UNDERSTANDING THE TRIBAL COURT EXHAUSTION DOCTRINE

October 7, 2013 Comments Off on UNDERSTANDING THE TRIBAL COURT EXHAUSTION DOCTRINE

In a recent appellate case, the Fifth Circuit Court of Appeals followed well-established precedent when it affirmed a federal district court decision that recognized the Choctaw tribal court’s jurisdiction over a tribal member’s suit against a non-member of the tribe.[1] The non-member (a non-Indian corporation) had filed suit in federal district court seeking to enjoin or stop the Choctaw tribal court from exercising jurisdiction over the tribal member’s tort case. But the district court concluded that the tribal court could hear the case because the non-member had entered into business dealings with a tribal member on tribal land.

Tribal Sovereignty and Tribal Court Jurisdiction

So, why must the tribal court be given the opportunity to exercise jurisdiction over the tort case against the non-member? The answer begins with tribal sovereignty. Long ago, in the famous Marshall trilogy of cases, the U.S. Supreme Court recognized the indigenous Indian nations as sovereign body politics with inherent powers to govern themselves although that power is subject to federal power.[2] In other words, the recognized Indian tribes are sovereign nations, but Congress has the authority to limit or even eliminate that sovereignty. This principle of tribal sovereignty is fundamental to American Indian law. Although the concept has evolved and been eroded somewhat over time, tribal sovereignty is strongly defended by Indian tribes.

Based on the recognition of tribal sovereignty, two contrasting legal rules on tribal court jurisdiction have been established by the Supreme Court. The first rule states when tribal courts have exclusive jurisdiction (no federal or state court has jurisdiction). The second rule states when tribal courts have no jurisdiction. (Please note, however, that this discussion is limited to jurisdiction in civil case; tribal jurisdiction in criminal cases has been limited by Congress).

Contrasting Rules on Tribal Court Jurisdiction

In civil cases, the courts follow a general rule holding that tribal courts have exclusive jurisdiction if the claim (1) is asserted against an Indian, and (2) arose from an event or transaction that occurred in Indian country.[3] Thus, if two tribal members are involved in an auto collision while driving on tribal land, and one member sues the other, the tribal court will have jurisdiction because the defendant is an Indian and the collision occurred on tribal land.

In contrast to the general rule, the Supreme Court has also held that tribal courts do not have jurisdiction if (1) the defendant is a non-Indian, and (2) the event or transaction occurred on non-Indian-owned, fee-title land within a reservation.[4] Thus, if a tribal member and a non-Indian are involved in an auto collision while driving on privately owned land within the boundary of a reservation, the tribal court would not have jurisdiction. This second rule, known as the Montana rule, has two important exceptions that would result in tribal court jurisdiction (discussed in more detail below).

These two rules are fairly clear, but cases that fall in between these two rules are less clear, and that’s where the parties have room to argue. As a result, the federal courts were regularly asked to assert jurisdiction when the defendant was a non-Indian and the event occurred in Indian country.

Deference to Tribal Courts If Jurisdiction is in Question

The tribal court exhaustion doctrine was developed as a response to this jurisdictional gray area. The Supreme Court established this doctrine in 1985 when it held that federal courts cannot exercise jurisdiction—must allow a tribal court to rule on its own jurisdiction in the case—if (2) the defendant is a non-Indian, and (2) the claim arose on tribal land.[5] Nonetheless, the doctrine also states that non-Indian defendants may file suit in federal court after all proceedings in tribal court have been exhausted.[6]

Under this doctrine, tribal sovereignty is protected because the doctrine allows the tribal court to make its own determination regarding its jurisdiction in the case. But the rights of non-Indian defendants are also protected because the defendant can file a case in federal court after the tribal court hears the case. Thus, the tribal court exhaustion doctrine is a matter of deference to the tribal court.

The Montana Rule Exceptions and the Tribal Court Exhaustion Doctrine

The Montana rule has two important exceptions that provide tribal courts with an opportunity to exercise jurisdiction. As stated above, the Montana rule provides that tribal courts do not have jurisdiction if (1) the defendant is a non-Indian, and (2) the event or transaction occurred on land located within a reservation, but privately owned in fee title.[7]

The exceptions to the Montana rule provide that a tribal court will have jurisdiction if (1) the non-Indian entered contractual or other relationships with the tribe or tribal members; or (2) the claim asserted effects the political, economic, or welfare interests of the tribe.[8] Again, these exceptions protect tribal sovereignty, and the policy of tribal self-determination, by respecting the authority of the tribal court to determine its own jurisdiction.

Other Exceptions to the Tribal Court Exhaustion Doctrine

Two other exceptions to the tribal court exhaustion doctrine exist. Unlike the Montana exceptions, however, these exceptions give jurisdiction to the federal courts, rather than to tribal courts.

The first of these exceptions is federal preemption. When Congress enacts a law that regulates a field on a national basis, such as the Clean Water Act, the law preempts (or “trumps”) any state or local law that is inconsistent with the federal law. This preemption also applies to the tribes, and the federal courts can take jurisdiction without deferring to a tribal court.[9]

Finally, the exhaustion doctrine will not apply if the tribal court does not allow the non-Indian defendant an opportunity to challenge the tribal court’s jurisdiction.[10] Thus, a tribal court cannot simply declare its jurisdiction without considering the issue.

Conclusion

To some, the tribal court exhaustion doctrine may mean litigating in an unfamiliar court, but the doctrine is designed to respect and protect well-established principles of tribal sovereignty and is supported by the federal policy of tribal self-determination. From a legal perspective, the exhaustion doctrine and its deference to tribal courts has become a necessary aspect of managing the jurisdictional relationship between the courts of three sovereigns—tribal, federal, and state.

We hope that this discussion has been informative and helpful, but it should not be taken as legal advice or establishing an attorney-client relationship. For more information on the legal services offered by the Law Office of James D. Griffith, P.L.L.C., please call (480) 275-8738 or use the “Contact Us” page on our website.

Endnotes

[1] Dolgencorp, Inc. v. Mississippi Band of Choctaw Indians, No. 12-60668, 2013 U.S. App. LEXIS 20307 (5th Cir. Oct. 3, 2013).

[2] Johnson v. McIntosh, 21 U.S. 543, 573 (1823); Cherokee Nation v. Georgia, 30 U.S. 1, 16-17 (1831); Worcester v. Georgia, 31 U.S. 515, 559 (1832).

[3] Williams v. Lee, 358 U.S. 217 (1959). The term “Indian country” refers to Indian reservations, pueblos, dependent Indian communities, Indian allotments, and certain other areas that may be off-reservation but are close to and often largely populated by Indians. 18 U.S.C. § 1151.

[4] Montana v. United States, 450 U.S. 544 (1981). In these cases, the land involved is not held in trust by the federal government for the Indian tribe, but instead is owned privately and is subject to state law.

[5] Nat’l Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 855-6 (1985).

[6] Id. 471 at 856-7; see also Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 19 (1987) (holding that a tribal court finding of tribal jurisdiction can be challenged in federal court and that the federal court will review the jurisdictional issue de novo).

[7] Montana, 450 U.S. at 564-66.

[8] Id.

[9] Nat’l Farmers Union, 471 U.S. at n.21.

[10] Id.; see also El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 484-488 (1999).

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JUDGE ORDERS ATTORNEYS TO MEET FOR LUNCH: The Power of “Legal Levity”

December 7, 2012 Comments Off on JUDGE ORDERS ATTORNEYS TO MEET FOR LUNCH: The Power of “Legal Levity”

This week I was reminded of the lighter side of the law when I recalled the time a Maricopa County Superior Court judge ordered two attorneys to meet for lunch (at their own expense, of course). The judge’s tongue-in-cheek order is quite humorous, and I thought I’d share it for anyone not familiar with this bit of “legal levity.”

Background

In 2006, the attorney for the plaintiff in a commercial litigation case asked the attorney for the defendant to meet for lunch. The plaintiff’s attorney wanted to discuss the schedule and deadlines for pretrial investigation of facts (referred to as “discovery”), but the defendant’s attorney was suspicious of plaintiff’s attorney’s motives. When the defendant’s attorney did not respond to these requests, the plaintiff’s attorney filed a “Motion to Compel Acceptance of Lunch Invitation” with the judge. In other words, he wanted the judge to order the defendant’s attorney to meet for lunch.

The Order

Judge Gaines, a well-respected judge in Maricopa County, saw an opportunity for little fun and entered an order granting the motion. Major portions of his order follow:

The Court has searched in vain in the [procedural rules, case law, and] leading treatises on federal and Arizona procedure, to find specific support for Plaintiff’s motion. Finding none, the Court concludes that motions of this type are so clearly within the inherent powers of the Court and have been so routinely granted that they are non-controversial and require no precedential support.

The writers support the concept. Conversation has been called “the socializing instrument par excellence” (Jose Ortega y Gasset, Invertebrate Spain) and “one of the greatest pleasures in life” (Somerset Maugham, The Moon and Sixpence). John Dryden referred to “Sweet discourse, the banquet of the mind” (The Flower and the Leaf).

Plaintiff’s counsel extended a lunch invitation to Defendant’s counsel “to have a discussion regarding discovery and other matters.” Plaintiff’s counsel offered to “pay for lunch.” Defendant’s counsel failed to respond until [this] motion was filed.

Defendant’s counsel distrusts Plaintiff’s counsel’s motives and fears that Plaintiff’s counsel’s purpose is to persuade Defendant’s counsel of the lack of merit in the defense case. The Court has no doubt of Defendant’s counsel’s ability to withstand Plaintiff’s counsel’s blandishments and to respond sally for sally and barb for barb. Defendant’s counsel now makes what may be an illusory acceptance of Plaintiff’s counsel’s invitation by saying, “We would love to have lunch at Ruth’s Chris with/on . . .” Plaintiff’s counsel. [Here, the judge added a footnote: Everyone knows that Ruth’s Chris, while open for dinner, is not open for lunch. This is a matter of which the Court may take judicial notice.]

. . . .

There are a number of fine restaurants within easy driving distance of both counsel’s offices, e.g., Christopher’s, Vincent’s, Morton’s, Donovan’s, Bistro 24 at the Ritz-Carlton, The Arizona Biltmore Grill, Sam’s Café (Biltmore location), Alexi’s, Sophie’s and, if either counsel has a membership, the Phoenix Country Club and the University Club. Counsel may select their own venue or, if unable to agree, shall select from this list in order. The time will be noon during a normal business day. The lunch must be conducted and concluded not later than August 18, 2006.

. . . .

The cost of the lunch will be paid as follows: Total cost will be calculated by the amount of the bill including appetizers, salads, entrees and one non-alcoholic beverage per participant. [Another footnote added by the judge: Alcoholic beverages may be consumed, but at the personal expense of the consumer.] A twenty percent (20%) tip will be added to the bill (which will include tax). Each side will pay its pro rata share according to number of participants.

Judge Gaines then ordered that the attorneys discuss pretrial discovery motion, protective order, and out-of-state depositions, which the attorneys were disputing. Here, a footnote states: “The Court suggests that serious discussion occur after counsel have eaten. The temperaments of the Court’s children always improved after a meal.” The judge then ordered that the attorneys file a “joint report detailing the parties’ agreements and disagreements regarding these motions [and] filed with the Court not later than one week following the lunch . . . .”

The court docket shows that a “Joint Report on Outstanding Discovery Disputes” was filed by the attorneys to comply with the order. Just goes to show that, sometime, a little bit of “legal levity” can be as powerful as “legal logic.” Click here for a full copy of the order.

For more information on the legal services offered by the Law Office of James D. Griffith, P.L.L.C., please visit our website.

MEDIATION PROVISION DID NOT WAIVE TRIBAL SOVEREIGN IMMUNITY IN STATE TRIBAL AGREEMENT

November 25, 2012 Comments Off on MEDIATION PROVISION DID NOT WAIVE TRIBAL SOVEREIGN IMMUNITY IN STATE TRIBAL AGREEMENT

The Ninth Circuit Court of Appeals recently upheld a lower court decision that the Puyallup Tribe did not waive its sovereign immunity when it entered a contract with the State of Washington that included a mediation provision. The key distinction supporting the non-waiver of sovereign immunity was that the contract did not include other terms clearly indicating a waiver of sovereign immunity by the Tribe. A copy of the decision is available here. See also Miller v. Wright, 2012 U.S. App. LEXIS 23295 (9th Cir. 2012).

Miller v. Wright.

In Miller, the Puyallup Tribe entered into a cigarette tax contract (the “CTC”) with the State of Washington. Under the CTC, the Tribe agreed to collect a $30.00 fee on all cartons of cigarettes sold by the Tribe or any tribally chartered business and to purchase cigarettes for resale only from Washington wholesalers, tribal manufacturers, or approved out-of-state wholesalers. In turn, the State agreed that it would return the fees collected to the Tribe if the fees were used for essential government services, such as health services, law enforcement, and emergency services. The CTC also provided that responsibility for enforcing the $30.00 fee would be shared by both the State and the Tribe, and that any dispute would be submitted to mediation.

A man named Miller and a woman named Lanphere, both non-Indians and non-residents of the Puyallup reservation, purchased cartons of cigarettes at a tribally chartered business operating on reservation land. Miller and Lanphere objected to the fee and filed suit. They sought a refund and an injunction against future collection of the fee. After pursuing their action in the state courts of Washington and the Puyallup tribal court system, Miller and Lanphere filed an action in federal court, which also dismissed the case. The customers then appealed to the Ninth Circuit Court of Appeals, which affirmed the dismissal.

Tribal Sovereign Immunity Protects Indian Tribes in Many Cases.

In affirming the district court, the Ninth Circuit relied on the legal principle that “[t]ribal sovereign immunity protest Indian tribes from suit absent express authorization from Congress of clear waiver by the tribe.” Cook v. AVI Casino Enterprises, Inc., 548 F.3d 718, 725 (9th Cir. 2008). The Cook case also states that this rule extends to tribal commercial activities and to corporations chartered under tribal law. The court then analyzed the CTC between the State and the Tribe and concluded, first, that the provisions of the CTC were common used in cigarette tax agreement and, second, that none of the terms supported a clear waiver by the Tribe of its sovereign immunity.

Citing a U.S. Supreme Court decision, the Ninth Circuit clarified that “an arbitration clause [in an agreement with a Tribe] may establish a clear waiver of sovereign immunity.” C & L Enterprises, Inc. v. Citizens Band of Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418-19 (2001) (emphasis added). In C & L Enterprises, however, the tribe that the contract would be governed Oklahoma law and that the Oklahoma Uniform Arbitration Act applies. C & L Enterprises contrasts with Demontiney v. U.S., 255 F.3d 801 (9th Cir. 2001). In Demontiney, the contract with the Indian tribe covered only “such mundane issues as indemnity, default remedies, interest rates, and [applicable] federal laws.” The contract even stated that the tribe retained its sovereign immunity, gave the tribal court exclusive jurisdiction, and established that tribal law governed the contract.

Based on the contrast between the C & L Enterprises and Demontiney cases, the Ninth Circuit in Miller v. Wright concluded that the CTC between the Puyallup Tribe and the State was “more akin” to Demontiney. In other words, the mere inclusion of a mediation provision was not enough to establish “a clear and explicit waiver of immunity” by the Tribe. In addition, the CTC did not include any of the other provisions found in the C & L Enterprises case that established state jurisdiction over the contract’s arbitration provisions. Thus, the Puyallup Tribe did not waive its sovereign immunity when it entered the CTC with the State of Washington.

Sovereign immunity can be a difficult and complicated area of Indian. If you would like further information regarding tribal sovereign immunity, or other Indian law matters, please visit the website for the Law Office of James D. Griffith, P.L.L.C. and use one of the contact options provided.

UNDER A COMMERCIAL LEASE, CAN A LANDLORD COLLECT RENT FROM A TENANT AFTER THE TENANT’S VALID ASSIGNMENT OF THE LEASE?

October 26, 2012 Comments Off on UNDER A COMMERCIAL LEASE, CAN A LANDLORD COLLECT RENT FROM A TENANT AFTER THE TENANT’S VALID ASSIGNMENT OF THE LEASE?

Under Arizona law, a tenant under a commercial lease remains liable to the landlord for payment of rent even after the tenant validly assigns the lease to a new tenant.

Remember Sally’s Café and the lease of space in Citywide Properties’ building at the corner of Fifth and Mill? (See my discussion of commercial leases and non-assignment clauses here.) Let’s say that Sally’s Café leased space from Citywide and later assigned the lease to Joe’s Burgers after Citywide consented to the assignment. That means the assignment is valid and enforceable in the eyes of the law.

“Privity” (I know, I know, it’s legal jargon)

In this situation, both Sally’s Café and Joe’s Burgers have liabilities under the lease with Citywide. The legal rule states that a validly assigned lease creates “privity of estate” between the landlord and the new tenant, but that the landlord and original tenant are still in “privity of contract.” In other words, the landlord and the new tenant owe obligations to each other because of the new tenant’s (valid) possession of the leased property, but the landlord and the original tenant still have obligations to each other under the lease agreement.

The most important obligation, of course, is the obligation to pay rent, which follows the assignment to the new tenant. Thus, the new tenant is obligated to pay rent to the landlord. This also applies to other obligations, such as the landlord’s obligation to make repairs or common area maintenance.

In our hypothetical case, because Citywide and Joe’s Burgers are in privity of estate, Citywide will be liable to Joe’s Burgers if Citywide fails to make a repair or maintain the building as required under the lease. Similarly, Joe’s Burgers will be liable to Citywide if Joe’s Burgers does not pay rent.

So why isn’t Sally’s Café off the hook when it validly assigns the lease to Joe’s Burger? Sally’s Café can still be held liable because Sally’s Café is in privity of contract with Citywide. If, for example, Joe’s Burgers fails to pay the rent, Citywide can sue both Joe’s Burgers and Sally’s Café for the outstanding rent. The only exception would be if Citywide had released Sally’s Café from liability under the lease.

Assignment to Third Tenant

Can the lease be assigned to a third tenant? Yes. What happens? Basically, the second tenant is released from all liability and the third tenant is in privity of estate with the landlord. In our case, Joe’s Burgers would be released from liability, and the third tenant (Valerie’s Vegan) owes the rent to Citywide. But Sally’s Café remains liable under privity of contract with Citywide.

Please remember that this is merely a general discussion of obligations and liabilities of landlords and tenants after the assignment of a commercial lease. This discussion should not be seen as legal advice, and any specific situation should be considered on its own terms. If you would like further information, or have a specific situation, please contact me by using one of the contact options provided on my website.

THE INDIAN ARTS AND CRAFTS ACT: Protecting Genuine Indian-Made Arts and Crafts

September 7, 2012 Comments Off on THE INDIAN ARTS AND CRAFTS ACT: Protecting Genuine Indian-Made Arts and Crafts

The Indian arts and crafts market is known for beautiful works that were handcrafted by Indians. Unfortunately, the market has been diluted by the sale of fake Indian art- and craftworks—fraud that has been described as “rampant.” If you’re an Indian artisan or a tribal official trying to protect genuine arts and crafts made by tribal members, the Indian Arts and Craft Act can help you limit unfair competition by non-Indians, stop fraudulent activity, and preserve your cultural heritage.

The Indian Arts and Crafts Act (“IACA”) was enacted in 1935 and was significantly strengthened by amendments in 1990, 2000, and 2010. Under the 1990 amendment, an Indian artisan or a tribe (for itself or on behalf of an artisan) may file a civil lawsuit alleging misrepresentation of an art- or craftwork as an authentic Indian-made product. This provides the Indian artisan or the tribe protection against the sale of non-genuine art- or craftworks if the seller fraudulently claims the item was made by the Indian artisan or the tribe. The amendment allows for restraining orders to stop the fraudulent claims and for the recovery of monetary damages and attorneys’ fees.

An Illinois-based retailer of authentic Indian arts and crafts, Native American Arts, Inc. (“NAA”), has used the civil action to great effect, filing at least eighty civil suits since 1998. NAA filed these suits to stop competing businesses from wrongfully claiming that their products were authentic Indian art- and craftworks. NAA’s attorney has stated that “the lawsuits have been highly successful [in] obtaining injunctions in almost every case” and that “the defendants have generally complied with the injunctions.” Nonetheless, civil suits can be difficult to pursue because of the time and expense involved.

NAA’s civil suits are not surprising considering the extent of misrepresentation in the Indian arts and crafts market. In a recent report, the U.S. Government Accountability Office (“GAO”) found that the Indian Arts and Crafts Board, a federal agency established under the IACA, received 649 complaints between 2006 and 2011. Of those complaints, 48.9% originated in western and southwestern states. California (60), Arizona (49), and New Mexico (45) accounted for 154 complaints (23.7% of the total). The GAO’s report is available at http://www.gao.gov/assets/320/317826.pdf.

As a “truth-in-marketing” law, the IACA protects Indian artisans and tribes from unfair competition by non-Indians, preserves Indian culture, and promotes tribal economic development. Indian artisans and tribes may want to consider using the IACA’s civil action if they discover that another person is fraudulently claiming that a non-genuine Indian art- or craftwork was made by an Indian or a tribal member. If you would like to learn more about the IACA, please refer to the Question-and-Answer discussion on my firm’s website or contact the Law Office of James D. Griffith, P.L.L.C. using one of the contact options available on the firm’s website.

ARE YOU PROTECTING YOUR TRADE SECRETS?

September 4, 2012 Comments Off on ARE YOU PROTECTING YOUR TRADE SECRETS?

All businesses rely on proprietary information that is valuable specifically because it provides an economic advantage over competitors. Businesses in Arizona can protect that information under the Uniform Trade Secrets Act to prevent employees and/or competitors from, in effect, stealing it and using for financial gain or a competitive edge.

As a smart business person, you already know that you rely on valuable proprietary information in running your business. But you may not be protecting all of your proprietary trade secrets. Why? Because virtually any information can be protected as a trade secret if it is (1) valuable in a business or trade specifically because it is not generally known to others, and (2) kept secret by reasonable efforts. This broad definition can include almost any formula, pattern, technique, process, method, device, or compilation.

Need some concrete examples? The most common example is the secret formula for Coca-Cola®, but the examples are many and varied. Consider these:

•   Client lists

•   Spreadsheets used for calculating bids

•   Best seller list (prior to release)

•   All research and development, including manuals, experimental studies, and testing results (and even the knowledge in an employee’s head)

•   Mathematical or scientific formulas, such as the chemical formula for a medication

•   Recipes for many food products, such as cookies, soup, salad dressing

•   Formulas for consumer products, such as toothpaste or mouthwash

•   Formula for WD-40® (a silicon-based lubricant)

•   Processes used to manufacture products made with Teflon®

•   Techniques used on a lathe to manufacture replacement parts for airplanes

•   Financial formulas used to estimate return on investment or profit margin

•   Financial information and statements

•   Sale performance information

•   Market research

The important thing is that the information have value to the business specifically because it is not known to others (and the business took reasonable steps to protect the secrecy of the information). For more on trade secrets, see a discussion of Arizona’s Uniform Trade Secrets Act here.

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