Amicus Curiae Brief — Kiowa Tribe of Okla. v. Manufacturing Technologies, Inc.

~

AEE OER) ENBRBBIC Ko

In the Supreme Court of the Giuted States

BRIEF FOR THE UNITED STATES AS

AMICUS CURIAITI

QUESTION PRESENTED

Whether the sovereign immunity from suit ac-

corded to Indian Tribes as a matter of federal law bars

an action brought in state court to recover money

damages for a breach of contract arising out of com-

mercial activity undertaken by the Tribe outside

Indian country.

TABLE OF CONTENTS

Page

Ee 1

EE a ae ee 5

SEE ES See a ee 20

TABLE OF AUTHORITIES

' Cases:

Aircraft Equip. Co. v. Kiowa Tribe of Okla.:

921 P.2d 359 (Okla. 1996) .................. 4, 7-8, 12, 15, 16, 18

No. 86,184 (Okla. May 6, 1997) .o....0..ccccccccececoceeee-. 9, 18

Blatchford v. Native Village of Noatak, 501 U.S.

EE 5, 13

Cherokee Nation v. Georgia 30 U.S. (5 Pet.) 1

a sen ebsanasuesasacessebeceseseccosce 1, 13, 14

Crow Dog, Ex parte, 109 U.S. 556 (1883) ................ 2

DeCoteau v. District County Court, 420 U.S.

EET a 16

DeFeo v. Ski Apache Resort, 904 P.2d 1065 (Ct.

App.), cert. denied, 903 P.2d 844 (N.M. 1995) ....... 17

Elliott v. Capital Int'l Bank & Trust, Ltd., 870

F. Supp 733 (E.D. Tex. 1994), aff’d, 102 F.3d 549

ARS: a 17

Escondido Mut. Water Co. v. La Jolla Band

Mission Indians, 466 U.S. 765 (1984) ................... 14

First Nat'l Bank in Altus v. Kiowa, Comanche,

& Apache Intertribal Land Use Comm., 913 P.2d

Ne 4,9

Gavle v. Little Siz, Inc., 555 N.W.2d 284 (Minn.

1996), petition for cert. pending, No. 96-1215 ........ 16, 19

Henry v. First Nat'l Bonk of Clarksdale v.

Mississippi Action for Progress, Inc., 595 F 2d

291 (5th Cir. 1979), cert. denied, 444 U.S. 1074

SUI Sisiaiiabdihabebtdendettliceesesceeetedsesecccseseneceeneseecceecess 18

FEED ennsdnstncessrsnenescescosenevessensscceces 4-5, 6, 7, 8, 11, 12, 18

(III)

Cases—Continued: Page

Lewis v. Sac & Fox Tribe of Okla. Hous.

Auth., 896 P.2d 503 (Okla. 1994), cert. denied 116

GR, GD cncnceinieneerinentpinincaninniinnenss 6, 7, 8, 16

Lone Wolf v. Hitchcock, 187 U.S. 553 (1908) ......... 2

Maricopa County v. Valley Nat'l Bank, 318 U.S.

Sola Serna 18

Mescalero Apache Tribe v. Jones, 411 US.

ee 8, 12

Morgan v. Colorado River Indian Tribe, 443

ef LS > a eae 16

Morton v. Mancari, 417 U.S. 535 (1974) ............... 14

National Farmers Union Ins. Cos. v. Crow Tribe,

GS GE, GE Ge cerecntrenitsnaintnasincniittiiinestennentne 14

Nevada v. Hall, 440 U.S. 410 (1979) ............ 7, 13, 15

North Sea Prods., Ltd. v. Clipper Seafoods Co.,

506 P.2d GBB (Wash. 1979) .....cccccccsccccsesecessccssseeesees 16

Oklahoma Tax Comm'n v. Citizen Band

Potawatomi Indian Tribe, 498 U.S. 505 (1991) ..... 5, 9, 10,

11, 12, 14, 19

Oklahoma Tax Comm'n v. Graham, 489 U.S. 553

GD CUBED encqncncecnsnenesinesscssrcnsusctintstannniastidintaininnns 6, 16

Organized Village of Kake v. Egan, 369 U.S. 60

CODD ccsessescsncetrenssccesnetatninnsanstiininimnintieesimdiiennien 12

Padilla v. Pueblo of Acoma, 754 P.2d 845 (N.M.

1988), cert. denied, 490 U.S. 1029 (1989) .............. 7, 8,17

Pueblo of Acoma v. Padilla, 490 U.S. 1029

CREED cncansecvsevesssesseccssnsscinncesesncitesttasssmentatesnnnntstane 17

Puyallup Tribe, Inc. v. Department of Game, 433

FS Re ee 5, 11, 12

Ramey Constr. Co. v. Apache Tribe of Mescalero

Reservation, 673 F 2d 315 (10th Cir. 1982) ........... 11

Richardson v. Mt. Adams Furniture, 980 F.2d 590

(9th Cir. 1992), cert. denied, 510 U.S. 1039 (1994) 17

Sac & For Nation v. Hanson, 47 F.3d 1061

(10th Cir.), cert. denied, 116 8S. Ct. 57 (1995) ..... 8, 15, 16,

18

Santa Clara Pueblo v. Martinez, 436 U.S. 49

GET ecnceccccistssaesssicintninmiininaiiaiiiinatintdetieateiaedeiamiietiemimnanl 5

Cases—Continued:

Seneca-Cayuga Tribe of Okla. v. Oklahoma ez rel.

Thompson, 874 F.2d 709 (10th Cir. 1989) .............

Thebo v. Choctaw Tribe, 66 F. 372 (8th Cir.

ED cecenscccnsccnninninnssscincpesbiiteemntncinisinnntinmenetiness

Be Ga ettceensecenerentnrnsntiintnisindindttinniiansintnen

Turner v. United States, 248 U.S. 354 (1919) ........

United States v. Alabama, 313 U.S. 274 (1941) ....

United States v. U.S. Fidelity & Guar. Co., 309

ee GE cocerntiraittihinenibiasintneinmaianiniens

United States v. Wheeler, 435 U.S. 313 (1978) .......

Verlinden B.V. v. Central Bank of Nigeria, 461

ee Ge ID cnscnscnntensinnnitiientnsnennenenimeeninsstantemen

Weeks Constr., Inc. v. Oglala Sioux Hous.

Auth., 797 F.2d 668 (8th Cir. 1986) ..........cccccceeeeee

White Mountain Apache Tribe v. Bracker, 448

le Be Ge cereetepreenentcnetersrmnsstennnereeen

Williams v. Lee, 358 U.S. 217 (1959) ..........ccccccceeee

Treaties, statutes and regulation:

Treaty with the Camanches, Etc., July 27, 1853,

Ee

Tre.ty with the Camanches and Kioways, Oct. 18,

Se CN CIEIIIE, TET direcicsinenicinitdnntebataieannndinaiiiaibiideudnte

emacs May 26, 1837, 7 Stat.

BB GRR. GED cnccncescecssvssvecensesssnnsnecesssnsnseeessnensesensevozse

rey SPs GERD cecnesrenesnqnnensnesnenssnntnecnnaccennmtenenenee

Anti-Injunction Act, 28 U.S.C. 2288 .0........ccccccceeeeeee

Federally Recognized Indian Tribe List Act of 1994:

Be es GD erectmnsracccncsencssennemietesesemennsaniens

ee es GUS centeirrnnstipnetenccesnsecenntngeeenceme

Foreign Sovereign Immunities Act of 1976, 28

Se GHEE dantnrceminesiebeenntttiennainedatanennaniteientseecedon

Page

11

1,2

1,2

17, 18

VI

Statutes and regulation—Continued:

Indian Reorganization Act of 1934, 25 U.S.C. 461

et seq.:

} 8 e

} 48 CS Re

Indian Self-Determination and Education

Assistance Act, 25 U.S.C. 450 et 8€q. .............cc00000

SD ete GED ccnerescimemememnensennaemnintinsnen

Indian Tribal Justice Act, 25 U.S.C. 3601(2) ............

Native American Housing Assistance and Self-

Determination Act of 1996, Pub. L. No. 104-330,

§ 2(3), 110 Stat. 4017 (to be codified at 25 U.S.C.

GEEEED caterensssemnmtrecstentnenbincinteniianenpeiiitinggs

Oklahoma Indian Welfare Act, ch. 831, § 3, 49 Stat.

TEE caccussmnespetnetnprntedncterenetnetebinmenetedenabitiettin

BD WEED. GD ccsccccssnsssesssnecencccessessssenessensnsensennseseess

Miscellaneous:

61 Fed. Reg. 58,211, 58,213 (1996) ...............ccccceeceeees

Jn the Supreme Court of the United States

OCTOBER TERM, 1996

No. 96-1037

KIOWA TRIBE OF OKLAHOMA, PETITIONER

v.

MANUFACTURING TECHNOLOGIES, INC.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE OKLAHOMA COURT OF APPEALS

BRIEF FOR THE UNITED STATES AS

AMICUS CURIAE

This brief is submitted in response to the Court’s

invitation to the Acting Solicitor General to express

the views of the United States.

STATEMENT

1. The United States entered into its first treaty

with the Kiowa Nation of Indians in 1837. 7 Stat. 533.

Later treaties with the Kiowa were concluded in 1853

(10 Stat. 1013), 1865 (14 Stat. 717), and 1867 (15 Stat.

581, 589). Those treaties effectively recognized the

Kiowa as a domestic dependent nation and established

a relationship of trust and protection between the

Tribe and the United States. See Cherokee Nation v.

Georgia, 30 U.S. (5 Pet.) 1, 17 (1831) (Indian tribes

(1)

2

“may * * * be denominated domestic dependent

nations,” whose “relation to the United States resem-

bles that of a ward to his guardian”); cf. Ex parte

Crow Dog, 109 U.S. 556, 571-572 (1883) (recognizing

original status and rights of Indian Tribes). To this

day, the United States continues to recognize the

Kiowa Tribe of Oklahoma as having “the immuni-

ties and privileges available to * * * federally ac-

knowledged Indian tribes by virtue of their govern-

ment-to-government relationship with the United

States as well as the responsibilities, powers, limita-

tions and obligations of such tribes.” 61 Fed. Reg.

58,211, 58,213 (1996) (quoting 25 C.F.R. 83.2); see also

25 U.S.C. 479a, 479a-1.'

In its 1867 treaties with the Kiowa, Comanche and

Apache Tribes, 15 Stat. 581, 589, the United States

set aside, from the original tribal lands, well over

2,000,000 acres as a permanent reservation for the

Tribes. See Lone Wolf v. Hitchcock, 187 U.S. 553

(1903) (describing history). Through later shifts in

law and policy, however, the United States largely

abrogated those treaties, and divested the Kiowa

Tribe of the majority of the reserved lands, in ex-

change for allotments of land to individual members of

the Tribe and cash compensation to be held in trust

for the Tribe by the United States. /bid. We are in-

formed that the Tribe today owns approximately 1,200

acres of land in Oklahoma, much of it in scattered

parcels, as well as an interest in approximately 3,000

acres of land held by the United States in trust for

the Kiowa, Comanche and Apache Tribes.

! We are informed that the Tribe presently has approxi-

mately 10,000 enrolled members, of whom a smaller number are

actively involved in tribal affairs.

3

2. The record in this case is sparse. It appears that

a tribal entity known as the Kiowa Industrial Devel-

opment Commission entered into a letter agreement

dated March 19, 1990, in which it agreed to purchase

stock then held by respondent in an Oklahoma corpo-

ration known as Clinton-Sherman Aviation, Inc. See

Pet. App. 2; Pet. on Prom. Note 1; Answer of Def.

Kiowa Tribe 1; Def. Kiowa Tribe’s Br. in Opp. to

Pitf’s Mot. for Summ. J. (Opp. Summ. J.) 1. On April

8, 1990, the then-Chairman of the Tribe’s Business

Committee signed, in the name of the Tribe, a short-

term promissory note (the Note) promising to pay

respondent $285,000, with interest at an annual rate of

10% in the ordinary course and 15% after any default.

Judgment 1 (Oct. 30, 1995); Note 1-2 (attached as Exh.

A to Pet. on Prom. Note); Opp. Summ. J. 1.

The face of the Note indicates that it was signed at

Carnegie, Oklahoma, where the Tribe maintains a

Tribal Complex on land held in trust for the Tribe by

the United States. Note 1-2; see Mot. to Dismiss 1.

Respondent’s petition seeking enforcement of the

Note alleges (at 4 2), however, that the Note was

“executed and delivered to [respondent] in Oklahoma

City,” and petitioner does not appear to have con-

tested that allegation. Unless otherwise directed,

payments were to be made at respondent’s offices

in Oklahoma City. Note 1. In a paragraph entitled

“Waivers and Governing Law,” the Note fails to spec-

ify a particular governing law, but it explicitly pro-

vides: “Nothing in this Note subjects or limits the

sovereign rights of the Kiowa Tribe of Oklahoma.”

Note 2.

The Note called for only two payments, to be made

20 and 90 days after the Note was signed. Note 1. The

Tribe did not make either payment. Judgment 1. It

d

further appears, from the decision in a related case,

that a similar financial undertaking given by the

Tribe in connection with the acquisition of additional

shares of Clinton-Sherman Aviation was secured by

the acquired shares, which subsequently proved to be

worthless. Pet. App. 3; Hoover v. Kiowa Tribe of

Okla., 909 P.2d 59, 60 & n.3 (Okla. 1995), cert. denied,

116 S. Ct. 1675 (1996); see also Aircraft Equip. Co. v.

Kiowa Tribe of Okla., 921 P.2d 359, 360 & n.1 (Okla.

1996) (default by Tribe on assumption and guaranty of

pre-existing promissory note).

3. Three years after payment was due, respondent

sued the Tribe in state court seeking judgment on the

Note. Pet. App. 2; Pet. on Prom. Note (filed Aug. 24,

1993). The Tribe moved to dismiss for lack of juris-

diction, in part on the ground that the Tribe had never

waived its sovereign immunity from suit, and there-

fore could not be sued for money damages. See Pet.

App. 2; Mot. to Dismiss 1. The court denied that mo-

tion (see Opp. Summ. J. 2 n.1), and the Tribe answered,

again asserting its immunity from suit (Answer 2).

The court granted respondent’s motion for summary

judgment, awarding respondent a total of $445,471 in

principal and accrued interest, together with attor-

neys’ fees and costs. Judgment 1-2.

The Oklahoma Court of Appeals affirmed. Pet. App.

1-4. The court rejected the Tribe’s sovereign immu-

nity argument on the authority of Hoover v. Kiowa

Tribe of Oklahoma, supra, and First National Bank

in Altus v. Kiowa, Comanche and Apache Inter-

tribal Land Use Committee, 913 P.2d 299 (1996), in

which the Oklahoma Supreme Court held that “a con-

tract between an Indian tribe and a non-Indian is en-

forceable in state court when the contract is executed

outside of Indian Country.” Hoover, 909 P.2d at 62.

5

In this case, the Oklahoma Supreme Court declined

discretionary review. See Pet. 2.

DISCUSSION

In this and related cases, the courts of the State of

Oklahoma have asserted jurisdiction over actions for

money damages brought directly against an Indian

Tribe. That assertion conflicts with decisions of this

Court, the federal courts of appeals, and courts of last

resort in other States. Review by this Court is

necessary to resolve that conflict and to correct a

serious error of federal law that fails to respect the

sovereign status of Indian Tribes and threatens their

economic well-being.

1. In Oklahoma Tax Commission v. Citizen Band

Potawatomi Indian Tribe, 498 U.S. 505, 509 (1991),

this Court reaffirmed that “[sJuits against Indian

tribes are * * * barred by sovereign immunity

absent a clear waiver by the tribe or congressional

abrogation.” That statement reflects longstanding

precedent. Blatchford v. Native Village of Noatak,

501 U.S. 775, 782 (1991) (“We have repeatedly held

that Indian tribes enjoy immunity against suits by

States.”); Santa Clara Pueblo v. Martinez, 436 U.S.

49, 58 (1978) (“Indian tribes have long been recognized

as possessing the common-law immunity from suit

traditionally enjoyed by sovereign powers.”); see also

Three Affiliated Tribes v. Wold Eng’g, 476 U.S. 877,

890-891 (1986); Puyallup Tribe, Inc. v. Department of

Game, 433 U.S. 165, 172-173 (1977); United States v.

U.S. Fidelity & Guar. Co., 309 U.S. 506, 512 (1940);

Turner v. United States, 248 U.S. 354, 358 (1919);

Thebo v. Choctaw Tribe, 66 F. 372, 374-376 (8th Cir.

1895).

6

2. In this case, petitioner has not waived its tribal

sovereign immunity. Indeed, the promissory note on

which respondent sued explicitly provides that

“{njothing in this Note subjects or limits the sover-

eign rights of the Kiowa Tribe of Oklahoma.” Note 2.

Nor has there been any suggestion that Congress has

abrogated the Kiowa Tribe’s immunity in any respect

that is relevant to this case. Nonetheless, the state

court of appeals held that “[a]s, the law now exists in

Oklahoma, there appears no doubt that the promis-

sory note at issue may be enforced in state court, the

doctrine of sovereign immunity notwithstanding.”

Pet. App. 4.

a. The court of appeals relied (Pet. App. 3) on the

decision rendered by the Supreme Court of Oklahoma

in a case with essentially identical facts, involving

the Kiowa Tribe and arising out of the same trans-

action. Hoover v. Kiowa Tribe of Okla., 909 P.2d 59,

60 & n.3 (1995), cert. denied, 116 S. Ct. 1675 (1996). In

Hoover, the Oklahoma Supreme Court first noted

that a state court has jurisdiction to consider the

merits of a tribal sovereign immunity defense raised

in litigation that is otherwise properly before the

court. Jd. at 61 (citing Oklahoma Tax Comm’n v.

Graham, 489 U.S. 838 (1989)). The court then refer-

red to its earlier decision in Lewis v. Sac and Fox

Tribe of Oklahoma Housing Authority, 896 P.2d 503

(1994), cert. denied, 116 S. Ct. 476 (1995), which held

(id. at 507-512) that the Oklahoma courts are gener-

ally empowered to decide civil cases arising within

their territorial jurisdiction, whether those cases are

governed by federal or state law. Although the Lewis

court recognized that a special jurisdictional inquiry

was appropriate “whenever Indian interests are ten-

dered in a controversy,” it held that “[oJnly that

7

litigation which is explicitly withdrawn by Congress

or that which infringes upon tribal self-government

stands outside the boundaries of permissible state-

court cognizance.” Jd. at 508.

Lewis did not address the question of sovereign

immunity, which was not asserted before the state

supreme court in that case. 896 P.2d at 506 n.15, 511

& n.59; Hoover, 909 P.2d at 61. In deciding that issue,

Hoover cited approvingly the New Mexico Supreme

Court’s decision in Padilla v. Pueblo of Acoma, 754

P.2d 845, 850-851 (1988), cert. denied, 490 U.S. 1029

(1989), which held that a New Mexico court could

decide a claim brought against a Tribe by a private

party alleging a breach of contract in connection with

off-reservation commercial activity undertaken by

the Tribe. Hoover adopted Padilla’s reasoning that

a forum State’s decision to recognize a Tribe’s sover-

eign immunity from suit on claims arising within the

usual territorial and subject-matter jurisdiction of

the state courts was no different from the forum

State’s decision to accord another State immunity

from claims arising out of activity undertaken by the

other State within the forum State’s territory.

Hoover, 909 P.2d at 62; see Padilla, 754 P.2d at

850-851. Citing this Court’s decision in Nevada v.

Hall, 440 U.S. 410 (1979), Padilla held that that

decision was “solely a matter of comity.” 754 P.2d at

850. Because Oklahoma, like New Mexico, allows its

courts to entertain suits against itself for breach of

contract, Hoover concluded that “a contract between

an Indian tribe and a non-Indian is enforceable in

state court when the contract is executed outside of

Indian Country.” 909 P.2d at 62.

b. The Oklahoma Supreme Court reaffirmed Hoo-

ver in Aircraft Equipment Co. v. Kiowa Tribe of

8

Oklahoma (Aircraft Equipment I), 921 P.2d 359

(1996), another case arising (like this case and Hoo-

ver) out of petitioner’s purchase of the shares of

Clinton-Sherman Aviation (see id. at 360 & n.1). The

dissent in Aircraft Equipment I (id. at 362-363)

argued that the court’s position “contravene|d] the

mainstream of contemporary sovereign immunity

jurisprudence” and conflicted directly with decisions

of two federal courts of appeals. Although the major-

ity acknowledged a conflict with the Tenth Circuit’s

decision in Sac and Fox Nation v. Hanson, 47 F.3d

1061, cert. denied, 116 S. Ct. 57 (1995), it dismissed

that decision as “a federal court’s pronouncement on a

state law question” that “lacks the force of author-

ity.” Aircraft Equip. I, 921 P.2d at 361.

Pointing out that its decisions in Lewis and Hoover

were based in large part on its reading of this Court’s

cases, the court in Aircraft Equipment I quoted the

statement in Mescalero Apache Tribe v. Jones, 411

U.S. 145, 148-149 (1973), that “[a]bsent express federal

law to the contrary, Indians going beyond reservation

boundaries have generally been held subject to non-

discriminatory state law otherwise applicable to all

citizens of the State.” Aircraft Equip. I, 921 P.2d at

361-362. The court concluded that “[hJjaving cited

those cases [in Hoover], and given the fact that the

Supreme Court of the United States has chosen not

to grant certiorari to review either the Hoover or

Lewis opinions, [the court would] decline to follow the

reasoning of the 10th Circuit.” Jd. at 362.

Finally, the Oklahoma Supreme Court recently

upheld the right of Aircraft Equipment Co. to enforce

its state judgment against petitioner using the reme-

dies ordinarily available to judgment creditors in

state court, including invoking state judicial power to

9

seize tribal tax revenues. Aircraft Equip. Co. v.

Kiowa Tribe of Okla., No. 86,184, (May 6, 1997).

Finding “no merit to the Tribe’s argument that

Lewis, Hoover, and Aircraft [Equipment] I are con-

trary to federal law,” slip op. 4 7, the court held (again

over a dissent based on tribal sovereign immunity)

that any burden on petitioner was “legally permis-

sible where the Tribe ventured outside its Indian

country, engaged in commercial activity for economic

gain, and created a contract controversy which was

ultimately settled in [state] court” (id. at 9 10). See

also First Nat’l Bank in Altus v. Kiowa, Comanche

and Apache Intertribal Land Use Comm., 913 P.2d

299, 301 (Okla. 1996) (finding Hoover “dispositive of

the question presented”).

3. The state court of appeals was therefore correct

to hold (Pet. App. 4) that it was required to assert

jurisdiction over petitioner in this case, “[a]s the law

now exists in Oklahoma.” The Oklahoma rule cannot,

however, be reconciled with this Court’s cases con-

cerning tribal sovereign immunity.

a. Oklahoma Tax Commission v. Citizen Band

Potawatomi Indian Tribe makes clear that tribal

sovereign immunity bars an action for monetary

relief, even if the action is based on a Tribe’s

commercial dealings with nonmembers. In Potawa-

tomi, Oklahoma sought to recover $2.7 million from

the Citizen Band Potawatomi Indian Tribe for taxes

on cigarettes sold to nonmembers by a store owned

and operated by the Tribe. See 498 U.S. at 507. This

Court held that the Tribe could be required to collect

state taxes on future cigarette sales to nonmembers,

but that tribal sovereign immunity barred a money

judgment against the Tribe for unpaid taxes on past

sales. Jd. at 509-511, 514.

10

In Potawatomi, the Court specifically refused

Oklahoma’s invitation “to construe more narrowly, or

abandon entirely, the doctrine of tribal sovereign

immunity.” 498 U.S. at 510. The State argued that

“tribal business activities * * * are now so detached

from traditional tribal interests that the tribal-sover-

eignty doctrine no longer makes sense,” and that the

doctrine therefore “should be limited to the tribal

courts and the internal affairs of tribal government.”

Ibid. In rejecting that argument, the Court observed

that Congress “has always been at liberty to dispense

with * * * tribal immunity or to limit it,” and “has

occasionally authorized limited classes of suits

against Indian tribes,” but that it has never author-

ized actions to enforce tax assessments, and has

“consistently reiterated its approval of the immunity

doctrine.” [bid.2 The Court concluded that, although

2 Congress has provided for suits against Indian Tribes in

connection with commercial activities under certain limited

circumstances, which are not alleged to obtain in this case. In

the Indian Reorganization Act of 1934 (IRA), 25 U.S.C. 461 et

seq., Congress authorized most Tribes to adopt constitutions for

the conduct of their governments (IRA § 16, 25 U.S.C. 476) and

to receive separate charters of incorporation to enable them to

engage in business activities through separate entities (IRA §

17, 25 U.S.C. 477). The Oklahoma Indian Welfare Act (OIWA),

ch. 831, § 3, 49 Stat. 1967 (1936), authorizes Oklahoma Tribes to

adopt constitutions and to receive corporate charters equiva-

lent to those issued under the IRA. 25 U.S.C. 503. Charters of

incorporation issued under Section 17 of the IRA often contain

a clause expressly allowing the corporation to sue or be sued.

Similarly, the OIWA authorizes any ten or more individual

Oklahoma Indians to form,a cooperative association chartered

by the Secretary of the Interior, and the Act expressly

provides that such an association “may sue and be sued” in

state or federal court. 25 U.S.C. 504-505. Some courts have

construed “sue or be sued” clauses in IRA charters to waive the

ll

the State might have alternative methods of

collecting the taxes at issue, there was “no doubt that

sovereign immunity bar(red] the State from pursuing

the most efficient remedy” by bringing suit directly

against the Tribe. /d. at 514.

. b. The Oklahoma Supreme Court’s decisions deny-

ing immunity to petitioner rely heavily on the fact

that the transaction giving rise to this litigation was

evidently negotiated, and the relevant documents

were allegedly signed, within the State’s territorial

jurisdiction and not on land held by or for the Tribe

or its members. See, ¢e.g., Hoover, 909 P.2d at 61-62.

This Court has previously refused to draw such a

distinction for purposes of tribal sovereign immunity

from suit.. In Puyallup Tribe, Inc. v. Department of

Game, a Tribe challenged a state court’s judgment

that asserted “jurisdiction to regulate the fishing

activities of the Tribe both on and off its reservation.”

immunity of the incorporated entity from suit. See, e.g., Weeks

Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 671

(8th Cir. 1986). Any such waiver is limited, however, to the

business dealings and assets of the corporation, and does not

extend to the Tribe in its sovereign capacity. See, ¢.g., Seneca-

Cayuga Tribe of Okla. v. Oklahoma ex rel. Thompson, 874

F.2d 709, 715 n.9 (10th Cir. 1989); Ramey Constr. Co. v. Apache

Tribe of Mescalero Reservation, 673 F.2d 315, 320 (10th Cir.

1982). Indeed, the absence of any similar authorization (by

charter or statute) to sue the tribal governments organized

under Section 3 of the OIWA (or Section 16 of the IRA) rein-

forces the conclusion that those governments remain protected

by the established rule of sovereign immunity. In this case, the

promissory note on which respondents sued was signed in the

name of the Tribe by the chairman of its governing Business

Committee, and there is no question of waiver because the Note

specifically reserved the Tribe's “sovereign rights.” Note 2:

Opp. Summ. J. 1.

12

433 U.S. at 167. This Court held that a claim of

sovereign immunity was “well founded” to the extent

that it was “advanced on behalf of the Tribe, rather

than the individual [Indian] defendants.” Jd. at 167-

168; see id. at 172-173. Accordingly, the Court held

that “the portions of the state-court order that

involve[d] relief against the Tribe itself must be

vacated in order to honor the Tribe’s valid claim of

immunity.” Jd. at 173. In reaching that conclusion,

the Court did not distinguish the Tribe’s activities on

reservation land from those occurring elsewhere,

observing simply that, “[a]bsent an effective waiver or

consent, it is settled that a state court may not

exercise jurisdiction over a recognized Indian tribe.”

Id. at 172.

The Oklahoma Supreme Court relied on cases such

as Mescalero Apache Tribe v. Jones, 411 U.S. 145

(1973), and Organized Village of Kake v. Egan, 369

U.S. 60 (1962). See Hoover, 909 P.2d at 61 (quoting

Mescalero and Kake), Aircraft Equip. I, 921 P.2d at

361-362 & n.2 (same). Those cases hold that a State

may have authority to tax or regulate Tribes or indi-

vidual Indians who engage in conduct (such as operat-

ing a ski resort, as in Mescalero, or fishing, as in

Kake) within the State but outside Indian country.

As Potawatomi makes clear (see 498 U.S. at 514),

however, there is a difference between the right to de-

mand compliance with state law and the means that

may be available to enforce such compliance. Neither

Mescalero nor Kake discusses enforcement, or men-

tions tribal immunity from suit. This Court’s later

decisions in Potawatomi and Puyallup address those

issues, and they hold that neither a valid state tax nor

a valid state fishing regulation may be enforced in a

suit brought directly against an affected Tribe.

13

ce. This Court’s decision in Nevada vy. Hall, 440

U.S. 410 (1979), is not to the contrary. In that case,

the California courts asserted jurisdiction over

the State of Nevada, based on conduct by a Nevada

agent within California’s territorial jurisdiction.

The Court noted that, in the absence of any other

source of controlling federal law, any restriction on

California’s judicial power would have to be found in

the federal Constitution. See id. at 414 & n.5. The

Court held, however, that the constitutional compact

generally leaves each State free to decide, as a matter

of policy and comity, whether and on what terms to

accord its sister States immunity from suit in its

courts. Jd. at 418-427.

_Indian Tribes, however, “are not States, and the

differences in the form and nature of their sover-

eignty make it treacherous” to reason too quickly by

analogy. vhite Mountain Apache Tribe v. Bracker,

448 US. 136, 143 (1980); see also Cherokee Nation v.

Georgia, 30 U.S. (5 Pet.) 1, 15-20 (1831) (Tribes are

neither “States” nor “foreign States” for purposes of

Article III, but “may, more correctly, perhaps, be

denominated domestic dependent nations”); compare

Blatchford, 501 U.S. at 781-782 (a Tribe may not sue a

State in federal court, as another State might do; the

mutual cession of jurisdiction by the States to the

federal sovereign does not apply to suits by or against

Tribes, “as it would be absurd to suggest that the

tribes surrendered immunity in a convention to which

they were not even parties”). Unlike the two States

involved in Nevada v. Hall, the State of Oklahoma and

the Kiowa Tribe involved in this case are both subject

to a body of federal constitutional, statutory, and com-

mon law that controls the question of tribal sovereign

immunity.

14

As “domestic dependent nations” (Potawatomi, 498

U.S. at 509, quoting Cherokee Nation, 30 U.S. (5 Pet.)

at 17), the Tribes “occupy a unique status under our

law” (National Farmers Union Ins. Cos. v. Crow

Tribe, 471 U.S. 845, 851 (1985)). See also, e.g., United

States v. Wheeler, 435 U.S. 313, 322-323 (1978);

Morton v. Mancari, 417 U.S. 535, 551-552 (1974);

United States v. U.S. Fidelity & Guar. Co., 309 U.S.

at 512-513. Although the Tribes “retain some of the

inherent powers of the self-governing political com-

munities that were formed long before Europeans

first settled in North America” (National Farmers

Union Ins. Cos., 471 U.S. at 851), their right to self-

government “is ultimately dependent on and subject

to the broad power of Congress” (White Mountain

Apache, 448 U.S. at 143). See also, e.g., Escondido

Mut. Water Co. v. La Jolla Band of Mission Indians,

466 U.S. 765, 787 n.30 (1984); Wheeler, 435 U.S. at 323.

On the other hand, Congress has recognized that “the

United States has a trust responsibility * * * that

includes the protection of the sovereignty of each

tribal government.” 25 U.S.C. 3601(2).* Consistent

with that policy, Congress has not abrogated, but

rather has confirmed, the sovereign immunity of

Indian Tribes from suit. See 25 U.S.C. 450n (nothing

in the Indian Self-Determination and Education As-

sistance Act, 25 U.S.C. 450 et seq., which establishes a

3 See also, e.g., Native American Housing Assistance and

Self-Determination Act of 1996, Pub. L. No. 104-330, § 2(3), 110

Stat. 4017 (to be, codified at 25 U.S.C. 4101(3)) (“[T)he Constitu-

tion of the United States invests the Congress with plenary

power over the field of Indian affairs, and through treaties,

statutes, and historical relations with Indian tribes, the United

States has undertaken a unique trust responsibility to protect

and support Indian tribes and Indian people.”).

15

framework of financial assistance for Tribes, is to be

construed as “affecting, modifying, diminishing, or

otherwise impairing the sovereign immunity from

suit enjoyed by an Indian tribe”). As a matter of both

plenary power and special responsibility, the legal

status of the Indian Tribes—including their immu-

nity from suit—is a matter of federal law.

These bedrock principles of federal law, and the

vesting of plenary power over Indian affairs in the

United States rather than in the States, establish

that the immunity of a Tribe from suit in state court

is not a mere matter of “comity” for each State to

decide, unlike in Nevada v. Hall.‘ Congress could, of

course, if it chose, render the Tribe amenable to suit

in state court on commercial contracts signed outside

of Indian country. But it has not done so. In the ab-

sence of affirmative congressional action, or consent

by the Tribe, the rule of this Court’s cases is that the

Tribe is immune from suit for money damages.

4. As the Oklahoma Supreme Court has acknowl-

edged (Aircraft Equip. I, 921 P.2d at 361-362), Okla-

homa’s assertion of jurisdiction over damage suits

against petitioner arising out of its commercial ac-

tivities outside Indian country conflicts directly with

wp Ponte sy decision in Sac and For Nation

v. Hanson. In Hanson, the federal court of appeals

affirmed the entry of an injunction against Oklahoma

state court proceedings that sought money damage

or indemnification from an Indian Tribe - the _—

* Similarly, the amenability of a foreign nation to suit i

state court is a matter of federal law, to patented by the

political Branches in the exercise of their plenary powers over

foreign affairs. See 28 U.S.C. 1604; Verlinden B.V. v. Central

Bank of Nigeria, 461 U.S. 480, 486-489, 493, 497 (1983).

16

of contractual and statutory claims arising out of a

tribal business venture outside the Tribe’s own

territory. See 47 F.3d at 1065 (“Without an explicit

waiver, the Nation is immune from suit in state

court—even if the suit results from commercial

activity occurring off the Nation's reservation.”).”

Hanson is consistent with this Court’s cases con-

cerning tribal sovereign immunity, and with the

decisions of most other appellate courts that have

considered the matter of state-court jurisdiction over

suits against Tribes. See Gavle v. Liftlé Six, Inc., 555

N.W.2d 284, 290 (Minn. 1996) (immunity from damage

suit arising from operation of casino, where alleged

acts took place both within and outside Indian

country), petition for cert. pending, No. 96-1215 (filed

Jan. 29, 1997); North Sea Prods., Ltd. v. Clipper

Seafoods Co., 595 P.2d 938, 941 (Wash. 1979) (Tribe did

not waive its immunity from state garnishment

action by engaging in commercial conduct off the

reservation); Morgan v. Colorado River Indian

Tribe, 443 P.2d 421, 423-424 (Ariz. 1968) (immunity

from suit for damages arising from accident at

5 The state supreme court incorrectly characterized

Hanson as “a federal court's pronouncement on a state law

question.” Aircraft Equip. 1, 921 P.2d at 361. As we have ex-

plained, the question of tribal immunity from suit is one of

federal law. The state court is generally correct, however,

that it has concurrent (rather than subordinate) jurisdiction

over many questions of federal law, including the question of

state-court jurisdiction in the face of a claim of tribal immu-

nity. See generally Lewis, 896 P.2d at 507-509; Oklahoma Tax

Comm'n ¥. Graham, supra. That is why the conflict between

the decisions is equivalent to a conflict in the courts of ap-

peals for purposes of this Court’s discretionary review. See

DeCoteau v. District County Court, 420 U.S. 425, 430-431

(1975).

17

amusement park operated by Tribe outside its

reservation); see also Elliott v. Capital Int'l Bank &

Trust, Ltd., 870 F. Supp. 733, 735 (E.D. Tex. 1994)

(immunity where officer of bank chartered and owned

by Tribe allegedly defrauded plaintiff outside Indian

country), aff'd, 102 F.3d 549 (5th Cir. 1996) (Table); but

see Padilla v. Pueblo of Acoma, supra. The Okla-

homa decisions rejecting Hanson and adopting the

reasoning of the New Mexico Supreme Court in

Padilla v. Pueblo of Acoma have deepened a preexist-

ing conflict on this issue. See Pueblo of Acoma vy.

Padilla, 490 U.S. 1029 (1989) (White, J., dissenting

from denial of certiorari); DeFeo v. Ski Apache Re-

sort, 904 P.2d 1065, 1069 (Ct. App.) (recognizing incon-

sistency between Padilla and federal decisions), cert.

denied, 903 P.2d 844 (N.M. 1995) (Table). That ripe and

square conflict distinguishes the situation in this

case from that in Richardson v. Mt. Adams Furni-

ture, 980 F.2d 590 (1992), cert. denied, 510 U.S. 1039

(1994), in which we suggested (92-1398 U.S. Br. at 14-

19) that the Court deny review of the Ninth Circuit’s

decision on a similar issue (tribal immunity from suit

by a bankruptcy trustee against a tribal business to

set aside a transfer that occurred outside Indian

country).

The conflict is, moreover, one that warrants reso-

lution by this Court. Because Oklahoma is within the

Tenth Circuit, Tribes are now subject to conflicting

rules on a fundamental legal question of tribal amena-

bility to suit. When a Tribe is sued in state court, the

Anti-Injunction Act (28 U.S.C. 2283), principles of

federal abstention, and the lower federal courts’ lack

of jurisdiction to review final state judgments (see

Pet. App. 11-13) will stand as significant barriers to a

Tribe’s ability to gain vindication of its federal rights

18

in federal court.’ Oklahoma Tribes (and other Tribes

doing business in Oklahoma) are therefore largely

deprived of the immunity guaranteed to them by

federal law; and neither Tribes nor their potential

commercial counterparties can be certain what law

will apply to prospective contractual arrangements.

Finally, as the state supreme court’s most recent

Aircraft Equipment decision underscores, the state

courts’ holdings leave petitioner subject to attach-

ment or garnishment of tribal tax revenues or other

tribal funds. Such attachment represents a signifi-

cant interference with the Tribe’s essential govern-

mental functions. In addition, as petitioner points

out (Pet. 13), the practical difficulty of separating

tribal funds from federal program funds provided by

the United States for administration by the Tribe—

which are unquestionably immune from garnish-

ment—has already led to direct and material interfer-

ence with federal programmatic interests.’

6 In Hanson, the court declined to consider the effect of

the Anti-Injunction Act on the ground that the defendant had

waived reliance on that Act by failing to raise it in the district

court. 47 F.3d at 1062-1063.

7 With respect to the immunity of property in which the

United States has an interest, see generally Maricopa County

v. Valley Nat'l Bank, 318 U.S. 357, 362 (1943); United States v.

Alabama, 313 U.S. 274, 282-283 (1941); Henry v. First Nat’

Bank of Clarksdale v. Mississippi Action for Progress, Inc.,

595 F.2d 291, 308-309 (5th Cir. 1979), cert. denied, 444 U.S. 1074

(1980). The United States Attorney’s Office for the Western

District of Oklahoma has already been directly and substan-

tially involved in two separate actions, removed by the United

States to federal court, seeking to gain the release of federal

program funds improperly frozen by local banks in response to

state court orders issued to enforce the judgments in the

Hoover and Aircraft Equipment actions. Carl E. Gungoll

19

These consequences are incompatible with the spe-

cial protection afforded Indian Tribes under federal

law, and with “Congress’ desire to promote the goal of

Indian self-government, including its overriding goal

of encouraging tribal self-sufficiency and economic

development.” Potawatomi, 498 U.S. at 510 (internal

quotation marks omitted). This Court should there-

fore grant review of the Oklahoma courts’ “doubt-

ful determination of [this] important question of state

power over Indian affairs.” Williams v. Lee, 358 U.S.

217, 218 (1959)."

Exploration Joint Venture v. Kiowa Tribe of Okla., No. CIV-96-

2059-T (W.D. Okla.) (awaiting stipulation as to separation of

federal and tribal funds); Hoover v. Kiowa Tribe of Okla., No.

CIV-96-1624-L (W.D. Okla.) (motion to remand to state court

pending).

* We note that the pending certiorari petition in Citizen

Potawatomi Nation v. C&L Enterprise, Inc., No. 96-1721 (filed

Apr. 25, 1997), presents essentially the same question as this

case, while the petition in Gavle v. Little Six, Inc., No. 96-1215

(filed Jan. 29, 1997), presents similar questions concerning the

immunity of a business corporation owned by a Tribe and

organized under tribal law. The interposition of a corporate

entity in No. 96-1215 somewhat complicates the immunity issue

in that case; and in No. 96-1721, the issue of waiver is clouded

by the existence of a potentially unclear choice-of-law clause.

See 96-1721 Pet. App. at 23 (“Project” defined as building to be

constructed); id. at 46 (contract governed by “law of the place

where the Project is located”); 96-1721 Pet. at 4 n.2 (building

located on “restricted Indian land” owned by the Tribe). This

case thus appears to be the better vehicle for resolution of

the conflict among state and federal courts on the immunity

question.

20

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

WALTER DELLINGER

Acting Solicitor General

Lois J. SCHIFFER

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

EDWARD C. DUMONT

Assistant to the Solicitor

General

DAVID C. SHILTON

ELIZABETH ANN PETERSON

Attorneys

JUNE 1997