In a very interesting, even disturbing, development, the Village of Hobart, which has taken lands of the Oneida Indian Nation of Wisconsin through the power of eminent domain (Oneida v. Hobart), has now begun to use restrictive convenants running with the land to thwart the Nation. Here is the district court opinion upholding the restriction (from the same judge who found that the Village had the power of eminent domain against the tribe).
In this case, the Village sold a golf course to TCGC, which later went bankrupt. During bankruptcy, the village asserted its rights under a restrictive covenant that ran with the land. The covenant, added to the property when the Village sold it, prevents any owner (especially a sovereign nation like Oneida) from taking the land off the property rolls. It is clear from the opinion that the Village of Hobart did this expressly to deny the Oneida Indian Nation the right to seek a fee-to-trust acquisition by the Secretary under 25 U.S.C. 465.
We suggest that Shelley v. Kraemer and/or the 14th Amendment precludes such covenants, but it is a close question.
This covenant reads:
Restriction on Transfer. Without the express written consent of the Village of Hobart, no owner of any interest in the Subject Real Estate . . . shall transfer any interest in the Subject Real Estate to any individual, entity, . . . organization, or sovereign nation, or during the period of ownership take any action the result of which would: (1) remove or eliminate the Subject Real Estate (or any part thereof) from the tax rolls of the Village of Hobart; (2) diminish or eliminate the payment of real estate taxes levied or assessed against the Subject Real Estate (or any part thereof) and / or (3) remove the Subject Real Estate (or any part thereof) from the zoning authority and / or jurisdiction of the Village of Hobart.
Shelley v. Kraemer forbids state courts from enforcing covenants that run with the land intended to prevent the use or occupancy of land by persons of color. The 14th Amendment prohibits a state actor (like the Village) from enjoying race-based restrictive covenants. It seems clear from the opinion that the Village of Hobart is targeting the Oneida Indian Nation. So is that a violation of the 14th Amendment? Perhaps. The bank didn’t make the argument, so we don’t have a definite statement in this case, but one would expect that the Nation might intervene and make the argument.
Regardless, here are the rest of the materials:
baylake-bank-motion-for-summary-judgment
Turtle Talk 
Interesting. Does this mean a tribe can transfer fee lands to members with restrictive covenants prohibiting the further transfer to non-members without the express written consent of the tribe or where the transferee expressly consents in writing to the tribe’s exercise of both civil and criminal jurisdiction over the transferee and the property in question? It isn’t race based, it’s political. It is narrow in scope and provides an “out” provided the transferee consents to the exercise of tribal jurisdiction.
I would think so. But this Village of Hobart case also shows how the political status classification can be used to discriminate against tribes.
Quite true.
However, it also seems to suggest there is a vehicle for tribes to transfer lands to members in fee for home ownership, while ensuring against future transfers that would deprive tribes from exercising sovereign powers over it. Which presents a real opportunity in so far as it would allow members to have the economic benefit of fee ownership yet ensure that tribes have the ability to exercise sovereign powers over those lands and their owners despite future transfers of ownership to non-members and non-Indians.
In short, tribes could reap the benefits of trust status (assurance of their ability to exercise sovereign power over the land) while members reap the benefits of fee ownership (in so far as trust land is far less marketable and consequently less significant of an economic investment than fee land).