United States District Court, D. Nevada
C. JONES, UNITED STATES DISTRICT JUDGE.
case arises out of the lease of Indian land allotted to an
individual Indian and held in trust by the United States.
FACTS AND PROCEDURAL HISTORY
Leon Mark Kizer is a member of the Washoe Indian Tribe of
Nevada and California (“the Tribe”). (First Am.
Compl. ¶ 4, ECF No. 338). He owns a 62.76-acre parcel of
land in Douglas County, Nevada (“the Property”)
that the United States holds in trust for him pursuant to 25
U.S.C. § 348. (Id.). In October 1997, Plaintiff
entered into a 99-year lease (fifty years plus an automatic
renewal of forty-nine years) of the Property (“the
Master Lease”) with PTP, Inc. a commercial developer,
for $331, 000. (Id.; Master Lease § 9(1), ECF
No. 338-2)). The Master Lease incorporates the provisions of
25 U.S.C. § 415 as well as the rules promulgated under
25 C.F.R. Part 162, which concern the leasing of allotted
Indian-trust land such as the Property. (First Am.
Compl. ¶ 14). The Master Lease also contains a
purchase option that grants PTP or a homeowners'
association with a right at any point after ten years from
the date of the Master Lease to purchase the Property for a
certain sum. (Id. ¶ 22). The Master Lease was
approved by Robert Hunter, the Superintendent of the Bureau
of Indian Affairs (“BIA”) Western Nevada Agency
at the time. (Id. ¶ 28). The Property was
subdivided into 250 individual lots for single-family and
manufactured homes and PTP invested considerable money in
establishing infrastructure to support the developing
October 1997, Plaintiff and PTP executed three amendments to
the Master Lease. The first amendment adjusted the lease
term, requiring approval of the Superintendent rather than an
automatic renewal for the additional forty-nine years.
(See Mod. of Master Lease, Feb. 6, 1998, ECF No.
338-3, at 19). The second amendment completely replaced the
language governing the purchase option, requiring a one-time
payment of $1, 000 if a sublessee, rather than PTP or the
HOA, chose to exercise the option and requiring Plaintiff to
take all steps necessary to secure a fee patent pursuant to
federal regulations governing Indian-trust lands.
(See Mod. of Master Lease, Sept. 1, 2000, ECF No.
338-3, at 22). The third amendment leased additional acreage
from Plaintiff to PTP for $38, 000. (Mod. of Master Lease,
Jan. 8, 2002, ECF No. 338-3, at 26). Each of these amendments
was approved by the Superintendent serving at the time of the
particular amendment. (See First Am. Compl.
October 2006, the BIA sent a letter to Tribal Chairman Brian
Wallace in response to concerns the Tribe had expressed
regarding certain provisions of the Master Lease, namely the
length of the term and the purchase option. The BIA indicated
that both provisions appeared to violate federal law.
(Anspach Letter, Oct. 24, 2006, ECF No. 333-3, at 33). The
BIA explained that 25 U.S.C. § 415 allows trust land to
be leased by Indian owners, with approval from the Secretary
of the Interior or his designated representative, for
“business purposes.” However, the term of such
leases is not to exceed twenty-five years, with one
additional term of twenty-five years, for a maximum of fifty
years. (Id.). The BIA opined that the Master Lease
was therefore valid “for the maximum period authorized
by federal law, ” i.e., “the maximum (extended)
term [of] fifty years.” The sale of Indian-trust land
is also restricted by Congress, with the terms and conditions
of such regulations delegated to the BIA. Under relevant BIA
regulations, non-Indian purchasers may only purchase trust
land at the fair market value calculated at the time of sale
and with BIA approval. (Id.). Accordingly, the BIA
opined that the purchase option provision was “null and
years later, the BIA sent a letter to Pineview Estates
Homeowners Association (“PVHOA”), the association
for the community developed by PTP, indicating that the
Washoe Tribe had raised issues concerning the validity and
enforceability of the Master Lease and that the BIA had
engaged Plaintiff and its Western Regional Office
(“WRO”) in discussions regarding the lease term
and purchase option. (Brown Letter, Aug. 25, 2010, ECF No.
338-3, at 39). The letter explained that the WRO had prepared
a framework whereby the leased premises could be transferred
to fee status and that steps should be taken to correct the
uncertainties in the Master Lease. (Id.). It
requested that PVHOA confirm a meeting date with Plaintiff,
the WRO, and representatives of PTP to determine how best to
move forward. (Id.). It is unclear whether such a
meeting took place or what the parties resolved to do.
February 26, 2015, Plaintiff sued PTP, PVHOA, and the
individual sublessees of the 250 lots in this Court, seeking
declaratory judgment that the Master Lease and subsequent
subleases are void ab initio because the Master
Lease violates federal law governing trust lands, and asking
the Court to quiet title to the Property in his favor. (First
Am. Compl. 22-23). Defendants moved to dismiss for failure to
state a claim. PVHOA moved to join the BIA as a Defendant.
The Court dismissed with prejudice Plaintiff's claim that
the amended purchase option violates law and BIA regulations,
because the relevant lease provisions require compliance with
applicable laws and regulations. The Court otherwise denied
the motion to dismiss and granted the motion to join the BIA
as a Defendant.
filed the First Amended Complaint (“FAC”).
Plaintiff filed two motions to dismiss counterclaims and
moved to further amend. The BIA moved to dismiss for lack of
jurisdiction. Due to settlement discussions, the Court denied
those motions without prejudice. The parties later refiled
the motions despite having informed the Court of a settlement
in the meantime. The Court denied a motion to further delay
the deadline to file dismissal documents and ruled on the
refiled motions, dismissing the BIA under the APA's
statute of limitations, dismissing the counterclaims, with
leave to amend in part, and denying leave to amend the FAC as
parties have asked the Court to approve a Settlement
Agreement. Under Rule 41 the parties may agree to dismiss
with or without a settlement, without the Court's
approval. This is not a class action requiring a fairness
determination under Rule 23(e) to protect class members, and
the parties do not appear to request a determination of good
faith under Nevada Revised Statutes section 17.245 to the
potential detriment of non-party tortfeasors. Presumably, the
parties desire the Court's imprimatur for some other
purpose. But whatever the standards of fairness to be
applied, it is impossible for the Court to make such a
determination without knowing the amounts under the
“Confidential Payment Agreements, ” as that term
is used in the Settlement Agreement. The Court cannot find
those agreements attached nor the relevant amounts revealed
in the documents that have been filed. The parties may keep
those amounts confidential from the general public, but the
Court cannot determine fairness without that information. The
parties must submit the relevant information in camera if
they desire the Court's imprimatur, which, again, they do
not require under Rule 41.
HEREBY ORDERED that a ruling on the Motion to Approve
Settlement (ECF No. 448) is DEFERRED.
FURTHER ORDERED that the parties shall, within fourteen (14)
days, SUBMIT the ...