Native American Legal Update : Native American Law : Foster Pepper Law Firm : Northwest, Seattle, Spokane, Portland Lawyer & Attorney

(Central Connecticut State University)

“They're out there melting snow and keeping a look out for any water they can use.”

“Schools have been out of session for a week and will likely be unable to open their doors for at least another week.”

“These events are showing just how painfully inadequate our emergency response capabilities are.”

In the midst of one of the worst winter storms in memory, the members of the Cheyenne River Sioux Tribe are struggling for survival. Located roughly 200 miles northeast of Rapid City, South Dakota, the Cheyenne River Reservation is home to 10,000 residents who have been without electricity and potable water for days. Worse still, the storms have critically damaged what little energy infrastructure the Tribe did have, making restoration of power and heat even more difficult. Freezing rain and wind have snapped off wooden power poles carrying the transmission wires. “Because of one ice storm, we had over 3,000 downed electrical lines and mass power outages," said Tracey Fischer, chief executive and president of First Nations Oweesta Corporation, a national nonprofit working on economic development in Native communities.

The problems from a lack of power in winter are compounded by the lack of running water. Although much has been said regarding the federal stimulus package and its components designed to assist Tribes with needed infrastructure, the Cheyenne River Tribe has for years asked Congress for funds to restore its ancient water system, which is decades overdue for an upgrade. The total cost would be about $65 million, but so far no allocation of federal funds has been made for the project.
 

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The Mashantucket Pequot Tribal Nation has reached a tentative agreement with the United Auto Workers Union (UAW) for a labor contract and collective bargaining on behalf of 2500 of table-game dealers at Foxwoods Resort Casino in Connecticut. The agreement is unique both for its scale – Foxwoods is billed as the largest resort casino in the United States – and for the fact that it was negotiated in the context of Tribal law rather than federal labor law.

The agreement has several facets that differ significantly from typical union labor contracts. The Nation’s laws prohibit strikes by workers and lockouts by owners, so the contract does not contain a strike provision. In the event of a labor dispute that cannot be resolved through negotiation, the matter will be submitted to private arbitration for resolution. The contract provides an average 12 percent increase in dealers' wages over two years, changes the distribution of tips for dealers, includes programs to reduce repetitive stress injuries, and creates a 24-table smoke-free gaming pit for workers and customers who prefer a smoke-free environment.

For the UAW, the agreement is being heralded as a major victory in their union organizing efforts. "Working together, we proved casino workers can successfully exercise their right to have a union under tribal law," said UAW Region 9A Director Bob Madore. "Our settlement demonstrates what we have known all along: that tribal sovereignty and employee rights need not be inconsistent. We value the investment and jobs the Mashantucket Pequot Tribe has brought to Connecticut, and we look forward to promoting this exciting resort as a destination of choice for working families and union members across New England."

For the Mashantucket Pequot Nation, the agreement may provide a measure of financial predictability for its casino operations. The casino, by far the Nation’s largest revenue source, is behind in its debt repayments and has been working with creditors to restructure its financing. The agreement with the UAW sets wage and benefit rates for two years, and eliminates the potential for labor unrest or further legal battles with the union or the federal government.
 

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The Mashantucket Pequot Tribal Nation, owner of Foxwoods Resort Casino, has reached a new agreement in principle with its senior lenders to extend a debt forbearance agreement. The agreement is designed to provide more time to improve the casino’s cash flow and repayment ability as it works to restructure $2.3 billion of debt. The existing forbearance agreement would have expired January 20th; the new agreement extends the timeline to April 30, 2010.

The agreement in principle has been made with a majority of the Tribal nation’s lenders and will be finalized and executed shortly, according to the Tribe’s spokesperson.  The statement emphasized that the Nation's debt restructuring efforts are separate and distinct from operations at Foxwoods and will not have any impact on guests, employees, suppliers or business partners at Foxwoods or MGM Grand at Foxwoods.

“Foxwoods remains committed to providing its guests with its signature guest service, unparalleled gaming options, the very best in entertainment, and world-class services, dining and amenities,” according to the statement.
 

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Native Talk Radio has aired an hour-long program regarding legal issues affecting Native-owned small businesses, and the unique factors of conducting business in and around Tribal communities. Host Annie O’Brien interviewed Foster Pepper’s Native American Legal Services Chair Greg Guedel on start-up considerations, contracts, government procurement programs, legal disputes, and a range of other topics pertinent to Native business ventures.

Download the podcast HERE, on Foster Pepper’s iTunes page, or from the Native Talk Radio homepage.
 

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We are happy to report that Newstex, with Amazon Kindle, is extending this website into new and exciting technologies, such as e-book reading devices.  Native American Legal Update is now available on the Kindle store, and you can subscribe to this site on the Kindle and take it wherever you go.

How do Blogs work on the Kindle? Unlike reading blogs on your PC, Kindle blogs are downloaded onto the device so you can read them even when you're not wirelessly connected.  Unlike RSS readers which often only provide headlines, blogs on Kindle also give you full text content and images.

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Bill Lomax, President of the Native American Finance Officers Association, has issued the following statement regarding the recent federal court decision in the Lac du Flambeau bond repayment case.

Dear Tribal Leaders and Finance Officers,

I am writing to inform you about a case concerning a Tribal bond issuance that has recently been decided and, in theory, has potential implications for any Tribe that currently has financing or may be seeking financing for a Tribal project.

The Decision:
On January 6, 2010, the United States District Court for the Western District of Wisconsin (the “Court”) issued an order in the case of Wells Fargo Bank, National Association, as Trustee v. Lake of the Torches Economic Development Corporation. This order invalidates the trust indenture for $46,615,000 of bonds issued by a tribal corporation of the Lac du Flambeau Band of Lake Superior Chippewa Indians (“LDF”) for the refinancing of the Lake of Torches Casino and other LDF debt. In this order, the Court ruled that the indenture amounted to a management contract and is void due to failure to seek the required National Indian Gaming Commission approval.

Some have suggested that this case may have dire consequences for all Tribes seeking financing. We have consulted with some of the top attorneys in Indian country and believe that this case is “sui generis” or unique in its facts and are hopeful that it will not have widespread application to the Native American community.

The Risk of Existing Tribal Trust Indentures or Financing Agreements Being Invalidated as Management Contracts:

The Indian Gaming Regulatory Act prohibits Tribes from entering into management agreements for casinos without review and prior approval by the Chairman of the NIGC. A financing arrangement risks being invalidated in its entirety if it includes provisions that could be construed as providing the lender with rights of management. The Court concluded that the bond indenture in the LDF financing does not comply with NIGC guidelines related to impermissible elements of management control.

Some have suggested that this case could lead to other Tribal trust indentures and financing agreements being invalidated as management contracts. We at NAFOA do not think this is the case. The trust indenture in the LDF case includes several critical provisions not commonly found in Tribal gaming financings.

One highly experienced Indian country attorney we consulted has suggested that “the trust indenture is like none [he has] ever seen and clearly does not conform with the standards set by the NIGC.” For example, according to the pleadings in this case, the indenture included provisions: 1) requiring bondholder approval of changes to specified senior management of LDF’s casino operation; 2) permitting bondholders to direct LDF to hire new management in the event of default by LDF; 3) upon certain financial covenant violations, requiring LDF to retain an independent gaming management consultant and thereafter use “best efforts” to implement the recommendations of such consultant; and 4) permitting the appointment of a receiver over casino revenues and casino equipment in the event of a default by LDF. The Court concluded that these provisions, among others, overstep NIGC rules concerning a lender’s ability to assert management powers within a financing agreement.

We believe that few trust indentures or other financing agreements in Indian country are likely to have provisions similar to the ones mentioned above and we think this will limit the applicability of this case to other Tribes. Thus, it is our hope that Tribes and their lenders need not be concerned about the validity of their financing agreements.

We do however have some concerns about the broad language used by the Court in this case. In addition to the provisions noted above, the Court included references to some commonly used provisions often found in trust indentures and loan agreements. We are hopeful that the National Indian Gaming Commission will provide some guidance so as to avoid confusion about which of the provisions, taken together or separately, would constitute a management contract if included in a trust indenture or loan agreement.
 

For detailed information on Tribal bond issues and the impact of current legal decisions, contact Jeff Nave, Marc Greenough, or Bill Tonkin.

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On February 18-20, 2010 the University of South Dakota School of Law will host the National Native American Law Students Association (NALSA) Moot Court Competition, in conjunction with a scholarly symposium co-sponsored by the South Dakota Law Review and the USD NALSA chapter and with the biennial Dillon Lecture on Indian law. The symposium represents the first time the annual Law Review Symposium has been combined with the NALSA Indian Law Symposium.

Student teams from across the country will participate in the National NALSA Moot Court Competition. Teams already registered include the University of Arizona, Arizona State University, University of California-Berkeley, University of Colorado, Columbia University, Gonzaga University, University of Hawaii, University of Iowa, Kansas University, Lewis & Clark University, University of Michigan, Michigan State University, University of Minnesota, University of New Mexico, University of North Dakota, University of Oklahoma, Stanford University, University of Tulsa, UCLA, University of Wisconsin, and William Mitchell College of Law.

The appellate problem for the competition has been drafted by USD Professor Frank Pommersheim, an internationally recognized Indian law expert who sits on several tribal supreme courts. It will involve issues of free exercise of religion in Indian Country. Judges for the Moot Court Competition will include members of the tribal, federal, and state judiciary and lawyers with expertise in Indian law. The Dillon Lecture will be presented by Professor Matthew Fletcher (Grand Traverse Band of Ottawa and Chippewa Indians), Director of the Indigenous Law & Policy Center of the Michigan State University College of Law. Professor Fletcher is a co-author of the leading national casebook on federal Indian law and a judge and consultant to tribal supreme courts.

Sponsorship opportunities are available and the funds will be used for the expenses of the National NALSA Moot Court Competition and NALSA Indian Law/South Dakota Law Review Symposium, including the original Donald Montileaux artwork and permission to use it for the Moot Court Competition materials; a graduate assistantship; additional staff support; honoraria for the Dillon Lecturer and Symposium panelists; travel expenses for Symposium speakers and Moot Court judges; meals for judges and competitors, including the Jackie Bird family program for the Friday night dinner and a Saturday night awards banquet; awards and prizes; and miscellaneous supplies and facilities cleaning costs. Any donations in excess of the expenses will be added to the NALSA scholarship endowment, which provides scholarship assistance to tribally enrolled students who attend the University of South Dakota School of Law.
 

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When the Lac du Flambeau Tribe fell behind on repaying $50 million in bonds that financed its casino in northern Wisconsin, bond issuer Wells Fargo asked a federal judge to appoint a receiver to run the casino and increase payments on the debt service. As reported on Turtletalk, the judge refused based on principles of Tribal sovereignty, leaving the bank and bondholders with few legal options other than negotiating with the Tribe.

In 2008, the Lac du Flambeau issued bonds to provide capital for the construction and operation of its casino. The bonds carried interest at 12% and required a monthly payment from the Tribe of approximately $800,000. With the economy plunging and over $46 million still to be repaid on the bonds, the Tribe stopped setting aside money to service the debt. Wells Fargo then filed suit in federal court to appoint a receiver to run the casino, in accordance with the terms of the bond agreement the Tribe executed with the bank.

The Tribe argued that the receivership clause in the bond agreement was so broad that it was actually a management agreement that would require approval by the National Indian Gaming Commission. The Commission had not been involved in negotiating the deal and did not provide any approval, therefore the Tribe argued that the agreement was void. The judge’s refusal to appoint a receiver essentially validated that position, leaving Wells Fargo with no direct ability to take control over the casino’s operations. “The entire agreement is a void issue,” said Tribal administrator William Beson.

The judge’s decision means the Tribe is not legally responsible to pay back the money, said Monica Riederer, the Tribe’s attorney. However, she said that does not mean the Tribe will completely renege on the debt. “They will do whatever they’re legally required to do,” Riederer said. Meanwhile, investors and Tribes across the country will no doubt closely monitor the impact this situation has on the ability of Tribal entities to obtain future bond financing. Having no ability to enforce collection of a bond debt is “a nightmare for investors,” said Megan Neuburger, an analyst who follows the Indian gaming industry for Fitch Ratings. “It’s sort of an investor’s worst-case fear.”

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A controversial wind farm project to be located off Cape Cod, Massachusetts has been stalled after local Tribes convinced the National Park Service to declare Nantucket Sound eligible for listing in the National Register of Historic Places. The Mashpee Wampanoag and the Aquinnah Wampanoag applied for the listing last fall, stating that the 130 proposed wind turbines would interfere with their spiritual ritual of greeting the sunrise which requires unobstructed views across the sound, and disturb ancestral burial grounds. The project has been in development since 2001 and is supported by state authorities.

The decision by the National Park Service does not terminate the project, but it requires more negotiations and potential changes to the project and/or its location. Interior Secretary Ken Salazar set a deadline of March 1, 2010 for the Tribes and the project’s developer, Energy Management Inc., to reach a compromise. Cedric Cromwell, chairman of the Mashpee Wampanoag tribe, said the decision confirmed “what the Wampanoag people have known for thousands of years: that Nantucket Sound has significant archaeological, historic and cultural values and is sacred to our people.”

Nantucket Sound, which encompasses more than 500 square miles, is by far the largest body of water ever found eligible for listing on the national historic register. “The decision is without precedent in terms of implicating many square miles of what is, legally speaking, the high seas,” said Ian A. Bowles, the Massachusetts Secretary of Energy and Environmental Affairs.

In seeking the historical designation, the Wampanoag tribes — whose name translates to “people of the first light” — said their view to the east across Nantucket Sound was integral to their identity and cultural traditions. “Here is where we still arrive to greet the new day, watch for celestial observations in the night sky and follow the migration of the sun and stars in change with the season,” wrote Bettina Washington, historic preservation officer for the Aquinnah Wampanoag, in a letter to federal officials. The Tribes also argued that the wind turbines, which would be 440 feet tall, could destroy long-submerged tribal artifacts from thousands of years ago, when the sound was dry land. Such artifacts could “yield further confirmation of our cultural histories,” according to Ms. Washington.
 

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The once-per-decade United States Census kicks off in April 2010, and the manager for the U.S. Census Bureau’s American Indian/Alaska Native Program is leading a focused effort to obtain an accurate count of the Native American and Alaska Native populations within the United States.

Program Director Curtis Zunigha, a member of the Delaware Tribe of Indians in Oklahoma, is already undertaking population counts in isolated sectors of Alaska, even though Census Day is April 1. “We’re actually beginning our remote Alaska operation in January. Many of the Alaska Natives engage in subsistence hunting and fishing in the spring in camps that our enumerators wouldn’t be able to find and they’re not going to get anything in the mail, so we’re going in early to the Native village of Noorvik. They’re a partner and the Tribal leadership has agreed to host the very first enumeration.”

Partnership is the key to a successful census, Zunigha said.

“After the first enumeration in Noorvik, we’ll be going village to village all across those remote areas all through the State of Alaska and getting these people counted early. And all the work that’s gone into building relationships and partnerships with the Native tribes and villages, all the outreach that’s gone into it to make people aware of the census, hiring people from the villages to be enumerators – all of that is a model of what we’re doing all across Indian country. If it happens the way we’ve planned in Noorvik, I expect a very positive response from Indian country over all.”

Data from the census is a primary element in determining the distribution of more than $400 billion in federal funding nationwide. For Native communities, that means funding for Indian Child Welfare, Children and Family Education, employment assistance, food distribution, Temporary Assistance for Needy Families, housing, community development block grants, and numerous other programs. The data will affect policy and resource allocations for human service programs for Native communities throughout the country.

According to Zunigha, one of the most challenging aspects of census taking in Native communities is establishing trust.

“The whole idea of mistrust of the federal government – that’s no secret in Indian country – but I think the best thing to overcome that is to emphasis the partnership aspect of the way we’re doing the census in Indian country.”

“Tribal leaders know true tribal sovereignty and self-determination means you don’t let somebody else come in and figure out this data for us. We do it ourselves and we can do our own planning and development for business and communities. I fully expect tribal demographers and data analysts to be using the reports that will be generated. You can bet the people like Harrahs and Bally's and other casino companies are using census data to do long range planning for site locations and businesses. So a good and successful census for Indian country only helps support tribal sovereignty and self-determination.”

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