Gladys STRAY CALF et al., Plaintiffs-Appellants, v. SCOTT LAND & LIVESTOCK CO. et al., Defendants-Appellees, 549 F.2d 1209

BURNS, District Judge: Plaintiffs-Appellants are adult Crow Indians, each of whom is the beneficial owner of trust land in the Crow Indian Reservation in southeastern Montana. DefendantsAppellees are non-Indian ranchers who lease the trust land from the plaintiffs for farming and grazing. The plaintiffs seek a declaration that the defendants’ leasing practices violate statutory and regulatory provisions which limit the duration of leases of Crow trust lands. The plaintiffs also seek injunctive relief and damages. After the parties stipulated that there were no issues of fact, except on the issue of damages, the district court granted the defendants’ motion for

summary judgment and denied the plaintiffs’ motion for partial

summary judgment. 391 F.Supp. 433 (D.Mont.1975). The plaintiffs appeal. We affirm. The Crow Indian Reservation, created by the Treaty of Fort Laramie of 1868, 15 Stat. 649, comprises about 2,000,000 acres. In the Crow Allotment Act of 1920, Act of June 4, 1920, ch. 224, 41 Stat. 751, Congress allotted to individual Crow Indians the tribal land suitable for agriculture and grazing. The Act established a commission to divide the Crow tribe into two classes — competent and incompetent. Some competent Crows received patents in fee for their allotments.

All other competent Crows, and all minor and incompetent Crows, were issued trust patents under which the United States retained legal title to the allotments and the Crow allottees acquired beneficial title. In 1926, Congress amended the Crow Allotment Act of 1920. Act of May 26, 1926, ch. 403, 44 Stat. 658. That Act authorized competent Crows to lease their trust land for grazing and agriculture without supervision by the Secretary of the Interior; the Secretary retained sole leasing authority over the trust land of incompetent arid minor Crows.

The 1926 Act further provided that leases of trust lands could not exceed five years. Congress had restricted lease terms in other Indian allotment statutes before the 1926 amendment to the Crow Allotment Act. Lessees tried to avoid these restrictions through various practices, including so-called overlapping leases. Under that practice, the Indian lessor and his lessee would execute a new lease for the maximum term long before the old lease expired, without cancelling the old lease. In 1915, the Supreme Court invalidated overlapping leases in United States v. Noble, 237 U.S. 74, 35 S.Ct. 532, 59 L.Ed. 844.

In 1927, Congress statutorily restricted overlapping leases on the Crow Indian Reservation by providing that no lease could be renewed, and no lands could be released, prior to a certain period before termination of the lease. Act of March 3,1927, ch. 325, 44 Stat. 1365. Congress deleted this 1927 language in 1948 when the Crow Allotment Act was amended to expand the class of competent Crow Indians. Act of March 15, 1948, ch. 120, 62 Stat. 80. After 1948, so-called in futuro leasing became a common practice on the Crow Indian Reservation.

Under that practice, the Crow-lessor and the rancher-lessee would execute an initial lease for the maximum five-year term, and the rancher would prepay the rent for the full five years. About a year after execution of that lease, the Crow and the rancher would execute a new document which cancelled the existing lease at some future date (usually about a year) and created a new five-year lease to begin at that future date. Upon execution of that document, the rancher would pay the Crow the rent for the added term.

In 1962, the Solicitor of the Department of the Interior declared that these in futuro leases violated the five-year restriction on leasing in the Crow Allotment Act, as amended. The rancher-lessees thereafter adopted the current practice. Under this practice, the rancher still prepays the entire five years of rent to the Crow-lessor. Each year the rancher and the Crow cancel the existing five-year lease, and, in a separate but simultaneously-signed document, execute a new five-year lease. The rancher then pays the Crow the rent for the added term.

The plaintiffs (Crow-lessors) contend that this leasing practice violates the five-year restriction imposed by both the Crow Allotment Act of 1920, as amended in 1926, and a federal regulation interpreting that statute. 25 C.F.R. § 131.15. The defendants (rancher-lessees) argue that they are complying with the law because each lease is for only five years. The plaintiffs acknowledge that the leases are for only five years. They contend, however, that the law requires that there land be totally free of encumbrances at least once every five years and that the current practice precludes that periodic freedom.

They say that Congress intended to protect the Crows from their own inexperience in business by limiting the duration of any disadvantageous lease to just five years. The current practice, the plaintiffs contend, has the effect of binding them to disadvantageous leases perpetually. The plaintiffs admit that they are legally free to let the current leases expire and then to negotiate new leases. But, they contend, financial and economic pressures prevent them from doing that. When a rancher-lessee prepays rent for a five-year lease, the Crow-lessor has to wait five years to get additional income from his land.

The plaintiffs contend that because the Crow-lessors are very poor and need annual income from their land they submit to the annual cancellation — re-leasing ritual with the rancher-lessee in order to receive the prepaid rental for the added term. The rancher-lessee, the plaintiffs contend, has the Crow-lessor’s land tied up for five years, so the Crow has to deal with the current rancher, who can and does insist on favorable terms. The Crow is thereby bound by successive unfavorable leases because he cannot afford to let five years run without income.

Furthermore, he is unable to terminate the lease in less than five years because he cannot afford to repay the prepaid rent for the unexpired term of the lease. The plaintiffs want the current leasing practice declared illegal and the existing leases voided. We need not decide whether the current practice is illegal. Even if we adopted the plaintiffs’ rule that their trust lands must be free of all encumbrances at least once every five years, the plaintiffs have failed to prove on the record before us that the current leasing practice violates that rule.

In previous cases involving restrictions on lease terms for Indian trust lands, the legality of the lease practices was capable of being determined without reference to financial and economic considerations. Here, the plaintiffs’ challenge to the current leasing practice on the Crow Indian Reservation can succeed only if the plaintiffs prove that financial and economic pressures compel them to re-lease their land to the defendants. The plaintiffs have not, however, proven this crucial point.

In this record, there is no evidence on plaintiffs’ financial situation, little evidence on the amount of the annual rental payments, and no evidence on the plaintiffs’ inability to avoid or mitigate the consequences of the leasing practice. On the other hand, it is admitted that the Crow tribe has had since 1962 a $1,000,000 fund from which competent Crows can borrow money (at 4%) secured by a mortgage on their trust land. This fund might help the plaintiffs avoid or mitigate the pressures which the plaintiffs allege are created by the defendants’ leasing practice.

Perhaps the plaintiffs could prevail on their theory in a future case if they make a sufficient factual showing. We express no opinion on that. We merely hold here that the plaintiffs have failed to prove all of the elements of their case. We therefore affirm the district court’s grant of

summary judgment against the plaintiffs. AFFIRMED. . More than 900,000 acres of the Crow Indian Reservation are leased each year by competent Crows, without the Secretary’s supervision. . Congress subsequently authorized certain irrigated land to be leased for up to ten years. . This period was twelve months for grazing land and eighteen months for farm land.