Court Limits U.S. Power Over Tribal Contracts

SAN FRANCISCO (CN) - The Secretary of the Department of the Interior must approve contracts involving tribal lands already held in trust, but not those that might be held in trust in the future, the 9th Circuit ruled.

Section 81 requires secretary approval for contracts that encumber tribal lands for seven or more years, in which lands are defined as "the title to which 'is' held by the United States in trust for an Indian tribe."

Judge Shadur said the word "is" should be read in the present tense, meaning the land must be in trust for the government to approve the contract. A 1999 amendment of Section 81 introduced the word "encumbers" to the statute, advancing tribal self-determination by forcing the government to take a step back in tribal land decisions.

In 2003 the Guidiville Band of Pomo Indians contracted with NGV Gaming Ltd. to build a casino in Northern California on an unspecified site. The chairman of the National Indian Gaming Commission declared the contract illegal due to NGV's proprietary interest in gaming activities, prompting the tribe to ask NGV for a rescission. Meanwhile, Harrah's Operating Company Inc. bought 354 acres of land from the city of Richmond, Calif., that it intended to place in trust for the tribe for casino development, causing the tribe to enter into an agreement with Harrah's.

The 9th Circuit ruled that the tribe's contract with NGV never needed approval from the government because it did not involve trust lands. After the tribe terminated its contract with NGV, the case had no place in the courts. Judge Shadur refused to allow the tribe to "fall back on its claimed sense of uncertainty about any future essays into the gambling industry."

Dissenting Judge N. Randy Smith said Section 81 includes lands held in trust both presently and in the future pursuant to the Dictionary Act, which calls for all present words used in acts of Congress to include future tense.

Smith objected to the majority's interpretation of the casino contracts, which were not first reviewed by the district court, and said the case should be remanded for a closer look at contracts.

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