Otradovec v. First Wisconsin Trust Co. of Milwaukee, Wis., 71-1293.

• Decision Date: 14 January 1972
• Docket Number: No. 71-1293.,71-1293.
• Citation: 454 F.2d 1258
• Parties: Irvin OTRADOVEC, Sr., et al., Plaintiffs-Appellants, v. FIRST WISCONSIN TRUST CO. OF MILWAUKEE, WISCONSIN, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

454 F.2d 1258 (1972)

Irvin OTRADOVEC, Sr., et al., Plaintiffs-Appellants, v. FIRST WISCONSIN TRUST CO. OF MILWAUKEE, WISCONSIN, Defendant-Appellee.

No. 71-1293.

United States Court of Appeals, Seventh Circuit.

January 14, 1972.

Joseph F. Preloznik, Warren A. Kenney, David J. Ross, Madison, Wis., for plaintiffs-appellants.

Thomas B. Fifield, Clay R. Williams, Charles A. Kranz, Gibbs, Roper & Fifield, Milwaukee, Wis., for defendant-appellee.

Before CASTLE, Senior Circuit Judge, CUMMINGS, Circuit Judge, and CAMPBELL, Senior District Judge.¹

CUMMINGS, Circuit Judge.

This appeal is from the dismissal of a class action commenced by four Menominee Indians whose children are subject to the 1961 Menominee Indian Assistance Trust. The complaint was filed on behalf of the named and other parents and also on behalf of "minor, non compos mentis, or incompetent" beneficiaries of the Trust. The sole defendant was the Trustee. The gravamen of the complaint was that the Assistance Trust constitutes an invidious discrimination² against the Menominees and violates their rights under 42 U.S.C. §§ 1981 and 1982.

Federal supervision over the Menominee Indian Tribe of Wisconsin terminated at midnight on April 30, 1961, pursuant to the Menominee Termination Act of 1954 (25 U.S.C. §§ 891-902). Earlier in 1961, pursuant to 25 U.S.C. § 896, a Termination Plan for Menominee Indians was published in 26 Fed.Reg. 3746. The plan was prepared by representatives of the tribe and approved in a modified form by the Secretary of the Interior. One of the provisions of the plan created the Menominee Assistance Trust to protect the interests of those former members of the tribe, their descendants or lawful transferees who "are less than eighteen years of age, non compos mentis, or in the opinion of the Secretary of Interior in need of assistance in conducting their affairs" (25 U.S.C. § 900). To protect such persons, Congress authorized the Secretary to cause the appointment of guardians or use "such other means as he may deem adequate" (idem). Pursuant to that authorization, he selected the Menominee Assistance Trust as a suitable protective device. In the Assistance Trust Agreement which was entered into by the Secretary as Trustor and by the defendant First Wisconsin Trust Company as Trustee, he found that all Menominee beneficiaries between 18 and 21 were in need of assistance in conducting their affairs. He also included as beneficiaries those persons named in an attached schedule who were non compos mentis or in his opinion otherwise in need of assistance in conducting their affairs. The assets of the Trust consisted of the beneficiaries' voting trust certificates,³ income bonds, and United States Savings Bonds.

The complaint prayed that the defendant be required to turn over all minors' property held under the Menominee Assistance Trust to guardians to be appointed by a Wisconsin court of competent jurisdiction and also to turn over to the district court all incompetents' property until their competency could be determined. The defendant filed a motion to dismiss, asserting that the complaint failed to state a claim upon which relief could be granted and asserting four other supporting grounds. The district court dismissed the action on the first ground. 322 F.Supp. 1082. The rationale of the opinion below was stated as follows:

"The Menominee Assistance Trust agreement entered into by the secretary and the defendant, and attached to the plaintiffs\' complaint as `Schedule A\' is the `other means\' authorized by § 900. Like the trust in Crain,⁴ the trust in the present action represents part of a Congressional scheme to effect a `continued partial guardianship\' over the affairs of certain members of the Menominee tribe. Under Waller and the other Supreme Court cases cited,<sup>5</sup> this court cannot rule that this scheme results in `invidious discrimination against the Menominee Indian plaintiffs\' so as to authorize a cause of action under 42 U.S.C. §§ 1981 and 1982." (322 F.Supp. at 1085.)

We affirm the dismissal.

Plaintiffs argue that the Assistance Trust violates 42 U.S.C. §§ 1981 and 1982⁶ because it was used in lieu of the provisions for guardianship contained in chapter 319 of the Wisconsin statutes. Plaintiffs develop their arguments as follows: First, they assert that the guarantees of 42 U.S.C. §§ 1981 and 1982 apply to American Indians. Second, they contend that these statutes protect against abridgement of their guarantees through discrimination perpetrated by the Federal government and its agents, specifically here the Secretary of the Interior and the trustee of the Assistance Trust, defendant First Wisconsin Trust Company. See Jones v. Alfred H. Mayer Co., 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189. Third, Sections 1981 and 1982 are said to obligate the Secretary of the Interior and the private trustee appointed by him to treat terminated Menominee Indians in precisely the same manner as the State of Wisconsin treats its similarly situated white citizens. Fourth, say plaintiffs, since Wis. Stat.Ann. § 319.09 (1958), providing for the appointment of guardians, would have governed the disposition of white minors' property under like circumstances,⁷ the Secretary was obligated to utilize that state procedure, and his creation of the Menominee Assistance Trust (and the defendant's administration of that trust) in its stead constitutes a violation of Sections 1981 and 1982.⁸

We have considerable difficulty in accepting plaintiffs' dialectic. Assuming arguendo the first point, and assuming the second as an abstract proposition, it seems clear that in creating the Menominee Assistance Trust, the Secretary was simply acting under the Congressional authorization to use "such other means as he may deem adequate" to protect the enumerated classes of tribal members. 25 U.S.C. § 900. In 25 U.S.C. § 897 Congress explicitly recognized the suitability of the Secretary's using a private trust to hold tribal property upon termination of the United States' trusteeship, so that the Secretary's use of a private trust would seem well within his discretion under 25 U.S.C. § 900. If the Secretary was obligated to use no other means in exercising his discretion than the Wisconsin Guardianship statute, as plaintiffs contend, then the authorization to use "other means" was entirely meaningless since the preceding phrase in 25 U.S.C. § 900 also authorized the Secretary to "cause the appointment of guardians for such members in courts of competent jurisdiction."

Plaintiffs nevertheless argue for such a strained construction on the theory that an investiture of discretion to use other means than Wis.Stat.Ann. § 319.09 (1958) would constitute a repeal by implication of 42 U.S.C. §§ 1981 and 1982, thus running afoul of the Due Process Clause of the Fifth Amendment by analogy to Reitman v. Mulkey, 387 U.S. 369, 87 S.Ct. 1627, 18 L.Ed.2d 830.⁹ While we appreciate the salutary principle of construing statutes so as to avoid facing a latent constitutional question, that principle cannot be stretched to the point of robbing legislation of its plain meaning. Welsh v. United States, 398 U.S. 333, 354-355, 90 S.Ct. 1792, 26 L.Ed.2d 308 (Harlan, J., concurring); Aptheker v. Secretary of State, 378 U.S. 500, 515, 84 S.Ct. 1659, 12 L.Ed.2d 992; Moore Ice Cream Co. v. Rose, 289 U.S. 373, 379, 53 S.Ct. 620, 77 L.Ed. 1265. We conclude that 25 U.S.C. § 900 clearly authorized the Secretary to create and the defendant to administer the Menominee Assistance Trust. Crain v. First National Bank of Oregon, Portland, 324 F.2d 532, 537-538 (9th Cir. 1963). In so concluding we express no opinion whatever on whether there is any conflict between 25 U.S.C. § 900 and 42 U.S.C. §§ 1981 and 1982.¹⁰

The single question which remains then is whether 25 U.S.C. § 900, which we hold authorizes the trust at issue here, violates the Due Process Clause of the Fifth Amendment. It would be constitutionally infirm only if it authorized an invidious discrimination. We note the statute's constitutionality has been upheld elsewhere, Crain v. First National Bank of Oregon, Portland, 324 F.2d 532, 535-537 (9th Cir. 1963), but find the issue not ripe for our consideration. See Poe v. Ullman, 367 U.S. 497, 81 S.Ct. 1752, 6 L.Ed.2d 989; United Public Workers of America v. Mitchell, 330 U.S. 75, 67 S. Ct. 556, 91 L.Ed. 754; Hinton v. Udall, 124 U.S.App.D.C. 283, 364 F.2d 676, 678-681 (1966).

Article III(C) of the Menominee Assistance Trust Agreement provides in part as follows:

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"The Trustee shall terminate the trust as to any Beneficiary other than a minor and distribute to such Beneficiary his portion of the trust assets upon a finding by the Trustee or a court of competent jurisdiction, upon application by the Trustee or such Beneficiary, that such Beneficiary is not in need of further assistance in conducting his affairs. The Trustee may terminate the trust as to any Beneficiary, regardless of age or the Beneficiary\'s ability to conduct his own affairs, if in the Trustee\'s discretion the continuation of the trust as to such Beneficiary is undesirable or unnecessary by reason of the out-of-state residence of the Beneficiary, an excessive reduction in number of Beneficiaries under this trust, or any other similar cause deemed sufficient by the Trustee: Provided, That the Trustee shall distribute the portion of the assets held for any such Beneficiary in need of assistance in conducting his affairs to a legal guardian, conservator, successor trustee or other person legally impowered to receive and administer such assets."

* * * * * *

Plaintiffs who are so disposed¹¹ may apply to the Wisconsin courts under Wis. Stat.Ann. § 319.09 (1958) for appointment as guardians of their children. Upon such appointment under Article III (C) of the Assistance Trust Agreement, such plaintiffs may request defendant to terminate the trust as to their children and to distribute the children's...