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

ea Supreme Court 1) «

é rts D

AUS 15 1997

No. 96-1037 |

— == CLERK =

In The

Supreme Court of the United States

October Term, 1996

*

THE KIOWA TRIBE OF OKLAHOMA,

Petitioner,

MANUFACTURING TECHNOLOGIES, INC.,

Respondent.

°

On Writ Of Certiorari

To The Court Of Appeals, Division I,

For The State Of Oklahoma

e

BRIEF OF THE NAVAJO NATION, THE NAVAJO

NATION OIL AND GAS CO., INC., THE NAVAJO

AGRICULTURAL PRODUCTS INDUSTRY, AND THE

MISSISSIPPI BAND OF CHOCTAW INDIANS AS

AMICI CURIAE IN SUPPORT OF THE PETITIONER

¢

Paut E. Frve*

Lisa M. ENFIELD

NorpuHaus, Hattom, TAYLor,

TARADASH & Frye, LLP

Suite 1050

500 Marquette Avenue, NW

Albuquerque, NM 87102

(505) 243-4275

* Counsel of Record Attorneys for Amici Curiae

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

I. ONLY CONGRESS MAY ABROGATE TRIBAL

SOVEREIGN IMMUNITY 3

Il. CONGRESS HAS NOT AUTHORIZED STATE

COURTS TO ADJUDICATE CLAIMS

BROUGHT AGAINST INDIAN NATIONS...

Ill. THE DECISION OF THE COURT BELOW

TABLE OF AUTHORITIES

Page

I. Cases

Adams v. Murphy, 105 F. 304 (CCA 8 1908)....... 7, 20

Aircraft Equip. Co. v. Kiowa Tribe of Oklahoma,

921 P.2d 359 (Okla. 1996).............. 16, 17, 18, 19

Aircraft Equip. Co. v. Kiowa Tribe of Oklahoma, et

al., No. 86,184, 1997 WL 222406 (Okla. May 6,

UDOT). ccccceccccccscecesces hese Sumy nnn 20

American Indian Agric. Credit Consortium, Inc. v.

Standing Rock Sioux Tribe, 780 F.2d 1374 (8th

Cie. 1965) ....cccccevccceseteseshesnwennnnn—n 15, 19

Bank of Oklahoma v. Muscogee (Creek) Nation,

972 F.2d 1166 (10th Cir. 1992)..........0.seeeeeees 18

Berizzi Bros. Co. v. The Pesaro, 271 U.S. 562 (1926).... 11

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

77S (1DP1). .. cccnccvevecsecsceseuseueaunannnne 5, 13

California v. Cabazon Band of Mission Indians,

480 U.S. 202 (1967)... ccecvcceseccceseuatesanunuen q

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

(TGS)... ccvcvcccccvccescccesccssntuueeeueeeu eens 4

County of Oneida, N.Y. v. Oneida Indian Nation,

470 U.S. 226 (1965) ....ccccccscsscnsscueeesaunenee 19

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

App.), cert. denied, 903 P.2d 844 (N.M. 1995) ..13, 15

Dixon v. Picopa Constr. Co., 772 P.2d 1104 (Ariz.

1989)... .ccccvescsccessesssceteeee neu ee enna 16

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

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

(Sth Cie. 1906)... .ccccccccccecsccusssuenpennaueuee 14

iii

TABLE OF AUTHORITIES - Continued

Federico v. Capital Gaming Int'l, Inc., 888 F. Supp.

Sc cedstibeebsbéedcccecccesscss

First Nat’! Bank in Altus v. Kiowa, Comanche and

se Intertribal Land Use Comm., 913 P.2d

EEE PP PTTT ETT TE

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

1996), petition for cert. filed, 65 U.S.L.W. 3539

(U.S. Jan. 29, 1997) (No. 96-1215) ..............

Hoover v. Kiowa Tribe of Oklahoma, 909 P2d 59

(Okla. 1995), cert. denied, 116 S.Ct. 1675 (1996)...

In Re Greene, 980 F.2d 590 (9th Cir. 1992), cert.

denied, sub nom. Richardson v. Mt. Adams Fur-

niture, 510 U.S. 1039 (1994)................055.

Lewis v. Sac and Fox Tribe of Okla. Housin

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

Neen TT ee oe. ce enecees

Lone Wolf v. Hitchcock, 187 U.S. 553 (1903)......

Maryland Cas. Co. & Citizens Nat’! Bank, 361 F.2d

517 (5th Cir.) cert. denied, 385 U.S. 918 (1966) ..

Maynard v. Narragansett Indian Tribe, 984 F.2d 14

CCC shebeebeebeedsccescccesscceses

McClanahan v. Arizona State Tax Comm'n, 411

Gch bbb beobevetcosscescccscccecce

McClendon v. United States, 885 F.2d 627 (9th Cir.

ets pec enbccccéccecccccceces

EE

Minnesota v. United States, 305 U.S. 382 (1939) ..

Morgan v. Colorado River Indian Tribe, 443 P.2d

SE EEE Soe bocccccccsecsscccccccccccces

iv

TABLE OF AUTHORITIES - Continued

Page

Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439

(D.C. Cir. 1988), cert. denied, 488 U.S. 1010

SOD . vcccdectchvanncseuseuensicasesdeetienes 11, 20

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

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

£- f fF |S Peer en eT er eee 15

Oklahoma Tax Comm'n v. Citizen Band

Potawatomi Indian Tribe, 498 U.S. 505

GOREN s + as cccceceddede ctudecdseuieed 4, 8, 9, 10, 17

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

SEED o wodvdcbnccectncedévadduannestounianneusedaa 16

Padilla v. Pueblo of Acoma, 754 P.2d 845 (N.M. 1988),

cert. denied, 490 U.S. 1029 (1989)........ 12, 13, 16, 17

Puyallup Tribe, Inc. v. Washington Dep’t of Game,

GS GEE, BE Gee o vv cdsctudedcddendentedebuasevess 8

S. Unique, Ltd. v. Gila River Pima-Maricopa

Indian Community, 674 P.2d 1376 (Ariz. App.

Ss 0.00000606006sseedsncseabbansbesteseens 16

Sac & Fox Nation v. Hanson, 47 F.3d 1061 (10th

Cir.), cert. denied, 116 S.Ct. 57 (1995)...... 13, 14, 18

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

SEEDED 4s ceducdecvedscéandhaceeeveenater 6, 8, 10, 12, 19

Seminole Tribe v. Florida, 517 U.S. __, 116 S.Ct.

BE Gere ccc vccccvnccétensccseocecesoltconcetuat 20

Thebo v. Choctaw Tribe, 66 F. 372

= Fb = re eae 6, 7, 10, 19

Three Affiliated Tribes of the Fort Berthold Reser-

vation v. Wold Eng’g, 476 U.S. 877 (1986)... 8, 18, 19

Tiger v. Western Inv. Co., 221 U.S. 286 (1911) ....... 20

v

TABLE OF AUTHORITIES - Continued

Page

Turner v. United States, 248 U.S. 354 (1919)........ 6, 7

Turner v. United States, 51 Ct. Cl. 125 (1916), aff'd,

ee ee MP cchiscddeaadecckidesacewes esse 11

United States v. Carver, 260 U.S. 482 (1923)......... 17

United States v. Kagama, 118 U.S. 375 (1886)......... 5

United States v. United States Fidelity & Guar.

Ss , SED 6 nc sce ccheudasecess 6, 7, 8

United States v. Wheeler, 435 U.S. 313 (1978)......... 5

Washington v. Confederated Tribes of the Colville

Indian Reservation, 447 U.S. 134 (1980) ............ 5

White Mountain Apache Indian Tribe v. Shelley,

re Pi ccctesnbédseaceactesceess 16

White Mountain Apache Tribe v. Bracker, 448 U.S.

Dn: 6 tcc luce kddnedneseuahenncacainebapsed 5, 13

Worcester v. Georgia, 31 U.S. (6 Pet.) 515 (1832)...... 6

Il. COnsTITUTIONAL PROVISIONS

Ce Ge, GOR. BBE, Ge Docc ccccccncscccceces 4,9, 12

Ill. Srarures

Se ee ED cde dccdinccbacosvesetvdesiesvne 11

ED wncciens ude buadénnehnabns sensdade 11

es Sp cdnktendvsdichsevubedsbunesceuies 10

ey RR as Stal dncddcocotdceséiveseddnkenees 10

Pt 6 cobusovndaecnsskbsasscenemedd 10

ee es PRE ac hcouphobedvecsesbudeitevenaines 12

St Mn MRED bGdaneenepaceeeseecvensdsbusioas eens 1

vi

TABLE OF AUTHORITIES — Continued

Page

WD UBL... B BIGIED « o ccuccesccstwcsccctecivecsosnces 11

BD CEB. B DE oc nkiid beccccdencanctentedustencsytss 10

Act of June 13, 1992, Pub. L. No. 87-482, 76 Stat. 96..... 1

IV. Orvner AUTHORITIES

H.R. Rep. No. 2408, 74th Cong., 2d Sess. (1936)..... 10

Choctaw Tribal Code, §§ 1-2-6, 1-5-1, 1-5-5........... 2

1 Navajo Nation Code §§ 551-555 (1995) ............. 2

5 Navajo Nation Code § 1636 (1995) ................. 2

5 Navajo Nation Code §§ 3100-3186 (1995)........... 1

Fergus M. Bordewich, How to Succeed in Busi-

ness: Follow the Choctaws’ Lead, Smithsonian

Magazine (March 1996).............0.00eeeeeeeeeees 2

Felix S. Cohen’s Handbook of Federal Indian Law

TE, Sees GE GE. GE. Bee cdctccccdsvccesecvces 5

Phillip P. Frickey, Marshalling Past and Present:

Colonialism, Constitutionalism, and Interpreta-

tion in Federal Indian Law, 107 Harv. L. Rev.

Be CGE oc cccccccccvccdeccctesevesseeetsiossnnces 12

Brian C. Lake, The Unlimited Sovereign Immunity

of Indian Tribal Businesses rating Outside

the Reservation: An Idea Whose Time Has

Gone, 1996 Colum. Bus. L. Rev. 87 (1996)..10, 14, 16

Note, In Defense of Tribal Sovereign Immunity, 95

OEE, Ts EE. ED ED cc iv-n bp dddasidandnesd encase 5

Note, Sovereign Immunity of States Engaged in

Commercial Activities, 65 Colum. L. . 1086

CRED s cccconcancendescccnccessetdsencotubeseucens 11

vii

TABLE OF AUTHORITIES - Continued

Page

Powers of Indian Tribes, 55 Interior Dec. 14 (1934) .... 11

Presidential Comm’n on Indian Reservation Econ-

omies, Report and Recommendations to the

President of the United States (1984)........... 18, 19

Special Message to the Congress on Indian

Affairs, 1970 Pub. Papers 564..................... 11

Statement on Indian Policy, 19 Weekly Comp.

I, “TE Cs a ek. 3

INTEREST OF THE AMICI CURIAE!

The Navajo Nation is a federally recognized Indian

nation with 225,000 citizens and a territory of over 25,000

square miles in the southwestern United States. The

Navajo Nation entered into two treaties with the United

States under which the United States agreed to protect

Navajo self-government and to promote the well-being of

the Navajo people. The Navajo Nation established the

Navajo Nation Oil and Gas Company (NOG) and the

Navajo Agricultural Products Industry (NAPI) in order to

provide needed revenues to the Navajo Nation and to

alleviate the high unemployment and crushing poverty of

the Navajo people. NAPI employs Navajo tribal members

and others on lands outside formal reservation bound-

aries provided by Congress for the 110,630-acre Navajo

Indian Irrigation Project. See Act of June 13, 1992, Pub. L.

No. 87-482, 76 Stat. 96. In 1993, the Navajo Nation Coun-

cil authorized the incorporation of NOG under the

Navajo Nation Corporation Act, 5 Navajo Nation Code

(“N.N.C.”) §§ 3100-3186 (1995), as a wholly-owned

instrumentality of the Nation.? All profits of NOG are

! Pursuant to Rule 37.6 of the Rules of this Court, amici state

that no counsel for a party authored this brief in whole or in

part, and that no person or entity other than amici and their

counsel made any monetary contribution to the preparation or

submission of this brief. Pursuant to Rule 37.2 of the Rules of

this Court, the parties have consented to the filing of this brief.

The parties’ letters of consent have been filed with the Clerk.

2 In establishing,NOG, the Navajo Nation Council

responded directly to Congress’ encouragement of the

formation of vertically integrated energy ventures. See 25 U.S.C.

§ 3503 (1995).

required by Navajo law to be devoted exclusively to

essential governmental services.

The Navajo Nation statutorily waived its sovereign

immunity for certain purposes and has established means by

which its sovereign immunity may be waived further. See

Navajo Sovereign Immunity Act, 1 N.N.C. §§ 551-555 (1995);

5 N.N.C. § 1636 (1995) (authorizing NAPI to waive sovereign

immunity). Generally, claims against the Navajo Nation must

be filed in the Navajo Courts, but NOG is authorized to

waive its immunity from suit in any court after 30 days’

notice to the Council.

The Mississippi Band of Choctaw Indians is a feder-

ally recognized Indian tribe whose citizens live in the

aboriginal Choctaw territory. Prior to 1979, the Tribe had

no industrial development and an unemployment rate of

75%. Living conditions were deplorable. However, in the

1980s the Tribe began to pursue an aggressive business

development strategy. Today, tribal unemployment is

below 20% and per capita income has doubled. See Fergus

M. Bordewich, “How to Succeed in Business: Follow the

Choctaws’ Lead,” Smithsonian Magazine (March 1996).

Tribal immunity of the Choctaw Tribe is covered in

§§ 1-2-6, 1-5-1 and 1-5-5 of the Choctaw Tribal Code. The

Tribe’s sovereign immunity has not impeded tribal self-

sufficiency or economic development but is, quite simply,

an issue dealt with routinely in contract negotiations. The

Tribe’s growth is the result of a carefully formulated

tribal strategy for balanced community and economic

development, building on its reservation land base and

operating under tribal, rather than state, regulatory and

adjudicatory jurisdiction.

Amici curiae have established solid business relation-

ships with people and entities who live or do business

outside Indian country. Amici curiae have relied on the

prior decisions of this Court that hold that, although an

Indian tribe may waive its sovereign immunity, only Con-

gress, and not the States, may abrogate tribal sovereign

immunity.* Were the views of the Oklahoma Court of

Appeals adopted here, the contractual expectations of

amici curiae would be upset and tribal self-determination

threatened. Indeed, if the approach of the Oklahoma

courts in the Kiowa cases were upheld, the States could

accomplish as a practical matter the goal of tribal termi-

nation that Congress has repeatedly repudiated.

s

SUMMARY OF ARGUMENT

Indian tribes are domestic, dependent nations. They

are not foreign states, nor are they subordinate to the

several States.

Under the Constitution, Congress has exclusive

authority to regulate commerce with the Indian tribes.

Only Congress may abrogate tribal sovereign immunity.

Because of the general impoverishment and the lack of

banks and other economic institutions in Indian country,4

3 There is no suggestion in this case that the Kiowa Tribe

waived its immunity; rather, the record shows that the Kiowa

expressly preserved its sovereign rights in the contract at issue.

Thus, this brief deals only with abrogation of tribal sovereign

immun. ty.

* see President Reagan’s 1983 Statement on Indian Policy,

19 Weekly Comp. Pres. Doc. 98, 100 (1983) (“Tribes have had

limited opportunities to invest in their own economies, because

often there has been no established resource base for

practically all tribal transactions of any significance have

some off-reservation component. Oklahoma’s extra-

constitutional abrogation of tribal sovereign immunity

gravely threatens Congress’ “goals of tribal self-govern-

ment, including its ‘overriding goal’ of encouraging tribal

self-sufficiency and economic development.” California v.

Cabazon Band of Mission Indians, 480 U.S. 202, 216 (1987).

The court below ignored settled law and federal pol-

icy simply to provide relief to one of its corporate citi-

zens, who deliberately entered into what turned out to be

an improvident transaction. This Court, in essence,

already rejected the views of the Oklahoma courts in

Oklahoma Tax Comm’n v. Citizen Band Potawatomi Indian

Tribe, 498 U.S. 505, 510 (1991). This Court should reverse.

e

ARGUMENT

I. ONLY CONGRESS MAY ABROGATE TRIBAL SOV-

EREIGN IMMUNITY.

Under the Constitution, Congress is delegated the

power to “regulate commerce . . . with the Indian tribes.”

U.S. Const. art. L, § 8, cl. 3. The Constitution distinguishes

Indian tribes from foreign states, but not “because a tribe

may not be a nation, but because it is not foreign to the

United States.” Cherokee Nation v. Georgia, 30 U.S. (5 Pet.)

community investment and development. Many reservations

lack a developed physical infrastructure, including utilities,

transportation, and other public services.”)

1, 19 (1831). Tribes are obviously not states,5 and the

relationship between the tribes and states lacks the

“mutuality of concession” that makes plausible an

implicit surrender of either’s sovereign immunity in the

other’s courts. Blatchford v. Native Village of Noatak, 501

U.S. 775, 782 (1991).

“The states have traditionally been hostile to the

tribes. .. . ” Note, In Defense of Tribal Sovereign Immunity,

95 Harv. L. Rev. 1058, 1077 (1982). “Because of the local ill

feeling, the people of the States where [the Indians] are

found are often their deadliest enemies.” United States v.

Kagama, 118 U.S. 375, 384 (1886). The tribes are under the

protection of the United States and may “not be subjected

to the laws of the State and the process of its courts.” Id.

(emphasis added). “[T]ribal sovereignty is dependent on,

and subordinate to, only the Federal Government, not the

States.” Washington v. Confederated Tribes of the Colville

Indian Reservation, 447 U.S. 134, 154 (1980).

Indian tribes are sovereigns. Blatchford, 501 U.S. at

780. Tribal sovereign powers “are not, in general, dele-

gated powers granted by express acts of Congress, but

rather ‘inherent powers of a limited sovereignty, which has

never been extinguished.’ ” Felix S. Cohen's Handbook of Fed-

eral Indian Law 231 (R. Strickland et al. eds. 1982) (quoting

United States v. Wheeler, 435 U.S. 313, 322-23 (1978)

(emphasis in original)). One component of that original

sovereignty is the tribes’ immunity from suit. See e.g.

5 See White Mountain Apache Tribe v. Bracker, 448 U.S. 136,

143 (1980). |

United States v. United States Fidelity & Guar. Co., 309 US.

506, 512-13 (1940).

Under the Constitution, Congress, not the Executive

branch or the federal courts, exercises the United States’

exclusive authority to regulate commerce with the

Indians. See Lone Wolf v. Hitchcock, 187 U.S. 553, 565

(1903). (“Plenary authority over the tribal relations of

Indians has been exercised by Congress from the begin-

ning, and the power has always been deemed a political

one, not subject to be controlled by the judicial depart-

ment of the government.”); Santa Clara Pueblo v. Martinez,

436 U.S. 49, 72 (1978). Thus, Congress - and only Con-

gress — may abrogate an Indian tribe’s sovereign immu-

nity. E.g., Turner v. United States, 248 U.S. 354, 358 (1919).

This has been the law and the settled policy of the

United States since the beginning of the Republic. See

generally Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 561-63

(1832) (per Marshall, C.J.); id. at 591-92 (analogizing

exclusivity of federal power to regw:ate intercourse with

Indian tribes with that respecting powers to coin money

and to enter into treaties with foreign nations) (per

M’Lean, J.). In Thebo v. Choctaw Tribe, 66 F. 372 (CCA 8

1895), the court affirmed the dismissal of an action

against the Choctaw Tribe in federal court. The court

observed that “no court has ever presumed to take juris-

diction of a cause against any of the five civilized Nations

in the Indian Territory in the absence of an act of congress

expressly conferring the jurisdiction in the particular

case.” Id. at 374. The court reasoned:

As rich as the Choctaw Nation is said to be in

lands and money, it would soon be impov-

erished if it was subject to the jurisdiction of the

courts, and required to respond to all the

demands which private parties chose to prefer

against it.

Id. at 376.

Thebo was extended in Adams v. Murphy, 165 F. 304

(CCA 8 1908), which held that allowing an action for

damages to be brought against the Creek Nation’s Princi-

pal Chief would be “to destroy in practice the very

exemption [tribal sovereign immunity] which at the out-

set is conceded as a legal right.” Id. at 308. The court

again observed that “the settled doctrine of the govern-

ment from the beginning” has been to “exempt from civil

suit” the Indian tribes. Id.

Justice Brandeis, writing for a unanimous Court in

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

plainly, “[w]ithout authorization from Congress, the

[Creek] Nation could not then have been sued in any

court; at least, without its consent.” Id. at 358. In United

States v. United States Fidelity & Guar. Co., 309 U.S. 506

(1940), the Court once again declared unambiguously:

“[t}hese Indian nations are exempt from suit without

congressional authorization.” Id. at 512 (footnote omit-

ted). “[T]he suability of . . . the Indian Nations, whether

directly or by cross-action, depends upon affirmative

statutory authorization.” Id. at 514. Fidelity & Guaranty

voided the judgment of a federal court insofar as it pur-

ported to “fix a credit against the Indian nations” even

though complete relief was unavailable in any other

forum. Id. at 512-13. Thebo, Adams, Turner, and Fidelity &

Guaranty all arose in Oklahoma (or Indian Territory in

what later became the State of Oklahoma).

Modern cases are in accord. In Puyallup Tribe, Inc. v.

Washington Dep't of Game, 433 U.S. 165 (1977), the Court

reviewed a state court judgment concerning the regula-

tion of “fishing activities of the Tribe both on and off its

reservation.” Id. at 167 (emphasis added). Despite the off-

reservation conduct, this Court reversed the judgment

with respect to the tribe, upholding its sovereign immu-

nity from suit. Id. at 172-73. One year later, the Court

ruled in Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58

(1978), that the Indian Civil Rights Act could not be

interpreted to authorize civil actions even for declaratory

and injunctive relief, stating that “ ‘without congressional

authorization,’ the ‘Indian Nations are exempt from

suit.’ ” Id. (quoting Fidelity & Guaranty, 309 U.S. at 512).

In Three Affiliated Tribes of the Fort Berthold Reservation

v. Wold Eng’g, 476 U.S. 877 (1986), the Court held that a

state could not condition the availability of its courts on

tribal consent to suit in all civil actions brought against

the tribes in state courts, because “those statutory condi-

tions may be met only at an unacceptably high price to

tribal sovereignty.” Id. at 889. The Court explained that

“tribal immunity, like all aspects of tribal sovereignty, is

privileged from diminution by the State.” Id. at 891.

Finally, in Oklahoma Tax Comm'n v. Citizen Band

Potawatomi Indian Tribe, this Court addressed essentially

the same issue that is presented here:

At the very least, Oklahoma proposes that the

Court modify Fidelity & Guaranty, because tribal

business activities such as cigarette sales are

now so detached from traditional tribal interests

that the tribal sovereignty doctrine no longer

makes sense in this context. The sovereignty

\

9

doctrine, it maintains, should be limited to the

tribal courts and the internal affairs of the tribal

government, because no purpose is served by

insulating tribal business ventures from the

authority of the States to administer their laws.

498 U.S. 505, 510 (1991). This Court rejected Oklahoma’s

position because, although “Congress has always been at

liberty to dispose with such tribal immunity or to limit

it... Congress has consistently reiterated its approval of

the immunity doctrine.” Id. Relying on Fidelity & Guar-

anty, the Court held that a tribe’s sovereign immunity

protected it from even the assertion of a compulsory

counterclaim by a state agency. Id. at 509-10.

Il. CONGRESS HAS NOT AUTHORIZED STATE

COURTS TO ADJUDICATE CLAIMS BROUGHT

AGAINST INDIAN NATIONS.

Congress was delegated the authority to “regulate

Commerce with foreign Nations . . . and with the Indian

tribes.” U.S. Const., art. L, § 8, cl. 3. Congress has exer-

cised this authority by statute. With respect to sovereign

immunity, Congress has treated Indian tribes quite differ-

ently than foreign nations, preserving intact the tribes’

sovereign immunity while abrogating that of foreign sov-

ereigns which engage in extra-territorial commercial

activities.

“Congress knows how to limit the sovereign immu-

nity of others when it wants to.” In Re Greene, 980 F.2d

590, 594 n.3 (9th Cir. 1992), cert. de: d sub nom. Richardson

v. Mt. Adams Furniture, 510 U.S. 1039 (1994). In the For-

eign Sovereign Immunity Act of 1976 (“FSIA”), Congress

10

exempted commercial activities of foreign states having a

direct effect in the United States from the general confer-

ral of immunity from state court process. See 28 U.S.C.

§ 1605. Congress has also abrogated tribal sovereign

immunity in rare instances. See, ¢e.g., Santa Clara Pueblo v.

Martinez, 436 U.S. at 71 (Congress provided federal court

review only in habeas corpus proceedings under the

Indian Civil Rights Act). “But, for obvious reasons, this

power has been sparingly exercised.” Thebo v. Choctaw

Tribe, 66 F. at 375.°

In fact, as this Court observed in Potawatomi, “Con-

gress has consistently reiterated its approval of the

[tribal] immunity doctrine.” 498 U.S. at 510. In 1934 Con-

gress preserved “all powers vested in any Indian tri-

be .. . by existing law” in the Indian Reorganization Act

(“IRA”), 25 U.S.C. § 476(e), and in 1936 Congress

extended the policies of the IRA to Oklahoma tribes in

the Oklahoma Indian Welfare Act (“OIWA”), 25 U.S.C.

§§ 501-509. Congress enacted the OIWA to “permit the

Indians of Oklahoma to exercise substantially the same

rights and privileges as those granted to Indians outside

of Oklahoma by the [IRA].” H.R. Rep. No. 2408, 74th

6 In the Indian Reorganization Act of 1934, Congress

authorized the creation of tribal corporations for the conduct of

business activities. Notably, those tribal corporations were

given the ability, but were not required, to include “sue or be

sued” language in their corporate charters. Brian C. Lake, The

Unlimited Sovereign Immunity of Indian Tribal Businesses

Operating Outside the Reservation: An Idea Whose Time Has Gone,

1996 Colum. Bus. L. Rev. 87, 101 (1996). The option of

establishing tribal corporations without “sue and be sued”

clauses was extended by Congress to non-IRA tribes in 1990. See

25 U.S.C. § 478-1.

11

Cong., 2d Sess. (1936); Muscogee (Creek) Nation v. Hodel,

851 F.2d 1439, 1443-46 (D.C. Cir. 1988), cert. denied, 488

U.S. 1010 (1989). As shown above, the doctrine of tribal

sovereign immunity, in Oklahoma and elsewhere, was

firmly established when the IRA and OIWA were

enacted, and even foreign states enjoyed “absolute immu-

nity” in United States courts for their extra-territorial

commercial activities then. See Berizzi Bros. Co. v. The

Pesaro, 271 U.S. 562 (1926); Note, Sovereign Immunity of

States Engaged in Commercial Activities, 65 Colum. L. Rev.

1086, 1087 (1965). See also Powers of Indian Tribes, 55 Inte-

rior Dec. 14, 24 (1934) (citing Turner v. United States, 51 Ct.

Cl. 125 (1916), aff'd, 248 U.S. 354 (1919)).”

Indeed, at about the same time as it passed the FSIA,

Congress preserved fully the tribes’ sovereign immunity

from suit. In effectuating President Nixon's “self-deter-

mination without termination” policy,’ Congress passed

the Indian Self-Determination and Education Assistance

Act of 1975, which provided that “[nJothing in this Act

shall be construed as . . . affecting, modifying, diminish-

ing, or otherwise impairing the sovereign immunity

enjoyed by an Indian tribe... . ” 25 U.S.C. § 450(n)(1).9

” Plainly, Congress has not waived generally the sovereign

immunity of the United States in state courts, in cases involving

Indians or otherwise. See, e.g., Minnesota v. United States, 305

U.S. 382, 388-89 (1939).

® Special Message to the Congress on Indian Affairs, 1970

Pub. Papers 564, 565.

* The Indian Self-Determination and Education Assistance

Act is but one of several recent statutes declaring Congress’

commitment to Indian self-sufficiency and self-determination.

25 U.S.C. § 450a(b). See Indian Tribal Justice Support Act of 1993,

25 U.S.C. § 3601(2) (“the United States has a trust responsibility

i2

Congress has not seen fit to abrogate tribal sovereign

immunity for tribal commercial activities that may have

off-reservation connections. It clearly has the power to do

so. “[A] proper respect both for tribal sovereignty itself

and for the plenary authority of Congress in this area

cautions that we tread lightly in the absence of clear

indications of legislative intent.” Santa Clara Pueblo v.

Martinez, 436 U.S. at 60. This requirement of a clear

statement from Congress honors the allocation of federal

power in Article I, § 8 of the Constitution, with lasting

structural and practical benefits. See Phillip P. Frickey,

Marshalling Past and Present: Colonialism, Constitutionalism,

and Interpretation in Federal Indian Law, 107 Harv. L. Rev.

381, 428 (1993).

Ill. THE DECISION OF THE COURT BELOW LACKS

ANY SUBSTANTIAL SUPPORT.

The issue before the Court is whether State courts

may abrogate tribal sovereign immunity on an ad hoc

basis where Congress has affirmatively preserved intact

that feature of tribal sovereignty. The court below held

that it had that power.

The holding of the Oklahoma Court of Appeals is

contrary to the great weight of authority. The decision

below ultimately rests on Padilla v. Pueblo of Acoma, 754

P.2d 845 (N.M. 1988), cert. denied, 490 U.S. 1029 (1989), a

to each tribal government that includes the protection of the

sovereignty of each tribal government”); Indian Gaming

Regulatory Act of 1988, 25 U.S.C. § 2701(4) (“a principal goal of

Federal Indian policy is to promote tribal economic

development, tribal self-sufficiency and strong tribal

government”).

13

decision that even New Mexico courts are beginning to

question. See DeFeo v. Ski Apache Resort, 904 P.2d 1065,

1067-68 (N.M. App.) (distinguishing Padilla and embrac-

ing the reasoning of Sac & Fox Nation v. Hanson, 47 F.3d

1061, 1064-65 (10th Cir.), cert. denied, 116 S.Ct. 57 (1995)),

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

Padill.. held that “the exercise of [state court] jurisdic-

tion over a sovereign Indian tribe for off-reservation con-

duct is solely a matter of comity.” 754 P.2d at 850. It came

to this startling conclusion in reliance on Nevada v. Hall,

440 U.S. 410 (1979), a case involving the assertion of

sovereign immunity by one State in the courts of a sister

State. Hall is inapposite, because

[w]hat makes the States’ surrender of immunity

from suit by sister States plausible is the mutu-

ality of that concession. There is no such mutu-

ality with . . . Indian tribes.

Blatchford v. Native Village of Noatak, 501 U.S. 775, 782

(1991). See also White Mountain Apache Tribe v. Bracker, 448

U.S. 136, 143 (1980) (fundamental differences in the

nature of tribal and state sovereignty make it “treach-

erous” to apply to tribes principles developed in cases

involving states). Padilla has been roundly criticized by

courts and commentators alike:

Padilla is flawed for the basic reason that the

New Mexico Supreme Court erred by incor-

rectly applying Nevada v. Hall in the context of

tribal immunity. The decision in Nevada v. Hall

narrowly addresses the issue of sovereign

immunity between the states and does not con-

tain any language signalling an intent to extend

its analysis to Indian tribes. The sovereign

14

immunity of states and tribes derives from dif-

ferent sources, and while large, financially

secure states no longer require the protection of

sovereign immunity, this immunity still remains

a very important tool used by Indian tribes to

protect their scarce resources.

Lake, supra n.6, at 108 (footnotes omitted); In Re Greene,

980 F.2d at 593-95.

Not one federal court that has addressed the issue

before the Court has agreed with either the reasoning or

the outcome of the court below. See In Re Greene (criticiz-

ing Padilla and upholding tribal sovereign immunity in

off-reservation commercial context); Sac & Fox Nation v.

Hanson, 47 F.3d 1061, 1063-65 (10th Cir.) (adopting reason-

ing of Greene and holding that “the extra-territorial

nature of [the] transactions does not strip the [Sac & Fox]

Nation of its right to assert sovereign immunity”), cert.

denied, 116 S.Ct. 57 (1995); Federico v. Capital Gaming Int'l

Inc., 888 F. Supp. 354, 357 (D.R.I. 1995) (quoting Hanson);

Elliott v. Capital Int'l Bank & Trust, Ltd., 870 F. Supp. 733,

735 (E. D. Tex. 1994) (immunity upheld where tribal bank

officer allegedly defrauded plaintiff outside Indian coun-

try), aff'd. 102 F.3d 549 (Sth Cir. 1996). See also Maryland

Cas. Co. v. Citizens Nat'l Bank, 361 F.2d 517, 521-22 (5th

Cir.) (“The fact that the Seminole Tribe was engaged in an

enterprise private or commercial in character, rather than

governmental, is not material. It is in such enterprises

and transactions that the Indian tribes and the Indians

need protection. The history of intercourse between the

Indian tribes and Indians with whites demonstrates such

I aye

15

need... . To construe the immunity to suit as not apply-

ing to suits on liabilities arising out of private transac-

tions would defeat the very purpose of Congress in not

relaxing the immunity, namely, the protection of the inter-

ests and property of the tribes and the individual

Indians.”), ert. denied, 385 U.S. 918 (1966); American

Indian Agric. Credit Consortium, Inc. v. Standing Rock Sioux

Tribe, 780 F.2d 1374, 1378-79 (8th Cir. 1985) (tribe’s sover-

eign immunity not waived by virtue of engaging in busi-

ness); Maynard v. Narragansett Indian Tribe, 984 F.2d 14, 16

(1st Cir. 1993) (declining to weigh several factors to infer

a tribe’s waiver of sovereign immunity).

No state court agrees with the court below, either,

except perhaps the New Mexico courts. See DeFeo, 904

P.2d at 1067-68. The State courts recognize that congres-

sional action is required if tribes are to be stripped of

their sovereign immunity, even in the context of commer-

cial disputes arising outside of Indian country. See North

Sea Prods., Ltd. v. Clipper Seafoods Co., 595 P.2d 938 (Wash.

1979) (en banc) (upholding tribal immunity against state

court garnishment action in context of tribal commercial

enterprise outside reservation boundaries); Gavle v. Little

Six, Inc., 555 N.W.2d 284, 290 (Minn. 1996) (upholding

tribal immunity where tribe’s commercial activity took

place both within and outside Indian country), petition for

cert. filed, 65 U.S.L.W. 3539 (U.S. Jan. 29, 1997) (No.

96-1215); Morgan v. Colorado River Indian Tribe, 443 P.2d

421 (Ariz. 1968) (upholding tribal immunity from suit for

damages arising from accident at tribe’s off-reservation

16

amusement park).'° See also Aircraft Equip. Co. v. Kiowa

Tribe of Oklahoma, 921 P.2d 359, 363 (Okla. 1996) (Sum-

mers, J., dissenting) (if the result of the Kiowa cases

“were based on the desire to make business dealings with

tribes more fair and equitable, such a remedy should and

could be fashioned by the United States Congress, not

this Court.”).

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

1995), cert. denied, 116 S.Ct. 1675 (1996), was the first case

decided by the Oklahoma Supreme Court concerning

tribal sovereign immunity in the commercial context."

Hoover's discussion of tribal sovereign immunity begins

with quotations of isolated passages from Mescalero

Apache Tribe v. Jones, 411 U.S. 145 (1973), and Organized

Village of Kake v. Egan, 369 U.S. 60 (1962). Hoover, 909 P.2d

at 61. Neither case concerns tribal sovereign immunity.

Jones affirmed the imposition of state gross receipts taxes

10 Arizona courts typically honor the sovereign immunity

of tribes and tribal corporations in the commercial context. See

Morgan v. Colorado River Indian Tribe, 443 P.2d 421 (Ariz. 1968); S.

Unique, Ltd. v. Gila River Pima-Maricopa Indian Community, 674

P.2d 1376 (Ariz. App. 1983) (farming company immune); White

Mountain Apache Indian Tribe v. Shelley, 480 P.2d 654 (Ariz. 1971)

(timber company immune). One case holding otherwise

employed a test (the “subordinate economic organization” test)

described as “an even worse option” than that used in Padilla.

Lake, supra n. 6, at 109, criticizing Dixon v. Picopa Constr. Co., 772

P.2d 1104 (Ariz. 1989).

11 Hoover noted Lewis v. Sac and Fox Tribe of Okla. Housing

Auth., 896 P.2d 503 (Okla. 1994), cert. denied, 116 S.Ct. 476 (1995),

but conceded that the tribal entity in Lewis had specifically

abandoned its immunity-based challenge to state court

jurisdiction. Hoover, 909 P.2d at 61 (citing Lewis, 896 P.2d at 511).

ee

17

on a tribe’s ski resort located wholly outside of reserva-

tion boundaries, but an act of Congress specifically

authorized such taxes. 411 U.S. at 149-50. Moreover, later

decisions of this Court make clear that, even if state law

applies to a tribe, the states may not be able to sue the

tribes directly — “the most efficient remedy” — to enforce

state law. Potawatomi, 498 U.S. at 514.

Hoover ultimately relies on Padilla - a most slender

reed, as shown above. Later Oklahoma cases offer a vari-

ety of additional justifications, set forth below, for depart-

ing from settled law.'? None withstand scrutiny.

1. Denial of Certiorari. In Aircraft Equip. Co. v. Kiowa

Tribe of Oklahoma, 921 P.2d 359 (Okla. 1996) (“Aircraft

Equip. I”), the following passage appears. “We follow the

jurisprudence of Hoover and Lewis because in both cases

certiorari was denied by the Supreme Court of the United

States.” Id. at 361. The court failed to recognize that the

denial of certiorari “imports no expression upon the

merits of the case, as the bar has been told many times.”

United States v. Carver, 260 U.S. 482, 490 (1923).

2. Professed Solicitude for the Indians. Aircraft Equip. I

also found “important public policy considerations” to

support the Oklahoma decisions, to wit: if sovereign

immunity were upheld, “the tribes would have difficulty

finding anyone willing to risk his funds in unenforceable

obligations. Such a rule would chill tribal commercial and

2 One subsequent decision, First Nat'l Bank in Altus v.

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

299 (Okla. 1996), engaged in no legal analysis and simply held

that Hoover was dispositive. Id. at 301.

18

entrepreneurial business.” 921 P.2d at 362. Amici curiae

have experienced no such chilling effect. In an analogous

setting, the Tenth Circuit has exposed this rationalization

of Aircraft Equip. I for what it is.

The Bank next argues that commercial rela-

tions between Indian tribes and non-Indian

banks will be chilled if the district court’s dis-

missal [for failure to exhaust tribal remedies] is

affirmed. This policy argument precisely misses

the point of sovereign immunity, which is the

power of self-determination. We decline the

Bank’s invitation to second-guess the wisdom of

the Nation’s business decisions under the guise

of judicial review.

Bank of Oklahoma v. Muscogee (Creek) Nation, 972 F.2d 1166,

1169 (10th Cir. 1992); see also Hanson, 47 F.3d at 1064.

Oklahoma’s policy consideration is, at best, misguided

paternalism. See Presidential Comm'n on Indian Reserva-

tion Economies, Report and Recommendations to the Presi-

dent of the United States, Part 2 at 31, 115, 121 (1984) (from

a “private sector business perspective” sovereign immu-

nity is considered a “problem which the teams discovered

low on the list of priorities. ... As noted above, the teams

found the lack of good business plans, a shortage of

entrepreneurs, and insufficient attention to cash flows to

be of far more importance to banks and other investors

than questions of collateral.”). Indeed, as this Court has

noted, “the perceived inequity of permitting the Tribe to

recover from a non-Indian for civil wrongs in instances

where a non-Indian allegedly may not recover against the

Tribe simply must be accepted in view of the overriding

federal and tribal interests in these circumstances. . .. ”

Three Affiliated Tribes, 476 U.S. at 893. Tribes and persons

ee ee

19

dealing with them have long been able to effect a valid

waiver of tribal sovereign immunity when they so desire.

See e.g. McClendon v. United States, 885 F.2d 627, 631-32

(9th Cir. 1989); American Indian Agric. Credit Consortium

Inc., 780 F.2d at 1378-79.

Disputes such as the instant one would literally

destroy many small tribes. See Report and Recommendations

to the President of the United States, Part 1 at 29 (“Approxi-

mately 35% of all Indian reservations and Alaskan vil-

lages have fewer than 100 resident members.”). In the

instant case, total state court judgments against the

Kiowa Tribe are said to exceed $1.5 million. Oklahoma

process is being employed to seize Kiowa tax revenues

and federal judgment funds. The warning of Thebo should

be heeded: an Indian tribe, regardless of its possible

wealth, “will soon be impoverished if it was subject to the

jurisdiction of the courts, and required to respond to all

the demands which private parties chose to prefer against

it.” 66 F. at 376.

3. The “state law” basis. The confusion of the

Okahoma courts is exemplified in the characterization of

the issue of tribal sovereign immunity as a “state law

question.” Aircraft Equip. I, 921 P.2d at 361. To the con-

trary, such issues are most assuredly federal law issues.

See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978)

(Tribal sovereign immunity “is subject to the superior and

plenary control of Congress.”); Three Affiliate? Tribes, 476

U.S. at 891 (“[I]n the absence of federal authorization,

tribal immunity . . . is privileged from diminution by the

States.”); see generally County of Oneida, N.Y. v. Oneida

Indian Nation, 470 U.S. 226, 234 (1985).

20

4. The “Unique History” of Oklahoma. In Aircraft

Equip. Co. v. Kiowa Tribe of Oklahoma, et al., No. 86,184,

1997 WL 222406 (Okla. May 6, 1997) (“Aircraft Equip. II”),

the court added another justification for its decisions -

the “unique history in regard to relations with Indian

tribes within [Oklahoma’s] boundaries;” Aircraft Equip. II,

1997 WL 222406, at *7 n.6, citing Oklahoma’s Organic Act

and the Curtis Act. Neither act supports distinguishing

Oklahoma tribes from other tribes. The Indian disclaimer

provisions of Oklahoma’s Enabling Act are practically

identical to those of the other western states. See Tiger v.

Western Inv. Co., 221 U.S. 286, 309 (1911) (“Since state-

hood, the status of Indian tribes in Oklahoma has been

similar to that of tribes in other states.”); McClanahan v.

Arizona State Tax Comm'n, 411 U.S. 164, 175 & n. 4 (1973);

Adams v. Murphy, 165 F. 304, 312 (CCA 8 1908) (Curtis Act

not intended to abolish tribal sovereign immunity). See

also Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439, 1446

(D.C. Cir. 1988) (OIWA impliedly repealed Curtis Act),

cert. denied, 488 U.S. 1010 (1989).

°

CONCLUSION

Only Congress may abrogate tribal sovereign immu-

nity under the Constitution. The Indian Commerce

Clause divests the States “of virtually all authority over

Indian commerce.” Seminole Tribe v. Florida, 517 U.S. ___

116 S.Ct. 1114, 1126 (1996) and id. at 1168 (“the States

have no sovereignty in the regulation of commerce with

the tribes”) (Souter, J., dissenting). No act of Congress has

divested the Kiowa Tribe of its sovereign immunity from

the exercise of state court jurisdiction in commercial or

ee

a a ee oe oe

21

any other disputes. The decision below must therefore be

reversed.

Respectfully submitted,

Paut E. Frvye*

Lisa M. Enrtetp

Attorneys for Amici Curiae

Norpuaus, Hattom, Taytor,

TaRaApvAsH & Frye, LLP

500 Marquette NW, Suite 1050

Albuquerque, NM 87102

Telephone No.: (505) 243-4275

Telefax No.: (505) 243-4464

"Counsel of Record