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Forrest Assoc. v. Passamaquoddy Tribe
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME 240
Docket:	Cum-98-213
Argued:	October 8, 1998
Decided:	November 6, 1998

Panel:		WATHEN, C.J., and CLIFFORD, RUDMAN, SAUFLEY, and ALEXANDER, JJ.




FORREST ASSOCIATES v. PASSAMAQUODDY TRIBE


ALEXANDER, J.

	[¶1]  Forrest Associates appeals from the summary judgment entered
in the Superior Court (Cumberland County, Mills, J.), holding that 25 U.S.C.
§ 81{1} rendered null and void an alleged agreement with the Passamaquoddy
Tribe to develop and manage a proposed gaming facility.  Because we
conclude that section 81 did not apply to the agreement that is asserted
here, we vacate the judgment.
	[¶2]  Forrest Associates (Forrest) is a Maine corporation that provides
consulting services.  The Passamaquoddy Tribe (The Tribe) is a federally
recognized Indian tribe with reservations in Washington County.  The tribe
purchased in fee land in Albany Township in Oxford County.  Although The
Tribe had been preparing to transfer title to this land to the United States
in trust for the benefit of The Tribe since 1991, they did not transfer title to
the United States until October 17, 1994.
	[¶3]  In March 1994, an attorney for The Tribe approached Forrest to
determine if Forrest was interested in working with The Tribe on the
development of a high stakes bingo operation on the Albany Township land. 
After a subsequent meeting between The Tribe and Forrest representatives,
Forrest completed a study of the economic feasibility of the proposed
gaming operation.  The Tribe then directed Forrest to prepare a business
plan.
	[¶4]  Forrest prepared the business plan and, on August 10, 1994,
presented it to a meeting of the Joint Tribal Council of the Passamaquoddy
Tribe (Joint Council).  The plan discusses the involvement of Forrest in each
stage of the development and operation of the enterprise.  In general terms,
the plan states that Forrest "proposes to assist in the procurement of
financing for the project, supervise the development process, aid in design
and development decisions, and ultimately transition its role to a related
entity dedicated to hospitality consulting and management, Forrest
Hospitality, in order to properly manage the operation."
	[¶5]  At the end of the August meeting, the Joint Council approved a
motion to proceed in accordance with the business plan, reserving certain
issues of Forrest's compensation for later.  From September through
October 1994, Forrest continued to work on the development of the
project, soliciting bids from engineering firms and working with architects
on the design of the facility.  In November work stopped due to the weather. 
The Tribe has never paid Forrest for the work it completed, and the facility
has not been built.
	[¶6]  In March 1997, Forrest brought suit against The Tribe, seeking
recovery for breach of contract, unjust enrichment and quantum meruit. 
The Tribe moved for summary judgment, claiming that 25 U.S.C. § 81
barred recovery and that there was no enforceable contract or unjust
enrichment. The Superior Court found that section 81 precluded Forrest
from recovering under each of their theories.
TITLE 25 U.S.C. § 81
	[¶7]  Summary judgment is proper "if 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 material
fact set forth in those statements and that any party is entitled to a
judgment as a matter of law."  M.R. Civ. P. 56(c).  When reviewing a grant of
summary judgment, "we view the evidence in the light most favorable to the
party against whom judgment has been granted and review the trial court
decision for errors of law."  June Roberts Agency v. Venture Properties, 676
A.2d 46, 48 (Me. 1996).  The issue on appeal is a question of law:  whether
25 U.S.C. § 81 bars Forrest's claim because their asserted contract lacked
Secretary of the Interior approval.  Barona Group of the Capitan Grande Band
of Mission Indians v. American Management & Amusement, Inc., 840 F.2d
1394, 1401 (9th Cir. 1987).
	[¶8]  Title 25 U.S.C. § 81 provides that any agreement for the payment
of "money or other thing of value . . . in consideration for services for . . .
Indians relative to their lands" must be approved by the Secretary of the
Interior.  If the contract is not approved by the Secretary, it "shall be null
and void."  Id.  A contract is governed by section 81 only if it is "relative to
Indian lands."  See Penobscot Indian Nation v. Key Bank of Maine, 112 F.3d
538, 545 (1st Cir. 1997).  To determine whether the contract is "relative to
[Indian] lands" we must first evaluate whether the land on which The Tribe
proposed to build the bingo facility is "Indian land" as understood within
the statute.
	[¶9]  In Penobscot Indian Nation, the United States Court of Appeals
for the First Circuit held that section 81 did not apply to "land that an
Indian tribe purchased in fee simple for investment purposes."  112 F.3d at
546; see also Native Village of Eyak v. GC Contractors, 658 P.2d 756, 760
(Alaska 1983) (holding that section 81 did not apply to a contract to build a
community center on land that was leased from a non-Indian third party). 
The court predicated its decision "primarily on the distinctions between
Indian trust or tribal lands . . . and lands that Indian tribes hold in fee
simple."  Penobscot Indian Nation, 112 F.3d at 546.  Indian trust land is
property "the title to which the United States holds in trust for an Indian
tribe."  Id. at 546.  By contrast, fee simple lands are "those in which the
owner 'is entitled to the entire property, with unconditional power of
disposition.'"  Id. (quoting Black's Law Dictionary 615 (6th ed. 1990)).
	[¶10]  The plain language of section 81 does not distinguish between
land owned in fee simple and land held in trust.  Examination of the
ordinary meaning of the term "Indian lands," relevant case law, and the
historic relationship between the federal government and Indian tribes,
demonstrates that section 81 does not govern a contract concerning land
not held in trust by the U.S. government at the time the contract is formed.
	[¶11]  "Indian lands" is defined as "[r]eal property ceded to the U.S.
by Indians, commonly to be held in trust for Indians."  Penobscot Indian
Nation, 112 F.3d at 547 (quoting Black's Law Dictionary 771 (6th ed. 1990)). 
The definition of "Indian tribal property" is similar: "real property the title
to which is vested in [the] United States but held in trust for the Indians." 
Id.  When used in the context of section 81, the term Indian lands "is
understood to refer to Indian trust lands."  Id. at 547 (citing Felix S. Cohen's
Handbook of Federal Indian Law at 318 n.293 (Rennard Strickland et al. eds.,
1982)).
	[¶12]  Federal courts that have analyzed whether a contract
concerning the management of a gaming facility by a non-Indian firm for an
Indian tribe is "relative to [Indian] lands" have generally focused on the fact
that the land on which the facility was located was Indian trust or tribal
lands.{2}  See Penobscot Indian Nation, 112 F.3d at 550; see also A.K.
Management Co. v. The San Manuel Band of Mission Indians, 789 F.2d 785,
787 (9th Cir. 1986); Wisconsin Winnebago Business Comm. v. Koberstein,
762 F.2d 613, 619 (7th Cir. 1985); United States ex rel. The Citizen Band
Potawatomi Indian Tribe of Oklahoma v. Enterprise Management
Consultants, Inc., 734 F. Supp. 455, 456-57 (W.D. Okla. 1990) (finding
section 81 applicable to an agreement where non-Indian firm "possessed
the exclusive right to operate bingo games on tribal land."); cf. American
Management & Amusement, Inc., 840 F.2d at 1403-04.{3}
	[¶13]  Historically the relationship between the federal government
and Indian tribes has been a "trust relationship . . . 'resembling that of a
ward to his guardian.'"  Penobscot Indian Nation, 112 F.3d at 546 (quoting
Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1831)).  One
manifestation of this relationship is that in 1872, the year that Congress
passed section 81, the federal government possessed title to all Indian lands
and the Indian tribes had only a right to occupancy.  Id. at 548-49 (citing
federal case law and legislation).
	[¶14]  Interpreting section 81 in light of the status of Indian lands in
the late nineteenth century, courts have concluded that the statute is
"predicated on the trust relationship between the federal government and
the Indian tribes."  See Penobscot Indian Nation, 112 F.3d at 552.  Applying
section 81 to Indian land held in fee simple would, therefore, contradict
"the statute's purpose and its drafters' intentions."  Id.  Such an
interpretation would force the federal government to "exercise a trust
responsibility with respect to lands over which Congress" had no trust
obligation.  See Id. at 553.  
	[¶15]  In reaching its conclusion, the First Circuit in Penobscot Indian
Nation rejected the holding in Narragansett Indian Tribe v. RIBO, Inc., 686
F. Supp. 48 (D.R.I. 1988). 112 F.2d at 552-53.  The court in Narragansett
Indian Tribe applied section 81 to a gaming management agreement that
contemplated the acquisition of land on which a bingo facility would be built. 
686 F. Supp. at 51.  The Tribe purchased the land, but did not transfer the
land into trust.  Id. at 50.  When the Tribe contended that the agreement
was void under section 81, the non-Indian defendants argued that the
section did not apply to the contract because it did not concern "tribal
land."  Id. at 51.  The court rejected the defendant's construction of the
statute, reasoning that such an interpretation would be at odds with the
statute's "broad remedial purpose" and would "emasculate the statute and
frustrate its purpose of providing a mechanism to regulate Indian land
transactions."  Id. at 51.
	[¶16]  The court in Penobscot Indian Nation agreed with the
construction of the statute proffered by the defendants in Narragansett
Indian Tribe, and held that "Indian fee lands purchased for investment
purposes and not designated as trust lands" do not qualify as Indian lands
under section 81.  112 F.3d at 553-54.  Given the First Circuit's acceptance
of the defendant's argument in Narragansett Indian Tribe, we conclude that
if presented with facts analogous to those in Narragansett Indian Tribe the
First Circuit would hold that section 81 was not applicable.
	[¶17]  The only difference between the facts in Narragansett and the
facts in this case is that here The Tribe eventually obtained trust status. 
There is no indication in Penobscot Indian Nation that such a difference
would change the First Circuit's analysis.  A change in the analysis would be
incorrect for two reasons.  First, to apply section 81 to a contract when a
Tribe eventually obtains trust status, but not when a Tribe was unable to
obtain trust status, would make application of section 81 dependent on
events that occur after the formation of the agreement and over which the
non-Indian party has no control.  Second, to apply the statute - which is
predicated on the trust relationship between Indian Tribes and the federal
government - to land that was not trust land "would force the Secretary to
exercise a trust responsibility with respect to lands over which Congress"
has no trust obligation.  See  Penobscot Indian Nation, 112 F.3d at 553.
	[¶18]  Given the common use of the term "Indian lands," the
importance of the existence of tribal trust lands to federal courts' analysis of
section 81, and the historic relationship between the federal government
and Indian tribes, we hold that section 81 is not applicable to the agreement
asserted by Forrest concerning land not held in trust by the federal
government at the time the parties formed the alleged contract.
	The entry is:
Judgment vacated.  Remanded to the Superior
Court for further proceedings consistent with
this opinion.

Attorney for plaintiff: Christopher C. Taintor, Esq., (orally) Paul F. Driscoll, Esq. Norman, Hanson & DeTroy P O Box 4600 Portland, ME 04112-4600 Attorneys for defendant: Gregory W. Sample, Esq., (orally) Melissa A. Hewey, Esq. Drummond, Woodsum, & MacMahon P O Box 9781 Portland, ME 04104-5081
FOOTNOTES******************************** {1} . Title 25 U.S.C.A. § 81 (1983) provides, in part: No agreement shall be made by any person with any tribe of Indians . . . for the payment or delivery of any money or other thing of value . . . in consideration of services for said Indians relative to their lands . . . unless such contract or agreement be executed and approved as follows: . . . . Second. It shall bear the approval of the Secretary of the Interior and the Commissioner of Indian Affairs indorsed upon it. . . . . All contracts or agreements made in violation of this section shall be null and void . . . . {2} . Indian trust lands and Indian tribal lands are used interchangeably and are synonymous. See Penobscot Indian Nation, 112 F.3d at 546 n.10. {3} . In Koberstein the court cites American Management to illustrate the importance of the existence of tribal trust land in evaluating whether a contract is relative to Indian lands. 112 F.3d at 551. The contract in American Management, however, involved reservation lands. There is no indication of whether of not the lands were held in trust by the United States. 840 F.2d at 1404; see also United States ex rel. Morongo Band of Mission Indians v. Rose, 34 F.3d 901, 905 (9th Cir. 1994) (noting that the American Management court held that section 81 was applicable when the lands involved "apparently were not trust lands."). Because we are not dealing with reservation lands in this case, we need not address how section 81 might apply to non-trust reservation lands if such a status exists.