Wisconsin Winnebago Business Committee v. Koberstein

Decision Date29 May 1985
Docket NumberNos. 84-1768,84-1863,s. 84-1768
PartiesWISCONSIN WINNEBAGO BUSINESS COMMITTEE, Plaintiff-Appellee, Cross-Appellant, v. John P. KOBERSTEIN & Ho-Chunk Management Corporation, Defendants-Appellants, Cross-Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

Douglas B.L. Endreson, Sonosky, Chambers, Sachse & Guido, Washington, D.C., for Wis. Winnebago Business.

John P. Koberstein, Madison, Wis., pro se.

Before BAUER, COFFEY, and FLAUM, Circuit Judges.

COFFEY, Circuit Judge.

The defendants, John P. Koberstein and the Ho-Chunk Management Corporation, 1 appeal the determination of the district court that its Bingo Management Agreement with the Wisconsin Winnebago Business Committee is null and void under 25 U.S.C. Sec. 81. We affirm.

I.

On July 9, 1983, the Wisconsin Winnebago Business Committee ("Business Committee"), the governing body of the federally recognized Wisconsin Winnebago Tribe ("Tribe"), hired Koberstein, the defendant, as its tribal attorney. At Koberstein's suggestion, the Tribe entered into a Bingo Management Agreement ("Agreement") with the co-defendant, the Ho-Chunk Management Corporation ("Ho-Chunk"), providing that Ho-Chunk would construct and manage a tribal bingo hall located near Lake Delton, Wisconsin. Koberstein is the president of the Ho-Chunk Management Corporation. Under the terms of the Agreement, Ho-Chunk was to receive $27,000 for preparing a proposal to be presented to the federal Department of Housing and Urban Development for federal funds and for supervising the construction of the hall. Ho-Chunk also was engaged under the terms of the contract for a five-year period "commencing the first day of operation of the Bingo Hall, to assist the [Business Committee] in obtaining financing, construct, improve, develope [sic], manage, operate and maintain the Property as a facility for the conduct of bingo games...." The Agreement granted Ho-Chunk the exclusive right to "operate and maintain the Property" as a tribal bingo hall and to control "all business and affairs in connection with the operation, management and maintenance of the Property." Furthermore, the Business Committee "specifically warrant[ed] and represent[ed] to [Ho-Chunk] that [the Business Committee] shall not act in any way whatsoever, either directly or indirectly, to cause this Management Agreement to be altered, amended, modified, canceled, terminated and/or attempt to assign or transfer this Management Agreement or any right to or interest in said Agreement. Further, [the Business Committee] warrant[ed] and represent[ed] that it shall take all actions necessary to ensure that the Management Agreement shall remain in good standing at all times."

The Agreement recited a legal description of the Property, located on tribal trust land, and allowed Ho-Chunk to record the Agreement "in any Public Record." Furthermore, the Agreement provided that the Business Committee "shall not act in any way whatsoever, either directly or indirectly to cause any party to become an encumbrancer of the Property subject to this Agreement without the prior written consent of [Ho-Chunk]." In return for providing management services, Ho-Chunk was to receive "25 percent of net operating profits for each fiscal year resulting from and in connection with any business activities upon the Property."

On August 23, 1983, Ho-Chunk submitted the Agreement and the Wisconsin Winnebago Business Committee resolution adopting the Agreement to the Bureau of Indian Affairs ("BIA") for approval under 25 U.S.C. Sec. 81. 25 U.S.C. Sec. 81 provides in relevant part:

"No agreement shall be made by any person with any tribe of Indians, or individual Indians not citizens of the United States, for the payment or delivery of any money or other thing of value, in present or in prospective, or for the granting or procuring any privilege to him, or any other person in consideration of services for said Indians relative to their lands, or to any claims growing out of, or in reference to, annuities, installments, or other monies, claims, demands, or thing, under laws or treaties with the United States, or official acts of any officers thereof, or in any way connected with or due from the United States, unless such contract or agreement be executed and approved as follows:

* * *

* * *

"(2) It shall bear the approval of the Secretary of the Interior and the Commissioner of Indian Affairs endorsed upon it.

* * *

* * *

"All contracts or agreements made in violation of this section shall be null and void."

Sometime during the second week of November, 1983, the Minnesota Area Office of the BIA requested an opinion from the Department of Interior's Office of the Field Solicitor concerning the Agreement. 2 On November 16, 1983, the Field Solicitor's Office advised the BIA that the Department of the Interior's approval was required only of contracts in which a "tribe purports to pay 'money or other thing of value' when such money or thing derives from amounts due to the tribe from the United States or is trust property or proceeds from trust property." Although the Field Solicitor found "[t]here is no doubt that the Agreement is related to lands of the Wisconsin Winnebago Tribe," section 81 did not apply because the funds Ho-Chunk was to receive were not "trust funds or proceeds of trust property." Ho-Chunk was not formally notified of this decision until February 28, 1984.

Sometime during the late summer or early fall of 1983, the Ho-Chunk Management Corporation directed that the construction of the Bingo Hall proceed even though it had not received a response from the BIA. On November 12, 1983, the same day that the Bingo Hall opened, the Business Committee voted to rescind the Agreement with Ho-Chunk. Some two weeks thereafter, on November 27, 1983, the Business Committee enacted an ordinance regulating bingo on tribal lands providing inter alia "No person shall engage in the operation of bingo games on Wisconsin Winnebago trust lands, unless duly licensed or permitted to do so by the Wisconsin Winnebago Tribe in accordance with the terms of this ordinance." 3 Even though the Bingo Management Agreement had been rescinded, Ho-Chunk, which had not applied to the Winnebago tribe for a bingo license, continued to operate the bingo enterprise.

On December 8, 1983, the Business Committee filed suit in the United States District Court for the Western District of Wisconsin to enjoin Ho-Chunk from operating bingo games on tribal trust lands on the Winnebago Reservation. The Business Committee alleged that the Agreement between Ho-Chunk and the Business Committee was void under 25 U.S.C. Sec. 81, and alternatively that Ho-Chunk's bingo operation violated the Tribe's Bingo Ordinance. Subsequently, the Business Committee moved for summary judgment. On April 2, 1984, the district court granted summary judgment holding that the Agreement was null and void since it had not been approved by the Department of Interior as required by 25 U.S.C. Sec. 81. Because the court "believe[d] that equity demands that defendants be given a period of time to cure the defect which mandated summary judgment against them or to resolve its responsibilities in an orderly fashion," it declared that the Agreement would become null and void effective June 30, 1984. 4 Additionally, the district court found that the bingo ordinance "left the WWBC in the position to exercise absolute discretion as to whether Ho-Chunk would be allowed to operate a bingo game. There is little doubt, under the facts in this case, that the WWBC would exercise its discretion against Ho-Chunk." The Court concluded that it could "see no reason why the bingo ordinance adopted by the tribe, respecting the manner of operation, and to the extent not specifically in conflict with contract provisions, cannot be given immediate implementation. However, the requirement that Ho-Chunk be licensed is directly contrary to the powers granted Ho-Chunk in the contract." The parties raise three issues on appeal: (1) whether the Bingo Management Agreement must be submitted for approval to the Secretary of the Interior pursuant to 25 U.S.C. Sec. 81; (2) whether the Ho-Chunk Management Corporation relied on the Field Solicitor's opinion that Sec. 81 did not apply to the Bingo Management Agreement; and (3) whether the Bingo Management Agreement could bar application of the tribal licensing ordinance to Ho-Chunk.

II.
A. Applicability of Section 81.

Ho-Chunk argues that the question of whether a contract is "relative to Indian lands" is irrelevant when determining whether section 81 requires Interior Department approval of a contract with Indian tribes. According to Ho-Chunk, the only relevant inquiry is whether "the tribe purports to pay 'money or other thing of value' when such money or thing derives from amounts due to the tribe from the United States or is trust property or proceeds from trust property." Section 81 was enacted in 1872 "to protect the Indians from improvident and unconscionable contracts...." In re Sanborn, 148 U.S. 222, 227, 13 S.Ct. 577, 579, 37 L.Ed. 429 (1893). No federal cases have been presented to us nor have we been able to discover any federal case law that comprehensively analyzes the scope of coverage of section 81. Moreover the Supreme Court cases that do address the scope of section 81 in a cursory fashion do not present a detailed explanation of why the statute applied and are quite ancient. In Green v. Menominee Tribe, 233 U.S. 558, 34 S.Ct. 706, 58 L.Ed. 1093 (1914), the Supreme Court held that an oral contract between an Indian tribe and a trader for supplies to be used in logging Indian land was

"so clearly within the text of the statute that it suffices to direct attention to such text without going further. But if it be conceded for argument's sake that there is ambiguity involved in determining from the text whether the statute is applicable, w...

To continue reading

Request your trial
37 cases
  • Pueblo of Santa Ana v. Hodel
    • United States
    • U.S. District Court — District of Columbia
    • 1 d5 Maio d5 1987
    ... ... to the Management Agreement and promised that any business development near the property would be designed so as not ... Mission Indians, 789 F.2d 785 (9th Cir.1986); Wisconsin Winnebago Business Committee v. Koberstein, 762 F.2d 613 ... ...
  • Penobscot Indian Nation v. Key Bank of Maine
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • 3 d2 Dezembro d2 1996
    ...generally have focused on the existence of Indian trust land in evaluating § 81's "relative to [Indian] lands" component. In Koberstein, 762 F.2d at 619, the Seventh Circuit explicitly stated that § 81 applied to a bingo management agreement because " § 81 applies to Indian land transaction......
  • United States ex rel. Shakopee v. Pan American Management
    • United States
    • U.S. District Court — District of Minnesota
    • 9 d5 Agosto d5 1985
    ...interpret them in light of the Congress that enacted them." (Indian trader statutes)); Wisconsin Winnebago Business Committee v. Koberstein & Ho-Chunk Management, 762 F.2d 613, 618 (7th Cir. 1985). The language "relative to their lands" is clear and complete and stands apart from the altern......
  • Bank v. Lake of The Torches Econ. Dev. Corp..
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • 28 d5 Outubro d5 2011
    ...be executed and approved [by the Secretary of the Interior and the Commissioner of Indian Affairs]. Wisconsin Winnebago Bus. Comm. v. Koberstein, 762 F.2d 613, 615 (7th Cir.1985) (quoting 25 U.S.C. § 81) (emphasis added). In 2000, Congress amended § 81. See Pub.L. No. 106–179, § 2. It now r......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT