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The Confederated Tribes of Warm Springs Reservation of Oregon v. Vanport International, Inc.

United States District Court, D. Oregon, Portland Division

December 16, 2019


          Albert Kennedy TONKON TORP LLP Joshn Newton Tyler J. Moore KARNOPP PETERSEN LLP Attorneys for Plaintiff

          Robert D. Scholz Samantha N. Javier Megan L. Ferris MacMILLAN SCHOLZ & MARKS, P.C. Attorneys for Defendant

          OPINION & ORDER


         Plaintiff The Confederated Tribes of the Warms Springs Reservation of Oregon (Plaintiff or "the Tribe"), had a contractual relationship with its wholly owned commercial forest products entity Warms Springs Forest Products Industries (WSFPI), under which WSFPI purchased Tribal Timber from the Tribe. WSFPI had a contractual relationship with Defendant Vanport International, Inc. (Defendant or "Vanport"), under which Defendant operated WSFPI and purchased and/or marketed sales of Tribal Timber or lumber milled from that timber. In this lawsuit, Plaintiff seeks from Defendant the value of Tribal Timber that WSFPI purchased from the Tribe and for which WSFPI failed to make payment. Presently, Plaintiff moves for summary judgment on its single claim in which Plaintiff seeks $2, 416, 731, the unpaid value of the Tribal Timber. Compl. ¶ 20, ECF 1. I deny the motion.


         I. The Parties and WSFPI

         The Tribe is a federally recognized, self-governing, sovereign Indian tribe consisting of three Indian tribal groups: the Warm Springs, the Wasco, and the Pauite. The Tribe is the legal successor in interest to the Indian signatories to the Treaty between the United States and the Tribes of Middle Oregon, which was executed on June 25, 1855, and ratified by Congress on March 8, 1859 ("the 1855 Treaty"). Pursuant to the 1855 Treaty, the Tribe ceded approximately ten million acres of its aboriginal territory to the United States and reserved approximately 640, 000 acres for exclusive use and occupation of the Tribe and its members as a permanent homeland, referred to as the Warm Springs Reservation. The United States holds legal title to almost the entire Warm Springs Reservation in trust for the benefit of the Tribe or its members.

         In 1934, Congress passed the Indian Reorganization Act of June 18, 1934 ("IRA"), which, among other things, provided for the political organization of Indian tribes under § 16 and then, in § 17, empowered the Secretary of the Interior to issue corporate charters to tribes to enable them to conduct business. 25 U.S.C. §§ 5123, 5124. As the Ninth Circuit explained in a 1985 case, § 16 of the IRA allows tribes to organize tribal governments and adopt constitutions and bylaws. White Mountain Apache Tribe v. Williams, 810 F.2d 844, 866 n.17 (9th Cir. 1985). Section 17 then authorizes a tribe organized under § 16 to request the Secretary of the Interior to issue charters of incorporation. Id.

         Under § 16 of the IRA, the Tribe adopted its Tribal Constitution. Tsumpti Decl. ¶ 6, ECF 55. Pursuant to the Tribal Constitution, certain enumerated governmental powers are vested in the Tribal Council. Id. ¶ 8. The Tribal Council has eleven members. Id. Eight members are elected positions with the three remaining positions reserved for lifetime chieftain positions, one for each of the three constituent tribes of the Tribe. Id. The Tribal Council oversees the Tribe's governmental services, including natural resource management, a court system, police, fire protection, water and sewer services, and social services. Id. Pursuant to the Tribal Constitution and the Tribal Corporate Charter, Tribal Council also exercises the corporate powers of the Tribe for economic development purposes. Id. ¶ 9.

         The Tribe's Tribal Corporate Charter was issued under § 17 of the IRA on April 23, 1938. Id. ¶ 6. On April 11, 1967, the Tribal Council created WSFPI pursuant to the Tribal Corporate Charter. Id. ¶ 10. According to the WSFPI Plan of Operation, WSFPI's original purposes and objectives included, among other things: (1) the promotion of "better and fuller development and utilization of the Reservation timber resources on a sustained yield basis"; (2) the construction or purchase of an industrial complex suitable to the manufacture of forest products from the Indian forest; and (3) the operation of the industrial complex so as to secure the maximum economic return from the timber resources consistent with providing the Tribe and its enrolled membership with education and training benefits, employment opportunities, and such social benefits as may flow therefrom. See Tsumpti Decl. ¶ 10; Id., Ex. 5 (WSFPI Plan of Operation).[1] WSFPI is a "tribal forest enterprise" as defined in the relevant regulations. 25 C.F.R. § 163.1.

         Defendant is a private company, headquartered in Boring, Oregon. Paul Owen Decl. ¶ 4, ECF 68. Beginning in 2008, Defendant entered into contracts with WSFPI regarding the operation of WSFPI's sawmill and the purchase of Tribal Timber. Under later agreements between Defendant and WSFPI, Defendant was to provide export sale, marketing, and other services to WSFPI. Details regarding these contracts are set forth below.

         II. WSFPI Timber Contracts With the Tribe

         A. United States as Title Holder

         The United States holds legal title to the Warm Springs Reservation forest lands in trust for the benefit of the Tribe and its members. See Seminole Nation v. United States, 316 U.S. 286, 296 (1942) (federal government has "distinctive obligation of trust" in its dealings with Indian tribes). In a 1939 case, the Supreme Court explained:

Under the provisions of the treaty and established principles applicable to land reservations created for the benefit of the Indian tribes, the Indians are beneficial owners of the land and the timber standing upon it and of the proceeds of their sale, subject to the plenary power of control by the United States, to be exercised for the benefit and protection of the Indians.

United States v. Algoma Lumber Co., 305 U.S. 415, 420 (1939). Before 1910, Indian tribes had no right to sell timber on reservation land but that year, Congress passed the Act of June 25, 1910 which authorized the Secretary of the Interior to provide for the harvesting of tribal timber "in such a manner as to conserve the interest of the people on the reservations, namely, the Indians." United States v. Mitchell, 463 U.S. 206, 220 (1983) (internal quotation marks omitted). As noted above, in 1934 Congress passed the IRA which, in addition to allowing the political organization of tribes and creating the ability for tribes to obtain charters of incorporation, directed the Department of the Interior to manage Indian forest resources "on the principle of sustained-yield management." Id. at 221 (internal quotation marks omitted). According to the Supreme Court, the tribal timber management statutes found in 25 U.S.C. §§ 406-07 and 5109, and the regulations promulgated thereunder at 25 C.F.R. Part 163, "establish the comprehensive responsibilities of the [United States] in managing the harvesting of Indian timber." Id. at 222.

         In 1990, Congress passed the National Indian Forest Resources Management Act (NIFRMA), 25 U.S.C. §§ 3101-3120. There, Congress expressly found and declared that "the forest lands of Indians are among their most valuable resources" and that there is "a serious threat to Indian forest lands from trespass and unauthorized harvesting of Indian forest land resources." 25 U.S.C. § 3101(1), (6). Congress also found and declared that the United States has a trust responsibility toward Indian forest lands. 25 U.S.C. § 3101(2). The Secretary of the Interior is statutorily required to undertake certain "forest land management activities" on Indian forest land, which include "all aspects of the preparation, administration, and supervision of timber sale contracts." 25 U.S.C. § 3104(a) (setting forth requirement); 25 U.S.C. § 3103(4)(G) (defining "forest land management activities").

         B. Cutting Contract

         1. Terms

         Pursuant to federal law, WSFPI, the Tribe, and the Bureau of Indian Affairs (BIA) entered into an agreement governing WSFPI's purchase of Warm Springs Reservation timber. By May 2004, the timber purchase agreement was titled the "Timber Allocation and Sales Agreement" and referred to as the "Cutting Contract." Tsumpti Decl. ¶ 11; see also id., Ex. 8 (Tribal Council resolution approving the Cutting Contract; Cutting Contract). The named parties to the Cutting Contract are WSFPI and the Tribe. Id., Ex. 8 at 5, § 2. The Secretary of the Interior and the Assistant Secretary for Indian Affairs granted "their Accommodation Approval and Consent to ensure compliance with the provisions of 25 U.S.C. § 81." Id., § 3.

         The Cutting Contract gave WSFPI the right to enter into contracts with the Tribe for the purchase of Tribal Timber which included (1) timber grown on tribal trust lands; (2) trust allotments in which the Tribe had more than a fifty-percent ownership interest; and (3) tribal fee lands within the Warms Springs Reservation. Id. at 8, §§ 4j, 5. The Cutting Contract was effective May 1, 2004 and was to remain in force through December 31, 2011, unless terminated in writing before that date with the approval of the Approving Officer, meaning the Secretary of the Interior or his/her designee. Id. at 12, § 5g. After December 31, 2011, the agreement could be renewed by consent of the parties with approval by the Approving Officer.[2] Id.

         Under Section 6 of the Cutting Contract, which governs "Payment for Timber," payment by WSFPI for Tribal Timber was to

be in accordance with 25 CFR § 163.22 unless other provisions are stipulated within the timber sale contract as provided in 25 CFR § 163.19. Not later than the twenty-fifth day of each month, the Bureau [of Indian Affairs] shall submit a bill for collection for timber harvested during the immediately preceding month. Enterprise [WSFPI] shall pay for Tribal timber monthly, within five (5) business days of receipt of the bill for collection. Any discrepancy in the bill for collection shall be addressed in following month bills for collection.

Id. at 14, § 6a. Thus, the terms of the Cutting Contract required the BIA to invoice WSFPI for the Tribal Timber and for WSFPI to pay for the invoiced Tribal Timber within five days. The Cutting Contract does not expressly state to whom WSFPI was to make payment.

         Under 25 C.F.R. § 163.22, "payment for forest products [is] required in advance of cutting for timber, or removal for other forest products." 25 C.F.R. § 163.22(a) (emphasis added). This regulation does not apply, however, to Indian tribal forest enterprises. Id. Because WSFPI is an Indian tribal forest enterprise, it was exempt from the pre-payment requirement. Thus, the Cutting Contract's payment provision governing WSFPI's payments for Tribal Timber and which did not require pre-payment, was consistent with§ 163.22(a).

         The Cutting Contract also provided that timber would be sold under the "terms and conditions in a Contract Form . . . agreed to" by the Tribe and WSFPI, and approved by the BIA. Tsumpti Decl., Ex. 8 at 11-12, § 5f.

         2. Compliance with Invoice/Payment Obligations

         Despite the payment provision language in the Cutting Contract stating that the BIA was to issue invoices to WSFPI, the preparation and issuance of Tribal Timber invoices to WSFPI was actually performed by tribal personnel. Javier Decl., Ex 1 (Stacona Dep.) 105-06, ECF 66-1. The record indicates that while the BIA was technically responsible under the Cutting Contract for invoicing WSFPI for the Tribal Timber, the invoicing function was actually performed by Tribe employees on behalf of the BIA which then reimbursed the Tribe in some fashion for the use of Tribe personnel. Id.

         Invoicing was routinely untimely. For twenty-three years, Louise Katchia, a Tribal member, processed "stumpage billing" for "the forestry under BIA" and as a tribal employee. Javier Decl., Ex. 8 (L. Katchia Dep.) 9, ECF 66-8; see also Id. at 29-31 (explaining that she performed this function on behalf of the BIA initially but then, at some point, the responsibility was transferred from the BIA to the Tribe). She tracked all the logs and stumpage volume removed from the reservation through a log scale data system. Id. at 25. She invoiced WSFPI for the Tribal Timber. Id. at 36 (she starting invoicing WSFPI in 1996 and continued until WSFPI closed). She testified in deposition that there were problems processing stumpage bills on a timely basis at least as far back as 2007 and continuing until WSFPI closed. Id. at 85. Louise Katchia explained that because WSFPI was "one of their own," there were "certain allowances back and forth" made about the payment obligations. Id. at 111. She explained: "We've never wrote them down and said, okay, you could take six to eight weeks instead of the 25 days. None of that's ever written down, but it's understood." Id.; see also Id. at 112 (further explaining the late invoicing and payments as "[i]t's like a gentlemen's agreement as with any tribal enterprise. There's always allowances both ways."). Louise Katchia was not concerned about payment arrearages except at year's end. Id. at 122.

         Others also noted the lag in invoicing. John Katchia worked for the WSFPI mill from 1989 until its closure in April 2016 in various positions and divisions, becoming Operations Manager at some point and then the CEO of WSFPI in July 2014. Javier Decl., Ex. 4 (J. Katchia Dep.) 20-31, ECF 66-4. John Katchia's understanding was that "the Tribe was responsible for the invoicing." Id. at 46. He also stated that "it was kind of haphazard from the Tribes about when we [referring to WSFPI] would receive the invoicing." Id. at 46 (further explaining that the Tribe's forestry department did the billing). According to John Katchia, invoicing for stumpage was sometimes delayed six to sixteen months. John Katchia stated that the payment provision in § 6 of the Cutting Contract was never complied with at any time before his becoming CEO of WSFPI in July 2014. Id. at 116.

         Orvie Danzuka, whom Defendant identifies as a member of the Tribe with a degree in natural resources from Oregon State University, and an experienced forestry technician, was a member of the Tribal Council from May 2013 to May 2016, and as a result, he was a member of the "Tribal Council WSFPI Board"[3] from June 2013 to the fall of 2014. Javier Decl., Ex. 3 (Danzuka Dep.) 15-16, 66, 69, 163, ECF 66-3. Danzuka states that the Tribe did not press WSFPI to meet its contractual payment deadlines because the tribal Forestry Department which issued the invoices on behalf of the BIA, was slow in getting the invoices out and there were times WSFPI needed the money for other reasons. Id.. at 88-89. In early 2014, the Tribal Council WSFPI Board granted WSFPI's request to defer Tribal Timber payments for March, April, and May 2014. Danzuka Dep. 115; J. Katchia Dep. 50. According to former Tribal Council member, former Tribal Council Chair, and former WSFPI Board Chair Austin Greene, WSFPI hoped to pay for the remainder of its 2013 Tribal Timber payment obligation as cash flow stabilized in October to December 2014. Javier Decl., Ex. 2 (Greene Dep.) 131-32, ECF 66-2; Javier Decl., Ex. 34, ECF 66-34. At a September 30, 2014 Tribal Council meeting, WSFPI management told Tribal Council that the Tribe had yet to invoice WSFPI for Tribal Timber from June to December 2013 and that WSFPI would pay when it had enough cash. Javier Decl., Ex. 35 at 2-3, ECF 35; see also L. Katchia Dep. 102 (stating that her supervisor instructed her to hold off on issuing a number of Tribal Timber invoices past the due date under the Cutting Contract).

         In September 2014, the BIA inquired and learned that WSFPI was six months behind on Tribal Timber payments. Ken Borchert, a member of the Cowlitz Tribe who has a forest management degree from Oregon State University, worked for the Tribe as an inventory forester from 1995 to 2003 and then as a forest planner employed by the BIA who worked exclusively on the Warm Springs reservation. Javier Decl., Ex. 7 (Borchert Dep.) 16-19, 23-24, ECF 66-7. He held that position until 2008 when the Tribe contracted with the BIA to provide its own forestry program. Id. at 25 (explaining that "basically, the Tribe assumed the role of the [BIA] forestry staff"). The Tribe offered Borchert the same position he had with the BIA which he took and held for about six months. Id. at 27. He later returned to the BIA in 2011 as a regional forest developer. Id. at 28-29. Borchert testified that under the Cutting Contract, meaning since 2004, "they [referring to WSFPI] tried to follow this [referring to the Cutting Contract payment schedule] but some months they weren't right on time, but at least the payment was coming." Id. at 161. In 2014, however, there was not one instance where payment was on time. Id. When Borchert asked how the arrearages had gotten to be more than $4.1 million as of year end 2014, he was told that because WSFPI had stopped paying, the Tribe had not produced the invoices. Id. at 161-62. By year end 2014, the BIA was aware of large Tribal Timber arrearages. Id. at 153, 155.

         C. Timber Sale Contracts Between WSFPI & the Tribe

         As noted, the Cutting Contract allowed WSFPI to enter into timber sale contracts with the Tribe. Plaintiff submits six timber sale contracts, each of which were prepared on a standard form created by the BIA. Brunoe Dec., Exs. 1-6, ECF 59; see 25 C.F.R. § 163.19(a) (providing that in sales of tribal forest products with an appraised stumpage value exceeding $15, 000, the parties must use contract forms approved by the Secretary of the Interior unless the Secretary approves a special form). "Stumpage value" is defined as "the value of a forest product prior to extraction from Indian forest land." 25 C.F.R. § 163.1. The parties to these timber sale contracts were WSFPI and the Tribe. Brunoe Decl., Exs. 1-6. The contracts were approved by the BIA Superintendent of the Warms Spring Agency. Id.

         Each contract covers a separate timber sale. They have approval dates of December 14, 2011, December 18, 2012, June 27, 2013, October 16, 2013, October 9, 2014, and November 2, 2015. Brunoe Decl., Exs. 1-6. Section A4 of each of these contracts states that the

Seller [the Tribe] agrees to sell to the Purchaser [WSFPI] and [WSFPI] agrees to buy, in accordance with the terms and conditions of this contract and the attached Part B, Standard Provisions, which are made a part hereof, all merchantable timber, living or dead designated by the [BIA] . . . within the boundaries of this logging unit.

Id. Section A8 of each of these contracts governs payment for timber and provides that the "Purchaser [WSFPI] shall pay for all timber covered by this contract in accordance with the provisions of Section B4.0 of the Standard Provisions or Section 6a & 6b of the approved [Cutting Contract]." Id.

         The Part B Standard Provisions do not appear to have actually been attached to Part A of each contract as represented in § A4. Nonetheless, the Part B Standard Provisions include § B2.1 which states that "[t]itle to the timber covered by the contract shall not pass to [WSFPI] until it has been scaled, paid for, and removed from the contract area." Id., Ex. 7. The Part B Standard Provisions also include § B4.1 addressing the method of payment. Id. That section states that the "Purchaser [WSFPI] shall pay for the timber covered by the contract in advance of cutting, as a single payment or installment payments in sales of predetermined volumes or in the form of advance payments or advance deposits in sales of estimated volumes." Id. Presumably, this portion of § B4.1 did not apply because, as stated above, the Cutting Contract did not require advance payments given that WSFPI is a tribal forest enterprise and exempt from the prepayment requirement under 25 C.F.R. § 163.22(a). Moreover, because § A8 of the timber sale contracts provides that payment is to be in accordance with § B4.0 of the Standard Provisions or § 6 of the Cutting Contract, payment obligations could be governed by the Cutting Contract and not the prepayment language in § B4.1. Section B4.1 continues, however, and further states that payments and deposits "shall be by check or postal money order, drawn payable to the Bureau of Indian Affairs, or in cash, and shall be transmitted to the Superintendent." Id. Presumably, because the Cutting Contract was silent as to whom WSFPI was to actually pay, this part of § B4.1 applied.

         III. WSFPI's Contracts with Defendant

         By 2008, WSFPI's economic condition had begun to deteriorate and the Tribe considered closing the WSFPI sawmill. Tsumpti Decl. ¶ 12. Instead of closing the mill, WSFPI entered into discussions with Defendant which resulted in a term sheet and then two agreements.

         A. The 2008 Agreement/2009 Operations Agreement

         In the fall of 2007, the Tribal Council WSFPI Board engaged in negotiations with Defendant for Defendant to operate the WSFPI mill. Javier Decl., Exs. 12, 15, ECF 66-12, 66-15. Tribal Council approved a preliminary Term Sheet outlining key terms to be used in negotiating a final agreement with Defendant and appointed as its negotiating agent the Tribe's Secretary-Treasurer who was also acting as CEO of WSFPI. Id..

         WSFPI and Defendant then negotiated formal agreements. From July 1, 2008 to December 31, 2013, WSFPI and Defendant were parties to agreements relating to the operation of the sawmill, including a July 1, 2008 Agreement and a June 30, 2009 Operations Agreement (together, the "2008/09 Agreements"). Tsumpti Dec. ¶ 13. Under the 2008/09 Agreements, Defendant managed WSFPI's sawmill and also had the option to purchase all Tribal Timber harvested by WSFPI pursuant to the Cutting Contract. See Tsumpti Decl., Ex. 9 at 1-4 (2008 Agreement); Id. at 41-54 (2009 Agreement). The 2009 Operations Agreement extended the contractual relationship to June 30, 2014. Id., Ex. 9 at 48.

         Key provisions of both agreements included the following:

         (1) Recital D: The current WSFPI Board was placed in abeyance by the Tribe and the Tribe assumed the duties of the WSFPI Board; the CEO of WSFPI reported to the Tribe through the Secretary Treasurer of the Tribe; (2) WSFPI would harvest logs and deliver them to the mill; (3) Article 2.1: "Title to all Tribal Timber purchased by Vanport shall pass at the Mill, and all products and derivatives relating to the purchased Tribal Timber (including but not limited to lumber, residuals and chips) shall thereafter be the property of Vanport"; (4) Article 3.1: Defendant would serve as the mill manager; and (5) Article 5.1: Defendant would pay WSFPI on the 10th of each month the market price for all Tribal Timber purchased by Defendant between the 16th and final day of the preceding month; Defendant would pay WSFPI on the 25th of each month the market price for all logs purchased by Defendant between the 1st and 15th days of the current month. Id., Ex. 9 at 1, 4, 6, 42, 44, 46.

         B. The 2014 Operations Restructure Agreement & Related Agreements

         During the life of the 2008/09 Agreements, WSFPI experienced continued financial decline. Michele Stacona was the Tribe's "treasury controller" in the Tribe's "finance department" from June 2006 through January 2010. Stacona Dep. 16. From January 2010 through June 2012, Stacona was the executive director of the Tribe's gaming commission. Id. at 19. After living and working in Arizona for several years, Stacona returned to the Tribe and has been the "secretary-treasurer chief executive officer" since November 2016. Id. at 19-20. The Tribe designated Stacona as a Rule 30(b)(6) witness on approximately fifty-one topics noticed by Defendant. During her deposition testimony, she testified that by year end 2013, the stumpage arrearage owed by WSFPI to the Tribe was $1, 456, 500. Id. at 143. During the life of the 2008/09 Agreements, Defendant was aware of WSFPI's financial problems. Kennedy Decl., Ex. 6 (Everett Dep.) 47 (stating that during the life of the 2008/09 Agreements, Defendant was aware from WSFPI financial statements that WSFPI was suffering losses every year), ECF 57.

         Given the circumstances, WSFPI and Defendant entered into a new agreement effective January 1, 2014, called the Operations Restructure Agreement. Tsumpti Dec. ¶ 14. It provided for (1) early termination of the 2009 Operations Agreement; (2) entry into an agreement for Defendant to provide export sales and marketing services to WSFPI; (3) the sale of certain assets from Defendant to WSFPI; and (4) loans from Defendant to WSFPI for the purchase of inventory and for a revolving line of credit. Id.; see also Tsumpti Decl., Ex. 10 (Operations Restructure Agreement). Under the terms of the Operations Restructure Agreement, Defendant would no longer purchase Tribal Timber. Id.

         The following related agreements were entered into along with the Operations Restructure Agreement: (1) Revolving Loan Agreement; (2) Security Agreement and a Promissory Note; (3) Termination of Operations Agreement; (4) Sales and Marketing Services Agreement; and (5) Bill of Sale for the Assets. Javier Decl., Ex. 22 (Ops. Res. Agmt. ¶ 2 referring to all of these related agreements); Id. (containing related agreements), ECF 66-22. I refer to these collectively as the "2014 Agreements."

         Defendant points to the following terms of the Sales & Marketing Agreement as relevant: (1) § 2.1(a): Defendant would purchase and market all export lumber products manufactured by WSFPI at the mill on an exclusive basis; (2) § 2.1(b): Defendant would provide on-site sales, marketing, and quality control assistance at the mill relating to milling, grading, packaging, and shipping quality in order to maximize selling value for export markets; (3) § 3.1(a): Defendant would earn five-percent of the final selling price for export lumber; (4) § 3.1(b): All prices of export lumber were FOB mill and Defendant assumed all risk of damage/loss upon delivery of export lumber to a carrier; (5) § 3.1(c): Payment terms were net fifteen days of the date of WSFPI's invoice; and (6) § 3.4(d): WSFPI warranted that all title to the lumber sold under the agreement would be unencumbered when title passed to Defendant. Javier Decl., Ex. 22 at 49-51.

         Under the 2014 Agreements, beginning January 1, 2014 and continuing until April 30, 2016, Defendant provided invoicing and collection services for WSFPI's domestic sales of Tribal Timber. Newton Decl., Ex. 2 at 7 (Def.'s Resp. to Receiver's Objs. to Def.'s Claim Dated May 27, 2018), ECF 58. Vanport collected over $23, 000, 000 in receipts from WSFPI's domestic sales of forest products. Id., Ex. 3 (Def.'s Sum. of Tribal Timber Domes. Receipts Collection 1/1/14-4/30/16). Also during this time, Defendant itself purchased over $3, 300, 000 of domestic lumber from WSFPI. Id., Ex. 4 (Def.'s Sum. of Tribal Timber VPI Domes. Purchases 1/1/14-4/30/16). And, Defendant served as the exclusive sales and marketing agent for WSFPI's export sales for forest products manufactured from Tribal Timber. Id., Ex. 5 (Sales & Marketing Agmt.). Defendant purchased WSFPI's export lumber and resold it to foreign buyers, paying itself a five-percent commission. Id. The commission Defendant paid itself amounted to more than $1, 200, 000. Id., Ex. 6 (Def.'s Summary of Tribal Timber VPI Exp. Purchases 1/1/14-4/30/16). Defendant also provided management services to WSFPI. From January 1, 2014 through February 2016, it invoiced WSFPI $208, 000 in management fees. Id., Ex. 2 at 7. Finally, Defendant provided a line of credit to WSFPI that was secured by inventory and accounts receivable. Defendant received significant principal and interest payments from WSFPI pursuant to the line of credit agreement. Id.

         V. WSFPI's Relationship with the Tribe During the Relevant Time Period

         Under the WSFPI Plan of Operation, the WSFPI Board of Directors was to have seven members. Tsumpti Decl., Ex. 5 at 3. The board members were divided into four classes with differing initial terms of service so that every year, one or two members' terms expired. Id. at 3-4. Additionally, at least three positions, but not more than four, were required to be a nonmember of the Tribe who had interest in the economic and social development of the Tribe and its membership. Id. The Board members were to be ...

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