Opinion ID: 1466405
Heading Depth: 1
Heading Rank: 4

Heading: NGV's Claim Against Harrah's

Text: We turn now to NGV's claim that Harrah's tortiously interfered with the contract that once bound NGV and the Tribe. Under California law [t]he elements of a cause of action for intentional interference with contract are: (1) a valid contract between plaintiff and a third party; (2) defendants' knowledge of the contract; (3) defendants' intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage ( Tuchscher Dev. Enters., Inc. v. San Diego Unified Port Dist., 106 Cal.App.4th 1219, 132 Cal. Reptr.2d 57, 73 (Cal.Ct.App. 2003)). At issue in this appeal is the first element of the tort: NGV contends that its contract with the Tribe was valid because it did not require approval under Section 81, while Harrah's argues that the contract was invalid precisely because it lacked such approval. In the alternative, Harrah's argues that the contract violated Section 2710, which requires that an Indian tribe have the sole proprietary interest and responsibility for any gaming activity. We address each of those arguments in turn, tackling the Section 81 inquiry first. That inquiry calls for a consideration of a number of factors, including the plain language of the statute, the role (if any) of 1 U.S.C. § 1, relevant legislative history and, of course, the actual language of the agreement that once bound NGV and the Tribe.
Our analysis begins with the plain language of Section 81, not only because that is the natural starting point dictated by all accepted canons of statutory construction but also because the statute's unequivocal present-tense use of the word is does a tremendous amount of the legwork in settling one of the main questions raised on this appeal. In full Section 81(a) defines the term Indian lands as (emphases added): lands the title to which is held by the United States in trust for an Indian tribe or lands the title to which is held by an Indian tribe subject to a restriction by the United States against alienation. Section 81(b) then prescribes: No agreement or contract with an Indian tribe that encumbers Indian lands for a period of 7 or more years shall be valid unless that agreement or contract bears the approval of the Secretary of the Interior or a designee of the Secretary. In this instance the Tribe-NGV contract was not within the purview of Section 81 because it plainly did not implicate Indian lands in statutory terms. Section 81(a)'s use of the present tense in defining Indian lands unambiguously prescribes that title to the real estate must already be held by the United States in trust for a tribe. Had Congress intended that Section 81 also extend to lands that might later be held in trust, it would have been the simplest of matters to word the statute differently. That it did not do so is not a linguistic decision to be treated lightly (see SEC v. McCarthy, 322 F.3d 650, 656 (9th Cir.2003), explaining that Congress's explicit decision to use one word over another in drafting a statute is material and adding that [i]t is a decision that is imbued with legal significance and should not be presumed to be random or devoid of meaning; Biehl v. CIR, 351 F.3d 982, 987 (9th Cir.2003), writing that courts will not stretch the statutory language to cover a situation not contemplated by Congress). Here the parties entered into their contract expressly contemplating  specifically intendingthat land would later be identified and acquired and then still later transferred to the United States to be held in trust for the Tribe. But no such lands existed when the Tribe and NGV entered into their contract. Hence the portion of Section 81 that limits the duration of encumbrances on Indian lands is simply inapplicable to this case.
Contrary to the contention raised by the dissent, nothing in our reading of Section 81 contravenes 1 U.S.C. § 1. [8] More commonly referred to as the Dictionary Act, that statute reads in relevant part: In determining the meaning of any Act of Congress, unless the context indicates otherwise . . . . words used in the present tense include the future as well as the present. Focusing upon the phrase words used in the present tense include the future as well as the present, the dissent asserts that the word is as used in Section 81(a) encompasses both lands that are currently held in trust by the United States for an Indian tribe and lands that might eventually be held in similar fashion. But in so doing, the dissent fails to grapple adequately with (1) the Supreme Court's repeated instructions regarding proper statutory construction and (2) the directive in the Dictionary Act itself that compels us to consider first the context of the statute. First, the Supreme Court has not once invoked the Dictionary Act in an effort to convert an unambiguous verb tense into claimed ambiguity, let alone then going on to employ that manufactured ambiguity as a stepping stone to altering the plain sense of a statute. [9] Here is the succinct directive in United States v. Wilson, 503 U.S. 329, 333, 112 S.Ct. 1351, 117 L.Ed.2d 593 (1992) and the cases that it cites: Congress' use of a verb tense is significant in construing statutes. See, e.g., Otte v. United States, 419 U.S. 43, 49-50, 95 S.Ct. 247, 42 L.Ed.2d 212 (1974); Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 63-64, n. 4, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987). Similarly, Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002) made clear that in all statutory construction cases, we begin with the language of the statute. Inquiries into the meaning of a statute come to an end if the statutory language is unambiguous and the statutory scheme is coherent and consistent ( id., quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)(internal quotation marks omitted)). Given the specific and unambiguous manner in which Section 81(a) defines the term Indian lands, it is not apparent why the Dictionary Act must even be consulted. Second, even on its own terms the Dictionary Act supports the analysis here: It looks first to context, and only if the context leaves the meaning open to interpretation does the default provision come into play. As defined by Rowland, 506 U.S. at 199-200, 113 S.Ct. 716 (alterations in original, emphasis added): Context here means the text of the Act of Congress surrounding the word at issue, or the texts of other related congressional Acts, and this is simply an instance of the word's ordinary meaning: [t]he part or parts of a discourse preceding or following a `text' or passage or a word, or so intimately associated with it as to throw light upon its meaning. Webster's New International Dictionary 576 (2d ed.1942). While context can carry a secondary meaning of [a]ssociated surroundings, whether material or mental, ibid., we doubt that the broader sense applies here. And Rowland, id. at 199 went on to explain that the word indicates broadens the scope of the inquiry that a court must make ( id. at 200, 113 S.Ct. 716): If context thus has a narrow compass, the indication contemplated by 1 U.S.C. § 1 has a broader one. The Dictionary Act's very reference to contextual indication bespeaks something more than an express contrary definition, and courts would hardly need direction where Congress had thought to include an express, specialized definition for the purpose of a particular Act; ordinary rules of statutory construction would prefer the specific definition over the Dictionary Act's general one. Where a court needs help is in the awkward case where Congress provides no particular definition, but the definition in 1 U.S.C. § 1 seems not to fit.[ [10] ] There it is that the qualification unless the context indicates otherwise has a real job to do, in excusing the court from forcing a square peg into a round hole. With that guidance in mind, we consider a series of congressional acts related to Section 81specifically, Sections 465, 2719 and 271that clearly avoid an awkward rendering of Section 81. Sections 465 and 2719 are particularly instructive, for they respond directly to the dissent's concern that construing Section 81 so that it applies only to contracts involving lands already in trust would allow parties to evade federal review entirely. Manipulative parties, the dissent fears, could take advantage of such an interpretation by carefully orchestrating the timing of any agreement so that any provision encumbering Indian lands would be executed only before placing land in trust. But such fears are more than adequately assuaged by the existence of Sections 465 and 2719, both of which guarantee that a contract such as the one that NGV and the Tribe had entered into can never escape the federal government's attention. First, Section 465 (already quoted in n. 4) and its implementing regulations set forth an extensive review process that the Secretary of the Interior must undertake before taking lands into trust (see, e.g., 25 C.F.R. §§ 151.3, 151.11(c); Larry E. Scrivner, Acquiring Land into Trust for Indian Tribes, 37 NEW ENG.L. REV. 603, 606-07 (2003)(Scrivner), [11] describing the trust application process and the Secretary's duty to investigate, among other things, the purpose for which the land will be used and the effect that placing the land into trust will have on the tax bases of local government; Mary Jane Sheppard, Taking Indian Land Into Trust, 44 S.D. L. REV. 681, 687-88 (1998-99) (Sheppard), [12] similarly describing the comprehensive nature of a Section 465 review). During such a review a tribe is first required to address, among other issues, its need for the land, the purpose for which the land will be used, the effect that taking the land into trust would have on state and local political subdivisions and whether a decision to take the land into trust would comply with the National Environmental Policy Act (see Scrivner, 37 NEW ENG.L. REV. at 606). With that initial information in hand, the Department of the Interior then gives state and local governments the opportunity to object to the tribe's application through evidentiary documentation demonstrating why taking the land into trust would impact[ ] their jurisdiction or their tax base ( id. at 607). Only after all sides have provided their input does the Department begin its own independent examination of the trust application, a process that requires a thorough analysis of all the facts and documentation, environmental clearances, archaeological studies, and all of the things that weigh into the action ( id. ). Any final decision is subject both to a similarly extensive administrative appeals process and to a subsequent review in the federal courts ( id. ). And relatedly, in cases where the tribe intends to use lands transferred into trust for gaming purposes, Section 2719(b)(1)(A) requires that the Secretary first determine[ ] that a gaming establishment ... would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community (see also Sheppard, 44 S.D. L. REV. at 687). In short, any concern that NGV was trying to game the system by executing its contract with the Tribe before transferring land into trust is wholly unfounded. Instead any later effort to take lands into trust triggers an extensive review process by the Secretarya review that is far more meaningful than any Section 81 proceeding that would deal with not-yet-identified lands that might be taken into trust in the future, because a Section 465 proceeding addresses the suitability of a specific parcel of land in all respects, rather than the totally speculative process that is necessarily involved when a presently unknown future acquisition is sought to be made the subject of an attempted analysis. Sections 2710(d)(3)(A) and 2710(d)(7) also help illuminate the meaning of Section 81, particularly because both are part and parcel of IGRA, which defines Indian lands in much the same manner as Section 81 (see Section 2703(4)(B) (emphasis added), defining Indian lands in part as any lands title to which is held in trust by the United States for the benefit of any Indian tribe....). Section 2710(d)(3)(A) provides: Any Indian tribe having jurisdiction over the Indian lands upon which a class III gaming activity is being conducted, or is to be conducted, shall request the State in which such lands are located to enter into negotiations for the purpose of entering into a Tribal-State compact governing the conduct of gaming activities. If any State should fail to enter into such negotiations, Section 2710(d)(7) provides the Indian tribe with a series of remedies, including the right to initiate an action against the State in federal district court. But to bring such an action, as the Sixth Circuit has held in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Engler, 304 F.3d 616, 618 (6th Cir.2002), the Indian tribe must show that it has Indian lands as defined by IGRA at the time of filing. Match-E-Be-Nash-She-Wish, id. spelled out the rationale underlying its conclusion in terms that bear considerably on the Section 81 question now before us: Under § 2710(d)(3)(A), it is clear that the State does not have an obligation to negotiate with an Indian tribe until the tribe has Indian lands. The purposes of this requirement appear to be to ensure that the casino will be inside the borders of the State, to give the State notice of where it will be, and to require the tribe to have a place for the casino that has been federally approved. If the Indian tribe does not have any land in the State that can be used for a casino, why should the State waste its time negotiating about such a casino? In the absence of a location, the State would have no way to assess the environmental, safety, traffic, and other problems that such a casino could pose. Accord, Mechoopda Indian Tribe of Chico Rancheria, Cal. v. Schwarzenegger, No. Civ. S-03-2327WBS/GGH, 2004 WL 1103021, at  (E.D.Cal. Mar.12, 2004). Given those practical concerns, it is no wonder that the Bureau's policy has been to review contracts under Section 81 only when they involve lands currently held in trust by the United States. That policy is evinced by the Bureau's own April 13, 2005 letter to the Tribe, which made clear that its conclusion that the NGV-Tribe agreement was invalid for lack of Section 81 approval was predicated on the Tribe's lawyers having alerted the Bureau to its Mendocino County property, not to the possibility of acquiring future trust lands. [13] That same policy is further confirmed through an affidavit included in the record by NGV from Kevin Gover (Gover), a former Assistant Secretary for Indian Affairs. Gover attests that during his tenure from late 1997 to early 2001, it was not the [Bureau's] policy or practice to review contracts to determine whether such contracts fall within the scope of 25 U.S.C. § 81(b) ... in the absence of the existence of trust lands. Instead, in cases where the purpose of the contract between a developer and a tribe [was] to assist the tribe in acquiring real property, and petitioning the United States to accept title to such property in trust for the benefit of the tribe, the Bureau's review would be done pursuant to the regulations implementing Section 465. As Gover puts it: [t]he Secretary's acceptance of title to the subject property in trust for the petitioning tribe subsumes all approvals required under Federal law. And as all of that applies to the facts before us, the fact that the Tribe and NGV would eventually have to undergo Section 465 review if their later-acquired lands were to be transferred into trust obviated any need to have their contract approved under Section 81. In conclusion, there is no reason to resort to the Dictionary Act's default rules of statutory interpresentation. Instead the context here clearly indicates that Section 81 is limited only to reviewing those contracts involving presently held trust lands.
Our literal reading of Section 81 is further corroborated by the statute's legislative history. [14] In seeking to persuade us to read Section 81 other than in plain-language terms, Harrah's points to some cases that, it claims, identify a legislative history of Section 81 that supports a nonliteral reading. We have reviewed those cases as well as the pertinent legislative history, and we conclude that those sources not only fail to support the position advanced by Harrah's but that they instead further corroborate our own plain-language statutory reading. Thus Harrah's seeks to call to its aid Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985), but that case significantly couched its view in terms that federal statutes relating to Indian tribes are to be construed liberally in favor of the Indians, with ambiguous provisions interpreted to their benefit  (emphasis added). Here that proposition does not aid Harrah's, for Section 81's present-tense wording leaves no room for ambiguity. [15] Indeed, even the Blackfeet Tribe concept of liberal construction in favor of the Indians does not call for a nonliteral reading of Section 81(b), for requiring that more rather than fewercontracts be approved under Section 81(b) would frustrate Indian tribes' efforts to promote economic development and fiscal autonomy ( Penobscot Indian Nation v. Key Bank of Me., 112 F.3d 538, 554 (1st Cir.1997), adding that the court's analysis reflects the modern trend in federal Indian policy away from outmoded paternalistic practices and policies). Section 81's own evolution confirms the advent of that more modern attitude toward Indian tribes, a perspective that the dissent does not acknowledge. That statute was originally enacted in 1872 to reflect[ ] Congressional concerns that Indians, either individually or collectively, were incapable of protecting themselves from fraud in the conduct of their economic affairs (see s. REP. NO. 106-150, at 2 (1999), adding that [t]he first and principal need then was that [Indians] should be shielded alike from their own improvidence and the spoliation of others). But in 1934 Congress shifted the focus of its Indian policy by enacting the Indian Reorganization Act (Reorganization Act) that represented a fundamental break with [the] policy underlying Section 81 (see id. ). As the 1999 Senate Report, id. (alteration in original and internal quotation marks omitted) went on to say: The intent and purpose of the [Reorganization Act] was to develop the initiative destroyed by a century of oppression and paternalism.... [It] seeks to get away from the bureaucratic control of the Indian Department, and it seeks further to give the Indians the control of their own affairs and of their own property. Following passage of the Reorganization Act, administrative agencies and courts were left with the difficult task of reconciling an 1872 statute that sought to protect Indian tribes by imposing extensive federal oversight with a 1934 Act intended to disentangle the tribes from official bureaucracy ( id. (internal citation omitted)). Fortunately Congress simplified that task in 1999 when it amended Section 81. Those amendmentswhich, among other changes, replaced the term relative to Indian lands with encumbers Indian lands [16]  ensure[d] that Indian tribes will be able to engage in a wide array of commercial transactions without having to submit those agreements to the BIA as a precaution ( id. at 9; see also id., expressly noting that the 1999 amendment eliminated the overly-broad scope of Section 81). Put simply, the tables have turned since 1872. Although at an earlier point courts may have been able to use the Black-feet Tribe presumption to justify a nonliteral expansion of Section 81, certainly the most recent amendment to that statute makes clear that Congress now considers self-determinationnot paternalismto be in the Indians' best interest. And that goal is more directly advanced by a literal rather than a nonliteral reading of Section 81.
With all of that said, we turn now to the actual language of the Lease to demonstrate that under the literal present-tense reading of Section 81, it does not apply to the only lands that the United States already held in trust for the Tribe's benefit at the time the Tribe-NGV agreement was entered into. Taking issue with our addressing the specifics of the contract, the dissent argues that this is a task best left in the first instance to the district court, particularly when parol evidence is involved. But our reading is based on the words of the contract itself (see n. 17), and contract interpretation has always been a matter of pure law that needs no preliminary screening by the district court. And our reference to the contract directly addresses Harrah's argumentindeed the primary one that it has raised on appeal that the Lease implicates the Mendocino County, California property already held in trust for the Tribe. Because it is exceedingly plain that neither the Tribe nor NGV ever contemplated that the document would extend to the Mendocino County lands, we hold that the agreement binding those two parties was valid without the Secretary's approval. It is of course true that the Tribe's 44 acres in Mendocino County qualify as Indian lands as that term is defined by Section 81. And it is equally true that such acreage was taken into trust by the United States for the benefit of the Tribe in 1999, well before NGV and the Tribe formalized their business relationship. But the Mendocino County land issue is really a red herring: Both the unambiguous language of the Lease and, at least as importantly, the equally unambiguous facts as to that property itself confirm that the Mendocino County lands are not at all within the purview of the parties' transaction and were therefore not even arguably encumbered by the Lease. Under the terms of the Lease, NGV and the Tribe partnered not to develop a casino on existing tribal land, but because the Tribe require[d] assistance . . . acquiring real property and petitioning the United States to accept title to such property in trust for the benefit of the Tribe (emphasis added). With the Mendocino County property already in handand having been accepted into trustwhen the parties entered into their deal, the Lease cannot fairly be read as providing (or even contemplating) that such property would or could become the eventual site of the casino. It would make no sense at all, of course, to speak of acquiring already-owned real property. And it must be remembered that the Mendocino County property had been acquired expressly for residential development, not for commercial development. Nothing suggests that such purpose had changed in any respect either before or at the time that NGV and the Tribe entered into their agreement. Additional language from the Lease further supports our conclusion. According to the Lease's Master Definitions List, Trust Lands is described as: Property held by the United States in Trust for the benefit of the Tribe. Property is in turn defined in terms of the future, not the present (emphasis added): The real property upon which the Structure will be constructed by Developer, which at the time of construction will be titled to the United States in trust for the benefit of the Tribe. Structure is similarly defined as: The buildings and improvements constructed and installed on the Trust Lands on which the Tribe operates the Facility. And finally, Facility is defined as: The Structure, equipped and ready for the Tribe to conduct Gaming for the public. With that definitional chain, the Lease provision sought to be relied on by Harrah's cannot reasonably be read as embracing the Tribe's acreage in Mendocino County. If that were to be done, Property would not be defined only in the future tense and Structure and Facility would not be defined in terms of a public gaming facility rather than private housing. In short, because the Mendocino County property was already held in trust and because it had been specifically slated and remained slatedfor residential development, that property simply does not come within the provision of the Lease restricting the Tribe's ability to alienate Trust Lands. [17]
To this point we have demonstrated in a number of different ways why Section 81 is inapplicable to the situation before us. But finally we soldier on to speak far more briefly to the substantially more attenuated possibility that the parties' agreement could somehow have violated Section 2710. As before, that inquiry begins by recourse to the plain statutory language. And by its express terms, Section 2710 pertains only to tribal ordinances or resolutionsnot to a tribe's contract with a third partyso that nothing in that statute impairs the validity of the Tribe-NGV agreement. Under Section 2710(b)(2)(A)(emphases added) the Chairman of the Gaming Commission: shall approve any tribal ordinance or resolution concerning the conduct, or regulation of class II gaming on the Indian lands within the tribe's jurisdiction if such ordinance or resolution provides that  (A) . . . . the Indian tribe will have the sole proprietary interest and responsibility for the conduct of any gaming activity . . . On appeal Harrah's argues that NGV's agreement with the Tribe violated that statute because the terms of the Lease allowed NGV to assume the dominant equity interest in the eventual gaming facility. That arrangement, it contends, is concomitant to NGV having a sole proprietary interest in the gaming facility. But Section 2710's plain language refutes that notion because Harrah's conclusion rests on a false premise. Here there was no tribal ordinance or resolution (note that the statute's implementing regulations likewise refer to gaming ordinance or resolution adopted by a tribe ) (see 25 C.F.R. § 522.1 (emphasis added)). That language simply does not speak to contracts entered into between a tribe and a third party (as contrasted with tribal legislation or regulations officially enacted by the tribe). That reading is further fortified by the sharp contrast between Section 2710 and Section 2705(a), a related statute that speaks of both tribal ordinances or resolutions and a specific type of contract that a tribe may enter into with a third party. [18] Thus the Tribe's agreement with NGV cannot be said to violate Section 2710 either. [19]