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Tuttle v. Jewell

United States District Court, District of Columbia

March 11, 2016

WILLIAM C. TUTTLE, Plaintiff,
v.
SALLY JEWELL, Secretary of the Interior, [1], Defendant.

OPINION

ROSEMARY M. COLLYER UNITED STATES DISTRICT JUDGE.

Plaintiff William Tuttle leased restricted Indian land in Riverside County, California, for a term of 50 years. The land is owned by the United States in trust for the Colorado River Indian Tribes. In 2010, the Bureau of Indian Affairs terminated the lease, finding that Mr. Tuttle had violated several of its provisions. The termination decision was affirmed by the Interior Board of Indian Appeals. The Bureau of Indian Affairs and the Interior Board of Indian Appeals are constituent agencies of the Department of Interior. Plaintiff sued the Secretary of the Interior, in her official capacity, complaining that the agency’s decision to terminate was arbitrary and capricious, in violation of both the Indian Long-Term Leasing Act and the terms of the Lease itself. Having reviewed the entire administrative record, the Court concludes that the agency acted reasonably on the record before it and within its authority. The Secretary’s motion for summary judgment will be granted.

I. FACTS

A. The Lease

Decades ago, in United States v. Brigham Young University, No. CV 72 3058-DWW (C.D. Cal. 1977), the United States brought suit to quiet title to the property at issue here. The district court found that the United States was the rightful owner of the property, in trust for the Colorado River Indian Tribes (Tribes), and that brothers William and Robert Tuttle wrongfully possessed a portion of the property “without any right, title, or interest therein.” AR 387-91.[2] To resolve the dispute, the parties entered into a Stipulated Judgment, see AR 363-66, and on March 31, 1977, the Tuttles entered into a 50-year Lease with the Tribes, see AR 239-69. The Lease, designated as Business Lease B-509-CR, provided that the Tribes leased to the Tuttles, as Lessees, 98.24 acres of restricted tribal land (Property). AR 240.

The Lease further provided that it was governed by “the Act of April 30, 1964 (78 Stat. 188), as supplemented by Part 131, Leasing and Permitting, of the Code of Federal Regulations, Title 25 -- Indians, and any amendments thereto relative to business leases on restricted Indian lands, all of which by reference are made a part hereof.” AR 239. The Act of April 30, 1964 (78 Stat. 188) declared certain lands, including the Property, to be held by the United States in trust for the Tribes. Thus, the Lease acknowledged the fact of beneficial ownership and expressly stated that the Lease was governed by federal regulations and subsequent amendments to the regulations.

Restricted Indian land, like the Property here, can be leased for residential or business purposes with the approval of the Secretary of the Interior, pursuant to the Indian Long-Term Leasing Act of 1955, 25 U.S.C. § 415. That Act provides:

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 . . . .

25 U.S.C. § 415. As recited in the Lease, the Secretary delegated that authority to the Commissioner of the Bureau of Indian Affairs (BIA); such authority was redelegated to the BIA Regional Director, and then redelegated again to the BIA Superintendent of the Colorado River Agency:

The within Lease is hereby approved pursuant to authority delegated from the Secretary of the Interior to the Commissioner of Indian Affairs in Order 230 DM 1 (10 BIAM 2), 39 F.R. 32166-32167 redelegated to the Phoenix Area Director by 10 BIAM 3, and further redelegated to the Superintendent of the Colorado River Agency by 10 BIAM 11.

AR 248.

The Lease gave the Tuttles the right to live on the Property and to use the Property for “commercial or community development and all uses necessary to community development” for a term expiring in 2027. AR 240. In exchange, the Tuttles were required to pay rent to the Tribes and to maintain public liability and fire insurance. After Robert Tuttle died, William Tuttle inherited his brother’s ownership interest.[3]

Mr. Tuttle was required to pay “Base Rent, ” annually and in advance, at a per-acre rate, starting from five dollars per acre for years one through five of the lease term ($491.20/year), increasing to ten dollars per acre for years six through twenty ($982.42/year), and increasing to fifteen dollars per acre for years twenty-one through fifty ($1, 473.60/year). AR 240-41. Section V of the Lease required:

All rents shall be paid without prior notice or demand. Past due rental shall bear interest at ten percent (10%) per annum from the due date until paid, but this provision shall not be construed to relieve the Lessee from his obligation to make timely rental payments.

AR 244.

Section VI of the Lease required the Lessee to carry liability insurance with prescribed minimum coverages, “written jointly to protect Lessee and Lessor” and that “[e]vidence of insurance shall be furnished to the Secretary” of the Department of the Interior. Id. Article 3 of the Lease Addendum required the Lessee to carry fire insurance jointly in the names of Lessee and Lessor and to provide proof of insurance to the Secretary. AR 250.[4]

At some point, Mr. Tuttle developed the Property for commercial purposes, see AR 39, and as a result on June 2, 1986, the parties executed a Modification to the Lease. See AR 74-76. The Modification required the payment of “Percentage Rent, ” in addition to Base Rent, in the amount of three percent (3%) of the gross receipts of all business conducted on the Property:

Modified to Provide: For the payment of percentage rental for business conducted on the leased premises, as follows:
. . . In addition to the foregoing rental, Lessee shall pay to Lessor not later than thirty (30) days after each anniversary date of the terms of this Lease, commencing March 31, 1986, THREE PERCENT (3%) of the gross receipts of all business conducted on the leased premises, including Lot Sales, Lot Rentals, and any other business or businesses operated on the leased premises, whether such business is conducted by Lessee, sublessee or assignee.

AR 75. The 1986 Modification required an annual accounting as follows:

The Lessee shall, not later than sixty (60) days after the ending date of each calendar year of the term of this Lease, . . . submit to the Lessor and the Secretary certified statements of gross receipts. With said statements, Lessee shall tender payment of the amount due under Rental provision IV (PERCENTAGE RENT) above. Said statements shall be prepared by an independent certified public accountant, duly licensed in either the State of Arizona, or the State of California, in conformity with standard accounting procedures, accompanied by an opinion rendered by the certified public accountant.

AR 75.

Article 17 of the Lease provided remedies in the event of default:

Should the Lessee default in any payment of monies as required by the terms of this lease, and if such default shall continue uncured for the period of thirty (30) days after written notice thereof by the Secretary to Lessee, or should Lessee breach any other covenant of this lease, and if the breach of such other covenant shall continue uncured for a period of sixty (60) ...

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