Sault Ste. Marie Tribe of Chippewa Indians v. Bernhardt

• Decision Date: 05 March 2020
• Docket Number: Case No. 1:18-cv-02035 (TNM)
• Citation: 442 F.Supp.3d 53
• Parties: SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS, Plaintiff, v. David BERNHARDT, et al., Defendants, and Saginaw Chippewa Indian Tribe of Michigan, et al., Defendant-Intervenors.
• Court: U.S. District Court — District of Columbia

442 F.Supp.3d 53

SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS, Plaintiff,

v. David BERNHARDT, et al., Defendants,andSaginaw Chippewa Indian Tribe of Michigan, et al., Defendant-Intervenors.

Case No. 1:18-cv-02035 (TNM)

United States District Court, District of Columbia.

Signed March 5, 2020

Arpit K. Garg, Kelly P. Dunbar, Kevin Matthew Lamb, Wilmer, Cutler, Pickering, Hale & Dorr, LLP., Washington, DC, for Plaintiff

Sara E. Costello, U.S. Department of Justice, Washington, DC, for Defendants

Donald C. Holmes, John Travis Pittman, Holmes Pittman & Haraguchi, LLP, Michael Anthony Carvin, William Dennis Coglianese, Jones Day, Allison C. Binney, Merrill C. Godfrey, Donald R. Pongrace, Akin Gump Strauss Hauer & Feld LLP, Washington, DC, William A. Szotkowski, Jessica Intermill, Leah K. Jurss, Hogan Adams PLLC, St. Paul, MN, for Defendant-Intervenors

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

"[T]he central, organizing question of Federal Courts doctrine involves allocations of authority: Who ought to have authority to give conclusive determinations of which kinds of questions?" Richard H. Fallon, Jr., Reflections on the Hart & Wechsler Paradigm , 47 Vand. L. Rev. 953, 962 (1994). This case is about who decides whether an Indian tribe acquired land for a permissible purpose—the Federal Government or tribal leaders. Finding that Congress vested tribal leaders with that decision here, the Court sets aside the Government's refusal to take land into trust for the Sault Ste. Marie Tribe of Chippewa Indians ("Sault" or the "Tribe").

The Tribe contends that this refusal was contrary to law and arbitrary and capricious under the Administrative Procedure Act ("APA"). For relief, the Tribe seeks vacatur of the decision and either an order compelling the Department to take the land into trust or an order directing the Department to issue a new decision on an expedited basis. The Tribe moves for summary judgment. The Department and Intervenors—three commercial casinos ("Casinos"), the Nottawaseppi Huron Band of the Potawatomi ("NHBP"), and the Saginaw Chippewa Indian Tribe of Michigan ("Saginaw Tribe")—cross-move for summary judgment.

The Court agrees with Sault on the merits. The Department overstepped its authority when it denied Sault's request to take land into trust because it believed the Tribe did not acquire the land for a proper purpose. Congress gave the Department no role in policing Sault's land acquisitions. And in any event, the land acquisition here was for a proper purpose under the relevant statute. The Court declines, however, to order the Department to take any land into trust or to issue a new decision on an expedited basis. The upshot is that the Court will grant in part and deny in part each motion for summary judgment, vacate the Department's decision, and remand to the agency for further proceedings.

I.

Sault is a federally recognized tribe with more than 40,000 enrolled members. A.R. 3113.¹ It has a well-documented history. See Sault Ste. Marie Tribe of Chippewa Indians v. United States , 576 F. Supp. 2d 838, 840–41 (W.D. Mich. 2008). The Tribe descends from a group of Chippewa bands that occupied a large area in the Upper Great Lakes region. Id. In the nineteenth century, these ancestors ceded much of their land to the Federal Government. See Treaty of March 28, 1836 (7 Stat. 491).

Alexis de Tocqueville starkly described the process by which the Federal Government obtained Indian lands in Democracy in America. Government envoys would gather the tribe members together, coax them with promises of riches in lands undisturbed by European encroachment, and bribe them with trinkets like glass necklaces and tinsel bracelets. Alexis de Tocqueville, Democracy in America 403 (Simon & Brown ed. 2013) (1835-1840). He continues:

If, when they have beheld all these riches, they still hesitate, it is insinuated that they have not the means of refusing their required consent, and that the government itself will not long have the power of protecting them in their rights. What are they to do? Half convinced, and half compelled, they go to inhabit new deserts, where the importunate whites will not let them remain ten years in tranquility. In this manner do the Americans obtain, at a very low price, whole provinces, which the richest sovereigns of Europe could not purchase.

Id.

Over a century later, Congress established the Indian Claims Commission to settle tribal land claims against the United States. See Act of Aug. 13, 1946, Pub. L. No. 79-726, 60 Stat. 1049, 1050. The Commission found that the 1836 treaty was "unconscionable." 26 Ind. Cl. Comm. 550, 553 (Dec. 29, 1971) (Docket Nos. 18-E and 58). The United States had paid the Chippewa bands $1.8 million for land worth $12.1 million. Id. As a remedy, the Commission awarded Sault and other tribes more than $10 million in damages. Id. at 561.

The question remained how to distribute these judgment funds among the beneficiary tribes. The answer came in the Michigan Indian Land Claims Settlement Act ("MILCSA"). See Pub. L. No. 105-143, 111 Stat. 2652 (1997). MILCSA is central to this case. Its express purpose is "to provide for the fair and equitable division of the judgment funds" among the beneficiary tribes "and to provide the opportunity for the tribes to develop plans for the use or distribution of their share of the funds." Id. § 102(b). The beneficiary tribes include Sault and the Bay Mills Indian Community, but not the intervenor tribes. Id. § 104.

Section 108 of MILCSA describes the plan for Sault. Id. § 105(a)(3). It directs the Secretary of the Interior to transfer the Tribe's share into a trust called the "Self-Sufficiency Fund." Id. § 108(a)(1)(A), (e)(1). The Tribe's board of directors is the "trustee" of this Fund and "shall administer the Fund in accordance with the provisions of" section 108. Id. § 108(a)(2). The "principal" of the Fund

shall be used exclusively for investments or expenditures which the board of directors determines ... (A) are reasonably related to ... economic development ... development of tribal resources ... (B) are otherwise financially beneficial to the tribe and its members ... or (C) will consolidate or enhance tribal landholdings.

Id. § 108(b)(1). The "interest and other investment income" of the Fund, meanwhile,

shall be distributed ... (1) as an addition to the principal of the Fund ... (2) as a dividend to tribal members ... (3) as a per capita payment to some group or category of tribal members designated by the board of directors ... (4) for educational, social welfare, health, cultural, or charitable purposes which benefit the members of the [Tribe] ... or (5) for consolidation or enhancement of tribal lands.

Id. § 108(c).

As we will see, the meaning of § 108(c)(5)—specifically, the phrase "enhancement of tribal lands"—is one of the main issues here. Section 108 also provides that "[n]otwithstanding any other provision of law," the Secretary's "approval ... for any payment or distribution from the principal or income of the [Fund] shall not be required and [he] shall have no trust responsibility for the investment, administration, or expenditure of the principal or income." Id. § 108(e)(2). Finally, MILCSA directs that "[a]ny lands acquired using amounts from interest or other income of the [Fund] shall be held in trust by the Secretary for the benefit of the tribe." Id. § 108(f). The meaning of § 108(f) is the other main issue here.

While section 108 of MILCSA takes center stage, it helps to understand section 107, which establishes the plan for Bay Mills. Id. § 105(a)(2). Section 107 bears similarities to section 108 but is different in some critical respects. It provides that 20 percent of the tribe's share goes into the "Land Trust." Id. § 107(a)(1). The tribe's Executive Council is the "trustee" of the Land Trust and "shall administer the [Trust] in accordance with" section 107. Id. § 107(a)(2). "The principal of the [Trust] shall not be expended for any purpose." Id. § 107(a)(4). The Trust's "earnings," meanwhile, "shall be used exclusively for improvements on tribal land or the consolidation and enhancement of tribal landholdings through purchase or exchange." Id. § 107(a)(3) (emphasis added). "Any lands acquired with funds" from the Trust "shall be held as Indian lands are held." Id. And, as with section 108, "[n]otwithstanding any other provision of law, the approval of the Secretary of any payment from the [Trust] shall not be required." Id. § 107(a)(6).

II.

A.

Sault describes itself as "economically distressed" and "severely land-starved." Compl. ¶¶ 18–19, ECF No. 1. Its current trust lands are all in Michigan's Upper Peninsula. A.R. 2154. These lands—consisting of 2,200 acres—serve the 15,000 members who live in that region. Id. Despite having no trust lands in Michigan's Lower Peninsula, about 14,000 of the Tribe's members live there. Id. According to the Tribe, federal policy in the twentieth century encouraged residents of the rural Upper Peninsula to relocate to urban areas in the Lower Peninsula. Id. at 2162–63. Once this failed "Voluntary Relocation Program" ended in 1975, many members could not afford to move back to the Upper Peninsula. Id. at 2163.

By 2012, the Tribe's situation was "increasingly tenuous." Compl. ¶ 33. It did not have enough land to serve its members in either the Upper or Lower Peninsula. Id. And its revenue from casinos in the "remote areas" of the Upper Peninsula had declined by 24.5 percent in the past decade. Id. ¶ 34. This was because of "competition from the Michigan State Lottery and new casinos in the Lower Peninsula." Id.

To remedy these problems, the Tribe's board approved a plan to open a casino in the Lower Peninsula. Id. ¶ 35. The Tribe has been candid from the outset that its endgame here is to open a casino, if allowed under the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq. A.R. 3112 n.1. Tribes can build casinos only on "Indian lands," 25 U.S.C. § 2710(d)(1), which...