Penobscot Indian v. Palmer
Case Date: 05/05/1997
Court: United States Court of Appeals
Docket No: 96-1670
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United States Court of Appeals For the First Circuit ____________________ No. 96-1670 PENOBSCOT INDIAN NATION, Plaintiff, Appellee, v. KEY BANK OF MAINE, ET AL., Defendants, Appellees, ________________ JOHN PALMER, PALMER MANAGEMENT CORPORATION, AND PALMER DEVELOPMENT CORPORATION, Appellants. _____________________ No. 96-1671 PENOBSCOT INDIAN NATION, Plaintiff, Appellant, v. KEY BANK OF MAINE, ET AL., Defendants, Appellees. _________________ No. 96-1672 PENOBSCOT INDIAN NATION, Plaintiff, Appellee, v. KEY BANK OF MAINE, ET AL., Defendants, Appellees. _____________________ JOHN SCHIAVI, Appellant. _____________________ No. 96-1736 PENOBSCOT INDIAN NATION, Plaintiff, Appellee, v. KEY BANK OF MAINE, Defendant, Appellant. ____________________ APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE [Hon. Morton A. Brody, U.S. District Judge] ____________________ Before Selya and Stahl, Circuit Judges, and Woodlock,* District Judge. ____________________ ERRATA SHEET Please make the following changes to the opinion issued on May 5, 1997: On page 6, line 9, "May 1988" should read "May 1989" On page 6, the first full paragraph, lines 9-15, should be moved in its entirety to become the end of the paragraph that begins on line 16 (beginning "In April 1989"). Specifically, it should be placed after the sentence that reads "As part of the liquidation plan, PIN and Palmer then assigned Schiavi Homes' assets to Key Bank." It should not form a new paragraph, but, instead, should form the continuation of the paragraph that currently is at page 6, lines 16-19. In addition, footnote marker 2 (currently located after "Key Bank." on page 6, line 19), should be moved to follow the sentence that reads "In May 1989, Key Bank notified PIN that it intended to exercise the purchase option contained in the Lease-Option Agreement." On page 17, line 15, replace brackets around [hereinafter "Indian fee lands"] with parentheses No. 96-1670 PENOBSCOT INDIAN NATION, Plaintiff, Appellee, v. KEY BANK OF MAINE, ET AL., Defendants, Appellees, ________________ JOHN PALMER, PALMER MANAGEMENT CORPORATION, AND PALMER DEVELOPMENT CORPORATION, Appellants. _____________________ No. 96-1671 PENOBSCOT INDIAN NATION, Plaintiff, Appellant, v. KEY BANK OF MAINE, ET AL., Defendants, Appellees. _________________ No. 96-1672 PENOBSCOT INDIAN NATION, Plaintiff, Appellee, v. KEY BANK OF MAINE, ET AL., Defendants, Appellees. _____________________ JOHN SCHIAVI, Appellant. _____________________ No. 96-1736 PENOBSCOT INDIAN NATION, Plaintiff, Appellee, v. KEY BANK OF MAINE, Defendant, Appellant. ____________________ APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE [Hon. Morton A. Brody, U.S. District Judge] ____________________ Before Selya and Stahl, Circuit Judges, and Woodlock,* District Judge. ____________________ Peter J. Haley, with whom Stephen F. Gordon, Gordon & Wise, Ronald C. Caron, and Caron & Sullivan,were on brief for appellant Penobscot Indian Nation and third-party defendants-appellees, Gerald Pardilla and Reuben Phillips. Catherine R. Connors, with whom Debra Brown and Pierce Atwood, were on brief for appellee and cross-appellant Key Bank of Maine. Justin W. Leary, with whom Leonard I. Sharon and Sharon, Leary & Detroy, were on brief for appellee Michael Marcello. Stephen B. Wade with whom Skelton, Taintor & Abbott was on brief for defendants- appellees and cross-appellants, John Palmer, Palmer Management Corp., and Palmer Development Corp. Jeffrey A. Thaler with whom Berman & Simmons, P.A. was on brief for defendant-appellee and cross-appellant, John Schiavi. Melissa A. Hewey with whom Drummond Woodsum & MacMahon was on brief for appellees Consumers Water Company, Burlington Homes of New England, Inc., and SHC Corporation. ____________________ May 5, 1997 ____________________ _____________________ * Of the District of Massachusetts, sitting by designation. STAHL, Circuit Judge. Appellant, a federally- recognized Indian tribe, appeals the district court's denial of its motion for declaratory judgment, pursuant to 25 U.S.C. S 81, seeking to invalidate several agreements concerning the purchase and operation of a mobile home business. Appellees cross appeal the district court's summary judgment ruling in favor of Appellant on several defamation counterclaims as well as a breach of contract and emotional distress counterclaim stemming from litigation involving the failure of this same mobile home business. Background Although the district court provided a cogent summary of the facts and procedural history in its memorandum opinion below, see Penobscot Indian Nation v. Key Bank, 906 F. Supp. 13, 16-17 (D. Me. 1995), the complexity of this case compels us to sketch the necessary background information. In 1983, Consumers Water Company ("CWC") acquired Schiavi Homes Corporation ("SHC"), a profitable Maine mobile home sales business, from John Schiavi ("Schiavi"). Under CWC's ownership, SHC continued to operate successfully. In 1985, John Palmer ("Palmer") became SHC's new president. In August 1985, Palmer and his wife, Mary Anna, also founded Palmer Development Corporation ("Palmer Development"). Like SHC, Palmer Development engaged in the sale of mobile homes throughout Maine. -3- In 1985, the Penobscot Indian Nation ("PIN") hired Tribal Assets Management ("TAM") to locate, evaluate, and recommend potential investment opportunities. Late in 1986, TAM identified SHC as a potential PIN investment and conducted a detailed analysis of SHC's viability as a successful business venture. TAM alerted PIN that SHC constituted a good investment possibility, but cautioned PIN that the success of the venture would depend largely on PIN's willingness to invest in new mobile home sites on which the mobile homes it sold to retail customers could be located. PIN expressed its willingness to use its lands and invest its resources for such purposes. On December 31, 1986, PIN and Palmer Management Corporation ("Palmer Management"), a corporation formed for the purpose of purchasing SHC, executed a Partnership Agreement creating Schiavi Homes ("Schiavi Homes" or "the Partnership"), a Maine limited partnership. Pursuant to the Partnership Agreement, PIN became the sole limited partner and Palmer Management the sole general partner.1 PIN acquired a ninety percent interest in Schiavi Homes. Palmer Management received only a ten percent share but secured full control over all management decisions. 1. Prior to the purchase, TAM informed PIN that Palmer had been the president of SHC. PIN also knew both that Palmer and his wife owned Palmer Development and that Palmer Development engaged in business activities similar to those of SHC. -4- 4 Also on December 31, 1986, the Partnership executed a Purchase and Sale Agreement with SHC, which provided for the Partnership's purchase of SHC's assets and business for approximately $5 million. Key Bank of Maine ("Key Bank") financed the purchase on the condition that Palmer retain full management control over Schiavi Homes. Key Bank also insisted that PIN post a $1 million letter of credit to secure its loan and agree to restrictions on the withdrawal of funds from Schiavi Homes. As part of its purchase of SHC, the Partnership secured three non-competition agreements. CWC entered into a non-competition agreement with Schiavi Homes and assigned to the Partnership its interest in an existing non-competition agreement with Schiavi, which it obtained at the time it originally acquired the business. Palmer signed a similar agreement with the Partnership. Schiavi Homes fared poorly from its inception. Although sales of mobile homes in Maine reached an all time high during this time, by the end of 1987 Schiavi Homes' market share had declined from eighteen to eight percent. Over the course of its three year existence, PIN made several investments in Schiavi Homes in an attempt to buoy its business fortunes. Most significantly, in October 1987, PIN signed a Lease-Option Agreement with Schiavi Homes leasing for the nominal fee of $1 per year a twenty-four acre tract of real -5- 5 property (the "Holden Lot") that PIN purchased during this same onth. The Lease-Option Agreement afforded the Partnership the option m to purchase the Holden Lot for $100,000. PIN subsequently invested approximately $135,000 to develop the Holden Lot for purposes of the Schiavi Homes business. In December 1988, with Schiavi Homes unable to make its regular monthly loan payment of principal and interest to Key Bank, the Partnership pledged the Lease-Option Agreement to Key Bank. In April 1989, acting on the advice of its counsel, Bernstein, Shur, Sawyer & Nelson ("Bernstein"), PIN decided to liquidate Schiavi Homes. As part of the liquidation plan, PIN and Palmer then assigned Schiavi Homes' assets to Key Bank. In May 1989, Key Bank notified PIN that it intended to exercise the purchase option contained in the Lease-Option Agreement.2 At this time, Key Bank also initiated three foreclosure actions with respect to real property that the Partnership owned and encumbered with mortgage deeds given to Key Bank in conjunction with the initial financing of SHC's purchase. On September 29, 1989, PIN entered into two comprehensive Settlement Agreements with Schiavi, SHC, Schiavi 2. The Area Director of the Eastern Area Office of the Bureau of Indian Affairs, George Big Eagle, approved the transfer of the Holden Lot to Key Bank pursuant to Title IV of the Indian Financing Act of 1974, 25 U.S.C. SS 1451-1543, which forbids, without written consent, any transfer or disposal of a project being improved with federal grant funds within three years of the use of such funds. -6- 6 Homes, Palmer, Palmer Management, Key Bank, Burlington Homes of New England3 ("Burlington Homes"), and CWC (collectively "Appellees"). PIN, Schiavi Homes, Schiavi, Palmer, Palmer Management, and Key Bank executed the first Settlement Agreement ("first Settlement Agreement"); PIN, Schiavi Homes, SHC, Palmer, Palmer Management, Key Bank, CWC, and Burlington Homes executed the second Settlement Agreement ("second Settlement Agreement"). The two agreements contained identical language that served broadly to "release, remise and forever discharge" all claims involving the signatories. Subsequent to the signing of the two Settlement Agreements, legal proceedings deriving from the operation of Schiavi Homes ceased. The ensuing period of calm ended on September 14, 1994, when PIN filed the lawsuit underlying this appeal. PIN's suit stemmed from an investigation of Key Bank's activities relating to Schiavi Homes that Penobscot County Deputy Sheriff Carl Andrews conducted between approximately 1993 and 1994.4 3. Burlington Homes of New England, a subsidiary of CWC, manufactured mobile homes. SHC, Schiavi Homes, and Palmer Development all sold homes that Burlington manufactured. 4. The record does not reveal the exact duration, scope, or findings of the investigation. Andrews testified that he provided the Maine Attorney General's office with a three page report summarizing his findings, but he did not divulge the report's contents to PIN. No party submitted this report into evidence; in fact, it is not apparent from the record that the results of the investigation were set out in writing or were made known to the public. It is clear, however, that no criminal proceedings of any kind resulted from Andrews' investigation. -7- 7 PIN alleges that Andrews' investigation revealed substantial improprieties on the part of PIN's business associates in the Schiavi Homes venture. Also on September 14, 1994, PIN held two press conferences, one in Bangor, Maine, and one in Portland, Maine, to announce the filing of its lawsuit in federal district court. Michael Marcello, PIN's media relations consultant, prepared the statements that PIN Governor Reuben Phillips and PIN Lieutenant Governor Gerald Pardilla read at the two press conferences. Marcello also distributed the text of the statements to members of the media. PIN's complaint contained nine counts and named nine defendants. Most importantly for our purposes, the complaint alleged that the two Settlement Agreements signed by PIN and the Appellees were void because they did not receive the Secretary of the Interior's approval pursuant to 25 U.S.C. S 81.5 SHC filed a motion to dismiss PIN's claims. Key Bank, Schiavi, Palmer, Palmer Development, Palmer Management, CWC, and Burlington Homes moved for summary judgment. 5. PIN's complaint also alleged the following: (1) breach of duty of good faith and fair dealing (against Key Bank, CWC, SHC, Burlington, Schiavi, Palmer, and Palmer Management); (2) breach of contract (against Schiavi); (3) misrepresentation (against CWC, SHC, Burlington, Schiavi, and Palmer); (4) fraud (against Bernstein); (5) negligence (against Bernstein); (6) breach of fiduciary duty (against Key Bank, Palmer, and Palmer Management); and (7) RICO violations (against Key Bank, CWC, Burlington, Bernstein, Schiavi, Palmer, Palmer Management, and Palmer Development). -8- 8 Palmer, Palmer Development, Palmer Management (the "Palmer Defendants"), Key Bank, and Schiavi filed counterclaims against PIN for defamation and punitive damages based on the alleged defamation stemming from the September 14, 1994 press conferences. Key Bank filed counterclaims for defamation against Marcello, Phillips, and Pardilla. Also deriving from these press conferences, Palmer asserted counterclaims against PIN for intentional and negligent infliction of emotional distress. Both Palmer and Palmer Management filed counterclaims against PIN for breach of contract, alleging that PIN's suit violated the release contained in the Settlement Agreements. Only Marcello responded with a motion for summary judgment. The district court (Brody, J.) concluded that 25 U.S.C. S 81 did not apply to the Settlement Agreements. Determining that the Settlement Agreements constituted valid releases, the district court granted summary judgment for the defendants with respect to all of PIN's claims. See Penobscot Indian Nation, 906 F. Supp. at 20-21. Treating SHC's motion to dismiss as a motion for summary judgment, the district court separately granted summary judgment for SHC based on the binding nature of the Settlement Agreements. See id. at 21-22. The district court also ruled that the statute of limitations barred PIN's RICO claims. See id. at 21. -9- 9 The district court then considered the counterclaims. Finding that Key Bank did not allege facts demonstrating even ence on Marcello's part, the district court granted Marcello's motion for summary judgment on Key Bank's defamation terclaim. neglig coun See id. at 23. Despite the fact that only Marcello filed a motion for summary judgment, the district court proceeded to grant summary judgment sua sponte for PIN and the remaining cross-Appellees with respect to the defamation claims.6 See id. Judge Brody also awarded summary judgment sua sponte for PIN and the other cross-Appellees on the punitive damage counterclaims. See id. at 24. Finally, the district court granted PIN's motion for summary judgment with respect to the emotional distress and breach of contract claims. See Penobscot Indian Nation v. Key Bank, Civ. No. 94- 0212-B (D. Me. Dec. 13, 1995). In the spring of 1996, PIN's malpractice claims against Bernstein went to trial before a jury. The jury returned a verdict in favor of Bernstein. The district court then entered a final judgment resolving all claims on May 7, 1996. These appeals ensued.7 6. The Palmer Defendants immediately filed a motion for reconsideration, which the district court subsequently denied See Penobscot Indian Nation v. Key Bank, Civ. No. 94-0212-B, 1 (D. Me. Dec. 13, 1995). 7. PIN did not appeal the adverse judgment respecting either its RICO claims or its other claims against Bernstein. Cross-Appellants did not appeal the district court's sua sponte ruling as to punitive damages. -10- 10 Standard of Review The district court must grant summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). "On appeal from the entry of summary judgment we review the district court's decision de novo, construing the record in the light most . . . [favorable] to the non-movant and resolving all reasonable inferences in that party's favor." Hachikian v. FDIC, 96 F.3d 502, 504 (1st Cir. 1996). We are not "wedded to the district court's reasoning. Rather, '[w]e are free, on appeal, to affirm a judgment on any independently sufficient ground.'" Garside v. Osco Drugs, Inc., 895 F.2d 46, 49 (1st Cir. 1990) (quoting Polyplastics, Inc. v. Transconex, Inc., 827 F.2d 859, 860-61 (1st Cir. 1987)). Discussion This appeal raises several issues which we address in turn. We begin by resolving an issue of first impression in this Circuit: whether 25 U.S.C. S 81 applies to agreements relative to lands that an Indian tribe purchases in fee simple for investment purposes. We then determine whether PIN's filing of this action in 1994 constituted an actionable breach of contract. Subsequently, we decide whether the district -11- 11 court erred in concluding that the statements Marcello prepared and individual PIN officials announced to the press in September 1994 did not amount to defamation. Thereafter, we touch upon the issue of whether PIN's conduct at the press conferences constituted either intentional or negligent infliction of emotional distress. Finally, we evaluate whether the district court has jurisdiction to hear the remaining state law claims at issue in this case. A. Section 81 PIN sought a declaratory judgment from the district court that the agreements it executed with the Appellees necessitated approval from the Secretary of the Interior pursuant to 25 U.S.C. S 81. Section 81 states in pertinent part: No agreement shall be made by any person with any tribe of Indians . . . for the payment or delivery of any money or other thing of value, in present or in prospective, or for the granting or procuring any privilege to him, or any other person in consideration of services for said Indians relative to their lands . . . unless such agreement be executed and approved as follows: . . . . It shall bear the approval of the Secretary of the Interior and the Commissioner of Indian Lands indorsed upon it. . . . . All contracts or agreements made in violation of this section shall be null and void . . . . -12- 12 Congress adopted S 81, originally Revised Statute S 2103, in 1872. To this day, Congress has not repealed S 81 and the few amendments to its text have been only technical. See Altheimer & Gray v. Sioux Mfg. Corp., 983 F.2d 803, 805 (7th Cir. 1993).8 Section 81 dictates that any agreement within its purview that is not approved by the Secretary of the Interior ("the Secretary") is void ab initio. PIN insists that S 81 applies not only to the two Settlement Agreements, but also to the agreements pertaining to the creation and operation of Schiavi Homes, specifically the Asset Purchase Agreement, the Partnership Agreement, and the Lease-Option Agreement. PIN therefore reasons that the Settlement Agreements, the Purchase and Sale Agreement, and the Lease-Option Agreement are not binding. PIN also contends that the Secretary improperly determined that S 81 did not apply to the Partnership Agreement. Significantly, if the Settlement Agreements are not valid because they never received the Secretary's approval pursuant to S 81, PIN may pursue its remaining claims against the Appellees. If, on the other hand, the Settlement Agreements do not fall within the parameters of S 81, PIN 8. In addition to technical amendments to S 81, Congress passed the Indian Gaming Regulatory Act, 25 U.S.C. SS 2701- 2721, which provides in part: "The authority of the Secretary under section 81 of this title, relating to management contracts regulated pursuant to this chapter, is hereby transferred to the [National Indian Gaming] Commission." 25 U.S.C. S 2711(h). -13- 13 concedes that its remaining non-S 81 claims fail due to the binding nature of the Settlement Agreements. We therefore begin our analysis by evaluating the applicability of S 81 to the Settlement Agreements. 1. Settlement Agreements Without regard to S 81, the two Settlement Agreements constituted valid releases. Both Settlement Agreements provided that the parties "release, remise and forever discharge each other . . . from all suits . . . at law or in equity . . . which directly or indirectly relate[] to . . . any . . . transactions . . . among each other." Whether or not S 81 pertains to and thus voids the Settlement Agreements depends upon whether either or both constitute an agreement with an Indian tribe for services relative to Indian lands. See 25 U.S.C. S 81. a. Agreement with an Indian Tribe The Appellees contend that the Partnership, rather than PIN in its individual capacity, represents the applicable entity in this case. This argument is unavailing. PIN's Lieutenant Governor signed both Settlement Agreements as PIN's personal representative, not as the Partnership's Limited Partner. John Palmer, the Partnership's General Partner, signed on behalf of Schiavi Homes. Moreover, even if Schiavi Homes, not PIN in its individual capacity, signed the agreements, the district court's observation that "[c]ourts -14- 14 look beyond the mere formality of corporate structure in construing the identity of parties with regard to S 81," Penobscot, 906 F. Supp. at 19, necessitates no elaboration on our part. Se e Altheimer & Gray, 983 F.2d at 809-10; Pueblo of Santa Ana v. Hodel, 663 F. Supp. 1300, 1306 (D.D.C. 1987). b. Services The district court ruled that "the Settlement Agreements themselves do not constitute contracts for services. The Settlement Agreements rather pertain to the release of legal claims . . . ." Penobscot, 906 F. Supp. at 20. This conclusion aptly describes the first Settlement Agreement, which made no reference to any service to be performed by any party to the Agreement for any other party to the Agreement. The first Settlement Agreement, consequently, did not involve services. The second Settlement Agreement contains a provision obligating Key Bank to "jointly [with PIN] seek a purchaser for the Holden Lot9 . . . at a price to be mutually agreed upon." Because the Supreme Court has instructed that federal statutes concerning Indian tribes must be construed "liberally in favor of the Indians," Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766 (1985), we assume for purposes of this opinion 9. At oral argument, PIN informed us that the Holden Lot constitutes the sole tract of land at issue in this case, and, thus, the only piece of Indian land to which S 81 could apply. -15- 15 that this provision in the second Settlement Agreement entailed a "service" within the meaning of S 81, see Green v. Menominee Tribe, 233 U.S. 558, 569 (1914) (finding S 81 applicable to sales contract); see also Wisconsin Winnebago Bus. Comm. v. Koberstein , 762 F.2d 613, 619 (7th Cir. 1985) (applying S 81 to management contract); United States ex rel. Citizen Band Potawatomi Indian Tribe v. Enterprise Management Consultants, Inc. , 734 F. Supp. 455, 457 (W.D. Okla. 1990) (same), aff'd in part and rev'd in part, 968 F.2d 22 (10th Cir. 1992); but see United States ex rel. Harlan v. Bacon, 21 F.3d 209, 211 (8th Cir. 1994) (determining that lease agreement which provided that forty percent of produce deriving from use of leased land be delivered to tribe did not entail service within meaning of S 81). c. Relative to Indian lands The final prong of the S 81 analysis, whether the Settlement Agreements were "relative to [Indian] lands," presents a more difficult question. The first Settlement Agreement is not relative to Indian lands because it neither pertained nor referred to any land whatsoever. The second Settlement Agreement, however, both involved and referred to land that an Indian tribe owned. Specifically, the second Settlement Agreement provided for the disposition of the Holden Lot. At first glance, S 81 may appear to apply to the Holden Lot because PIN, an Indian tribe, owned this parcel of land. -16- 16 We believe, however, that the meaning of S 81's language, the intentions of its drafters, the Interior Secretary' of S 81, the case law from o-determinatio e statute does not apply to the Holden s interpretation n support a holding that th Lot. Although we have uncovered no precedent that explicitly considers whether or not S 81 applies to land that an Indian tribe purchased in fee simple for investment purposes, in doing so now we give voice to an assumption underlying virtually every decision addressing the applicability of S 81 to service agreements with Indian tribes relative to their lands. We base our conclusion primarily on the distinctions between Indian trust or tribal lands (hereinafter "Indian trust lands")10 and lands that Indian tribes hold in fee simple (hereinafter "Indian fee lands"). The phrase "Indian trust lands" derives from the historic trust relationship existing between Indian tribes and the federal government, originally described as "resembl[ing] that of a ward to his guardian." Worcester v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1831); see also Oneida County v. Oneida Indian Nation, 470 U.S. 226, 247 10. We use the terms "Indian trust lands" and "Indian tribal lands" interchangeably because we have not located any authority that draws a distinction between these terms that is material for our purposes. See, e.g., Black's Law Dictionary 772 (1990); Felix S. Cohen's Handbook of Federal Indian Law 35-36, 476 (Rennard Strickland et al. eds., 1982); Reid P. Chambers & Monroe E. Price, Regulating Sovereignty: Secretarial Discretion and the Leasing of Indian Lands, 26 Stan. L. Rev. 1061, 1061 (1974) (referring to Indian lands delineated "restricted" in 25 U.S.C. S 415 as "Indian trust land"). -17- 17 (1985); United States v. Sam Pelican, 232 U.S. 442, 447 (1914); Joint Tribal Council of the Passamaquoddy Tribe v. Morton, 528 F.2d 370, 379 (1st Cir. 1975). Indian trust lands constitute real property the title to which the United States holds in trust for an Indian tribe. See 25 U.S.C. S 465; Felix S. Cohen's Handbook of Federal Indian Law 476 (Rennard Strickland et al. eds., 1982) [hereinafter Cohen's Handbook]. Fee simple lands, by contrast, are those lands in which the owner "is entitled to the entire property, with unconditional power of disposition." Black's Law Dictionary 615 (6th ed. 1990). Federal law recognizes that Indian tribes may hold certain lands in fee simple and that these lands may not be subject to the trust relationship between Indian tribes and the federal government. See, e.g., 25 U.S.C. S 1466. Specifically, and pertinent to these appeals, the Maine Indian Claims Settlement Act, 25 U.S.C. SS 1721-1735, indicates that the Holden Lot constitutes Indian fee land over which the federal government does not have a trust responsibility because the Lot does not lie within designated PIN Territory. In fact, Congress expressly disavowed trust responsibility for Indian real property encompassing the area in which the Holden Lot is situated. 11 Accordingly, we find that PIN held the Holden Lot 11. 25 U.S.C. S 1724(d)(3) provides: "Land or natural resources acquired outside the boundaries of [Penobscot Indian Territory] . . . shall be held in fee by the respective tribe or nation, and the United States shall have no further trust responsibility with respect thereto." 25 -18- 18 in fee simple. We now consider the impact this fact has on whether S 81 applies to the second Settlement Agreement. This inquiry necessitates that we first consider the statute's text. See United States v. Gonzales, 117 S. Ct. 1032, 1034 (1997). As previously noted, S 81 states: "No agreement shall be made by any person with any tribe of Indians . . . for the payment or delivery of any money or other thing of value, in present or in prospective, or for the granting or procuring any privilege to him, or any other person in consideration of services for said Indians relative to their lands . . . ." The statute does not distinguish between Indian trust lands and Indian fee lands; nor does it refer to all Indian lands. In fact, S 81's scope is not clearly defined. See Mark A. Jarboe, Fundamental Legal Principles Affecting Business Transactions in Indian Country, 17 Harmline L. Rev. 417, 430 (1994); see also Stowell v. Secretary of Health and Human Servs., 3 F.3d 539, 542 (1st Cir. 1993) ("Given two plausible alternatives, and recognizing that the universe of interpretive possibilitie s may extend beyond them, we think the U.S.C. S 1722(j) defines Penobscot Indian Territory as "those lands as defined in the Maine Implementing Act." The Maine Implementing Act defines Penobscot Indian Territory as the Penobscot Indian Reservation and "[t]he first 150,000 acres of land acquired by the secretary for the benefit of the Penobscot Nation" as further defined in this section. Me. Rev. Stat. Ann. tit. 30, S 6205(2)(B) (1993). The Holden Lot does not fall within either the Penobscot Indian Reservation or the remaining area that S 6205(2)(B) designed as current or potential Penobscot Indian Territory. -19- 19 statute contains an undeniable ambiguity."). Section 81's lack of clarity and its failure t Smith o define the phrase "Indian lands" requires us to determine the "ordinary or natural" meaning of these terms. See v. United States, 508 U.S. 223, 228 (1993). When Congress has failed to define statutory language, the Supreme Court has resorted to authoritative texts to determine the ordinary meaning of statutory language. See id. at 229. According to one such text, the term "Indian lands" refers to "[r]eal property ceded to the U.S. by Indians, commonly to be held in trust for Indians." Blac k's Law Dictionary 771 (6th ed. 1990). The definition of Indian tribal or trust land is virtually identical: "real propt 772.12 In the context of S 81, the phrase "relative to [Indian] lands" is understood to refer to Indian trust lands. See Cohen's Handbook at 318 n.293 (explaining that "25 U.S.C. S 81[] prohibit[s] contracts with Indian tribes concerning trust property unless approved by the Commissioner of Indian affairs") (emphasis added); Patrick K. Duffy and Lois A. 12. It is noteworthy that the phrase "Indian country" refers to "all lands set aside by whatever means for the residence of tribal Indians under federal protection, together with trust and restricted Indian allotments." Cohen's Handbook at 34; see also United States v. John, 437 U.S. 634, 648-50 (1978). The phrase "as Indian lands are held" is read "simply to state the United States will hold title in trust for the tribe." Cohen's Handbook at 476. These definitions would seem to indicate that "Indian country" and "Indian lands" encompass Indian trust lands but not Indian fee lands. -20- 20 Lofgren, Jurassic Farce: A Critical Analysis of the Government's Seizure of "Sue," A Sixty-Five-Million-Year-Old Tyrannosaurs Rex Fossil, 39 S. D. L. Rev. 478, 528 n.169 (1994) (indicating that pursuant to S 81, the Secretary "has oversight responsibility for approving or vetoing the terms and conditions of all contracts involving Native American tribal or trust property") (emphasis added). No authority directly states that S 81 applies to Indian fee lands. It is understood, however, that by adopting S 81 "Congress prohibited most contracts between non-Indians and tribes . . . unless approved by the Secretary of the Interior and the Commissioner of Indian Affairs." Cohen's Handbook at 143. Thus, although it appears that S 81's "relative to [Indian] lands" language connotes Indian trust lands rather than Indian fee lands, we acknowledge that this interpretation is not iron-clad. Recognizing that we cannot end our inquiry with the "ordinary" or "natural" meaning of the statute's terms, we consider the relevant legislative history in an effort to give effect to the intentions of the statute's drafters. See Griffin v. Oceanic Contra ctors, Inc., 458 U.S. 564, 571 (1982); United States ex rel. S. Prawer & Co. v. Fleet Bank, 24 F.3d 320, 327 (1st Cir. 1994); Federal Election Comm'n v. Massachusetts Citizens for Life, Inc., 769 F.2d 13, 17 (1st Cir. 1985), aff'd, 479 U.S. 238 (1986). This inquiry is particularly appropriate in the context of federal Indian law. -21- 21 The Supreme Court has made it clear that "Indian law[] cannot be interpreted in isolation but must be read in light of the common notions of the day and the assumptions of those who drafted [such law]." Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 206 (1978); see also Central Machinery Co. v. Arizona State Tax Comm'n, 448 U.S. 160, 166 (1980) (explaining that courts must "interpret [certain federal statutes involving Indian tribes] . . . in light of the Congress that enacted them"). Congress "intended [S 81] to protect the Indians from improvident and unconscionable contracts." In re Sanborn, 148 U.S. 222, 227 (1893); see also Cong. Globe, 41st Cong., 3d Sess. 1483, 1483 (daily ed. Feb. 22, 1871) (declaring that statute was for Indians' "protection and to prevent them from being plundered") (comments of Senator Davis). Specifically, Congress adopted S 81 to protect Indian tribes and individual Indians from persons, particularly attorneys and claims agents, offering dubious services, typically the assertion of the Indians' land claims against the government, in exchange for enormous fees. See Cong. Globe, 41st Cong. at 1483-86. One senator indicated that this section "would prevent . . . contracts being made by [Indian tribes] unless approved by the Secretary of the Interior in any matter relating to the land or annuities that they hold under or derive from the United States." See Cong. Globe, 41st Cong. at 1486 (comments of -22- 22 Senator Harlan) (emphasis added). Another senator declared that S 81 "is limited to such agreements or services as are made or rendered relative to the lands of the Indians or to any claim against annuities from or treaties with the United States." Id. (comments of Senator Casserly) (emphasis added). Evidence of the drafters' assumptions and intentions does little to resolve whether or not the phrase "relative to [Indian] lands" pertains to both Indian trust land and Indian fee lands, or solely to the former. The two statements addressing the application of S 81 may be read differently: Senator Harlan's description may indicate that the statute applies solely to lands over which the federal government exercises a trust responsibility; Senator Casserly's explanation may mean that the statute applies to Indian lands generally. To reconcile this ambiguity, and thus to parse the ordinary meaning of S 81 at the time of its ratification, we consider the understanding of the status of Indian lands that prevailed at the time Congress passed S 81.13 See Oliphant, 13. Our determination to further consider the nature of Indian land ownership during this time in order to properly interpret the phrase "relative to [Indian] lands" would be appropriate even if we read Senator Harlan's statement in the disjunctive, rather than in the conjunctive as the sentence was recorded. That is, if we read the phrase "relating to the land or annuities that they hold under or derive from the United States" so that the qualifying statement "that they hold under or derive from the United States" qualifies only the word "annuities" but not the words "the land," we still would have learned little more concerning the definition of "Indian lands." Such a reading, though tortured, would resolve the ambiguity between the drafters' two statements -23- 23 435 U.S. at 206. In 1872, when Congress passed S 81, federal law provided that Indian tribes enjoyed the right to possess and occupy lands but not to alienate these lands without the federal government's approval. See Johnson v. M'Intosh, 21 U.S. (8 Wheat.) 543, 574 (1823) (indicating that United States possessed title to all Indian lands "subject only to the Indian right of occupancy"); Uni ted States v. Cook, 86 U.S. (19 Wall.) 591, 592-94 (1873) (explaining that Indians enjoyed only right of occupancy in Indian lands and that "the fee was in the United States"); David H. Getches and Charles F. Wilkinson, Federal Indian Law 161 (1986) ("The United States had the exclusive right to purchase or extinguish Indian title.") [hereinafter Federal Indian Law]. Memorializing this conception of Indian real property rights, Congress adopted general, comprehensive legislation addressing the rights of Indian tribes with respect to their lands during this era. See , e.g. , Nonintercourse Act of 1834, R.S. S 2116 (codified as 25 U.S.C. S 177) (prohibiting "purchase, grant, lease, or other conveyance of |