Guidiville Band of Pomo Indians v. NGV Gaming, Ltd.

531 F.3d 767, 2008 U.S. App. LEXIS 13474, 2008 WL 2521901
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 26, 2008
Docket05-17066, 05-17067
StatusPublished
Cited by29 cases

This text of 531 F.3d 767 (Guidiville Band of Pomo Indians v. NGV Gaming, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Guidiville Band of Pomo Indians v. NGV Gaming, Ltd., 531 F.3d 767, 2008 U.S. App. LEXIS 13474, 2008 WL 2521901 (9th Cir. 2008).

Opinions

SHADUR, Senior District Judge:

This appeal presents the single, seemingly straightforward question whether the word “is” really means “is,” at least as that word is employed in 25 U.S.C. § 81.1 At the core of the present dispute, that statute requires the Secretary of the Department of the Interior (“Secretary”) to approve any “contract with an Indian tribe that encumbers Indian lands for a period of 7 or more years” before such a contract can be considered valid. Section 81(a) defines the term “Indian lands” in part as “lands the title to which is held by the United States in trust for an Indian tribe” (emphasis added).

Appellant NGV Gaming Ltd. (“NGV”) asks us to read Section 81 literally—as pertaining solely to contracts that implicate lands already held in trust by the federal government. Appellees Harrah’s Operating Company (“Harrah’s”) and Gui-diville Band of Pomo Indians (“the Tribe”2 ), on the other hand, urge a nonliteral reading of the statute—one that would treat Section 81 as also covering contracts in which the parties reach agreement, not with respect to already-held lands, but to [770]*770acquire lands in the future that might eventually be held in trust. Under the latter interpretation the contract at issue in this appeal would be invalid, lacking as it does the Secretary’s approval, and the district court’s decision to dismiss NGV’s suit against Harrah’s for tortious interference with that contract would have to be affirmed. But under the first—and literal—reading, the district court’s decision would be in error, and the state law action could proceed.

Motivated largely by the plain meaning of Section 81—but after also taking into account related statutes, relevant legislative history and the language of the contract itself—we conclude that the word “is” means just that (in the most basic, present-tense sense of the word) and that Section 81 therefore applies only to contracts that affect lands already held in trust by the United States. We therefore reverse the district court and remand for further proceedings.

I. Factual Background

A. Terms of the Contract

On July 3, 2002 the Tribe contracted with FEGV Corporation (“FEGV”) for the latter to develop and construct a gaming facility on a to-be-acquired parcel of land in Northern California. In December 2003 FEGV assigned to NGV its rights and duties under that contract, which comprised two separate documents: (1) a Development Agreement and Personal Property Lease (“the Lease”), and (2) a Cash Management Agreement. Here is the purpose of the transaction as described at the outset of the Lease:

The Tribe requires assistance with (i) financing the day-to-day operations of the Tribal government, (ii) acquiring real property and petitioning the United States to accept title to such property in trust for the benefit of the Tribe ..., and (iii) the development, design, financing, construction and initial equipping of the Facility.

“Facility,” the Lease explains, includes “buildings and improvements” that would be constructed on to-be-acquired real property and that would then be used to conduct Class II or Class III gaming3 for the public. Both parties intended to transfer the to-be-acquired real property into trust, a process set forth under Section 465 that allows the United States to accept and hold property for the benefit of an Indian tribe.4 But to be clear: No such land existed at the time the contract was entered into—nothing had been identified or acquired or, least of all, had been placed in trust.

NGV’s role in that forward-looking endeavor was to use its “experience, expertise and resources ... to assist the Tribe” in accomplishing its objectives. In exchange NGV would be compensated through a combination of fixed payments and a percentage of gross and net revenues earned by the newly constructed [771]*771gaming facility. In addition NGV would enjoy other rights related to the land. Most notably, under the Lease the Tribe could not without NGV’s consent:

Sell, dispose of, lease, assign, sublet, transfer, mortgage or encumber (whether voluntarily or by operation of law) all or any part of its right, title, or interest in or to the Trust Lands, the Facility, or the Equipment.

Finally the Lease set forth several commitments, one of which is critically important to this appeal. It specified that the Tribe would “[ojbtain all necessary and appropriate federal and tribal permits and approvals necessary with respect to the enforceability of the [Lease and Cash Management Agreement] or the operation of the Facility.” Among such potential federal approvals was the approval contemplated by Section 81. Another potentially relevant federal statute was Section 2710(b)(2)(A), which calls for the Chairman of the National Indian Gaming Commission (“Gaming Commission”) to approve “any tribal ordinance or resolution” involving Class II gaming on Indian lands.

B. Rescission of Tribe’s Contract with NGV

Beginning in January 2004 Harrah’s and Upstream Molate, LLC (“Upstream”) partnered and entered into negotiations to purchase 354 acres of land from the City of Richmond, California. Harrah’s and Upstream intended to place that land in trust on behalf of the Tribe and to use the land to build a gaming facility that the Tribe would operate. According to NGV, Harrah’s and Upstream began those negotiations despite knowing of the Tribe’s preexisting obligations to NGV.

On August 2, 2004 the Tribe—acting through its chairperson, Merlene Sanchez—sent a letter to NGV seeking to rescind their contract. Sanchez explained that the Tribe had submitted their contract to the Bureau of Indian Affairs (“Bureau”) and the Gaming Commission for both agencies’ approval under Sections 81 and 2710. Because the Gaming Commission had already informed the Tribe that its contract with NGV was illegal, Sanchez concluded that the Tribe had “no choice but to rescind the agreement.”

Indeed, in a letter dated July 21, 2004 the Gaming Commission explained that the Tribe’s contract with NGV violated Section 2710(b)(2)(A). It stated that “the Agreements evidence Developer’s proprietary interest in the Tribe’s gaming activity” and that such a proprietary interest contravened the Indian Gaming Regulatory Act (“IGRA”).

Similar news came from the Bureau on April 13, 2005. After reviewing the Lease and Cash Management Agreement, that agency “concluded, as a matter of law, that the agreements must be approved by the Secretary under Section 81 in order for them to be valid and enforceable.” Absent such approval, the Bureau explained, the contract was “unenforceable as a matter of law.” Its conclusion, it noted, stemmed from information provided to it by attorneys for the Tribe “showing that the United States had accepted at least three parcels in Mendocino County, California, into trust for the benefit of the Tribe in 1999.” Those 44 acres had been accepted into trust in 1999 with the intention that they would be used by the Tribe for residential development, not a gaming facility.

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Bluebook (online)
531 F.3d 767, 2008 U.S. App. LEXIS 13474, 2008 WL 2521901, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guidiville-band-of-pomo-indians-v-ngv-gaming-ltd-ca9-2008.