Washington COA Decides Section 81 Matter Involving Nooksack Business Corp.

Here is the opinion in Outsource Services Management v. Nooksack Business Corp.:

Unpublished Opinion

An excerpt:

The Nooksack Business Corporation (NBC) borrowed more than $15 million to finance construction of and improvements to a casino on Nooksack Indian Tribe land. 25 U.S.C. § 81(b) (Section 81) requires preapproval by the Secretary of the Interior for any agreement or contract that “encumbers” tribal land. NBC’s limited recourse loan is secured by a pledge of revenue to the lender. But because the lender’s right to collect pledged revenues does not deprive the tribe of its exclusive proprietary control of its land, the loan agreements do not encumber tribal land for purposes of Section 81.

Under the broad language of the loan agreements, the lender may execute upon future revenues and rents whether or not the facilities are used as a casino. Additionally, merger does not preclude the lender from executing upon assets pledged as security for the loan. And, consistent with our Supreme Court’s decision in a prior appeal between the lender and NBC, the state court has subject matter jurisdiction to adjudicate the lender’s right to enforce its judgment.

The loan agreement provides for attorney fees to the prevailing party. Because the lender is the prevailing party, it is entitled, to attorney fees on appeal.


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