Gasplus, L.L.C. v. U.S. Department of Interior

• Decision Date: 06 September 2007
• Docket Number: Civil Action No. 03-1902(RMC).
• Citation: 510 F.Supp.2d 18
• Parties: GASPLUS, L.L.C., Plaintiff, v. UNITED STATES DEPARTMENT OF the INTERIOR, et al., Defendants.
• Court: U.S. District Court — District of Columbia

510 F.Supp.2d 18

GASPLUS, L.L.C., Plaintiff, v. UNITED STATES DEPARTMENT OF the INTERIOR, et al., Defendants.

Civil Action No. 03-1902(RMC).

United States District Court, District of Columbia.

September 6, 2007.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Shelby J. Kelley, Nancy J. Appleby, Bracewell & Giuliani "LLP, Washington, DC, Mark A. Smith, Rodey, Dickason, Sloan, Akin & Robb, PA, Albuquerque, NM, for Plaintiff.

Devon Lehman McCune, U.S. Department of Justice, Environment & Natural Resources Division, Denver, CO, for Defendants.

MEMORANDUM OPINION

ROSEMARY M. COLLYER, District Judge.

Before the Court are cross-motions for summary judgment filed by Plaintiff GasPlus, L.L.C. and Defendants Department of the Interior ("DOI") and the Bureau of Indian Affairs ("BIA"). The fundamental question in this lawsuit is whether a contract between GasPlus and the Nambe Pueblo Indian Tribe was subject to the requirements of 25 U.S.C. § 81 ("Section 81"), thereby requiring BIA's approval. BIA concluded that it was and, because approval was never obtained, voided the contract. GasPlus argues that this decision was incorrect as a matter of law and that, in the process of reaching that decision, Defendants violated its constitutional due-process rights. The Court agrees with GasPlus that Section 81 was inapplicable to the contract and will therefore grant GasPlus's summary judgment motion on that basis.

I. FACTUAL BACKGROUND

The following facts are contained in the Administrative Record (A.R.), the Supplemental Administrative Record (Supp.A.R.), and the Court's prior decisions in this matter. "Under former New Mexico law, bulk distributors of gasoline could avoid the state's excise tax by selling their gasoline to a Registered Indian Tribal Distributor and then buying the gasoline back at a slightly higher price. This feature of the tax law provided New Mexico's Indian tribes with an obvious business opportunity." GasPlus, L.L.C. v. U.S. Dep't of Interior, 466 F.Supp.2d 43, 44 (D.D.C.2006). The Nambe Pueblo is a federally recognized Indian tribe that owns a gasoline distribution business located in Santa Fe County, New Mexico. A.R. 379. The Nambe Pueblo Development Corporation ("NPDC") is a federally chartered corporation that the Nambe Pueblo tribe created in order to operate the gasoline distribution business which, because it is located on tribal land, could take advantage of New Mexico's special tax law regarding the distribution of gasoline by Indian tribes. Id. GasPlus is a. New Mexico limited liability company engaged in the business of managing gasoline distribution businesses. A.R. 103.

On January 4, 2001, GasPlus and the Nambe Pueblo signed a Management Agreement under which GasPlus agreed to "manage, supervise, and operate [Nambe Pueblo's] Gasoline Distribution Business." Id.¹ Under the Management Agreement, GasPlus took on the following duties, among others:

• "Supervise and direct the general operations of' the gasoline distribution business • "Select and train personnel to run the daily operations" of the business

• "Negotiate prices and coordinate deliveries of [g]asoline"

• "Develop policies for the purpose of maximizing net income"

• "Maintain proper and suitable records and books of account"

• "Bill and collect revenues and fees from sales of branded and unbranded [g]asoline"

• "Pay or cause to be paid out of [Nambe Pueblo's] funds operating expenses"

• "Market, promote, and advertise" the distribution business

• "Supervise and pay, out of [Nambe Pueblo's] funds, construction ... to build or expand the" business

• "Maintain books and records for the" business

• "[P]repare and file with the appropriate authorities on behalf of [Nambe Pueblo] monthly reports"

• "Prepare annual operating and capital expenditure budgets"

A.R. 103-105. The Management Agreement further required GasPlus to "regularly consult with [Nambe Pueblo's] Board ... with respect to GasPlus's conduct of the Gasoline Distribution Business" and, "at least monthly, prepare and provide to the [Nambe Pueblo's] Board a brief written report summarizing the activity of the Gasoline Distribution Business." A.R. 106.

As consideration for managing the business, GasPlus would receive "a management fee ... equal to 30% of [the Gasoline Distribution Business's] `Net Income' for each calendar year." Id. The term of the Management Agreement was five years, and GasPlus had the option to renew the Agreement for two additional five-year terms. A.R. 107. David Perez, then-Governor of the Nambe Pueblo, signed the Management Agreement, as did four members of the tribal counsel, on behalf of the Nambe Pueblo; Delese Dellios signed on behalf of GasPlus. A.R. 112. The Management Agreement does not mention the real property on which the Nambe Pueblo's distribution business is located, other than to note in the recitals that the business is located in Santa Fe County, New Mexico. A.R. 103.

In late 2001 or early 2002 Tom Talache Jr., the newly elected Governor of the Nambe Pueblo, contacted the BIA and asked it to review the Management Agreement under Section 81. Pl.'s Facts ¶ H (citing Defendants' Answer ¶ 17). On February 7, 2002, Robert D. Baracker, who was BIA's Southwest Regional Director, issued a letter to Governor Talache and Ms. Dellios indicating that he had reviewed the Management Agreement and was declaring it invalid under Section 81 because, in his view, it gave GasPlus "nearly exclusive proprietary control over tribal lands." A.R. 82-84. Mr. Baracker concluded the letter by "demand[ing]" that GasPlus (1) immediately vacate the premises of NPDC's terminal facility; (2) immediately contact the Nambe Pueblo to transfer books and records; and (3) disgorge all proceeds it had received under the Management Agreement. A.R. 83-84. GasPlus received no prior notice that the BIA was reviewing the Management Agreement and had no opportunity to submit any materials for Mr. Baracker's consideration. Pl.'s Facts ¶ L. Nonetheless, the letter from BIA stated that Mr. Baracker's decision was "final and hereby made immediately effective under 25 C.F.R. § 2.6(a) in order to protect the tribal trust resources." A.R. 84. On February 11, 2002, in reliance on Mr. Baracker's letter, the Nambe Pueblo issued an Ex Parte Custody and Temporary Restraining Order to obtain custody of any records developed by GasPlus relating to the Management Agreement and to prevent GasPlus from withdrawing funds from its bank accounts. Supp. A.R. 487-88.

GasPlus immediately appealed Mr. Baracker's decision to the Interior Board of Indian Appeals. A.R. 7-9. Before the Board could hear the appeal, however, the DOI's Acting Assistant Secretary for Indian Affairs, Aurene M. Martin, took jurisdiction over the appeal pursuant to 29 C.F.R. § 2.20(c)(1) and 43 C.F.R. § 4.332(b). See A.R. 379. After briefing by GasPlus, the Regional Director's Office, the NPDC, and the Nambe Pueblo, Ms. Martin issued her decision on June 9, 2003. A.R. 379-400. Ms. Martin concluded that under the Management Agreement

GasPlus has more than a mere financial interest in [the gasoline distribution] business. GasPlus is doing more than just providing services to the Pueblo. Under the terms of the Agreement, the Pueblo cedes all day-to-day operations and control over its facility to GasPlus. While this level of proprietary control may not be "exclusive" since GasPlus still has reporting obligations to the Pueblo and spending limits, it is so pervasive as to be "nearly exclusive" within the meaning of the regulations and legislative history of Section 81. The Agreement therefore "encumbers" the land within the meaning of Section 81 and the regulations.

A.R. 393. Ms. Martin affirmed Mr. Baracker's decision and further stated that GasPlus was obligated to "take all of the actions ordered in the Regional Director's decision, including ... vacating the premises, transferring the books and records of the business to Pueblo or NPDC, and returning all proceeds and management fees to the Pueblo or NPDC." A.R. 399.

Three months after Ms. Martin's decision, on September 10, 2003, GasPlus filed this action challenging Ms. Martin's decision under the Administrative Procedures Act, 5 U.S.C. § § 701-706 ("APA"). In June 2004 GasPlus moved for summary judgment, and in response to that motion Defendants moved to remand the action to the BIA for further consideration of issues raised by GasPlus in its summary judgment motion — namely, whether the remedies imposed by Mr. Baracker and Ms. Martin were authorized by Section 81 and whether GasPlus's due-process rights had been violated during the administrative review process. The Court granted the motion to remand on November 8, 2004. Approximately one year later, on November 21, 2005, the BIA's Associate Deputy Secretary rendered his decision on the remanded issues, concluding that the remedies enumerated in Mr. Baracker's and Ms. Martin's decisions were not authorized by the statute (but that there was no harm to GasPlus because those decisions, in theory, did not actually order GasPlus to take any action) and that GasPlus's due-process rights had not been violated. Supp. A.R. 567-578.

On January 6, 2006, GasPlus filed a second amended complaint in this Court, and on April 29, 2006, GasPlus filed a third amended complaint in which it added Bivens² claims against Mr. Baracker and Ms. Martin. On July 10, 2006, Defendants moved to dismiss the Bivens allegations on jurisdictional grounds, and on December 8, 2006, the Court granted the motion. On January 22, 2007, GasPlus and Defendants both filed motions for summary judgment. Those motions have been fully briefed and are now ripe for decision.

II. LEGAL STANDARDS

Under Federal Rule of Civil Procedure 56, summary judgment must be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any...