The United States, in its own capacity and as trustee for the Coeur d'Alene Indian Tribe, brought this suit against the State of Idaho seeking to quiet title to submerged lands under Coeur d'Alene Lake and the St. Joe River located inside the exterior boundaries of the Coeur d'Alene Indian Reservation. The Tribe intervened as plaintiff. The District Court for the District of Idaho quieted title in favor of the United States as trustee and the Coeur d'Alene Tribe as beneficial owner, but refused to adjudicate ownership of submerged lands within Heyburn State Park.[1] Both Parties appealed and the Ninth Circuit affirmed, holding that Congress's course of conduct in the years immediately preceding Idaho's statehood in 1890 demonstrated its intent to defeat Idaho's title to the submerged lands within the Coeur d'Alene Indian Reservation. The court also upheld the district court's decision not to adjudicate ownership of submerged lands within Heyburn State Park because the United States disclaimed any intent to quiet title in those lands.

In 1867, the President established by executive order (EO) a reservation embracing a small portion of Coeur d'Alene Lake without knowledge of the Coeur d'Alene Tribe.[2] The Tribe was informed of the EO when it requested a charter for a reservation in its petition to the Commissioner of Indian Affairs in 1871.[3] The Tribe sent a second petition in 1872, requesting inclusion of the mission and the St. Joe and Coeur d'Alene river valleys because of the Tribe's dependence on fisheries and water resources.[4] Congress responded in 1873, authorizing a commission to negotiate with the Tribe for a larger reservation. The 1873 reservation was created by EO and included the vast majority of Coeur d'Alene Lake.[5] This EO was contingent on congressional approval, which was never issued. However, subsequent executive and congressional action in 1887[6] and 1889[7] operated under the boundaries identified in the 1873 EO, including the submerged lands underlying Coeur d'Alene Lake. Congress formally ratified the 1887 and 1889 agreements in 1891,[8] nine months after Idaho's admission to the Union.[9] The statehood act cross-referenced the Idaho Constitution, which disclaimed Idaho's "right and title to . . . all lands lying within said limits owned or held by any Indians or Indian tribes."[10]

The Ninth Circuit reviewed the district court's interpretation of treaties, statutes, and executive orders de novo, juxtaposing two competing principles: the canon of treaty construction that dictates ambiguities be resolved in favor of Indians, and the presumption under the Equal Footing Doctrine that a state gains title to submerged lands within its borders upon admission to the Union.[11] Three Supreme Court decisions provided the Ninth Circuit with the legal framework for determining whether Idaho's presumptive title to submerged lands had been defeated.[12] Adopting the two-prong test set out in Montana v. United States[13] and reaffirmed in United States v. Alaska,[14] the Ninth Circuit stated that the key question was "whether the United States intended [1] to include submerged lands within the [reservation] and [2] to defeat [Idaho's] title to those lands."[15]

The Ninth Circuit acknowledged that in a case involving submerged lands and equal footing, the court must begin with a strong presumption against the defeat of Idaho's title. The court then applied the Montana test to determine whether the United States overcame that presumption. The court brushed aside the first prong of the test, noting that for purposes of appeal, Idaho conceded that the 1873 EO intended to reserve title to the submerged lands in the Coeur d'Alene Tribe and not the State. The court then turned to the second prong. Emphasizing that nothing in the Supreme Court's decision in Alaska requires a finding of explicit congressional ratification of an agreement reserving submerged lands,[16] the Ninth Circuit held that "Congress's actions prior to statehood clearly indicate[d] its acknowledgement, express recognition, and acceptance of the executive reservation, thereby establishing its intent to defeat [Idaho's] title."[17]

The court's determination that federal intent overcame Idaho's title was based on application of three key factors set out in Alaska: 1) the reservation boundaries were drawn to include the submerged lands; 2) the purpose of the reservation would be defeated without inclusion of the submerged lands; and 3) Congress included language in the statehood act indicating it retained regulatory authority in the reservation.[18] Most significant to the court was the series of congressional actions in the 1880s indicating that Congress acknowledged beneficial ownership of the submerged lands had passed to the Coeur d'Alene Tribe. Congress's post-statehood actions also reflected recognition and confirmation that the submerged lands belonged to the Tribe. The court found it crucial to outline the precise information Congress had before it in the 1880s. Examining Congress's language in the 1889 negotiations to redraw the 1873 reservation boundaries, the court applied the canons of treaty construction favoring Indians and determined the purpose was specifically for "establishing the Tribe's right to the Lake and rivers."[19] Therefore, the court concluded that Congress intended the reservation to encompass the submerged lands.

Citing the Tribe's refusal to settle on the 1867 lands, which did not include Coeur d'Alene Lake and its waterways, the court found even stronger support for its conclusion in the second factor. Because the Coeur d'Alene Tribe was dependant on the fisheries supported by the lake, the purpose of the reservation would have been defeated if it did not include the lake's submerged lands. The court rejected Idaho's argument that the purpose of the reservation should be determined from the perspective of Congress at the time it ratified the treaty, rather than when the executive reservation was created in 1873. The Ninth Circuit emphasized that "[w]hat mattered was that Congress recognized that the executive reservation included submerged lands, not that it knew or acknowledged the executive purpose in reserving them."[20]

The court noted that although Congress had the power and the opportunity to reject the executive order reservation and the 1887 agreement, Congress never did. Instead, the court found particularly persuasive Congress's 1889 authorization for negotiations to acquire non-agricultural lands "for the purchase and release by said tribe of such portions of its reservation . . . as such tribe shall consent to sell."[21] The court interpreted these events as clear evidence that Congress's main purpose was to buy whatever submerged lands the Coeur d'Alene Tribe was willing to sell. The court also found Idaho's admission bill and constitution persuasive, which set forth a declaratory clause recognizing the United States's authority and title over Indian lands within Idaho. Finally, the court concluded that Congress's post-statehood actions confirmed that the lands underlying Coeur d'Alene Lake passed to the Tribe before Idaho entered the Union. Most notably, the Harrison Act of 1894[22] withdrew a narrow strip of land and a corner of the Lake from the reservation. The court found this "acknowledgement of tribal ownership of the lake bed . . . tantamount to a memorialization of prior events," as was a land withdrawal in 1908 for creation of a park.[23]

The Ninth Circuit also upheld the district court's denial to adjudicate submerged lands within Heyburn State Park because the United States disclaimed any intent to quiet title in those lands and it was outside of the pleadings. Thus, the court affirmed the district court's decision.