Wisconsin
Lawyer
Vol. 81, No. 11, November
2008
Determining Tribal Jurisdiction Over Non-Tribe Members
The author provides seven principles
to help determine tribal court jurisdiction over non-tribe members
following the U.S. Supreme Court’s recent decision in Plains Commerce
Bank applying the “Montana exceptions” to the general rule against a
tribe’s lack of jurisdiction over nonmembers.
by Brian L.
Pierson
ccording to a recent report, casinos
owned by Wisconsin’s 11 federally-recognized Indian tribes
generated $1.335 billion in revenues during 2007.1 A large portion of tribal earnings are cycled
through the state’s economy to pay for a vast array of goods and
services needed to operate not only tribal casinos and other commercial
enterprises but also tribal governments. In addition, tribe members are
starting reservation-based2 businesses with
increasing frequency. What court – tribal or state – has
jurisdiction over disputes arising from these businesses? Attorneys
representing parties doing business with tribes and tribe members need
to know the jurisdictional principles that apply.
In one of its final decisions of the 2007-08 term, the U.S.
Supreme Court, in Plains Commerce Bank v. Long Family Land &
Cattle Co.,3 held that the Cheyenne
River Sioux Tribal Court lacked jurisdiction over a bank that had
engaged in extensive dealings with a corporation owned by members of the
Cheyenne River Sioux Tribe of South Dakota. The court relied on an
analytic framework established in its 1981 decision in Montana v.
United States.4 This article summarizes
the Montana rule, describes the evolution of the rule in recent
decades (culminating in the Plains Commerce Bank decision), and
identifies the principles that currently determine tribal court
jurisdiction.
The Montana Rule and Exceptions
In Montana v. United States,5 a
decision authored by Justice Potter Stewart, the U.S. Supreme Court held
that the treaties between the United States and the Crow Tribe
establishing the Tribe’s Montana reservation did not give the
Tribe authority to regulate non-Indian fishing on the Big Horn River,
which flows through the heart of the Tribe’s reservation. In
rejecting the argument that the Tribe’s inherent sovereign
authority supported its regulatory jurisdiction, the Court relied on
Oliphant v. Suquamish Indian Tribe6
and United States v. Wheeler,7
decisions in which the Court had described tribes’
“diminished status as sovereigns”8 resulting from their incorporation into the
United States and treaties with the federal government. Conceding the
retention of certain inherent tribal powers,9 the Court denied that these went beyond
“what is necessary to protect tribal self-government or to control
internal relations.”10
The power to regulate nonmembers’ activities,11 the Montana Court declared, was
beyond the tribes’ scope of authority, with two exceptions. First,
even on fee lands within reservation boundaries, “[a] tribe may
regulate, through taxation, licensing, or other means, the activities of
nonmembers who enter consensual relationships with the tribe or its
members, through commercial dealing, contracts, leases, or other
arrangements.”12 Second, “[a]
tribe may also retain inherent power to exercise civil authority over
the conduct of non-Indians on fee lands within its reservation when that
conduct threatens or has some direct effect on the political integrity,
the economic security, or the health or welfare of the tribe.”13
The two Montana exceptions are strikingly broad.
Consensual relationships supporting regulatory jurisdiction under the
first Montana exception extend not only to the tribe but to any
member of the tribe, and the scope of such relationships includes not
only commercial dealings, contracts, and leases, but also “other
arrangements.” Even in the absence of a consensual relationship,
tribes could exercise regulatory jurisdiction under the second
Montana exception provided only that the regulated conduct have
“some direct effect” on the “economic security”
or on the “health or welfare” of the tribe. These undefined,
vague terms suggested a vast sphere of nonmember conduct subject to
tribal jurisdiction.
The evolution of the Montana rule, reflecting a gradual
conservative trend in the Court from 1981 to 2008, occurred in a series
of decisions in which the Court, while never abandoning its 1981
decision, qualified, amended, and fundamentally reinterpreted it to
severely limit tribal jurisdiction. In its 1989 decision in Brendale
v. Confederated Bands of the Yakima,14
the Court, applying Montana, held that, except for isolated
“land-locked” tracts surrounded by tribal lands, tribes
could not zone reservation fee land owned by nonmembers. A tribe’s
general interest in regulating reservation land use could not, according
to the Court, support its jurisdiction under the second Montana
exception.15
Brian L. Pierson, U.W. 1983, is an attorney
with Godfrey & Kahn S.C., Milwaukee.
With Strate v. A-1 Contractors,16
decided in 1997, the Montana rule assumed its modern form. The
issue in Strate was tribal court jurisdiction over claims brought
by tribe members against a nonmember arising from a motor vehicle
accident on the Fort Berthold reservation. First, the Court extended the
Montana rule, previously applied to tribal regulatory authority,
to a tribe’s adjudicatory authority, holding that the scope of a
tribe’s adjudicatory authority could not exceed the scope of its
regulatory authority.17 Second, the Court
effectively held that the exceptions to the general Montana rule
really weren’t exceptions at all. Conceding that “[r]ead in
isolation, the Montana rule’s second exception can be
misperceived,” the Court declared as the “key” to its
proper application the underlying principle that a tribe’s
authority does not extend beyond what is necessary to protect tribal
self-government or to control internal relations.18 In other words, circumstances that seemed
to satisfy one of the two Montana exceptions still would not
support tribal jurisdiction if the exercise of such jurisdiction would
run afoul of the general Montana rule. Because the authority to
adjudicate a motor vehicle dispute between individuals, even when tribe
members are involved,19 was unnecessary to
the Tribe’s right to govern its internal affairs, the Court
concluded that jurisdiction was unwarranted. Finally, Strate
established the jurisdictional equivalency between fee land within
reservation boundaries and trust land20
subject to a state right-of-way.
Two cases decided in 2001, Atkinson v. Shirley21and Nevada v. Hicks,22 solidified the limitations on the
Montana exceptions announced in Strate. In
Atkinson, the Court held that acceptance of tribal governmental
services by a nonmember-owned hotel, on fee land within reservation
boundaries, did not constitute a consensual relationship within the
first Montana exception, and that a consensual relationship with
a tribe would support regulatory jurisdiction only if the regulation
arose out of a consensual relationship.23
Hicks reinforced the post-Strate weakness of the second
Montana exception, holding that tribal jurisdiction over a suit
against state wardens arising from a search and seizure on reservation
land was not necessary to tribal self-governance and must, therefore, be
rejected.24
The Plains Commerce Bank Case
Plains Commerce Bank (the bank), a bank owned by non-Indians and
located in Hoven, South Dakota, had a long-term relationship with the
Long Family Land and Cattle Company (the company), a South Dakota
corporation owned by Cheyenne River Sioux Tribe (CRST) members Ronnie
and Lila Long and located on the Tribe’s reservation. Beginning in
1989, the bank made various loans to the company guaranteed by the
Bureau of Indian Affairs. Many of the bank’s meetings with the
company took place on the reservation. The non-Indian father of one of
the company’s owners pledged fee land within reservation
boundaries to secure one of the loans. When the company defaulted, the
bank foreclosed on the land but later entered into new agreements under
which the company received additional loans and an option to buy back
the foreclosed property within two years. When the company proved unable
to exercise the option, the bank sold the land to non-Indians.
The company sued the bank in the tribal court, alleging that the
bank had discriminated against the company based on the race of its
owners when it offered terms to the non-Indian purchasers that were more
favorable than those offered the company. The tribal court found for the
company and the Longs and awarded damages of $750,000. In a later
supplemental judgment, the court ordered the bank to give the company an
option to purchase the parcel it still occupied on the terms offered to
the non-Indian purchasers. The CRST Court of Appeals affirmed. The bank
brought a federal action challenging the tribal court’s
jurisdiction. The district court, citing the first Montana
exception, held that the bank’s consensual relationship with the
company supported tribal court jurisdiction. The Eighth Circuit Court of
Appeals affirmed.25 On June 25, 2008, the
U.S. Supreme Court reversed.26
While previous cases involving tribal adjudicatory jurisdiction
had focused on the second Montana exception relating to conduct
on fee lands that “threatens or has some direct effect on the
political integrity, the economic security, or the health or welfare of
the tribe,” Plains Commerce Bank focused on the first
Montana exception, which permits a tribe to exercise jurisdiction
over “the activities of nonmembers who enter consensual
relationships with the tribe or its members, through commercial dealing,
contracts, leases, or other arrangements.”27 The company argued that the bank’s
longstanding consensual relationship and the reservation locus of the
land and many of the parties’ dealings supported tribal
jurisdiction. In a 5-4 decision authored by Chief Justice Roberts, the
Court held otherwise.
The Court’s decision relies on 1) a narrow construction of
the “activities of nonmembers” for purpose of the first
Montana exception, and 2) an emphasis on the tribe’s
diminished sovereignty and Montana’s general rule against
the exercise of sovereignty beyond what is necessary for
self-government. With respect to the first point, according to Justice
Roberts, the bank’s activities to which the plaintiffs objected
were nothing more than the bank’s alleged discriminatory sale of
fee land to a third party.28 Because a
tribe has no authority to regulate the sale of fee lands, there could be
no jurisdiction: “According to our precedents, ‘a
tribe’s adjudicative jurisdiction does not exceed its legislative
jurisdiction.’… We reaffirm that principle today and hold
that the Tribal Court lacks jurisdiction to hear the Longs’
discrimination claim because the Tribe lacks the civil authority to
regulate the bank’s sale of its fee land.”29
With respect to diminished
sovereignty, Justice Roberts emphasized the primacy of
Montana’s general rule over its exceptions: “[T]he
tribes have, by virtue of their incorporation into the American
republic, lost the right of governing persons within their limits except
themselves.”30 Any assertion of
tribal jurisdiction must be justified by its effect on tribal self-rule:
“The logic of Montana is that certain activities on
non-Indian fee land (say, a business enterprise employing tribal
members) or certain uses (say, commercial development) may intrude on
the internal relations of the Tribe or threaten tribal self-rule. To the
extent that they do, such activities or land uses may be
regulated.”31 While acknowledging
that “noxious uses” of fee land might meet the standard,32 the Court held that a mere sale does not:
“Once the land has been sold in fee simple to non-Indians and
passed beyond the tribe’s immediate control, the mere resale of
that land works no additional intrusion on tribal relations or
self-government.”33
Although the key holding in the Court’s decision was the
lack of tribal jurisdiction over fee land, Justice Roberts took the
opportunity to narrow the Montana exceptions in other respects.
Implicit in the first Montana exception is the notion that the
described “consensual relationships” with the tribe or its
members per se satisfy the principal rule, that is, they are
relationships that affect the tribe’s right of self-government to
a degree sufficient to support tribal jurisdiction. Justice Roberts
suggested a stricter consent requirement: “Indian courts differ
from traditional American courts in a number of significant
respects…. And nonmembers have no part in tribal government
– they have no say in the laws and regulations that govern tribal
territory. Consequently, those laws and regulations may fairly be
imposed on nonmembers only if the nonmember has consented, either
expressly or by his actions. Even then, the regulation must stem from
the tribe’s inherent sovereign authority to set conditions on
entry, preserve tribal self-government, or control internal
relations.”34 While conceding that
the bank “may reasonably have anticipated that its various
commercial dealings with the Longs could trigger tribal authority to
regulate those transactions,” a question the Court expressly
declined to decide, the Court insisted that there is no reason the Bank
should have anticipated that its general business dealings with
respondents would permit the Tribe to regulate the Bank’s sale of
land it owned in fee simple.”35
In dicta, Justice Roberts also suggested a stricter
standard for applying the second Montana exception, noting that
“[t]he conduct must imperil the subsistence of the tribal
community…. One commentator has noted that ‘the elevated
threshold for application of the second Montana exception
suggests that tribal power must be necessary to avert catastrophic
consequences.’”36 The distance
between the “catastrophic consequences” standard proposed by
Justice Roberts and the “some direct effect” language used
in the Montana case is obvious.
Principles Governing a Tribe’s Jurisdication Over Nonmembers
Today
Justice Stewart’s 1981 formulation of the Montana
exceptions does not aptly describe the rules that the U.S. Supreme Court
actually applies to matters of tribal jurisdiction today. Although the
Court continues to insist on their continued vitality, the
Montana exceptions are so encrusted with corollaries,
interpretations, and qualifications as to be almost useless. Moreover,
in view of the Court’s proclivity for ad hoc decision-making in
situations in which tribal jurisdiction is concerned, any effort to
identify rules likely to be applied in future cases is hazardous. The
following principles are nonetheless offered as a rough summary of the
current law, based on the Plains Commerce Bank case and the
antecedent Strate, Atkinson, and Hicks decisions
discussed above:
- For purposes of the first Montana exception, there must be a
nexus between the nonmember’s consensual relation with a tribe or
its members and the conduct being regulated or adjudicated. There is no
tribal counterpart to state court “general jurisdiction”
based on systematic contacts unrelated to the dispute at bar.37
- Consensual relationships with a tribe or tribe member squarely
within the first Montana exception may nonetheless be
insufficient to establish tribal jurisdiction in the absence of an
identified sovereignty interest relating to self-governance. The
tribe’s general interest in protecting the interests of its
members does not satisfy this sovereignty interest requirement.
- A tribe’s right to regulate a reservation-based business
enterprise that employs tribe members, a reservation-based commercial
development, or other nonmember activity depends on whether these
activities “intrude on internal relations” or
“threaten tribal self-rule.”
- Whether a nonmember “has consented either expressly or by his
actions” to tribal jurisdiction is relevant to the court’s
authority to exercise its jurisdiction. The reasonableness of a
nonmember’s anticipation of tribal regulation is pertinent to this
inquiry. It follows that if the tribe enacts and publishes commercial
laws governing a nonmember’s dealings with members, the nonmember
might reasonably anticipate being regulated by the tribe, thus
satisfying the Plains Commerce Bank “consent by
action” requirement and supporting the case for tribal
jurisdiction.
- For a tribe to establish jurisdiction over nonmembers on fee land
under the second Montana exception, it will have to show that the
conduct being regulated imperils the subsistence of the tribal
community. As the Strate decision illustrates, a tribe’s
desire to protect its members from nonmembers’ reckless operation
of motor vehicles on the reservation will not meet this standard.
- Except in extraordinary circumstances, such as an isolated parcel
of nonmember fee land surrounded by tribal land or an activity that
poses a grave risk to the tribal community, a tribe cannot zone fee land
or otherwise regulate nonmember uses of fee land.
- Although a tribe’s jurisdiction over nonmembers on trust land
is broader than on fee lands, trust lands over which a tribe has ceded a
landowner’s right of control, for example, by granting a right of
way, are the equivalent of fee lands. Moreover, a tribe still will
probably be unable to exercise jurisdiction over the conduct of state
officials, even on trust land, with respect to actions within the
state’s authority.
Conclusion
As the U.S. Supreme Court decisions make clear, there is a
presumption against tribal court jurisdiction over nonmembers and, in
the absence of a congressional delegation (a rare thing), the burden is
on a tribe to show that one of the Montana exceptions, as
construed by the Court, applies. There is no reason to believe that the
general trend restricting the Montana exceptions will not
continue for the foreseeable future. Tribes that enact and publish legal
codes to support the sovereignty basis for their regulation of
nonmembers increase nonmembers’ reasonable expectation of tribal
jurisdiction. In the long term, tribes’ willingness to model their
courts on state and federal courts may allay the fears of
nonmembers and the Supreme Court alike and lead to broader tribal
jurisdiction.
Endnotes
Wisconsin Lawyer