Opinion ID: 1466405
Heading Depth: 2
Heading Rank: 2

Heading: Rescission of Tribe's Contract with NGV

Text: 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 pre-existing 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. Based on the existence of the Mendocino County property the Bureau determined that the Tribe has an interest in `Indian land' as defined in § 81(a), and that interest was encumbered by its contractual provision with NGV that affirmatively require[s] the Tribe to refrain from selling or disposing of any part of an interest the Tribe has in Indian land ... so long as the agreements remain in effect. In August 2004  before having received the Bureau's letter but after having received the Gaming Commission's decisionthe Tribe officially entered into an agreement with Harrah's and Upstream to develop and manage the Tribe's proposed gaming facility. That agreement contained an indemnification clause requiring the Tribe to defend Harrah's against any future claims made by NGV.