Coast Indian Community v. United States, 850-71.

• Decision Date: 23 February 1977
• Docket Number: No. 850-71.,850-71.
• Parties: COAST INDIAN COMMUNITY v. The UNITED STATES.
• Court: U.S. Claims Court

550 F.2d 639

COAST INDIAN COMMUNITY v. The UNITED STATES.

No. 850-71.

United States Court of Claims.

February 23, 1977.

COPYRIGHT MATERIAL OMITTED

Art Bunce, California Indian Legal Services, Escondido, Cal., attorney of record, for plaintiff. George Forman, California Indian Legal Services, Oakland, Cal., of counsel.

Hubert M. Crean, Washington, D.C., with whom was Asst. Atty. Gen. Peter R. Taft, Washington, D.C., for defendant. Rembert A. Gaddy, Washington, D.C., of counsel.

Before DAVIS, KASHIWA and KUNZIG, Judges.

OPINION

PER CURIAM:

This case comes before the court on defendant's exceptions to the recommended decision of Trial Judge Charlotte P. Murphy, filed January 9, 1976, pursuant to Rule 134(h), having been submitted on the briefs and oral argument of counsel. Upon consideration thereof, since the court agrees with the trial judge's recommended decision, with a minor modification, as hereinafter set forth, it hereby affirms and adopts the said decision, as modified, as the basis for its judgment in this case. It is therefore concluded that, in accordance with the trial judge's recommendation, plaintiffs are entitled to recover the net amount of $47,500 and judgment is so entered for plaintiffs with further proceedings to be held pursuant to Rule 131(c) in order to determine the beneficiaries who are entitled to share in this award and whether interest is awardable.

OPINION OF TRIAL JUDGE

MURPHY, Trial Judge:

Plaintiffs are members of an unincorporated association known as the Coast Indian Community. They seek damages from the United States in the amount of $54,500, plus interest from April 5, 1966, for an undercompensated taking of their property and a breach of fiduciary obligation owed plaintiffs by the Bureau of Indian Affairs (hereafter BIA), as an agent of the United States.

Plaintiffs assert, as the basis for their claim, that a right-of-way across their reservation, valuable because it provided the most direct access to a large redwood and Douglas fir timbering area, was conveyed by the United States as trustee for the reservation land to the County of Del Norte, California, for a grossly inadequate consideration. According to plaintiffs, the right-of-way, worth approximately $57,000, was sold by the BIA agents for $2,500.

The factual issues in this case concern the valuation of the right-of-way and the validity of consents to the right-of-way sale, allegedly executed by three Coast Indian Community members (two now deceased). The legal adequacy of those consents and the necessity in law for obtaining them are likewise in contention. Three additional questions of law are also in dispute: whether the plaintiffs own a compensable interest in the Resighini Rancheria (hereafter Rancheria); whether the value obtained for the easement by the BIA amounts to a taking of property without sufficient compensation or a breach of fiduciary duty owed to the plaintiffs, or neither; and whether, if relief is forthcoming, the judgment should include interest from April 5, 1966, the date of the sale to Del Norte County (hereafter County).

Trial was held in Eureka, California, for 3 days and the court made an on-site inspection of the land in question, the surrounding timberland, and the lumber processing plant across the Klamath River at Klamath, California. For reasons hereafter discussed, the court holds for plaintiffs.

I

By deed dated January 7, 1938, a tract of land known as the Rancheria was conveyed to the United States:

* * * in Trust for such Indians of Del Norte and Humboldt Counties, in California, eligible to participate in the benefits of the Indian Reorganization Act of June 18, 1934 (48 Stat. 984) 25 U.S.C. §§ 461 et seq. (1970), as shall be designated by the Secretary of the Interior * * *.

The 228-acre site, situated along the south bank of the Klamath River in the County, was purchased by the BIA under the authority of the cited statute, and proclaimed an Indian reservation by the Acting Secretary of the Interior in 1939.¹ Beginning in 1938, at the invitation of an agent of the BIA, certain Indian families of Del Norte and Humboldt Counties took up residence on the Rancheria. Some 13 Indian families of various tribal origins lived there and came to be known collectively, at the BIA's suggestion, as the Coast Indian Community. The Klamath River flooded the Rancheria, which is largely flatland, in December 1964, forcing the relocation of all but two of the families. The two remaining families moved off the land when their homes burned, one in 1969 and the other in 1973. Since the last date, no one has lived permanently on the Rancheria, but most of the Indian families formerly resident there have continued using it for camping and gardening, often staying on the land for extended periods in the summer and fall of the year.

Across the river to the north of the Rancheria is a lumber processing mill of the Simpson Timber Company (hereafter Simpson). To the south of the Rancheria lies a hilly area replete with high quality redwood and Douglas fir timber, timber mostly owned, cut, and processed by Simpson. The BIA issued an annual revocable permit to Simpson on March 26, 1965, allowing Simpson to transport approximately 4 million board feet of timber across the Rancheria. For this privilege, Simpson was charged 25 cents per thousand board feet, the fair rental value of the right-of-way as determined by BIA appraiser Elmer Heisel.

Even before March 1965, however, Simpson and the BIA began discussing the acquisition by Simpson of a permanent right-of-way over the Indian land. BIA agents told Simpson that the latter should have the County apply for a permanent public road easement. The County, having obtained Simpson's agreement to pay all costs of acquiring and building the road sought, applied for and was granted this easement. Pursuant to Heisel's appraisal, the BIA sold the right-of-way now at issue to the County for $2,500 on April 5, 1966. This right-of-way running for 1,934.11 feet along the southern boundary of the Rancheria, with an average width of 50 feet and a total area of 2.06 acres, was eventually turned into a public road by virtue of improvements made by Simpson. It was accepted into the County's road system in 1972.

II

To determine whether plaintiffs hold a compensable interest in the Rancheria, the court must decide whether the members of the Coast Indian Community were in fact the beneficial owners of the Rancheria. It is undisputed that the United States held title to the Rancheria in 1966 as trustee. However, defendant contends that, as of the date of the right-of-way sale, no individual Indian had been "designated" as the beneficiary of the trust by the Secretary of the Interior, as required by the 1938 deed and the 1939 proclamation.²

Dorothy Frye, a widow, testified at trial that in 1938, at the urging of an agent of the BIA, she, her husband William (now deceased), and their three children moved into a one-room shack on the Rancheria and were the first Indians to settle there. Later, when the donor of the land left, the Fryes moved into the main house. They continued to live on the Rancheria until the main house burned in 1969 and their daughter's house burned in 1973.

The second family arriving at the Rancheria, according to Mrs. Frye, was William Scott and his wife. With the help of William Frye, the BIA then built five houses. The Rancheria group continued to grow until 13 families lived there by 1960, some living in mobile homes they brought with them. Thereafter, the population numbered about 75 people, of which about 50 were children.

The Coast Indian Community was comprised of formerly homeless Indians living on the Rancheria. In March 1964, according to Mrs. Frye, those actually living at the Rancheria were the Dowds, the Fryes, two families named Frank, the Hoffmans, the Jakes, the Jameses, the McCoveys, the Novas, the Proctors, the Scotts, the Wards, and the Brahams. Except for a few husbands, all of these persons were Indians. Most of the husbands worked away from the Rancheria, mainly in the woods for Simpson.

In 1964, all but two houses were swept away by the Klamath River flood and the only residents thereafter were William and Dorothy Frye, their daughter Dorothy Frye Williams, and their families. Although the BIA agreed to replace the destroyed homes, they could not be built on the Rancheria site, which was determined to be flood plain. Since fires destroyed the remaining homes, the land has been used only in the summer for gardening and camping by seven or eight families, according to Mrs. Frye.

Venola Dowd testified that she moved to the Rancheria on July 4, 1940, at age 14 with her mother, Lena McCovey. She corroborated Mrs. Frye's testimony that 13 families had accepted the BIA's invitation and had taken up residence on the Rancheria before the 1964 flood. Thereafter, only two families lived on the Rancheria. The rest were resettled mainly at Crescent City, California, although three families settled across the Klamath River from the Rancheria. The testimony by Mrs. Frye and Mrs. Dowd stands uncontradicted.

While the 1938 deed and the 1939 proclamation indicate that the Secretary of the Interior would designate the beneficial owners of the Rancheria, no specific procedures for accomplishing such designation were prescribed. Hence, it was not necessary that the designation be made by a formal proclamation, listing all the beneficiaries by name. Moreover, the personnel of the BIA, as subordinates of the Secretary specifically empowered to deal with Indian problems on his behalf,³ could accomplish the designation.⁴

Thus, in the absence of specifically prescribed designation procedures, the conduct of the BIA in locating the Coast Indian Community members on the Rancheria, in acquiescing in their continued presence on and use of the Rancheria for many years, in building houses for them on the Rancheria, and in providing plaintif...