Cuidiville Band of Pomo Indians v. NGV Gaming, Ltd.

This appeal presents the single, seemingly straightforward
question whether the word "is" really means "is," at least as
that word is employed in 25 U.S.C. § 81.1 At the core of the
present dispute, that statute requires the Secretary of the
Department of the Interior ("Secretary") to approve any "contract
with an Indian tribe that encumbers Indian lands for a
period of 7 or more years" before such a contract can be considered
valid. Section 81(a) defines the term "Indian lands" in
part as "lands the title to which is held by the United States
in trust for an Indian tribe" (emphasis added).

Appellant NGV Gaming Ltd. ("NGV") asks us to read Section
81 literally - as pertaining solely to contracts that implicate
lands already held in trust by the federal government.

Appellees Harrah's Operating Company ("Harrah's") and
Guidiville Band of Pomo Indians ("the Tribe"2), on the other
hand, urge a nonliteral reading of the statute - one that would
treat Section 81 as also covering contracts in which the parties
reach agreement, not with respect to already-held lands, but
to acquire lands in the future that might eventually be held in
trust. Under the latter interpretation the contract at issue in
this appeal would be invalid, lacking as it does the Secretary's
approval, and the district court's decision to dismiss NGV's
suit against Harrah's for tortious interference with that contract
would have to be affirmed. But under the first - and
literal - reading, the district court's decision would be in
error, and the state law action could proceed.

Motivated largely by the plain meaning of Section 81 - but
after also taking into account related statutes, relevant legislative
history and the language of the contract itself - we conclude
that the word "is" means just that (in the most basic,
present-tense sense of the word) and that Section 81 therefore
applies only to contracts that affect lands already held in trust
by the United States. We therefore reverse the district court
and remand for further proceedings.

I. Factual Background

A. Terms of the Contract

On July 3, 2002 the Tribe contracted with FEGV Corporation
("FEGV") for the latter to develop and construct a gaming
facility on a to-be-acquired parcel of land in Northern
California. In December 2003 FEGV assigned to NGV its
rights and duties under that contract, which comprised two
separate documents: (1) a Development Agreement and Personal
Property Lease ("the Lease"), and (2) a Cash Management
Agreement. Here is the purpose of the transaction as
described at the outset of the Lease:

The Tribe requires assistance with (i) financing the
day-to-day operations of the Tribal government, (ii)
acquiring real property and petitioning the United
States to accept title to such property in trust for the
benefit of the Tribe . . . , and (iii) the development,
design, financing, construction and initial equipping
of the Facility.

"Facility," the Lease explains, includes "buildings and
improvements" that would be constructed on to-be-acquired
real property and that would then be used to conduct Class II
or Class III gaming3 for the public. Both parties intended to
transfer the to-be-acquired real property into trust, a process
set forth under Section 465 that allows the United States to
accept and hold property for the benefit of an Indian tribe.4
But to be clear: No such land existed at the time the contract
was entered into - nothing had been identified or acquired or,
least of all, had been placed in trust.

NGV's role in that forward-looking endeavor was to use its
"experience, expertise and resources . . . to assist the Tribe"
in accomplishing its objectives. In exchange NGV would be
compensated through a combination of fixed payments and a
percentage of gross and net revenues earned by the newly
constructed gaming facility. In addition NGV would enjoy
other rights related to the land. Most notably, under the Lease
the Tribe could not without NGV's consent:

Sell, dispose of, lease, assign, sublet, transfer, mortgage
or encumber (whether voluntarily or by operation
of law) all or any part of its right, title, or
interest in or to the Trust Lands, the Facility, or the
Equipment.

Finally the Lease set forth several commitments, one of
which is critically important to this appeal. It specified that
the Tribe would "[o]btain all necessary and appropriate federal
and tribal permits and approvals necessary with respect
to the enforceability of the [Lease and Cash Management
Agreement] or the operation of the Facility." Among such
potential federal approvals was the approval contemplated by
Section 81. Another potentially relevant federal statute was
Section 2710(b)(2)(A), which calls for the Chairman of the
National Indian Gaming Commission ("Gaming Commission")
to approve "any tribal ordinance or resolution" involving
Class II gaming on Indian lands.

B. Rescission of Tribe's Contract with NGV

Beginning in January 2004 Harrah's and Upstream Molate,
LLC ("Upstream") partnered and entered into negotiations to
purchase 354 acres of land from the City of Richmond, California.

Harrah's and Upstream intended to place that land in
trust on behalf of the Tribe and to use the land to build a gaming
facility that the Tribe would operate. According to NGV,
Harrah's and Upstream began those negotiations despite
knowing of the Tribe's pre-existing obligations to NGV.

On August 2, 2004 the Tribe - acting through its chairperson,
Merlene Sanchez - sent a letter to NGV seeking to
rescind their contract. Sanchez explained that the Tribe had
submitted their contract to the Bureau of Indian Affairs
("Bureau") and the Gaming Commission for both agencies'
approval under Sections 81 and 2710. Because the Gaming
Commission had already informed the Tribe that its contract
with NGV was illegal, Sanchez concluded that the Tribe had
"no choice but to rescind the agreement."

Indeed, in a letter dated July 21, 2004 the Gaming Commission
explained that the Tribe's contract with NGV violated
Section 2710(b)(2)(A). It stated that "the Agreements evidence
Developer's proprietary interest in the Tribe's gaming

activity" and that such a proprietary interest contravened the
Indian Gaming Regulatory Act ("IGRA").

Similar news came from the Bureau on April 13, 2005.

After reviewing the Lease and Cash Management Agreement,
that agency "concluded, as a matter of law, that the agreements
must be approved by the Secretary under Section 81 in
order for them to be valid and enforceable." Absent such
approval, the Bureau explained, the contract was "unenforceable
as a matter of law." Its conclusion, it noted, stemmed
from information provided to it by attorneys for the Tribe
"showing that the United States had accepted at least three
parcels in Mendocino County, California, into trust for the
benefit of the Tribe in 1999." Those 44 acres had been
accepted into trust in 1999 with the intention that they would
be used by the Tribe for residential development, not a gaming
facility. Based on the existence of the Mendocino County
property the Bureau "determined that the Tribe has an interest
in ‘Indian land' as defined in §81(a)," and that interest was
encumbered by its contractual provision with NGV that "affirmatively
require[s] the Tribe to refrain from selling or disposing
of any part of an interest the Tribe has in Indian land . . .
so long as the agreements remain in effect."

In August 2004 - before having received the Bureau's letter
but after having received the Gaming Commission's
decision - the Tribe officially entered into an agreement with
Harrah's and Upstream to develop and manage the Tribe's
proposed gaming facility. That agreement contained an
indemnification clause requiring the Tribe to defend Harrah's
against any future claims made by NGV.

C. Procedural History

NGV eventually filed suit against both Upstream and Harrah's
in the federal district court, alleging that those two
defendants had tortiously interfered with its existing contract
with the Tribe. Later the Tribe filed its own lawsuit seeking
declaratory and injunctive relief against NGV, asking to have
the Lease and Cash Management Agreement declared invalid
under applicable federal statutes. Both actions - NGV's
against Upstream and Harrah's and the Tribe's against NGV
- were later consolidated.

On July 28, 2005 the Tribe, Harrah's and Upstream all
moved for summary judgment. NGV responded by contesting
the district court's subject matter jurisdiction. It claimed that
there was no case or controversy between NGV and the Tribe,
for NGV had assured the Tribe that it would not file an action
against it. For its part the Tribe contended that there was subject
matter jurisdiction based upon (1) the Tribe's obligation
to indemnify Harrah's against claims made by NGV and (2)
the Tribe's continuing interest in developing a gaming facility
without fear of litigation.

On October 19, 2005 the district court granted the Tribe's
motion for declaratory relief. In particular the court held that
(1) it had subject matter jurisdiction over the Tribe's declaratory
relief action; (2) Section 81 applied to contracts involving
lands not yet acquired and not yet transferred into trust;
and (3) because the Secretary of the Interior had not approved
the Tribe's contract with NGV as required under Section 81,
the contracts were invalid. As a result the district court
granted the Tribe's motion. In so doing it also granted Harrah's
and Upstream's motion for summary judgment, dismissing
NGV's tortious interference claim as a matter of law
because no valid contract existed between NGV and the
Tribe.

NGV timely filed this appeal. While it was pending this
court granted NGV's motion for the voluntary dismissal of
Upstream from the matter because those two parties had settled.

In addition, while this appeal was pending the Tribe and
Harrah's terminated their contract and entered into a settlement
agreement that provided in part for the Tribe's continued
indemnification of Harrah's against claims made by NGV
- but the Tribe acknowledges that its original contract with
Harrah's (the one that spawned the termination and its continued
indemnification undertaking) lacked the approval necessary
under Section 2710.

II. Standards of Review

We review both the existence of subject matter jurisdiction
and a grant of summary judgment de novo (Galt G/S v. JSS
Scandinavia, 142 F.3d 1150, 1153-54 (9th Cir. 1998)). In
reviewing the latter decision, we determine whether there are
any genuine issues of material fact for trial, viewing the evidence
in the light most favorable to the nonmovant (Gammoh
v. City of La Habra, 395 F.3d 1114, 1122 (9th Cir. 2005)).

We also review de novo the interpretation and construction of
statutes (Soltani v. W. & S. Life Ins. Co., 258 F.3d 1038, 1041
(9th Cir. 2001)), as well as the principles of contract interpretation
as applied to the facts before us (L.K. Comstock & Co.
v. United Eng'rs & Constructors Inc., 880 F.2d 219, 221 (9th
Cir. 1989)).

III. The Tribe's Claim Against NGV

We begin with the Tribe's effort to obtain a declaratory
judgment, seeking a proclamation that its agreement with
NGV was invalid because it had not been approved by the
Secretary pursuant to Section 81 or, in the alternative, because
it violated Section 2710. We have no occasion to decide the
merits of those questions - at least not at this stage of this opinion5
- because we conclude that the Tribe's efforts do not
belong in the federal courts at all.

[1] It is undisputed that the Tribe's claimed adversary NGV
has released it from any liability whatever, looking instead
solely to a claim against Harrah's. And the Tribe has itself
recognized that its management contract with Harrah's (which
would have imposed on it an indemnification obligation covering
NGV's claims against Harrah's) was void under Section
2705(a)(4) due to the Tribe's failure to have obtained
approval of that contract by the Chairman of the Gaming Commission.

Constitution from giving to putative litigants (see, e.g., City
of Los Angeles v. Lyons, 461 U.S. 95, 106-07, 110-11 (1983),
holding that because Lyons could not show that he "faced a
real and immediate threat of again being illegally choked," his
claim was "speculative" in nature and therefore could not
meet Article III's "case or controversy" requirement).

As already stated, that alone should operate to knock the
Tribe out of the box in terms of standing to pursue its own litigation.

This case scenario poses a dramatic contrast to litigation
such as a patent case seeking a declaratory judgment (see,
e.g., Société de Conditionnement en Aluminium v. Hunter
Eng'g Co., 655 F.2d 938, 942-44 (9th Cir. 1981)), where there
are two parties involved in the dispute with actual interests
"of sufficient immediacy and reality" (Maryland Cas. Co. v.
Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)), even though
no infringement action has been brought.

[2] If, as and when the Tribe chooses to engage in a future
proposed entry into gambling activity with some other party
and may then seek a declaration of its rights under a contract
with that party, there may perhaps be federal subject matter
jurisdiction to address that subject (a question that need not be
answered here because it is purely hypothetical). But here,
with the contractual relationship that once bound NGV and
the Tribe already having been terminated, there is no one on
the other side of the "v." sign from the Tribe - and that is fatal
in jurisdictional terms. We thus vacate the district court's
decision to grant the Tribe the declaratory relief it sought.

IV. NGV's Claim Against Harrah's

We turn now to NGV's claim that Harrah's tortiously interfered
with the contract that once bound NGV and the Tribe.
Under California law "[t]he elements of a cause of action for
intentional interference with contract are: (1) a valid contract
between plaintiff and a third party; (2) defendants' knowledge
of the contract; (3) defendants' intentional acts designed to
induce a breach or disruption of the contractual relationship;
(4) actual breach or disruption of the contractual relationship;
and (5) resulting damage" (Tuchscher Dev. Enters., Inc. v.
San Diego Unified Port Dist., 132 Cal. Reptr.2d 57, 73 (Cal.
Ct. App. 2003)). At issue in this appeal is the first element of
the tort: NGV contends that its contract with the Tribe was
valid because it did not require approval under Section 81,
while Harrah's argues that the contract was invalid precisely
because it lacked such approval. In the alternative, Harrah's
argues that the contract violated Section 2710, which requires
that an "Indian tribe have the sole proprietary interest and
responsibility for any gaming activity."

We address each of those arguments in turn, tackling the
Section 81 inquiry first. That inquiry calls for a consideration
of a number of factors, including the plain language of the
statute, the role (if any) of 1 U.S.C. §1, relevant legislative
history and, of course, the actual language of the agreement
that once bound NGV and the Tribe.

A. Plain Language of Section 81

Our analysis begins with the plain language of Section 81,
not only because that is the natural starting point dictated by
all accepted canons of statutory construction but also because
the statute's unequivocal present-tense use of the word "is"
does a tremendous amount of the legwork in settling one of
the main questions raised on this appeal. In full Section 81(a)
defines the term "Indian lands" as (emphases added):
lands the title to which is held by the United States
in trust for an Indian tribe or lands the title to which
is held by an Indian tribe subject to a restriction by
the United States against alienation.

Section 81(b) then prescribes:

No agreement or contract with an Indian tribe that
encumbers Indian lands for a period of 7 or more
years shall be valid unless that agreement or contract
bears the approval of the Secretary of the Interior or
a designee of the Secretary.

[3] In this instance the Tribe-NGV contract was not within
the purview of Section 81 because it plainly did not implicate
"Indian lands" in statutory terms. Section 81(a)'s use of the
present tense in defining "Indian lands" unambiguously prescribes
that title to the real estate must already be held by the
United States in trust for a tribe. Had Congress intended that
Section 81 also extend to lands that might later be held in
trust, it would have been the simplest of matters to word the
statute differently. That it did not do so is not a linguistic
decision to be treated lightly (see SEC v. McCarthy, 322 F.3d
650, 656 (9th Cir. 2003), explaining that "Congress's explicit
decision to use one word over another in drafting a statute is
material" and adding that "[i]t is a decision that is imbued
with legal significance and should not be presumed to be random
or devoid of meaning"; Biehl v. CIR, 351 F.3d 982, 987
(9th Cir. 2003), writing that courts "will not stretch the statutory
language to cover a situation not contemplated by Congress").

[4] Here the parties entered into their contract expressly
contemplating - specifically intending - that land would later
be identified and acquired and then still later transferred to
the United States to be held in trust for the Tribe. But no such
lands existed when the Tribe and NGV entered into their contract.
Hence the portion of Section 81 that limits the duration
of encumbrances on "Indian lands" is simply inapplicable to
this case.

B. Role of the Dictionary Act in Interpreting
Section 81

[5] Contrary to the contention raised by the dissent, nothing
in our reading of Section 81 contravenes 1 U.S.C. §1.8 More
8That statute was not adverted to by either party in the original briefing
on the appeal (or for that matter before the district court). We invited input
commonly referred to as the Dictionary Act, that statute reads
in relevant part:

In determining the meaning of any Act of Congress,
unless the context indicates otherwise -

. . . .

words used in the present tense include the
future as well as the present.

Focusing upon the phrase "words used in the present tense
include the future as well as the present," the dissent asserts
that the word "is" as used in Section 81(a) encompasses both
lands that are currently held in trust by the United States for
an Indian tribe and lands that might eventually be held in similar
fashion. But in so doing, the dissent fails to grapple adequately
with (1) the Supreme Court's repeated instructions
regarding proper statutory construction and (2) the directive
in the Dictionary Act itself that compels us to consider first
the "context" of the statute.

[6] First, the Supreme Court has not once invoked the Dictionary
Act in an effort to convert an unambiguous verb tense
into claimed ambiguity, let alone then going on to employ that
manufactured ambiguity as a stepping stone to altering the
plain sense of a statute.9 Here is the succinct directive in
from the litigants on that score following oral argument, and each party
has had ample opportunity to address through their supplemental briefing
the question of what if any effect the Dictionary Act has on the interpretation
of Section 81.

United States v. Wilson, 503 U.S. 329, 333 (1992) and the
cases that it cites:

Congress' use of a verb tense is significant in construing
statutes. See, e.g., Otte v. United States, 419
U.S. 43, 49-50 (1974); Gwaltney of Smithfield, Ltd.
v. Chesapeake Bay Foundation, Inc., 484 U.S. 49,
63-64, n.4 (1987).

Similarly, Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450
(2002) made clear that in "all statutory construction cases, we
begin with the language of the statute." Inquiries into the
meaning of a statute come to an end "if the statutory language
is unambiguous and the statutory scheme is coherent and consistent"
(id., quoting Robinson v. Shell Oil Co., 519 U.S. 337,
340 (1997)(internal quotation marks omitted)). Given the specific
and unambiguous manner in which Section 81(a) defines
the term "Indian lands," it is not apparent why the Dictionary
Act must even be consulted.

[7] Second, even on its own terms the Dictionary Act supports
the analysis here: It looks first to "context," and only if
the "context" leaves the meaning open to interpretation does
the default provision come into play. As defined by Rowland,
506 U.S. at 199-200 (alterations in original, emphasis added):

713 n.1 (2003) (Stevens, J., concurring in judgment); Rowland v. Cal.
Men's Colony, 506 U.S. 194, 196 (1993); Ngiraingas v. Sanchez, 495 U.S.
182, 190-91 (1990); Will v. Mich. Dep't of State Police, 491 U.S. 58, 69
(1989)). We ourselves have relied on the Dictionary Act for the same purpose
(see United States v. Middleton, 231 F.3d 1207, 1210 (9th Cir.
2000)). And on one other occasion we have relied on the Dictionary Act
simply to corroborate an independent conclusion - derived solely from
"the plain language of the statute" - that a criminal statute written in the
present tense cannot be used to penalize past behavior (United States v.
Jackson, 480 F.3d 1014, 1019 (9th Cir. 2007)). Because none of those
cases approaches the situation presented here, none affects this decision.

"Context" here means the text of the Act of Congress
surrounding the word at issue, or the texts of
other related congressional Acts, and this is simply
an instance of the word's ordinary meaning: "[t]he
part or parts of a discourse preceding or following a
‘text' or passage or a word, or so intimately associated
with it as to throw light upon its meaning."

Webster's New International Dictionary 576 (2d ed.
1942). While "context" can carry a secondary meaning
of "[a]ssociated surroundings, whether material
or mental," ibid., we doubt that the broader sense
applies here.

And Rowland, id. at 199 went on to explain that the word "indicates"
broadens the scope of the inquiry that a court must
make (id. at 200):

If "context" thus has a narrow compass, the "indication"
contemplated by 1 U.S.C. §1 has a broader
one. The Dictionary Act's very reference to contextual
"indication" bespeaks something more than an
express contrary definition, and courts would hardly
need direction where Congress had thought to
include an express, specialized definition for the purpose
of a particular Act; ordinary rules of statutory
construction would prefer the specific definition over
the Dictionary Act's general one. Where a court
needs help is in the awkward case where Congress
provides no particular definition, but the definition in
1 U.S.C. §1 seems not to fit.[10] There it is that the
qualification "unless the context indicates otherwise"
has a real job to do, in excusing the court from forcing
a square peg into a round hole.

With that guidance in mind, we consider a series of congressional
acts related to Section 81 - specifically, Sections 465,
2719 and 271 - that clearly avoid an "awkward" rendering of
Section 81.

Sections 465 and 2719 are particularly instructive, for they
respond directly to the dissent's concern that construing Section
81 so that it applies only to contracts involving lands
already in trust would allow parties to evade federal review
entirely. Manipulative parties, the dissent fears, could take
advantage of such an interpretation by carefully orchestrating
the timing of any agreement so that any provision encumbering
Indian lands would be executed only before placing land
in trust. But such fears are more than adequately assuaged by
the existence of Sections 465 and 2719, both of which guarantee
that a contract such as the one that NGV and the Tribe had
entered into can never escape the federal government's attention.

First, Section 465 (already quoted in n.4) and its implementing
regulations set forth an extensive review process that
the Secretary of the Interior must undertake before taking
lands into trust (see, e.g., 25 C.F.R. §§151.3, 151.11(c); Larry
E. Scrivner, Acquiring Land into Trust for Indian Tribes, 37
NEW ENG. L. REV. 603, 606-07 (2003)("Scrivner"),11 describing
the trust application process and the Secretary's duty to
investigate, among other things, the purpose for which the
land will be used and the effect that placing the land into trust
will have on the tax bases of local government; Mary Jane
Sheppard, Taking Indian Land Into Trust, 44 S.D. L. REV.
681, 687-88 (1998-99) ("Sheppard"),12 similarly describing
the comprehensive nature of a Section 465 review). During
such a review a tribe is first required to address, among other
issues, its need for the land, the purpose for which the land
will be used, the effect that taking the land into trust would
have on state and local political subdivisions and whether a
decision to take the land into trust would comply with the
National Environmental Policy Act (see Scrivner, 37 NEW
ENG. L. REV. at 606). With that initial information in hand, the
Department of the Interior then gives state and local governments
the opportunity to object to the tribe's application
through "evidentiary documentation" demonstrating why taking
the land into trust would "impact[ ] their jurisdiction or
their tax base" (id. at 607). Only after all sides have provided
their input does the Department begin its own independent
examination of the trust application, a process that "requires
a thorough analysis of all the facts and documentation, environmental
clearances, archaeological studies, and all of the
things that weigh into the action" (id.). Any final decision is
subject both to a similarly extensive administrative appeals
process and to a subsequent review in the federal courts (id.).

And relatedly, in cases where the tribe intends to use lands
transferred into trust for gaming purposes, Section
2719(b)(1)(A) requires that the Secretary first "determine[ ]
that a gaming establishment . . . would be in the best interest
of the Indian tribe and its members, and would not be detrimental
to the surrounding community" (see also Sheppard, 44
S.D. L. REV. at 687). In short, any concern that NGV was trying
to game the system by executing its contract with the
Tribe before transferring land into trust is wholly unfounded.

Instead any later effort to take lands into trust triggers an
extensive review process by the Secretary - a review that is
far more meaningful than any Section 81 proceeding that
would deal with not-yet-identified lands that might be taken
into trust in the future, because a Section 465 proceeding
addresses the suitability of a specific parcel of land in all
respects, rather than the totally speculative process that is necessarily
involved when a presently unknown future acquisition
is sought to be made the subject of an attempted analysis.

Sections 2710(d)(3)(A) and 2710(d)(7) also help illuminate
the meaning of Section 81, particularly because both are part
and parcel of IGRA, which defines "Indian lands" in much
the same manner as Section 81 (see Section 2703(4)(B)
(emphasis added), defining "Indian lands" in part as "any
lands title to which is held in trust by the United States for the
benefit of any Indian tribe . . . ."). Section 2710(d)(3)(A) provides:
Any Indian tribe having jurisdiction over the Indian
lands upon which a class III gaming activity is being
conducted, or is to be conducted, shall request the
State in which such lands are located to enter into
negotiations for the purpose of entering into a Tribal-
State compact governing the conduct of gaming
activities.

If any State should fail to enter into such negotiations, Section
2710(d)(7) provides the Indian tribe with a series of remedies,
including the right to initiate an action against the State
in federal district court. But to bring such an action, as the
Sixth Circuit has held in Match-E-Be-Nash-She-Wish Band of
Pottawatomi Indians v. Engler, 304 F.3d 616, 618 (6th Cir.
2002), the Indian tribe must show that it has "Indian lands"
as defined by IGRA at the time of filing. Match-E-Be-Nash-
She-Wish, id. spelled out the rationale underlying its conclusion
in terms that bear considerably on the Section 81 question
now before us:

Under § 2710(d)(3)(A), it is clear that the State does
not have an obligation to negotiate with an Indian
tribe until the tribe has Indian lands. The purposes of
this requirement appear to be to ensure that the
casino will be inside the borders of the State, to give
the State notice of where it will be, and to require the
tribe to have a place for the casino that has been federally
approved. If the Indian tribe does not have any
land in the State that can be used for a casino, why

should the State waste its time negotiating about
such a casino? In the absence of a location, the State
would have no way to assess the environmental,
safety, traffic, and other problems that such a casino
could pose.

Accord, Mechoopda Indian Tribe of Chico Rancheria, Cal. v.
Schwarzenegger, No. Civ. S-03-2327WBS/GGH, 2004 WL
1103021, at *5 (E.D. Cal. Mar. 12, 2004).

Given those practical concerns, it is no wonder that the
Bureau's policy has been to review contracts under Section 81
only when they involve lands currently held in trust by the
United States. That policy is evinced by the Bureau's own
April 13, 2005 letter to the Tribe, which made clear that its
conclusion that the NGV-Tribe agreement was invalid for
lack of Section 81 approval was predicated on the Tribe's
lawyers having alerted the Bureau to its Mendocino County
property, not to the possibility of acquiring future trust lands.13
That same policy is further confirmed through an affidavit
included in the record by NGV from Kevin Gover ("Gover"),
a former Assistant Secretary for Indian Affairs. Gover attests
that during his tenure from late 1997 to early 2001, "it was
not the [Bureau's] policy or practice to review contracts to
determine whether such contracts fall within the scope of 25
13In that letter the Bureau wrote that "[a]t an earlier stage of our review,
it was not clear whether the United States held title to any land in trust for
the benefit of the Tribe, and, as a consequence, whether the agreements
covered any ‘Indian land' as defined in 25 U.S.C. §81(a)" (emphasis
added)). Thus the Bureau concluded that Section 81 applied to NGV's
contract with the Tribe only after "[a]ttorneys for the Tribe . . . provided
[the agency] with documents showing that the United States accepted at
least three parcels in Mendocino County, California, into trust for the benefit
of the Tribe in 1999." If the Bureau had viewed Section 81 as applying
to contracts involving lands that would later be transferred into trust, the
existence of the Mendocino County property would have been irrelevant
to its analysis of the NGV-Tribe contract.

U.S.C. §81(b) . . . in the absence of the existence of trust
lands." Instead, in cases "where the purpose of the contract
between a developer and a tribe [was] to assist the tribe in
acquiring real property, and petitioning the United States to
accept title to such property in trust for the benefit of the
tribe," the Bureau's review would be done pursuant to the
regulations implementing Section 465. As Gover puts it:

"[t]he Secretary's acceptance of title to the subject property in
trust for the petitioning tribe subsumes all approvals required
under Federal law." And as all of that applies to the facts
before us, the fact that the Tribe and NGV would eventually
have to undergo Section 465 review if their later-acquired
lands were to be transferred into trust obviated any need to
have their contract approved under Section 81.

[8] In conclusion, there is no reason to resort to the Dictionary
Act's default rules of statutory interpresentation. Instead
the context here clearly indicates that Section 81 is limited
only to reviewing those contracts involving presently held
trust lands.

C. Legislative History of Section 81

Our literal reading of Section 81 is further corroborated by
the statute's legislative history.14 In seeking to persuade us to
read Section 81 other than in plain-language terms, Harrah's
points to some cases that, it claims, identify a legislative history
of Section 81 that supports a nonliteral reading. We have
reviewed those cases as well as the pertinent legislative history, and we conclude that those sources not only fail to support
the position advanced by Harrah's but that they instead
further corroborate our own plain-language statutory reading.

Thus Harrah's seeks to call to its aid Montana v. Blackfeet
Tribe of Indians, 471 U.S. 759, 766 (1985), but that case significantly
couched its view in terms that federal statutes relating
to Indian tribes "are to be construed liberally in favor of
the Indians, with ambiguous provisions interpreted to their
benefit" (emphasis added). Here that proposition does not aid
Harrah's, for Section 81's present-tense wording leaves no
room for ambiguity.15 Indeed, even the Blackfeet Tribe concept
of liberal construction "in favor of the Indians" does not
call for a nonliteral reading of Section 81(b), for requiring that
more - rather than fewer - contracts be approved under Section
81(b) "would frustrate Indian tribes' efforts to promote
economic development and fiscal autonomy" (Penobscot
Indian Nation v. Key Bank of Me., 112 F.3d 538, 554 (1st Cir.
1997), adding that the court's "analysis reflects the modern
trend in federal Indian policy away from outmoded paternalistic
practices and policies").

Section 81's own evolution confirms the advent of that
more modern attitude toward Indian tribes, a perspective that
the dissent does not acknowledge. That statute was originally
enacted in 1872 to "reflect[ ] Congressional concerns that
Indians, either individually or collectively, were incapable of
protecting themselves from fraud in the conduct of their economic affairs" (see S. REP. NO. 106-150, at 2 (1999), adding
that "[t]he first and principal need then was that [Indians]
should be shielded alike from their own improvidence and the
spoliation of others"). But in 1934 Congress shifted the focus
of its Indian policy by enacting the Indian Reorganization Act
("Reorganization Act") that "represented a fundamental break
with [the] policy" underlying Section 81 (see id.). As the 1999
Senate Report, id. (alteration in original and internal quotation
marks omitted) went on to say:

The intent and purpose of the [Reorganization Act]
was to develop the initiative destroyed by a century
of oppression and paternalism . . . . [It] seeks to get
away from the bureaucratic control of the Indian
Department, and it seeks further to give the Indians
the control of their own affairs and of their own
property.

Following passage of the Reorganization Act, administrative
agencies and courts were left "with the difficult task of
reconciling an 1872 statute that sought to protect Indian tribes
by imposing extensive federal oversight with a 1934 Act
intended to disentangle the tribes from official bureaucracy"
(id. (internal citation omitted)). Fortunately Congress simplified
that task in 1999 when it amended Section 81. Those
amendments - which, among other changes, replaced the term
"relative to" Indian lands with "encumbers" Indian lands16 -
"ensure[d] that Indian tribes will be able to engage in a wide
array of commercial transactions without having to submit
those agreements to the BIA as a precaution" (id. at 9; see
also id., expressly noting that the 1999 amendment "eliminated
the overly-broad scope" of Section 81).

[9] Put simply, the tables have turned since 1872. Although
at an earlier point courts may have been able to use the Blackfeet
Tribe presumption to justify a nonliteral expansion of
16See n. 15.

Section 81, certainly the most recent amendment to that statute
makes clear that Congress now considers selfdetermination -
not paternalism - to be in the Indians' best
interest. And that goal is more directly advanced by a literal
rather than a nonliteral reading of Section 81.

D. Language of the Lease and Mendocino County
Property

With all of that said, we turn now to the actual language of
the Lease to demonstrate that under the literal present-tense
reading of Section 81, it does not apply to the only lands that
the United States already held in trust for the Tribe's benefit
at the time the Tribe-NGV agreement was entered into. Taking
issue with our addressing the specifics of the contract, the
dissent argues that this is a task best left in the first instance
to the district court, particularly when "parol evidence" is
involved. But our reading is based on the words of the contract
itself (see n.17), and contract interpretation has always
been a matter of pure law that needs no preliminary screening
by the district court. And our reference to the contract directly
addresses Harrah's argument - indeed the primary one that it
has raised on appeal - that the Lease implicates the Mendocino
County, California property already held in trust for the
Tribe. Because it is exceedingly plain that neither the Tribe
nor NGV ever contemplated that the document would extend
to the Mendocino County lands, we hold that the agreement
binding those two parties was valid without the Secretary's
approval.

It is of course true that the Tribe's 44 acres in Mendocino
County qualify as "Indian lands" as that term is defined by
Section 81. And it is equally true that such acreage was taken
into trust by the United States for the benefit of the Tribe in
1999, well before NGV and the Tribe formalized their business
relationship. But the Mendocino County land issue is
really a red herring: Both the unambiguous language of the
Lease and, at least as importantly, the equally unambiguous

facts as to that property itself confirm that the Mendocino
County lands are not at all within the purview of the parties'
transaction and were therefore not even arguably encumbered
by the Lease.

[10] Under the terms of the Lease, NGV and the Tribe partnered
not to develop a casino on existing tribal land, but
because the Tribe "require[d] assistance . . . acquiring real
property and petitioning the United States to accept title to
such property in trust for the benefit of the Tribe" (emphasis
added). With the Mendocino County property already in hand
- and having been accepted into trust - when the parties
entered into their deal, the Lease cannot fairly be read as providing
(or even contemplating) that such property would or
could become the eventual site of the casino. It would make
no sense at all, of course, to speak of "acquiring" alreadyowned
real property. And it must be remembered that the
Mendocino County property had been acquired expressly for
residential development, not for commercial development.

Nothing suggests that such purpose had changed in any
respect either before or at the time that NGV and the Tribe
entered into their agreement.

Additional language from the Lease further supports our
conclusion. According to the Lease's "Master Definitions
List," "Trust Lands" is described as:

Property held by the United States in Trust for the
benefit of the Tribe.

"Property" is in turn defined in terms of the future, not the
present (emphasis added):

The real property upon which the Structure will be
constructed by Developer, which at the time of construction
will be titled to the United States in trust
for the benefit of the Tribe.

"Structure" is similarly defined as:

The buildings and improvements constructed and
installed on the Trust Lands on which the Tribe
operates the Facility.

And finally, "Facility" is defined as:

The Structure, equipped and ready for the Tribe to
conduct Gaming for the public.

[11] With that definitional chain, the Lease provision
sought to be relied on by Harrah's cannot reasonably be read
as embracing the Tribe's acreage in Mendocino County. If
that were to be done, "Property" would not be defined only
in the future tense and "Structure" and "Facility" would not
be defined in terms of a public gaming facility rather than private
housing. In short, because the Mendocino County property
was already held in trust and because it had been
specifically slated - and remained slated - for residential
development, that property simply does not come within the
provision of the Lease restricting the Tribe's ability to alienate
"Trust Lands."17

E. Inapplicability of Section 2710

[12] To this point we have demonstrated in a number of
different ways why Section 81 is inapplicable to the situation
before us. But finally we soldier on to speak far more briefly
to the substantially more attenuated possibility that the parties' agreement could somehow have violated Section 2710.
As before, that inquiry begins by recourse to the plain statutory
language. And by its express terms, Section 2710 pertains
only to tribal ordinances or resolutions - not to a tribe's
contract with a third party - so that nothing in that statute
impairs the validity of the Tribe-NGV agreement.
Under Section 2710(b)(2)(A)(emphases added) the Chairman
of the Gaming Commission:

shall approve any tribal ordinance or resolution concerning
the conduct, or regulation of class II gaming
on the Indian lands within the tribe's jurisdiction if
such ordinance or resolution provides that -
(A) . . . . the Indian tribe will have the sole
proprietary interest and responsibility for
the conduct of any gaming activity . . .

On appeal Harrah's argues that NGV's agreement with the
Tribe violated that statute because the terms of the Lease
allowed NGV to assume the dominant equity interest in the
eventual gaming facility. That arrangement, it contends, is
concomitant to NGV having a "sole proprietary interest" in
the gaming facility.

[13] But Section 2710's plain language refutes that notion
because Harrah's conclusion rests on a false premise. Here
there was no "tribal ordinance or resolution" (note that the
statute's implementing regulations likewise refer to "gaming
ordinance or resolution adopted by a tribe" (see 25 C.F.R.
§ 522.1 (emphasis added)). That language simply does not
speak to contracts entered into between a tribe and a third
party (as contrasted with tribal legislation or regulations officially
enacted by the tribe). That reading is further fortified by
the sharp contrast between Section 2710 and Section 2705(a),
a related statute that speaks of both "tribal ordinances or resolutions"
and a specific type of contract that a tribe may enter

into with a third party.18 Thus the Tribe's agreement with
NGV cannot be said to violate Section 2710 either.19

* * *

http://www.ca9.uscourts.gov/ca9/newopinions.nsf/4BCE7325DCFF2CE1882574740001FA3B/$file/0517066.pdf?openelement

We first vacate the judgment in the Tribe’s declaratory
judgment action against NGV and dismiss that action for lack
of subject matter jurisdiction. As the Tribe’s contracts with
both NGV and Harrah’s have been rescinded, there is no
“case or controversy” at issue as between the Tribe and NGV,
leaving us with no federal jurisdiction on that score.
[14] We further hold that Section 81 requires approval by
the Secretary as to only those contracts that implicate lands
already held in trust by the United States for an Indian tribe.
Because the contract between the Tribe and NGV did not
implicate such lands, it remained valid without such approval.
We further hold that the same contract also did not violate
Section 2710, for that statute pertains only to tribal ordinances
and resolutions, not to a tribe’s agreement with a third party.
All of those things being true, we reverse the judgment in
Harrah’s favor and remand for resolution of NGV’s action
against Harrah’s on the merits.
VACATED IN PART; REVERSED AND REMANDED
IN PART.

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