Inter-Tribal Council of Ariz., Inc. v. United States

Decision Date17 April 2020
Docket Number2019-1758
Citation956 F.3d 1328
Parties INTER-TRIBAL COUNCIL OF ARIZONA, INC., Plaintiff-Appellant v. UNITED STATES, Defendant-Appellee
CourtU.S. Court of Appeals — Federal Circuit

Melody McCoy, Native American Rights Fund, Boulder, CO, argued for plaintiff-appellant.

Phillip Seligman, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by Joseph H. Hunt, Ruth A. Harvey, Michael John Quinn ; Kenneth A. Dalton, Office of the Solicitor, Indian Trust Litigation Office, United States Department of the Interior, Washington, DC.

Before O’Malley, Mayer, and Wallach, Circuit Judges.

Wallach, Circuit Judge.

Appellant Inter-Tribal Council of Arizona, Inc. ("ITCA") filed a lawsuit against the United States ("Government") in the U.S. Court of Federal Claims, alleging that the Government breached its fiduciary duties established pursuant to the Arizona-Florida Land Exchange Act ("AFLEA"), Pub. L. No. 100-696, 102 Stat. 4571, 4577–93 (1988).1 The Government filed a motion to dismiss ITCA’s complaint for lack of subject matter jurisdiction and for failure to state a claim, pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the U.S. Court of Federal Claims ("RCFC"), respectively. The Court of Federal Claims granted the Government’s motion in part, dismissing two of the Complaint’s three claims. Specifically, the court found that it lacked jurisdiction over a portion of Claim I, and that Claim II and the remaining portion of Claim I failed to state a claim upon which relief could be granted. See Inter-Tribal Council of Ariz., Inc. v. United States , 140 Fed. Cl. 447, 460 (2018) ; see also J.A. 1 (Partial Final Judgment), 2–8 (Order on Plaintiff’s Motion for Entry of Partial Final Judgment).2

ITCA appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3). We affirm-in-part and reverse-in-part.

I. Factual History
A. The Phoenix Indian School

From its inception in 1891, "an off-reservation federal Indian elementary and secondary boarding school" ("Phoenix Indian School") was "operated by" the U.S. Department of the Interior’s ("DOI") Bureau of Indian Affairs, on land owned by the Government in Phoenix, Arizona. J.A. 37–38. The Phoenix Indian School "consisted of [thirty-four] buildings on over [one-hundred] acres located in the heart of central Phoenix." J.A. 38. "While open to members of tribes nationwide, the Phoenix Indian School primarily served tribes located in Arizona." J.A. 38. In 1987, as part of a larger movement to close boarding schools for students of Indian tribes, J.A. 38, the Government "determined that the Phoenix Indian School was no longer required or needed," J.A. 40, and the school "was closed in 1990," J.A. 50; see AFLEA § 404(a) (requiring the U.S. Secretary of the Interior ("Secretary") to "close the Phoenix Indian ... School ... no earlier than June 1, 1990, and no later than September 1, 1990"); see also id. § 401(18) (" ‘Secretary’ means the Secretary of the Interior.").

B. The Arizona-Florida Land Exchange Agreement

"[S]ince at least 1984," the Government and Barron Collier Co. ("Collier") "had been discussing ... the possible acquisition by the [Government]" of approximately 108,000 acres of wetlands owned by Collier in the Florida Everglades. J.A. 38, 246. "Lacking the funds to make an outright purchase of Collier’s Florida lands," the Government "offered various surplus property that it held to Collier in exchange for the Florida lands." J.A. 38. "Collier ultimately selected" the property on which the Phoenix Indian School was located ("Phoenix Indian School Property"), after which the Government and Collier negotiated an exchange agreement that was executed in May 1988. J.A. 43. "The Exchange Agreement provided ... that approximately [seventy-two] acres of the Phoenix Indian School Property would be conveyed to Collier[,]" in exchange for Collier’s Florida lands. J.A. 43. "The Exchange Agreement [also] provided that Collier would pay $34.9 million in cash to the [Government] at closing," representing the difference in estimated value between the lands exchanged. J.A. 43–44. In November 1988, Congress enacted the AFLEA, which ratified the Exchange Agreement. See AFLEA § 402(b) ("The Exchange Agreement is ratified and confirmed and sets forth the obligations, duties, and responsibilities of the parties to the Exchange Agreement."); see also J.A. 48.

1. The AFLEA

The AFLEA established two trust funds: an "Arizona InterTribal Trust Fund" ("AITF") "for the benefit of Arizona Tribes that were members of ... [ITCA] ... and the members of such tribes," AFLEA §§ 401(2), 405(a)(1); and a "Navajo Trust Fund" ("NTF") "for the benefit of the Navajo Tribe and its members," id. §§ 401(11), 405(a)(2).4 The AFLEA required that "Monetary Proceeds," defined as "the cash amount required to be paid ... by Collier upon closing," id. § 401(10), "be paid to the [Government] for deposit in the [AITF] and the [NTF]," id. § 403(a), with 95 percent "of the total amount" allocated to the AITF, and the remaining 5 percent allocated to the NTF, id. § 405(e). "Trust Income" from the AITF and NTF was to be used only for "supplemental educational and child-welfare programs, activities, and services for the benefit of" members of ITCA and the Navajo Nation, respectively, as well as "the design, construction, improvement, or repair of related facilities[.]" Id. § 405(d)(2)(A), (B); see id. § 401(21) (" ‘Trust Income’ ... means the interest earned on amounts deposited into [the AITF and NTF] and any amounts paid into each such trust fund in the form of annual Trust Fund Payments."); see also id. § 401(19) (" ‘Trust Fund Payment’ means the payment ... of the Monetary Proceeds for deposit into ... the [AITF or NTF], in the form of a lump sum payment or annual payments[.]"). Additionally, "[a]n amount equal to 5 percent of the Trust Income" from the AITF and NTF, was to be "paid annually" to ITCA and the Navajo Nation, respectively, "for education, child welfare, community development, and general administrative purposes[.]" Id. § 405(d)(4)(A), (B).

The AFLEA permitted the Secretary to "elect to receive" the Monetary Proceeds "in the form of either a lump sum payment or [thirty] annual payments[.]" Id. § 403(b). Relevant here, if the Secretary "elect[ed] to receive" the Monetary Proceeds "in the form of annual payments," Collier was required to make: (1) "[thirty] annual payments equal to the interest due on ... the Monetary Proceeds[,]" id. § 403(c)(2)(A); and (2) "at the time of the last annual payment, a [principal] payment equal to ... the Monetary Proceeds[,]" id. § 403(c)(2)(B). Further, if the Monetary Proceeds were to be received pursuant to the annual payment method, the Government, through the Secretary of the Treasury, was required to "hold in trust ... security provided in accordance with the Trust Fund Payment Agreement." Id. § 405(c)(2); see id. § 401(20) (" ‘Trust Fund Payment Agreement’ means an agreement providing for payment by the Purchaser of annual Trust Fund Payments for deposit into the [AITF] or the [NTF][.]").

2. The Trust Fund Payment Agreement, Deed of Trust, and Promissory Note

"In June 1991, Collier gave preliminary notice of [its] intent to accept [the Government’s] offer on the Phoenix Indian School [P]roperty, but also told [the Government] that it would not proceed with the [Exchange Agreement] unless it could use the annual payment method[.]" J.A. 51. In September 1991, "over objections by" ITCA and the Navajo Nation, the Secretary "agreed to Collier’s demand for the annual payment method." J.A. 54 (internal quotation marks omitted). In December 1991, Collier accepted the Government’s offer. J.A. 55. Thereafter, Collier and the Government proceeded to negotiate the terms of the land exchange. J.A. 55–61.5

In December 1992, Collier and the DOI executed a Trust Fund Payment Agreement ("TFPA"), J.A. 62; see J.A. 341–468 (TFPA), as well as a deed of trust, J.A. 64; see J.A. 529–99 (Deed of Trust). Consistent with the AFLEA, the TFPA required Collier to provide the Government with a promissory note "for [the] payment of $34.9 million ‘with interest thereon.’ " J.A. 62; see J.A. 349; see also J.A. 469–81 (Promissory Note). Importantly, the TFPA provided that the Deed of Trust and Promissory Note, which were attached as "Exhibits" to the TFPA, "constitute[d]" parts of the "TFPA" "as such term is used in the [AFLEA][.]" J.A. 346.

The Promissory Note—executed by Collier in December 1992, J.A. 62—required Collier to: (1) make thirty annual interest payments of $2,966,500 ("Trust Fund Payments"), reflecting an interest rate of "[8.5] percent ... per annum" "on the Principal Amount," J.A. 63, 171; see J.A. 470, 473 ("Principal Amount means $34.9 million." (emphasis omitted)); and (2) "pay ... the Principal Amount," J.A. 62; see J.A. 470. Additionally, Collier was required to make thirty annual payments into an annuity ("Annuity"), "sufficient ... to pay the [Government] a lump sum of [$34.9 million]" "on the completion" of those thirty payments. J.A. 62; see J.A. 351–53. According to the TFPA, the Promissory Note was "secured by the Annuity" and a "Trust Estate" as "defined in the Deed of Trust[.]" J.A. 350; see J.A. 63. The Deed of Trust, in turn, provided that the Trust Estate consisted of fifteen acres of the Phoenix Indian School Property ("fifteen-acre Phoenix Indian School Property"), as well as Collier’s development interests in about seven and one-half acres of land located in downtown Phoenix ("Downtown Development Interests"), which Collier acquired in an exchange with the City of Phoenix. J.A. 535–37, 569–74; see J.A. 318 ("The obligations for payment will be secured by liens on Collier’s interest in [fifteen] acres of the [Phoenix] Indian School [P]roperty and on about [seven and one-half] acres of downtown Phoenix land that Collier[ ] will receive as a result of a land exchange...

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