Ute Indian Tribe of the Uintah v. Lawrence , 875 F.3d 539 ( 2017 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS November 7, 2017
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UTE INDIAN TRIBE OF THE UINTAH
AND OURAY RESERVATION, a
federally recognized Indian Tribe, and a
federally chartered corporation; UINTAH
AND OURAY TRIBAL BUSINESS
COMMITTEE, SHAUN CHAPOOSE,
Chairman of the Uintah and Ouray Tribal
Business Committee; UTE ENERGY No. 16-4154
HOLDINGS, a Delaware LLC, (D.C. No. 2:16-CV-00579-RJS)
(D. Utah)
Plaintiffs - Appellants,
v.
HONORABLE BARRY G. LAWRENCE,
District Judge, Utah Third Judicial District
Court, in his individual and offical
capacities; LYNN D. BECKER,
Defendants - Appellees.
_________________________________
ORDER
_________________________________
Before HARTZ and EBEL, Circuit Judges.
_________________________________
This matter is before the court on appellee Lynn D. Becker’s Petition for Panel
Rehearing and Request for Rehearing En Banc. We also have a response from the
appellants.
Upon consideration, that part of the petition seeking panel rehearing is granted in
part and only to the limited extent of the changes made to the attached revised Opinion.
The request for panel rehearing is otherwise denied. The clerk is directed to file the
amended decision attached to this order effective today’s date.
The Petition and the response were also circulated to all the judges of the court
who are in regular active service and who are not recused. See Fed. R. App. P. 35(a). As
no judge on the original panel or the en banc court requested that a poll be called the
request for en banc rehearing is denied.
Entered for the Court
ELISABETH A. SHUMAKER, Clerk
2
FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS November 7, 2017
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UTE INDIAN TRIBE OF THE UINTAH
AND OURAY RESERVATION, a
federally recognized Indian Tribe, and a
federally chartered corporation; UINTAH
AND OURAY TRIBAL BUSINESS
COMMITTEE, SHAUN CHAPOOSE,
Chairman of the Uintah and Ouray Tribal
Business Committee; UTE ENERGY
HOLDINGS, a Delaware LLC, No. 16-4154
Plaintiffs - Appellants,
v.
HONORABLE BARRY G. LAWRENCE,
District Judge, Utah Third Judicial District
Court, in his individual and official
capacities; LYNN D. BECKER,
Defendants - Appellees.
_________________________________
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:16-CV-00579-RJS)
_________________________________

The Honorable Neil Gorsuch participated in the oral argument but not in the decision.
The practice of this court permits the remaining two panel judges, if in agreement, to act
as a quorum in resolving the appeal. See 28 U.S.C. § 46(d); see also United States v.
Wiles, 106 F.3d 1516, 1516, at n* (10th Cir. 1997) (noting that this court allows
remaining panel judges to act as a quorum to resolve an appeal). In this case, the two
remaining panel members are in agreement.
Frances C. Bassett (Jeffrey S. Rasmussen, Thomas W. Fredericks, Jeremy J. Patterson,
and Thomasina Real Bird, with him on the briefs), Fredericks Peebles & Morgan,
Louisville, Colorado, for Ute Indian Tribe of the Uintah and Ouray Reservation, Utah,
Plaintiffs-Appellants.
David K. Isom, Isom Law Firm, PLLC, Salt Lake City, Utah, for Defendant-Appellee,
Lynn D. Becker.
Brent M. Johnson and Keisa L. Williams, Utah Administrative Office of the Courts, Salt
Lake City, Utah, for Defendant-Appellee, Judge Barry G. Lawrence.
_________________________________
Before HARTZ and EBEL, Circuit Judges.
_________________________________
HARTZ, Circuit Judge.
_________________________________
This appeal arises from a contract dispute between Lynn Becker and the Ute
Indian Tribe of the Uintah and Ouray Reservation.1 Our concern, however, is not the
merits of the dispute but jurisdiction. Mr. Becker, who is not an Indian, pursued his
claim against the Tribe in Utah state court. The Tribe responded by filing suit in the
United States District Court for the District of Utah, asserting, among other things, that
the state court lacked subject-matter jurisdiction to hear the case. But the federal district
court in turn held that it lacked jurisdiction to consider the Tribe’s challenge to the
jurisdiction of the state court. We respectfully disagree with the district court.
1
This appeal is brought by the Ute Indian Tribe; the Uintah and Ouray Tribal Business
Committee (the Tribe’s elected governing body); Ute Energy Holdings, LLC (whose
100% owner and sole member is the Tribe); and Shaun Chapoose (Chairman of the Tribal
Business Committee). Because the appellants raise identical arguments, we will
generally refer to them all as the Tribe.
2
Exercising jurisdiction under 28 U.S.C. § 1291, we reverse and remand for further
proceedings. We hold that the Tribe’s claim—that federal law precludes state-court
jurisdiction over a claim against Indians arising on the reservation—presents a federal
question that sustains federal jurisdiction.
I. BACKGROUND
The contract at issue is the Independent Contractor Agreement (the Contract)
between the Tribe and Mr. Becker, a former manager in the Tribe’s Energy and Minerals
Department. Mr. Becker claims that the Tribe breached the Contract by failing to pay
him 2% of net revenue distributed to Ute Energy Holdings, LLC from Ute Energy, LLC.
After Mr. Becker filed suit in Utah state court, the Tribe filed this suit against him and
Judge Barry Lawrence, the state judge presiding over Mr. Becker’s suit, seeking
declarations that (1) the state court lacks subject-matter jurisdiction over the dispute, (2)
the Contract is void under federal and tribal law, and (3) there is no valid waiver of the
Tribe’s sovereign immunity for the claims asserted in state court. The Tribe also sought a
preliminary injunction ordering the defendants to refrain from further action in the state-
court proceedings. The Tribe invoked jurisdiction under 28 U.S.C. § 1331 (federal-
question jurisdiction) and § 1362 (federal question when suit brought by an Indian tribe).
Jurisdiction under § 1331 is limited to “actions arising under the Constitution, laws, or
treaties of the United States”; and jurisdiction under § 1362 requires that “the matter in
controversy arise[] under the Constitution, laws, or treaties of the United States.” After a
3
hearing on the Tribe’s request for a preliminary injunction, the district court concluded
that it lacked subject-matter jurisdiction and dismissed the suit as moot.2
II. DISCUSSION
We review de novo the district court’s conclusion that it lacked jurisdiction. See
Kaw Nation ex rel. McCauley v. Lujan, 378 F.3d 1139, 1142 (10th Cir. 2004).
The issue before us must be examined in light of a long history of federal law
regarding Indian affairs. “[T]he Constitution grants Congress broad general powers to
legislate in respect to Indian tribes, powers that . . . have [been] consistently described as
plenary and exclusive.” United States v. Lara, 541 U.S. 193, 200 (2004) (internal
quotation marks omitted). In particular, “the policy of leaving Indians free from state
jurisdiction and control is deeply rooted in the Nation’s history.” McClanahan v. State
Tax Comm’n of Ariz., 411 U.S. 164, 168 (1973) (brackets and internal quotation marks
omitted). In Worcester v. State of Georgia, 31 U.S. 515 (1832), the Supreme Court
considered a challenge to Georgia’s attempt to regulate activity on the Cherokee
Reservation. The State sought to punish a federally licensed non-Indian missionary for
his refusal to leave the Reservation. Chief Justice Marshall declared that “[t]he Cherokee
nation . . . is a distinct community occupying its own territory, . . . in which the laws of
Georgia can have no force,” and that “[t]he whole intercourse between the United States
2
It appears that the district court construed the Tribe’s amended complaint as advancing
a claim under the federal civil-rights act, 42 U.S.C. § 1983. The district court dismissed
that claim without prejudice, and the Tribe has not challenged this ruling on appeal. The
Tribe made clear in district court, however, that it was not relying exclusively on § 1983.
4
and this nation, is, by our constitution and laws, vested in the government of the United
States.” Id. at 561. Although the Supreme Court has since “departed from Chief Justice
Marshall’s view that the laws of a State can have no force within reservation boundaries,”
Nevada v. Hicks, 533 U.S. 353, 361 (2001) (brackets and internal quotation marks
omitted), federal supremacy over tribes has remained a constant, see Michigan v. Bay
Mills Indian Cmty., 134 S. Ct. 2024, 2030 (2014) (“[T]he tribes are subject to plenary
control by Congress.”); cf. United States v. Jicarilla Apache Nation, 564 U.S. 162, 175
(2011) (“Throughout the history of the Indian trust relationship, we have recognized that
the organization and management of the trust is a sovereign function subject to the
plenary authority of Congress.”).
Thus, federal law regulates a tribe’s right to exercise authority over non-Indians.
See Nat’l Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845, 851–52
(1985) (on “questions concerning the extent to which Indian tribes have retained the
power to regulate the affairs of non-Indians . . . , the governing rule of decision has been
provided by federal law.”). With respect to tribal-court jurisdiction in particular,
“whether a tribal court has adjudicative authority over nonmembers is a federal
question.” Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 324
(2008). When parties challenge tribal jurisdiction, “it is federal law on which they rely as
a basis for the asserted right of freedom from Tribal Court interference.” Nat’l Farmers
Union, 471 U.S. at 853.
5
Similarly, the Supreme Court has made clear that state adjudicative authority over
Indians for on-reservation conduct is greatly limited by federal law. (The Tribe contends
that Mr. Becker’s contract claim arose on the reservation.) The leading decision on the
matter in the civil context is Williams v. Lee, 358 U.S. 217, 217–18, 223 (1959), which
held that an Arizona state court could not exercise civil jurisdiction over a suit brought by
a non-Indian store operator against a Navajo couple to collect on a debt incurred at a store
located on the reservation. To rule otherwise, the Court said, “would undermine the
authority of the tribal courts over Reservation affairs and hence would infringe on the
right of the Indians to govern themselves.” Id.
Of particular relevance are decisions under a federal statute—Public Law 280, ch.
505, 67 Stat. 588 (1953) (codified as amended at 18 U.S.C. § 1162; 25 U.S.C. §§ 1321–
1326; 28 U.S.C. § 1360)—that, for most states, grants state-court jurisdiction over
litigation arising in Indian country in which an Indian is a party only when certain actions
are taken by a state or tribe. When passed in 1953 it “delegated civil and criminal
jurisdiction over Indian reservations to certain States [and] provided a means whereby
other States could assume jurisdiction over Indian reservations without the consent of the
tribe affected.” McClanahan, 411 U.S. at 177 n.17 (citations omitted). But the Indian
Civil Rights Act, passed in 1968, “changed the prior procedure to require the consent of
the Indians involved before a State was permitted to assume jurisdiction.” Id.; see United
States v. Burch, 169 F.3d 666, 669 (10th Cir. 1999) (“[The statute] was amended in 1968
6
to omit the requirement of affirmative [state] legislative action and to require the consent
of the Indian tribe by special election before a state could assume jurisdiction.”).
The statute has been strictly enforced. In Kennerly v. District Court of Ninth
Judicial District of Montana, 400 U.S. 423, 426–29 (1971) (per curiam), the Supreme
Court held that Montana courts could not exercise jurisdiction over a civil claim against
Indians arising on the Blackfeet reservation—despite tribal legislation granting
jurisdiction to the Montana courts—because the grant did not comply with either version
of the statute. It did not comply with the initial requirement because there had been no
state legislation authorizing jurisdiction over actions on the reservation. And the tribal
legislation did not satisfy the later requirement of a special election establishing the
consent of Indians within the affected area. Then, in Fisher v. District Court of Sixteenth
Judicial District of Montana, in & for Rosebud County, 424 U.S. 382, 386–88 (1976)
(per curiam), the Court held that Montana courts could not exercise jurisdiction over
adoption proceedings involving only Indians residing on the reservation because such an
exercise of jurisdiction would infringe on tribal self-government and “[n]o federal statute
sanction[ed] this interference.”
Thus, it is clear that whether the state court has jurisdiction to hear Mr. Becker’s
claim is a matter of federal law. The only remaining question is whether the Tribe’s suit
seeking an injunction to halt the proceedings in state court is an action “arising under”
federal law (so that there is jurisdiction under 28 U.S.C. § 1331) or whether “the matter
in controversy [in this suit] arises under” federal law (so that there is jurisdiction under
7
28 U.S.C. § 1362). The parties agree that the difference in language in the two statutes is
immaterial to the issue before us. We hold that the jurisdictional predicate is satisfied.
The federal courts generally have jurisdiction to enjoin the exercise of state
regulatory authority (which includes judicial action) contrary to federal law. As the
Supreme Court stated in Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96 n.14 (1983): “A
plaintiff who seeks injunctive relief from state regulation, on the ground that such
regulation is pre-empted by a federal statute which, by virtue of the Supremacy Clause of
the Constitution, must prevail, thus presents a federal question which the federal courts
have jurisdiction under 28 U.S.C. § 1331 to resolve.”
This equitable jurisdiction under § 1331 has repeatedly been employed to police
the boundaries between state and tribal authority. A few days before Shaw the Supreme
Court upheld a federal-court order enjoining the State of New Mexico from enforcing
hunting and fishing laws against non-Indians for acts on the reservation. See New Mexico
v. Mescalero Apache Tribe, 462 U.S. 324, 329–30 (1983). Two years later, in a mirror
image of the case before us, the Court in National Farmers Union Insurance Cos. v.
Crow Tribe of Indians, 471 U.S. 845, 852–53 (1985), upheld the jurisdiction of a federal
court to issue an injunction halting tribal-court proceedings against a non-Indian. The
Court first extended the above-quoted statement in Shaw to encompass federal common-
law claims. See id. at 850 (the grant of jurisdiction in § 1331 “will support claims
founded upon federal common law as well as those of a statutory origin” (internal
quotation marks omitted)). Explaining its holding, the Court then wrote:
8
The question whether an Indian tribe retains the power to compel a non-
Indian property owner to submit to the civil jurisdiction of a tribal court is
one that must be answered by reference to federal law and is a “federal
question” under § 1331. Because petitioners contend that federal law has
divested the Tribe of this aspect of sovereignty, it is federal law on which
they rely as a basis for the asserted right of freedom from Tribal Court
interference. They have, therefore, filed an action “arising under” federal
law within the meaning of § 1331. The District Court correctly concluded
that a federal court may determine under § 1331 whether a tribal court has
exceeded the lawful limits of its jurisdiction.
Id. at 852–53 (footnote omitted) (emphasis added).
We fail to see how we can distinguish these Supreme Court precedents from the
case before us with respect to federal-court jurisdiction. If a suit to enjoin a tribe from
exercising jurisdiction contrary to federal law is an action “arising under” federal law,
then so is a suit to enjoin a State from exercising jurisdiction contrary to federal law.
And, indeed, this court has exercised such arising-under jurisdiction over the years. See
Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1237, 1240 (10th Cir.
2001) (affirming a district-court injunction forbidding Kansas authorities from enforcing
state motor-vehicle-registration and titling laws against the plaintiff tribe); United
Keetoowah Band of Cherokee Indians v. State of Okla. ex rel. Moss, 927 F.2d 1170, 1173
(10th Cir. 1991) (“We are persuaded that an action such as this by a tribe asserting its
immunity from the enforcement of state laws is a controversy within § 1362 jurisdiction
as a matter arising under the Constitution, treaties or laws of the United States.”); Seneca-
Cayuga Tribe of Okla. v. State of Okla. ex rel. Thompson, 874 F.2d 709, 716–17 (10th
Cir. 1989) (affirming preliminary injunction preventing State of Oklahoma from
9
interfering with operation of gaming on tribal land and from proceeding with suit in state
court). And more recently, in Ute Indian Tribe of the Uintah & Ouray Reservation v.
Utah, 790 F.3d 1000, 1007, 1012 (10th Cir. 2015) (Gorsuch, J.), cert. denied, Uintah
Cty., Utah v. Ute Indian Tribe of the Uintah & Ouray Reservation, 136 S. Ct. 1451
(2016), and Wasatch Cty., Utah v. Ute Indian Tribe of the Uintah & Ouray Reservation,
136 S. Ct. 1451 (2016), we reversed the district court’s denial of a request for a
preliminary injunction against a state prosecution and ordered the court to enter the
injunction because the State was attempting to exercise criminal jurisdiction against an
Indian for conduct on tribal lands. Although that case did not (as ours does) involve civil
jurisdiction, no reason has been offered why that should matter. As we have already
noted, Public Law 280 covers both criminal and civil jurisdiction.3
Mr. Becker argues, however, that our decision in a prior appeal involving this
litigation has already resolved that the federal district court lacked jurisdiction. Our
decision in Becker v. Ute Indian Tribe of the Uintah & Ouray Reservation, 770 F.3d 944
(10th Cir. 2014), concerned Mr. Becker’s suit against the Tribe in federal district court to
resolve the present contract dispute. He brought state-law claims for breach of contract,
3
Our recent decision in Hackford v. Utah, 845 F.3d 1325 (10th Cir. 2017), is not to the
contrary. Although we affirmed the district court’s denial of a motion filed by a plaintiff
claiming to be an Indian seeking a preliminary injunction against a state prosecution, that
was because we agreed that “the alleged offenses occurred outside of Indian Country,” id.
at 1326. The outcome was driven by facts different from those before us. And even
though we denied relief, we did not order that the federal-court action be dismissed for
lack of jurisdiction, thereby indicating that such a suit to enjoin a state-court action for
lack of jurisdiction is a matter within the federal district court’s jurisdiction, even if the
suit turns out to lack merit.
10
breach of the covenant of good faith and fair dealing, and an accounting. He contended
that the court had federal-question jurisdiction under 28 U.S.C. § 1331 because the claims
raised substantial questions of federal law regarding the validity of the Contract and the
Tribe’s sovereign immunity. See id. at 946. The district court concluded that jurisdiction
was not proper because the possibility that the Tribe would raise federal-law defenses,
such as sovereign immunity, to the state-law claims could not establish federal-question
jurisdiction. See id. We agreed and affirmed the dismissal. See id. at 948–49.
Mr. Becker says that “[n]othing has changed,” Becker Br. at 9, as we move from that
appeal to this one. We agree that the law has not changed. But this case differs from the
earlier appeal in decisive respects.
To be sure, there is some overlap in the issues raised in the two appeals. But there
was no question in the prior appeal regarding state-court jurisdiction over the contract
dispute between Mr. Becker and the Tribe. In fact, there was no state-court proceeding
pending or imminent at the time.
Moreover, our treatment of the sovereign-immunity issue in the prior appeal does
not control the issue now before us. We resolved the immunity issue by relying on the
Supreme Court decision in Oklahoma Tax Commission v. Graham, 489 U.S. 838 (1989)
(per curiam), which, in our words, “singled out tribal sovereign immunity as a type of
federal defense that does not convert a suit otherwise arising under state law into one
which, in the § 1331 sense, arises under federal law.” Becker, 770 F.3d at 948 (brackets
and internal quotation marks omitted). Graham involved the removal of a case from state
11
court to federal district court. The State of Oklahoma had sued the Chickasaw Tribe and
the manager of a tribal enterprise in state court to collect unpaid cigarette and gaming
excise taxes. See Graham, 489 U.S. at 839. The Tribe removed the case to federal court,
asserting jurisdiction under § 1331; and the district court denied the State’s motion to
remand the case back to state court. See id. This court affirmed, reasoning that even
though the complaint in state court did not on its face present a federal claim, the
question of tribal sovereign immunity was “inherent within the complaint because of the
parties subject to the action.” Id. at 840 (internal quotation marks omitted). The
Supreme Court summarily reversed. It relied on the well-pleaded-complaint rule, which
states that “[w]hether a case is one arising under federal law, in the sense of [§ 1331],
must be determined from what necessarily appears in the plaintiff’s statement of his own
claim in the bill or declaration, unaided by anything alleged in anticipation of avoidance
of defenses which it is thought the defendant may interpose.” Id. at 840–41 (brackets,
ellipsis, and internal quotation marks in original omitted). “[I]t has long been settled,”
said the Court, “that the existence of a federal immunity to the claims asserted does not
convert a suit otherwise arising under state law into one which, in the statutory sense,
arises under federal law.” Id. at 841.
But there are two significant differences between Graham and our case. To begin
with, sovereign immunity and a court’s lack of subject-matter jurisdiction are different
animals. See, e.g., Blatchford v. Native Village of Noahtak, 501 U.S. 774, 786 n.4
(1991); United States v. Park Place Associates, Ltd., 563 F.3d 907, 923–24 (9th Cir.
12
1991). The Tribe’s complaint asserts that several laws, including Public Law 280,
deprived the state court of subject-matter jurisdiction regardless of any waiver of
sovereign immunity. And ordinarily subject-matter jurisdiction is not waivable or can be
waived only through specified procedures. For example, Public Law 280 requires certain
prelitigation action by the state or the tribe for there to be state-court jurisdiction. See 25
U.S.C. § 1322(a); Kennerly, 407 U.S. at 425, 427–29; William C. Canby, Jr., American
Indian Law in a Nutshell 211 (6th ed. 2015) (Under Kennerly, “the parties cannot confer
[subject-matter] jurisdiction on the state by consent.”). Tribal sovereign immunity, in
contrast, is a waivable defense. See Graham, 489 U.S. at 841 (tribal immunity is a
defense); Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754, 760 (1998) (tribe
can waive immunity). And it can be raised in any court with jurisdiction to consider the
tribe’s dispute. See Bay Mills, 134 S. Ct. at 2028 (“Indian tribes have immunity even
when a suit arises from off-reservation commercial activity.”). Thus, Public Law 280
might be invoked when tribal sovereign immunity is not at issue (because the defense has
been waived or the Indian party—say an individual member of a tribe—is not entitled to
claim tribal immunity). See Kennerly, 400 U.S. at 425, 27–29 (state court lacked
jurisdiction despite an unambiguous consent from the tribe, because the consent did not
comply with Public Law 280). And sometimes tribal sovereign immunity can be invoked
when Public Law 280 is not at issue (because, say, the dispute did not arise in Indian
country, see Bay Mills, 134 S. Ct. at 2028). See Cohen § 7.05[1][b], at 640 n.27 (“The
sovereign immunity inquiry is solely concerned with whether the tribe itself is being sued
13
and whether the tribe or Congress has explicitly waived immunity, and is unrelated to
factors such as tribal, federal, or state interests relevant to the state jurisdiction
question.”). 4
More importantly, Graham and Mr. Becker’s appeal considered suits seeking
declarations that federal law did not override state law, whereas the Tribe contends that
state law must yield to federal law. “[F]or reasons involving perhaps more history than
logic,” Franchise Tax Board v. Construction Laborers, 463 U.S. 1, 4 (1983), whether a
case arises under federal law can depend on which party to a dispute raises the federal
issue. In Franchise Tax the state tax board brought an action against the defendant in
state court for a declaratory judgment that the defendant had to honor all its future levies
because federal law (ERISA) did not preempt state law; preemption was the only dispute
between the parties. See id. at 14. The defendant removed the case to federal court. The
4
Mr. Becker does not dispute that the Public Law 280 requirements for state-
court jurisdiction have not been satisfied in Utah. Utah did not adopt the required
legislation before the 1968 amendment to the law and nothing in the record indicates that
the Tribe has ever given consent to state-court jurisdiction. See United States v. Felter,
752 F.2d 1505, 1508 n.7 (10th Cir. 1985) (“Although Utah since has indicated its
willingness to assume this jurisdiction, no Indian tribe has accepted its offer.”); Cohen’s
Handbook of Federal Indian Law (Cohen) § 6.04[3][a], at 537–38 n.47 (Nell Jessup
Newton ed., 2012) (“Utah has a post-1968 statute accepting jurisdiction when tribes
consent . . . . No tribe has consented.”). Nevertheless, there may be a question whether
Public Law 280 applies to suits against tribes, as opposed to individual Indians. We need
not resolve that issue or the applicability of the other laws relied on by the Tribe as
depriving the state court of subject-matter jurisdiction. The point is only that the federal
district court had jurisdiction to decide the issue of state-court subject-matter jurisdiction.
How to decide that question is left for the district court to decide in the first instance on
remand.
14
Supreme Court ruled that the suit did not “arise under” federal law so removal had been
improper. See id. at 20. Yet the Court indicated that there would have been jurisdiction
if the defendant had gone to federal court to enjoin the board’s imposition of levies on the
ground that the levies were preempted by ERISA: “If [the defendant] could have sought
an injunction under ERISA against application to it of state regulations that require acts
inconsistent with ERISA, does a declaratory judgment suit by the State ‘arise under’
federal law? We think not.” Id. (footnote and paragraph break omitted).
The point was clearly resolved in another decision by the Court that day, the Shaw
decision that we have already quoted. In that case the Court stated, “A plaintiff who
seeks injunctive relief from state regulation, on the ground that such regulation is pre-
empted by a federal statute which, by virtue of the Supremacy Clause of the Constitution,
must prevail, thus presents a federal question which the federal courts have jurisdiction
under 28 U.S.C. § 1331 to resolve.” Shaw, 463 U.S. at 96 n.14. The Court distinguished
Franchise Tax: “The Court’s decision today in [Franchise Tax] does not call into
question the lower courts’ jurisdiction to decide these cases. [Franchise Tax] was an
action seeking a declaration that state laws were not pre-empted by ERISA. Here, in
contrast, companies subject to ERISA regulation seek injunctions against enforcement of
state laws they claim are pre-empted by ERISA, as well as declarations that those laws
are pre-empted.” Id. As stated by a leading treatise, “[T]he best explanation of the
results in these cases may be that a party claiming that federal law controls and that state
law has been preempted . . . can institute an action in federal court even though a suit by
15
the party who maintains state law still is valid, as in Franchise Tax Board, can neither be
brought in federal court nor removed from state court to federal court.” 10B Charles
Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus, A. Benjamin
Spencer & Adam N. Steinman, Federal Practice and Procedure § 2767 (4th ed. April
2017 Update).
That is the very distinction between Mr. Becker’s suit in our prior appeal and the
Tribe’s suit now before us. Mr. Becker sought federal jurisdiction on the ground that
resolution of the dispute would require the court to decide the validity of several federal
defenses that he believed the Tribe would raise. In effect, he was seeking, among other
things, a declaration that his state-law claims were not preempted by federal law. His
claim was similar in this respect to the Franchise Tax state-law claim that the defendants
had tried to remove to federal court. The Tribe, in contrast, is seeking injunctive and
declaratory relief against state regulation (the state-court proceeding) that it claims is
preempted by federal law. Our precedents support distinguishing Graham in the context
here. See Sac & Fox Nation v. Hanson, 47 F.3d 1061, 1062, 1063–65 (10th Cir. 1995)
(affirming permanent injunction preventing state-court proceeding against Tribe as barred
by sovereign immunity); Kiowa Indian Tribe of Okla. v. Hoover, 150 F.3d 1163, 1165,
1171–72 (10th Cir. 1998) (court could grant injunction against pursuit of contract claims
infringing tribal sovereign immunity); see also Aroostook Band of Micmacs v. Ryan, 404
F.3d 48, 69 (1st Cir. 2005) overruled on other grounds by Narragansett Indian Tribe v.
Rhode Island, 449 F.3d 16, 24–25 (1st Cir. 2006) (distinguishing Graham and holding
16
that a tribe’s “claim of tribal sovereign immunity presents a ‘colorable’ claim of a federal
cause of action”).
Thus, the controlling precedent is not Graham but National Farmers, which, as
previously noted, was the mirror image of this case. Rather than, as in this case,
addressing an Indian challenge under federal law to the jurisdiction of a state court,
National Farmers addressed a challenge by non-Indians that federal law barred a tribal
court from hearing a suit against them. But that opinion’s reasoning is directly applicable
here: “Because petitioners contend that federal law has divested the Tribe of this aspect
of sovereignty, it is federal law on which they rely as a basis for the asserted right of
freedom from Tribal Court interference. They have, therefore, filed an action ‘arising
under’ federal law within the meaning of § 1331.” Nat’l Farmers Union, 471 U.S. at
852–53 (emphasis added). Here, the Tribe likewise relies on federal law “as a basis for
the asserted right of freedom from [state-court] interference.” Id.
Finally, we recognize that there may be limitations on the district court’s authority
to enjoin ongoing state proceedings.5 But the defendants have not raised any such
limitation on appeal, and such issues can be addressed by the district court in the first
instance.6
5
We note, however, that we have said: “It is possible that section 1362 [federal-question
jurisdiction in cases brought by Indian Tribes] authorizes federal courts to enter
injunctions against state proceedings.” Sac & Fox Nation, 47 F.3d at 1063 n.1.
6
We can readily dispose of Mr. Becker’s remaining arguments. First, he contends that
the doctrine of complete preemption does not create § 1331 jurisdiction here. But
17
III. CONCLUSION
We REVERSE and REMAND to the district court for further proceedings
consistent with this opinion. In particular, the district court should address in the first
instance whether the Tribe’s claims for declaratory relief fall within its supplemental
jurisdiction under 28 U.S.C. § 1367.
because we do not rely on complete preemption as a basis for jurisdiction in this case, we
need not address the argument. Second, he contended at oral argument that, based on
notions of comity and the Seventh Circuit’s decision in Stifel, Nicolaus & Co., Inc. v. Lac
du Flambeau Band of Lake Superior Chippewa Indians, 807 F.3d 184 (7th Cir. 2015),
federal courts should defer to a state court’s determination of its own jurisdiction. That
argument, however, should be left to the federal district court to resolve on remand. The
issue does not go to the federal court’s jurisdiction. See Smith v. Moffett, 947 F.2d 442,
445 (10th Cir. 1991) (“concerns of comity do not present a jurisdictional bar”).
For the same reason, we leave to the federal district court to address in the first
instance the other arguments made by Judge Lawrence: judicial immunity, the effect of a
tribal waiver of sovereign immunity, and the application of the tribal-exhaustion rule in
state courts. Because the district court concluded that it lacked subject-matter
jurisdiction, it did not consider these arguments. See Trans–Western Petroleum, Inc. v.
United States Gypsum Co., 830 F.3d 1171, 1175 (10th Cir. 2016) (“As a general rule, a
federal appellate court does not consider an issue not passed upon below.” (internal
quotation marks omitted)).
18