SPECIAL ISSUES WHEN DEVELOPING ON NATIVE AMERICAN LAND. Nancy J. Appleby, Esq.

Transcription

1 SPECIAL ISSUES WHEN DEVELOPING ON NATIVE AMERICAN LAND Nancy J. Appleby, Esq. Appleby Law PLLC 333 North Fairfax Street, Suite 302 Alexandria, VA Hospitality Law Conference, February 9-11, 2015

2 Nancy J. Appleby Appleby Law PLLC (703) North Fairfax Street, Suite 302 Alexandria, VA Nancy Appleby is a nationally recognized expert in real estate, project development and financing on Indian lands. Ms. Appleby s practice, includes real estate and commercial development, real property and mortgage law; leasing; construction and permanent lending for commercial and residential projects; banking and title insurance; regulatory and agency matters; government-guaranteed loan programs and commercial litigation, both within and outside of Indian country. Ms. Appleby is a member of the Board of Regents of the American College of Mortgage Attorneys, the American Bar Association s representative on the Uniform Law Committee s Drafting Committee on a Model Tribal Probate Code, an American Bar Association Fellow and the Chair of the American Land Titles Association s Native American Lands Committee. Ms. Appleby is recognized by Chambers USA and Best Lawyers for her practice in real estate and federal Indian law. Appleby Law PLLC is ranked as one of the top law firms in the U.S. in federal Indian law, and it has been recognized by U.S. News & World Report/Best Lawyer as Law Firm of the Year in Native American Law ( ). 2

3 SPECIAL ISSUES WHEN DEVELOPING ON NATIVE AMERICAN LAND Issue #1: Federal Trust Responsibility Federal government s trust responsibility to Indian tribes is a fundamental principle of federal Indian law Based on jurisprudence declaring that the US has a fiduciary obligation to tribes Management of tribal trust assets Protection of tribal interests Oversight of transactions with tribes o Approval of encumbrances of trust and restricted land (25 U.S.C. 415) o Approval of certain contracts with tribes (25 U.S.C. 81) o Approval of agreements to develop mineral resources o Grant of rights of way BIA owns records related to title to Indian land Recording in BIA Land Titles and Records Office (LTRO) Canons of construction may require that ambiguities be interpreted in favor of the tribe Specific contractual provisions may be required to create an enforceable contract with a tribe (e.g. 25 U.S.C. 81) Practice Tip: Failure to obtain requisite federal approval may render a contract with a tribe null and void. Issue #2: Sovereignty Domestic dependent nations o May not convey land only to the U.S. o May not deal with foreign powers Essence of sovereignty = the right to govern o Power to govern members, including power to adopt laws, to tax and to regulate o Power to exclude persons from tribal land o Power to exclude persons from membership 3

4 o Certain federal laws do not apply to Indian country, e.g. the Bill of Rights, Title VII, the Americans with Disabilities Act o Power to govern non-members under certain circumstances, e.g. non-member consents to tribal jurisdiction State law generally does not apply to tribal Indians on Indian reservations, except where Congress has provided otherwise (e.g. P.L. 280) State and local law (e.g. tribes are liable for property taxes on land it bought unless and until the land is transferred to the U.S. in trust for the tribe) applies to tribes when they transact business outside of tribal lands o But tribal immunity from suit applies even when the claim arises from a tribe s activities outside of Indian land Persons who enter into consensual relationships with tribes subject themselves to tribal law. o Parties may select other law to govern the contract, but the choice may not be honored by the court or arbitrator o Confirm that tribal law is adequate to protect the non-indian party s rights Foreclosure ordinance Enforcement of judgments Issue #3: Sovereign Immunity Tribe is immune from suit absent an enforceable waiver o Applies to both on reservation and off reservation activities May be waived by Congress or by tribe Waiver by tribe should o Be express and unambiguous o Be limited to specific assets and remedies o Consent to jurisdiction o Consent to a choice of law o Address enforcement of judgment Section 17 corporations generally are immune from suit, particularly if they are wholly owned by the tribe 4

5 o Examine Charter and other organic documents to determine extent and form of waiver o Sue and be sued clauses generally are not sufficient Individual Indians do not have sovereign immunity, but their activities on Indian land are governed and protected by tribal law Issue #4: Organization of the Tribally-Owned Borrower Tribes carry out business through various entities o The tribe itself or instrumentality of the tribe o Section 17 corporation o Corporation, partnership or other business entity created under tribal or state law Tribe or tribal instrumentality (e.g. housing authorities, utility commissions, land commissions) Section 17 corporation o Tribe may have transferred some of its authority to engage in business to the Section 17 corporation o Charter describes corporation s purposes, power and authority how autonomous it is from tribal government control the extent to which its actions must be approved by the tribe or by the Secretary the extent to which the corporation may encumber tribal and corporate assets the corporation s ability to waive its (or the tribe s) sovereign immunity Tribally- or state-chartered business entity o Diligence organizational documents to determine corporation s purposes, power and authority how autonomous it is from tribal government control the extent to which its actions must be approved by the tribe or by the Secretary 5

6 the extent to which the corporation may encumber tribal and corporate assets o Diligence the tribe s business entity codes and/or resolutions authorizing formation of the entity to determine if the entity was properly formed the limitations on the entity s power and authority whether the entity has the power to sue and be sued whether the entity has immunity from suit Practice tip: Confirm actual authority of person or persons negotiating and executing documents on behalf of the tribally-owned businesses. Do not assume authority or rely on apparent authority. Issue #5: Title to Land Typically, title to reservation land is held in trust by the U.S. for tribe s benefit Tribes may apply to the U.S. to transfer fee land into trust General rule: tribal trust land may not be sold, taxed or encumbered o BIA approval required for leases of trust land Exception: HEARTH Act tribes o Lease term limited to 25 years with 25 year renewal, unless otherwise provided by statute o BIA approval for mortgage on leasehold interest in tribal land o Leasehold mortgage may permit lender to exercise dominion and control over the leased land in the event of a default Individual Indian trust land, or restricted land, may not be sold, taxed or encumbered without Secretarial approval Subject to limitations, mortgage on allotted land may be foreclosed Determining status of land requires reviewing treaties, Acts of Congress, Secretarial proclamations and title records maintained by the BIA LTRO Practice tip: Always have a competent title company with knowledge of Indian land search title. 6

7 Issue #6: Adjudication of Disputes Federal courts have limited jurisdiction State courts have plenary jurisdiction, but not over disputes involving tribes that arise on reservation o Exception for states, including California, that have jurisdiction over civil actions (P.L. 280 states) and for mortgages, which may be governed by the laws of the state in which the land is located and which may confer jurisdiction in state court Tribal courts have jurisdiction over tribal members Query: do tribal courts have jurisdiction over non-members? o Jurisdiction over non-members is limited Tribal exhaustion doctrine 7