North Star Alaska, North Star Borough, Intervenor-Appellee v. United States

North Star Alaska Housing Corporation (North Star) brought this action in district court seeking reformation of an Outlease it had entered into with the United States Army. The district court determined that it had no jurisdiction and dismissed the complaint without prejudice. North Star timely appeals. We have taken this ease en banc to resolve a conflict between North Side Lumber Co. v. Block, 753 F.2d 1482 (9th Cir.) (North Side Lumber), cert. denied, 474 U.S. 931 , 106 S.Ct. 265 , 88 L.Ed.2d 271 (1985), and Lehner v. United States, 685 F.2d 1187 (9th Cir.1982) (Lehner), cert. denied, 460 U.S. 1039 , 103 S.Ct. 1431 , 75 L.Ed.2d 790 (1983).

I

In 1986, North Star and the Secretary of the Army entered into an Outlease under which North Star was permitted to lease a portion of the Fort Wainwright Military Reservation for a period of 32 years. The document stated that 10 U.S.C. § 2667 authorized the Secretary to enter into the Outlease for the “sole purpose of constructing, operating and leasing 400 units of residential housing.” Among other things, the Outlease provided that North Star would be responsible for any taxes assessed against the leased property. North Star and the…