`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`VERNON MOODY, ANITA MOODY,
`Plaintiffs-Appellants
`
`v.
`
`UNITED STATES,
`Defendant-Appellee
`______________________
`
`2018-2227
`______________________
`
`Appeal from the United States Court of Federal Claims
`in No. 1:16-cv-00107-EJD, Senior Judge Edward J.
`Damich.
`
`______________________
`
`Decided: July 24, 2019
`______________________
`
`TERRY LEE PECHOTA, Pechota Law Office, Rapid City,
`SD, argued for plaintiffs-appellants.
`
` ANN MOTTO, Commercial Litigation Branch, Civil Divi-
`sion, United States Department of Justice, Washington,
`DC, argued for defendant-appellee. Also represented by
`MARGARET JANTZEN, JOSEPH H. HUNT, TARA K. HOGAN,
`ROBERT EDWARD KIRSCHMAN, JR.
` ______________________
`
`Before DYK, CHEN, and STOLL, Circuit Judges.
`
`

`

`2
`
`MOODY v. UNITED STATES
`
`DYK, Circuit Judge.
`Vernon and Anita Moody sued the United States in the
`Court of Federal Claims (“Claims Court”) alleging that the
`United States was a party to contracts with the Moodys
`and breached these contracts.1 The Moodys also contended
`that they had implied-in-fact contracts with the United
`States, and that the United States committed an uncom-
`pensated takings under the Fifth Amendment. The Claims
`Court dismissed the complaint. It concluded that the
`United States was not a party to the contracts. The Claims
`Court also concluded that the Moodys failed to state a claim
`upon which relief could be granted as to the alleged im-
`plied-in-fact contracts with the United States, and that
`there was no cognizable takings claim. We affirm.
`BACKGROUND
`The Moodys leased various parcels on the Pine Ridge
`Indian Reservation in South Dakota for agricultural use.
`The question is whether the United States was a party to
`those contracts.
`“[T]he United States has a trust responsibility to pro-
`tect, conserve, utilize, and manage Indian agricultural
`lands consistent with its fiduciary obligation and its unique
`relationship with Indian tribes.” 25 U.S.C. § 3701(2). To
`carry out this trust responsibility “the Secretary [of the In-
`terior is authorized] to take part in the management of In-
`dian agricultural lands, with the participation of the
`beneficial owners of the land, in a manner consistent with
`the trust responsibility of the Secretary and with the objec-
`tives of the beneficial owners.” 25 U.S.C. § 3702(2). The
`Secretary has delegated some of these responsibilities to
`
`1 For convenience, this opinion treats the leases as
`being entered into by both of the Moodys, though all the
`leases were, in fact, entered into either by Vernon Moody
`or Anita Moody, not both.
`
`

`

`MOODY v. UNITED STATES
`
`3
`
`the Bureau of Indian Affairs (“BIA”), within the Depart-
`ment of the Interior, which has promulgated regulations
`governing agricultural leases on Indian lands. See 25
`C.F.R. §§ 162.101–.256. These regulations generally allow
`Indian landowners to enter into such agricultural leases
`with the approval of the BIA. The BIA is also involved in
`the enforcement of the lease provisions. See id. §§ 162.247–
`.256.
`In 2011, the Moodys entered into five-year leases with
`respect to the parcels of land in question. The leases con-
`tain similar, albeit not identical, language. Each lease de-
`fined “the Indian or Indians” as the “LESSOR” and the
`Moodys as “LESSEE.” See J.A. 18, 32, 35, 47, 61. Although
`the documentary record is not entirely clear, the Claims
`Court concluded that “[t]he Oglala Sioux Tribe was a sig-
`natory to all five leases.” J.A. 2. No party disputes this on
`appeal.2 The leases stated that “the Secretary of the Inte-
`rior [was] acting for and on behalf of Indians,” and that the
`land being leased was “lands and interest(s) held in trust
`or restricted status by the United States for the benefit of
`an Indian Tribe.” See, e.g., J.A. 18. Other provisions of the
`leases further distinguished between the parties to the
`lease and the Secretary of the Interior/United States.3
`
`
`2 At oral argument the Moodys agreed. Oral Arg. at
`2:11–36 (“Q. [I]t is quite clear that the other party is the
`Oglala Sioux . . . A. Okay. I agree with that . . . .”).
`3 See, e.g., J.A. 19 (“Any [change to the lease] may be
`made only with the approval of the Secretary and the writ-
`ten consent of the parties to the lease . . . .”); id. (“[The
`LESSEE] shall not destroy or permit to be destroyed any
`trees, except with the consent of the LESSOR and the ap-
`proval of the Secretary . . . .”); id. (“The owners of the land
`and the LESSEE shall be notified by the Secretary of
`any . . . change in the [trust] status of the land.”); J.A. 20
`(“Neither the LESSOR, nor the United States . . . .”).
`
`

`

`4
`
`MOODY v. UNITED STATES
`
`Issues with respect to lease payments arose in 2012.
`The Moodys’ amended complaint alleged the following,
`which we must accept as true for purposes of this appeal.
`The Moodys visited the BIA Pine Ridge Agency of Interior
`to determine the amount they owed on the leases. They de-
`livered a personal check for the proper amount to the BIA,
`J.A. 93 ¶ 16, but the BIA subsequently returned the check
`and demanded that the payment be made by cashier’s
`check, J.A. 93 ¶ 18. The BIA then sent letters to the
`Moodys, which “serve[d] as [the Moodys’] official notifica-
`tion that effective April 18, 2013, [four of the leases were]
`hereby cancelled for non-compliance” for failure “to submit
`bonding, and payment” as to Lease Nos. 1-0218-11-15 and
`1-T561-11-15, J.A. 76, 78, and “for failure to submit bond-
`ing, Crop Insurance for 2012,” “any crop reports,” and “Ne-
`gotiable Warehouse Receipts” for Lease Nos. 1-Unit5-11-15
`and 1-UNT19-11-15, J.A. 80–81. J.A. 3; J.A. 93 ¶ 19. The
`letters also noted that the Moodys could appeal the decision
`to the BIA’s “Regional Director . . . in accordance with the
`regulations in 25 CFR Part 2,” and that the “notice of ap-
`peal must be filed in this office within 30 days of the date
`[the Moodys] receive this decision.” J.A. 78. The letters fur-
`ther specified that “[i]f no appeal is timely filed, this deci-
`sion will become final for the Department of Interior at the
`expiration of the appeal.” J.A. 79. “No extension of time
`may be granted for filing a notice of appeal” and “[i]f [the
`Moodys] should require further assistance in this matter,
`[they] may contact the Branch of Realty.” J.A. 79.
`Within the 30-day appeal period, the Moodys went
`back to the BIA with a cashier’s check in the proper
`amount, which the BIA accepted. J.A. 93 ¶¶ 19–20. The
`BIA also informed the Moodys that they did not need to
`appeal, could continue farming the land according to the
`leases, and did not require written confirmation. J.A. 93
`¶ 20. Subsequently, on June 3, the Moodys received tres-
`pass notices, which led them to once again return to the
`BIA to resolve the issue. J.A. 93–94 ¶¶ 22–24. For a second
`
`

`

`MOODY v. UNITED STATES
`
`5
`
`time they were instructed that they “should continue to
`farm.” J.A. 94 ¶¶ 23, 24. But, a short time later, they were
`instructed to vacate the land, which they did. J.A. 94 ¶ 25.
`On July 9, 2013, the Moodys received a cancellation letter
`“for failure to submit bonding, all crop reports and ‘nego-
`tiable Warehouse receipts’” for the fifth lease, Lease No. 1-
`T367B-12-16, J.A. 83. Accord J.A. 3; J.A. 94 ¶ 26.
`Based on the allegations in the complaint, it appears
`that the Moodys would have had good grounds to appeal
`the lease terminations with the BIA. After there is a can-
`cellation decision on an agricultural lease, the tenant has
`30 days from receiving the cancellation letter to appeal the
`decision. 25 C.F.R. § 162.254. The cancellation will typi-
`cally remain ineffective during the time that tenant’s ap-
`pellate rights are being exhausted. Id. §§ 2.6(a), 162.254.
`For cancellation of agricultural leases, the appeal is first
`filed with the Area Director and thereafter with the Inte-
`rior Board of Indian Appeals. Id. §§ 2.4(a), (e), 2.20.
`The Board reviews questions of law and the sufficiency
`of the evidence de novo, Early S. Burley v. Acting S. Plains
`Reg’l Dir., 64 IBIA 162, 167, 2017 WL 2415322, at *5 (IBIA
`2017), but will not substitute its own judgment for the BIA
`official’s if the matter is committed to the BIA’s discretion
`and is otherwise consistent with law, Barber v. W. Reg’l
`Dir., 42 IBIA 264, 266, 2006 WL 1148723, at *2 (IBIA
`2006). The appellant bears the burden of showing error
`with the decision below. Guerrero v. Nw. Reg’l Dir., 63 IBIA
`346, 350, 2016 WL 5335850, at *3 (IBIA 2016) (citing 43
`C.F.R. § 4.322(a)). Generally, after the exhaustion of ad-
`ministrative remedies, see 25 C.F.R. §§ 2.1–2.21; 43 C.F.R.
`§ 4.331, the BIA’s final agency decision is subject to chal-
`lenge in district court under the Administrative Procedure
`Act, 5 U.S.C. § 704.
`The Moodys did not file an appeal with the BIA for the
`cancellation of any of the leases. Instead, in 2016, the
`Moodys filed a complaint against the United States in the
`
`

`

`6
`
`MOODY v. UNITED STATES
`
`Claims Court seeking more than $1.5 million in damages.
`They asserted three main theories of liability. First, they
`contended that the United States was a party to the leases
`and had breached the leases. Second, they contended that
`even if the United States was not a party to the original
`leases, the United States agreed to revive the leases
`thereby creating implied-in-fact contracts with the United
`States, which were breached by the United States. Third,
`the Moodys contended that the United States committed
`an uncompensated takings under the Fifth Amendment
`when the BIA cancelled the leases, informed the Moodys to
`continue farming, and then ultimately removed the
`Moodys.
`The Claims Court dismissed the written contract
`claims for lack of jurisdiction because the United States
`was not a party to the leases, for failure to state a claim
`upon which relief could be granted because the Moodys did
`not have implied-in-fact contracts with the government,
`and for failure to raise a legally cognizable takings claim
`because their claim was based on the government’s alleged
`violation of applicable regulations.
`The Moodys appealed. We have jurisdiction pursuant
`to 28 U.S.C. § 1295(a)(3). We review dismissal of a com-
`plaint for lack or jurisdiction and failure to state a claim de
`novo. See Turping v. United States, 913 F.3d 1060, 1064
`(Fed. Cir. 2019).
`
`DISCUSSION
`We reject each of the Moodys’ three arguments as to
`why the United States is liable for damages arising from
`the cancellation of the leases.4
`
`
`4 The Moodys argue that they should be able to re-
`cover in quantum meruit, but we conclude that the Claims
`
`

`

`MOODY v. UNITED STATES
`
`7
`
`First, the Moodys contend that, even though the tribe
`was a party to the leases, the United States was also a
`party to the leases. Unless the United States is a party to
`the contracts, there is no privity of contract between the
`United States and the Moodys and thus no jurisdiction in
`the Claims Court under the Tucker Act for this claim. See
`Cienega Gardens v. United States, 194 F.3d 1231, 1239
`(Fed. Cir. 1998). The theory that the United States is a
`party to the leases is contrary to the express contractual
`language, which distinguished between
`the Secre-
`tary/United States “acting for and on behalf of” the Indian
`landowners and the parties to the lease—the Oglala Sioux
`Tribe as the “LESSOR” and the Moodys as the “LESSEE.”
`In United States v. Algoma Lumber Co., 305 U.S. 415
`(1939), the Supreme Court held that the United States’ en-
`try into leases on behalf of an Indian landowning tribe and
`exercise of its trust responsibilities to Indian beneficial
`landowners “does not necessarily involve the assumption of
`contractual obligations” “in the absence of any action taken
`by the government or on its behalf indicating such a pur-
`pose.” Id. at 421. “The Algoma opinion represents the
`Court’s rejection of the trust theory of liability as a means
`of holding the United States contractually liable to third
`parties when it acts on behalf of Indians.” Sangre de Cristo
`Dev. Co. v. United States, 932 F.2d 891, 895–96 (10th Cir.
`1991). Here, there are no alleged facts that would support
`a conclusion that the United States was acting as anything
`other than a trustee when approving and managing the
`leases. Under Algoma, the allegations of the complaint are
`legally insufficient to support a conclusion that the United
`States was a party to the leases.
`In Wapato Heritage, L.L.C. v. United States, 637 F.3d
`1033 (9th Cir. 2011), the Ninth Circuit rejected a similar
`
`Court properly found that the Moodys did not plead such a
`claim in their complaint.
`
`

`

`8
`
`MOODY v. UNITED STATES
`
`argument and concluded that the United States was not
`the “lessor” in a lease between members of an Indian tribe
`and the plaintiff. Based on Algoma, the Ninth Circuit noted
`that “the BIA’s obligation to act in furtherance of Native
`American interests does not mean that the BIA per se as-
`sumes their contractual obligations when it acts on their
`behalf.” Id. at 1037. Although the applicable regulations
`“authorize an approval role for the BIA concerning [l]eases
`signed with Native Americans, [they] do not authorize the
`BIA to enter into a contract with [the plaintiff] . . . on be-
`half of the government.” Id. at 1038–39. The court also
`found that the contract language unambiguously showed
`that the BIA was not the lessor, as “[t]he [l]ease explicitly
`define[d] the individual Landowners as the ‘Lessor’ and
`separately define[d] the Secretary” and treated the two as
`separate parties. Id. at 1039–40. We have the same situa-
`tion here where the BIA’s alleged acts were all made pur-
`suant to its trust responsibilities to the tribe, and the
`contract clearly distinguishes between the parties to the
`contract, LESSOR and LESSEE, and the Secretary/United
`States. See also Sangre de Cristo, 932 F.2d at 895–96.
`The Moodys contend that Algoma and related cases are
`inconsistent with the Restatement (Second) of Trusts,
`which recognized that “the trustee is subject to personal li-
`ability upon contracts made by him in the course of the ad-
`ministration of the trust.” Restatement (Second) of Trusts
`§ 262 (Am. Law. Inst. 1959). To be sure, the Supreme Court
`has looked to the Restatement when evaluating the trust
`relationship between the United States and the Indians,
`see White Mountain Apache Tribe v. United States, 249
`F.3d 1364, 1377–78 (Fed. Cir. 2001) (collecting Supreme
`Court cases), aff’d, 537 U.S. 465 (2003). But even if the Re-
`statement (Second) of Trusts could be read as making the
`trustee a party to the contract, the Restatement (Third) of
`Trusts reflects a change in the law. Now it is recognized
`that, in general, a trustee is not personally liable for con-
`tracts entered into for the benefit of the trust. Section 106
`
`

`

`MOODY v. UNITED STATES
`
`9
`
`states that “[a] trustee is personally liable . . . on a contract
`entered into in the course of a trust administration only if
`[(1) it constituted a breach of the trust, (2) the trustee’s rep-
`resentative capacity was undisclosed, or (3) the contract
`otherwise provides].” Restatement (Third) Trusts § 106
`(Am. Law. Inst. 2012) (emphasis added).5 None of these cir-
`cumstances is alleged to be present here.
`This approach is also consistent with the Restatement
`(Third) of Agency § 6.01 (Am. Law Inst. 2006) (“[w]hen an
`agent acting with actual or apparent authority makes a
`contract on behalf of a disclosed principal . . . the agent is
`not a party to the contract unless the agent and third party
`agree otherwise” (emphasis added)), the Uniform Probate
`Code § 7-306(a) (“[u]nless otherwise provided in the con-
`tract, a trustee is not personally liable on contracts
`properly entered into in his fiduciary capacity in the course
`of administration of the trust estate unless he fails to re-
`veal his representative capacity and identify the trust es-
`tate in the contract”), and the Uniform Trust Code
`§ 1010(a) (“[e]xcept as otherwise provided in the contract,
`a trustee is not personally liable on a contract properly en-
`tered into in the trustee’s fiduciary capacity in the course
`of administering the trust if the trustee in the contract dis-
`closed the fiduciary capacity”).
`Given the Supreme Court’s decision in Algoma and the
`state of general trust law, we see no basis for concluding
`that the United States became a party to the contract and
`waived its sovereign immunity by approving and acting for
`
`
`5 See 4 Austin Wakeman Scott, William Franklin
`Fratcher & Mark L. Ascher, Scott & Ascher on Trusts
`§ 26.2 (4th ed. 2007) (“[T]here is now a substantial body of
`authority . . . that a trustee who has signed a contract in a
`representative capacity is . . . not personally [liable].”).
`
`

`

`10
`
`MOODY v. UNITED STATES
`
`the benefit of the Indian or Indians with respect to the
`leases.
`Second, the Moodys contend that there were implied-
`in-fact agreements created between the Moodys and the
`United States when the BIA told the Moodys (twice) to con-
`tinue farming the lands after sending the cancellation let-
`ters. The BIA does not have general authority to lease land
`held for the benefit of a tribe unless it receives direct au-
`thorization from the tribe. See 25 C.F.R. § 162.207(a)
`(“Tribes grant leases . . . subject to [BIA’s] approval.”); id.
`§ 162.209 (identifying limited circumstances, not applica-
`ble here, where the BIA can grant an agricultural lease
`without direct authorization). Such direct authorization
`was satisfied here by the tribal signature on the original
`leases. It is difficult to see how the United States, without
`specific authorization, could enter into an implied-in-fact
`contract with the Moodys on behalf of the tribe. The
`Moodys’ only response to this issue appears to be that the
`earlier cancelled leases, which were signed by the Tribe,
`were revived by the BIA’s oral representations and thus did
`not require new tribal authorization. The Moodys do not
`present any salient legal support for their position that the
`BIA can revive a cancelled lease without tribal authoriza-
`tion. Even if such authority did exist, as the Moodys recog-
`nize, the effect would merely be that “[t]here were
`originally written leases that were terminated but then
`orally revived on the same terms as in the previous written
`leases.” Moody Br. at 23. As discussed above, the United
`States was not a party to the original leases, and thus
`would also not be a party to the implied-in-fact contracts
`revived with the same terms. We agree with the Claims
`Court that the Moodys’ implied-in-fact contract claim does
`not constitute a claim upon which relief can be granted.
`Third, the Moodys contend that the United States ef-
`fectuated an uncompensated takings when it evicted the
`Moodys after the BIA had informed them to continue to
`farm the land despite the earlier cancellation letters. In
`
`

`

`MOODY v. UNITED STATES
`
`11
`
`their amended complaint, the Moodys claimed that they
`“and their property were removed, contrary to applicable
`regulations, from the leases and plaintiffs were deprived of
`monies expended to plant and sow the crops and the profits
`from any harvest.” J.A. 95 (emphasis added); see J.A. 91
`(“This is an action by plaintiffs against defendant for un-
`lawful termination and breach of lease agreements . . . .”
`(emphasis added)).
`A takings claim cannot be found on the theory that the
`United States has taken unlawful action. “[A]n uncompen-
`sated taking and an unlawful government action constitute
`two separate wrongs that give rise to two separate causes
`of action.” Acadia Tech., Inc. v. United States, 458 F.3d
`1327, 1331 (Fed. Cir. 2006). “[C]omplaints about the
`wrongfulness of the [government action] are therefore not
`properly presented in the context of [a] takings claim.” Rith
`Energy, Inc. v. United States, 270 F.3d 1347, 1352 (Fed.
`Cir. 2001) (on petition for rehearing). “[T]o the extent that
`[a] plaintiff claims it is entitled to prevail because the
`agency acted in violation of statute or regulation, [our de-
`cisions do] not give the plaintiff a right to litigate that issue
`in a takings action rather than in the congressionally man-
`dated administrative review proceeding.” Lion Raisins,
`Inc. v. United States, 416 F.3d 1356, 1369 (Fed. Cir. 2005)
`(emphasis and first and third alterations in original) (quot-
`ing Rith Energy, Inc. v. United States, 247 F.3d 1355, 1366
`(Fed. Cir. 2001)). Thus, “a claim premised on a regulatory
`violation does not state a claim for a taking.” Id. The theory
`that the Moodys were harmed by the BIA’s violation of reg-
`ulations does not give rise to a takings claim but rather the
`right to appeal the lease cancellations through the admin-
`istrative process at the BIA, an action that the Moodys did
`not take. The Moodys argue on appeal that their allegation
`in the complaint that the BIA’s actions were “contrary to
`applicable regulations,” J.A. 95, should be ignored, but
`even without that clause, the Moodys’ argument rests on
`the same theory. Namely, the theory that the BIA’s actions
`
`

`

`12
`
`MOODY v. UNITED STATES
`
`were contrary to law, which, as discussed above, cannot be
`the basis of a takings claim. We therefore see no reversible
`error with the Claims Court’s decision dismissing the tak-
`ings claim.
`We express no opinion as to whether the Moodys now
`have an administrative remedy or whether the limits for
`seeking such relief should be equitably tolled. See Irwin v.
`Dep’t of Veterans Affairs, 498 U.S. 89, 96 (1990) (“We have
`allowed equitable tolling . . . where the complainant has
`been induced or tricked by his adversary’s misconduct into
`allowing the filing deadline to pass.”).
`AFFIRMED
`COSTS
`
`No costs.
`
`