instructive. In Pueblo of Santa Ana, the Pueblo tribal governing body created a non-profit enterprise whose stated purpose was to provide for the health, education, and welfare of the Pueblo through the creation of business opportunities and utilization of tribal resources. To this end, the tribal enterprise was empowered to encumber its interests in specifically assigned or leased tribal lands, and to make contracts and sue and be sued in its organizational name. Any agreements made by the tribal enterprise were binding on the corporation alone, with the Pueblo tribe and its officers protected from any resulting liability.
The tribal enterprise executed a long-term contract with a non-Indian consultant for the development, management and operation of a greyhound racing track on tribal property leased to the enterprise. The Secretary of the Interior was not favorably disposed to the project. The tribal enterprise, in conjunction with the tribe, filed an action in federal court contesting whether § 81 governed the contract between the tribal enterprise and the non-Indian management consultant. The tribal enterprise contended that it was not a tribal entity for purposes of the contract with the non-Indian consultant. It argued that its contract with the non-Indian consultant was not subject to § 81 review. The district court rejected this argument, concluding that "Congress could not have mandated that the Secretary review all leases and contracts between Indian and non-Indian only to permit tribes to avoid review when they deem provident." 663 F. Supp. at 1306. Thus, the district court held that § 81 review and approval applied.
Sioux Manufacturing bears many of the same attributes of the tribal enterprise in Pueblo of Santa Ana. The stated purposes of Sioux Manufacturing include providing general and specific "revenue to the Tribe to fund programs regarding public health, safety, welfare and for other tribal purposes," Articles §§ 3.2, 3.11-.20; McKay Aff. § 3. The letter of intent between Health Care and Sioux Manufacturing itself reflects another of Sioux Manufacturing's enumerated governmental purposes by expressly stating that Health Care will aid Sioux Manufacturing in implementing hiring guidelines that accord with Sioux Manufacturing's "desire that the Business be operated in a manner which reduces unemployment among the people of the Fort Totten Tribe of the Sioux Nation." Letter of Intent § 3; see Articles § 3.1.
That the purposes of Sioux Manufacturing are closely tied to the advancement of core tribal governmental concerns is not surprising in light of the fact that Sioux Manufacturing is the "chief source of tribal income and employment." Devils Lake Sioux Tribe Resolution No. A05-89-191; McKay Aff.'s 7. The interrelationship of Sioux Manufacturing and the Tribe is further reflected in the organizational structure of Sioux Manufacturing. As in Pueblo of Santa Ana, the Tribal Council, the governing body of the Sioux Tribe, controls all appointments to the Sioux Manufacturing board of directors. McKay Aff. § 4. Moreover, half of the Sioux Manufacturing board must be comprised of the six sitting members of the Sioux Tribal Council, with the Tribal Council Chairman sitting as the chairman of the Sioux Manufacturing board. Id.
Finally, the letter of intent strongly suggests that plaintiffs themselves viewed the Tribe and Sioux Manufacturing as closely interrelated. According to plaintiffs, the parties to the letter of intent were Health Care, its officers, and Sioux Manufacturing. Yet the language of the letter of intent clearly suggests that plaintiffs regarded the Tribe as an active participant in the contemplated transactions. Various provisions of the letter of intent, including the allocation of expenses clause upon which Altheimer & Gray bases its claim, are directed to both the Tribe and Sioux Manufacturing, referring to them collectively as "the Sioux." Letter of intent § 13.
The letter of intent does refer to the Tribe individually, as distinct from Sioux Manufacturing. For instance, the provision containing the waiver of sovereign immunity, choice of law and forum selection clauses is directed individually to the Tribe, as well as to Sioux Manufacturing. Letter of intent § 9. Yet the letter of intent contains only signature blocks for representatives of Health Care and Sioux Manufacturing. Id. at p. 9. Thus, plaintiffs appear to have regarded the signature of Sioux Manufacturing as generally binding the Tribe itself to the terms of the letter of intent.
Sioux Manufacturing's enumerated purposes, organizational structure, and impact on the tribal community are fully consistent with its express designation as an arm of the tribal government. The plaintiffs, as drafters of the letter of intent, also appear to have regarded Sioux Manufacturing and the Tribe as essentially the same entity. Under these circumstances, the tribal law designation of Sioux Manufacturing as a corporation for the apparent purpose of protecting the Tribe's larger trust holdings should not be viewed as removing Sioux Manufacturing and the leased tribal land on which its facilities are located from the broad scope of § 81 review. The letter of intent relates to a business venture between an Indian and a non-Indian organization to be located on tribal land and thus required the approval of the Secretary of Interior. Absent that approval, the letter of intent is null and void under § 81. Sioux Manufacturing is entitled to judgment as a matter of law because plaintiffs' breach of contract claims are based upon an invalid contract.
Sioux Manufacturing's motion to stay proceedings under the tribal exhaustion rule is denied. Sioux Manufacturing's motion for summary judgment on the grounds that the letter of intent is null and void under 25 U.S.C. § 81 is granted. Judgment is entered for defendant Sioux Manufacturing Corporation and against plaintiff Altheimer & Gray (Case No. 91 C 3496), and for defendant Sioux Manufacturing Corporation and against plaintiffs Health Care Services, Ltd. and John Veleris (Case No. 91 C 3653).
Suzanne B. Conlon
United States District Judge
November 14, 1991