Court Opinion

ID: 6933995
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:21:08.210793+00
Date Added: 2024-06-11T16:07:21.503476
License: Public Domain

FLAUM, Circuit Judge,
concurring.
I agree that Supreme Court jurisprudence dictates that the plaintiffs’ qui tam action satisfies both constitutional and prudential standing requirements and that this action should be remanded with instructions to proceed on the merits of the case. I nonetheless write separately to discuss two related issues not directly addressed in the majority opinion.
First, the Minnesota District Court’s opinion in United States ex rel. Hall, 825 F.Supp. 1422 (D.Minn.1993), upon which the district court in this case relied, separately concluded that dismissal was appropriate under Fed. R.Civ.P. 19 because of an inability to join necessary and indispensable parties — namely, the Indian tribes who are parties to the agreements in question. But see United States ex rel. Gulbronson v. D & J Enterprises, No. 93-C-233-C (W.D.Wis. Dec. 22, 1993) (concluding that an Indian tribe was not a necessary and indispensable party in a qui tam action brought by members of the tribe challenging contracts involying gaming-related goods and services); United States ex rel. Mosay v. Buffalo Brothers Management, Inc., No. 92-C-925-S, 1993 WL 643378 (W.D.Wis. Mar. 16, 1993) (same), aff'd, 20 F.3d 739 (7th Cir.1994). It is unclear from the district court’s orders of August 6 and September 15, 1993, whether the court adopted the Minnesota opinion in its entirety or simply adopted its holding that a lack of standing deprived the court of subject matter jurisdiction over the .case. In any event, “[t]he application of Rule 19, of course, turns on the facts of each case,” LeBeau v. Libby-Owens Ford Co., 484 F.2d 798, 800 (7th Cir.1973), and thus is a task better suited, at least in the first instance, to the district court. Accordingly, on remand I would direct the district court to apply independently the relevant Rule 19 factors to the particular circumstances of this case.
Second, even if the plaintiffs have standing to assert claims under §§ 81 and 201, we must still determine whether these sections provide the remedies that plaintiffs hope they do because dismissal would be proper if they do not. According to the plaintiffs, the qui tam provision of § 81 is self-contained in the sense that it allows recovery for the substantive violations of that.very section— contracts for services relating to lands made without the approval of federal authorities. *1217Section 201, on the other hand, purports to authorize all actions to collect any and all penalties “which shall accrue under this title.” Accordingly, plaintiffs insist that § 201 allows them to enforce the substantive obligations imposed by §§ 81, 264, and 2711.
In my view, plaintiffs clearly are entitled, to proceed with their claims seeking to enforce alleged violations of §§ 81 and 264. Whether there was a violation of § 81 in this ease depends on whether the contracts at issue fall within the purview of that statute. At this stage of the litigation, it would be inappropriate (and perhaps impossible) for us to decide that question here. However, unless the provisions of the contract are ambiguous, thereby raising a question of fact, a district court may consider the applicability of § 81 to be a question of law appropriate for resolution at summary judgment according to the standard set forth in Altheimer & Gray v. Sioux Mfg. Corp., 983 F.2d 803, 811 (7th Cir.1993). Accordingly, I would remand with instructions to determine whether the contracts underlying the plaintiffs’ suit involve payment “in consideration of services for ... Indians relative to their lands.” 25 U.S.C. § 81. In addition, I would allow the plaintiffs to pursue their claim that the defendants have violated the Indian Traders Licensing Act, 25 U.S.C. § 264,1 by virtue of their having standing under § 201. Sections 201 and 264 existed within the same title (Title XVIII of the Revised Statutes) of the federal statutes as early as 1834, and since that time both have been recodified under Title 25 of the United States Code. The historical linkage between these two sections suffices to establish that a penalty imposed under § 264 may be recovered in a suit brought pursuant to § 201, though the case law from other circuits indicates that plaintiffs’ potential recovery may be limited. See, e.g., United States ex rel. Hornell v. One 1976 Chevrolet, 585 F.2d 978, 981 (10th Cir.1978) (holding that a forfeiture of merchandise -under § 264 is not a “penalty” as that term is used in § 201 and thus cannot be recovered by a qui tam litigant proceeding under that section).
The most difficult issue raised in this case, in my view, is whether either § 81 or § 201 applies to the plaintiffs’ claims to recover for violations of the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701 et seq.2 Mo-say expresses doubt that § 81 applies to contracts now governed by the IGRA for the following reasons:
Contractors would be subject to enormous legal risk that one of their contracts with an Indian tribe might be held to be a collateral agreement that they should have but failed to file, in which event they would have to repay everything received under the contract, Qui tam liability would expand indefinitely at the very moment that Congress had created a new administrative remedy and vested its enforcement in a new, specialized agency with its own detailed, measured, modern set of remedies.
*1218Mosay, 20 F.3d at 743. Here plaintiffs allege standing under § 201. If we actually had to resolve this issue, we might start by considering, in addition to the concerns noted by the Mosay court, whether a penalty assessed under the IGRA may be considered to have accrued within the same title as § 201. We would have to decide whether the relevant “title” is Title XVIII of the Revised Statutes of 1834 or Title 25 of the United States Code as of the day this action was filed. We also would have to consider whether the language of the IGRA limits the authority to levy and collect fines to one (and only one) person — namely, the Chair of the Commission..
I would leave these difficult questions unresolved today because we cannot even be certain at this stage of the litigation that the IGRA even applies to the contracts at issue here. In Mosay we read the language of the IGRA regulatory scheme as directing that' the old regime under § 81 would continue to operate until the Commission was “up and running,” and we therefore concluded that qui tam liability for failure to comply with the IGRA did not exist during the limbo period between the date on which the Commission was “established” by the new Act (October 17, 1988) and the date on which the Commission was actually operating. See 20 F.3d at 743; see also S.Rep. No. 446, 100th Cong., 2d Sess. at 1, 17, (1978), reprinted in 1988 U.S.C.C.A.N. 3071, 3087 (noting that Section 10 of P.L. 100-497, codified at 25 U.S.C. § 2709, requires the Secretary of the Interior to exercise continuing authority over Indian Gaming until the Commission is “in place”). Thus, following the reasoning of Mosay, plaintiffs here surely cannot establish a violation of the IGRA if the Commission was not yet in operation on the date that the plaintiffs filed this lawsuit challenging then-existing contracts. Mosay does not tell us precisely when the Commission was operating — it simply notes that almost five years elapsed between the relevant dates. 20 F.3d at 743. My research indicates that the Commission proposed regulations for, among other things, submitting gaming ordinances to the Chairman for approval on July 8, 1992. It subsequently published the final rules on January 22, 1993, see Fed.Reg. 5810 (1993), to take effect exactly one month later. See 25 C.F.R. 501 et seq. Apparently, then, the earliest date on which the Commission could be considered to have been operating is February 22, 1993. On the record before us, all we know is that the plaintiffs commenced this action on December 3, 1992, in the District of Minnesota and, after the matter was transferred to the Eastern District of Wisconsin, filed an Amended Complaint on May 14,1993. We do not know, however, whether all of the relevant contracts were entered into prior to February 22,1993, in which case they would not be governed by the new IGRA regime. To be sure, contracts predating the IGRA still may fall within the authority of the Secretary of the Interior and/or the Commissioner of Indian Affairs under the old regime (a question we also cannot answer on the limited record before us), but there can be no violation of the IGRA because, in any event, the Secretary was not- required to exercise his authority in accordance with the substantive criteria of the new law at the time the relevant contracts were made. See Mosay, 20 F.3d at 744. Accordingly, I would remand the claims under § 201 alleging a violation of the IGRA for an initial determination of whether the IGRA even applies to the contracts at issue here. If the IGRA does not apply, the plaintiffs’ claim would have to be dismissed; if it does apply, the district court would need to resolve on the merits whether the new statute can be enforced through an action in qui tam, an issue on which I express no view at this time.
The qui tam action in the present case reflects the paternalistic concern of a bygone era over Native Americans and their ability to contract. Whether, as a policy matter, such actions actually prevent fraudulent agreements or instead prove vexatious to the very interests they are designed to serve may well be open to debate, but that is an argument for another forum: namely, Congress. For the foregoing reasons, I agree that the plaintiffs in this case have standing and that the case should be remanded for further proceedings.

. That section provides in relevant part:
Any person other than an Indian of the full blood who shall attempt to ... introduce goods, or to trade therein, without such license, shall forfeit all merchandise offered for sale to the Indians or found in his possession, and shall moreover be liable to a penalty of $500.
25 U.S.C. § 264.

. As we observed in Mosay, Congress has established "two distinct, successive regulatory regimes” to oversee certain contracts made with Indians. The traditional regime, administered by the Bureau of Indian Affairs under § 81, recently has been supplemented (and in some respects supplanted) by the IGRA. The IGRA carves out a defined class of contracts — casino management contracts, including "all collateral agreements to [management] contract[s] that relate to the gaming activity” — that are subjected to the authority .of the newly created National Indian Gaming Commission ("NIGC”), a three-member independent agency within the Department of the Interior, see 25 U.S.C. § 2711. The Commission's grant of authority includes the levying and collection of civil fines of up to $25,000 for violations of the Act, regulations issued under it, or tribal ordinances or resolutions adopted under it. 25 U.S.C. § 2713(a)(1). In addition, the Commission is required to review all contracts adopted prior to October 17, 1988, the day the Act was passed, and to issue orders bringing non-conforming contracts into line with the new statute. 25 U.S.C. §-2712. Contracts that "relate to Indian lands” but do not fall within the scope of the IGRA still require BIA approval, and "failure to submit exposes the contractor to the fell sanction of a qui tam suit.” Mosay, 20 F.3d at 743.