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

No. 96-1037

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—

In The

Supreme Court of the United: States

October Term, 1996

>

KIOWA TRIBE OF OKLAHOMA,

Petitioner,

V.

MANUFACTURING TECHNOLOGIES, INC.,

Respondent.

.

On Writ Of Certiorari

To The Oklahoma Court Of Appeals

.

BRIEF OF FIRST NATIONAL BANK OF ALTUS AND

RAYMOND L. FRIEDLOB, RECEIVER FOR ALPINE

MUTUAL FUND TRUST AS AMICI CURIAE

IN SUPPORT OF RESPONDENT

.

Steven W. Bucc, OBA #1299 RicHarp H. Govpserc,

(Counsel of Record) CO #6365

McAree & Tart Frieptop SANDERSON RasKIN

A Professional Corporation PAULSON &

10th Floor Tourtittott, LLC

Two Leadership Square 1400 Glenarm Place,

211 North Robinson 3rd _ Floor

Oklahoma City, Oklahoma Denver, Colorado 80202

73102-7103 Phone: 303/571-1400

Phone: 405/235-9621 Fax: 303/615-5472

Fax: 405/255-0699 Counsel for Raymond L.

Counsel for First National Friedlob, receiver for

Bank in Altus and Raymond Alpine Mutual Fund Trust

L. Friedlob, receiver for

Alpine Mutual Fund Trust

September 26, 1997

—— ——————————————————_———_———————————EEE

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

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

INTERESTS OF AMICI CURIAE SUPPORTING

MANUFACTURING TECHNOLOGIES, INC

ARGUMENT AND AUTHORITIES

I. TRIBAL SOVEREIGN IMMUNITY DOES NO!

EXTEND TO ACTIVITIES CONDUCTED BY A

TRIBE OUTSIDE OF ITS TERRITORIAL JURIS-

DICTION .

PRACTICAL CONSIDERATIONS DICTATE

THAT INDIAN TRIBES BE TREATED IN THE

SAME MANNER AS ALL OTHER GOVERN-

MENTS WITH RESPECT TO SOVEREIGN

IMMUNITY

A. Waiver of Sovereign Immunity is Not a Via-

ble Solution

Failure to Extend Sovereign Immunity

Beyond Indian Country Will Not Impair

Tribal Activities or Frustrate Congressional

Policies ...

CONCLUSION

TABLE OF AUTHORITIES

Page

Cases

Aircraft Equipment Company v. Kiowa Tribe of Okla-

homa, 921 P.2d 359 (Okla. 1996)...............0000: 9

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

111 S.Ct. 2578, 115 L.Ed.2d 686 (1991) ............. 5

First National Bank in Altus v. Kiowa, Comanche and

Apache Intertribal Land Use Committee, 913 P.2d

209 (Olde. NODE)... 6. .0csccevcccdinccee 1

Hilton v. Guyot, 159 U.S. 113, 16 S.Ct. 139, 40 L.Ed.

DS (RBGSD ow ccvevecssvcsesspe 6deeaweeeenanneee 16

Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. __,

117 S.Ct. 2028, 138 L.Ea.2d 438 (1997) .......... 5, 13

lowa Mutual Insurance Company v. LaPlante, 480

U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987)........ 16

Merrion v. Jicarilla Apache Tribe, 445 U.S. 130, 102

S.Ce. P46, 71 1.0.28 Zl (ISG. . onckccscctncvcnees 16

Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93

S.Ct. 1267, 36 L.Ed.2d 114 (1973)............... 10, 11

Nevada v. Hall, 440 U.S. 410, 99 S.Ct. 1182, 59

ces SEG CIGPUD. » . 0 +.0ss6deccunne eee passim

Oklahoma Tax Commission v. Citizen Band

Potawatomie Indian Tribe of Oklahoma, 498 U.S.

505, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991)..... 11, 12

Organized Village of Kake v. Egan, 369 U.S. 60, 82

DEX. S68, 7 LABDS SIS GHP. cs vc cvacuusi essa 10

TABLE OF AUTHORITIES ~— Continued

Page

Puyallup Tribe, Inc. v. Washington Department of

Game, 433 U.S. 165, 97 S.Ct. 2616, 53 L.Ed.2d 667

th Nomtidedenseanesshesevteescceseees 11, 12

Santa Clara Pueblo v. Martinez, 436 U.S. 49, 98 S.Ct.

1670, 56 L.Ed.2d 106 (1978).....................5, 15

Telex Corporation v. Hamilton, 576 P.2d 767 (Okla.

cei seek ee bedebe + dvsctcdvccsescees 17

The Schooner Exchange v. M'Faddon, 7 Cranch 116, 3

irr b UC te dccedetesevsecacececceces 6,7

United States v. Mazurie, 419 U.S. 544, 95 S.Ct. 710,

Sick tae Wseescdbessecccces 16

United States v. United States Fidelity & Guaranty

Company, 309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894

TE SUGESGs bcdcbeusdebesescotesesesvesece 14

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

480, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983)........... 7

Williams v. Shearson Lehman Brothers, Inc., 917 P.2d

EE nb die dkdbse0e'escbeececceses 17

INTERESTS OF AMICI CURIAE SUPPORTING

MANUFACTURING TECHNOLOGIES, INC.',2

First National Bank in Altus (the “Altus Bank”) is the

plaintiff in First National Bank in Altus v. Kiowa, Comanche

and Apache Intertribal Land Use Committee, 913 P.2d 299

(Okla. 1996), which is one of the cases relied upon by the

Oklahoma Court of Appeals in rendering its decision in

this case. In 1990 and 1991, the Altus Bank made loans to

the Kiowa, Comanche and Apache Intertribal Land Use

Committee (“KCA”) to own and operate a dress making

facility in Altus, Oklahoma. The dress making facility was

located on leased land that was not Indian country. The

promissory notes were executed at the Altus Bank, which

was also not Indian country, and provided for payment at

the Bank. The only relationship which this commercial

transaction had with an Indian tribe was that KCA was

the owner of the facility and the entity that borrowed the

money

After the Oklahoma Supreme Court's decision, KCA

commenced an action in the United States District Court

tor the Western District of Oklahoma entitled Kiowa,

Comanche and Apache Intertribal Land Use Committee v.

District Court of Jackson County, No. CIV-96-1003-L. In that

action, KCA sought an injunction against the district

' Pursuant to Rule 37.6, Rules of the Supreme Court,

counsel for amici curiae states that no counsel for any party

authored this brief in whole or in part, and that no person or

entity other than the amici and their counsel made any monetary

contribution to the preparation and submission of this brief

* The parties have consented to the filing of this brief

amicus curiae. Letters of consent have been filed with the Clerk

of this Court.

court and the district judge prohibiting them from pro-

ceeding with the state court litigation. In seeking the

injunction, KCA claimed sovereign immunity. The federal

district court dismissed the action for lack of jurisdiction.

The action is currently pending on a motion for rehear-

ing.

Upon remand from the Oklahoma Supreme Court,

the Altus Bank pursued the claim in state court and has

obtained a judgment against KCA of approximately

$850,000. This Court's decision in the present case may

affect the validity or collectibility of the Altus Bank’s

judgment.

Raymond L. Friedlob has been appointed by the

United States District Court for the District of Colorado

to act as receiver for Alpine Mutual Fund Trust

(“Alpine”), a Massachusetts business trust consisting of

two series mutual funds, including California Municipal

Asset Trust (“CMAT”). Alpine was registered with the

Securities and Exchange Commission (the “SEC”) as an

open-end investment company. In 1991, after an investi-

gation by the SEC, the SEC requested that the federal

court in Colorado appoint a receiver. As part of his

duties, Friedlob is responsible for collecting and liquidat-

ing the assets of CMAT and protecting the interests of its

shareholders. The shareholders in CMAT consist of

approximately 750 individuals, many of whom are

retired.

CMAT was engaged primarily in the business of

making equipment leases, including leases with Indian

tribes. In these transactions, CMAT would typically loan

money for the acquisition of machinery and equipment

for a business to be operated by the tribe. The contracts

were often negotiated and executed outside of Indian

country. CMAT typically required the tribe to provide an

opinion of its counsel that the agreement was valid, bind-

ing and enforceable in accordance with its terms.

Friedlob is currently in the process of attempting to

collect in excess of $1,500,000 which is owed by the

Comanche Tribe of Oklahoma and the Kiowa Tribe of

Oklahoma. In each case, Friedlob commenced litigation in

state court in Oklahoma. Despite the opinions of counsel,

both tribes have raised the defense of sovereign immu-

nity. The trial courts have denied the defense of sovereign

immunity and the actions are still pending.

In addition to asserting the defense of tribal immu-

nity in the state court action, the Comanche Tribe com-

menced a separate action in federal court seeking to

enjoin the district judge and the district court from pro-

ceeding with the state court litigation. The Comanche

Tribe asserted that the action should not proceed because

of its claim of sovereign immunity. That action was dis-

missed by the federal court for lack of jurisdiction and is

now pending on appeal before the Tenth Circuit Court of

Appeals as Comanche Indian Tribe v. District Court of Grady

County, No. 97-6194.

Friedlob has a direct interest in the outcome of the

present case because if the decision of the Oklahoma

courts is reversed and the Kiowa Tribe is found to be

protected by sovereign immunity, the efforts by Friedlob

to liquidate the claims against the Comanche Tribe and

the Kiowa Tribe will be affected.

4

ARGUMENT AND AUTHORITIES

I. TRIBAL SOVEREIGN IMMUNITY DOES NOT

EXTEND TO ACTIVITIES CONDUCTED BY A

TRIBE OUTSIDE OF ITS TERRITORIAL JURIS-

DICTION.

Petitioner, Kiowa Indian Tribe (the “Kiowa Tribe”)

and their supporting amici curiae urge the Court to extend

tribal sovereign immunity to activities which tribes con-

duct outside of their territorial jurisdiction. The Kiowa

Tribe and the supporting tribes seek the protection of

sovereign immunity for any activity which they may

conduct anywhere in the United States. No government,

whether state, federal or foreign, enjoys the protection

which the tribes seek to obtain in the present action.

Contrary to the position asserted by the Kiowa Tribe and

the supporting tribes, the absolute sovereign immunity

enjoyed by any government is limited to activity which

that government conducts within its own territorial juris-

diction. When a government goes beyond its own juris-

dictional boundaries and engages in activity within

another jurisdiction, the sovereignty of the host jurisdic-

tion is necessarily implicated. Nevada v. Hall, 440 U.S. 410,

416, 99 S.Ct. 1182, 59 L.Ed.2d 416, 422 (1979). The host

government, in the exercise of its own sovereignty, has

the right to determine whether to recognize the sovereign

immunity as a matter of grace and comity.

To determine whether an Indian tribe is protected by

sovereign immunity when it engages in commercial activ-

ities outside of its jurisdictional boundaries, the Court

must consider the characteristics of tribal sovereign

immunity and the nature and history of sovereign immu-

nity between nations. The nature of tribal sovereign

immunity was described in Santa Clara Pueblo v. Martinez,

436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106, 115 (1978):

Indian tribes have long been recognized as

possessing the common-law immunity from suit

traditionally enjoyed by sovereign powers.

The comparison of tribal sovereignty to foreign sover-

eignty was reiterated in Blatchford v. Native Village of

Noatak, 501 U.S. 775, 782, 111 S.Ct. 2578, 115 L.Ed.2d 686,

696 (1991) where this Court stated:

Respondents argue that Indian tribes are

more like States than foreign sovereigns. That is

true in some respects: They are, for example,

domestic. The relevant difference between States

and foreign sovereigns, however, is not domes-

ticity, but the role of each in the convention

within which the surrender of immunity was for

the former, but not for the latter, implicit. What

makes the State’s surrender of immunity from

suit by sister States plausible is the mutuality of

that concession. There is no such mutuality with

either foreign sovereigns or Indian tribes.

Finally, in this Court’s most recent pronouncement.

Indian tribes were again compared with foreign powers

with respect to their sovereign immunity. In Idaho v. Coeur

d'Alene Tribe of Idaho, 521 U.S. __, 117 S.Ct. 2028, 138

L.Ed.2d 438, 447 (1997) the Court reaffirmed its finding in

Blatchford, supra, by stating:

Indian tribes, we therefore concluded, should be

accorded the same status as foreign sovereigns,

against whom States enjoy Eleventh Amend-

ment immunity.

Indian tribes, like all other sovereigns, enjoy absolute

immunity from suit for activities which occur within their

territorial jurisdiction. The State of Oklahoma has not

sought to subject the Kiowa Tribe to suit in Oklahoma

courts for activities which occurred within Indian country

subject to Kiowa jurisdiction. Rather, the present dispute

involves commercial activity by the Kiowa Tribe within

the State of Oklahoma and outside of Indian country. In

such circumstances where one foreign sovereign has vol-

untarily engaged in activity within the jurisdiction of

another sovereign, the determination of whether the for-

eign sovereign’s claim of sovereign immunity will be

recognized is one for the host sovereign to make based

upon its own laws and grace and comity. This issue was

first addressed by this Court in The Schooner Exchange v.

M’Faddon, 7 Cranch 116, 136, 3 L.Ed. 287, 293 (1812)

where Chief Justice Marshall stated:

The jurisdiction of courts is a branch of that

which is possessed by the nation as an indepen-

dent sovereign power.

The jurisdiction of the nation within its own

territory is necessarily exclusive and absolute. It

is susceptible of no limitation not imposed by

itself. Any restriction upon it, deriving validity

from an external source, would imply a diminu-

tion of its sovereignty to the extent of the

restriction, and an investment of that sover-

eignty to the same extent in that power which

could impose such restriction.

All exceptions, therefore, to the full and

complete power of a nation within its own terri-

tories, must be traced up to the consent of the

nation itself. They can flow from no other legiti-

mate source.

Since the decision in The Schooner Exchange, this

Court has continued to recognize that, in the absence of a

treaty or other agreement, the determination of whether

the sovereign immunity of a foreign government will be

recognized must be based upon the laws of the host

jurisdiction as a matter of grace and comity. In Verlinden

B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486, 103 S.Ct.

1962, 76 L.Ed.2d 81, 87 (1983) (emphasis added) this rule

was reiterated:

As The Schooner Exchange made clear,

however, foreign sovereign immunity is a matter of

grace and comity on the part of the United States,

and not a restriction imposed by the Constitu-

tion.

Because Indian tribes possess the same common-law

immunity from suit traditionally enjoyed by sovereign

powers, this case is controlled by the Court's decision in

Nevada v. Hall, 440 U.S. 410, 99 S.Ct. 1182, 59 L.Ed.2d 416

(1979). In that action, a Nevada employee was involved in

a car wreck within the State of California. In response to

the tort action filed in California state court, Nevada

claimed sovereign immunity. California, which had

waived sovereign immunity for itself, did not recognize

Nevada’s claim of immunity. In considering Nevada's

claim of immunity from suit in California’s courts for

activity which occurred within California, this Court

noted:

The doctrine of sovereign immunity is an

amalgam of two quite different concepts, one

applicable to suits in the sovereign’s own courts

and the other to suits in the courts of another

sovereign.

This explanation adequately supports the

conclusion that no sovereign may be sued in its

own courts without its consent, but it affords no

support for a claim of immunity in another sov-

ereign’s courts. Such a claim necessarily impli-

cates the power and authority of a second

sovereign; its source must be found either in an

agreement, express or implied, between the two

sovereigns, or in the voluntary decision of the

second to respect the dignity of the first as a

matter of comity.

{Ijf California and Nevada were independent

and completely sovereign nations, Nevada's

claim of immunity from suit in California’s

courts would be answered by reference to the

law of California.

440 U.S. at 414, 416-417, 59 L.Ed.2d at 421-423. The Court

then considered and rejected Nevada's claim that the

Constitution imposed restrictions on California's right to

choose whether or not to recognize Nevada's claim of

immunity for activity occurring in California. The restric-

tions in the Constitution relied upon by Nevada did not

abrogate the individual States’ status as independent sov-

ereigns:

Collectively they demonstrate that ours is not a

union of 50 wholly independent sovereigns. But

these provisions do not imply that any one State's

immunity from suit in the courts of another State is

anything other than a matter of comity.

440 U.S. at 425, 59 L.Ed.2d at 428 (emphasis added).

Because Indian tribes are treated as foreign nations

for sovereign immunity purposes and because States

have the right to decide as a matter of comity whether to

recognize the claim of sovereign immunity, Oklahoma

was entitled to make this decision in the exercise of its

own sovereignty. Just as California had the right to

decide whether to recognize Nevada's claim for immu-

nity in Nevada v. Hall, supra, Oklahoma has the right to

decide whether to recognize the claim of immunity by the

Kiowa Tribe.

In the present action, the Kiowa Tribe has voluntarily

engaged in commercial activity within the State of Okla-

homa. If the claim of sovereign immunity is upheld,

Respondent, Manufacturing Technologies, will have no

remedy for the breach of contract. Such a result is con-

trary to the public policy of Oklahoma. Oklahoma

requires all governments, state, county and municipal, to

fulfill their contractual obligations or be liable in dam-

ages. Oklahoma is merely holding the Kiowa Tribe to the

same standard. This public policy was expressly

announced by the Oklahoma Supreme Court in Aircraft

Equipment Company v. Kiowa Tribe of Oklahoma, 921 P.2d

359, 362 (Okla. 1996):

Behind this reasoning are important public pol-

icy considerations. Our contract law protects

parties to contracts from arbitrariness that

would otherwise control if parties were free to

disregard any contract clauses that a disadvan-

taged party believed would be enforced to its

detriment. Contracts are effective when parties

know that the provisions of the contract will be

enforced in our district courts. Such a policy

protects all of our citizens including the tribes

10

who voluntarily choose to do business with

their fellow Oklahoma citizens. If it were other-

wise, the tribes would have difficulty finding

anyone willing to risk his funds in unenforce-

able obligations. Such a rule would chill tribal

commercial and entrepreneurial business.

The result that Indian tribes are not protected by

sovereign immunity when they engage in activities out-

side of their territorial boundaries is merely a recognition

of existing law. Not only is that holding compelled by

Nevada v. Hall, supra, but the result is consistent with

other Supreme Court precedent that Indian tribes are

subject to state regulation for activities occurring outside

of Indian country. This Court has consistently held that

tribal activities occurring outside of a tribe's territorial

jurisdiction are subject to state regulation. In Mescalero

Apache Tribe v. Jones, 411 U.S. 145, 148-149, 93 S.Ct. 1267,

36 L.Ed.2d 114, 119 (1973), this Court held:

But tribal activities conducted outside the

reservation present different considerations.

‘State authority over Indians is yet more exten-

sive over activities . . . not on any reservation.’

Organized Village of Kake, supra, at 75, 7 L.Ed.2d

573. Absent 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.

See Organized Village of Kake v. Egan, 369 U.S. 60, 82 S.Ct.

562, 7 L.Ed.2d 573 (1962).

The Kiowa Tribe, the United States, and the other

amici curiae urge the Court to reach a different result

arguing that exclusive federal authority over Indian

11

tribes is vested with the United States. The Kiowa Tribe

urges that such authority arises from the Indian com-

merce clause of the Constitution. That result was

expressly rejected in Mescalero Apache Tribe v. Jones, supra,

411 U.S. at 147-148, 36 L.Ed.2d at 119 where this Court

stated:

At the outset, we reject - as did the state

court - the broad assertion that the Federal Gov-

ernment has exclusive jurisdiction over the Tribe

for all purposes and that the State is therefore

prohibited from enforcing its revenue laws

against any tribal enterprise ‘[w]hether the

enterprise is located on or off tribal land.’ Gen-

eralizations on this subject have become partic-

ularly treacherous. . . . The upshot has been the

repeated statements of this Court to the effect

that even on reservations state laws may be

applied unless such application would interfere

with reservation self-government or would

impair a right granted or reserved by federal

law.

Finally, the United States suggests that this Court has

previously held that tribes were protected by sovereign

immunity in state court, even for activity occurring out-

side the reservation boundaries. In making this assertion,

the United States relies upon Puyallup Tribe, Inc. v. Wash-

ington Department of Game, 433 U.S. 165, 97 S.Ct. 2616, 53

L.Ed.2d 667 (1977) and Oklahoma Tax Commission v. Citizen

Band Potawatomie Indian Tribe of Oklahoma, 498 U.S. 505,

111 S.Ct. 905, 112 L.Ed.2d 1112 (1991). However, the issue

of jurisdiction over activities occurring off the reservation

was not at issue in either case. In the Puyallup Tribe case,

the issue, as framed by the tribe was:

12

The Tribe, supported by the United States as

amicus curiae, contends in this Court that the

doctrine of sovereign immunity requires that the

judgment be vacated, and that the state courts of

Washington are without jurisdiction to regulate

fishing activities on its reservation.

433 U.S. at 167, 53 L.Ed.2d at 671 (emphasis added).

Likewise, in the Oklahoma Tax Commission case, the issue

was also clearly framed to be limited to activities on the

reservation:

Finally, Oklahoma asserts that even if sover-

eign immunity applies to direct actions against

tribes arising from activities on the reservation,

that immunity should not apply to the facts of

this case.

498 U.S. at 511, 112 L.Ed.2d at 1121 (emphasis added). In

fact, the exact opposite conclusion must be drawn from

the Oklahoma Tax Commission case. As Justice Stevens

noted in his concurring opinion, the Court impliedly held

that tribes were not entitled to absolute immunity in state

courts, when he stated: “My purpose in writing sep-

arately is to emphasize that the Court’s holding in effect

rejects the argument that this governmental entity — the

Tribe - is completely immune from legal process.” 498

U.S. at 515-516, 112 L.Ed.2d at 1124.

Because the determination of whether a sovereign

government must recognize the claim of immunity by a

foreign government conducting activity outside of that

government's territorial jurisdiction has always been a

matter of grace and comity for the host sovereign, Okla-

homa is free to determine based upon its own laws and as

a matter of comity, whether and to what extent it will

_ _ a ——a

oOo

13

recognize the sovereign immunity of the Kiowa Tribe for

the activities occurring outside of Indian country. To deny

Oklahoma the right to make this decision is to impinge

upon Oklahoma's sovereignty. Nevada v. Hall, supra, 440

U.S. at 416, 59 L.Ed.2d at 422. Oklahoma has the right and

authority to make such a determination with respect to

any foreign nation, and Indian tribes are accorded the

same status as foreign sovereigns for sovereign immunity

purposes. Idaho v. Coeur d'Alene Tribe of Idaho, supra, 138

L.Ed.2d at 447. Oklahoma's decision not to recognize

tribal sovereign immunity in this case must be upheld.

Il. PRACTICAL CONSIDERATIONS DICTATE THAT

INDIAN TRIBES BE TREATED IN THE SAME

MANNER AS ALL OTHER GOVERNMENTS

WITH RESPECT TO SOVEREIGN IMMUNITY.

If the Kiowa Tribe prevails in this action, the Kiowa

Tribe and other Indian tribes will gain a status unique

among all governmental entities, whether state, munici-

pal, or foreign. If Oklahoma is denied the right to decide

for itself whether to recognize the claim of sovereign

immunity for activity occurring outside of Indian country

but within the State of Oklahoma, Indian tribes will be

free to unilaterally decide whether and how to fulfill

contractual obligations. No other government enjoys such

status. Indian tribes would be free to engage in commerce

throughout the United States knowing that they will

never be required to fulfill their contractual obligations.

The other party to the contract will have no remedy in

any court, state or federal. It is precisely this type of

abuse that the Oklahoma Supreme Court was seeking to

avoid.

14

Several of the amici curiae have suggested that it is

unnecessary to provide non-Indian parties to a contract

with a forum for resolution of disputes and enforcement

of obligations because such parties are sophisticated busi-

nessmen capable of protecting their interests by other

means. Even if true with respect to Manufacturing Tech-

nologies, the Altus Bank, and others, such a statement is a

gross generalization which would certainly not be true

with respect to many business situations. Many busi-

nesses have never had dealings with Indian tribes in their

governmental capacity and would not be aware of the

special rules applicable to Indian tribes.

A. Waiver of Sovereign Immunity is Not a Viable

Solution.

Several of the amici curiae have suggested that a

simple waiver of sovereign immunity would be adequate

to protect the non-Indian. Waiver of sovereign immunity

does not provide a viable solution to this issue. First, it is

not entirely clear if or how Indian tribes may waive

sovereign immunity. In United States v. United States Fidel-

ity & Guaranty Company, 309 U.S. 506, 513, 60 S.Ct. 653, 84

L.Ed. 894, 899 (1940) the Court stated:

It is a corollary to immunity from suit on the

part of the United States and the Indian Nations

in tutelage that this immunity cannot be waived

by officials.

Assuming that an official can waive sovereign immunity

for a tribe if properly authorized, a contracting party

must determine whether tribal law authorizes a waiver,

what steps are required to grant a waiver, and what

i5

officials are authorized to act. A contracting party would

have to review all tribal governmental documents to

ensure that a waiver was validly obtained.

The second hurdle for a waiver of sovereign immu-

nity is the waiver language itself. In Santa Clara Pueblo v.

Martinez, supra, 436 U.S. at 58, 56 L.Ed.2d at 115, the

_ Court stated:

It is settled that a waiver of sovereign

immunity “cannot be implied but must be

unequivocally expressed.”

Because waivers are strictly construed in favor of Indian

tribes, the language must be carefully drafted to cover

not only the transaction in question but also any remedies

which may be availa’ e. If in hindsight, a court deter-

mines that the waiver language is not broad enough to

cover a particular situation, the injured party will be left

without a remedy. Given these difficulties in obtaining a

valid waiver of sovereign immunity that was properly

worded to cover the transaction, only the largest and

most important transactions would warrant the icgal

expense required. Obtaining a waiver of sovereign immu-

nity is not a viable solution when transacting business

with an Indian tribe.

B. Failure to Extend Sovereign Immunity Beyond

Indian Country Will Not Impair Tribal Activ-

ities or Frustrate Congressional Policies.

The Kiowa Tribe suggests that failure to extend sov-

ereign immunity to activities which they conduct off the

reservation will impair their ability to conduct tribal gov-

ernment and will hinder Congress’ policy of promoting

16

tribal self-sufficiency. The Kiowa Tribe asserts that

because it has a limited land base, it will be difficult for it

to engage in commercial activity.

The Kiowa Tribe as well as other Indian tribes have

an opportunity to completely protect themselves from

unauthorized suits, whether in state or federal court.

Such tribes need only restrict their activities to lands

within their jurisdiction. It is undisputed that Indian

tribes are protected by sovereign immunity for activities

occurring within their jurisdiction.

Restricting activity to a tribe's territorial jurisdiction

in order to maintain the benefits of sovereign immunity is

consistent with the rights and powers of Indian tribes

generally. Like all governments, a tribe is limited by its

territorial jurisdiction. As this Court noted in Hilton v.

Guyot, 159 U.S. 113, 163, 16 S.Ct. 139, 40 L.Ed. 95, 108

(1895):

No law has any effect, of its own force,

beyond the limits of the sovereignty from which

its authority is derived.

The jurisdiction of an Indian tribe is similar to that of

any other government. An Indian tribe only has jurisdic-

tion over its members and its territory. United States v.

Mazurie, 419 U.S. 544, 557, 95 S.Ct. 710, 42 L.Ed.2d 706,

716 (1975); lowa Mutual Insurance Company v. LaPlante, 480

U.S. 9, 14, 107 S.Ct. 971, 94 L.Ed.2d 10, 18 (1987).

This Court has consistently recognized this territorial

limitation on the power of an Indian tribe. In Merrion v.

Jicarilla Apache Tribe, 445 U.S. 130, 141-42, 102 S.Ct. 894,

904, 71 L.Ed.2d 21, 32 (1982) (emphasis added), the Court

described this territorial limitation as follows:

17

[A] tribe has the power to tax nonmembers only

to the extent the nonmember enjoys the privi-

lege of trade or other activity on the reservation

to which the tribe can attach a tax. This limita-

tion on tribal taxing authority exists not because

the tribe has the power to exclude nonmembers,

but because the limited authority that a tribe

may exercise over nonmembers does not arise

until the nonmember enters the tribal jurisdic-

tion. We do not question that there is a significant

territorial component to tribal power: a tribe has no

authority over a nonmember until the nonmem-

ber enters tribal lands or conducts business with

the tribe.

The territorial limitation is an inherent aspect of

tribal government. The fact that a tribe’s land base may

be limited does not justify providing special treatment.

The land base in Oklahoma is small in comparison to the

State of Texas, but Oklahoma does not receive special

treatment.

Finally, if a tribe is concerned that its activities out-

side of Indian country will subject it to jurisdiction, the

tribe has an available remedy. It may merely negotiate

with the other party to the contract an appropriate choice

of law and choice of forum clause designating tribal law

and tribal forums as controlling. Choice of law and choice

of forum clauses are enforced in Oklahoma. See Telex

Corporation v. Hamilton, 576 P.2d 767 (Okla. 1978); Williams

v. Shearson Lehman Brothers, Inc., 917 P.2d 998 (Okla. App.

1996). This approach has the special advantage of ensur-

ing that the other party to the contract is aware of the

special laws applicable to Indian tribes. When faced with

the request for a choice of law or choice of forum clause,

18

a party must inquire as to why such clauses are desired

and what effect they will have on the contract.

Recognizing and enforcing the territorial restriction

on the powers of Indian tribes will not impair tribal

activities. Tribes will be free to engage in whatever activ-

ities they desire under whatever rules they may enact

within their own territorial jurisdiction. However, when

tribes choose to engage in activities outside of their terri-

torial jurisdiction, the State where the activity occurs

must be allowed to determine whether it will recognize a

claim of sovereign immunity or provide its citizens with a

forum and remedy for breach of contract.

°

CONCLUSION

Indian tribes possess the common-law immunity

from suit traditionally enjoyed by sovereign powers. With

respect to a tribe’s own territory, that immunity is abso-

lute. However, when a tribe, like any other sovereign,

engages in activity beyond its territorial jurisdiction, sov-

ereign immunity is not absolute. Rather, the sovereignty

of the State in which the activity occurs is affected. The

State, in the exercise of its sovereignty, has the right to

choose whether it will recognize the claim of sovereign

immunity as a matter of comity.

In the present case, Oklahoma has chosen to treat the

Kiowa Tribe in the same manner as any other government

and to provide a remedy and forum to its citizens for

breaches of contract within the State. Nevada v. Hall,

supra, controls this litigation and mandates that Okla-

homa has the right to make that determination. This

ee ee

19

Court should affirm the decision of the Oklahoma Court

of Appeals.

Respectfully submitted,

Steven W. Bucc, OBA #1299

(Counsel of Record)

McAree & Tart

A Professional Corporation

10th Floor

Two Leadership Square

211 North Robinson

Oklahoma City, Oklahoma

73102-7103

Phone: 405/235-9621

Fax: 405/235-0439

Counsel for First National Bank

in Altus and Raymond L. Friedlob,

receiver for Alpine Mutual Fund

Trust

and

RicHarp H. Gorpserc, CO #6365

FrigDLOB SANDERSON RASKIN

Pautson & Tourtittorr, LLC

1400 Glenarm Place, 3rd Floor

Denver, Colorado 80202

Phone: 303/571-1400

Fax: 303/615-5472

Counsel for Raymond L. Friedlob,

receiver for Alpine Mutual Fund

Trust