New Mexico Environment Department (“NMED”) in all circumstances except for situations in which mining activities are to undertaken on “Indian lands.” In such cases, the permit must be sought from the EPA itself. For purposes of the Act, the EPA defines “Indian lands” to mean “Indian country” as defined by U.S.C. § 1151.
HRI, believing that the property was not designated as “Indian lands,” applied for and received a mining permit from NMED. Subsequent to HRI’s receiving this permit, EPA issued a final land status determination in which it proclaimed the land in question was, in fact, “Indian land.” As such, the EPA believed that it retained the authority to issue the mining permit.
In deciding this case, the majority held that “Watchman’s community of reference test did not survive Venetie and that dependent Indian communities under § 1151 (b) consist only of lands explicitly set aside for Indian use by Congress (or its designee) and federally superintended.” It adopted a new test that looked to whether Congress took some explicit action setting aside the land for use and whether the land is superintended by the federal government. Under this new test, the land under dispute was not “Indian Land” and the EPA did not have the authority to issue the relevant mining permit.
The dissent, written by Judge Ebel with whom Chief Judge Briscoe and Circuit Judges Henry, Lucero, and Murphy joined, expressed serious concern in both the majority’s holding and its reasoning. So much so that Circuit Judge Henry joined by Chief Judge Briscoe and Circuit Judge Lucero wrote a separate dissenting opinion reiterating their concerns. The underlying premise of much of the dissent was that “the Supreme Court did not address a separate, antecedent question: to what area of land should this two-part test [in Venetie] be applied?” Furthermore, these judges expressed concern that this decision overturned “decades of our precedent . . . introduces confusion into an area of law that had been largely settled, and does so based on a case that did not even consider the issue.”
The dissent rested much of its analysis on the interpretation of the word “communities.” It noted that “[t]he Court . . . gave meaning to the word communities in [a] statute by looking at the surrounding area of land in which the [property at issue] was located, rather than simply looking at the plot of land itself.” It also referred to the nature of the property in dispute, arguing that because aquifers “generally are not found underneath just one specific isolated parcel of land, but rather extend under surrounding lands as well, and indeed the aquifer underneath HRI’s Section 8 land runs underneath much of the [NCRC].” Based on these two principals, the dissent concluded that “the word communities in § 1151 (b) requires consideration of land in context, and not in isolation on a parcel-by-parcel basis.”
The dissent proposed a two-step process for considering whether a piece of land constitutes dependent an Indian community under § 1151. This process involves first determining the appropriate community of reference. After making this determination, the dissent advocated, the court should apply the Venetie factors to determine if that community is both dependent and Indian.
The majority eliminated the concept of a community of reference when attempting to characterize potential “Indian lands.” It reasoned that that the community of reference test “disregards and regularly overrides Congress’s plenary authority in charting the extent of Indian country.” While it supported this reasoning by stating it is in line with the holding in Venetie, Venetie only went so far as to say that an Indian community must be sufficiently dependent on the government. Thus, the Tenth Circuit’s decision to extinguish the community of reference test is not, in fact, based on the reasoning of the Supreme Court. Accordingly, the dissent validly argued that the community of reference test is still relevant.
After applying the two-part test described above, the dissent concluded that the Church Rock Chapter is an appropriate community of reference. It further determined that HRI’s land is within the dependent Indian community. Finally, the dissent concluded by saying that “[i]n overturning the community-of-reference test, the majority . . . reache[d] a result not compelled by either Supreme Court or Tenth Circuit precedent. Before all is said and done, this confusion and the serious consequences generated by [the court’s] opinion may ultimately require resolution by the Supreme Court.”
The Tenth Circuit’s majority opinion in Hydro Resources is reflective of the latent ambiguity around the definition of the term “Indian lands.” As noted by the dissent, the Supreme Court’s decision in Venetie left many important and relevant questions unanswered. As is likely to be the case in sister circuits, the Hydro Resources majority makes several unsupported assumptions about the Supreme Court’s reasoning in Venetie in order to develop a test to characterize potential “Indian lands.” Consequently, a resolution of the community of reference issue as it applies to § 1151 by the Supreme Court is perhaps required.
 608 F.3d 1131 (10th Cir. 2010).
 522 U.S. 520 (1998).
 Hydro Res., at 1138.
 18 U.S.C. § 1151 (2006).
 Alaska, 522 U.S. at 527.
 Hydro Res., 608 F.3d at 1141 (citing Pittsburg & Midway Coal Mining Co. v. Watchman, 52 F.3d 1531 (10th Cir. 1995)).
 Id. at 1159 (discussing the area’s “checkerboarded character”).
 Id.at 1137.
 Id. at 1138.
 Id. at 1148.
 Id. at 1166.
 Id. at 1168.
 Id. at 1174 (citing United States v. Mazurie, 419 U.S. 544, 545 (1975)).
 Id. at 1179.
 Id. at 1152.
 Id. at 1182.