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

Supreme Court brief1998

Ask Donna

What actually matters in this document.

Text

No. 96-1037

In the

Supreme Court of the United States

October Term, 1997

KIOWA TRIBE OF OKLAHOMA,

Petitioner,

Vv.

MANUFACTURING TECHNOLOGIES, INC.,

Respondent.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS,

DIVISION |, FOR THE STATE OF OKLAHOMA

BRIEF OF AMICUS CURIAE FOND DU LAC

BAND OF LAKE SUPERIOR CHIPPEWA

IN SUPPORT OF PETITIONER

DENNIS J. PETERSON HENRY M. BUFFALO, JR.

Counsel of Record JACOBSON, BUFFALO,

Fond du Lac Legal Office SCHOESSLER &

1720 Big Lake Road MAGNUSON, LTD.

Cloquet, MN 55720 810 Lumber Exchange Bldg.

(218) 879-4593 Ten South Fifth Street

Minneapolis, MN 55402

(612) 339-2071

Attorneys for the Fond du Lac Band

of Lake Superior Chippewa

1997 - Bachman Legal Printing @ (612)339-9518 of 1-800-715-3582 @ FAX (612)337-8053

TABLE OF CONTENTS

DETERMINATIONS REGARDING

THE NATURE AND SCOPE OF

TRIBAL SOVEREIGN IMMUNITY

ARE A FUNCTION OF FEDERAL,

NOT STATE, LAW

. THE PRECEDENTS OF THIS COURT

AND OF THE LOWER FEDERAL

COURTS SUPPORT THE

APPLICABILITY OF TRIBAL

IMMUNITY TO A BREACH OF

CONTRACT ACTION ARISING OFF-

RESERVATION

- THE APPLICABILITY OF THE TRIBAL

IMMUNITY DOCTRINE TO TRIBAL

CONTRACTHIAL RELATIONSHIPS

INVOLVING OFF-RESERVATION

PERFORMANCE IS ESSENTIAL TO

THE MAINTENANCE OF TRIBAL

SELF-GOVERNMENT AND TO THE

FULFILLMENT OF THE FEDERAL

TRUST RESPONSIBILITY TO

PRESERVE TRIBAL ASSETS ........csseceseeeeseesenenees

IV. PARTIES TO CONTRACTS WITH

INDIAN TRIBES HAVE WHATEVER

RIGHTS AND REMEDIES AS ARE

RESERVED UNDER THE CONTRACT

CONCLUSION

SOE EEE EEE EEE EEE E EEE HERE EEE

TABLE OF AUTHORITIES

Cases: Page

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

No. 86,184 (Okla. May 6, 1997) oo....cccccccccccccccsscssceeeeeeees 6

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

SR 6

American Indian Agricultural Consortium, Inc

v. Standing Rock Sioux Tribe, 780 F.2d 1374

EE 8, 13, 18

Bank of Oklahoma v. Muscogee (Creek) Nation,

972 F.2d 1166 (10th Cir. 1992)...0.....ccccccccccescesoccesereeseseeee 14

Blatchford v. Native Village of Noatak,

EEE 10

Bryan v. Itasca County, 426 U.S. 373 (1976) cocccccccccccccoeeoooee... 8

C & B Investments v. Wisconsin Winnebago Health Dept.,

198 Wis. 105, 542 N.W.2d 168 (Wis. Ct. App. 1995) .....14

California v. Cabazon Band of Mission Indians.

EEE 8

Cogo v. Central Council of the Tinglit and Haida

Indians, 465 F. Supp. 1286 (D. Alaska 1979) .................... 9

Dixon v. Picopa Const. Co., 160 Ariz. 251,

772 P.2E 12D CEDEDP wcnceccrccsssnssssnscsssesssesvsssvecessescsenesesnseess 15

Elliot v. Capitol International Bank & Trust, Ltd.,

870 F. Supp. 733 (E.D. Tex. 1994), aff'd,

I 7

Federal Power Comm'n v. Tuscarora Indian Nation,

———————————————— 16

First National Bank in Altus v. Kiowa, Comanche and

Apache Intertribal Land Use Comm., 913 P.2d 299

Fond du Lac Band of Chippewa v. Carlson,

Civ. No. 5-92-159 (D. Minn. March 18, 1996),

app. pending, Nos. 97-1757 et al. (8th Cir. 1997)........... 2,3

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

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

(Okla. 1995), cert. denied, US. _,

ee 4, 6, 10, 12, 14

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

cert. denied sub nom., Richardson v.

Mt. Adams Furniture, 510 U.S. 1039 (1995)............. 6,7, 13

In re Ransom v. St. Regis Mohawk Education

& Community Fund, Inc., 86 N.Y .2d 553,

658 N.E.2d 989, 635 N.Y.S.2d 116 (1995) ............cccceceees 14

Iowa Mutual Insurance Co. v. LaPlante, 480 U.S. 9

EEE 2 ee 8

Lac Courte Oreilles Band of Indians v. Wisconsin,

668 F. Supp. 1233 (D. Wis. 1987)...............ccsecscrecrerrsesesees 3

Maryland Cas. Co. v. Citizens Nat. Bank of West

Hollywood, 361 F.2d 517 (Sth Cir.),

cert. denied, 385 U.S. 918 (1966) .............ccccecceeeneereecersevees 13

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

RS Se ea ee 13

Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973)........ 12

Mille Lacs Band of Chippewa Indians v.

Minnesota, 861 F. Supp. 784 (D. Minn. 1994)................... 3

Montana v. Blackfeet Tribe, 471 U.S. 759 (1985)............c00000- 9

Morgan v. Colorado River Indian Tribe,

EE 15

Nevada v. Hall, 440 U.S. 410 (1979) ...........cccccccecseoes 4, 6,7, 10

New Mexico v. Mescalero Apache Tribe,

eae aiaiimincnitereemnseel 8

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

595 P.2d 938 (Wash. 1979) ........c..cccccccvsvceveceeseeeeessssseveeeen 14

Oklahoma Tax Commission v. Citizen Band Potawatomi

Indian Tribe, 498 U.S. 505 (1991) ............... 4,5, 7,8, 9,12

Oneida Indian Nation v. County of Oneida,

OST, Gas CP nennteiettinennciighdeiitnctdunitaiiiemamninineniaia u

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

(N.M. 1988), cert. denied,

oS Ee 6, 7, 10, 14, 15

Pan American Company v. Sycuan Band of Mission

Indians, 884 F.2d 416 (9th Cir. 1989)............ccccccceceeeeeeeees 13

People v. LeBlanc, 399 Mich. 31, 248 N.W.2d 199 (1976)...14

Puyallup Tribe v. Dep't of Game, 433 U.S. 165

CBU Od cence 4,9, 12

Ramey Const. Co. v. Apache Tribe, 673 F.2d 315

oo: 306 ee ee 14

Sac and Fox Nation v. Hanson, 47 F.3d 1061

ee 14

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

ee ee 7, 8, 12

State v. Gurnoe, 53 Wis.2d 390, 192 N.W.2d 892 (1972).....14

Three Affiliated Tribes of Fort Berthold Reservation

v. Wold Engineering Co., 476 U.S. 877 (1986).......8, 12, 16

Tiger v. Western Investment Co., 221 U.S. 286 (1911).......... 1]

Turner v. United States, 248 U.S. 354 (1919).........cccccceceeseesers 8

vii

United States v. Forty Three Gallons of Whiskey,

aI ciiccnicsintanpeieremmpenmtmmpapnmeyenmaces 9

United States v. Michigan, 653 F.2d 277

EE TI aserinsinoctieepinegpiainentipeastepenuscamerrepmmmansnnecaters 3

United States v. Testan, 424 U.S. 392, 399 (1976) ........cc0c00000 9

United States v. United States Fidelity & Guaranty

Oe 8,9, 12

United States v. Wheeler, 435 U.S. 313 (1978) ........cccccceeeeesees 7

United States v. Winans, 198 U.S. 371 (1908) ..........ccccecceeeeee 7

Washington v. Washington State Commercial Passenger

Fishing Vessel Ass'n, 443 U.S. 658 (1979).........ccccecceeeeeees 7

Weeks Construction Co., Inc. v. Oglala Sioux Housing

Authority, 797 F.2d 668 (8th Cir. 1986) .............ccccccceeeeees 11

White Mountain Apache Tribe v. Bracker,

ee He nicintieintnesesnntettaiensienrecenaeninemasnces 8, 10

White Mountain Apache Tribe v. Shelley, 107 Ariz. 4,

Oe citcccsmenimaieniantenreneninensememesnes 14, 15

Worchester v. Georgia, 31 U.S. (6 Pet.) 515 (1832)............... 9

Viii

STATUTES

Federal Torts Claims Act of 1946, 28 U.S.C. §§ 1346(b),

OBOE cessessscserervenengiesteseiepimpdianginmimnmnin 11

Indian Child Welfare Act of 1978, 25 U.S.C. § 1901

GOGO, crssrsersscnstinttiimmnceamnmpemnapartingniapinenents 8

Indian Civil Rights Act of 1968, 25 U.S.C. § 1301 ef seq........8

Indian Financing Act of 1974, 25 U.S.C. § 1451 ef seq............ 8

Indian Gaming Regulatory Act of 1988,

ee 6 re COD ceereemrecittniecegntiantomtrctecseennncion 8

Indian Health Care Improvement Act of 1976,

Be ts he Oe cattcencinrepncnemaantitaninestenctsccersctemease 2

Indian Reorganization Act of 1934,

a i errerencentatiipinictnntesnenscsnseseemeemciens 8,11

Indian Self-Determination and Education

Assistance Act of 1975, 25 U.S.C. § 450 et seq. ...2, 7, 8, 11

Indian Tribal Justice Act of 1993, 25 U.S.C. § 3601

GO ODB, cosceescemtrtmescttiemnemninnsintetaiaietbiammennectesenessenel 8

Indian Tribal Government Tax Status Act of 1982,

8 IT A AE 0 Ae »

Native American Housing Assistance and Self-

Determination Act of 1996, Pub.L. 104-330,

et Oe 2,8

Oklahoma Indian Welfare Act of 1936, 25 U.S.C. § 501

1D GIDE), <cusisinmntncubtantectidmeapatsenninctnengeninseneincngsenreategmncscensenseeses 1]

Treaty of July 29, 1837, 7 Stat. 536 .......cccccccsserseeesereeereesessees 2

Treaty of LaPointe, Sept. 30, 1854, 10 Stat. 1109 0.0.0... 2

Tribally-Controlled Community College Act of 1978,

BP ls Oe ee I cesecttncscnianociarstcnccssenenenseseseenssossteneents 2

OTHER AUTHORITIES

American Bar Association, Model Rules of

Prafeaalamdl CORE cccccccsccscscscssesosessccssessscscsssscscssscsneosecee 17

FAs Cs CII Cte Prccccccssnceccececencsesesserncssssnsnscssmesseen 19

Cohen, Handbook of Federal Indian Law (1982 ed.) ........000+«. 8

Dietrich, Tribal Businesses and the Uncertain Reach of

Tribal Sovereign Immunity: A Statutory Solution,

67 Wash. L. Rev. 113 (1997).........ccccccccsceesseeeeeeeee veeeeevenen 15

Kelly, "Doing Business with Indian Tribes,"

Business North, Avg. 1997 .......0cccccccecsersereeserseseeseereeeeeeeenes 20

Note, /n Defense of Tribal Sovereign Immunity,

Fp ee Bie BRIO. DEN Ce encscnccncvccsccecsscnscsenssnsccsscensvesees 8

Note, Sovereign Immunity -- Indian Tribal Sovereignty --

Tribes Not Immune From Suits Arising From

Off-Reservation Business Activity -- Padilla

v. Pueblo of Acoma, 102 Harv. L. Rev. 556 (1988)............. 7

No. 96-1037

In the

Supreme Court of the United States

October Term, 1997

KIOWA TRIBE OF OKLAHOMA,

Petitioner,

Vv.

MANUFACTURING TECHNOLOGIES, INC.,

Respondent.

On Writ of Certiorari to the Court of Appeals,

Division I, for the State of Oklahoma

BRIEF OF AMICUS CURIAE FOND DU LAC

BAND OF LAKE SUPERIOR CHIPPEWA

IN SUPPORT OF PETITIONER

INTEREST OF AMICUS *

The Fond du Lac Band of Lake Superior Chippewa is a

federally recognized Indian tribe which occupies the Fond du

Lac Reservation in northeastern Minnesota pursuant to the

” Pursuant to rule 37.6 of the Rules of this Court, counsel for amicus

states that no counsel for any party authored this brief in whole or part,

and that no person or entity other that amicus and its counsel made any

monetary contribution to the preparation and submission of this brief.

Treaty of LaPointe, 10 Stat. 1109. The Fond du Lac Band

administers a variety of programs for Band members and other

Indians in the Band's service area, including the operation of

educational, housing and health care facilities and also

operates several businesses, including two gaming

establishments,’ a hotel, and a construction company. The

Band operates a health clinic, a group home and a tribal college

off of the Reservation. In addition, the Band maintains a

comprehensive conservation and natural resource management

program in connection with its exercise of hunting, fishing and

gathering rights under the treaties of 1837° and 1854,4 much of

which is federally-funded. Fond du Lac Band of Chippewa v.

Carlson, Civ. No. 5-92-159 (D. Minn. March 18, 1996),

appeal pending, Nos. 97-1757 et al. (8th Cir. 1997).5 The

‘The Band's educational program is funded by the United States

pursuant to the Indian Self-Determination and Education Assistance Act of

1975, 25 U.S.C. § 450 et seq., and the Tribally-Controlled Community

College Act of 1978, 25 U.S.C. § 1801 et seg.; the Band's health care

program is funded by the United States pursuant to the Indian Health Care

Improvement Act of 1976, 25 U.S.C. § 1601 ef seg.; and the Band's

housing program is funded pursuant to the Native American Housing

Assistance and Self-Determination Act of 1996, Pub. L. 104-330, 110

Stat. 4017, to be codified at 25 U.S.C. § 4101 er seq.

* One of the Band's casinos, the Fond-du-Luth Casino, is operated

on tribal trust land in downtown Duluth, Minnesota (approximately 25

miles northeast of the original Reservation) pursuant to a Tribal-City

accord between the Band and the City, under which the City receives 30

percent of the net revenues of the Casino.

* Treaty of July 29, 1837, 7 Stat. 536.

* Treaty of September 30, 1854, 10 Stat. 1109 (Treaty of LaPointe).

"Under the 1837 and 1854 treaties, the Fond du Lac Band has

reserved harvest rights over some 8 million acres of land, from east-central

Minnesota to the Canadian border. The harvest activities of Band

members are exempt from state law only to the extent to which the Band

itself maintains an effective system of self-regulation, which naturally

requires an extensive regulatory and enforcement presence in those off-

common purposes of these operations is to improve the

quality of life for Band members and to promote the

continuity and self-determination of the Band as a whole.

The Fond du Lac Band has an interest in this case because

every government program and enterprise operated by the

Band engages in contractual relations involving some degree of

off-reservation performance. The Band routinely enters into

contracts with a variety of off-reservation vendors,

contractors and consultants in its day-to-day operations. The

maintenance of tribal autonomy in the modern world -- which

has been the essence of federal Indian policy for three decades

-- necessitates such interaction. An erosion of the tribal

sovereign immunity doctrine in this case would expose tribes

to unlimited litigation in alien forums which would sap the

tribal resources necessary to the fulfillment of that purpose.

The Band accordingly files this brief to urge this Court to

uphold its earlier decisions regardingthe nature and scope of

tribal sovereign immunity and to hold that the Oklahoma

courts are federally preempted from finding an implicit waiver

of tribal immunity under Oklahoma state law.

Both parties have consented to the filing of this brief

amicus curiae, and those consents have been lodged with the

Clerk.

SUMMARY OF ARGUMENT

The Oklahoma Court of Appeals has in this case

erroneously resolved an issue of tribal sovereign immunity

reservation areas. Fond du Lac Band v. Carlson, slip op. at 25-29 (citing

United States v. Michigan, 653 F.2d 277, 279 (6th Cir. 1981); Mille Lacs

Band of Chippewa v. State of Minnesota, 861 F. Supp. 784, 838-39 (D.

Minn. 1994); Lac Courte Oreilles Band of Indians v. Wisconsin, 668 F.

Supp. 1233, 1241-42 (D. Wis. 1987)).

under Oklahoma state law, and has further erred by holding

that the sovereign immunity of the Kiowa Tribe does not bar

State jurisdiction over a breach of contract action against the

Tribe arising off of tribal territory. Issues involving tribal

sovereign immunity are the exclusive province of federal law,

and numerous precedents of this Court provide that tribal

sovereign immunity cannot be waived by implication, but

only through the express and unequivocal consent to suit by

Congress or by the tribe itself.

The primary state precedent relied upon by the

Oklahoma Court of Appeals in this matter, Hoover v. Kiowa

Tribe of Oklahoma, 909 P.2d 59 (Okla. 1995), cert. denied

___ U.S. __, 116 S.Ct. 1675 (1996), has mistakenly applied

the precedent of Nevada v. Hall, 440 U.S. 410 (1979) in

arriving at the conclusion that state court accommodation of

tribal sovereign immunity is a discretionary function of

comity. Nevada v. Hall is inapposite to this matter because

that decision involved an issue of sovereign immunity arising

between two states. Tribes are not states, and unlike the issue

of state immunity in Nevada v. Hall, there is a constitutional

barrier to the resolution of tribal immunity issues under state

law. Indeed, Oklahoma consented to exclusive federal

authority over Indian affairs upon achieving statehood.

The precedents of this Court and of the lower federal

courts support the application of the tribul immunity doctrine

in off-reservation and contractual contexts. The decisions of

this Court regarding tribal immunity have without exception

focused on the sovereign status of the tribes and on the federal

trust responsibility to preserve tribal assets rather than on the

situs of the claim. In Puyallup Tribe, Inc. v. Department of

Game, 433 U.S. 165, 172-73 (1977), tribal immunity was

recognized as a barrier to state jurisdiction over tribal fishing

activities off-reservation, and in Oklahoma Tax Commission

v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505, 509-

11 (1991), this Court held that tribal immunity bars an action

for monetary damages against a tribe. The courts of at least

five federal circuits have accordingly recognized tribal

sovereign immunity as a jurisdictional barrier in contractual

and off-reservation contexts.

As a policy matter, the federal objectives of promoting

tribal self-determination and economic development would be

seriously hampered by a restriction of the availability of tribal

immunity to matters arising exclusively on tribal territory.

The ability of tribes as sovereigns to conduct business

dealings with parties outside of tribal territory is essential to

the maintenance of a meaningful degree of tribal autonomy and

self-determination. Without the benefit of immunity, the

tribes would be faced with the impossible choice of limiting

tribal activity to tribal territory or capitulating to state

authority over tribal interests whenever potential claims can

be pleaded in off-reservation facts. Either alternative would

undermine the federal purposes of protecting the continuity of

tribes as separate peoples.

As a practical matter, the issue of whether tribal

sovereign immunity is to be waived in connection with the

rights or remedies of a party to a commercial arrangement with

a tribe is more appropriately addressed in the negotiation and

formulation of the particular contract at issue. Indian law is a

specialized area, but it is accessible, and there should be no

surprises for a party entering into a transaction with

reasonable preparation and adequate legal counsel. The

immunity issue in the present case would have been

effectively dealt with by an express waiver in the contract

documents.

ARGUMENT

I. DETERMINATIONS REGARDING THE NATURE

AND SCOPE OF TRIBAL SOVEREIGN IMMUNITY

ARE A FUNCTION OF FEDERAL, NOT STATE,

LAW.

The Oklahoma Court of Appeals in this case held that the

state courts of Oklahoma have jurisdiction to hear a breach of

contract action against the Kiowa Tribe, despite the absence

of an express waiver of tribal sovereign immunity by the Tribe

or a consent to suit by Congress, because (1) under Oklahoma

state law such actions could be brought against the Oklahoma

state government, (2) Congress has not expressly prohibited

suit against tribes, and (3) the action does not infringe upon

tribal self-government. Pet. App. 3 (citing Hoover v. Kiowa

Tribe, 909 P.2d 59, 62 (Okla. 1995), cert, denied 5 ae

—— 116 S.Ct. 1675 (1996)).° In effect, the Court of Appeals

* The Oklahoma Supreme Court in Hoover v. Kiowa Tribe cited the

New Mexico Supreme Court's decision in Padilla y. Pueblo of Acoma,

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

decisions relied upon this Court's decision in Nevada v. Hall, 440 U.S.

410 (1979), that the recognition of the sovereign immunity of one state by

another is a function of comity. Hoover, 909 P.2d at 62; Padilla, 754

P.2d at 850-51. See also Aircraft Equip. Co. v. Kiowa Tribe of

Oklahoma, No. 86,184 (Okla. May 6, 1997) following Hoover in

upholding state court seizure of tribal tax revenues in satisfaction of

judgment); Aircraft Equip. Co. v. Kiowa Tribe of Oklahoma, 921 P.2d

359, 361 (Okla. 1996)(following Hoover in applying state law to tribal

immunity defense); and First Nat'l Bank in Altus v. Kiowa, Comanche

and Apache Intertribal Land Use Comm., 913 P.2d 299, 301 (Okla.

1996) following Hoover in rejecting tribal immunity as a jurisdictional

defense).

The Padilla decision is clearly contrary to the weight of federal

law. See, e.g., In re Greene, 980 F.2d 590, 593-95 (9th Cir. 1993), cert.

made the determination of tribal sovereign immunity a

function of state law, found an implicit waiver of tribal

immunity by virtue of the fact that the contract at issue was

performed in part off of the Kiowa Reservation, and

disregarded both the express reservation of tribal rights in the

contract at issue and the preemptive effect of federal law and

policy in this matter.

This Court has long recognized that Indian tribes possess

the same degree of inherent’? common law immunity from suit

as does the United States itself.’ See, ¢.g, Oklahoma Tax

denied sub nom., Richardson v. Mt. Adams Furniture, 510 US. 1039

(1994) Padilla itself recognizes that “[a]bsent federal authorization, tribal

immunity is privileged from diminution by the states, 754 P.2d at 847,

but then assesses the scope of tribal immunity under state

rather than federal law); Elliot v. Capitol International Bank & Trust,

Lid., 870 F. Supp. 733, 734 (E.D. Tex. 1994), aff'd 102 F.3d 549 (Sth

Cir. 1996)("the Padilla approach is generally rejected outside of the courts

of that state"), and Note, Sovereign Immunity — Indian Tribal Sovereignty

-- Tribes Not Immune From Suits Arising From Off-Reservation Business

Activity — Padilla v. Pueblo of Acoma, 102 Harv. L. Rev. 556, 562

(1988\("The {Padilla} court's application of Nevada v. Hall to indian

tribes is not only a simplistic and unsound extension of precedent, but

also a misguided and dangerous encroachment on tribal sovereignty").

” An important feature of tribal sovereign immunity is the fact that it

is not granted by the United States, but rather is a retained attribute of the

preconstitutional sovereign status of a tribe. See, eg, Santa Clara

Pueblo v. Martinez, 436 U.S. 49, 56 (1978); United States v. Wheeler,

435 U.S. 313, 322 (1978). “[T]he treaty was not a grant of rights to the

Indians, but a grant of rights from them -- a reservation of those not

granted." Washington v. Washington State Commercial Passenger

Fishing Vessel Ass'n, 443 U.S. 658, 680 (1979)(quoting United States v.

Winans, 198 U.S. 371, 381 (1908)).

* Consider, e. , that the primary statutory vehicle providing for

federal funding of tribal programs, the Indian Self-Determination and

Education Assistance Act of 1975, contains an express retention of tribal

sovereign immunity. See 25 U.S.C. § 450n ("Nothing in this Act shall

Commission v. Citizen Band Potawatomi Indian T; ribe, 498

U.S. 505, 509-10 (1991); Santa Clara Pueblo v. Martinez, 436

U.S. 49, 58 (1978); Bryan v. Itasca County, 426 U.S. 373,

383-90 (1976); United States v. United States Fidelity &

Guaranty Co., 309 U.S. 506, 512 (1940); Turner v. United

States, 248 U.S. 354, 358 (1919). Federal court adherence to

the tribal immunity doctrine is intended to conserve tribal

assets necessary to achieve the federal policy objectives of

e.g., Citizen Band Potawatomi, supra; Three Affiliated Tribes

of Fort Berthold Reservation v. Wold Engineering Co., 476

U.S. 877, 890-91 (1986); American Indian Agricultural

Consortium v. Standing Rock Sioux Tribe, 780 F.2d 1374,

1378 (8th Cir. 1985); F. Cohen, Handbook of Federal Indian

Law 324-28 (1982 ed.); Note, Jn Defense of Tribal Sovereign

immunity, 95 Harv. L. Rev. 1058, 1072-73 (1982).° “If tribal

assets could be dissipated by litigation, the efforts of the

*The federal policy objectives of tribal economic

development and self-determination have been characterizedby this Coun

as being of an “ iding” nature. See, e.g Citizen Band Potawatomi,

450 et seq.; the Indian Reorganization Act of 1934, 25 U.S.C. § 461 ef

seq.; the Indian Civil Rights Act of 1968, 25 U.S.C. § 1301 ef seg.; the

Indian Financing Act of 1974, 25 U.S.C. § 1451 ef seg.; the Indian Child

Welfare Act of 1978, 25 US.C. § 1901 e seq.; the Indian Gaming

Regulatory Act of 1988, 25 U.S.C. § 2701 ef seq; the Indian Tribal

Justice Act of 1993, 25 U.S.C. § 3601 et seq; the Native American

Housing Assistance and Self-Determination Act of 1996, Pub. L. 104-330,

110 Stat. 4017, to be codified at 25 U.S.C. § 4101 er seg.; and the Indian

Tribal Government Tax Status Act of 1982, 26 U.S.C. § 7871.

United States to provide the tribes with economic and

political autonomy could be frustrated." Cogo v. Central

Council of the Tlingit and Haida Indians, 465 F. Supp. 1286,

1288 (D. Alaska 1979).

Tribal sovereign immunity cannot be waived by

implication, but can only be waived through express consent

to suit by Congress or by the tribe itself. See, e.g, Citizen

Band Potawatomi, supra, Puyallup Tribe, supra, 433 U.S. at

172-73; United States Fidelity, supra, 309 U.S. at 512-13.

"[A] waiver of sovereign immunity ‘cannot be implied but

must be unequivocally expressed," and waivers must be

strictly construed in favor of tribal interests. Santa Clara

Pueblo, supra (quoting United States v. Testan, 424 U.S. 392,

399 (1976)). “Absent an effective waiver or consent, it is

settled that a state court may not exercise jurisdiction over a

recognized Indian tribe." Puyallup Tribe, supra, 433 U.S. at

172.

Issues of tribal sovereign immunity, like other aspects of

Indian law, lie within the exclusive authority of the United

States, and cannot be resolved by reference to state law. See

generally Montana v. Blackfeet Tribe, 471 U.S. 759, 764

(1985); Oneida Indian Nation v. County of Oneida, 414 U.S.

661, 671 (1974); United States v. Forty-Three Gallons of

Whiskey, 93 U.S. 188, 195 (1876); and Worchester vy.

Georgia, 31 U.S. (6 Pet.) 515, 561 (1832)(Indian affairs are

the exclusive province of the federal government).

In this case, the Oklahoma Court of Appeals has found

tribal immunity to be waived not by consent to suit but by

the fact that the claims against the Tribe were pleaded in an

off-reservation context. This amounts to an implicit waiver

which, if upheld by this Court, would expose all Indian tribes

to potential state court litigation in virtually any commercial

matter which is not strictly intramural to a tribe and

geographically limited to a tribe's reservation. Such a result

would have a tremendous chilling effect upon tribal economic

development and self. inati

The Oklahoma courts, like the New Mexico Supreme

Court in the Padilla case, have avoided the authority of federal

law governing tribal sovereign immunity by analogical

reference to the interstate immunity issue addressed by this

Court in Nevada v. Hall, 440 U.S. 410 (1979). See Hoover v.

Kiowa Tribe, 909 P.2d 59, 62 (Okla. 1995), cert. denied, _

U.S. __, 116 S.Ct. 1675 (1996); Padilla v. Pueblo of Acoma,

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

(1989). Nevada v. Hall held that, because the federal

Constitution imposes no requirement for one state to

recognize the immunity of another state, the forum state must

decide for itself whether, and under what conditions, it will

give effect to the immunity of a sister state in its courts. Jd.

440 U.S. at 418-27.

However, the rationale of Nevada v. Hall is inapposite to

issues involving state recognition of tribal sovereign immunity.

The tribes are not parties to the Constitution, and they are not

each state delegated exclusive authority to the federal

government upon entering the Union. See also Blatchford v.

Native Village of Noatak, 501 U.S. 775, 781-82 (1991)(the

mutuality of concession under the Constitution that

surrenders state immunity from suit by a sister state is not

applicable to tribes, “as it would be absurd to suggest that

tribes surrendered immunity in a convention to which they

were not even parties"); White Mountain Apache Tribe vy.

Bracker, 448 U.S. 136, 143 (1980)(tribes “are not States, and

the differences in the form and nature of their sovereignty

make it treacherous to import" by analogy the constitutional

principles affecting one to the other). More to the point,

because the tribal immunity doctrine is a creature of federal

common law, it can only be restated by the United States

itself and, to date, Congress has rarely limited the availability

of tribal immunity.'° This Court specifically held, in Tiger v.

Western Investment Co., 221 U.S. 286 (1911), that “[ijn

passing the enabling act for the admission of Oklahoma ...

Congress was careful to preserve the authority of the United

States over the Indians, their lands and property, which it had

prior to the passage of the act." Jd, 221 U.S. at 309. If there

are to be any changes of the tribal immunity doctrine,

Congress should be the forum within which a focused and

RESERVATION.

Trt

qd et

slihitliy

sire’ tues

cpenes lf

piste

Hea:

HT te

of tribal as a defense by insurers under

availability ids aed oe 4. -

provide coverage to tribes under the Torts Claims Act for claims

eee eee . « a

The precedents of this Court addressing tribal sovereign

immunity support the applicability of tribal immunity as a

jurisdictional barrier to a breach of contract action arising off-

reservation and brought in state court. Those decisions,

without exception, focus on the preconstitutional sovereign

status of the tribes and on the federal trust responsibility of

draw no distinction based on the situs of the claim.'' See, e.g.,

Oklahoma Tax Commission v. Citizen Band Potawatomi

Indian Tribe, 498 U.S. 505, 509-10 (1991); Three Affiliated

Tribes of Fort Berthold Reservation v. Wold Engineering Co.,

476 U.S. 877, 890-91 (1986); Santa Clara Pueblo v. Martinez,

436 U.S. 49, 56-58 (1978); United States v. United States

Fidelity & Guaranty Co., 309 U.S. 506, 512 (1940). Indeed, in

Puyallup Tribe, Inc. v. Dep't of Game, 433 U.S. 165 (1977),

this Court held that tribal immunity barred state jurisdiction

over a tribe arising out of the tribe's exercise of treaty-reserved

fishing rights on and off the reservation. Jd, 433 U.S. at 172-

73. In Citizen Band Potawatomi, this Court recognized that

tribal immunity bars an action for monetary damages against a

tribe. Jd, 498 U.S. at 509-11.

At least five federal circuits have interpreted this Court's

articulation of the tribal sovereign immunity doctrine as

"In Hoover v. Kiowa Indian Tribe of Oklahoma, 909 P.2d 59, 61

(Okla. 1995), cert. denied __ US. __» 116 S.Ct. 1675 (1996), the

Oklahoma Supreme Court relied upon the statement of this Court in

Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973), that "[absent

express federal law to the contrary, Indians going beyond reservation

boundaries have generally been held subject to nondiscriminatory state law

otherwise applicable to all citizens of the State.” Id, 411 U.S. at 148-49.

However, Mescalero does not mention tribal immunity from suit, and, as

recognized by this Court in Citizen Band Potawatomi, the legal

applicability of a state law to an Indian tribe is a distinct and

separate

issue from the ability of the state to enforce compliance. Id, 498 U.S. at

$14.

extending to tribal commercial activities and/or to tribal

conduct off-reservation. In Maynard v. Narragansett Indian

Tribe, 984 F.2d 14 (1st Cir. 1993), the First Circuit held that

tribal sovereign immunity barred state jurisdiction over

trespass actions against the Tribe arising off-reservation.

In Maryland Cas. Co. v. Citizens Nat. Bank of West

Hollywood, 361 F.2d 517, 521 (Sth Cir.), cert. denied 385

U.S. 918 (1966), the Fifth Circuit held that tribal immunity is

available to bar an action arising out of tribal commercial

activities in the same manner as to a tribe generally, because

"[i}t is in such enterprises and transactions that the Indian

tribes and Indians need protection."

In American Indian Agricultural Consortium v. Standing

Rock Sioux Tribe, 780 F.2d 1374, 1378 (8th Cir. 1985), the

Eighth Circuit held that tribal immunity barred jurisdiction

over a breach of contract action, emphasizing the fact that

immunity is "necessary to promote tribal self-determination,

economic development, and cultural autonomy."

In Pan American Co. v. Sycuan Band of Mission Indians,

884 F.2d 416, 419 (9th Cir. 1989), the Ninth Circuit held that

tribal immunity barred jurisdiction over a breach of contract

action arising out of a bingo agreement with the Band, noting

that "[cJonsent [to suit] by implication, whatever its

justification, still offends the clear mandate of Santa Clara

Pueblo." Also, in Jn re Greene, 980 F.2d 590, 596 (9th Cir.

1993), cert. denied sub nom., Richardson v. Mt. Adams

Furniture, 510 U.S. 1039 (1994), the Ninth Circuit held that

tribal immunity barred suit by a bankruptcy trustee against a

furniture business owned by a tribe arising out of an off-

reservation transaction, citing this Court's continuous and

broad reaffirmation of the tribal immunity doctrine as

requiring recognition that tribal immunity under federal

common law contains an "extraterritorial component."

Most notably, for the purposes of this case, the Tenth

Circuit, in Sac and Fox Nation v. Hanson, 47 F.3d 1061 (10th

Cir.), cert. denied, __ U.S. ___, 116 S.Ct. 57 (1995), held

that tribal immunity bars state court jurisdiction over third

party claims for damages brought by employees of a former

manufacturing plant operated by the Nation off-reservation,

and that the location of tribal commercial activity cannot be

determinative of whether a tribe is entitled to immunity

because "the point of sovereign immunity ... is the power of

self-determination." /d., 47 F.3d at 1064 (quoting Bank of

Oklahoma v. Muscogee (Creek) Nation, 972 F.2d 1166, 1169

(10th Cir. 1992)); see also Ramey Const. Co. v. Apache Tribe,

673 F.2d 315, 320 (10th Cir. 1982)(upholding dismissal of

breach of contract action on tribal immunity grounds).

The rule on tribal immunity is settled law in the federal

courts. Further, the Padilla and Hoover decisions are not

representative of state court understandings of the doctrine.

See, e.g., Gavie v. Little Six, Inc., 555 N.W.2d 284, 292-96

(Minn. 1996)(recognizing immunity of tribal corporation for

civil claims partially arising off-reservation); Jn re Ransom vy.

St. Regis Mohawk Education & Community Fund, Inc., 86

N.Y.2d 553, 560, 658 N.E.2d 989, 993, 635 N.Y.S.2d 116,

120 (1995)(immunity extends to a tribally-owned nonprofit

corporation chartered under state law); C & B Investments v.

Wisconsin Winnebago Health Dept., 198 Wis. 105, __, 542

N.W.2d 168, 170 (Wis. Ct. App. 1995)(immunity extends to

tribal health board in breach of contract action); North Sea

Prods., Lid. v. Clipper Seafoods Co., 595 P.2d 938, 941

(Wash. 1979)(immunity bars state garnishment action against

tribe despite tribal commercial activity off-reservation);

People v. LeBlanc, 399 Mich. 31, _, 248 N.W.2d 199, 212-

13 (1976)(tribe immune from state regulation of treaty-

reserved fishing off-reservation); State v. Gurnoe, 53 Wis.2d

390, __, 192 N.W.2d 892, 902 (1972)(same); White

Mountain Apache Tribe v. Shelley, 107 Ariz. 4, 7, 480 P.2d

654, 657 (1971)(immunity extends to _ tribally-owned

business); and Morgan v. Colorado River Indian Tribe, 443

P.2d 421, 423 (Ariz. 1968)(immunity applies to claims arising

from accident at tribally-owned amusement park off-

reservation).'? The rationale of the Hoover decision, and of

the Oklahoma Court of Appeals in the present case, are at

odds with the observance of the immunity doctrine in other

states. Indeed, it is the view of the Fond du Lac Band that

this case, when considered in the overall context of the

generally litigious posture towards tribes by the State of

Oklahoma, is indicative of a fundamental intolerance of tribal

existence itself.

Ill. THE APPLICABILITY OF THE TRIBAL

IMMUNITY DOCTRINE TO TRIBAL

CONTRACTUAL RELATIONSHIPS INVOLVING

OFF-RESERVATION PERFORMANCE IS

ESSENTIAL TO THE MAINTENANCE OF TRIBAL

SELF-GOVERNMENT AND TO THE

FULFILLMENT OF THE FEDERAL TRUST

RESPONSIBILITY TO PRESERVE TRIBAL

ASSETS.

" Contra Dixon v. Picopa Const. Co., 160 Ariz. 251, __, 772

P.2d 1104, 1107-10 (1989)tribally-owned corporation governed by a

tribally-elected board of directors deemed to be too far removed from tribal

control to benefit from immunity). For a critique of the Dixon and Padilla

decisions, see Dietrich, Tribal Businesses and the Uncertain Reach of

Tribal Sovereign Immunity: A Statutory Solution, 67 Wash. L. Rev. 113,

124-27 (1997).

Tribal sovereign immunity, and the purposes underlying

the immunity doctrine, cannot be limited to the on-reservation

or governmental functions of the tribe without seriously

impairing the ability of tribes to maintain any appreciable

degree of autonomy or self-determination. As recognized by

this Court in Three Affiliated Tribes of Fort Berthold

Reservation v. Wold Engineering Co., 476 U.S. 877 (1986),

"[t]he common law sovereign immunity possessed by the

Tribe is a necessary corollary to Indian sovereignty and self-

governance." Jd, 476 U.S. at 891. The real success of the

immunity doctrine in achieving these federal policy purposes

is not found in the cases arising in which tribal immunity is

raised as a jurisdictional defense, but in the doctrine's deterrent

effect of discouraging the multitude of claims that would

otherwise be brought. Without the benefit of immunity, tribal

self-government and economic development would be

undermined by an endless stream of claims against tribal

resources grounded in state law and pleaded in off-reservation

facts.

The preservation of the tribal immunity doctrine is

essential to tribal survival because the continued vitality of

tribes depends upon their ability to maintain their measured

separatism without converting reservations to detention areas

outside of which tribes dare not venture for fear of loss of

their sovereign identity. Meaningful tribal self-determination

requires that tribes have the ability to conduct business with

the outside world without becoming subordinate to and

assimilated by the laws of the dominant culture. This is the

essential promise by the United States to the tribes, in every

treaty and statute: "we will protect you against extinction."

And, as Justice Black stated: "Great nations, like great men,

should keep their word." Federal Power Comm'n vy.

Tuscarora Indian Nation, 362 U.S. 99, 142 (1960)Black, J.,

dissenting).

IV. PARTIES TO CONTRACTS WITH INDIAN TRIBES

HAVE WHATEVER RIGHTS AND REMEDIES AS

ARE RESERVED UNDER THE CONTRACT

DOCUMENTS. |

Parties to contractual relationships with Indian tribes are

not at a legal disadvantage or disability simply because the

legal rules applicable to such transactions reside in a

specialized area. A contract between an Indian tribe and an

off-reservation business is not unlike a transaction between

any two parties in a market economy: both parties are

presumed to negotiate the transaction with their "eyes open,"

and are each responsible for researching the merits and

contingencies of a proposal, and for obtaining the appropriate

professional advice before entering into a contract. To the

extent that legal advice is sought in connection with a

proposed transaction, the rules of professional conduct for

attorneys universally require a lawyer to render competent

representation, which includes the responsibility to provide

"the legal knowledge, skill, thoroughness and preparation

reasonably necessary for the representation." American Bar

Association, Model Rules of Professional Conduct Rule 1.1

(1983). The rule of competence further requires an attorney

to recognize whether it is necessary “to refer the matter to, or

associate or consult with, a lawyer of established competence

in the field in question." Jd, Comment 1.

The unique rules governing Indian law generally, and the

tribal immunity doctrine in particular, are the law of the land,

and are the basis of settled expectations by the tribes, federal

and state governments, and members of the business

community. The Oklahoma and New Mexico courts have

attempted to restate the rules regarding tribal immunity in a

manner which directly contravenes two centuries of federal

common law. The Kiowa Tribe is presently bearing the

burden of their experiment. However, such a drastic change in

tribal immunity law is neither necessary or desirable, and

poses a direct challenge to the exclusivity of federal control

over Indian affairs in our Nation.

"Tribes and persons dealing with them long have known

how to waive sovereign immunity when they so wish."

American Indian Agricultural Consortium v. Standing Rock

Sioux Tribe, 780 F.2d 1374, 1379 (8th Cir. 1985). A business

that is pursuing a particular transaction with a tribe may

negotiate an express waiver of tribal immunity as a condition

of the transaction, and the tribe will presumably decide

whether the particular proposal is important enough to tribal

interests to grant such a waiver. If a waiver had been

negotiated as part of the contract at issue in the present case,

this case would not have been necessary. Because the Kiowa

Tribe has the authority to waive its immunity in a contract, it

is in the negotiation and language of the contract at issue in the

present case that the question of a waiver should have been

addressed. If a waiver had been granted, immunity would not

have been unavailable as a jurisdictional defense by the Tribe

in connection with that contract, and this case would not have

been necessary. However, Manufacturing Technologies, Inc.

did not insist on a waiver as part of the transaction, and in fact

agreed to a deal which expressly reserved the sovereign rights

of the Tribe. The sovereign rights of the Kiowa Tribe which

were expressly reserved in the promissory note at issue are

reserved under federal statutory and common law, and include

the right to assert sovereign immunity against the unconsented

operation of state law upon the Tribe. For this Court to make

further inquiry into this matter would depart from the cardinal

principle of contract law that "the meaning of a contract must

be determined from the four corners of the instrument." 17A

C.J.S. Contracts § 296(2)(1963).

The Fond du Lac Band is a party to contracts with off-

reservation businesses amounting to several million dollars a

year. It has been the experience of the Band that attorneys

representing those businesses are aware of the tribal immunity

doctrine, and either negotiate the terms for a waiver of

immunity, or secure alternative remedies, within the contract.

There are no secrets or surprises, only a unique body of law

reflecting the unique legal status of the Band as a federally

recognized Indian tribe. A radical change in the law on tribal

immunity would severely disrupt settled law and

expectations.

A recent article in a northern Minnesota business

publication concerning the conduct of business between a tribe

and off-reservation vendors stated:

Nearly every business transaction is the product of

some negotiation. Because a tribal government may

waive its sovereign immunity, a non-tribal business

seeking to supply goods or services under contract

may try to negotiate a provision that may be open to

linking dispute resolution in a tribal court using a

specified legal framework, specified by the UCC or

some other common body of business law ...

Doing business with tribes requires adjusting to

unfamiliar rules. It also may require submitting

disputes to a tribal court. Don't let that be a barrier.

Instead, take care to ensure dispute resolutions are

spelled out in the contract, and understood by all

parties at the onset.

John D. Kelly, "Doing Business with Indian Tribes," Business

North, August 1997, p. 13.

The point is, the tribal immunity doctrine works as an

instrument of achieving the purposes of federal Indian policy,

but needn't constitute an obstacle to a fairly negotiated

contractual quid pro quo, provided that the parties to

contracts with tribes are diligent in the protection of their own

interests; however, in the event that they are not attentive to

the unique legal status of the tribes, it is not an appropriate or

desirable function of federal law or of this Court to protect

them from their own deals.

CONCLUSION

Tribal sovereign immunity is exclusively governed by

federal law. The State of Oklahoma's denial of the availability

of tribal immunity as a jurisdictional defense by the Kiowa

Tribe in this case is contrary to the overwhelming weight of

federal authority, including numerous precedents of this

Court. Further, a limitation of the immunity doctrine at this

late time to commercial disputes arising in tribal territory

would contravene the federal policy of promoting tribal self-

determination and economic development, and would interfere

with the settled expectations of the tribes and parties doing

business with tribes by over a century of federal precedent.

The appropriate place to address the tribal immunity issue in

commercial dealings is in the negotiation and structure of

individual contracts.

For these reasons, the decision of the Oklahoma Court of

Appeals in this matter should be reversed.

Respectfully submitted,

DENNIS J. PETERSON HENRY M. BUFFALO JR.

Counsel of Record JACOBSON, BUFFALO

Fond du Lac Legal Office SCHOESSLER&