Cully Corp. v. United States

CULLY CORPORATION, Plaintiff, v. THE UNITED STATES, Defendant.

No. 19-339C

United States Court of Federal Claims

April 14, 2022

Samuel Fortier, Fortier & Mikko, P.C., Anchorage, AK, for Plaintiff.

Joseph A. Pixley, Trial Attorney, L. Misha Preheim, Assistant Director, Patricia M. McCarthy, Director, and Brian M Boynton, Acting Assistant Attorney General, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., with Robin M. Richardson Senior Environmental Litigation Attorney for AF/JA-Operations and International Law, Environmental Law and Litigation Division, for Defendant.

MEMORANDUM OPINION AND ORDER

DAVID A. TAPP, JUDGE.

Alaska is different. As Chief Justice Roberts succinctly states, in application of the law, "Alaska is often the exception not the rule." Sturgeon v. Frost, 577 U.S. 424 440 (2016). This case concerns the extent of one such exception. Plaintiff, Cully Corporation ("Cully"), is a Native village corporation of Point Lay, Alaska. In that capacity, Cully claims that the United States Air Force (the "Air Force") donated to it three buildings in 2005. (Sec. Am. Compl. at 6- 7, ECF No. 42). Several years after that purported transfer, the Air Force independently determined the prior transaction violated federal regulations and concluded that the buildings were never effectively transferred. The buildings were subject to a lease to the North Slope Borough (the "NSB" or the "Borough"). Cully assumed, based on discussions with the Air Force, that the buildings were removed from the lease after transfer; they were not, and an Alaskan state court found that Cully does not hold a present possessory interest. This Court is bound by that finding. The questions that remain at this stage are whether Cully can maintain a takings claim against the Air Force and whether it has established a quantum meruit claim.

The parties move for summary judgment, (Pl.'s Mot., ECF No. 80; Def.'s Mot., ECF No. 83). For the reasons set forth, the Court finds that Cully has established a valid, reversionary interest in the property at issue; however, genuine issues of material fact remain for trial to determine whether a taking has occurred or could occur. Second, the Court is unable to resolve Cully's quantum meruit claim on the United States' motion. Therefore, the cross-motions for summary judgment are denied.

I. Background^[1]

A. Alaska Native Regional and village corporations

The Alaska Statehood Act of 1958, (72 Stat. 339) Public Law 85-508, 85th Congress, H. R. 7999, July 7, 1958, allotted Alaska approximately 104 million acres of land and accompanying mineral rights, an unprecedented land grant to a new state at that time. This Act did not comprehensively acknowledge many concerns of Alaskan natives. Among other shortcomings, the Statehood Act failed to address the issue of legal title to land claimed by Alaska Natives. See generally Alaska v. United States, 35 Fed.Cl. 685 (1996) (providing an overview of the political debates surrounding Alaska's statehood). Additional legislation was necessary to rectify claims to land.

The Alaska Native Claims Settlement Act ("ANCSA"), Pub. L. No. 92-203, 85 Stat. 668 (1971) (codified as amended at 43 U.S.C. §§ 1601-1629f), sought to achieve "a fair and just settlement of all claims by Natives and Native groups of Alaska, based on aboriginal land claims." 43 U.S.C. § 1601(a). In order to effectuate this, the ANCSA authorized the transfer to Native Alaskans of 40 million acres of land and $962.5 million in direct payments and mineral royalties. § 1602(j).^[2] In exchange, all Native land claims in Alaska based on aboriginal occupancy were permanently extinguished. See § 1603. The ANCSA did not convey land or money directly to individual Alaskans but instead provided for distributions to be made to corporations that reflected preexisting Native organizations. § 1603. Congress created Alaska Native Corporations ("ANCs") to manage and develop the assets rather than vesting assets in existing tribal governments, a route taken with Indian Reservations in the lower forty-eight states. See Indian Reorganization Act of 1934 (IRA), ch. 576, 48 Stat. 984 (codified as amended at 25 U.S.C. § 461 et seq.).

The ANCSA mandated two tiers of ANCs. First, it mandated the incorporation of twelve Alaska Native regional corporations. 43 U.S.C. §1606 (stating that "[f]or purposes of this chapter, the State of Alaska shall be divided by the Secretary within one year after December 18, 1971, into twelve geographic regions, with each region composed as far as practicable of Natives having a common heritage and sharing common interests."). The second tier of ANCs were "village corporations." See § 1607. The Native residents of each native village were required to organize as a for-profit business or nonprofit corporation under the laws of Alaska before the Native village could receive patents to lands or benefits under ANCSA. § 1607. A village corporation under ANCSA is "organized under the laws of the State of Alaska as a business for profit or nonprofit corporation to hold, invest, manage and/or distribute lands, property, funds, and other rights and assets for and on behalf of a Native village[.]" § 1602(j). The initial articles of incorporation for each village corporation were subject to the approval of the Regional Corporation for the region in which the village is located. § 1607. Each village corporation is entitled to select an allotment of land in and around the village it serves. § 1611. Plaintiff in this case, Cully, is one such village corporation.

B. Land at Point Lay and Lease with North Slope Borough

Cully is the village corporation for the Native Village of Point Lay. (Sec. Am. Compl. at 1; Pl.'s Mot. Ex. 3, ECF No. 81-3). Point Lay is not incorporated as a municipality under state law; it is an unincorporated community in the Borough. Official Website of the North Slope Borough, Point Lay, http://www.north-slope.org/our-communities/point-lay (last visited March 12, 2022). The Native Village of Point Lay is a federally recognized tribe within the Arctic Slope Regional Corporation. Arctic Slope Native Association, Point Lay, https://arcticslope.org/about/communities/point-lay/ (last visited April 12, 2022). It lays within the remote Artic on the Chukchi Sea in northwestern Alaska, about 180 miles southwest of the community formerly known as Barrow, now renamed Utqiagvik. A. Himes-Cornell, et al., Community Profiles for North Pacific Fisheries - Alaska - Technical Memorandum NMFS-AFSC-259, National Oceanic and Atmospheric Administration, Nov. 2013, at 195, 199. The coastal landscape in that area is characterized by bays and inlets, lagoons with barrier islands, gravel and sandy shores, basins, shallow lakes, and deltas. Id. at 5. The largest coastal lagoon system in Artic Alaska which abuts the village hosts a large summer concentration of beluga whale, walrus, seal, and Brant geese. Id. at 195. In many respects, Point Lay is a subsistence community relying on the harvest of whales, caribou, waterfowl, fish, and formerly seals, walrus, and polar bears. Id. at 207, 217-18.

Pursuant to a series of public land orders, the United States withdrew public lands in and near Point Lay for military purposes. (Sec. Am. Compl. at 2). The site was previously used as a Distant Early Warning ("DEW") location, which is a network of radar and communication installations in, among other places, Alaska; it lies immediately adjacent to the Native Village of Point Lay. (Id.). Though the radar stations were deactivated in 1994, the site of the DEW facility remained contaminated with hazardous material. (Id. at 3).

Since the 1980s, the Air Force and the NSB, the Alaskan municipal body for the North Slope, have executed several agreements for the Borough's use of facilities at Point Lay. In 1996, the Borough entered a 5-year lease for the airstrip at the DEW Site. (Sec. Am. Compl. at 2). In 2000, Cully formed an interagency planning group with NSB, the Air Force, the Bureau of Land Management ("BLM"), the Federal Aviation Administration ("FAA"), and the Arctic Slope Regional Native Corporation to discuss issues surrounding any potential land transfer and airstrip improvements. (See Pl.'s Mot. Ex. 9 at 1). The NSB and Cully pursued funding through the FAA for runway improvements at the Point Lay airstrip; per the Air Force, the FAA requires a minimum 20-year lease of the property to a non-federal before authorizing funds for airfield improvements. (Pl.'s Mot. Ex. 10 (2002 Letter from USAF Commander Chamberlain to Senator Ted Stevens)).

On May 23, 2005, the Air Force and the NSB executed a renewed lease for 25 years, beginning on November 1, 2004 and concluding on October 31, 2029. (Def.'s Mot. Appendix ("A__) at 4 (Lease excerpt, ¶ 1.0), A42 (Cully Corp. v AECOM, Inc., No. 2BA-13-00214 CI, Alaska Super. Ct., Sept. 18, 2015) (AECOM Decision at 2)). The Lease encompasses thirteen facilities, notably including the Vehicle Maintenance Shop (garage), Air Freight Terminal (hangar), and Warehouse Supply and Equipment Base (warehouse), identified respectively as buildings 2, 3, and 4 (collectively referred to here as "the Buildings"). (Def.'s Mot. A24 (Lease. Exhibit A - Description of Premises); A42 (AECOM Decision at 2)). The Borough's use of the thirteen facilities includes storage, emergency shelter, administrative office, and workshop space. (Def.'s Mot. A6 (Lease, ¶ 6.0), A42 (AECOM Decision at 2)). In lieu of paying rent, the NSB maintains and manages the property and premises, insures them, and provides utilities, fire service, and police service. (Def.'s Mot. A5, A11-12, A15-16 (Lease, ¶ 4.1, ¶ 11, ¶ 15, ¶ 18); A42 (AECOM Decision at 2)). The Borough is obligated...