Indian Nations Law Update - February 2015: Selected Court Decisions
In Redding Rancheria v. Jewell, 776 F.3d 706 (9th Cir. 2015), the Redding Rancheria sued the U.S. Department of Interior (DOI), challenging DOI’s decision that parcels of undeveloped riverfront lands, located several miles outside the tribe’s reservation, would not be “restored lands” eligible for gaming under the Indian Gaming Regulatory Act (IGRA) if the tribe purchased them. The Ninth Circuit held that (1) the DOI’s adoption of the 25 CFR Part 292 regulations, including the prohibition of the use of the exception by a tribe that has already built a casino, was a reasonable implementation of IGRA’s “restored lands” exception, (2) the canon of construction requiring courts to interpret ambiguous statutes in tribes’ favors did not apply because “[i]n this circuit, an agency’s legal authority to interpret a statute appears to trump any practice of construing ambiguous statutory provisions in favor of Indians” and because the tribe’s preferred interpretation would disadvantage other tribes, (3) the DOI’s action was not arbitrary and capricious because it allegedly changed pre-Part 292 policy since “an agency is permitted to change its policy so long as it provides some minimal explanation for the change” and (4) it was arbitrary and capricious for the DOI, without explanation, to reject the tribe’s application without considering its offer to close its existing gaming facility and conduct its gaming at the proposed new site. The court remanded and directed the DOI to address the tribe’s offer.
In Smith v. Parker, 774 F.3d 1166 (8th Cir. 2014), the state of Nebraska, village of Pender and owners of businesses and clubs that sold alcoholic beverages brought action against Omaha Tribal Council members in their official capacities for prospective injunctive and declaratory relief from the tribe’s attempt to enforce its liquorlicense and tax laws on the owners, contending that the village and the business owners were not within the tribe’s reservation or subject to its jurisdiction. The trial court held that Pender and the plaintiff businesses were within the tribe’s reservation and the Eighth Circuit affirmed, holding that an 1882 act of Congress providing that the disputed area be “surveyed, if necessary, and sold” did not reflect the requisite congressional intent to diminish the reservation.
In Two Shields v. United States, 2015 WL 513315 (Fed. Cl. 2015), plaintiffs, including members of the Three Affiliated Tribes in North Dakota and Standing Rock Sioux Tribes, owned allotments within the oil-rich Bakken shale oil formation. They sued the United States, contending that the DOI breached its fiduciary duty as trustee by leasing their lands to oil companies at below-market royalty rates. The Court of Federal Claims granted the government’s summary judgment motion on the plaintiffs’ money damages claims, holding that the plaintiffs were members of the class action Cobell lawsuit whose claims, therefore, were released as part of the Cobell settlement resolving all claims accruing up to Sept. 30, 2009. The court dismissed the plaintiffs’ claims for an equitable accounting for lack of jurisdiction.
In U.S. v. Washington, 2015 WL 687339 (W.D. Wash. 2015), The Makah Indian Tribe (Makah), alleging encroachment on their own fishing rights, brought a subproceeding in the Washington treaty rights case initiated in 1970 (the “Boldt Litigation”) seeking a federal court order defining the “usual and accustomed” (U & A) fishing grounds of the Quileute and Quinault Tribes for purposes of their treatyreserved, off-reservation fishing rights. The Quileute and Quinault tribes argued that the proceeding was barred by laches, judicial estoppel, and acquiescence. The court disagreed: “Far from sleeping on their rights, the Makah actively worked with the Quinault and Quileute since the 1980’s to obtain amicably negotiated solutions to conflicts over their respective ocean fisheries, all the while preserving their right to seek adjudication in this Court should informal methods of dispute resolution reach an impasse. ... There was nothing unreasonable in the Makah’s decision to decline to investigate the western boundary of the Quileute and Quinault U & A and to wait to bring the issue to the court for resolution until negotiated pathways broke down with the whiting dispute. The court is unwilling to punish a tribe for attempting to solve intertribal issues intertribally and without judicial intervention, a pathway oft encouraged by the court. …” The court also rejected the argument that the Makah had the burden of proving the Quileute and Quinault U & A fishing, observing that “it is the settled law of this case that each tribe bears the burden to produce evidence to support its U & A claims.”
In California v. Picayune Rancheria of Chukchansi Indians of California, 2015 WL 545987 (E.D. Cal. 2015), several factions claiming to constitute the tribe’s legitimate government contested control of the tribe’s casino by various means, including the threat of firearms. The Federal District Court exercised jurisdiction under the Indian Gaming Regulatory Act (IGRA) and issued certain orders in the interest of public safety. When one of the factions attempted to obtain additional relief at the expense of its opponents, the court declined to expand its involvement: “Jurisdiction exists in this case pursuant to 25 U.S.C. § 2710(d) (7) (A)(ii), a provision of the IGRA, which provides in pertinent part that the ‘United States district courts shall have jurisdiction over ... any cause of action initiated by a state or Indian tribe to enjoin a Class III gaming activity located on Indian lands and conducted in violation of any Tribal– State compact....’ …Section 10.1 of the compact, which provides that the ‘tribe will not conduct Class III gaming in a manner that endangers the public health, safety, or welfare...’ While this court has jurisdiction to address safety concerns pursuant to 25 U.S.C. § 2710(d)(7)(A)(ii) and the terms of the compact, it does not have jurisdiction to resolve any intra-tribal governance dispute.”
In Brown v. Western Sky Financial, LLC, 2015 WL 413774 (M.D.N.C. 2015), the plaintiffs, all non-Indian residents of North Carolina, Western Sky Financial, LLC, an Indianowned, internet payday lender based on the Cheyenne River Sioux Reservation, and various entities involved in Western Sky’s lending activities, alleging violations of the North Carolina Consumer Finance Act, North Carolina usury statutes, North Carolina Unfair and Deceptive Trade Practices Act, North Carolina common law, as well as the federal Truth In Lending Act, Electronic Fund Transfer Act, and the Racketeer Influenced and Corrupt Organizations Act. The defendants moved to dismiss on the ground that the loan agreements provided for dispute resolution by “Arbitration, which shall be conducted by the Cheyenne River Sioux Tribal (CRST) Nation by an authorized representative in accordance with its consumer dispute rules and the terms of this agreement.” Plaintiffs contended that the forum selection clause was invalid because it purported to vest jurisdiction in a court that lacked subject matter jurisdiction and that the tribe was a biased forum. The court granted the motion, without prejudice, on the ground that the federal court should require exhaustion of tribal remedies before asserting jurisdiction where the tribe’s jurisdiction is colorable: “There is nothing in the current record suggesting any actions taken by plaintiffs themselves to warrant a finding by this court that the CRST is a fraudulent forum and not the proper jurisdiction for the action, when plaintiffs entered into contracts, that clearly stated that it is. On the present record, it would be inappropriate for this court to assume that another court is unable to decide whether or not it is the proper jurisdiction without allowing that court the first attempt to answer the question. … Because this court finds that defendants have asserted at least a colorable claim of CRST jurisdiction, this court is persuaded by the Heldt court approach and with requiring tribal court exhaustion.”
In U.S. v. Parry, 2015 WL 631979 (W.D. Mo. 2015), the United States had indicted Parry and 17 others for wire fraud, contraband cigarette trafficking in violation of the Contraband Cigarette Trafficking Act (CCTA) and other offenses related to the transportation of untaxed cigarettes purchased in Missouri into New York and their sale to non-Indians within the state. Parry, a citizen of the Seneca Nation of Indians residing and conducting business on the nation’s Cattaraugus Territory, moved to dismiss on the ground that his business was not conducted within the State of New York and the CCTA did not apply to his business. The district court denied the motion: “While case law is clear that federal law prohibits New York from taxing cigarette sales to enrolled tribal members on their own reservations for personal use, case law is equally clear that New York may tax on-reservation cigarette sales to persons other than reservation Indians.”
In Massachusetts v. Wampanoag Tribe of Gay Head, 36 F.Supp.3d 229 (D. Mass. 2014), Massachusetts sued the Wampanoag Tribe of Gay Head in a commonwealth court, alleging that the tribe’s efforts to commence commercial gaming operations on tribal land violated the parties’ congressionally-approved settlement agreement, which provided that state law, including anti-gambling laws, would apply on the tribe’s lands. The tribe removed the action to federal court and commonwealth moved to remand. The district court denied the motion, holding that resolution of the lawsuit presented substantial question of federal law: “To be clear, not every dispute with some relation to tribal gaming creates a federal question implicating federal jurisdiction, whether under the Smith doctrine or otherwise. … However, in the area of jurisdiction over and regulation of gaming on Indian tribal lands, Congress has made the federal interest clear and has provided states a very limited role—essentially, to negotiate a tribal-state compact governing the conduct of Class III gaming activities in good faith. … Courts accordingly have held that the Indian Gaming Regulatory Act (IGRA) trumps state-specific agreements and state regulations” In Massachusetts v. Wampanoag Tribe of Gay Head, 2015 WL 854850 (D. Mass. 2015), the Department of the Interior’s Office of the Solicitor had opined that the lands of the Wampanoag Tribe of Gay Head were eligible for gaming under the IGRA and the National Indian Gaming Commission (NIGC) had subsequently approved the tribe’s gaming ordinance. The commonwealth of Massachusetts sued the Wampanoag Tribe of Gay Head in a commonwealth court, alleging that the tribe’s efforts to commence commercial gaming operations on tribal land violated the parties’ congressionally-approved settlement agreement, which provided that state law, including anti-gambling laws, would apply on the tribe’s lands. After the tribe removed the action to federal court, the town of Aquinnah and the Aquinnah/Gay Head Community Association (AGHCA) intervened. The tribe moved to dismiss the AGHCA complaint on the basis of sovereign immunity and for failure to state a claim upon which relief could be granted and moved to dismiss the other complaints for failure to join the United States as a required party. The court held that (1) the Massachusetts Supreme Court’s 2004 holding in Building Inspector and Zoning Officer of Aquinnah v. Wampanoag Aquinnah Shellfish Hatchery Corp. that the tribe had waived its immunity with respect to enforcement of state land use laws was entitled to preclusive effect in the federal court, (2) the Massachusetts Supreme Court’s holding in Shellfish Hatchery that the settlement agreement continued in force and that the tribal council that entered into it could bind the tribe were also binding on the federal court, (3) the United States was not a required party, (4) the tribe’s counterclaims against the commonwealth must be dismissed based on the commonwealth’s sovereign immunity, (5) the tribe’s counterclaims against state officials were cognizable under the doctrine of Ex Parte Young and (6) the state officials’motion to dismissthe tribe’s counterclaims for lack of standing would be denied: “[T]he very existence of this lawsuit provides ample proof that the commonwealth and its officials intend to block the tribe from operating a gaming facility. Under the circumstances, it would defy common sense to conclude that the tribe’s allegations do not establish ‘plausible grounds’ for its right to relief.”
In Wells Fargo Bank, Nat. Ass’n v. Apache Tribe of Oklahoma, 2014 WL 7772267, 2015 OK CIV APP 10 (Okla. App. 2014), the Apache Tribe of Oklahoma had adopted a constitution designating its general council, comprised of members at least 18 years of age, as the “supreme governing body” of the tribe. The general council subsequently passed a resolution delegating the tribe’s “full and complete authority to the Business Committee to transact any and all business related to the tribe involving matters such as tribal land, tribal budget and any other matters relating to government programs and the Bureau of Indian Affairs...” In 2008, the tribe borrowed $4,365,000 from Wells Fargo to pay off debt and remodel its casino. The loan agreement, approved by the Business Committee, provided for the assignment of casino revenues to repay the loan, application of Oklahoma law, arbitration under American Arbitration Association rules in the event of a dispute and a waiver of sovereign immunity for enforcement of any award in the courts of Oklahoma. After the tribe defaulted, an arbitrator entered an award in favor of Wells Fargo in the amount of $2,751,160 and Wells Fargo sued in state court to enforce. The state court entered judgment in favor of Wells Fargo. The Oklahoma Court of appeals affirmed, holding that (1) although the reference to AAA rules did not vest the arbitrator with the authority to decide the question of his own jurisdiction, the tribe’s waiver of sovereign immunity did, in fact, vest the arbitrator with jurisdiction, (2) the general council’s delegation of its “full and complete authority to transact business” to the Business Committee included the authority to waive immunity even if the delegation did not mention immunity, (3) the tribe’s previous dealings reflected the understanding of the general council and Business Committee that the latter had waiver authority, (4) the arbitrator did not exceed his authority in deciding that the pledge of casino revenues did not convert the loan agreement into a management contract requiring the approval of the NIGC and (5) the Indian Gaming Regulatory Act did not preempt the state court’s authority to order turnover of casino revenues to satisfy Well Fargo’s judgment.
In Save Mille Lacs Sportsfishing, Inc. v. Minnesota Dept. of Natural Resources, 2015 WL 648326 (Minn. App. 2015), The Minnesota Department of Natural Resources (DNR) had adopted a rule, based in part on the state’s obligation to assure the treaty-reserved rights of the Chippewa tribes, that restricted the size and number of northern pike, bass and walleye that each person could take, and limited the season for taking largemouth and smallmouth bass. The plaintiffs sued, contending that the administrative record did not reference Article XIII, section 12, of the Minnesota Constitution (the Preservation Provision) or the public-trust doctrine and that the rule was beyond the DNR’s authority. The Minnesota Court of Appeals rejected the challenge and upheld the rule: “Assuming that fishing resources are within the publictrust doctrine, petitioners’ argument that the DNR had an obligation to explicitly refer to the doctrine in adopting the challenged rule is not persuasive. It would be a dramatic new rulemaking principle for us to impose upon agencies an expansive duty to identify and consider an undeveloped and possibly an irrelevant legal principle.”
In Young v. State, Slip Copy 2015 WL 567012 (Iowa App. 2015), Young, a member of the Sac and Fox Tribe of the Mississippi in Iowa, was convicted of operating a motor vehicle without a license, a simple misdemeanor, in violation of Iowa Code section 321.174 (2009). He challenged his conviction on the ground that the state court lacked jurisdiction because the offense occurred on the Sac and Fox reservation. The court of appeals affirmed, holding that (1) Congress conferred jurisdiction over tribal members on the state when it enacted Public Law 80-846, a tribespecific forerunner to Public Law 83-280, providing: “Jurisdiction is hereby conferred on the state of Iowa over offenses committed by or against Indians on the Sac and Fox Indian Reservation,” (2) Young failed to prove that the offense occurred within the reservation, (3) the “reservation road” status of the road where the offense occurred did not establish its location within reservation boundaries and (4) even if the offense occurred within the reservation, Young did not establish that title to the road was not held by the state. Based on its conclusion that Young failed to prove the offense occurred within the reservation, the court declined to consider Young’s argument that the charged offense was civil/regulatory in nature and, therefore, not within the scope of Public Law 846 jurisdiction. In the case of In re KMN, 2015 WL 806982 (Mich. App. 2015), Heidi Nelson, a non-Indian, had consented to the termination of her parental rights and the adoption of her child, KMN. The child’s father, Carlson, a member of the Match–E–Be–Nash– She–Wish Band of Pottawatomi Indians, had voluntarily consented to termination of his parental rights. A Michigan court entered an order placing KMN with the Arbutantes, a non-Indian couple, pending finalizationoftheir adoptionofKMN. The tribe intervened and appealed, arguing that the court violated the Indian Child Welfare Act (ICWA) and the Michigan Indian Family Protection Act (MIFPA) ignoring the standards for the placement of Indian children in foster or adoptive homes that reflect the unique values of Indian culture. The appellate court rejected the tribe’s ICWA challenge, citing the Supreme Court’s 2013 decision in Adoptive Couple v. Baby Girl: “In the instant case, at the time of the June 4 hearing, the Arbutantes were the only couple that had formally sought to adopt KMN. … Although the tribe’s attorney stated on the record that there was an Indian relative ready, willing and able to adopt KMN, that unnamed relative had not formally sought to adopt her and can be likened to the 100 certified families in Baby Girl that had not petitioned for adoption during the state court proceedings. … Absent a pending adoption petition of an alternative party that was eligible to be preferred under § 1915(a), there was no ICWA preference to apply at the June 4 hearing.” The court also found, however, that the placement with the Arbutantes was not warranted under the stricter standards of the MIFPA and ordered the matter remanded: “[U]nlike ICWA, under MIFPA, the fact that no alternate petition for adoption had yet been filed is irrelevant. After the trial court has been alerted that there are alternative possible placements consistent with the statute, a trial court must first ensure they have been thoroughly investigated and eliminated. Before making a placement outside of the statutorily preferred placement options, the trial court is required to address efforts to place an Indian child in accordance with this section at each hearing until the placement meets the requirements of this section.