OPINIONS OF THE SOLICITOR
VALIDITY OF CONTINGENT FEE EXPERT WITNESS
CONTRACTS IN INDIAN CLAIMS LITIGATION
Indian Tribes: Contracts
While the general rule is that contingent witness fee contracts are void as against public policy, such contracts between tribes and expert witnesses in connection with Indian claims litigation do not violate public policy where
(1) the tribe's right to recovery has been established,
(2) the impoverished condition of the tribe makes such a contract necessary to make the testimony available to the Commission,
(3) the fee is in a fixed amount which is a small percentage of the reasonably anticipated recovery, and
(4) the contingent nature of the contract is called to the attention of the Indian Claims Commission.
Contracts where the witness would testify on the issue of liability are not included in this ruling.
MemorandumTo: Secretary of the Interior
You have requested reconsideration of my ruling (K-61-1113.9a) issued February 27, 1962, refusing to approve a contract between the Kalispel Indian Community and Karl D. Henze for services as a timber appraiser and witness before the Indian Claims Commission. The basis for my ruling was that the contract was of the character recently declared by the Commission in the Crow case (Indian Claims Commission Docket No. 54) to be void as against public policy since the compensation of the witness was to have been made out of the judgment in the matter in which he was called upon to testify.
Upon reconsideration of the ruling I have concluded that the contract should be approved and, pursuant to the delegation of authority from you. I am approving said contract.
Past Practices in the Department
Because of representations made in the letter from counsel for the tribe dated March 20, 1962, I caused an investigation to be made of past practices in this office and in the Department with respect to contingent fee contracts for appraisers in Indian Claims Commission cases. I learned that for many years in the past, contracts have been approved between Indian tribes and expert witnesses wherein payment of compensation was contingent on recovery of judgment favorable to the tribes.1 The result is that there are contracts outstanding in various stages of work, which have been approved by the Department and which can now be repudiated only by doing grave injustice to contracting parties. Indeed, while we cannot verify with certainty that the department has insisted that contracts be made contingent when they are absolute in terms, as alleged in counsel's letter at page 11, I am informed by members of my staff that this is true. The Department has been reluctant to permit the Indian tribes to incur absolute liability when they have no prospect of having funds to make payment except special appropriation of Congress, and the proceeds of any judgment recovered. In order to avoid the necessity of an appropriation it has been required that the contracts be made contingent on the recovery of a judgment.
The Validity of the Contract
The general rule with reference to contingent fee contracts for witnesses is that they are against public policy and void.2 The contract involved in the Crow case was declared invalid upon application of this general rule.3
The primary basis for the public policy rendering contingent witness fee contracts illegal is the danger that the witness might be induced by the____________________
been only to contracts made
has been judicially established.
2 6 Williston on Contracts 4853.
3 Indian Claims Commission. Docket No. 54.
DEPARTMENT OF THE INTERIOR
JUNE 15, 1962
prospect of a fee to testify falsely.4 This basis is similar to the reasons underlying the rule at common law disqualifying a party--even a defendant in a criminal case--from testifying in his own behalf.5
Exceptions to the general rule that contracts against public policy are void have been based in certain cases on a combination of circumstances not present in the case before us. The circumstances are that the contract be made in good faith, that the work has been completed, and that there appears to be no over-reaching by the party claiming under the contract. These circumstances appeared in the Alcea6 case and in the case of contracts made between expert witnesses and the Northern Paiute Indians, which contracts we have recently re-approved. The basis for the rule was that the interest of the witness provided a motive for lying, the witness might therefore lie and the tribunal might thereby be misled.
The disqualification of parties as witnesses has long since been abandoned. It was recognized that their testimony was usually so necessary that a correct determination of the case could not be had without hearing it.
What was involved in the abrogation of the rule disqualifying the party witness was a balancing of certain risks. On the one hand, there was the risk that the tribunal might be misled by false testimony. This risk is increased when a witness has a motive for testifying in a certain way. On the other hand, there was the risk that the party could not secure justice unless he was permitted to testify. At the time of the origin of the rule the risk that the tribunal might be misled outweighed all other considerations and the risk that some persons might be denied justice was regarded as unimportant. History has seen the scales of balance change their positions. The general rule has been abrogated in the case of parties. It is now explained that juries, with knowledge of the interest of the parties and other witnesses, are the best judges of the credibility of their testimony. The fact that a witness has an interest in the outcome of the case goes to the weight of his testimony rather than to its admissibility. The curt impatience with which early courts brushed aside the argument that the general rule denied justice in some cases is likewise not the attitude prevalent today. The legitimacy of contingent fee contracts for attorneys attests the fact that modern society has concern for the impecunious plaintiff. The rule is no longer defended on the ground that otherwise the courts would be swamped with litigation. These circumstances weaken the general rule that a contingent witness fee contract is illegal. However, the rule persists, save where the contracts come within the exception when the work has been done, the amount claimed is not unreasonable and the contract was made in good faith.
In the case of claims by tribes under the Indian Claims Commission Act, a special situation is presented. The poverty of Indian tribes is in a different context from the poverty of an ordinary tort claimant, for example. As to the latter, the policy of the law has accepted the fact that he might be denied relief, but has regarded this as less important than the fear that contingent witness fee contracts might result in ill-advised judgments.
In the enactment of the Indian Claims Commission Act, Congress expressed an intention to right the wrongs done to Indians in years past. The importance of hearing the case and of hearing all available evidence is paramount. Necessity for the testimony, which previously rose to a level of importance sufficient to overwhelm the disqualification of the party-witness, is also the dominant consideration in Indian claims litigation. The necessity is established by Congress. Its purpose is to do justice. A special tribunal is created to take care of the cases. A conscience stricken nation is trying to atone for the wrongs it has committed. Great caution must be exercised in the application of rules which might inhibit the accomplishment of congressional purpose.
Where an Indian tribe is impecunious and cannot employ an expert witness otherwise than by a contingent fee contract, important evidence necessary to a just determination of Indian rights may be unavailable. In such circumstances the same considerations which dictated the abolition of the party-witness disqualification require a recognition that public policy is best served by approval of contingent fee contracts in proper cases.
The Alcea case is not precisely analogous to the situation presented here. There the work had been done and the case could have turned upon that fact. Here the work has not been started we have for our approval the contract by which it will be done. The court in Alcea, however, did not base its decision upon this fact. It said that the contract was necessary to the proper prosecution of the case. However, the necessity exists whether the work has been done or not, and so in this sense the Alcea case is a precedent for approval of the contract submitted here.____________________
Von Kesler v. Baker, 21 P 2d 1017 (Calif. 1933); 6
Williston on Contracts (Rev. Ed.) Sec. 1716.
5 U.S. v. Clark, 96 U.S. 37, 24 L., Ed. 696; Wigmore on Evidence (3d Ed.) Sec. 576.
6 Alcea Rand of Tillarnooks, et al. v. The United States, 181 Ct Cl. 173.
OPINIONS OF THE SOLICITOR
NOVEMBER 28, 1962
In the situation presented here the Indian Claims Commission has already rendered its judgment on the issue of liability. Previous awards indicate that the prospect that a substantial judgment will be rendered for the Indians is as nearly certain as can be any prediction of the outcome of litigation. The possibility that any testimony by the witness can affect his compensation is extremely remote, if it exists at all. While a reversal on appeal of the judgment of liability might result in the partial failure of the contingency upon which payment rests, nothing which Mr. Henze can say as an appraiser can affect that risk. In addition, Mr. Henze's fee is fixed in amount and is not to be measured in any way by the amount of the recovery. Thus, the effect the contract has in tempting the witness to practice deceit or commit perjury is reduced to negligible proportions.In summary, public policy generally renders contingent witness fee contracts void on the ground that they might encourage perjury. A similar rule at common law disqualified the party-witness for the same reason. The latter rule has been abandoned because of the necessity of obtaining all relevant evidence. In Indian claims cases a similar necessity, established by Congress, requires the approval of contingent fee witness contracts. Since the exception is made only on the grounds of necessity, it should be allowed only to the extent necessary to make the testimony available to the Commission.
The disqualification of the party-witness was removed upon reflection that the trier of fact could best judge what weight should be given to his testimony, especially after he was subjected to cross-examination. In order to assure that these safeguards will be available in Indian Claims Commission cases, copies of such contracts approved by us in the future will be transmitted to the Commission and to the Department of Justice.
This case presents a contingent witness fee contract made after liability had been established in the court of first instance. So far as we have been able to determine from an examination of Departmental records and reported cases only such contracts have heretofore been approved. The risk of perjury in such cases is minimal, since evidence establishing substantial liability is not involved and the fees contracted for are much lower than the judgment reasonably expected. On weighing all the factors in the present case, I have determined that the contract should be approved.
I have not intended to express an opinion as to whether a contingent witness fee contract providing for testimony bearing on the issue of liability, should be approved.
FRANK J. BARRY,
AUTHORITY OF SECRETARY TO RESTORE LANDS IN
SAN CARLOS MINERAL STRIP TO TRIBAL
M-36599 November 28, 1962.
Indian Lands: Ceded lands--Indian Reorganization Act
The vacant, unappropriated and undisposed of portions of the land ceded to the United States by the San Carlos Indian Tribe by agreement of February 25, 1896 (29 Stat. 360) and commonly known as the "San Carlos Mineral Strip" are "surplus" land under Section 3 of the Indian Reorganization Act of 1934 (48 Stat. 984; 25 U.S.C.A. 463 (a) ) and the Secretary of the Interior has the discretionary authority to restore such land to tribal ownership.
MemorandumTo: The Secretary of the Interior
The San Carlos Indian Tribe seeks restoration to tribal ownership of the vacant, unappropriated and undisposed of portion of the land it ceded to the United States by agreement of February 25, 1896. This land is within the area commonly known and referred to as the "San Carlos Mineral Strip." Under the terms of the agreement and the subsequent ratifying act of June 10, 1896, the lands were "opened to occupation, location, and purchase under the provisions of the mineral land laws only. . . ."1 The net proceeds accruing from the disposal of the "coal and mineral lands, lying within the ceded territory" were to be placed by the United States to the credit of the San Carlos Tribe. The lands were opened to mineral prospecting and later withdrawn. Disposition under the mineral land laws has sup plied net revenues of $12,433 to the Tribe. Portions of the land have been leased for grazing by
1 29 Stat. 360.
DEPARTMENT OF THE INTERIOR
NOVEMBER 28, 1962
the Bureau of Land Management pursuant to the Taylor Grazing Act.2 The tribe now has approximately $90,000 income from these leases deposited to its account with the United States.
Restoration of the vacant and unappropriated areas in the Strip is sought under the Indian Reorganization Act of 1934 (Wheeler-Howard Act).3 Section 3 of the Act provides as follows:
"The Secretary of the Interior, if he shall find it to be in the public interest, is hereby authorized to restore to tribal ownership the remaining surplus lands of any Indian reservation heretofore opened, or authorized to be opened, to sale, or any other form of disposal by Presidential proclamation, or by any of the public land laws of the United States: Provided, however, That valid rights or claims of any persons to any lands so withdrawn existing on the date of the withdrawal shall not be affected by this Act. . . ." (further provisos are inapplicable).
While this provision has been utilized extensively to restore lands which were surplus to allotments made to Indians under treaties, agreements, special laws, and the General Allotment Act,4 (Dawes Act), this is the first occasion to examine into the application of the provision to other lands ceded by an Indian tribe in trust to the United States. Section 3 provides that in order to qualify for restoration at the discretion of the Secretary, land must be:
1. Remaining surplus lands
2. Of an Indian reservation
3. Opened before June 18, 1934, or authorized to be opened:
a. To sale, or
b. To any other form of disposal by Presidential proclamation or by public land laws.
There is no question but that two of the three requisites are met here. It was settled in an opinion of this office dated June 15, 1938, involving ceded Colorado Ute Indian lands that to qualify for restoration, land need have been part of a reservation only at the time it was ceded to the United States.5 As detailed above the Strip was part of the San Carlos Reservation until ceded. The cession was made in 1896 and was for disposal of the ceded land under the mineral laws. Thus the last two requirements are met.
The major question remaining is whether or not the Strip comprises "surplus lands" within the meaning of the act. For a clear understanding of the problem some reference must be made to the evolution in real property relationships between the Federal Government and the Indian tribes.
Evolution in Real Property Relationships
Prior to 1880, most of the treaties, agreements and statutes by which Indian tribes ceded lands to the United States provided for outright and final conveyance, in return for which the Indians received cash payments, annuities, substitute lands, or other things of value. After cession, the Indians were removed from the land and often relocated on new land in the West.
After 1880 and until the 1930s a new pattern prevailed. Land not needed by the Indians (surplus land) was not ceded absolutely to the Government but was conveyed under an agreement whereby the Government opened the lands for disposal and credited the Indians with the proceeds only as the land was sold. The United States was not itself bound to purchase any of the lands. Under the pattern the United States in effect took title in trust for the Indians and the land remained tribal property until disposed of. 6 These two basic patterns are often termed "cession and removal" and "relinquishment in trust." The most common relinquishments in trust were made by agreements which contemplated allotments under the General Allotment Act and its subsequent amendments. This act authorized the President to allot tribal lands in designated quantities to reservation Indians. If any surplus lands remained after the allotments had been made, the Secretary was authorized to negotiate with the tribe for the purchase of any of such land by the United States, purchase money to be held in trust for the sole use or benefit of the tribe to which the reservation belonged. The resulting agreements usually provided for the United States to open the land for public disposal and credit the tribes with the proceeds.
While most relinquishments in trust were made after the passage of the General Allotment Act, some were undoubtedly effected by cessions outside of or prior to the act. As one example, land ceded by the Colorado Ute Indians under the
Act of June 28, 1934, 48 Stat. 1273, as amended, 43 U.S.C. 315, 315j and 315m.
3 48 stat. 984.
4 24 Stat. 388.
5 Restoration to Tribal Ownership of Ceded Colorado Ute Indian Lands, 56 I.D. 330.
6 Ash Sheep Co. v. United States, 252 U.S. 159 (1920) aff'g 250 F. 591 (1918) and 254 F. 59 (1918).
OPINIONS OF THE SOLICITOR
NOVEMBER 28, 1962
act of June 15, 1880, before the enactment of the General Allotment Act, was held by the Assistant Secretary on June 15, 1938, to be in this category.7 In a subsequent opinion dealing with the application of the Taylor Grazing Act to "Indian lands ceded to the United States for disposition under the public-land laws," the Solicitor held that the lands in the San Carlos Mineral Strip are in this same trust category.8In 1934, the most recent stage in the evolution of Federal attitudes toward real property relationships between the United States and the Indians was expressed in the Indian Reorganization Act. The allotment system had allowed the Indians to part with 90,000,000 acres of land over a fifty year period. Large numbers of Indians were landless and many reservations were crowded. One of the major purposes of the act was to provide sufficient non-alienable land for Indian tribes to assure their present and future support. The first five sections of the act were designed to effectuate this purpose. Section 1 of the act prohibited further allotment of Indian lands. Section 2 extended existing periods of trust and restrictions on alienation previously placed on Indian lands. Section 4 prohibited inter vivos transfers of restricted Indian land except to an Indian tribe, and limited testamentary disposition of such land. Section 5 authorized the acquisition of lands for Indians and declared that such lands would be tax exempt. Section 3 fitted into this same general framework; it allowed the Secretary to restore to tribal ownership surplus lands previously opened to sale.
This Department has had occasion many times since the passage of the I.R.A. (Indian Reorganization Act) to examine into the exact meaning of section 3. Less than three months after the passage of the act, the Department issued an instruction withdrawing undisposed-of land in Indian reservations which could be eligible for restoration under the terms of section 3. The purpose of the withdrawal was to prevent disposition of the land until: (1) it had been determined which tribes would elect to come under the act, and (2) the Secretary could decide which lands he wanted to restore to the tribes which so elected. In listing the lands to be withdrawn, the instruction discussed the meaning of the term "surplus lands." It defined them as lands "the proceeds of which, if sold, would be deposited in the Treasury of the United States for the benefit of the Indians."9 The San Carlos Mineral Strip was listed as one of the tracts withdrawn.
In 1936, Solicitor Nathan Margold considered whether certain land formerly a part of the San Carlos or White Mountain Indian Reservation, but restored to public domain by Executive order, was "surplus land" within the meaning of section 3. The restorations to public domain had been made in 1873, 1874, 1876, 1877, and 1902, and were absolute and unconditional. Margold confirmed the meaning of "surplus lands" established in the 1934 Instruction as lands of Indian reservations opened to sale or disposal for the benefit of the Indians. Since the land involved in the opinion had been ceded unconditionally it was held not to be "surplus land."10
In considering the significance of the term "surplus land," Assistant Secretary Oscar Chapman said in a 1938 opinion:11
"The word 'surplus' means that which remains over and above what is required. It might be argued that practically all lands ceded by Indians were surplus lands according to this definition since they were doubtless considered as not being required by the Indians. However, Congress could not have intended that all remaining undisposed-of ceded lands should be available for restoration to tribal ownership, as such lands would embrace practically all of the remaining public domain. The Interior Department has taken the position that section 3 is not intended to cover all ceded lands but those ceded lands in which the Indians have retained an interest by reason of the fact that the lands were ceded to the United States to be disposed of by the United States in specified ways, the proceeds of the sale to be held for the benefit of the Indians. This type of ceded land was evidently in the mind of Congress at the time of the passage of the Reorganization Act. The debates on the bill in the Senate show that section 3 was discussed as a provision making possible the restoration of the use of the lands to the Indians in place of the proceeds to which they were entitled from any sale. (Congressional Record, 73d Congress, 2d Session, page 11135.)"
The same tack was taken in Solicitor's Opinion of January 15, 1960,12 holding that certain ceded____________________
8 58 I.D. 203, 210.
9 54 I.D. 557, 563.
10 M-27878, May 20, 1936.
11 56 I.D. 330, 334.
12 67 I.D. 10.
DEPARTMENT OF THE INTERIOR
NOVEMBER 28, 1962
lands, previously reserved for school and agency purposes, could be restored under section 3 even though no trust relationship as such was involved. The opinion recognized that:
"The rationale of the interpretations and the administration by the Department of section 3 of the 1934 act is that the significant and controlling factor under this legislation is the existence of a tribal right to proceeds from the sale of the lands and not the narrower question of the existence or absence of a trust title. This interpretation is in harmony with the language of the act and its broad purpose to augment the tribal land base." (Emphasis supplied.)
The "Strip" as Surplus Land
All of these opinions indicate the consistent position in this Department since the enactment of the I.R.A. that "surplus lands" are lands held in some manner for the benefit of the Indian tribes. None of the opinions, however, deals directly with the question involved here: namely, whether the term "surplus" refers generally to lands surplus to the needs of Indians or only to lands remaining after allotments. The previous opinions all involved allotment surpluses so no distinctions were attempted between such allotment surpluses and land which was surplus to other needs of the Indians.
The issue arises because of possible ambiguity in the term "surplus lands." The phrase had often been used in connection with the General Allotment Act as a term of art referring to land remaining after allotments had been completed. Such remaining land was to be disposed of by the United States for the benefit of the Indian tribes as detailed earlier. The common meaning of the word, "surplus," though, as quoted earlier from Assistant Secretary Chapman's opinion, is "that which remains over and above what is required." Such a construction would include all lands which were surplus to the needs of the Indians, rather than just those surplus to allotment needs. Hence the ambiguity, and the necessity for the application of rules of statutory construction.The rules of statutory construction all have as their basic aim ascertainment of legislative intent. Probably the best method of determining legislative intent is to look to the object to be accomplished, the evils and mischief sought to be remedied, or the purpose to be subserved by the act.13
In Otoe and Missouria Tribe of Indians v. United States, 131 F. Supp. 265 (Ct. of Claims, 1955), the court discussed the various rules of statutory construction at length and then said:
"The court should give the statute the plain meaning indicated by its language unless that meaning is clearly at variance with the legislative purpose as manifested by the whole act and confirmed by the legislative history, in which latter event the court would be justified in following the purpose rather than the literal meaning of the portions of the statute under consideration."
The plain meaning of the language of the statute here--"the remaining surplus lands of any Indian reservation opened before June 18, 1934"--seems clear. It means the undisposed portion of land which was opened to disposal before 1934 because it was surplus to the needs of the Indians at that time. Questions arise only upon consideration of the word "surplus" as a word of art. Applying the rule enunciated by the Court of Claims, however, there should be no departure from the plain meaning of the language unless such meaning is clearly at variance with the legislative purpose.The legislative purpose of the first five sections of the act, as outlined above, was to provide more land for the Indian tribes. The purpose of this particular section was to allow the Secretary to restore to tribal ownership lands which the Government held in trust or in other manner for the benefit of the tribes. The plain meaning of the language under consideration here is not in any way at variance with this purpose, but is in fact most consonant with it.
There is no valid reason for separating land which is not needed for allotment from land which is not needed for other purposes. If the purpose of the I.R.A. had been to make land available for further allotments, there would be a logical reason for restricting "surplus lands" to surplus allotment lands. The Secretary would then be able to use for allotment purposes land which had originally been intended for allotments. But such is not the case. The I.R.A. rejects the allotment system. It seeks to put land back into tribal ownership. It is most logical to empower the Secretary to return to the tribes any land which the Government holds for their benefit. Whether the land was surplus to allotments or surplus to other needs of the Indians when ceded is totally immaterial to the purpose of the act. What is material is the fact that the lands are held for the benefit of the Indians. The Secretary is given the freedom to determine whether it would benefit the Indians more to have
13 The United States v. Coombs, 37 U.S. (12 Pet.) 72 (1838); 82 C.J.S. Statutes, See. 323.
OPINIONS OF THE SOLICITOR
NOVEMBER 29, 1962
the land or the proceeds therefrom, and to act accordingly.
The legislative history of section 3 indicates that most Senators, in the course of debate, referred to "surplus lands" as land remaining after allotments. This is easily explained, however, by the fact that all the surplus lands in the states these men represented were allotment surpluses. Thus their statements are not at all inconsistent with the inclusion of other surplus land, such as the Mineral Strip. Senator Steiner of Oregon was more careful in his statements during the debate and recognized that "surplus lands" were "those tribal lands not necessary for allotment or for other purposes. . . . "14 (emphasis supplied).Administrative interpretations of the section have all been consistent with inclusion of the Strip. The 1934 Instruction included the Strip as one of the areas withdrawn.15 Assistant Secretary Chapman's 1938 Opinion said:
"The reference to surplus lands in section 3 of the Reorganization Act refers, however, primarily to surplus lands remaining after the actual or contemplated allotment of the Indians. . . ." (emphasis supplied).16
His use of the word "primarily" indicates recognition that more than just allotment surpluses were included in the term "surplus lands." On November 30, 1937, W. H. Flanery, Assistant Solicitor, in the absence of the Solicitor, stated as follows in a memorandum to the Commissioner of Indian Affairs discussing S. 3003 of the 75th Congress, a bill providing for payments to the San Carlos Apache Indians for this land:
"The consideration of immediate payment of the relatively small amount proposed in the bill does not warrant the relinquishment of an existing authority (Indian Reorganization Act) under which the Department may give recognition to the Indian Claim by restoring the undisposed of lands to tribal ownership." (Emphasis supplied.)
Also worthy of consideration is the settled rule of construction that in the field of Indian legislation ambiguities are to be resolved in favor of the Indians.17 Such a resolution of the ambiguities here would compel the conclusion that section 3 is applicable to the Mineral Strip lands.
In view of the plain meaning of language of section 3, the underlying purposes of the I.R.A., the continuing interpretations of the section by this Department, and the principles governing the construction of Indian legislation, it is my opinion that the Secretary has the discretionary power to return the remaining undisposed-of portions of the Mineral Strip to the San Carlos Tribe.
FRANK J. BARRY,
LEASING OF CROW INDIAN LAND
69 I.D. 203M-36644 November 29, 1962.
Indian Lands: Allotments: Alienation--Indian Lands: Leases and Permits: Generally
Executory lease agreements with competent Crow Indians which purport to cancel existing leases between the same parties as of a date one year or eighteen months in the future and to take effect themselves as five-year leases at that future date violate the Act of March 15, 1948 (62 Stat. 80) and are void.
Indian Lands: Allotments: Alienation--Indian Lands: Leases and Permits: Generally
Any leasing agreement or combination of agreements affecting a competent Crow allotment held in trust by the United States which does not allow the Indian to negotiate freely for a new lease of the property at least once every five years violates the Act of March 15, 1948 (62 Stat. 80) and is void.
Statutory Construction: Implied Repeals
While the law generally does not favor repeals by implication, the amendment of an act by the substitution of language which omits the words of a previous intermediate amendment constitutes a repeal of that intermediate amendment, in the absence of indications of a contrary congressional intent.
78 Cong. Rec. 11135.
15 54 I.D. 559, 563.
16 56 I.D. 330, 334.
17 Winters v. United States, 207 U.S. 564, 576 (1908); Choate v. Trapp, 224 U.S. 665, 675 (1912); United States v. Nice, 241 U.S. 591, 599 (1916); Carpenter v. Show, 280 U.S. 363, 366 (1930).
DEPARTMENT OF THE INTERIOR
NOVEMBER 29, 1962
Assistant Secretary Public Land Management
Subject: Leasing of Crow Indian Lands
In response to your memorandum of November 13, 1961, we have re-examined the issues raised in the brief of Tribal Attorney Bert W. Kronmiller dated April 10, 1961. Mr. Kronmiller questioned the validity of five-year leases of competent Crow Indian lands which purport to cancel leases as of a date one year in the future and to take effect upon such cancellation. We replied in our letter of September 29, 1961, that the leases were void.The Act of March 15, 1948 1 authorizes competent Crow Indians to lease allotted lands held under trust deeds but states that no lease (except of irrigable lands under the Big Horn Canal) shall be made for a period longer than five years. This act amended the Act of May 26, 1926 2 which contained a similar five-year restriction. The 1926 act had previously been amended in 1927 3 to provide that no lands leased for grazing could be re-leased prior to one year before the termination of such lease and that agricultural lands could not be re-leased more than eighteen months before such termination.
We understand that until recently, non-Indians have followed a general practice of annually or biennially entering into executory lease agreements with competent Crow Indians which purported to cancel existing leases between the same parties as of a date one year or eighteen months in the future. These lease agreements purported to take effect themselves as five-year leases at that future date. The Indian has customarily been paid one or two years' rent when the new lease agreement was executed.Since the issuance of our letter of September 29, 1961, many rancher-lessees have canceled their previous leases which were to have terminated in 1965 or 1966 and are obtaining new five-year leases commencing upon execution. As consideration for these leases the lessees are paying up to one year's rental. Our study of this matter has been directed to these new leases as well as the leases dealt with in our previous letter.
This re-examination has led us to affirm our conclusion that the leases described by Mr. Kronmiller are void. Apparently these leases were made in reliance on the 1927 amendment. Since that act allowed Indians to re-lease their lands one year or eighteen months prior to the "termination" of existing leases, the lessees apparently assumed that the word "termination" included early termination by agreement and made the executory lease cancellations and re-leases on that assumption. While this assumption may be incorrect, there is no reason to deal with this issue as I have determined that the 1948 act effected a repeal of the 1927 amendment. Consequently the validity of these leases must be judged under the provisions of 1948 act as these or similar provisions have been interpreted by the courts.
The courts have uniformly held that leases of restricted Indian land which purport to take effect at times one year or more in the future are void. The leases described in the Kronmiller brief fall into this category.These overlapping leases have had the effect of allowing lessees to continue in possession indefinitely at artificially depressed rental amounts. While the Indians were not bound to enter into contracts of this nature, as a practical matter they were induced to do so by the promise of immediate, though inadequate, cash payments. Since the leases were made at times when the lessees held three- to four-year unexpired terms, the Indians could deal with no one else and had to accept whatever the lessees offered. The five-year limitation was designed to protect against just such improvidence.
Congress set a five-year limitation on the power to lease allotted trust land as a protection to the Indians. The essence of the protection afforded by the limitation is the Indian's opportunity at least once every five years to renegotiate this lease--to deal with the property as his own and bargain for better rentals and lease terms. Any contractual arrangement which denies this opportunity to the Indian violates the law and is void.
The validity of the leases executed recently after cancellations of prior leases must be determined on a case by case basis according to the criteria set out above.
1. Statutory Background
The Act of June 4, 1920,4 directed the Secretary of the Interior to allot lands within the Crow Indian Reservation among the members of the Crow Tribe. The act provided that trust patents were to be issued to competent allottees unless they elected, in writing, to have their allotments patented to them in fee. The force and legal effect
____________________1 62 Stat. 80.
OPINIONS OF THE SOLICITOR
NOVEMBER 29, 1962
of the trust patents were to be as prescribed by the General Allotment Act of February 8, 1887.5 This act states that any contract made touching trust lands "shall be absolutely null and void." While the General Allotment Act called for a 25 year trust period, the period has been extended a number of times and is currently in effect under the Secretarial General Order of January 7, 1959.6
Until 1926, competent Crow Indians holding allotted lands under trust patents could not lease these lands, except with the approval of the superintendent. The Act of May 26, 1926, amended the Act of June 4, 1920, by adding a proviso to section 1 which allowed unsupervised farming and grazing leasing by competent Crow Indians as follows:
. . . "Provided further, That any allottee classified as Competent may lease his or her allotment or any part thereof and the allotments of minor children for farming and grazing purposes. Any adult incompetent Indian with the approval of the superintendent may lease his or her allotment or any part thereof and the allotments of minor children for farming and grazing purposes. The allotments of orphan minors shall be leased by the superintendent. Moneys received for or on behalf of all incompetent Indians and minor children shall be paid to the superintendent by the lessee for the benefit of said Indians. No lease shall be made for a period longer than five years. All leases made under this section shall be recorded at the Crow Agency."
The purpose of this amendment, as expressed by the House Managers at the conference committee on the bill, was to "give the Crow Indians a very liberal voice in the leasing of their lands and also give adequate protection." (Emphasis supplied.) 7 By late 1926 the Indians' right to issue five-year leases without Government supervision was being exploited by white men in the area. Lessees holding under five-year leases issued (with the approval of the superintendent) in 1923 were obtaining new five-year leases to become effective two years in the future and paying the rent in advance. This left the Indian with very little, if any, income from the land during the term of the lease.On January 27, 1927, delegates to the Crow Tribe wrote to Congressman Scott Leavitt of Montana, Chairman of the Committee on Indian Affairs, describing the problem and requesting that Congress amend the 1926 act to forbid such overlapping leases. The letter recognized that the Supreme Court in U.S. v. Noble, 237 U.S. 74 (1915), had held that Indian leases of trust lands to commence at unreasonable periods in the future were void, but sought the legislation anyway saying:
"While we are convinced because of this decision that these overlapping leases which are being taken are illegal, the members of our tribe are confronted with the fact that the lessees taking these leases are threatening to take the Indians into court who made the leases. This would involve them in delay, expense, and litigation. In order to meet this condition we have drafted the proposed amendment which we think will meet the situation and clarify and remove all doubts." 8
The amendment suggested by the tribe would have provided that no lease could be re-leased or renewed prior to six months before the "expiration" of its term. In reporting on the bill, the Secretary of the Interior suggested that the provision be amended to allow re-leasing one year (for grazing leases) or eighteen months (for farming leases) prior to "termination" of the existing lease. The Secretary's suggested amendment was adopted in the form of two provisos inserted before the last sentence of. the language added to section 1 by the 1926 act.In 1947 a bill (S. 1317) was introduced in the Senate to give to the members of the Crow Tribe the power to manage and assume charge of their restricted lands for their own use or for lease purposes while such lands remained under trust patents. The purpose of the bill was to remedy a major deficiency in the 1920 and 1926 acts. Under these acts only the original Crow allottees could lease their lands; their heirs or devisees were not "competent" and thus could not lease. By 1947 only 318 of the 575 Indians who had been classified as competents under the 1920 act were alive. In that year only 318 of 2,470 Indians on the Crow Reservation were classified as competent.9 The House Report on the bill indicated that its purpose was to put "all adult Crow Indians on an equal basis in the handling of their individual and collective affairs regarding land leases." 10
The bill as introduced did not mention the earlier 1926 and 1927 acts. It passed the Senate____________________
24 Stat. 388.
6 24 Fed. Reg. 127.
7 H. Rept. 1255, 69th Cong., 1st Sess.
8 68 Cong. Rec. 4365.
9 S. Rept. 386. 80th Cong., 1st Sess.
10 H. Rept. 940. 80th Cong., 1st Sess.
DEPARTMENT OF THE INTERIOR
and then was substantially amended and passed by the House. A conference committee met in early 1948 and reported the bill out in the form in which it was enacted as an amendment to the 1926 act.11
2. Repeal of the 1927 Act.
In our letter to Mr. Kronmiller we stated that the 1948 Act did not by implication repeal the 1927 Act. We were mistaken; it did effect such a repeal. While it is true that the law does not favor repeals by implication, this general proposition does not apply when an act is amended by the substitution of new language which omits the words of previous amendments. The 1948 act amended the last proviso of the 1926 act "to read as follows:". It then repeated, with modifications, the language from the beginning of the last proviso of section 1 to the end of the section. It omitted the two provisos inserted in 1927.
In very similar situations, the Federal courts have held that such an intermediate omitted amendment is repealed. Where section 7 of the Judiciary Act of 1891 was amended in 1895 "to read as follows. . . ," and in 1900 the original section of the act of 1891 was amended "to read as follows . . ," the court held that the original section and amendatory act of 1895 were necessarily repealed by the 1900 act though it did not declare in terms the repeal of either. Rowan v. Ide, 107 Fed. 161 (5th Cir. 1901), cert. denied, 181 U.S. 619, 21 Sup. Ct. 924, 45 L. Ed. 1031 (1901).12
In 1960, a Federal district court in Pennsylvania held that the words "amended to read as follows" in a statutory amendment set fourth a legislative intent that all law on the subject is to follow and that the new statute is to be a full substitute for the amended statute. The court pointed out that there is no need for inconsistency in order for the amendment to operate as a repeal. U.S. v. Baker, 189 F. Supp. 796 (W. D. Pa. 1960).
The application of the principle set out in these cases to this situation does not appear to do violence to the intent of Congress. As stated above, the 1927 act had merely formalized the existing law and, as will appear in the next section, reduced the degree of protection previously afforded the Indian.3. Invalidity of In Futuro Leases
With the 1927 act repealed by the 1948 act, we turn to the language of the 1948 act and judicial decisions interpreting such language to determine the legality of the competent Crow extension leases.
U.S. v. Noble, 237 U.S. 74, 59 L. Ed. 844 (1915) is the leading case on the nature of an Indian's authority to lease for a specified period of years without Government supervision. The case involved leases executed by a Quapaw Indian under statutes providing that "allotments shall be inalienable for a period of twenty-five years" but allowing allottees to lease the lands "for a term not exceeding . . . ten years for mining or business purposes."13 While a number of leases and assignments were involved in the case, the transaction pertinent to the issues here was a lease for ten years executed to Y in 1905 when the property was already subject to a valid ten-year lease to X signed in 1902. The Court held the 1905 lease invalid saying:
"At common law, as the government points out, it was the established doctrine that a tenant for life, with a general power to make leases, could only make a lease in possession, and not leases in reversion or in futuro. He was not authorized to make a lease to commence 'after the determination of a lease in being.' Such a lease was deemed to be 'reversionary'. . . . (cases) 'A general power to lease for a certain number of years without
11 "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the last proviso of the first section of the Act of May 26, 1926, entitled 'An Act to amend sections 1, 5. 6, 8, and 18 of an Act approved June 20, 1920, 'an Act to provide for the allotment of lands of the Crow Tribe, for the distribution of tribal funds and for other purposes',' approved May 26, 1926 (44 Stat. 658. 659), be amended to read as follows:
"Provided further, That any Crow Indian classified as competent may lease his or her trust lands or any part thereof and the trust lands of their minor children for farming and grazing purposes: Provided, That any Crow Indian classified as competent shall have the full responsibility of obtaining compliance with the terms of any lease made: And provided further, That leases on inherited or devised trust lands having more than five competent devisees or heirs shall be made only with the approval of the Superintendent. Any adult incompetent Indian with the approval of the Superintendent may lease his or her trust lands or any part thereof and the inherited or trust lands of their minor children for farming and grazing purposes. The trust lands of orphan minors shall be leased by the Superintendent. Moneys received for and on behalf of all incompetent Indians and minor children shall be paid to the Superintendent by the lessee for the benefit of said Indians. No lease shall be made for a period longer than five years, except irrigable lands under the Big Horn Canal, which may be leased for periods of ten years. All leases made under this Act shall be recorded at the Crow Agency."
See also Heinze v. Butte & B. Consol. Min. Co., 107 Fed 165 (9th
Cir. 1901); Minnesota & M. Land & Improvement Co. v. City of Billings, III Fed. 972 (9th Cit. 1901);
Columbia Wire Co. v. Boyce,
Fed. 172 (9th Cir. 1900).
13 Act of March 2, 1895, 28 Stat. 876, 907; Act of June 7, 1897, 30 stat 62, 72.
OPINIONS OF THE SOLICITOR
saying either in possession or reversion, authorizes only a lease in possession, and not in futuro.' Such a power receives the same construction as a power to make leases in possession. . . . This is not to say that an agreement for a new lease, at a fair rental, made shortly before the expiration of an existing lease, would not be sustained in equity. . . ."
The Court recognized that this rule of common law was designed to protect remainder men, but reasoned by analogy that where the purpose of the limitation of the term was to protect the Indian allottee, the rule should apply equally.
"The protection accorded by Congress, through the restriction upon the alienation of the allottee's estate,--modified only by the power to lease as specified,--was not less complete, because the limitation was not in the interest of a remainder man, but was for the benefit of the allottee himself as a ward of the Nation. The Act of 1897 gives him authority 'to lease' for a term not exceeding the stated limit. Taking the words in their natural sense, they authorize leases in possession, and nothing more."14
The language of the 1948 Act stating that no competent Crow lease "shall be made for a period longer than five years, except irrigable lands under the Big Horn Canal, which may be leased for periods of ten years" is substantially similar to Quapaw Act language construed in the Noble case. Under this authority a competent Crow may make leases in possession of allotted trust lands and nothing more.
The case does recognize, though, that it is sometimes necessary to execute a new lease shortly before the expiration of an existing lease in order to regulate the course of cultivation in the ensuing year. This was dealt with more particularly in a series of Oklahoma decisions. In Mullen v. Curter, 173 Pac. 512 (Okla. 1918), an Indian allottee, acting under a statute similar to the one here involved, leased to X for a term expiring December 31, 1911. On September 5, 1911, he leased to Y for a term commencing January 1, 1912. The Court held that the lease was not necessarily invalid as a lease in futuro provided:
". . . such lease is made near the termination of the existing valid lease, and the circumstances are such that it is necessary to make the lease at such time in order to regulate the course of cultivation intended to be pursued the following year, and provided, further, that in no case shall the lease be for a period of more than five years from its date. . . ."15
Whether in such a situation the lease was made at a time reasonably near the termination of the existing lease and when necessary to control the course of cultivation for the ensuing year is a question of fact to be determined on the evidence in each case. In Carter v. McCasland, 268 Pac. 706 (Okla. 1928) a Choctaw homestead allotment, which could be leased for not more than one year, was leased on August 22, 1923, for a one year term beginning January 1, 1924. The trial court specifically found that it was necessary to take the lease at that time in order to regulate cultivation for the year 1924. The Oklahoma Supreme Court reversed on the basis that there was no evidence to support such a finding, and held the lease invalid.16
The leases of allotted Crow lands described by Mr. Kronmiller were signed during the first or second year of existing five-year leases and provided for the cancellation of existing leases and the commencement of new five-year terms on a date one year or more in the future. Since the lessees were already in possession under leases with lengthy unexpired terms, no necessity could be shown for making the cancellations and new leases operative in the future. These are clearly leases in futuro and invalid under the Noble case.
In Bunch v. Cole, 263 U.S. 250, 68 L. Ed. 290 (1923) the Supreme Court indicated that leases in futuro were not merely voidable but void. The lower court had held that a state statute in effect created tenancies at will as to such leases. The Supreme Court reversed, holding that the state law conflicted with the Federal law in trying to give life to void leases, and was thus invalid under the Constitution:
"These leases were made in violation of a congressional prohibition. They were not merely voidable at the election of the allottee, but absolutely void and not susceptible of ratification by him. Nothing passed under them and none of their provisions could be taken as a standard by which to measure the compensation to which the allottee was entitled for the unauthorized use and occupancy of his land."
15 See also Hudson v. Hildt, 51 Okla. 359 151 PAC. 1063 (1915).
16 See also Nemecek v. Gates, 33 P. 2d 768 (Okla. 1934) to the same effect.
DEPARTMENT OF THE INTERIOR
NOVEMBER 29, 1962
The statutes governing the Crow leases are substantially identical to those interpreted in Bunch v. Cole where the relevant statute provided that ". . . any lease of such restricted land made in violation of law . . . shall be absolutely null and void."17 The Crow leases are on lands which are in trust status, the force and legal effect of which status is prescribed by the General Allotment Act of February 8, 1887. It also provides that any contract touching the trust lands "shall be absolutely null and void." The permission given in the 1926 and 1948 acts to lease for five years without Government approval is an exception to this provision and any lease outside this permission is subject to the general nullifying provision.
4. Effect of Surrender and Lease.While the new leases now being executed after the surrender and cancellation of pre-existing leases are not clearly invalid under the rule of the Noble case, their validity is nevertheless subject to question.
A similar transaction was involved in Harley v. McCasland, 19 P. 2d 356 (Okla. 1933). There Dora Hall, a Choctaw Indian, made a five-year agricultural lease of part of her allotted surplus lands to Brown on September 20, 1922. Brown assigned to Harley seven months before this lease was to terminate, in February 1927, while Harley was in possession of the property, he and Dora Hall executed a contract which declared the old lease to be null and void and granted Harley a five year term commencing February 15, 1927. The statute empowered the Choctaw Indian allottees to lease their surplus land "for a period not to exceed five years, without the privilege of renewal." In this situation the court held the February 1927 lease void stating that the statute authorized a lease in possession and nothing more. The court also relied on the statement in two earlier Oklahoma cases that:
". . . the spirit and intention of the Act goes to the extent of precluding the allottee from leasing his land in any manner, so that on the expiration of five years from any date, after the beginning of the term of a lease granted he cannot have it free, clear and unencumbered." (emphasis supplied) Whitman v. Lehmer, 22 Okla. 627, 98 Pac. 351 (1908), and Hudson v. Hildt, 51 Okla. 359, 151 Pac. 1063 (1915).
To the same effect are Eagle-Picher Lead Co. v. Fullerton, 28 F. 2d 472 (8th Cir. 1928) cert. denied 279 U.S. 839, 73 L. Ed. 986 (1929); S. S. & G. Mining Co. v. Fullerton, 250 Pac. 911 (Okla. 1926); Balthrop v. Clark, 222 Pac. 520 (Okla. 1924); Dowel1 v. Brown, 208 Pac. 220 (Okla. 1922). These cases all involve either new leases obtained during the life of an existing lease by the same lessee, or early cancellations of existing leases following by an immediate re-leasing to the same lessee. All indicate that such transactions violate the rule of the Noble case.Two Federal cases would seem to conflict with these holdings. In U.S. v. Abrams, 194 Fed. 82 (8th Cir. 1912) a Quapaw allottee, Minnie Redeagle, leased her lands to Abrams in 1902 for ten years. In 1905 and 1906 she leased the same land to the Iowa and Oklahoma Mining Company for ten years. In 1910 Abrams and the Company executed and delivered to her a cancellation and surrender of each of the three leases. On the same date Minnie Redeagle executed a new ten-year lease to the Company. The United States sued to invalidate all but the 1902 lease, claiming that when the Indian made the first ten-year lease, she exhausted her power and authority as to that land until the expiration of the ten-year period. The court denied the Government's claim, holding that there was:
". . . nothing in the letter or spirit of the congressional enactment, which restrains her, after having made a lease, from entering into a valid contract with the lessee to cancel such lease before the expiration of its term, and then make a new lease to such party or parties as she might see fit for another term, not exceeding ten years."
The Government took no appeal from the decision.
This same court was reversed in the Noble case three years later in an appeal from a similar holding involving, however, not a cancellation and re-leasing, but a lease to Y during the life of a lease to X. But the underlying principle of the Noble case, i.e., that an allottee's leasing authority was limited to a power to make a lease in possession was not known to the circuit court at the time of U.S. v. Abrams.
In 1931, though, the court distinguished the Noble case and appeared to follow the Abrams case in Hallam v. Commerce Mining & Royalty Co., 49 F. 2d 103 (10th Cir. 1931), cert. denied, 284 U.S. 643, 76 L. Ed. 547 (1931). There a Quapaw allottee, Anna Beaver Hallam, leased to Wills in 1911 for ten years, then leased to him again in 1912 for ten years. Wills assigned both leases to the Commerce Company in 1913. In 1913 and 1915 Beaver again made leases to Wills, as agent for
17 Act of May 27, 1908, Sec. 5, 35 Stat. 313.
OPINIONS OF THE SOLICITOR
NOVEMBER 29, 1962
Commerce Company, each for ten years. Then later in 1915 Wills, as agent, and Mrs. Hallam agreed that all prior leases were surrendered and canceled, and on the same date Mrs. Hallam signed a new lease to Wills, as agent, for ten years. In 1919 Mrs. Hallam was declared incompetent and subsequently in 1922 the Commerce Company obtained a new lease from her, with the approval of the Secretary of the Interior. The Secretary of the Interior also expressly approved, retroactively, the 1915 lease. Mrs. Hallam sued Commerce Company for cancellation of all the leases and an accounting for the ores extracted, claiming that all but the 1922 lease were overlapping leases and void under the Noble case.
The court reviewed the Noble Case and distinguished it on the basis that its holding did not apply to a new lease granted to the same lessee during the life of an old lease. It said that such a lease operated as a surrender of the first lease by operation of law, and was thus not a lease in futuro. The court then stated that the lease of June 11, 1915, executed after the cancellation and surrender of the prior leases, was valid under the Abrams case. These statements constituted only dicta, however, since the court held that in any event the Secretary's subsequent approval validated the lease from its inception.
While these two lines of cases apparently are in conflict, they have one basic principle in common. The Oklahoma cases recognize the importance of the Indian's having the land free, clear and unencumbered at least once every five years. The Abrams case states that nothing in the congressional enactment restrains the Indian from canceling a lease, then making "a new lease to such party or parties as she might see fit for another term." Abrams assumes that the Indian would be free to lease as she saw fit, the Oklahoma cases say she must be so free or the lease is void. The crucial factor is the Indian's freedom to deal with the property as his own at least every five years.In empowering competent Crow allottees to lease for five-year terms and no more, Congress recognized "the dependent character of the Indians, their recognized inability to safely conduct business affairs, and the peculiar duty of the Federal Government to safeguard their interests and protect them against the greed of others and their own improvidence. . ." (emphasis supplied)18
Congress did not intend that the Indian be entirely free to lease his property. The five-year limitation on the power to lease was meant to afford a protection to the Indian. The essence of this protection is the right to deal with the property free, clear, and unencumbered at intervals of no less than five years. If a non-Indian lessee could obtain a new lease long before the termination of his existing lease, he could set his own terms. The Indian could deal with no one else because a lease with another person to commence at the termination of the existing lease would be void under Noble. In such circumstances the lessee could perpetuate his leasehold indefinitely at artificially depressed rental rates and the protection of the five year term would be destroyed. The ultimate test, then, of any leasing agreement or combination of agreements affecting a Crow allotment held in trust by the Government must be whether it allows the Indian to deal freely with the property at least once every five years.
This brings us to the question of the validity of the leases signed after the September 29, 1961, letter. If the lessee purported to surrender the term of his existing lease only on condition that the Indian agree to issue the new lease, this violated the act and resulted in the invalidity of the new lease. In such circumstance the Indian did not get the land free and unencumbered, but with strings attached. He could not look to other potential purchasers and negotiate his own terms. On the other hand, if the purported surrenders were made in good faith and left the Indian free to lease to anyone, the new leases are valid.
While this leaves each case involving a cancellation and subsequent new lease to be determined on its merits, a court might view the transactions with some suspicion because of the prior practice in the area. In U.S. v. Noble, supra, the court said:
"This is not to say that an agreement for a new lease, at a fair rental, made shortly before the expiration of an existing lease, would not be sustained in equity." (emphasis supplied)
If a fair rental is necessary to the validity of a new lease made shortly before the expiration of an existing lease, the absence of a fair rental in a new lease after early cancellation of an old lease would surely cast some doubt on its validity.
I have concluded that the leases described in Mr. Kronmiller's letter are void. Any leases executed after the expiration or cancellation of prior existing leases may be valid provided the Indian lessor had a real opportunity before re-leasing to seek other lessees and renegotiate terms.FRANK J. BARRY,
v. U.S. 266 U.S.
226, 233, 45 S.
Ct 64, 69
L. Ed. 259 (1924).
DEPARTMENT OF THE INTERIOR
FEBRUARY 14, 1963
SUPPLEMENTAL RELIEF BASED UPON
February 14, 1963.The Honorable,
DAVID WARNER, Esq.
Chief, General Litigation Section
Enclosed is a copy of a petition, filed under 28 U.S.C. 2202, for supplemental relief based upon declaratory judgment in the case of Klamath and Modoc Tribes et al. v. Maison et al., Civil No. 8081, U.S.D.C., Oregon. The original decision in the case was entered in 1956 (139 F. Supp. 634), prior to enactment of the Klamath Indian Termination Act, and did not, therefore, consider the applicability of that act to the hunting and fishing rights of the Klamath Indians. The present petition raises this question.
In this petition "plaintiffs contend that the Tribe and its remaining enrolled members have at all times retained said hunting and trapping rights as to all lands contained in the original Klamath Reservation * * *." (Page 4, lines 9 to 12 of petition.) The plaintiffs allege that the defendants (Oregon State game officials) have, since the termination of Federal supervision over the Klamath Indians "again commenced to threaten to enforce State of Oregon game laws and regulations against remaining enrolled members of the Tribe * * * because these tribal members asserted their right to hunt out of season on all lands within the original Klamath Indian Reservation." (Page 3, lines 14 to 19 of petition.)
The Klamath Forest National Wildlife Refuge was established pursuant to section 28 of the Klamath Indian Termination Act which section was added to the act by an amendment approved August 23, 1958 (P.L. 85-731). Said section 28 provided in part as follows:
"(f) The lands that comprise the Klamath Marsh shall be a part of the property selected for sale pursuant to subsection 5 (a) (3) of this Act to pay members who withdraw from the tribe. Title to such lands is hereby taken in the name of the United States, effective April 1, 1961. Such lands are designated as the Klamath Forest National Wildlife Refuge, which shall be administered in accordance with the law applicable to areas acquired pursuant to section 4 of the Act of March 16, 1934 (48 Stat. 451), as amended or supplemented."
It is our opinion that by virtue of this express statutory provision the United States has extinguished any fishing and hunting rights which the Klamath Indians had by virtue of their treaty or their ownership of the reservation. This would be true as to both withdrawing and remaining members of the tribe. Section 28 made provision for compensating the Indians for the taking of the Refuge. Any claim of the Indians that this compensation was inadequate is a matter for separate consideration and is not properly a part of this case. Indeed, the Tribe has brought an action in the United States Court of Claims alleging inadequacy of compensation for the taking of its lands and other rights.
As noted above, section 28 expressly provides that the Klamath Forest National Wildlife Refuge is to be administered in accordance with the law applicable to areas acquired pursuant to section 4 of the Act of March 16, 1934. This is the Migratory Bird Hunting Stamp Act (16 U.S.C. 718d).Section 4(b) of the aforementioned 1934 act authorizes the acquisition
"* * * of suitable areas for migratory bird refuges under the provisions of the Migratory Bird Conservation Act and for administrative costs incurred in the acquisition of such areas: Provided, That not to exceed 40 per centum at any one rime of any area which heretofore has been or which hereafter may be acquired, reserved, or set apart for the use of the Department of the Interior as an inviolate sanctuary for migratory birds under any law, proclamation, or Executive order may be administered by the Secretary of the Interior, in his discretion, as a wildlife management area within which the taking of migratory game birds or resident species may be permitted under such regulations as he may prescribe: * * *."
The Migratory Bird Conservation Act referred to in the quoted section is set out at 16 U.S.C. 715 et seq. 16 U.S.C. 715i restricts the taking of birds in such areas.
There abound in the legislative history of the
Act of August 23, 1958, amending the Termination
Act, statements which emphasize the importance of retaining the marsh for wildlife conservation. In a letter dated January 13, 1958, to the President of the Senate, the Secretary of the Interior made the following statement in support of the
OPINIONS OF THE SOLICITOR
APRIL 8, 1963
Department's recommendation in favor of passage of this amendment:
"In the fall, waterfowl by the millions, following the Pacific Flyway, pour into the Upper Klamath Basin to rest and feed before continuing southward to their wintering grounds, The Marsh on the Klamath Reservation is the most important marsh to waterfowl that is left unprotected in the nation. This nesting area has been one of the mainstays in keeping up the supply of redheads, canvasbacks and ruddy ducks in the Pacific Flyway."
It is a recognized principle of statutory construction that:
"* * * when construing a statute, the reason for its enactment should be kept in mind, and the statute should be construed with reference to its intended scope and purpose. The court should seek to carry out this purpose rather than to defeat it." Crawford, Statutory Construction (1940 Ed.), p. 249.
Inasmuch as the retention by Indians of hunting rights on the lands comprising the refuge would render it ineffective as a refuge, the only interpretation of the statute which would accomplish the purposes intended by section 28 is to construe the section as extinguishing the tribe's fishing and hunting rights on that portion of the reservation taken for the wildlife refuge. The general position of this Department with respect to Indian hunting and fishing rights on all lands which comprised the original Klamath Reservation is expressed in the enclosed letter dated February 5, 1958, from the Acting Secretary to Senator Neuberger. However, it is not necessary at this time to discuss these views except as they apply to the Klamath Forest National Wildlife Refuge.We do not feel that subsection 14 (b) of the act is inconsistent with the interpretation which we have been discussing. This subsection provides in part as follows:
"(b) Nothing in this act shall abrogate any fishing rights or privileges of the tribe or the members thereof enjoyed under Federal treaty."
We do not believe that language was intended in the sense that Congress should be prevented from extinguishing the fishing and hunting rights through a subsequent amendment which provides for payment of compensation for rights taken by the Government--which Congress did in adding section 28 to the Termination Act.
It should be noted that section 14 of the original Termination Act, which preserves the tribe's fishing rights, says nothing about hunting rights. The court's original opinion in this case, which recognizes the tribe's hunting rights, was based upon the tribe's rights as beneficial owner and quasi-sovereign authority over the lands of the Klamath Reservation. Neither of those conditions continues to exist with respect to the lands comprising the wildlife refuge. Consequently, the earlier decision in this case is not a bar to the interpretation which we urge here.
The United States was an intervenor on behalf of the Indians in the earlier proceedings of the case, and the United States Attorney has been served with a copy of the present petition. Since those earlier proceedings the position of the Government in this area has changed from protector of Indians to protector of wildlife. Although the United States has not been joined as a party defendant in this action, we believe that this case could result in an injunction which would adversely affect Federal authority. Therefore, we regard it as essential that the United States actively participate in the present proceedings in order to establish that the plaintiffs have no special hunting rights on the refuge and that the Migratory Bird Treaty Act can be enforced against them on all of the lands involved.
We are advised by the office of our Regional Solicitor in Portland that the United States Attorney is entirely willing to appear on our behalf in this case. We herewith request that you take appropriate action to assure that this will be done.
A pre-trial hearing before Judge Solomon is to be held Monday, February 18, 1963. It is essential that proper instructions reach the United States Attorney before then. Your prompt attention to this urgent matter will be most appreciated.EDWARD W. FISHER,
LONG TERM FARMING LEASES OF INDIAN LANDS70 I.D. 119
M-36651 April 8, 1963.
Indian Lands: Leases and Permits--Secretary of the Interior--Words and Phrases
Under the Act of August 9, 1955 (69 Stat. 539; 25 U.S.C., sec. 415), which authorizes the Indian owners of restricted tribally or individually
APRIL 8, 1963
owned lands to lease such lands, wit11 the approval of the Secretary of the Interior, for a term of not to exceed twenty-five years "for those farming purposes which require the making of a substantial investment in the improvement of the land for the production of specialized crops as determined by said Secretary," the phrase "specialized crops" is not one of limitation, and the Secretary is authorized to approve such leases if, in order to produce the crop or crops proposed to be grown, he determines that a substantial investment in the improvement of the land is necessary for that purpose and the lessee is required to make such an investment.
To: Secretary of the Interior
Subject: Long-term farming leases of Indian lands
In accordance with your request, we have made a study of the authority to enter into or approve long-term farming leases of Indian lands. Inquiries regarding the scope and application of existing laws have been made by the Commissioner of Indian Affairs on several occasions,1 and further interpretation and application of these laws will likely be involved in the proposed development of lands on the Colorado River Indian Reservation, as well as elsewhere. Many of the proposals to lease would entail the subjugation of raw land, in some cases raw desert land, and envisage extensive clearing, leveling, draining, terracing, and soil-building, and the use of irrigation for the production of various agricultural crops. The principal problem in such proposals is that only if the lease term is of sufficient duration to permit recoupment of the developmental expenses, plus a reasonable profit, can they be made sufficiently attractive to warrant substantial expenditures of money, and in many cases such recoupment could not reasonably be anticipated in less than 25 years.
In approaching this problem it is necessary to examine and interpret the Act of July 3, 1926 (44 Stat. 894; 25 U.S.C. sec. 402a), and the Act of August 9, 1955 (69 Stat. 539; U.S.C. sec. 415), as amended.
The Act of July 3, 1926, supra, reads as follows:
"The unallotted irrigable lands on any Indian reservation may be leased for farming purposes for not to exceed ten years with the consent of the tribal council, business committee, or other authorized body representative of the Indians, under such rules and regulations as the Secretary of the Interior may prescribe."
This act, while adequate for the leasing of tribal lands within Indian reservations, does not extend to such lands outside reservation boundaries, nor does it permit the leasing of individually owned trust or restricted lands. Moreover, it does not permit leasing for terms longer than ten years and therefore has no application to those situations where longer terms are needed for amortization of large developmental expenses.
Section I of the Act of August 9, 1955, supra, provides in part:
"Any restricted Indian lands, whether tribally or individually owned, may be leased by the Indian owners, with the approval of the Secretary of the Interior, for public, religious, educational, recreational, residential, or business purposes, including the development or utilization of natural resources in connection with operations under such leases, for grazing purposes, and for those farming purposes which require the making of a substantial investment in the improvement of the land for the production of specialized crops as determined by said Secretary. All leases so granted shall be for a term of not to exceed twenty-five years, except leases of land for grazing purposes which may be for a term not to exceed ten years. Leases for public, religious, educational, recreational, residential, or business purposes with the consent of both parties may include provisions authorizing their renewal for one additional term of not to exceed twenty five years, and all leases and renewals shall be made under such terms and regulations as may be prescribed by the Secretary of the Interior." (Emphasis added.)
The 1955 net was amended in 19592 to permit leases on the Agua Caliente (Palm Springs) Reservation to be issued for a term of not to exceed ninety-nine years. It was again amended in 19603 to extend the ninety-nine year leasing authority to the Navajo Reservation, and in 19614 to extend
1 Most recently,
SanTan Ranch Company, Inc., proposed a 25-year lease of lands within the Gila
River Indian Reservation in Arizona, but it is now negotiating for a lease for
ten years. Also recently, the Farmers Investment Company has proposed a 25-year
lease of lands of the San Xavier Indian Reservation, also in Arizona, but the
matter has been deferred pending disposition of objections by the City of
2 Act of September 21, 1959, 73 Stat. 597.
3 Act of June 11, 1960, 74 Stat. 199.
4 Act of October 4, 1961, 75 Stat. 804.
OPINIONS OF THE SOLICITOR
APRIL 8, 1963
that authority to the Dania Reservation and to except from renewal those leases in which the initial term extends for more than seventy-four years. The most recent amendment was enacted in 19625 and extended the ninety-nine year leasing authority to the Southern Ute Reservation.
The regulations originally issued pursuant to the 1955 act were published on April 19, 1956,6 and are last found in published form as Part 171 of 25 CFR, 1949 Ed., Supp. as of January 1, 1957. Section 171.6 (b) thereof provided:
"Farming, and agricultural leases which require the making of a substantial investment for the production of specialized crops, and such farm leases which require the development and utilization of the soil and water resources in connection with their operation as determined by the Secretary or his representative may be executed for a term of not to exceed twenty-five years."
Section 171.1 (j) provided that " 'specialized crops' means those crops requiring a deferred period of years for investment return."
The quoted language was carried into the January 1, 1958, revision of 25 CFR as Section 131.6(b) and 131.1 (i). The regulations were amended November 23, 1961,7 and the former Section 131.6(b) now appears as Section 131.8(b), as follows:
"Faming and agricultural leases for the purpose of growing specialized crops shall not exceed 25 years."
The 1961 amendments deleted the definition of "specialized crops."8
In discussing the reasons for changing the regulations in 1961, the Chief, Branch of Real Property Management, in a memorandum of November 28, 1962, to the Associate Commissioner of Indian Affairs, said: "The regulation change made the language conform literally to the words of the statute. The change was made after informal discussions among Bureau personnel and with the Solicitor's Office and it was concluded that" the 1955 act "authorized farming and agricultural leases only in those cases where the purpose of the lease required the making of a substantial investment in the improvement for the production of specialized crops." The memorandum also noted that "the files pertaining to the revision of the regulations contain no specific mention of this particular change. The amended regulation had Solicitor's Office clearance."
It is worthy of note that, although the amended regulation was an apparent attempt to bring it within the literal limitations of the underlying statute, neither it nor the former regulation used the exact language of the statute, i.e., "the making of a substantial investment in the improvement of the land for the production of specialized crops as determined by said Secretary." (Emphasis added.)
In the absence of a regulation defining "specialized crops," the determination of whether a particular lease proposal is within the scope of the statute and the current regulations is in the authorized approving official. The Secretary's authority under the 1955 act has been delegated by Section 13(n) of Secretarial Order No. 2508, of January 11, 19499 as amended,10 to the Commissioner of Indian Affairs to approve farming and other leases pursuant to former Part 171, now Part 131, of 25 CFR.Because of the doubt cast upon the regulations adopted contemporaneously with the enactment of the statute, and the uncertainty which led to their amendment in an attempt to conform to, rather than to Interpret and apply, the legislative enactment, they are of little assistance in construing the statute. Although we cannot overlook the fact that a substantial number of farming leases issued under the 1955 art, supra, have been approved for terms longer than ten years,11 it must be
5 Act of October 10, 1962, 76 Stat. 805.
6 21 F.R. 2562.
7 26 F.R. 10966.
8 The proposed revision of Part 131, as published in the Federal Register on July 6, 1960 (25 F.R. 6332), would have provided in section 131.1 (f) as follows:
" (f) 'Specialized Crops' means:
" (1) Long life perennials which maintain profitable production over a period of years, or
" (2) Those crops the production of which require a substantial development investment on the described land."
9 14 F.R. 258, January 18, 1949.
10 20 F.R. 7017 (Amendment No. 13, September 17, 1955); 23 F.R. 90 (Amendment No. 23, December 19, 1957); 25 F.R. 192 (Amendment No, 43, July 23, 1960); 26 F.R. 3207 (Amendment No. 45, April 7, 1961); 27 F.R. 987 (Amendment No. 50, January 26, 1962).
11 In a memorandum to the Deputy Commissioner of Indian Affairs dated December 17, 1962, the Chief, Branch of Real Property Management, summarizes reports from Bureau field offices as showing that under the authority of the 1955 Act 11 approved farming leases had been issued to Navajo Indian Reservation in New Mexico; 12 farming leases of Shiprock Irrigation Farm Training Project of the Navajo Indian Reservation in New Mexico; 12 farming leases of lands on the Fort Hall Indian Reservation in Idaho and 51 farming leases of land on the Yakima Indian Reservation in Washington had been approved for terms exceeding ten years; and that one twenty-five year farming lease of lands within the Papago Reservation in Arizona had been approved but had been cancelled by the Superintendent and is pending in this office on appeal. In addition 4 leases for terms in excess of ten years were approved covering lands on the Colorado Indian Reservation in Arizona under the Act of August 14, 1955 (69 Stat. 725) which authorized the Secretary, to and until August 14, 1957, to approve leases of unassigned lands on that reservation "for those farming purposes which require the making of a substantial investment in the improvement of the land for the production of specialized crops as determined by said Secretary," such language being identical with that found in the Act of August 14, 1955, which we are here considering.
DEPARTMENT OF THE INTERIOR
APRIL 8, 1963
recognized that they were considered for approval in accordance with the regulations as they then existed, and, as indicated above, earlier versions of the regulations were considered sufficiently questionable to require their amendment to attempt to conform to the language of the act.From the beginning, the administration of the 1955 act has been troublesome because of the feeling that it limited long-term farming leases to that which called for the growing of "specialized crops," and that term was nowhere defined in the statute. The early regulations emphasized that aspect of the authority, and attempted to define the phrase administratively. Although the present regulations contain no such definition, they do limit long-term farming leases to those whose purpose is that of "growing specialized crops."
In the absence of a statutory definition, and in seeking to ascertain the intent of the Congress in enacting the legislation, we are justified in turning to the legislative history of the act. With respect to this legislation, the first reference to the phrase "specialized crops" is found in identical executive communications dated January 25, 1955, from the Assistant Secretary of the Interior to the President of the Senate and the Speaker of the House of Representatives, respectively, transmitting a proposed bill "To authorize the leasing of restricted Indian lands for public, religious, educational, recreational, residential, business, and other purposes requiring the grant of long-term leases." The communications requested that the proposed bill be referred to the appropriate committee for consideration, and recommended that it be enacted. That part of the proposed bill which concerned farming leases would authorize the Secretary to approve leases of restricted Indian lands "for those farming purposes (not to include grazing) which require the making of a substantial investment in the improvement of the land for the production of specialized crops as determined by said Secretary."
Except for the parenthetical reference to grazing, the quoted language of the proposed bill is identical with the underscored language of the 1955 act heretofore quoted in this memorandum. The proposed bill and the transmittal documents were prepared in the Bureau of Indian Affairs, but the author left behind no indication of the source of the language nor explanation of what it meant to him.
The executive communications of January 25, 1955, said in part:
"The present law governing the leasing of Indian lands for public, religious, educational, recreational, residential, business or farming purposes are unduly restrictive."
After referring to the existing leasing laws and certain principal exception,12 they said:
"Because of the existing limitations upon the duration of leases many Indian lands that could be profitably utilized under long-term leases are idle and the Indians are deprived of much needed income. Other lands that are leased for shorter periods would bring much higher rentals to the Indians if the lands could be leased for longer terms.
"The absence of authority for long-term leases discriminates against Indians who own restricted lands that are suitable for the location of business establishments, residential subdivisions, summer homes, airports, or for other purposes that require a substantial outlay of capital by the prospective lessee. It also penalizes Indian owners of raw but potentially valuable farm lands on which the cost of subjugation is too great for the Indian himself to finance. In such cases, prospective lessees are willing to undertake these expensive improve-
general, these laws preclude Indians from leasing their trust lands, whether
tribal or allotted, for periods longer than 5 years. The principal exceptions to
this limitations are (a) lands in the State of Washington may be leased for
periods up to 25 years for any of the foregoing purposes except farming or
residential (Act of August 9, 1946, 25 U.S.C. 403b); (b) lands in any state
which are capable of irrigation may be leased for periods up to 10 years for
farming purposes in certain circumstances (Act of July 3, 1926, 25 U.S.C. 402a;
Act of May 18, 1916, 25 U.S.C. 394); (c) lands belonging to incorporated tribes
may be leased for periods up to 10 years for such purposes as are permitted by
tribal charters (Act of June 18, 1934, 25 U.S.C. 478); and (d) lands on the
Navajo-Hopi (Act of April 19, 1950, 25 U.S.C. 635), the Port Madison, Snohomish,
and Tulalip Reservations (Act of October 9, 1940, 25 U.S.C. 403a), and
lands belonging to Pueblo Indians (Act of June 7, 1924, 43 Stat. 636, 641-642)
may be leased on a long-term basis for a variety of purposes."
OPINIONS OF THE SOLICITOR
APRIL 8, 1963
ments only if guaranteed tenure by a long-term lease."
Bills were introduced in the First Session of the 84th Congress containing language identical to that proposed by this Department. On the Senate side, these were S. 34 by Senator Goldwater and S. 631 by Senator Murray and on the House side, H.R. 2681 by Congressman Udall and H.R. 2862 by Congressman Metcalf. S. 34 and H.R. 2681 were limited to the leasing of Indian lands in Arizona; S. 621 and H.R. 2862 were not so limited. H.R. 2681 was superseded by H.R. 7157, also by Congressman Udall, which would have authorized the Secretary to approve leases of restricted Indian lands for terms of not to exceed twenty-five years, without limitation as to purpose, and contained none of the language relating to farming leases recommended by this Department.
In reporting to the Chairman of the Senate Committee on Interior and Insular Affairs on March 21, 1955, on S. 34, and on March 25, 1955, on S. 621, the Assistant Secretary of the Interior repeated the language quoted above from his letters of January 25, 1955, to the President of the Senate and the Speaker of the House of Representatives. The same language was also used in reporting to the Chairman of the House Committee on Interior and Insular Affairs by letters dated March 21, 1955, on H.R. 2681, and March 25, 1955, on H.R. 2862.In repenting on S. 34, the Senate Committee on Interior and Insular Affairs incorporated substitute language for that in the bill as introduced, and broadened the bill to make it applicable to Indians generally. In the report, the Committee explained the need for the legislation in the identical language used by the Department and above quoted from its letters of January 25, 1955, and said:
"In addition, these lands could be leased for farming purposes which require the making of substantial investment in the improvement of the land for the production of specialized crop."13
The bill was amended as reported, and was passed by the Senate on May 26, 1955.14
The House Committee on Interior and Insular Affairs held hearings on H.R. 2681, H.R. 2862, and H.R. 7157, but reported only on H.R. 7157.15 It was this bill, much broader in scope than the others, which would have authorized Secretarial approval of leases of restricted individual or tribal lands for not to exceed twenty-five years, with a like right of one renewal, without limitation as to purpose. Consequently, there was no need to refer specifically to farming leases, but the Committee did say, on page I of its report:
"Because of existing limitations upon the duration of leases many Indian lands which could be profitably developed under long-term leases are idle, and the Indians are deprived of much needed income. Other lands that are leased for shorter periods would bring much higher rentals to the owners if the lands could be leased on a long-term basis. Enactment of H.R. 7157 would remove these unfair restrictions."
The first two sentences of this paragraph are identical with the language quoted above from the Department's initial letters of January 25, 1955.
H.R. 7157 was passed by the House on July 18, 1955. S. 34 was then taken from the Speaker's table, amended by striking out all after the enacting clause and inserting the language of H.R. 7157, and passed. H.R. 7157 was then laid on the table.16
The Senate disagreed to the amendment of the House and requested a conference thereon.17 The House insisted on its amendment and agreed to the conference.18 The Committee of Conference recommended that the Senate recede from its disagreement to the House amendment, and agree to the same with an amendment which in effect restored the language of S. 34 with an additional provision to permit leasing for grazing purposes. The conference report explained the original Senate version in the terms of S. 34, but did not discuss the meaning of the language.19 The conference report was submitted to the House,20 and was agreed to by both House21 and Senate22 on July 29, 1955.
We have discussed the legislative history of the 1955 act in much detail because we think it clearly shows, as concerns the Secretary's authority to approve farming leases of restricted Indian lands for
S. Rept. No. 375, 84th Cong., 1st Sess. 2 (1955).
14 101 Cong. Rec. 7092 (1955).
15 H.R. Rept. No. 1093, 84th Cong., 1st Sess. (1955).
16 101 Cong. Rec. 10760 (1955).
17 Id. at 11143.
18 Id. at 11375.
19 ". . . S. 34 provided for the lease . . . of any restricted Indian lands . . . for the purposes which require the making of a substantial investment in the improvement of the land for the production of specialized crops as determined by the Secretary of the Interior;"
20 101 Cong. Rec. 11932 (1955).
21 Id. at 12092.
22 Id. at 11998.
DEPARTMENT OF THE INTERIOR
APRIL 8, 1963
terms of up to twenty-five years, that the criteria for such approval is not the crop to be produced but the investment to be made in improvement of the land.
After informal discussions with knowledgeable individuals in the Department of Agriculture as well as in this Department, we are led to the conclusion that the phrase "specialized crops" is not one which has a generally accepted and well understood meaning in the field of agriculture.23 It does not connote the same meaning as "specialty crops" which, although not a term of fixed definition, at least is often used to refer to a limited class of crops which require special knowledge for their production.24 The very fact that there is no commonly understood meaning of the phrase "specialized crops," coupled with the failure to define it in the statute itself and the complete absence of any relevant discussion in the reports and debates in the legislative history of the 1955 act, can only lead to the conclusion that it was not employed in a limiting sense but rather in a generally descriptive way to refer to the end resulting from substantial investments made in the improvement of the land subject to lease under that act.25 With this in mind, it seems entirely proper to conclude that you are authorized by the 1955 statute to approve those leases of tribally or individually owned restricted Indian lands which, before they can profitably be famed, will require substantial investments in the improvement of the land. In deciding whether to approve or disapprove a lease it will be necessary to consider the crop or crops which the prospective lessee proposes to grow, and to determine whether or not a substantial investment in the improvement of the land is necessary for that purpose. If it is, and the lessee is required to make such an investment, you are authorized to approve it. lf the land need not be improved in order to grow the proposed crop, or if the investment required is not substantial, the lease should not be approved.
The feasibility of growing the proposed crop or crops in the area in which the leased land lie, will also be a factor to consider. A proposal to grow a particular crop in an area not climatically or geographically favorable to its production should not be approved regardless of the investment proposed to be made in improving the land.
Although the necessity for making a substantial investment in land improvement is the justification for approval of leases under the 1955 act, the amount or substantiality of the investment will also be an element to consider in evaluating the term of a proposed lease. If the investment, plus a reasonable profit can be recovered from anticipated crop or other farm income in ten years, there would be no basis for approving a lease for a longer term.The conclusions which we have reached in this opinion have necessarily been expressed in the form of rather broad guidelines. Further interpre-
23 Although the
phrase was not encountered in the many Yearbooks of the Department of
Agriculture nor in most of the other agricultural texts and reference works
which we have examined, it is occasionally used. For example:
"Properties devoted to the production of specialized crops and livestock are either: (1) a number of properties in a community or district on which the type of production varies from that generally typical of the region, or (2) individual farms which vary from the typical of the community." Crouse and Everett, Rural Appraisals 235 (1956).
24 Currently indexed under "Specialty Crops" in the regulations of the Department of Agriculture are almonds, filberts, walnuts, dates, raisins, grapes for crushing, and dried prunes. 7 C.F.R. Parts 981-999.100. We are informally advised that the Specialty Crops Branch of the Fruit and Vegetable Division, Agricultural Marketing Service, deals with such other commodities as hops, spices, peanuts, honey and coffee, but that the products falling within its administrative jurisdiction are subject to change by the Secretary of Agriculture at any time.
25 S. 108 was introduced in the 87th Congress by Senator Anderson to amend the 1955 act by increasing the permissible lease term from 25 years to 99 years. Although it did not become law, it would also have provided for approval of 25-year farming leases that require "the making of a substantial investment in the improvement of the land." All reference to "specialized crops" would have been eliminated. In the Senate debate on the measure, Senator Case of South Dakota inquired about the changes which the bill would make in existing law. He also said:
"Mr. President, I have examined the report on the bill, and I note a paragraph which I think satisfies the question which was in my mind.
"Part of the paragraph reads as follows:
" ' The 10-year limitation on grazing leases and the 25-year limitation on farming leases that require substantial improvements, that are contained in the present law, are retained in the bill.'
"So there would be a 10-year limitation on grazing leases and a25-year limitation on farming lease that require substantial investments in improvements.
"Therefore, I have no objection to the bill." 107 Cong. Rec. 5359 (1961).
Thus, as recently as 1961, here is another indication that Congress regarded the 1955 act as providing for approval of those farming leases which require substantial investments in the improvement of the land and not as being . . . Thus, as recently as 1961, here is another indication that[sic]
OPINIONS OF THE SOLICITOR
tation may be required with respect to any particular lease proposal.FRANK J. BARRY,
BY EXECUTIVE ORDER FOR INDIAN PURPOSES
70 I.D. 166M-36652 May 14, 1963.
Alaska: Indian and Native Affairs--Indian Lands: Leases and Permits: Oil and Gas--Withdrawals and Reservations: Generally
Lands in Alaska which have been withdrawn by Executive order for Indian purposes or for the use and occupancy of any Indians or tribe, may be leased for oil and gas development pursuant to the act of March 3, 1927.Oil and Gas--Statutory construction: Generally
The act of May 11, 1938, repealed only those parts of the act of March 3, 1927, which were inconsistent therewith, and did not affect the authority established in the earlier act to lease, for oil and gas development, lands withdrawn by Executive order for Indian purposes or for the use and occupancy of Indians.
Alaska: Oil and gas leases--Statutory construction: Legislative History
The language and legislative history of the act of March 3, 1927, together with the avowed purpose of establishing a uniform policy for leasing all Executive order reservations for Indian purposes, compel the conclusion that the 1927 act is applicable to lands in Alaska.
Alaska: Oil and Gas Leases--Withdrawals and Reservations: Generally--Executive Orders and Proclamations--Words and Phrases
Lands in the Tyonek Reserve (Moquawkie Reservation) in Alaska which were ". . . withdrawn from disposal, and reserved for the U.S. Bureau of Education . . . " by Executive Order 2141, February 27, 1915, were ". . . withdrawn for Indian purposes or for the use and occupancy of Indians . . ." within the meaning of the act of March 3, 1937.
Subject: Oil and Gas Leasing on Lands Withdrawn by Executive Order for Indian Purposes in Alaska
In response to a request from the Commissioner of Indian Affairs I have examined the subject of oil and gas leasing on lands withdrawn or reserved by Executive order for Indian purposes in Alaska with a view to determining whether such reserved or withdrawn lands are subject to leasing under the tribal mineral leasing acts of March 3, 1927,1 and May 11, 1938.2 Specifically, the Commissioner has requested advice as to the legal status of the Tyonek Reserve (Moquawkie Reservation) for purposes of leasing the land within the reserve for oil and gas development.
The subject of leasing for minerals other than oil and gas on lands withdrawn or reserved for Indian purposes in Alaska was previously considered by Solicitor J. Reuel Armstrong who, in an unpublished memorandum dated September 7, 1955, concluded that ". . . legislation is essential which would definitely describe or fix authority with respect to the leasing for mining purposes of lands within the Klukwan and like Indian Reservations in Alaska." The question before the Solicitor at that time involved the leasing of an Executive order Indian reservation for the mining of iron ore pursuant to the act of May 11, 1938, supra. I have concluded that nothing in the 1955 memorandum or the authorities cited therein would preclude the leasing of lands within the Tyonek Reserve (Moquawkie Reservation) for oil and gas development pursuant to the act of March 3, 1927.
Act of March 3, 1927
As codified in 25 U.S.C., sec. 398a, section 1 of the act of March 3, 1927, 3 provides as follows:
"Unallotted lands within the limits of any reservation or withdrawal created by Executive order for Indian purposes or for the use and occupancy of any Indians or tribe may be leased for oil and gas mining purposes in ac-
____________________1 44 Stat. 1347, 25 U.S.C. sec. 398a.
DEPARTMENT OF THE INTERIOR
MAY 14, 1963
cordance with the provisions contained in section 398 of this title."4
The view has been advanced that, in enacting the 1927 leasing act, Congress recognized Indian title to lands reserved or withdrawn by Executive order for the benefit of Indians.5 However, for our present purposes, and for reasons hereinafter discussed, it is not necessary to determine whether Congress has recognized Indian title to lands withdrawn for Indian purposes by Executive order.The only questions left for determination are (1) whether the 1927 leasing act is applicable to lands withdrawn by Executive order for Indian purposes in the State of Alaska, and (2) whether Tyonek Reserve (Moquawkie Reservation) consists of "Unallotted lands within the limits of any reservation or withdrawal created by Executive order for Indian purposes or for the use and occupancy of any Indians or tribe . . .," within the meaning of the 1927 act.
Legislative History of the 1927 Act
Nothing in the 1927 act itself or in the legislative history of the act would make it expressly inapplicable to Indian lands in Alaska. The purposes of the legislation are set out in the House and Senate reports on the bill6 as follows:1. Permit the exploration for oil and gas on Executive order Indian reservations.
2. Give the Indian tribes all the oil and gas royalties.
3. Authorize the States to tax production of oil and gas on such reservations.
4. Place with Congress the future determination of any changes of boundaries of Executive order reservations or withdrawals.
5. Extend relief to permittees and applicants who in good faith expended money in development looking to the discovering of oil and gas under the general leasing act of February 25, 1920, upon Executive order Indian reservations, at a time when such lands were held to come within the terms of said act. (S. Rept. No. 1240, at p. 3; H.R. Rep. No. 1791, at p. 3.)
The report further explained the purposes of this legislation as follows:
"The first section of the bill establishes a uniform policy for the leasing of all Indian reservation lands for oil and gas mining purposes, under the supervision of the Bureau of Indian Affairs. . . ." (Emphasis supplied.)
* * *
"In general, the congressional policy toward the disposal of the wealth of Indian-Executive order reservations has been a uniform one for 50 years, the proceeds from the natural resources as well as the use of the surface having been allowed to the tribes or credited to them, and this policy, continued in the bill now reported, is in evident accord with equity and with the historical fact that the greater part of all the existing Indian reservation area has been created since 1871, the date when the treaty-making power with the Indians was ended." (S. Rep. No. 1240, at pp. 3-4; H-R. Rep. No. 1791, at pp. 3-4.)
Since one purpose of the 1927 legislation was the establishment of a uniform policy for the leasing of all unallotted Indian lands for oil and gas, it would subvert such purpose to hold that the act was inapplicable to such lands in Alaska.
In addition to the Senate and House reports on this legislation, extensive hearings were held on the bills introduced in the Second Session of the 69th Congress,7 and on similar legislation in the First Session of the 69th Congress.8 The hearings
4 Section 398 which codified the act of May 29, 1924 (43 Stat. 244), provides:
"Unallotted land on Indian reservations other than lands of the Five Civilized Tribes and the Osage Reservation subject to lease for mining purposes for a period of ten years under the preceding section may be leased at public auction by the Secretary of the Interior, with the consent of the council speaking for such Indians, for oil and gas mining purposes for a period of not to exceed ten years, and as much longer as oil or gas shall be found in paying quantities, and the terms of any existing oil and gas mining lease may in like manner be amended by extending the term thereof for as long as oil and gas shall be found in paying quantities: Provided, That the production of oil and gas and other minerals on such lands may be taxed by the State in which said lands are located in all respects the same as production on unrestricted lands, and the Secretary of the Interior is authorized and directed to cause to be paid the tax so assessed against the royalty interests on said lands: Provided, however, That such tax shall not become a lien or charge of any kind or character against the land or property of the Indian owner." (May 29, 1924, c. 210, 43 Stat. 244.)
5 See Note, Tribal Property Interests in Executive Order Reservations: A Compensable Indian Right, 69
Yale L.J. 627 (1960).
6 S. Rep No. 1240; H.R. Rep. No. 1791, 69th Cong., 2d Sess. (1927).
7 S. 4893 and H.R. 15021, 69th Cong., 2d Sess. (1927).
8 S. 1722. S. 3159, and H.R. 9133, 69th Gong., 1st Sess. (1926).
OPINIONS OF THE SOLICITOR
MAY 14, 1963
on all of these bills were printed and published.9
While it is apparent that Congress, in enacting the 1927 act, was primarily concerned with the leasing of Navajo lands in New Mexico, Utah and Arizona, no effort was made to restrict the operation of the 1927 act to leasing of Navajo lands only. Again, the purpose of this legislation was to establish a uniform leasing policy on all Executive order Indian lands.With one exception, the record in all of the hearings above-cited is barren of any reference to the then Territory of Alaska. In the Hearings Before a Subcommittee of the House Committee on Indian Affairs on H.R. 9133,10 there were extensive discussions concerning the taxation of the proceeds from rents, royalties, or bonuses derived from oil and gas leases authorized by the proposed bill. In this connection, the sub-committee reprinted, as part of the record of the hearings, several exhibits including a summary of State laws imposing severance taxes or making special provisions relative to the taxation of natural resources.11 One of the references cited therein is Alaska, Laws, 1923, ch. 101, p. 274, imposing a license tax on mining operators in the Territory of Alaska. The inclusion of a reference to the Alaska Territorial Laws by the sub-committee would indicate that the members of the sub-committee considered the 1927 act to apply to lands in Alaska in the same manner as in the States.
The debates on this legislation in the House and Senate are no more conclusive on the present issue than the hearings and reports. The floor debate in the Second Session of the 69th Congress on S. 4893 was extremely brief12 and no reference was made to the Territory of Alaska therein. There was extended debate on S. 4152 during the First Session of the 69th Congress,13 but again, no reference is made therein to the application of the proposed legislation to lands in the Territory of Alaska.I have set forth in the footnote a number of relevant excerpts from the 1926 debates which illustrate the general purpose and scope of this legislation.14 The relevant portions of the record
9 See Hearings Before
a Subcommittee of the Senate Committee on Indian Affairs on S. 1722 and S. 3159,
1st Sess. (1926); Hearings before the Senate Committee on Indian Affairs on S. 3159 and S.
4152, 69th Cong., 1st Sess. (1926); Hearings Before a Subcommittee of the House Committee on Indian
Affairs on H.R. 9133, 69th Cong., 1st Sess. (1926); Hearings Before the Senate Committee on Indian
Affairs on H.R. 15021, 69th Cong., 2d Sess. (1927).
10 69th Cong., 1st Sess. (1926).
11 Exhibit 1, Hearings, op cit., supra., p. 91.
12 See 68 Cong. Rec. 2793-95 (1927).
13 See 67 Cong. Rec. 10912-925, 11381-398 (1926).
14 See 67 Cong. Rec. 10913 (Senate debate):
Mr. La Follette . . . The first section of the bill endeavors to lay down a policy with regard to the leasing of oil and gas on Executive order reservations . . .
* * *
See 67 Cong. Rec. 10913 (Senate debate):
Mr. Bratton . . . Prior to 1871 the method of establishing reservations for the occupancy of Indians was through treaties entered into between the United States and the Indian tribes. Reservations were created and established in that manner. In 1871 the procedure was changed and the method of creating reservations by treaty was discontinued. The new method was adopted which was to create such reservations by Executive orders entered by the President from time to time. Under that method various reservations were created. At the present time they are located in 10 different States, and the area aggregates about 23,000,000 acres of land. It is that land with which we are dealing in this bill.
See 67 Cong. Rec. 10914 (Senate debate):
Mr. Bayard. Is not the pending bill predicated upon the theory that this property belongs to the United States of America and not to the Indians?
Mr. Jones of New Mexico. Whether it belongs to the United States or to the Indians makes no difference, so far as this bill is concerned.
* * *
Congress has complete control of Indian lands, and regardless of title, regardless of their interest in those lands Congress has the right to legislate with respect to the development of oil in them and to provide for royalties, and so forth.
* * *
See 67 Cong. Rec. 10916 (Senate debate):
Mr. Bratton. That [Navajo reservation] is one of the reservations involved. This bill covers every Executive order reservation in the 10 States of the Union, and embraces 22,000,000 or 23,000,000 acres of land.
Mr. Wheeler. Of course, I understand that; and, as far as I am concerned, I think it should cover them all. I think the Indians should be given title to it without question.
* * *
See 67 Cong. Rec. 11384 (House debate):
It is the purpose of this legislation to lease the remaining 22,000,000 acres of Executive-order Indian reservation lands for the development of oil and gas by giving complete power to the Commissioner of Indian Affairs to designate under what rules and regulations this land shall be leased. It includes all remaining Executive-order Indian lands within the United States including the Indian lands situated within 10 states . . . (Emphasis supplied.)
DEPARTMENT OF THE INTERIOR
MAY 14, 1963
indicate that Congress was primarily concerned about leasing for oil and gas on Executive order reservations in certain Western States wherein large portions of land were withdrawn for Indian purposes. The lack of any reference to withdrawn or reserved lands situated in the Territory of Alaska indicates that those who debated and discussed the bill on the floor and in hearings were either uninformed or unconcerned about lands withdrawn for Indian purposes in Alaska. But again, the language used in the legislation finally enacted, together with the avowed purpose of establishing a uniform policy for leasing all Executive order reservations for Indian purposes, compel the conclusion that the 1927 act is applicable to lands in Alaska which have been reserved or withdrawn by Executive order for Indian purposes or for the use and occupancy of Indians.
This same conclusion was reached in a Solicitor's Opinion rendered April 19, 1937 (56 I.D. 110), wherein, in dictum, it was stated that:
". . . the acts of June 30, 1919 (41 Stat. 34), and March 3, 1927 (44 Stat. 1347), have been passed prohibiting the withdrawal of public lands of the United States for Indian reservations or the enlargement of existing reservations except by act of Congress. These acts would appear to apply to Alaska. . . ." 56 I.D. at 112.
On January 31, 1938, Secretary of the Interior Ickes, in a letter to the Speaker of the House, regarding a bill which was later enacted as the act of May 31, 1938,15 made the following statement:
"As section 4 of the act of March 3, 1927 (44 Stat. 1347), which has been held applicable to Alaska, provides that reservations of public lands for Indian purposes cannot be made except by act of Congress, there is no authority of law for permanently reserving the small tracts of public domain that will be needed for the purposes indicated." (Emphasis supplied.)
The holding to which Secretary Ickes had reference was apparently the Solicitor's Opinion of April 19, 1937, supra. There is apparently no other reported case which has reached the question of the applicability of the 1927 act to lands in Alaska.
Effect of the Act of May 11, 1938
The question has been raised as to whether the act of May 11, 1938,16 applicable to unallotted Indian lands, repealed the act of March 3, 1927. In an unpublished letter of January 25, 1963, to the attorneys representing the Navajo Indians, the contention that the 1938 act repealed the taxing authority estalblished by the 1927 act and related legislation was rejected. In that letter, the position was taken that the 1938 act repealed only those acts or parts of acts which were inconsistent therewith,17 and that nothing in the later act was inconsistent with those provisions in the earlier acts which granted the various States the authority to tax the proceeds from leasing thereunder. In this regard, I have concluded that there is nothing in the 1938 act which is inconsistent with the sale of oil and gas leases on lands withdrawn by Executive order for Indian purposes as authorized by the 1927 act, and that, consequently, the leasing authority established in the earlier act has not been repealed.It is also pentinent to note at this point that the Native Village of Tyonek, in a suit filed in the United States District Court for the District of Alaska,18 has asserted that such lands may be leased pursuant to the 1938 act rather than under the 1927 act. Such a contention, if sustained, would require the conclusion that Tyonek Reserve (Moquawkie Reservation) consists of ". . . unallotted lands within [an] Indian reservation or lands owned by [a] tribe, group, or band of Indians . . ." within the meaning of the 1938 act. Since the 1927 act provides the specific legislative authority for leasing lands withdrawn by Executive order for Indian purposes, we need not consider whether the Indians own the lands in question or whether Tyonek Reserve is the type of "reservation" contemplated in the 1938 act. These further questions are reserved until such time as they are presented in a case requiring such a determination.
Status of Tyonek Resertre (Moquawkie Reservation)
As stated above, it is necessary here to determine whether Tyonek Reserve (Moquawkie Reservation) consists of ". . . unallotted lands within the limits of any reservation or withdrawal created by Executive order for Indian purposes or for the use or occupancy of any Indian or tribe . . . ," within the meaning of the act of March 3, 1927.
____________________15 52 Stat. 588, 48 U.S.C., sec. 381.
"All Acts or parts of Acts inconsistent herewith are hereby repealed."
18 Native Village of Tyonek v. Bennett, No. A-17-63 (Filed
April 2, 1963).
OPINIONS OF THE SOLICITOR
MAY 31, 1963
The Tyonek Reserve was withdrawn by Executive Order No. 2141, February 27, 1915. That withdrawal was phrased as follows:
"It is hereby ordered that the tract of land hereinafter described, be, and the same is hereby withdrawn from disposal, and reserved for the use of the U.S. Bureau of Education, subject to existing vested right."19
The question has arisen as to whether the withdrawal above-quoted was made for Indian purposes or for the benefit of the Indians. In this regard, the Bureau of Education in Alaska formerly performed many of the functions and services now provided by the Bureau of Indian Affairs.20 That this withdrawal is, in fact, a withdrawal for Indian purposes, is in evidence in the official papers concerning the withdrawal. In a letter from the Commissioner of the General Land Office to the Secretary of the Interior, on February 23, 1915,21 the following statement appears:
"I have the honor to present a request of the Commissioner of Education, . . . asking that a suitable tract of land along the northwest shore of Cook Inlet to be known as the Moquawkie Reserve, may be withdrawn from all other kinds of disposal, and reserved for the use and benefit of Alaskan natives under the care and instructions of said Bureau and its superintendents." (Emphasis supplied.)
In the letter dated February 25, 1915,22 from the Secretary of the Interior to President Wilson, it was stated:
"I have the honor to transmit herewith a draft of an Executive Order, providing for the withdrawal and reservation of a tact of land on the west shore of Cook Inlet, for the use of the U.S. Bureau of Education and for the benefit of Alaskan natives of that region, under said Bureau. . . ." (Emphasis supplied.)
And finally, in a letter dated March 5, 1915,23 to the Secretary of the Interior from the Secretary to the President regarding the signed Executive order, the following language appears:
". . . the President on February 27th signed an Executive order providing for the withdrawal and reservation of a tract of land on the West shore of Cook Inlet for the use of the U.S. Bureau of Education and for the benefit of Alaskan natives of that region." (Emphasis supplied.)
Upon concluding that the Tyonek Reserve consists of a ". . . withdrawal created by Executive order for Indian purposes or for the use or occupancy of . . . Indians . . . ," within the meaning of the act of March 3, 1927, it necessarily follows that these lands are leasable for oil and gas development pursuant to the last cited statute.In light of the conclusions reached herein, I have advised the Commissioner of Indian Affairs that the lands within the Tyonek Reserve (Moquawkie Reservation) may be leased for oil and gas development under the act of March 3, 1927, if the Bureau, with the consent of the natives of the Village of Tyonek, finds it desirable to do so.
OF SECRETARY TO PROBATE ESTATE
OF DECEASED PEORIA INDIAN AFTER PASSAGE OF
PEORIA TERMINATION ACT OF 1956
May 31, 1963.
To: Regional Solicitor, Tulsa
Subject: Jurisdiction of the Secretary to probate the estate of Matilda Stand Beaver,
deceased Peoria Indian, who died on July 30, 1959
Your memorandum of May 13 forwarded a memorandum of May 3 from the Examiner of Inheritance at Shawnee which inquires whether, in view of the Peoria Termination Act of August 2, 1956, 70 Stat. 937, 25 U.S.C. § 821 et seq., he has authority to probate the subject estate.
A copy of Executive Order No. 2141 is attached hereto as Appendix A.
20 Administrative jurisdiction over the educational and medical services for the natives of Alaska was transferred from the Office of Education to the Office of Indian Affairs by Secretarial Order, pursuant to authority contained in the act of March 4, 1931 (46 Stat. 1552. 1568). See Order No. 494, March 14, 1931, and Order No. 497, March 24, 1931.
21 A complete copy of the letter of February 23, 1915, is attached hereto as Appendix B.
22 A complete copy of the letter of February 25, 1915, together with a copy of the draft of the proposed Executive order is attached hereto as Appendix C.
23 A complete copy of the letter of March 5, 1915, is attached hereto as Appendix D.