A federal judge has dismissed the Legend Lake Property Owners Association’s legal challenge to a U.S. Bureau of Indian Affairs decision to take 40 association properties, bought by a Menominee tribal member, into tribal trust.
According to the decision District Judge William Griesbach issued Feb. 6, in 2009, the LLPOA adopted restrictive covenants for the lots in and around the lake, which were intended to maintain property values and preserve the tax base of Menominee County.
The restrictive covenants were made binding upon all parties and their heirs. The covenants prohibited property in the association from being removed from the county tax rolls. Also, the properties are to remain subject to laws, regulations of the municipality and state of Wisconsin even if the property was transferred to a person not otherwise subject to those laws and regulations.
In 2017, Guy F. Keshena acquired 40 parcels, totaling 21.35 acres, within the Legend Lake development.
Keshena knew about the covenants when he purchased the properties, and he acquired them to convey the properties to the United States of America in trust for the Menominee Indian Tribe of Wisconsin.
In 2018, the BIA’s Midwest Regional Director authorized the transfer of the properties into tribal trust status. The LLPOA appealed that decision, which was subsequently upheld by the U.S. Department of Interior Board of Indian Appeals.
In its decision, the board concluded the trust acquisition criteria do not recognize the LLPOA’s covenants, also the covenants are preempted by federal law and cannot render the regional director’s decision “null and void.”
Importantly, the Menominee Restoration Act made it mandatory to approve the tribe’s petitions to take the properties into trust status.
Taking the properties into tribal trust exempts them from local and state taxes and zoning authority.
The Interior Board explained that the Menominee Restoration Act requires that property taken into tribal trust must be located in or adjacent to Menominee County and must be transferred by a tribal member.
The association appealed that decision to federal district court. It contended that it was harmed by the Interior Board’s decision which removed significant amounts of land and resulted in the loss of dues and assessments it would have collected.
The association also argued that the Interior Board exceeded its authority in deciding whether the restrictive covenants were preempted by federal law because a federal agency doesn’t have the authority to decide such constitutional questions.
The Department of Interior asked Griesbach to dismiss the suit.
Griesbach concluded that the board has the authority to review any legal issues raised in trust acquisition cases, “except those challenging the constitutionality of laws or regulations.” In this case, the judge found that the board didn’t decide the constitutionality of a law or regulation.
Instead, he concluded that the board properly resolved the conflict between the association’s restrictive covenants and the Restoration Act’s mandate to take the properties into tribal trust.
Griesbach granted the government’s motion to dismiss the association’s lawsuit and denied the tribe’s request to file a brief supporting the BIA’s decision.
Steve Kastning, LLPOA president, wasn’t ready to say if Griesbach’s decision would be appealed but said the association will fully engage in protecting the lands owned by association members.
Kastning also said that he was concerned as the decision “sets a precedent” for further acquisition of association properties transferred into tribal trust status.
There remains between 1,650 and 1,750 properties in the association, but there have been more properties taken into tribal trust since the Guy Keshena acquisitions, Kastning said.
Kastning didn’t know what financial impact the withdrawal of 40 properties has had on the association but there’s an impact to the county, too.
“It’s important to the county because the Legend Lake Association is about 96% of Menominee County’s tax base,” he said Feb. 27.
Categories
