Opinion ID: 4526620
Heading Depth: 3
Heading Rank: 1

Heading: The AFLEA

Text: The AFLEA established two trust funds: an “Arizona InterTribal Trust Fund” (“AITF”) “for the benefit of Arizona Tribes that were members of . . . [ITCA] . . . and the members of such tribes,” AFLEA §§ 401(2), 405(a)(1); and a “Navajo Trust Fund” (“NTF”) “for the benefit of the Navajo Tribe and its members,” id. §§ 401(11), 405(a)(2). 4 The AFLEA required that “Monetary Proceeds,” defined as “the cash amount required to be paid . . . by Collier upon closing,” id. § 401(10), “be paid to the [Government] for deposit in the [AITF] and the [NTF],” id. § 403(a), with 95 percent “of the total amount” allocated to the AITF, and the remaining 5 percent allocated to the NTF, id. § 405(e). “Trust Income” from the AITF and NTF was to be used only for “supplemental educational and child-welfare programs, activities, and services for the benefit of” members of ITCA and the Navajo Nation, respectively, as well as “the design, construction, improvement, or repair of related facilities[.]” Id. § 405(d)(2)(A), (B); see id. § 401(21) (“‘Trust Income’ . . . means the interest earned on amounts deposited into [the AITF and NTF] and any amounts paid into each such trust fund in the form of annual Trust Fund Payments.”); see also id. § 401(19) (“‘Trust Fund Payment’ means the payment . . . of the Monetary Proceeds for deposit into . . . the [AITF or NTF], in the form of a lump sum payment or annual payments[.]”). Additionally, “[a]n amount equal to 5 percent of the Trust Income” from the AITF and NTF, was to be “paid annually” to ITCA and the Navajo Nation, respectively, “for education, child welfare, community 4 Because the parties use the term “Navajo Nation” to refer to the “Navajo Tribe and its members” as set forth in the AFLEA, see, e.g., Appellant’s Br. 3 n.1; Appellee’s Br. 6 n.2, we do as well. Case: 19-1758 Document: 29 Page: 6 Filed: 04/17/2020 6 INTER-TRIBAL COUNCIL OF AZ v. UNITED STATES development, and general administrative purposes[.]” Id. § 405(d)(4)(A), (B). The AFLEA permitted the Secretary to “elect to re- ceive” the Monetary Proceeds “in the form of either a lump sum payment or [thirty] annual payments[.]” Id. § 403(b). Relevant here, if the Secretary “elect[ed] to receive” the Monetary Proceeds “in the form of annual payments,” Collier was required to make: (1) “[thirty] annual payments equal to the interest due on . . . the Monetary Proceeds[,]” id. § 403(c)(2)(A); and (2) “at the time of the last annual payment, a [principal] payment equal to . . . the Monetary Proceeds[,]” id. § 403(c)(2)(B). Further, if the Monetary Proceeds were to be received pursuant to the annual payment method, the Government, through the Secretary of the Treasury, was required to “hold in trust . . . security provided in accordance with the Trust Fund Payment Agreement.” Id. § 405(c)(2); see id. § 401(20) (“‘Trust Fund Payment Agreement’ means an agreement providing for payment by the Purchaser of annual Trust Fund Payments for deposit into the [AITF] or the [NTF][.]”). 2. The Trust Fund Payment Agreement, Deed of Trust, and Promissory Note “In June 1991, Collier gave preliminary notice of [its] intent to accept [the Government’s] offer on the Phoenix Indian School [P]roperty, but also told [the Government] that it would not proceed with the [Exchange Agreement] unless it could use the annual payment method[.]” J.A. 51. In September 1991, “over objections by” ITCA and the Navajo Nation, the Secretary “agreed to Collier’s demand for the annual payment method.” J.A. 54 (internal quotation marks omitted). In December 1991, Collier accepted the Government’s offer. J.A. 55. Thereafter, Collier and the Case: 19-1758 Document: 29 Page: 7 Filed: 04/17/2020 INTER-TRIBAL COUNCIL OF AZ v. UNITED STATES 7 Government proceeded to negotiate the terms of the land exchange. J.A. 55–61. 5 In December 1992, Collier and the DOI executed a Trust Fund Payment Agreement (“TFPA”), J.A. 62; see J.A. 341–468 (TFPA), as well as a deed of trust, J.A. 64; see J.A. 529–99 (Deed of Trust). Consistent with the AFLEA, the TFPA required Collier to provide the Government with a promissory note “for [the] payment of $34.9 million ‘with interest thereon.’” J.A. 62; see J.A. 349; see also J.A. 469– 81 (Promissory Note). Importantly, the TFPA provided that the Deed of Trust and Promissory Note, which were attached as “Exhibits” to the TFPA, “constitute[d]” parts of the “TFPA” “as such term is used in the [AFLEA][.]” J.A. 346. The Promissory Note—executed by Collier in December 1992, J.A. 62—required Collier to: (1) make thirty annual interest payments of $2,966,500 (“Trust Fund Payments”), reflecting an interest rate of “[8.5] percent . . . per annum” “on the Principal Amount,” J.A. 63, 171; see 5 In October 1992, ITCA filed suit in the U.S. District Court for the District of Arizona (“Arizona District Court”), seeking to enjoin the Government from proceeding with the land exchange. J.A. 67–68; see J.A. 620–46 (ITCA’s October 1992 Complaint). Among other concerns, ITCA was worried that the Government had “inadequately collateralize[d]” Collier’s payment obligations. J.A. 68. The Arizona District Court denied ITCA’s request for a preliminary injunction, J.A. 662; see J.A. 68, and in June 1993, granted the Government’s and Collier’s motion to dismiss, J.A. 663; see J.A. 69, finding, inter alia, “that the Secretary[’s] . . . decision regarding the . . . adequacy of the collateral [was] precluded from judicial review,” J.A. 662–63; see J.A. 68– 69. The U.S. Court of Appeals for the Ninth Circuit affirmed. See Inter Tribal Council of Ariz. v. Babbitt, 51 F.3d 199, 203 (9th Cir. 1995)); see also J.A. 69. Case: 19-1758 Document: 29 Page: 8 Filed: 04/17/2020 8 INTER-TRIBAL COUNCIL OF AZ v. UNITED STATES J.A. 470, 473 (“Principal Amount means $34.9 million.” (emphasis omitted)); and (2) “pay . . . the Principal Amount,” J.A. 62; see J.A. 470. Additionally, Collier was required to make thirty annual payments into an annuity (“Annuity”), “sufficient . . . to pay the [Government] a lump sum of [$34.9 million]” “on the completion” of those thirty payments. J.A. 62; see J.A. 351–53. According to the TFPA, the Promissory Note was “secured by the Annuity” and a “Trust Estate” as “defined in the Deed of Trust[.]” J.A. 350; see J.A. 63. The Deed of Trust, in turn, provided that the Trust Estate consisted of fifteen acres of the Phoenix Indian School Property (“fifteen-acre Phoenix Indian School Property”), as well as Collier’s development interests in about seven and one-half acres of land located in downtown Phoenix (“Downtown Development Interests”), which Collier acquired in an exchange with the City of Phoenix. J.A. 535–37, 569–74; see J.A. 318 (“The obligations for payment will be secured by liens on Collier’s interest in [fifteen] acres of the [Phoenix] Indian School [P]roperty and on about [seven and one-half] acres of downtown Phoenix land that Collier[] will receive as a result of a land exchange with the City of Phoenix.”); see also J.A. 64. 6 The Deed of Trust allowed Collier to request, and required the Government to release, portions of the Trust Estate if the value of the property remaining in the Trust Estate exceeded 130 percent of a defined “Release Level 6 Prior to execution of the TFPA, Collier agreed to “exchange[] some of the . . . Phoenix Indian School [P]roperty that it [was to] receive[] under the AFLEA with the City of Phoenix” for the Downtown Development Interests. J.A. 64; see J.A. 318. Case: 19-1758 Document: 29 Page: 9 Filed: 04/17/2020 INTER-TRIBAL COUNCIL OF AZ v. UNITED STATES 9 Amount.” J.A. 560–61; see J.A. 64. 7 The Deed of Trust also included a “Maintenance of Collateral Value” provision, which provided that if, after a partial security release, the “fair value” of the remaining unreleased property falls below 130 percent of the Release Level Amount, Collier “shall add to the Trust Estate” U.S. Government-backed securities sufficient in value to “restore the fair value” of the unreleased property to 130 percent of the Release Level Amount. J.A. 561; see J.A. 65. Finally, the TFPA, Promissory Note, and Deed of Trust each “provide[d] that resort for payment of the [Promissory] Note was to be solely against the Annuity and the Trust Estate[.]” J.A. 66; see J.A. 350 (“[R]esort for payment of the Promissory Note shall be solely against the Annuity and the Trust Estate[.]”), 471 (similar), 564 (similar).