The United States issued a 500-acre grant to the State of Alaska in 1961 for use in the Parks Highway, the primary highway between Anchorage and Fairbanks. In 1969, the United States amended the grant to include only the land on which the highway was built. In 1970, William Bryant, an Alaska Native, filed an application for an Alaska Native allotment of 120 acres straddling the highway. He claimed to have used the land for hunting, berry-picking, and trapping for six years. The Bureau of Land Management approved Bryant's allotment in 1988, and the state brought private contest proceedings. Both an administrative law judge and the Interior Board of Land Appeals (IBLA) dismissed the state's claim. The IBLA decision outlined two major points: 1) the application for an allotment related back to the commencement of the use, at which time the land needed to be vacant and unappropriated and 2) the 1961 land grant was a right of way, not a fee, so the state relinquished all but four acres needed for the highway. The state subsequently filed suit in the United States District Court for the District of Alaska to obtain judicial review of IBLA's decision under the Administrative Procedure Act (APA). The district court dismissed the case for lack of jurisdiction,[1] and the state appealed to the Ninth Circuit.

The Quiet Title Act[2] is the exclusive means by which adverse claimants can challenge the United States' title to real property.[3] However, adverse claimants cannot name the United States as a defendant in disputes concerning trusts or other restricted Indian lands.[4] The Ninth Circuit had previously held that the Indian lands exception could not be avoided by obtaining jurisdiction under the APA,[5] so the state's claim was held to be subject to the Quiet Title Act's limitations. However, the Ninth Circuit had also carved out an exception to the Indian lands exception for cases where the claims of Indian lands were not colorable. The standard of review in judging the United States' action is an arbitrary and frivolous standard, set forth in Alaska v. Babbitt.[6] This standard can be satisfied by a determination that the government had some rationale for holding the lands in trust for the Indians.[7] The State of Alaska contended that no government rationale existed for holding the particular land in trust, and thus, the claim of Indian lands was not colorable.

While the case was pending in the Ninth Circuit, IBLA changed its interpretation of the Quiet Title Act to require occupancy to be under color of law.[8] IBLA held that allotments are granted subject to existing rights, and a state right of way is a valid and existing right.[9] The state already had occupancy under color of law and relation back to the commencement of Bryant's occupancy would not help him. IBLA also held that a subsequent elimination of right of way, as seen in the 1969 refining of Alaska's initial grant, does not automatically give color of law to the Native use.[10] Because the state had existing rights at the time that Bryant began his use of the area, the Ninth Circuit held that Bryant did not have a colorable claim to the land. Thus, the Indian lands exception did not apply because the claim of Indian land was not under color of law. Consequently, the Ninth Circuit held that the district court did have jurisdiction under the Quiet Title Act.