Window Rock Unified School District v. Reeves

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WINDOW ROCK UNIFIED SCHOOL No. 13-16259

DISTRICT; PINON UNIFIED SCHOOL

DISTRICT, D.C. No.

Plaintiffs-Appellees, 3:12-cv-08059-

PGR

v.

ANN REEVES; KEVIN REEVES;

LORETTA BRUTZ; MAE Y. JOHN;

CLARISSA HALE; MICHAEL COONSIS;

BARBARA BEALL,

Defendants,

and

RICHIE NEZ; CASEY WATCHMAN;

BEN SMITH; WOODY LEE; JERRY

BODIE; EVELYN MEADOWS;

UNKNOWN PARTIES, named as John

and Jane Does I–V (Current or

former members of the Navajo

Nation Labor Counsel),

Defendants-Appellants.

2 WINDOW ROCK USD V. NEZ

WINDOW ROCK UNIFIED SCHOOL No. 13-16278

DISTRICT; PINON UNIFIED SCHOOL

DISTRICT, D.C. No.

Plaintiffs-Appellees, 3:12-cv-08059-

PGR

v.

ANN REEVES; KEVIN REEVES; OPINION

LORETTA BRUTZ; MAE Y. JOHN;

CLARISSA HALE; MICHAEL COONSIS;

BARBARA BEALL,

Defendants-Appellants,

and

RICHIE NEZ; CASEY WATCHMAN;

BEN SMITH; WOODY LEE; JERRY

BODIE; EVELYN MEADOWS;

UNKNOWN PARTIES, named as John

and Jane Does I–V (Current or

former members of the Navajo

Nation Labor Counsel),

Defendants.

Appeal from the United States District Court

for the District of Arizona

Paul G. Rosenblatt, Senior District Judge, Presiding

Argued and Submitted September 17, 2015

Submission Vacated January 5, 2016

Resubmitted June 28, 2017

San Francisco, California

Filed June 28, 2017

WINDOW ROCK USD V. NEZ 3

Before: Consuelo M. Callahan, Morgan Christen,

and Michelle T. Friedland, Circuit Judges.

Opinion by Judge Friedland;

Dissent by Judge Christen

SUMMARY *

Tribal Jurisdiction

The panel reversed the district court’s decision enjoining

tribal forum proceedings on employment-related claims

against two Arizona public school districts operating schools

on leased tribal land.

The panel held that it was “colorable or plausible” that

the tribal adjudicative forum, the Navajo Nation Labor

Commission, had jurisdiction because the claims arose from

conduct on tribal land over which the Navajo Nation had the

right to exclude nonmembers, and the claims implicated no

state criminal law enforcement interests. Well-established

exhaustion principles therefore required that the tribal forum

have the first opportunity to evaluate its own jurisdiction,

including the nature of the state and tribal interests involved.

The panel reaffirmed that there exist two distinct

frameworks for determining whether a tribe has jurisdiction

over a case involving a non-tribal-member defendant: (1)

the right to exclude, which generally applies to nonmember

*

This summary constitutes no part of the opinion of the court. It

has been prepared by court staff for the convenience of the reader.

4 WINDOW ROCK USD V. NEZ

conduct on tribal land; and (2) the exceptions articulated in

Montana v. United States, 450 U.S. 544 (1981), which

generally apply to nonmember conduct on non-tribal land.

The panel held that Nevada v. Hicks, 533 U.S. 353 (2001)

(addressing concerns related to enabling state officers to

enforce state criminal laws for crimes that occurred off the

reservation), did not eliminate the right-to-exclude

framework, such that jurisdiction over a nonmember exists

only if a Montana exception applies, regardless of whether

the relevant conduct occurred on tribal or non-tribal land.

The panel held that the court’s caselaw left open the question

of what state interests might be sufficient to preclude tribal

jurisdiction over disputes arising on tribal land; therefore,

tribal jurisdiction was plausible enough that exhaustion was

required.

The panel reversed the district court’s summary

judgment in favor of the plaintiff school districts and

remanded with instructions to dissolve the injunction and

dismiss the case for failure to exhaust.

Dissenting, Judge Christen wrote that the majority’s

opinion created a split with the Seventh, Eighth, and Tenth

Circuits. She wrote that tribal jurisdiction was neither

colorable nor plausible because Montana and the Supreme

Court authority that followed it make clear that the inherent

sovereign powers of Indian tribes generally do not extend to

the activities of nonmembers. Judge Christen wrote that she

disagreed with the majority’s holding that unless a state is

seeking to enforce its criminal laws, Montana does not apply

to nonmember conduct on tribal land even in the presence of

clear competing state interests. In addition, the majority

gave short shrift to the school districts’ obligation to operate

public schools within the Navajo Reservation’s boundaries.

WINDOW ROCK USD V. NEZ 5

COUNSEL

Paul Spruhan (argued), Navajo Nation Department of

Justice, Window Rock, Arizona, for Defendants-Appellants

Richie Nez, Casey Watchman, Ben Smith, Woody Lee, Jerry

Bodie, and Evelyn Meadows.

David R. Jordan, Law Offices of David R. Jordan P.C.,

Gallup, New Mexico, for Defendants-Appellants Ann

Reeves, Kevin Reeves, Loretta Brutz, Mae Y. John, Clarissa

Hale, Michael Coonsis, and Barbara Beall.

Eileen Dennis GilBride (argued) and Georgia A. Staton,

Jones Skelton & Hochuli P.L.C., Phoenix, Arizona; Patrice

M. Horstman, Hufford Horstman Mongini Parnell & Tucker

P.C., Flagstaff, Arizona; for Plaintiffs-Appellees.

Josephine Foo, Office of the Chief Justice, Judicial Branch

of the Navajo Nation, Window Rock, Arizona, for Amicus

Curiae Navajo Nation Supreme Court.

OPINION

FRIEDLAND, Circuit Judge:

This appeal requires us to decide whether it is “colorable

or plausible” that a tribal adjudicative forum has jurisdiction

over employment-related claims against two public school

districts operating schools on leased tribal land. Because the

claims arise from conduct on tribal land and implicate no

state criminal law enforcement interests, we conclude that

tribal jurisdiction is colorable or plausible under our court’s

interpretation of Nevada v. Hicks, 533 U.S. 353 (2001).

Well-established exhaustion principles therefore require that

6 WINDOW ROCK USD V. NEZ

the tribal forum have the first opportunity to evaluate its own

jurisdiction over this case, including the nature of the state

and tribal interests involved. We thus reverse the district

court’s decision enjoining tribal forum proceedings.

I.

The question of tribal jurisdiction arose when a group of

current and former employees (the “Employees”) of two

Arizona public school districts, Window Rock Unified

School District and Pinon Unified School District (the

“Districts”), filed complaints with the Navajo Nation Labor

Commission (the “Commission”).

The Districts both operate schools on land leased from

the Navajo Nation (the “Nation”). Window Rock’s lease

requires the school district to abide by Navajo laws, to the

extent that they do not conflict with Arizona or federal law,

and it further provides that the agreement to abide by Navajo

laws does not forfeit any rights under state or federal laws.

Pinon’s lease with the Nation does not mention Navajo law.

In their complaints before the Commission, some of the

Employees alleged that the Districts owed them merit pay

under Arizona law and others alleged that the Districts had

violated their rights under the Navajo Preference in

Employment Act. 1 The Commission eventually

consolidated all of the Employees’ complaints.

The Districts moved to dismiss the complaints on the

ground that the Commission lacked jurisdiction over

personnel decisions made by Arizona public school districts.

Following a motion hearing, the Commission ordered

1

Most of the Employees are members of the Navajo Nation.

WINDOW ROCK USD V. NEZ 7

additional discovery on the relationship between the Nation

and the Districts.

Before the Commission could hold an evidentiary

hearing on the additional discovery, the Districts filed suit in

federal district court seeking a declaration that “the

[Commission] and the Navajo tribal courts lack jurisdiction

over public school districts’ employment decisions and

practices conducted on the Navajo Reservation.” The

Districts also sought an injunction “to bar further

prosecution of those claims in the tribal courts due to the lack

of jurisdiction.” The Commission, joined by the Employees,

moved to dismiss for failure to exhaust tribal remedies. The

Districts countered with a motion for summary judgment,

asserting that tribal jurisdiction was so plainly lacking that

the Districts did not need to exhaust tribal remedies. The

Commission responded that summary judgment was

unwarranted, particularly in the absence of fact-finding by

the Commission. The Employees similarly argued that

summary judgment was improper, and they also filed a Rule

56(f) motion to stay summary judgment proceedings to

allow discovery.

The district court held that tribal jurisdiction was so

plainly lacking that exhaustion in the tribal forum was not

required. Accordingly, it denied the Commission and

Employees’ motion to dismiss and the Employees’ motion

to stay summary judgment proceedings. It also granted

summary judgment to the Districts and enjoined further

tribal proceedings. The Commission and Employees timely

appealed.

II.

“We review questions of tribal court jurisdiction and

exhaustion of tribal court remedies de novo and factual

8 WINDOW ROCK USD V. NEZ

findings for clear error.” Grand Canyon Skywalk Dev., LLC

v. ‘Sa’ Nyu Wa Inc., 715 F.3d 1196, 1200 (9th Cir. 2013),

cert. denied sub nom. Grand Canyon Skywalk Dev., LLC v.

Grand Canyon Resort Corp., 134 S. Ct. 825 (2013). The

merits of the Employees’ complaints were not before the

district court, nor are they before us—the only question

presented here is whether tribal jurisdiction is so plainly

lacking that the district court properly enjoined tribal

proceedings. 2

III.

A tribal adjudicative body generally must have the first

opportunity to evaluate its jurisdiction over a matter pending

2

The dissent discusses the merits of the Employees’ claims. But the

Districts asked the district court to enjoin the tribal proceedings on the

ground that “the Navajo tribal courts lack jurisdiction over public school

districts’ employment decisions and practices conducted on the Navajo

Reservation, when the Districts are fulfilling their state responsibilities

to provide education for all Arizona citizens,” and the district court

entered the requested injunction after agreeing as a matter of law with

that broad legal principle, without discussing the merits of any particular

employee’s claim. Similarly, in defending the district court’s judgment

on appeal, the Districts argue that “[t]he facts material to the

jurisdictional issue are (1) the status of the [school districts] as non-

Indians—i.e., Arizona political subdivisions who were haled into tribal

court as defendants; and (2) the fact that the [school] districts’ conduct

at issue—employment decisions made in the scope of their constitutional

obligation to provide a general and uniform public school system—is not

connected to tribal lands.” (citations omitted). Even if we were to

consider the merits issues raised by the dissent and agreed that some of

the employees’ claims should likely fail, the dissent offers no reason to

believe that Michael Coonis’s claim lacks merit. So, even assuming a

merits evaluation were relevant to the exhaustion question, there exists

no merits-based justification for dismissing the entire consolidated

action.

WINDOW ROCK USD V. NEZ 9

before it. In National Farmers Union Insurance Cos. v.

Crow Tribe of Indians, 471 U.S. 845 (1985), the Supreme

Court explained the importance of this exhaustion

requirement: “[Congress’s] policy of supporting tribal self-

government and self-determination . . . favors a rule that will

provide the forum whose jurisdiction is being challenged the

first opportunity to evaluate the factual and legal bases for

the challenge.” Id. at 856. The Court reasoned that requiring

exhaustion of jurisdictional questions in a tribal forum would

not only appropriately respect “tribal self-government and

self-determination,” but would also serve “the orderly

administration of justice in the federal court . . . by allowing

a full record to be developed in the Tribal Court before either

the merits or any question concerning appropriate relief is

addressed.” Id. Moreover, “[e]xhaustion of tribal court

remedies . . . will encourage tribal courts to explain to the

parties the precise basis for accepting jurisdiction, and will

also provide other courts with the benefit of their expertise

in such matters in the event of further judicial review.” Id.

at 857. 3

In light of the importance of exhaustion, federal courts

will excuse the failure to exhaust in only four circumstances.

See Elliott v. White Mountain Apache Tribal Court, 566 F.3d

842, 847 (9th Cir. 2009). The Districts argue that one of

these circumstances exists here: “when it is ‘plain’ that tribal

court jurisdiction is lacking, so that the exhaustion

requirement ‘would serve no purpose other than delay.’” Id.

3

The dissent criticizes us for not explaining why the policy purposes

the Supreme Court set forth in National Farmers favor exhaustion in this

case. But those policy purposes reflect a respect for the sovereignty of

tribes and are therefore not dependent on the particular facts of any case.

That is why we have held that exhaustion is always required unless

certain limited circumstances are present. See Elliott v. White Mountain

Apache Tribal Court, 566 F.3d 842, 847 (9th Cir. 2009).

10 WINDOW ROCK USD V. NEZ

(quoting Nevada v. Hicks, 533 U.S. 353, 369 (2001)). We

have explained that the “plainly lacking” exception to the

exhaustion requirement does not apply when “jurisdiction is

‘colorable’ or ‘plausible.’” Id. at 848 (quoting Atwood v.

Fort Peck Tribal Court Assiniboine, 513 F.3d 943, 948 (9th

Cir. 2008)). We must therefore decide whether tribal

jurisdiction in this case is colorable or plausible.

IV.

Our caselaw has long recognized two distinct

frameworks for determining whether a tribe has jurisdiction

over a case involving a non-tribal-member defendant: (1) the

right to exclude, which generally applies to nonmember

conduct on tribal land; and (2) the exceptions articulated in

Montana v. United States, 450 U.S. 544 (1981), which

generally apply to nonmember conduct on non-tribal land.

The Commission and Employees argue that tribal

jurisdiction is colorable in this case under either framework.

The Districts respond that Nevada v. Hicks, 533 U.S. 353

(2001), eliminated the first framework such that jurisdiction

over a nonmember exists only if a Montana exception

applies, regardless of whether the relevant conduct occurred

on tribal or non-tribal land.

We have repeatedly rejected the Districts’ reading of

Hicks, and today we reaffirm that the right-to-exclude

framework continues to exist. Our court has read Hicks as

creating only a narrow exception to the general rule that,

absent contrary provisions in treaties or federal statutes,

tribes retain adjudicative authority over nonmember conduct

on tribal land—land over which the tribe has the right to

exclude. We have held that Hicks applies “only when the

specific concerns at issue in that case exist.” Water Wheel

Camp Recreational Area, Inc. v. LaRance, 642 F.3d 802,

813 (9th Cir. 2011). The specific concerns at issue in Hicks

WINDOW ROCK USD V. NEZ 11

related to enabling state officers to enforce state criminal

laws for crimes that occurred off the reservation. 533 U.S.

at 358 n.2. Because Arizona’s interest in the enforcement of

state criminal laws is not implicated here, we reject the

Districts’ argument that any state interest in this case plainly

defeats jurisdiction under Hicks. 4 Contrary to the dissent’s

arguments, however, this is not to say that state interests

beyond those in criminal law enforcement could never

trigger application of Hicks. Rather, we hold only that

because our caselaw leaves open the question of what state

interests might be sufficient to preclude tribal jurisdiction

over disputes arising on tribal land, tribal jurisdiction is

plausible enough here that exhaustion is required.

A.

To understand what Hicks did and did not do, it is

important to situate that case in the context of other Supreme

Court precedent.

1.

We begin with the general principle that a tribe’s right to

exclude non-tribal members from its land imparts regulatory

and adjudicative jurisdiction over conduct on that land.

The Supreme Court has long recognized that Indian

tribes have sovereign powers, including the power to

exclude non-tribal members from tribal land. See, e.g., New

Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 333

4

Because we hold that jurisdiction is colorable under the right-to-

exclude framework, we need not reach Appellants’ arguments about the

second framework.

12 WINDOW ROCK USD V. NEZ

(1983). A tribe’s regulatory authority derives from these

sovereign powers. As the Supreme Court has explained:

This power [to exclude] necessarily includes

the lesser power to place conditions on entry,

on continued presence, or on reservation

conduct, such as a tax on business activities

conducted on the reservation. When a tribe

grants a non-Indian the right to be on Indian

land, the tribe agrees not to exercise its

ultimate power to oust the non-Indian as long

as the non-Indian complies with the initial

conditions of entry. However, it does not

follow that the lawful property right to be on

Indian land also immunizes the non-Indian

from the tribe’s exercise of its lesser-included

power to tax or to place other conditions on

the non-Indian’s conduct or continued

presence on the reservation.

Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 144–45

(1982).

In Strate v. A-1 Contractors, 520 U.S. 438 (1997), the

Supreme Court tied the scope of adjudicative jurisdiction to

regulatory jurisdiction by holding that “[a]s to nonmembers,

. . . a tribe’s adjudicative jurisdiction does not exceed its

legislative jurisdiction.” 5 Id. at 453. This suggested that,

because tribes generally maintain the power to exclude and

5

Whether a tribe’s adjudicative jurisdiction equals its legislative

jurisdiction remains an open question. See Hicks, 533 U.S. at 358; Philip

Morris USA, Inc. v. King Mountain Tobacco Co., 569 F.3d 932, 940 (9th

Cir. 2009) (“[I]t is unclear whether . . . tribal adjudicative jurisdiction

extends to the boundary of tribal legislative jurisdiction.”).

WINDOW ROCK USD V. NEZ 13

thus to regulate nonmembers on tribal land, tribes generally

also retain adjudicative jurisdiction over nonmember

conduct on tribal land.

The federal government may, however, limit a tribe’s

power either by treaty or by statute. See Iowa Mut. Ins. Co.

v. LaPlante, 480 U.S. 9, 18 (1987). In interpreting the extent

of any such limits, courts do not “lightly assume that

Congress . . . intend[ed] to undermine Indian self-

government.” Michigan v. Bay Mills Indian Cmty., 134 S.

Ct. 2024, 2032 (2014). Thus, “[c]ivil jurisdiction over . . .

activities [of non-Indians on tribal land] presumptively lies

in the tribal courts unless affirmatively limited by a specific

treaty provision or federal statute.” Iowa Mut. Ins. Co.,

480 U.S. at 18. On the other hand, criminal jurisdiction over

non-Indians for offenses committed on tribal land does not

presumptively lie in the tribal courts. See Oliphant v.

Suquamish Indian Tribe, 435 U.S. 191, 195, 206–08 (1978). 6

The Supreme Court has made clear that this distinction rests

largely on the difference between Congress’s traditional

approach to tribal criminal jurisdiction, which Congress has

historically limited, and its approach to tribal civil

6

The decision in Oliphant that tribal courts lack criminal

jurisdiction over non-Indians was based partly on the Supreme Court’s

conclusion that relevant legislation and treaties at the time required this

outcome. 435 U.S. at 203–08. Since Oliphant, Congress has expanded

tribal jurisdiction to criminal cases involving nonmember Indians’

conduct on tribal land, see United States v. Lara, 541 U.S. 193, 196

(2004) (citing 25 U.S.C. § 1301(2)), and it has authorized tribal courts

“to ‘exercise special domestic violence criminal jurisdiction’ over

certain domestic violence offenses committed by a non-Indian against an

Indian,” United States v. Bryant, 136 S. Ct. 1954, 1960 n.4 (2016)

(quoting 25 U.S.C. § 1304). Nevertheless, it remains true that “[t]ribal

governments generally lack criminal jurisdiction over non-Indians who

commit crimes in Indian country.” Id. (citing Oliphant, 435 U.S. at 195).

14 WINDOW ROCK USD V. NEZ

jurisdiction, which it has not so limited. See Nat’l Farmers,

471 U.S. at 854–55.

Supreme Court precedent prior to Hicks thus indicated

that tribes generally have civil but not criminal adjudicative

jurisdiction over nonmember conduct on tribal land.

2.

By contrast, the Supreme Court has held that a tribe does

not possess any inherent sovereign right to regulate

nonmembers on non-tribal land, even if the land falls within

the boundaries of a reservation. For nonmember conduct on

non-tribal land, therefore, the Supreme Court has applied a

different framework for analyzing the scope of tribal

adjudicative authority.

In Montana v. United States, 450 U.S. 544 (1981), the

Court held that the Crow Tribe did not have the sovereign

right to regulate nonmember fishing and hunting on land that

was within the boundaries of the Crow Reservation but was

owned by nonmembers (commonly referred to as “non-

Indian fee land” or “fee land”). See id. at 563–67. The Court

then set forth two exceptions to this general rule. First, “[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.” Id. at 565. Second, “[a] tribe may . . . 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.” Id. at 566.

WINDOW ROCK USD V. NEZ 15

The Court analyzed both exceptions and found that

neither was satisfied on the facts presented. See id. at 566.

Thus, the Tribe did not have the right to regulate nonmember

fishing or hunting on fee land. Instead, the Tribe could

prohibit or regulate fishing or hunting by nonmembers only

on tribal land within the reservation, “land on which the

Tribe exercises ‘absolute and undisturbed use and

occupation.’” 7 Id. at 559 (quoting Second Treaty of Fort

Laramie, Crow Indians-U.S., May 7, 1868, 15 Stat. 649,

650).

As the Supreme Court has summarized, then, “tribes

retain considerable control over nonmember conduct on

tribal land.” Strate, 520 U.S. at 454 (emphasis added).

“[W]ith respect to non-Indian fee lands,” however,

“[s]ubject to controlling provisions in treaties and statutes,

and the two exceptions identified in Montana, the civil

authority of Indian tribes and their courts . . . generally ‘does

not extend to the activities of nonmembers of the tribe.’” 8

7

We note one apparent inconsistency in the Supreme Court’s

caselaw. Although National Farmers post-dated Montana, and although

the conduct at issue in National Farmers—like that in Montana—took

place on non-tribal land within the boundaries of a reservation, the

Supreme Court in National Farmers did not analyze the question of

jurisdiction pursuant to Montana. Instead, the Court stated that “the

existence and extent of a tribal court’s jurisdiction will require a careful

examination of tribal sovereignty, the extent to which that sovereignty

has been altered, divested, or diminished, as well as a detailed study of

relevant statutes, Executive Branch policy as embodied in treaties and

elsewhere, and administrative or judicial decisions,” and that this

“examination should be conducted in the first instance in the Tribal Court

itself.” Nat’l Farmers, 471 U.S. at 855–56 (footnote omitted).

8

The dissent suggests that Plains Commerce Bank v. Long Family

Land & Cattle Co., 554 U.S. 316 (2008), demonstrates that the Montana

exceptions should govern the jurisdictional question in this case. But

16 WINDOW ROCK USD V. NEZ

Id. at 453 (alteration omitted) (emphasis added) (quoting

Montana, 450 U.S. at 565).

B.

In Hicks, the Supreme Court modified this general

framework to what our court has understood to be a limited

extent.

The jurisdictional question in Hicks arose after state

game wardens executed a search warrant on tribal land at the

home of a tribal member suspected of committing a crime

outside the reservation. See Hicks, 533 U.S. at 356. The

suspect alleged that his property was damaged during the

search and asserted civil rights claims against the state game

wardens in tribal court. See id. at 356–57.

To resolve whether the tribal court had jurisdiction, the

Supreme Court examined “the principle that Indians have the

right to make their own laws and be governed by them[,

which] requires ‘an accommodation between the interests of

the Tribes and the Federal Government, on the one hand, and

those of the State, on the other.’” Id. at 362 (quoting

Washington v. Confederated Tribes of Colville Reservation,

447 U.S. 134, 156 (1980)). The Court explained that “tribal

authority to regulate state officers in executing process

related to the violation, off reservation, of state laws is not

essential to tribal self-government or internal relations—to

the right to make laws and be ruled by them.” Id. at 364

(internal quotation marks omitted). The Court reasoned that,

by contrast, “[t]he State’s interest in execution of process is

Plains Commerce Bank involved “a non-Indian’s sale of non-Indian fee

land,” id. at 330, and thus does not control this case, in which the conduct

at issue occurred on tribal land.

WINDOW ROCK USD V. NEZ 17

considerable.” Id. Accordingly, the Court concluded that

the tribal court lacked jurisdiction, even though the events

giving rise to the claim had transpired on tribal land. See id.

at 374.

The Supreme Court recognized in Hicks that its earlier

cases suggested that tribal jurisdiction over civil suits

depended on land ownership, but the Court stated that “[t]he

ownership status of land, . . . is only one factor to consider

in determining whether regulation of the activities of

nonmembers is ‘necessary to protect tribal self-government

or to control internal relations.’” Id. at 360 (quoting

Montana, 450 U.S. at 564). The Court reaffirmed, however,

that the ownership status of land is a “significant” factor, id.

at 370, that “may sometimes be . . . dispositive,” id.

Although the Court further suggested in Hicks that “the

general rule of Montana applies to both Indian and non-

Indian land,” id. at 360, it also stated in a footnote: “Our

holding in this case is limited to the question of tribal-court

jurisdiction over state officers enforcing state law. We leave

open the question of tribal-court jurisdiction over

nonmember defendants in general.” Id. at 358 n.2.

C.

Although the Districts and the dissent would have us

read Hicks to eliminate the right-to-exclude framework, our

court has repeatedly rejected this interpretation. We have

held that “Hicks is best understood as the narrow decision it

explicitly claims to be,” and we have emphasized that

Hicks’s “application of Montana to a jurisdictional question

arising on tribal land should apply only when the specific

concerns at issue in [Hicks] exist.” Water Wheel, 642 F.3d

at 813. When other concerns have been present in civil cases

involving nonmember conduct on tribal land, we have held

18 WINDOW ROCK USD V. NEZ

that tribal courts have jurisdiction unless a treaty or federal

statute provides otherwise—regardless of whether the

Montana exceptions would be satisfied.

In McDonald v. Means, 309 F.3d 530 (9th Cir. 2002), for

example, we held that a tribal court had jurisdiction over a

tort suit arising from an accident on a road within a

reservation because it was a tribal road—even though neither

Montana exception applied. See id. at 535–40, 536 n.2. We

explained that Hicks did not preclude jurisdiction because its

holding was limited to “the question of tribal-court

jurisdiction over state officers enforcing state law.” Id. at

540 (quoting Hicks, 533 U.S. at 358 n.2). In doing so, we

explicitly rejected the argument that Hicks modified or

overruled Montana such that it would “bar tribal jurisdiction

not only over the conduct of nonmembers on non-Indian fee

land but on tribal land as well.” Id. at 540 n.9.

Similarly, in Water Wheel Camp Recreational Area, Inc.

v. LaRance, 642 F.3d 802 (9th Cir. 2011), we reaffirmed that

narrow interpretation of Hicks. We held that the Tribe’s

right to exclude implied tribal civil jurisdiction over an

eviction proceeding that arose after a nonmember, private

lessee of tribal land failed to pay rent. Id. at 805–06, 812–

13. We explained that the Montana framework was

inapplicable because the conduct at issue occurred on tribal

land. Id. at 809–14. We also reiterated that Hicks is limited

to situations in which “the specific concerns at issue in that

case exist.” 9 Id. at 813.

Although our decision in Philip Morris USA, Inc. v. King Mountain

9

Tobacco Co., 569 F.3d 932 (9th Cir. 2009), could arguably be read to

extend the Montana framework more broadly, we explained in Water

Wheel that “Philip Morris’s comments regarding jurisdiction are best

WINDOW ROCK USD V. NEZ 19

We again adhered to our narrow reading of Hicks in

Grand Canyon Skywalk Development, LLC v. ‘Sa’ Nyu Wa

Inc., 715 F.3d 1196 (9th Cir. 2013). We held that tribal

jurisdiction was not plainly lacking over a property and

contract dispute involving a company that was operating a

tourist attraction on tribal land. See id. at 1199, 1205. We

held instead that the right-to-exclude framework applied

because the dispute arose on tribal land, and we

characterized Montana as “consider[ing] tribal jurisdiction

over nonmember activities on non-Indian land, held in fee

simple, within a reservation.” Id. at 1205. Given the lack of

any “obvious state interests at play” we concluded that, “[a]t

the very least, it [could] not be said that the tribal court

plainly lack[ed] jurisdiction” under Hicks. 10 Id. We

understood as a reiteration of the Supreme Court’s rule that a tribe’s

adjudicative jurisdiction may not exceed its regulatory jurisdiction.”

642 F.3d at 815. “Furthermore,” we continued, “Philip Morris did not

involve a question related to the tribe’s authority to exclude or its interest

in managing its own land. To the contrary, the activity in question

occurred off reservation.” Id. Similarly, although Smith v. Salish

Kootenai College, 434 F.3d 1127 (9th Cir. 2006) (en banc), could

arguably be read to extend the Montana framework, the jurisdictional

question in Smith arose in a different context from the one presented

here. In Smith, a nonmember challenged a tribal court’s authority to

adjudicate a claim that he had filed as a plaintiff in tribal court. Id. at

1128, 1133. We held that by filing the claim, the nonmember had

consented to tribal jurisdiction. Id. at 1136. By contrast, nonmember

defendants—not plaintiffs—challenge the tribal forum’s jurisdiction in

this case.

10

The dissent here describes Water Wheel and Grand Canyon as

“acknowledge[ing] that Hicks requires application of the Montana

framework when there are ‘competing state interests at play.’” In fact,

in both cases we identified the lack of competing state interests as a

reason why the Montana framework did not apply, Grand Canyon,

715 F.3d at 1205; Water Wheel, 642 F.3d at 805, but we did not say that

the presence of competing state interests—whatever their nature—would

20 WINDOW ROCK USD V. NEZ

therefore held that exhaustion of tribal remedies was

required. See id. at 1200–01.

Our precedent thus makes clear that the right-to-exclude

framework survives the narrow carve out effected by

Hicks. 11

automatically cause Montana to apply. Indeed, in Grand Canyon, we

stated that “when a competing state interest exists courts balance that

interest against the tribe’s” to determine whether there is tribal

jurisdiction. 715 F.3d at 1205. Here, the tribal tribunal had ordered

discovery on the nature of the tribal and state interests at stake, but the

district court enjoined the tribal proceedings before that discovery or any

hearing about it could occur. We thus do not know the full contours of

the tribal and state interests at stake, including whether or how, as the

dissent contends, Arizona’s “interest in complying with a statutory and

constitutional directive to provide a uniform system of public education

to all the State’s children” is implicated by the individual employment

disputes in this case. Indeed, the parties dispute whether the Districts are

traditional school districts controlled by state or local government, or

whether they are “special-purpose governments with a separately elected

governing body” that are “legally separate, and fiscally independent of

other state and local governments,” and thus dispute how directly the

State’s policies are involved. Nor do we know how the tribal tribunal

would have balanced the interests at stake here if exhaustion had run its

course.

11

The dissent apparently disagrees with our precedents in this area.

But we as a three-judge panel are bound by those precedents absent an

intervening irreconcilable Supreme Court decision. See Miller v.

Gammie, 335 F.3d 889, 892–93 (9th Cir. 2003) (en banc). The dissent

points to no such Supreme Court decision. Indeed, every Supreme Court

case that the dissent discusses was decided before Water Wheel and

Grand Canyon and thus cannot be described as an intervening decision.

The dissent refers without citation to “all existing authority” that

establishes that when “there are competing state interests at stake, tribal

jurisdiction over nonmembers only exists if at least one of the two

Montana exceptions is satisfied.” We are unaware of any such authority

from our court or the Supreme Court.

WINDOW ROCK USD V. NEZ 21

V.

Tribal jurisdiction is plausible in this case because (a) the

schools operated by the Districts are located on tribal land

over which the Navajo Nation maintains the right to exclude,

and (b) state criminal law enforcement interests are not

present here. We need not decide whether Hicks could be

expanded to cover state interests other than those in criminal

law enforcement because the only issue here is whether

jurisdiction is colorable or plausible under our current

precedent.

A.

The 1868 treaty that established the Navajo Reservation

makes clear that the Navajo Nation has the right to exclude

nonmembers from the land on which the Districts’ schools

are now located. Article II of the treaty defines the

reservation’s boundaries and contains an “exclusion” clause:

[T]he United States agrees that no persons

except those herein so authorized to do, and

except such officers, soldiers, agents, and

employe[e]s of the government, or of the

Indians, as may be authorized to enter upon

Indian reservations in discharge of duties

imposed by law, or the orders of the

President, shall ever be permitted to pass

over, settle upon, or reside in, the territory

described in this article.

Treaty between the United States of America and the Navajo

Tribe of Indians, Navajo Tribe of Indians-U.S., art. II, June

1, 1868, 15 Stat. 667. In Article VI of the treaty, the Navajo

tribe agreed “to compel their children . . . to attend school,”

and the United States committed to providing teachers who

22 WINDOW ROCK USD V. NEZ

would “reside among” the tribe. Although this provision

suggests that the Navajo Nation may have waived its right to

exclude federal teachers and schools, it says nothing about

the Navajo Nation’s authority to exclude state officials. 12

Indeed, interpreting that treaty in a case involving

Arizona’s right to tax Navajo tribe members on tribal land,

the Supreme Court held that “it cannot be doubted that the

reservation of certain lands for the . . . Navajos and the

exclusion of non-Navajos from . . . [those lands] was meant

to establish the lands as within the exclusive sovereignty of

the Navajos.” McClanahan v. State Tax Comm’n of Ariz.,

411 U.S. 164, 174–75 (1973). Absent explicit congressional

action to modify or eliminate tribal rights granted by a treaty,

those rights remain. See South Dakota v. Yankton Sioux

Tribe, 522 U.S. 329, 343 (1998) (“Congress possesses

plenary power over Indian affairs, including the power to

modify or eliminate tribal rights. Accordingly, only

Congress can alter the terms of an Indian treaty by

diminishing a reservation, and its intent to do so must be

‘clear and plain.’” (citations omitted) (quoting United States

v. Dion, 476 U.S. 734, 738–39 (1986))).

Thus, as the treaty makes clear, the land at issue here is

“within the exclusive sovereignty of the Navajos,” and from

this sovereignty, regulatory and adjudicative authority

follow. See Merrion v. Jicarilla Apache Tribe, 455 U.S. 130,

12

The dissent states that Arizona “became subject to the Treaty’s

specific requirement of government schools on Indian land” without

citing any authority for that proposition. As discussed infra, the

Enabling Act required Arizona to establish a system of public education,

but it said nothing about Arizona taking over the federal government’s

treaty relationship with the Navajo, as the dissent seems to suggest.

WINDOW ROCK USD V. NEZ 23

144–45 (1982); Strate v. A-1 Contractors, 520 U.S. 438, 453

(1997).

The Districts argue, however, that the treaty is not broad

enough to support jurisdiction over state school districts.

Instead, according to the Districts, the treaty protects only

the Navajo Nation’s authority over tribal lands and internal

affairs. But it is at least plausible that the Tribe has

adjudicative jurisdiction here because the conduct occurred

on tribal land, where the Navajo Nation has the right to

exclude. See McClanahan, 411 U.S. at 174 (“[T]his Court

in interpreting Indian treaties, [has] adopt[ed] the general

rule that ‘[d]oubtful expressions are to be resolved in favor

of [the Tribe].’” (third alteration in original) (quoting

Carpenter v. Shaw, 280 U.S. 363, 367 (1930))).

The Districts next argue that whatever rights the treaty

originally preserved for the Navajo Nation, Congress

eliminated the Nation’s right to exclude, and thus its

regulatory and adjudicative authority, by enacting the New

Mexico-Arizona Enabling Act (the “Enabling Act”), ch. 310,

36 Stat. 557 (1910). The Enabling Act authorized the

creation of the State of Arizona, and it required, as a

condition of admission to the United States, the adoption of

a constitution requiring the establishment and maintenance

of a public school system. Id. at 570. It also specifically

mandated that “the schools, colleges, and universities

provided for in this Act shall forever remain under the

exclusive control of the said State.” Id. at 573–74. The

Districts argue that, under this congressional enactment,

even schools located on tribal land must remain under the

exclusive control of the State, including for purposes of

adjudicative jurisdiction. But “courts will not lightly assume

that Congress in fact intends to undermine Indian self-

government.” Michigan v. Bay Mills Indian Cmty., 134 S.

24 WINDOW ROCK USD V. NEZ

Ct. 2024, 2032 (2014). And nothing in the Enabling Act

specifically addresses state schools on tribal land. In fact,

the Enabling Act required Arizona, as a condition of

admission, to disclaim any right to tribal land within its

boundaries. See 36 Stat. at 569. Thus there are at least

colorable arguments on both sides of the question whether

the Enabling Act eliminated the Nation’s right to exclude.

The Districts’ argument is therefore not strong enough to

render tribal jurisdiction implausible. 13

The Districts further argue that Congress abrogated the

treaty when it authorized, with the Navajo Nation’s consent,

enforcement of state compulsory school attendance laws.

But this argument likewise fails to demonstrate that tribal

jurisdiction is clearly lacking. It is true that Congress

authorized state officials to enter tribal land for the limited

purpose of enforcing compulsory school attendance laws,

and that the Navajo Nation consented to the enforcement on

tribal land of such laws. See Act of Feb. 15, 1929, ch. 216,

45 Stat. 1185; Act of Aug. 9, 1946, ch. 930, 60 Stat. 962

(amending the Act of Feb. 15, 1929); 10 Navajo Nation Code

§ 503. But, beyond officers enforcing truancy laws, such

authorization and consent do not abrogate the right to

exclude state public schools and their employees more

generally—or the regulatory and adjudicative jurisdiction

attendant to that right. Indeed, the fact that the Districts had

to sign leases with the Navajo Nation to operate schools on

13

To the extent that the Districts argue that Arizona is under a

federal mandate to provide a free public education to Navajo children,

any such mandate does not necessarily require that schools be located on

tribal land as opposed to, for example, land located within the boundaries

of the reservation but owned by the State or nonmembers.

WINDOW ROCK USD V. NEZ 25

Navajo land suggests that the Navajo Nation maintains the

right to exclude state schools.

Furthermore, the leases themselves cannot be understood

as a surrender of tribal jurisdiction. “[U]nless expressly

waived ‘in unmistakable terms’ within [a] contract, a tribe

retains its inherent sovereignty, and as such, the tribe may

have jurisdiction.” Grand Canyon Skywalk Dev., LLC v.

‘Sa’ Nyu Wa Inc., 715 F.3d 1196, 1205 (9th Cir. 2013)

(quoting Merrion, 455 U.S. at 148). Neither lease “expressly

waive[s] in unmistakable terms” tribal jurisdiction. Window

Rock’s lease requires the school district to abide by Navajo

laws, to the extent that they do not conflict with Arizona or

federal law, and it further provides that the agreement to

abide by Navajo laws does not forfeit any rights under state

or federal laws. Pinon’s lease does not mention Navajo law

or jurisdiction. At most, the Window Rock and Pinon leases

are ambiguous as to their effect on tribal jurisdiction, which

leads us to conclude that tribal jurisdiction is not plainly

lacking. 14

B.

The Districts argue in the alternative that Arizona’s

interest in this case is important enough that Hicks applies to

deprive the tribal courts of jurisdiction. But as discussed

above, our court has taken Hicks at its word that its “holding

14

Although the employment contracts of two employees state that

jurisdiction for matters arising out of the contract lie with Arizona state

courts and federal courts, most of the contracts provided only that the

employees agreed to abide by state and federal law and were silent as to

the laws that would govern the contractual relationship and as to where

disputes about the employment relationship would be litigated. Most of

the contracts, including Michael Coonis’s, see n.2 supra, lack any

provisions that even arguably bear on the tribal jurisdiction question.

26 WINDOW ROCK USD V. NEZ

. . . is limited to the question of tribal-court jurisdiction over

state officers enforcing state law.” Nevada v. Hicks,

533 U.S. 353, 358 n.2 (2001). Because “the specific

concerns at issue in that case,” Water Wheel Camp

Recreational Area, Inc. v. LaRance, 642 F.3d 802, 813 (9th

Cir. 2011), are not present here, it is at least plausible that

tribal jurisdiction exists. Exhaustion is therefore required.

Our conclusion is bolstered by National Farmers Union

Insurance Cos. v. Crow Tribe of Indians, 471 U.S. 845

(1985). There, a tribal member student was injured at a

school on state land within the boundaries of an Indian

reservation. Id. at 847. The Supreme Court required tribal

court exhaustion in the resulting tort suit. See id. at 847,

856–57. This case arguably presents even stronger reasons

to require tribal court exhaustion, because, unlike the school

in National Farmers, the schools operated by the Districts

are located on tribal land, not state-owned land.

In sum, because the conduct at issue here occurred on

tribal land over which the Navajo Nation has the right to

exclude nonmembers, and because state criminal law

enforcement interests are not present, we hold that tribal

jurisdiction is at least colorable or plausible and that

exhaustion in the tribal forum is therefore required.

CONCLUSION

For the foregoing reasons, we REVERSE the grant of

summary judgment and REMAND to the district court with

instructions to DISSOLVE the injunction and DISMISS the

case for failure to exhaust.

WINDOW ROCK USD V. NEZ 27

CHRISTEN, Circuit Judge, dissenting:

The opinion issued today creates a circuit split and is

notable for what it leaves out. First, the majority does not

explain that, before they filed claims in tribal court, five out

of the seven employee claimants had already received

adverse state-court rulings on their claims against the school

districts. The majority also overlooks that two of the

employee claimants had employment contracts specifying

that jurisdiction for any employment disputes would

exclusively lie in state or federal court. The majority

nominally recognizes the pathmarking case on tribal

jurisdiction over nonmembers, Montana v. United States,

450 U.S. 544 (1981), only to flip its seminal holding.

Montana, and the Supreme Court authority that followed it,

make clear that the inherent sovereign powers of Indian

tribes generally do not extend to the activities of

nonmembers. See Nevada v. Hicks, 533 U.S. 353, 358–59

(2001).

The majority takes refuge primarily in two entirely

distinguishable cases from our circuit, Water Wheel Camp

Recreational Area, Inc. v. LaRance, 642 F.3d 802 (9th Cir.

2011) (per curiam), and Grand Canyon Skywalk

Development, LLC v. ‘Sa’ Nyu Wa Inc., 715 F.3d 1196 (9th

Cir. 2013), which purport to limit Montana’s framework to

cases where there are competing state interests. Water

Wheel and Grand Canyon are already recognized as outliers,

but the majority goes much farther, striking out on its own

and holding that unless a state is seeking to enforce its

criminal laws, Montana does not apply to nonmember

conduct on tribal land even in the presence of clear

competing state interests.

Finally, in my view, the majority gives short shrift to the

school districts’ obligation to operate public schools within

28 WINDOW ROCK USD V. NEZ

the Navajo Reservation’s boundaries, treating Window Rock

and Pinon Unified School Districts as private parties

engaged in consensual, private-sector contractual

relationships on the Navajo Reservation. In fact, the districts

are non-tribal-member political subdivisions of the State of

Arizona with statutory and state constitutionally imposed

mandates to provide a uniform public school system to all

Arizona’s children. For these reasons, tribal jurisdiction

over these consolidated disputes is neither colorable nor

plausible, and I must respectfully dissent.

BACKGROUND

This appeal addresses seven cases consolidated by the

Navajo tribal court, the Navajo Nation Labor Commission.1

The claimants are not similarly situated. The first four,

Loretta Brutz, Mae John, and Ann and Kevin Reeves, are

employees of Window Rock Unified School District.

Respectively, they work as a speech therapist and

pathologist, a speech language pathologist, a school

psychologist, and a physical therapist. None of them are

certified teachers. Brutz and John are members of the

Navajo Nation; Ann and Kevin Reeves are not. These four

claimants (the Brutz claimants) filed a complaint in state

superior court challenging Window Rock’s determination

that they are not entitled to the merit pay that Arizona’s

public school teachers receive pursuant to Arizona’s

Proposition 301. See Ariz. Rev. Stat. § 15-977(A), (B). The

state superior court agreed with the school district that non-

teachers are not entitled to Proposition 301 merit pay, and

1

The tribal court consolidated the separately filed complaints of

Loretta Brutz, Mae John, and Ann and Kevin Reeves in 2009. The tribal

court later consolidated these complaints with those of Michael Coonis,

Clarissa Hale, and Barbara Beall.

WINDOW ROCK USD V. NEZ 29

the Arizona Court of Appeals affirmed that decision. See

Reeves v. Barlow, 251 P.3d 417 (Ariz. Ct. App. 2011).

Rather than seek review in the Arizona Supreme Court, the

Brutz claimants pressed their argument for teacher merit pay

by filing new complaints, this time in tribal court.

The next two claimants, Michael Coonis and Clarissa

Hale, are members of the Navajo Nation and former

employees of Window Rock. Coonis and Hale allege that

Window Rock violated the Navajo Preference in

Employment Act (NPEA). 2 They contend that Window

Rock failed to promote them to positions for which they

were the most qualified Navajos. After filing employment

charges with the Office of Navajo Labor Relations (ONLR),

Coonis and Hale filed complaints with the tribal court.

The final claimant, Barbara Beall, is a member of the

Navajo Nation and a former employee of Pinon Unified

School District. Pinon terminated Beall for unprofessional

conduct and continual and repeated failure to comply with

school-district policies. Beall appealed her termination to a

state administrative hearing officer, and lost. Instead of

filing an appeal in superior court, Beall filed an employment

charge with the ONLR and a complaint in tribal court. Both

allege that Pinon violated the NPEA by firing Beall without

just cause.

All seven claimants signed employment contracts with

the school districts agreeing to abide by applicable laws of

the United States and the State of Arizona, as well as the

2

The NPEA requires employers to give preference in employment

to Navajos and dictates that employers may not fire Navajo employees

without just cause. See 15 Navajo Nation Code §§ 601, et seq.

30 WINDOW ROCK USD V. NEZ

State Board of Education’s policies, rules, and regulations.

Hale’s and Beall’s contracts further specified that “Arizona

State and federal courts shall exercise exclusive jurisdiction

over any and all matters arising out of this contract.” 3

In tribal court, Window Rock and Pinon filed motions to

dismiss these claims for lack of tribal-court jurisdiction,

giving the tribal court first crack at resolving this

jurisdictional dispute. Without ruling on the motion to

dismiss, the tribal court consolidated the employees’ claims,

and ordered an evidentiary hearing for the school districts to

present detailed evidence concerning the history of

government-to-government compacts between the Navajo

Nation and the State of Arizona and the ethnic composition

of the districts. Only then did the school districts file this

action in federal court seeking to enjoin the tribal-court

proceedings and arguing that exhaustion was not required

because the tribal court plainly lacked jurisdiction. The

school districts named as defendants the seven claimants

identified above, and members of the tribal court assigned to

the consolidated case.

In federal court, the defendants filed a motion to dismiss,

and the school districts filed a motion for summary

judgment. The district court granted Window Rock and

Pinon’s motion for summary judgment. In doing so, the

court began with the touchstone authority concerning tribal-

3

By providing this background, I do not suggest that the merits of

the claimants’ disputes with the school districts are before us. The nature

of the claims, not the merits of the claims, gives context to the

jurisdictional question we must decide. It also shows that: (1) several of

the claimants are actually challenging the jurisdiction of the state courts

that already rendered verdicts on the same claims they raise here; and

(2) unlike many cases involving challenges to tribal jurisdiction, comity

concerns in this case weigh heavily against exhaustion.

WINDOW ROCK USD V. NEZ 31

court jurisdiction over non-tribal members, Montana v.

United States, 450 U.S. 544 (1981). The court recognized

that Montana’s general rule governed these claims due to

“the state’s considerable interest, arising from outside of the

reservation, in providing for a general and uniform public

education.” The court considered Montana’s two

exceptions, but decided that neither of them established

tribal jurisdiction over these employment-related disputes

between the school districts and their present and former

employees, and that further factual development was not

necessary because tribal jurisdiction was plainly lacking.

The panel majority reverses, deciding that tribal-court

jurisdiction is plausible and exhaustion is thus required. 4 I

would affirm the district court’s ruling in all respects.

DISCUSSION

I. Although Indian Tribes Retain Inherent Sovereign

Powers, They Do Not Possess the Full Attributes of

Sovereignty.

“Indian tribes are ‘unique aggregations possessing

attributes of sovereignty over both their members and their

territory.’” Montana, 450 U.S. at 563 (quoting United States

v. Wheeler, 435 U.S. 313, 323 (1978), superseded by statute

on other grounds as recognized in United States v. Lara,

541 U.S. 193, 199–207 (2004)). They possess inherent

4

The majority describes several reasons behind the policy favoring

exhaustion, see Nat’l Farmers Union Ins. Cos. v. Crow Tribe of Indians,

471 U.S. 845, 856–57 (1985), but does not explain why the policy

weighs in favor of exhaustion in this case. Strate v. A–1 Contractors,

520 U.S. 438, 450 (1997), makes clear that the exhaustion preference is

based on prudential considerations and is not required if tribal

jurisdiction is plainly lacking. See id. at 450–51. This inquiry is highly

case specific.

32 WINDOW ROCK USD V. NEZ

“powers of self-government.” 25 U.S.C. § 1301. “Thus, in

addition to the power to punish tribal offenders, the Indian

tribes retain their inherent power to determine tribal

membership, to regulate domestic relations among

members, and to prescribe rules of inheritance for

members.” Montana, 450 U.S. at 564. Tribes “may also

exclude outsiders from entering tribal land,” Plains

Commerce Bank v. Long Family Land & Cattle Co.,

554 U.S. 316, 328 (2008), and “place conditions on entry, on

continued presence, or on reservation conduct, such as a tax

on business activities conducted on the reservation,”

Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 144 (1982).

Tribes retain these inherent sovereign powers in the absence

of contrary treaties or federal statutes. See Nevada v. Hicks,

533 U.S. 353, 365 (2001).

But “Indian tribes are . . . no longer ‘possessed of the full

attributes of sovereignty.’” Wheeler, 435 U.S. at 323

(quoting United States v. Kagama, 118 U.S. 375, 381

(1886)). “Their incorporation within the territory of the

United States, and their acceptance of its protection,

necessarily divested them of some aspects of the sovereignty

which they had previously exercised.” Id. “[E]xercise of

tribal power beyond what is necessary to protect tribal self-

government or to control internal relations . . . cannot survive

without express congressional delegation.” Montana,

450 U.S. at 564.

II. Tribal Jurisdiction Generally Does Not Extend to

Non-Tribal Members.

The panel majority concludes that absent contrary

treaties or federal statutes, Indian tribes’ inherent sovereign

right to exclude generally affords tribal-court jurisdiction

over nonmember conduct on tribal land. Not so. Supreme

Court precedent and our own case law makes clear that at

WINDOW ROCK USD V. NEZ 33

least where there are competing state interests, tribes

generally lack jurisdiction over the conduct of non-tribal

members within the boundaries of a reservation, regardless

of the status of the land on which nonmember conduct

occurs.

In Montana v. United States, the Supreme Court

addressed whether the Crow Tribal Council had jurisdiction

to regulate non-Indian hunting and fishing on non-Indian

land located within the Crow Reservation. 5 450 U.S. at 547.

Finding no treaties or statutes that conferred tribal authority

to regulate such conduct on non-Indian land within the

reservation, the Supreme Court discussed whether such

regulatory authority existed by virtue of the Crow Tribe’s

inherent sovereign authority. Id. at 557–66. The Supreme

Court stated that as a “general proposition[,] . . . the inherent

sovereign powers of an Indian tribe do not extend to the

activities of nonmembers of the tribe.” Id. at 565. “[T]he

Indian tribes have lost any ‘right of governing every person

within their limits except themselves.’” Id. (quoting

Fletcher v. Peck, 10 U.S. 87, 147 (1810)).

The Montana Court nonetheless articulated two

exceptions to the general rule of no tribal jurisdiction over

nonmembers: (1) “[a] tribe may regulate, through taxation,

5

The State of Montana owned this land in fee simple. See Montana,

450 U.S. at 547–48, 556. Reservation land generally falls into three

categories: (1) unallotted lands held in trust by the United States for the

Tribe; (2) allotted land held in trust by the United States for individual

Indians; and (3) fee lands now owned by non-Indians. See id. at 458; see

also Big Horn Cty. Elec. Co-op., Inc. v. Adams, 219 F.3d 944, 948 (9th

Cir. 2000) (“There is a checkerboard pattern of land ownership on the

Reservation composed of fee land owned by non-Indians and members

of the Tribe and trust land held by the United States in trust for the

Tribe.”).

34 WINDOW ROCK USD V. NEZ

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”; and (2) “[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 tribes.”

Id. at 565–66. The Supreme Court then held that regulating

non-Indian hunting and fishing on non-Indian land did not

fall into either exception and, as such, was not within the

Crow Tribe’s jurisdiction. Id. at 566.

Montana was directed at tribal regulatory authority, but

in Strate v. A–1 Contractors, the Supreme Court extended

Montana’s rule to tribal adjudicative authority. 520 U.S.

438, 442 (1997). Strate arose when two non-Indians were

involved in a car accident on a highway that crossed the Fort

Berthold Indian Reservation in North Dakota. Id. at 442–43.

The state operated the highway pursuant to a federally

granted right of way, but the tribal court determined it had

jurisdiction to hear a suit for damages between the drivers,

one driver’s employer, and the employer’s insurer. Id. at

443–44. The tribal-court defendants sued in federal court to

enjoin the tribal-court proceedings, id. at 444, eventually

leading to the Supreme Court’s first statement that while

Montana applies to questions of tribal adjudicative

jurisdiction, “[a]s to nonmembers, . . . a tribe’s adjudicative

jurisdiction does not exceed its legislative jurisdiction,” id.

at 453. Applying this holding to the accident in Strate, the

Court held that neither Montana exception afforded tribal-

court jurisdiction over “run-of-the-mill” car-accident suits

occurring on state-operated highways. Id. at 456–59.

WINDOW ROCK USD V. NEZ 35

In these decisions, the Supreme Court broadly stated the

general rule of no tribal jurisdiction over nonmembers, but

the Court only had occasion to apply the rule to conduct on

land owned or controlled by non-Indians. That changed in

Nevada v. Hicks, where the Supreme Court addressed tribal-

court jurisdiction over a claim for damages arising from a

state game warden’s service of process on tribal land.

533 U.S. 353, 356–57 (2001). In Hicks, Nevada state game

wardens allegedly damaged property of tribal member Floyd

Hicks and exceeded the bounds of a search warrant while

searching Hicks’ home for evidence that he unlawfully killed

a bighorn sheep off the reservation. Id. The Supreme Court

held that the tribal court did not have jurisdiction over Hicks’

civil claims against the state game wardens. Id. at 364–69.

The Hicks Court further held that the State of Nevada

was not required to exhaust tribal remedies before bringing

its jurisdictional challenge in federal court because the tribal

court plainly lacked jurisdiction. Id. at 369. The decision

expressly extended Montana’s general rule of no tribal

jurisdiction to non-Indian conduct on Indian land. Id. at 360

(stating that “the general rule of Montana applies to both

Indian and non-Indian land” and “[t]he ownership status of

the land . . . is only one factor to consider”). The Court was

clear that its ruling did not contravene “the principle that

Indians have the right to make their own laws and be

governed by them,” but equally clear that this right must be

balanced against the State’s “interests outside the

reservation.” Id. at 362.

The Supreme Court reaffirmed the Hicks holdings in

Plains Commerce Bank v. Long Family Land & Cattle Co.,

554 U.S. 316 (2008). Plains Commerce Bank involved

allegations that a non-Indian bank sold fee land that it owned

on a reservation to non-Indians under terms that were more

36 WINDOW ROCK USD V. NEZ

favorable than terms the bank offered to an Indian couple.

See id. at 320–24. The couple sued the bank for

discrimination in tribal court, and they were awarded a

$750,000 general verdict. Id. at 323. The bank sought a

declaratory judgment in federal district court that the tribal

judgment was null and void due to lack of jurisdiction over

the couple’s discrimination claim. Id. Applying Montana,

the Supreme Court agreed with the bank. Id. at 324.

The Court began its analysis with the principle that

“tribes do not, as a general matter, possess authority over

non-Indians who come within their borders.” Id. at 328. The

Supreme Court reiterated that although this principle applies

with particular strength to “non-Indian fee land,” the

ownership of the land is just one factor, and tribal authority

over nonmember conduct on all land within a reservation is

restricted. See id. at 327–28. Plains Commerce Bank

recognized the continuing validity of the two Montana

exceptions, but held that neither exception conferred

jurisdiction on the tribal court under the facts of that case.

Id. at 329–30, 340–41. 6

6

The panel majority relies heavily on the fact that the school

districts are located on tribal land, whereas the conduct in Plains

Commerce Bank occurred on non-Indian fee land. Boiled down, the

majority announces a rule that tribal jurisdiction is plausible any time

nonmember conduct occurs on tribal land unless state criminal law

enforcement interests are implicated. (“But it is at least plausible that

the Tribe has adjudicative jurisdiction here because the conduct occurred

on tribal land, where the Navajo Nation has the right to exclude.”). In

doing so, the majority overlooks the general directives in Plains

Commerce Bank. “[T]he inherent sovereign powers of an Indian tribe

do not extend to the activities of nonmembers of the tribe.” 554 U.S. at

328 (alteration in original) (quoting Montana, 450 U.S. at 565). “This

general rule restricts tribal authority over nonmember activities taking

place on the reservation, and is particularly strong when the

WINDOW ROCK USD V. NEZ 37

Our court has recognized that, apart from the two

Montana exceptions, “the tribes’ inherent sovereignty does

not give them jurisdiction to regulate the activities of

nonmembers.” See Philip Morris USA, Inc. v. King

Mountain Tobacco Co., 569 F.3d 932, 938–39 (9th Cir.

2009) (“As a general rule, tribes do not have jurisdiction,

either legislative or adjudicative, over nonmembers, and

tribal courts are not courts of general jurisdiction.”). But in

two recent cases, our circuit case law purports to limit

Montana’s expansive general rule: Water Wheel Camp

Recreational Area, Inc. v. LaRance, 642 F.3d 802 (9th Cir.

2011) (per curiam), and Grand Canyon Skywalk

Development, LLC v. ‘Sa’ Nyu Wa Inc., 715 F.3d 1196 (9th

Cir. 2013).

In Water Wheel, our court considered a dispute arising

from the lease of a resort located on land held in trust by the

United States for the Colorado River Indian Tribes. 642 F.3d

at 805. After leasing the land for twenty-five years, the

resort stopped making the required lease payments to the

Tribes but continued to operate essentially rent-free for

another seven years. Id. The resort operators refused to

vacate the land even after the lease expired, so the Tribes

sued to evict the resort operator, collect unpaid rent, and

recover damages for their lost use of the property. Id.

It was in this context that our court stated, “[Hicks’s]

application of Montana to a jurisdictional question arising

on tribal land should apply only when the specific concerns

at issue in that case exist. Because none of those

circumstances exist here, we must follow precedent that

nonmember’s activity occurs on land owned in fee simple by non-

Indians . . . .” Id. (emphasis added).

38 WINDOW ROCK USD V. NEZ

limits Montana to cases arising on non-Indian land.” Id. at

813. Water Wheel went on:

In this instance, where the non-Indian activity

in question occurred on tribal land, the

activity interfered directly with the [T]ribe’s

inherent powers to exclude and manage its

own lands, and there are no competing state

interests at play, the [T]ribe’s status as

landowner is enough to support regulatory

jurisdiction without considering Montana.

Id. at 814 (emphasis added). Water Wheel did not precisely

identify what it meant by the “specific concerns” at issue in

Hicks that warranted application of Montana’s general rule

to jurisdictional questions arising on tribal land, but it did

expressly recognize that “competing state interests” would

change the analysis. There were no competing state interests

in Water Wheel, and the court concluded that the Tribes had

both regulatory and adjudicative jurisdiction over the resort

operator’s conduct. See id. at 816.

Notably, Water Wheel also concluded that Montana’s

two exceptions would allow for jurisdiction over the Tribes’

dispute with the resort operator. Id. at 816–19. In particular,

the second Montana exception established tribal jurisdiction

over the Tribes’ trespass claim because the resort operator’s

“unlawful occupancy and use of tribal land not only deprived

[the Tribes’] of [their] power to govern and regulate [their]

own land, but also of [their] right to manage and control an

asset capable of producing significant income.” Id. at 819.

In keeping with Hicks’ admonition that land ownership

status “may sometimes be a dispositive factor,” see Hicks,

533 U.S. at 360, Water Wheel concluded that the Tribes’

assertion of jurisdiction was proper in light of their

WINDOW ROCK USD V. NEZ 39

significant interest in securing occupancy and control of

tribal land and the absence of competing state interests,

642 F.3d at 819.

In Grand Canyon, our court considered a situation

similar to Water Wheel. Grand Canyon involved the glass-

bottomed “Skywalk,” a viewing platform overlooking the

Grand Canyon built on land held in trust for the Hualapai

Tribe. 715 F.3d at 1198–99. A non-tribal developer, Grand

Canyon Skywalk Development, entered into a revenue

sharing agreement with a tribal corporation in order to build

and operate the Skywalk, and the Tribe later passed a

resolution to exercise eminent domain over the developer’s

contractual interests. Id. at 1199.

Alleging that the Tribe had no authority to condemn its

private contract rights, the developer filed a motion for a

temporary restraining order in district court seeking to enjoin

the eminent domain action. Id. Grand Canyon held that the

developer was required to exhaust its remedies in tribal

court. See id. at 1203–04. In so ruling, the court looked to

Water Wheel and noted that, as in Water Wheel, Grand

Canyon involved a non-tribal-member who entered into a

consensual agreement “to develop and manage a tourist

location on tribal land in exchange for a fee” and “it was

access to the valuable tribal land that was the essential basis

for the agreement.” Id. at 1204. Grand Canyon reasoned,

“as the dispute centers on Hualapai trust land and there are

no obvious state interests at play, the Hicks exception is

unlikely to require Montana’s application. At the very least,

it cannot be said that the tribal court plainly lacks

jurisdiction.” Id. at 1205 (emphasis added). Like Water

Wheel, Grand Canyon concluded that the Montana

exceptions, if applied, would also provide for tribal

jurisdiction. Id. at 1205–06.

40 WINDOW ROCK USD V. NEZ

The results in Water Wheel and Grand Canyon were a

function of the Tribes’ significant interests in managing

exceptionally valuable tribal land and the lack of any

competing state interests. See, e.g., Water Wheel, 642 F.3d

at 814 (emphasizing that “the activity interfered directly with

the [T]ribe’s inherent powers to exclude and manage its own

lands, and there are no competing state interests at play”).

Nevertheless, our court’s narrow interpretation of Hicks and

Montana has been criticized. The dissent in Dolgencorp,

Inc. v. Mississippi Band of Choctaw Indians observed, “Both

the Choctaw Supreme Court and the district court a quo have

ruled, in light of dicta in Hicks and Plains Commerce Bank,

that the Ninth Circuit’s narrow application of Montana is

incorrect, a ruling that the tribal defendants do not

challenge.” 746 F.3d 167, 180 n.8 (5th Cir. 2014) (Smith,

J., dissenting), aff’d by an equally divided court sub nom.

Dollar Gen. Corp. v. Miss. Band of Choctaw Indians, 136 S.

Ct. 2159 (2016) . 7 And in Stifel, Nicolaus & Co. v. Lac du

Flambeau Band of Lake Superior Chippewa Indians, the

Seventh Circuit expressed its view that Water Wheel’s

reasoning cannot be reconciled “with the language that the

Court employed in Hicks and Plains Commerce Bank.”

807 F.3d 184, 207 n.60 (7th Cir. 2015). But even assuming

Water Wheel and Grand Canyon correctly interpreted Hicks

to mean that Montana need not be applied in every case

involving tribal land, all existing authority points to the rule

that when there are no contrary treaties or statutes and there

7

The majority in Dolgencorp applied Montana and held that the

Tribe had jurisdiction over a nonmember based on the first Montana

exception. See 746 F.3d at 169. The dissent agreed that Montana

applied, but disagreed with the majority’s conclusion that the tribe had

met the requirements of the first exception. See id. at 177–80 (Smith, J.,

dissenting).

WINDOW ROCK USD V. NEZ 41

are competing state interests at stake, tribal jurisdiction over

nonmembers only exists if at least one of the two Montana

exceptions is satisfied. 8

III. The Tribe Does Not Have the Right to Exclude

Nonmember School Districts from the Reservation.

The panel majority further errs by concluding that the

Treaty of 1868 secured the Navajo Nation’s unqualified right

to exclude the school districts, and by disregarding the

compelling state interests at play here. The Treaty of 1868

carved out and reserved specific rights for the Navajo

Nation. By virtue of its inherent tribal sovereignty, the

Navajo Nation also retained other rights necessary to self-

government and control of internal relations, see Strate v. A–

1 Contractors, 520 U.S. 438, 445–46 (1997) (discussing

what powers the tribes retain), but the right to exclude

nonmember school districts from the Navajo Reservation is

not among them. 9

8

The panel majority states that neither Water Wheel nor Grand

Canyon decided that Montana applies where there are competing state

interests, only that Montana does not apply where there are no competing

state interests. But both decisions skirt Montana and Hicks based on the

lack of competing state interests and both acknowledge that Montana

would otherwise be the rule. See Water Wheel, 642 F.3d at 804–05; see

also Grand Canyon, 715 F.3d at 1205 (“Here, as the dispute centers on

Hualapai trust land and there are no obvious state interests at play, the

Hicks exception is unlikely to require Montana’s application.” (emphasis

added)).

9

Defendants argue that the school districts may be tribal members

for purposes of responding to employment claims in tribal court because

tribal members sit on the school district boards. But this argument

disregards Arizona law. See Ariz. Rev. Stat. § 15-101(23) (“‘School

district’ means a political subdivision of this state . . . .”).

42 WINDOW ROCK USD V. NEZ

A. The Tribe Ceded Any Inherent Right to Exclude

the School Districts from the Reservation.

“[A] portion of what had once been [the Navajo

Nation’s] native country” was set apart as the Navajo

people’s “permanent home” by the Treaty of 1868. Williams

v. Lee, 358 U.S. 217, 221 (1959). Article II of the Treaty

“provided that no one, except United States Government

personnel, was to enter the reserved area.” Id. According to

Article II:

[T]he United States agrees that no persons

except those herein so authorized to do, and

except such officers, soldiers, agents, and

employees of the government, or of the

Indians, as may be authorized to enter upon

Indian reservations in discharge of duties

imposed by law, or the orders of the

President, shall ever be permitted to pass

over, settle upon, or reside in, the territory

described in this article.

Treaty between the United States of America and the Navajo

Tribe of Indians, Navajo Tribe of Indians-U.S. (Treaty of

1868), art. II, June 1, 1868, 15 Stat. 667. Though the

majority suggests otherwise, this provision does not grant

the Navajo Nation an absolute right to exclude. In fact, the

Treaty of 1868 expressly allows for entry of federal

government agents for various purposes and specifically

obligates the government to provide compulsory education

of Navajo children in schoolhouses created by the

government, by schoolteachers furnished by the government

and “resid[ing] among” the Tribe. See Treaty of 1868,

art. VI.

WINDOW ROCK USD V. NEZ 43

When the Treaty of 1868 was executed, the State of

Arizona did not exist, but Arizona took on the obligation to

provide compulsory education to Navajo children as a

condition of Arizona’s statehood. In the Arizona Enabling

Act, Congress mandated that Arizona shall establish and

maintain “a system of public schools[,] which shall be open

to all the children of [Arizona],” Act of June 20, 1910, ch.

310, 36 Stat. 557, 570 (1910), and that this public school

system “shall forever remain under [Arizona’s] exclusive

control,” id. at 573–74. In its constitution, Arizona both

agreed to disclaim all rights to Indian land within its

boundaries, Ariz. Const. art. XX, § 4, and affirmed its

obligation to provide a system of public schools “open to all

the children of the state,” id. § 7.

In 1929, Congress authorized “the agents and employees

of any State to enter upon Indian tribal lands, reservations,

or allotments therein . . . to enforce the penalties of State

compulsory school attendance laws against Indian children[]

and parents.” Act of Feb. 15, 1929, ch. 216, 45 Stat. 1185.

Congress amended the act in 1946 to require tribal consent

to such entry, see Act of Aug. 9, 1946, ch. 930, 60 Stat. 962,

and the Navajo Nation consented, see 10 Navajo Nation

Code § 503. Nothing in subsequent legislation, see Indian

Self-Determination and Education Assistance Act,

25 U.S.C. § 5301 (1975), relieved Arizona of its obligation

to provide a uniform, statewide system of public education.

The panel majority does not acknowledge that the State

of Arizona became subject to the Treaty’s specific

requirement of providing government schools on Indian

land. Nor does it consider that the school districts are

political subdivisions of the State of Arizona, present within

the Navajo Nation for the purpose of carrying out the

expressly contemplated function of educating Navajo

44 WINDOW ROCK USD V. NEZ

children. The panel majority reasons that the Navajo Nation

generally retained its right to exclude after signing the Treaty

of 1868, but it offers no support for its conclusion that the

Tribe may exclude school districts where, as here, the state

officials are performing a governmental function on tribal

land pursuant to a congressional mandate with tribal consent.

The holding in Strate v. A–1 Contractors, 520 U.S. 438

(1997), is instructive in this context. In that case, a car crash

involving non-Indians occurred on a highway over land that

the United States held in trust for the Three Affiliated Tribes.

Id. at 442–43. The State of North Dakota operated and

maintained the highway pursuant to a federally granted

right-of-way. Id. With the Tribes’ consent, Congress gave

the right-of-way to North Dakota to ensure access to a

federal water-resource project controlled by the Army Corps

of Engineers. Id. at 454–56. Given these circumstances, the

Supreme Court held that the highway was the “equivalent,

for nonmember governance purposes, to alienated, non-

Indian land,” over which “the Tribes [could not] assert a

landowner’s right to occupy and exclude.” Id. at 454, 456;

see also Cty. of Lewis v. Allen, 163 F.3d 509, 514 (9th Cir.

1998) (en banc) (holding that the Nez Perce Tribe ceded the

right to exclude county law enforcement officers by

“consenting to and receiving the benefits of state law

enforcement protection”). So too here. Like the tribe in

Strate, the Navajo Nation has ceded the right to exclude the

school districts from the Navajo oftlineReservation by:

(1) expressly agreeing that the federal government must

enter to provide a system of compulsory education for

Navajo children; and (2) consenting to state enforcement of

compulsory education on the Navajo Reservation.

WINDOW ROCK USD V. NEZ 45

B. The Significant State Interests Present Here

Render Water Wheel and Grand Canyon

Inapplicable.

The panel majority asserts that our court interprets Hicks,

533 U.S. 353, “as creating only a narrow exception to the

general rule that, absent contrary provisions in treaties or

federal statutes, tribes retain adjudicative authority over

nonmember conduct on tribal land—land over which the

tribe has the right to exclude.” (Emphasis added). This flips

Montana’s general rule on its head. The majority primarily

looks to Water Wheel and Grand Canyon to support this

interpretation of Supreme Court precedent, but even those

outlier decisions do not permit such a cramped reading of

Hicks, and no existing authority supports the newly minted

rule that the panel majority dubs “general.”10

First, as noted, Water Wheel and Grand Canyon

recognized that Montana’s exceptions allowed for tribal

10

The panel majority also cites one of our cases that followed close

on the heals of Hicks: McDonald v. Means, 309 F.3d 530 (9th Cir. 2002).

The majority describes McDonald as “explicitly reject[ing] the argument

that Hicks modified or overruled Montana such that it would ‘bar tribal

jurisdiction not only over the conduct of nonmembers on non-Indian fee

land but on tribal land as well.’” (Quoting McDonald, 309 F.3d at 540

n.9). In McDonald, a minor member of the Cheyenne Tribe hit a horse

owned by a nonmember. 309 F.3d at 535–36. The accident happened

on a road that the McDonald court determined was Indian land. Id. at

537–40. McDonald treated ownership of the land as dispositive and

concluded that the Tribe had jurisdiction over the dispute. Id. at 539–40.

The holding was expressly limited to a tort claim involving an accident

occurring on a tribal road: “We hold that the nature and purpose of the

grant [of a right-of-way over the road to the Bureau of Indian Affairs],

the continuing control exercised by the Tribe over the road, and the

Supreme Court’s previous treatment of BIA roads supports the

conclusion that the tribal court had jurisdiction to entertain [the minor

46 WINDOW ROCK USD V. NEZ

jurisdiction in what respectively amounted to a landlord-

tenant dispute and an eminent domain action involving

prime tribal land. As such, the disputes arose from

“activit[ies] [that] interfered directly with the [T]ribe’s

inherent powers to exclude and manage its own lands.”

Water Wheel, 642 F.3d at 814. Second, both cases

acknowledged that Hicks requires application of the

Montana framework when there are “competing state

interests at play.” See Water Wheel, 642 F.3d at 810–14;

Grand Canyon, 715 F.3d at 1204–05. Those interests were

entirely absent in Water Wheel and Grand Canyon. To the

contrary, the non-tribal-members in Water Wheel and Grand

Canyon were private businesses engaged in consensual, for-

profit transactions with the Tribes and the Tribes had

overwhelming interests in the use and disposition of their

tribal assets (“prime” tribal land on the banks of the

Colorado River in one case, and tribal land overlooking the

Grand Canyon in the other). See Water Wheel, 642 F.3d at

817; Grand Canyon, 715 F.3d at 1198. In this way, Water

Wheel and Grand Canyon were consistent with Hicks’

observation that the ownership of land is only one factor to

consider in analyzing whether tribal-court jurisdiction exists,

but in some circumstances land ownership may be

dispositive.

The case at bar stands in stark contrast. For starters, the

employees’ disputes with Window Rock and Pinon School

Indian’s suit] against the McDonald family.” Id. at 540. McDonald

predates our en banc decision in Smith v. Salish Kootenai College, where

we applied the Montana framework to a dispute arising on tribal land

and stressed that in deciding whether a tribal court has jurisdiction over

a nonmember “[o]ur inquiry is not limited to deciding precisely when

and where the claim arose.” 434 F.3d 1127, 1135 (9th Cir. 2006) (en

banc). McDonald and Smith are consistent with Hicks’ rule that

ownership of the land is only one factor to consider.

WINDOW ROCK USD V. NEZ 47

Districts have nothing to do with occupancy of the tribal land

or buildings in which the school districts operate. These

disputes involve entitlement to teacher merit pay provided

by a state ballot measure and the rights and obligations

arising from the claimants’ employment contracts. The

Navajo Nation Supreme Court’s amicus brief asserts

interests in protecting Navajo employees and students, and

the tribal court’s opening brief asserts interests in hearing

complaints arising from employment decisions of all-Navajo

school boards. But the school boards are political

subdivisions of the State of Arizona, and Arizona has vitally

important competing interests in the finality of its state-court

judgments and its ability to enforce them. Further, Arizona’s

constitution mandates “the establishment and maintenance

of a general and uniform public school system,” Ariz. Const.

art. 11, § 1, a requirement of the Arizona Enabling Act, ch.

310, 36 Stat. 557, 570 (1910). It cannot be questioned that

Arizona has a compelling interest in complying with its

statutory and state constitutional mandate. With these state

interests at issue, Hicks requires us to apply Montana

notwithstanding the holdings in Water Wheel and Grand

Canyon.11

Our circuit is already an outlier in this area of the law.

Only our circuit interprets Hicks to mean that the Montana

11

The panel majority opines that there are factual disputes that the

tribal court should decide to determine what state interests exist in this

case. In my view, the state interests at issue are already clear and no

further factual development is necessary to determine whether these state

interests are sufficient to preclude tribal jurisdiction. If a State’s interest

in executing legal process to enforce its criminal laws was sufficient in

Nevada v. Hicks, 533 U.S. 353, 364 (2001), it is hard to imagine how a

State’s interest in complying with a statutory and constitutional directive

to provide a uniform system of public education to all the State’s children

would be insufficient.

48 WINDOW ROCK USD V. NEZ

framework need not be applied to questions of tribal

jurisdiction over nonmembers in the absence of competing

state interests. Today, the panel majority goes one giant step

farther, interpreting Hicks to authorize dodging Montana

even when there are exceptionally strong competing state

interests, so long as those interests do not involve state

criminal law enforcement and the dispute arises on tribal

land. No case law, from any circuit, suggests this is the

correct analysis.

The panel majority puts our court at odds with every

other circuit that has addressed tribal jurisdiction over

nonmembers after Hicks. Recently, the Seventh Circuit

unanimously rejected the argument that notwithstanding

Hicks and Plains Commerce Bank, “Montana only applies to

situations in which tribes attempt to regulate nonmember

conduct on non-Indian fee land, as opposed to tribal trust

land.” Stifel, Nicolaus & Co. v. Lac du Flambeau Band of

Lake Superior Chippewa Indians, 807 F.3d 184, 206 (7th

Cir. 2015). In two cases specifically involving school

districts, the Eighth Circuit did not find ownership of the

land dispositive, analyzed the contours of tribal jurisdiction

over nonmembers within the Montana framework, and held

that the tribal court lacked jurisdiction over tribal members’

claims against the districts. See Belcourt Pub. Sch. Dist. v.

Davis, 786 F.3d 653, 660 n.5, 661 (8th Cir. 2015); Fort Yates

Pub. Sch. Dist. No. 4 v. Murphy ex rel. C.M.B., 786 F.3d 662,

670 & n.6 (8th Cir. 2015).

The Tenth Circuit is in accord with the Seventh and

Eighth Circuits. It considered a case in which the Navajo

Nation asserted jurisdiction over county employees and

concluded: “The notion that Montana’s applicability turns,

in part, on whether the regulated activity took place on non-

Indian land was finally put to rest in Hicks.” MacArthur v.

WINDOW ROCK USD V. NEZ 49

San Juan Cty., 497 F.3d 1057, 1069 (10th Cir. 2007).

Striking out on its own, the panel majority today announces

a decision that pits our circuit’s case law against Tenth

Circuit precedent, subjecting the Navajo Nation’s tribal

courts to different rules governing their assertion of

jurisdiction. See id. at 1069–70.

Nor does the panel majority’s reading of Hicks find

support in the Supreme Court case itself. Hicks began its

analysis with “the general proposition that the inherent

sovereign powers of an Indian tribe do not extend to the

activities of nonmembers of the tribe.” 533 U.S. at 358–59

(quoting Montana, 450 U.S. at 565). The panel majority

characterizes Hicks as “suggest[ing] . . . ‘the general rule of

Montana applies to both Indian and non-Indian land.’”

(Quoting Hicks, 533 U.S. at 360). But the Supreme Court

left nothing to suggestion. Hicks’ holding on this point is

express:

While it is certainly true that the non-Indian

ownership status of the land was central to the

analysis in both Montana and Strate, the

reason that was so was not that Indian

ownership suspends the “general

proposition” . . . that “the inherent sovereign

powers of an Indian tribe do not extend to the

activities of nonmembers of the tribe” except

to the extent “necessary to protect tribal self-

government or to control internal relations.”

533 U.S. at 359 (quoting Montana, 450 U.S. at 564–65).

In fact, two concurring Justices in Hicks emphasized

their agreement with the Supreme Court majority that

Montana governs the question of tribal civil jurisdiction over

nonmembers’ conduct no matter who holds title to the land

50 WINDOW ROCK USD V. NEZ

on which the conduct occurs. See id. at 375 (Souter, J.,

concurring) (“Like the Court, I take Montana v. United

States . . . to be the source of the first principle on tribal-court

civil jurisdiction . . . .”); id. at 387 (O’Connor, J.,

concurring) (“Today, the Court finally resolves that

Montana v. United States . . . governs a tribe’s civil

jurisdiction over nonmembers regardless of land

ownership. . . . This is done with little fanfare, but the

holding is significant because we have equivocated on this

question in the past.”).

Essentially, the panel majority decides that the Supreme

Court did not mean what it said. It relies entirely on a

strained reading of the second footnote in Hicks where the

Court explained, “Our holding in this case is limited to the

question of tribal-court jurisdiction over state officers

enforcing state law. We leave open the question of tribal-

court jurisdiction over nonmember defendants in general.”

Id. at 358 n.2.

In this footnote, the Supreme Court focused on the status

of the nonmember, not the land, foreseeing a case such as

Dolgencorp, Inc. v. Mississippi Band of Choctaw Indians,

746 F.3d 167, 180 (5th Cir. 2014), where the Fifth Circuit

was called upon to address tribal jurisdiction over a

nonmember private actor rather than a government agent.12

12

In Dolgencorp, the nonmember over whom the tribal court

asserted jurisdiction was the operator of a Dollar General store on the

Choctaw Reservation. See 746 F.3d at 169. The store sat on Indian land

and operated pursuant to a lease agreement and business license issued

by the Mississippi Band of Choctaw Indians. Id. After the store entered

into a consensual agreement to participate in a tribal job training program

that placed young tribal members in internships with local businesses,

the store manager allegedly molested one of the interns on store

WINDOW ROCK USD V. NEZ 51

Footnote two lends no support to the panel majority’s thesis;

it only establishes that Hicks stopped short of announcing a

bright line rule concerning tribal jurisdiction over all

nonmembers. The footnote does not excuse our court from

applying Montana.

At best, under our existing circuit precedent and

Supreme Court authority, what the panel majority calls “the

right-to-exclude framework” applies to nonmember conduct

on tribal land only if there are no contrary treaties or statutes

and no competing state interest at play. Here, Arizona

possesses obvious competing and compelling interests. The

panel majority insists that it need not decide whether Hicks

covers state interests other than those in criminal law

enforcement. But in light of the state interests in this case,

Hicks already requires us to begin with Montana’s general

rule that tribes lack civil jurisdiction over nonmembers

unless one of the Montana exceptions is satisfied.

IV. The Tribe Plainly Lacks Jurisdiction Under

Montana.

Where no treaty or statute confers tribal jurisdiction and

competing state interests are at play, federal courts assessing

civil tribal jurisdiction over nonmembers look to the two

exceptions described in Montana, 450 U.S. at 563–66.

Neither exception plausibly justifies the assertion of tribal-

court jurisdiction over the employees’ claims against the

school districts.

The first Montana exception provides that “[a] tribe may

regulate, through taxation, licensing, or other means, the

premises. Id. The intern brought tort claims against the store operator

for negligent hiring, training, and supervision. Id.

52 WINDOW ROCK USD V. NEZ

activities of nonmembers who enter consensual relationships

with the tribe or its members, through commercial dealing,

contracts, leases, or other arrangements.” Id. at 565. Hicks

explained that in the context of Montana’s first exception,

“‘other arrangement’ is clearly another private consensual

relationship,” and rejected the argument that, by seeking a

search warrant from the tribal court, the state game wardens

entered into a relationship with the Tribe that gave rise to

tribal jurisdiction. Hicks, 533 U.S. at 359 n.3. Courts of

appeal, including this court sitting en banc, have uniformly

interpreted Montana’s first exception as inapplicable to

relationships between tribes or tribal members and

governmental entities. See Belcourt Pub. Sch. Dist. v. Davis,

786 F.3d 653, 659 (8th Cir. 2015) (operating agreement

between Tribe and school district); Fort Yates Pub. Sch.

Dist. No. 4 v. Murphy ex rel. C.M.B., 786 F.3d 662, 668 (8th

Cir. 2015) (same); MacArthur v. San Juan Cty., 497 F.3d

1057, 1072–74 (10th Cir. 2007) (employment contracts

between tribal members and county medical clinic); Cty. of

Lewis v. Allen, 163 F.3d 509, 515 (9th Cir. 1998) (en banc)

(law enforcement agreement between the Tribe and county).

Montana’s first exception only applies to private consensual

relationships, not to relationships involving state

subdivisions, such as the Window Rock and Pinon Unified

School Districts.

Even if Montana’s first exception encompassed tribal

relationships with governmental entities, it does not yield a

plausible argument that assertion of tribal-court jurisdiction

over the school districts’ employment contracts would be

proper. At bottom, the first exception is a recognition that

parties who enter into consensual relationships with tribes or

tribal members can fairly anticipate being subject to tribal-

court jurisdiction. See Plains Commerce Bank v. Long

Family Land & Cattle Co., 554 U.S. 316, 338 (2008). The

WINDOW ROCK USD V. NEZ 53

school districts’ contractual relationships with its seven

employees provided that the employees would abide by state

and federal law—and two of the employment contracts

actually specified that jurisdiction for disputes arising from

the contracts would lie in state and federal courts and that the

contracts would be governed by state and federal law. Based

on these contractual provisions, the school districts could not

have anticipated that they would be hailed into Navajo tribal

court.

The employees’ lawsuits against the school districts and

the school districts’ counter suit for a declaratory judgment

arise from employment contracts. Notably, the Navajo

Nation is not a party to the employment contracts. The panel

majority does not identify a nexus between the school

districts’ contact with the Navajo Nation and “the activity

giving rise to this lawsuit.” See Philip Morris USA, Inc. v.

King Mountain Tobacco Co., 569 F.3d 932, 942 (9th Cir.

2009). The Navajo Nation is a “stranger[]” to these

employment relationships. See Strate v. A–1 Contractors,

520 U.S. 438, 457 (1997) (citation omitted). Some of the

employees are not even members of the Navajo Nation.

The school districts’ leases with the Navajo Nation do

not provide the missing jurisdictional hook. The Supreme

Court has observed that consensual relationships with tribes

are not “in for a penny, in for a Pound.” See Plains

Commerce Bank, 554 U.S. at 338 (quoting Atkinson Trading

Co. v. Shirley, 532 U.S. 645, 656 (2001)). Non-Indians, such

as the school districts, do not consent to tribal-court

jurisdiction over unrelated transactions by entering into

separate consensual relationships, such as leases, with a

tribe. See id. “[T]he suit must also arise out of those

consensual contacts,” Philip Morris, 569 F.3d at 941

(emphasis added), and there must be “a nexus to the

54 WINDOW ROCK USD V. NEZ

consensual relationship between the nonmember and the

disputed commercial contacts with the tribe,” id. at 942.

The interest asserted by the Navajo Nation is not the sort

that satisfies the second Montana exception. The second

Montana exception provides that a tribe “retain[s] inherent

power to exercise civil authority over the conduct of non-

Indians . . . when that conduct threatens or has some direct

effect on the political integrity, the economic security, or the

health or welfare of the tribe.” Montana, 450 U.S. at 566.

Conduct giving rise to jurisdiction under this exception must

“imperil the subsistence” of the Tribe such that tribal power

is necessary to “avert catastrophic consequences.” Plains

Commerce Bank, 554 U.S. at 341 (citations omitted). For

example, federal courts have concluded that the second

Montana exception was at least plausibly satisfied where a

non-Indian security company forcibly entered a tribal

government building and seized tribal government

documents; where a non-Indian trespassed on Indian land

and started a forest fire; and where non-Indian landowners

exercised riparian rights in a way that threatened

environmental degradation of important tribal resources.

See Attorney’s Process & Investigation Servs., Inc. v. Sac &

Fox Tribe of the Miss. in Iowa, 609 F.3d 927, 932, 941 (8th

Cir. 2010) (document seizure); Elliott v. White Mountain

Apache Tribal Court, 566 F.3d 842, 844–45, 848–51 (9th

Cir. 2009) (forest fire); Confederated Salish & Kootenai

Tribes of the Flathead Reservation, Mont. v. Namen,

665 F.2d 951, 964 (9th Cir. 1982) (riparian rights).

Courts generally do not find that private transactions,

like the employment relationships here, implicate Montana’s

second exception. In Plains Commerce Bank, tribal

members alleged that a nonmember bank had discriminated

against them in a land sale, 554 U.S. at 322, 338, but the

WINDOW ROCK USD V. NEZ 55

Supreme Court held that the Tribe lacked jurisdiction over

the dispute, reasoning, “The sale of formerly Indian-owned

fee land to a third party . . . cannot fairly be called

‘catastrophic’ for tribal self-government.” Id. at 341

(quoting Strate, 520 U.S. at 454). The second Montana

exception is narrow. See Strate, 520 U.S. at 459; State of

Mont. Dep’t of Transp. v. King, 191 F.3d 1108, 1114 (9th

Cir. 1999).

Defendants argue that the employees’ lawsuits against

the school districts concern the Navajo Nation’s interest in

enforcing the Navajo Preference in Employment Act and

thus lowering unemployment. Certainly, the welfare of a

tribe is harmed by very high levels of unemployment on

reservations. See King, 191 F.3d at 1114. But in a similar

situation, we held that even the Tribe’s interest in promoting

local hire does not justify the assertion of tribal-court

jurisdiction. King considered whether a tribe could regulate

employment practices for hiring construction workers on a

state highway running through a reservation and concluded

the tribe lacked this regulatory authority. See id. at 1110–

12. Notwithstanding the Tribe’s interest in lowering

unemployment, we held:

The [Tribe] agreed to the right of way, and

the State of Montana became responsible to

maintain the road at its own expense. Thus,

the [Tribe’s] assertion of authority over the

State’s own employees goes beyond the

internal functioning of the [T]ribe and its

sovereignty and instead impinges on one of

the State of Montana’s sovereign

responsibilities—maintaining Highway 66

and the right of way at its own expense.

56 WINDOW ROCK USD V. NEZ

Id. at 1114 (internal quotation marks omitted).

The panel majority does not explain why a different

outcome is warranted for a dispute seeking merit pay under

a state initiative, or a suit challenging a school district’s

grounds for terminating a teacher for failure to abide by

school-district policies, or a case invoking the Navajo

Preference in Employment Act. The concerns that mandated

the outcome in King require the same result here: under the

Arizona Enabling Act and the Arizona Constitution, the

State bears the sovereign responsibility to maintain

Arizona’s school system and the Navajo Nation cannot

plausibly claim jurisdiction over the contractual

relationships between the school districts and their

employees. The facts of this case fall well beyond the

boundaries of the second Montana exception.

V. Exhaustion in Tribal Court Was Not Required.

Exhaustion in tribal court is not required if “it is plain”

that tribal court jurisdiction is lacking and the exhaustion

requirement “would serve no purpose other than delay.”

Hicks, 533 U.S. at 369 (quoting Strate, 520 U.S. at 459 n.14).

Under our precedent, “it is ‘plain’ that the tribal court lacks

jurisdiction” if jurisdiction is neither “colorable” nor

“plausible.” Elliott v. White Mountain Apache Tribal Court,

566 F.3d 842, 848 (9th Cir. 2009) (quoting Atwood v. Fort

Peck Tribal Court Assiniboine, 513 F.3d 943, 948 (9th Cir.

2008)). Here, I would hold that jurisdiction is plainly

lacking and that exhaustion in tribal court is not required.

The majority invokes the Supreme Court’s general

policy in favor of exhaustion, citing National Farmers

Union Insurance Cos. v. Crow Tribe of Indians. See

471 U.S. 845 (1985); National Farmers identified the

factors underpinning this policy: (1) “supporting tribal self-

WINDOW ROCK USD V. NEZ 57

government and self-determination”; (2) allowing “the

forum whose jurisdiction is being challenged the first

opportunity to evaluate the factual and legal bases for the

challenge”; (3) “allowing a full record to be developed in the

Tribal Court before either the merits or any question

concerning appropriate relief is addressed”; and

(4) “provid[ing] other courts with the benefit of [tribal

courts’] expertise in such matters in the event of further

judicial review.” Id. at 856–57. More recently, the Supreme

Court emphasized that exhaustion was required in National

Farmers “based on comity,” Strate, 520 U.S. at 453, and a

preference for “allowing tribal courts initially to respond to

an invocation of their jurisdiction,” id. at 448. The Supreme

Court “d[id] not extract from National Farmers anything

more than a prudential exhaustion rule, in deference to the

capacity of tribal courts ‘to explain to the parties the precise

basis for accepting [or rejecting] jurisdiction.’” Id. at 450

(alteration in original) (quoting Nat’l Farmers, 471 U.S. at

857). Strate also made clear that exhaustion is not required

when “it is plain that no federal grant provides for tribal

governance of nonmembers’ conduct on land covered by

Montana’s main rule.” Id. at 459 n.14.

The comity concerns at play in National Farmers are not

present here. The school districts did not seek to bypass the

tribal court; they filed suit in federal court only after the

tribal court declined to rule on their motion to dismiss and

sought to impose a costly evidentiary hearing. Importantly,

for five of the seven employees, state-court decisions had

already been entered, and two of the employees’ contracts

with the school districts expressly provided that jurisdiction

shall be in state or federal court, not tribal court. Thus, it is

clearly the state courts’ jurisdiction that is being challenged.

Although these facts alone do not foreclose application of

the preference for exhaustion in tribal court, they easily

58 WINDOW ROCK USD V. NEZ

distinguish the case at bar from ones in which the Supreme

Court has required exhaustion.13

Arizona has a compelling interest in ensuring that

Navajo children have access to public education on the

Navajo Reservation, and Montana v. United States, 450 U.S.

544 (1981), is the applicable framework. Because I would

hold that jurisdiction is not colorable or plausible under

Montana, I respectfully dissent.

13

Moreover, National Farmers was decided thirty years ago and

predates the Supreme Court’s holdings in Nevada v. Hicks, 533 U.S. 353

(2001), and Strate v. A–1 Contractors, 520 U.S. 438 (1997). See also

State of Mont. Dep’t of Transp. v. King, 191 F.3d 1108, 1112–13, 1115

(9th Cir. 1999) (summarizing circumstances when exhaustion is not

required). Even if tribal jurisdiction was plausible at the time National

Farmers was decided, subsequent developments in the law render tribal

jurisdiction implausible today.