Fort Yates Public School District 4 v. Murphy Ex Rel. C.M.B. , 786 F.3d 662 ( 2015 )

United States Court of Appeals
For the Eighth Circuit
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No. 14-1541
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Belcourt Public School District; Angel Poitra
lllllllllllllllllllll Plaintiffs - Appellants
v.
Ella Davis
lllllllllllllllllllll Defendant - Appellee
Turtle Mountain Tribal Court
lllllllllllllllllllll Defendant
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No. 14-1542
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Belcourt Public School District
lllllllllllllllllllll Plaintiff - Appellant
v.
Erica Malaterre
lllllllllllllllllllll Defendant - Appellee
Turtle Mountain Tribal Court
lllllllllllllllllllll Defendant
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No. 14-1543
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Belcourt Public School District; Chris Parisien
lllllllllllllllllllll Plaintiffs - Appellants
v.
Mike Nelson; Judy Nelson on behalf of their Minor Child S.N.
lllllllllllllllllllll Defendants - Appellees
Turtle Mountain Tribal Court
lllllllllllllllllllll Defendant
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No. 14-1545
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Belcourt Public School District; Roman Marcellais; School Board Members for
the Belcourt Public School District
lllllllllllllllllllll Plaintiffs - Appellants
v.
Bruce Allard; Martin Desjarlais; Jeff Laducer; Chad Marcellais; Robert St. Germaine
lllllllllllllllllllll Defendants - Appellees
Turtle Mountain Tribal Court
lllllllllllllllllllll Defendant
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No. 14-1548
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Belcourt Public School District; Roman Marcellais; School Board Members for
the Belcourt Public School District
lllllllllllllllllllll Plaintiffs - Appellants
v.
Steve Herman
lllllllllllllllllllll Defendant - Appellee
Turtle Mountain Tribal Court
lllllllllllllllllllll Defendant
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Appeals from United States District Court
for the District of North Dakota - Bismarck
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Submitted: December 10, 2014
Filed: May 15, 2015
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Before BYE, SMITH, and KELLY, Circuit Judges.
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SMITH, Circuit Judge.
Plaintiff-Appellants, Belcourt Public School District ("School District") and
certain of its employees, brought an action against Defendant-Appellees, members
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of the Turtle Mountain Band of Chippewa Indians ("Tribe") and the Turtle Mountain
Tribal Court ("Tribal Court"), seeking (1) a declaration that the Tribal Court lacks
jurisdiction over claims that the Tribe members filed against Plaintiff-Appellants in
Tribal Court, and (2) injunctions prohibiting the prosecution of the claims before the
Tribal Court. Plaintiff-Appellants also moved for default judgment against one of the
Tribe members. The district court denied the motion for default judgment and found
that the Tribal Court had jurisdiction. For the reasons stated herein, we affirm in part
and reverse in part.
I. Background
The School District is a political subdivision of the State of North Dakota,
Bismarck Pub. Sch. Dist. #1 v. State By and Through N.D. Legislative Assembly, 511
N.W.2d 247, 251 (N.D. 1994), that operates within the exterior boundaries of the
Turtle Mountain Indian Reservation ("Reservation"). The Constitution of North
Dakota requires that the School District provide education to all children in North
Dakota, including children who are Indians or reside on Indian reservations. N.D.
Const. art. VIII, § 1 ("[P]ublic schools [ ] shall be open to all children of the state of
North Dakota . . . .").
The Tribe and School District have agreed to mutually share the responsibility
for educating students, both Indian and non-Indian, residing on the Reservation.
Accordingly, the Tribe and School District entered into agreements ("Plans of
Operations") in both 2006 and 2009 that provided the School District with exclusive
authority to administer the "day-to-day operations" of the Turtle Mountain
Community High School ("Grant High School"), subject to applicable laws. This
arrangement vested the School District with exclusive administrative authority over,
among other things, the supervision and employment of staff at Grant High School.1
1
Although both the School District and Grant High School operate within the
boundaries of the Reservation, it is unclear in the record what, if any, of their
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Several Tribe members filed suit against the School District and its employees
in Tribal Court, alleging defamation, excessive use of force, and multiple
employment-related claims. The Tribal Court ultimately dismissed the claims
pursuant to the United States Supreme Court's decision in Nevada v. Hicks, 533 U.S.
353 (2001), on the grounds that the Tribal Court lacked jurisdiction over the School
District and its employees for claims related to the employees' performance of their
official duties. On appeal, however, the Turtle Mountain Tribal Court of Appeals
("Tribal Court of Appeals") reversed the Tribal Court's decision, finding that Hicks
was not dispositive in part because the School District signed the Plans of Operations,
thereby subjecting itself to Tribal jurisdiction.2 The School District and its employees
thereafter filed actions in federal court, seeking (1) a declaration that the Tribal Court
lacks jurisdiction over the claims, and (2) injunctions prohibiting the Tribal members
from pursuing the claims and likewise prohibiting the Tribal Court from adjudicating
them.
The School District and its employees later moved for default judgment in one
of the actions ("Nelson" action) based on the defendants' alleged failure to defend
against the claims. The district court exercised its discretion to deny the motion,
facilities or the land on which the facilities are located belong to the Tribe. Per the
Plans of Operations, however, it is clear that some but not all of the property used by
Grant High School is "federally owned."
2
Upon completion of the Tribal Court of Appeals' appellate review, all requisite
tribal remedies were exhausted. Strate v. A-1 Contractors, 520 U.S. 438, 449 (1997)
("[A] federal court should stay its hand until after the Tribal Court has had a full
opportunity to determine its own jurisdiction." (quotation omitted)). The School
District and its employees were not required to fully litigate the merits of the claims
before seeking review of the Tribal Court's jurisdiction in federal court. Strate, 520
U.S. at 459 n.14 (exhaustion not required when, among other things, it "would serve
no purpose other than delay").
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however, holding that, at least in that case, "default judgment is not the appropriate
avenue" to issue declaratory relief.
The School District and its employees then moved for summary judgment in
all of the actions. The district court ultimately denied the motions and concluded that
the Tribal Court, in fact, had jurisdiction over the claims. In so holding, the district
court found inapplicable the United States Supreme Court's decision in Montana v.
United States, 450 U.S. 544 (1981). It further found that, even if Montana were
applicable, the Tribal Court would nevertheless have jurisdiction because the School
District entered into the Plans of Operations with the Tribe.
II. Discussion
A. Tribal Court Jurisdiction
The School District and its employees argue on appeal that the Tribal Court
lacked jurisdiction over them and, consequently, that the district court erred in
denying their motions for summary judgment. We review de novo a district court's
denial of summary judgment. Solomon v. Petray, 699 F.3d 1034, 1038 (8th Cir. 2012)
(citation omitted). "The extent of tribal court subject matter jurisdiction over claims
against nonmembers of the Tribe is a question of federal law which we review de
novo." Attorney's Process & Investigation Servs., Inc. v. Sac & Fox Tribe of Miss. in
Iowa, 609 F.3d 927, 934 (8th Cir. 2010) (citation omitted).
No federal statute or a treaty specifically provides the Tribal Court with
jurisdiction over the claims at issue in this case; therefore, the Tribal Court's
jurisdiction must arise from its "retained or inherent sovereignty." Atkinson Trading
Co., Inc. v. Shirley, 532 U.S. 645, 649–50 (2001). We analyze the contours of a tribal
court's inherent jurisdiction over nonmembers of the tribe within the framework and
principles set forth in Montana, which remains the "'pathmarking case'" on the
subject. Hicks, 533 U.S. at 358 (quoting Strate, 520 U.S. at 445). In Montana, the
Supreme Court addressed whether a tribe could prohibit hunting and fishing activities
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by non-Indians on reservation land owned in fee simple by non-Indians. As a general
matter, the Court held, "the inherent sovereign powers of an Indian tribe do not
extend to the activities of nonmembers of the tribe." 450 U.S. at 565 (emphases
added). The Court then noted, however, two relatively narrow exceptions to this
general rule:
To be sure, Indian tribes retain inherent sovereign power to exercise
some forms of civil jurisdiction over non-Indians on their reservations,
even on non-Indian fee lands. A tribe may regulate, through taxation,
licensing, or other means, the activities of nonmembers who enter
consensual relationships with the tribe or its members, through
commercial dealing, contracts, leases, or other arrangements. A tribe
may also retain inherent power to exercise civil authority over the
conduct of non-Indians on fee lands within its reservation when that
conduct threatens or has some direct effect on the political integrity, the
economic security, or the health or welfare of the tribe.
Id. at 565–66 (emphases added) (internal citations omitted).3 These two categories of
nonmember conduct that Indian tribes may regulate are commonly referred to as the
"Montana exceptions." The Court in Montana ultimately found that neither exception
provided the tribe with jurisdiction over non-Indians' hunting and fishing on non-
Indian land. Id. at 566.
Given the general rule set forth and applied in Montana—that a tribe's inherent
sovereign powers do not vest it with jurisdiction over the activities of
nonmembers—the Tribal Court presumably does not have jurisdiction over the claims
asserted in this case. "The burden rests on the tribe" to establish that one of the
3
The Tribal Court's jurisdiction cannot exceed the Tribe's regulatory power. See
Strate, 520 U.S. at 453 ("As to nonmembers, we hold, a tribe's adjudicative
jurisdiction does not exceed its legislative jurisdiction."); Attorney's Process, 609
F.3d at 936 (tribal court jurisdiction "turns upon whether the actions at issue in the
litigation are regulable by the tribe" (quoting Hicks, 533 U.S. at 367 n.8)).
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Montana exceptions applies. Plains Commerce Bank v. Long Family Land & Cattle
Co., 554 U.S. 316, 330 (2008).
1. First Montana Exception
The School District agreed to provide educational services to students residing
on the Reservation, as memorialized, at least in part, in the Plans of Operations. But
these agreements between the School District and the Tribe do not alone confer
jurisdiction on the Tribal Court under the first Montana exception. Notably, North
Dakota law specifies that a school district cannot "[a]uthorize an agreement that
enlarges or diminishes the jurisdiction over civil or criminal matters that may be
exercised by . . . tribal governments located in North Dakota." N.D. Cent. Code §
54–40.2–08. The agreements do not state that the School District intended to, or
represented that it could, deviate from North Dakota law.
Moreover, even assuming arguendo that the School District could agree to an
expansion of Tribal Court jurisdiction under North Dakota law, the first Montana
exception still would not provide the Tribal Court with jurisdiction. Indeed, in Hicks,
the Supreme Court elaborated on the first Montana exception and specified that,
"[r]ead in context, an 'other arrangement' is clearly another private consensual
relationship . . . ." 533 U.S. at 359 n.3 (holding that a tribal court lacked jurisdiction
over claims asserted against state officials who executed a search warrant on tribal
land to search for evidence of an off-reservation crime). To resolve lingering
ambiguities as to what constitutes an "other arrangement" under the first Montana
exception, the Court further stated that:
The [Montana] Court (this is an opinion, bear in mind, not a
statute) obviously did not have in mind States or state officers acting in
their governmental capacity; it was referring to private individuals who
voluntarily submitted themselves to tribal regulatory jurisdiction by the
arrangements that they (or their employers) entered into. This is
confirmed by the fact that all four of the cases in the immediately
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following citation involved private commercial actors. See [Washington
v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134,
152 (1980)] (nonmember purchasers of cigarettes from tribal outlet);
[Williams v. Lee, 358 U.S. 217 (1959)] (general store on the Navajo
reservation); [Morris v. Hitchcock, 194 U.S. 384 (1904)] (ranchers
grazing livestock and horses on Indian lands "under contracts with
individual members of said tribes"); Buster v. Wright, 135 F. 947, 950
(8th Cir. 1905) (challenge to the "permit tax" charged by a tribe to
nonmembers for "the privilege . . . of trading within the borders").
Id. at 372 (emphasis added).
The Tribe members nevertheless contend that the requisite "consensual
relationship" existed under the first Montana exception because the School District
entered into contracts (that is, the Plans of Operations) with the Tribe. But they are
mistaken. The Ninth and Tenth Circuits have held that contractual agreements
between tribes and government entities do not constitute "consensual relationships"
within the meaning of the first Montana exception. In County of Lewis v. Allen, for
instance, the Ninth Circuit, en banc, held that a tribal court lacked jurisdiction over
a tribal member's civil claims against a political subdivision of a state stemming from
his arrest on reservation land—even though the arrest was made pursuant to a specific
law enforcement contract between the state and the tribe. 163 F.3d 509, 514–16 (9th
Cir. 1998) (en banc). In so holding, the court noted that "Montana's exception for
suits arising out of consensual relationships has never been extended to contractual
agreements between two government entities . . . . [T]he Agreement between the tribe
and the state is not a "'consensual relationship' of the qualifying kind." Id. at 515
(quotation marks omitted) (quoting Strate, 520 U.S. at 457). Likewise, in MacArthur
v. San Juan County, the Tenth Circuit held that employment relationships that were
"contractual in nature" between a state's political subdivision and two tribe members
"were not 'private consensual relationships' . . . and [therefore] do not fall within the
first Montana exception." 497 F.3d 1057, 1071, 1074 (10th Cir. 2007).
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More recently, in Red Mesa Unified School District v. Yellowhair, a district
court reached the same conclusion in a case remarkably similar to this case. There,
two school districts operating on Indian reservations filed for declaratory and
injunctive relief in federal court to prohibit a tribal administrative tribunal from
deciding employment-related claims filed against the school districts. No.
CV-09-8071-PCT-PGR, 2010 WL 3855183, at *2 (D. Ariz. Sept. 28, 2010). The
court granted the relief and specifically found that the first Montana exception did not
apply—notwithstanding a lease agreement between the school districts and the
tribe—because the school districts "made the employment decisions at issue while
operating in their governmental capacities pursuant to their state
constitutionally-imposed mandate to operate a public school system within the
reservation boundaries." Id. at *3.
We agree with these well-reasoned decisions. The School District in this case
was clearly acting in its official capacity and, specifically, in furtherance of its
obligations under the Constitution of North Dakota to make public education "open
to all children of the state of North Dakota," see N.D. Const. art. VIII, § 1, when it
entered into the agreements relevant to this case. The agreements therefore do not fall
within the ambit of the first Montana exception.4
2. Second Montana Exception
Because there is no private consensual relationship between the School District
and the Tribe, the Tribal Court will have jurisdiction only if the claims at issue
involve "conduct [that] threatens or has some direct effect on the political integrity,
the economic security, or the health or welfare of the tribe." Montana, 450 U.S. at
4
To be clear, we are not ruling out the possibility that a state and a tribe could
enter into an agreement that confers jurisdiction upon the tribe—such as an agreement
that expressly provides for such jurisdiction. But no such agreement is at issue in the
instant case.
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566. In conducting this analysis, we note at the outset that not every event that
impacts a tribe's political integrity, economic security, health, or welfare will
necessarily give rise to tribal court jurisdiction; indeed, a lax application or overly
broad reading of the second Montana exception would render meaningless Montana's
general rule that "the inherent sovereign powers of an Indian tribe do not extend to
the activities of nonmembers of the tribe." Id. at 565. The Court in Hicks emphasized
the necessarily narrow scope of the second Montana exception when it confirmed
that, "[w]here nonmembers are concerned, the 'exercise of tribal power beyond what
is necessary to protect tribal self-government or to control internal relations is
inconsistent with the dependent status of the tribes, and so cannot survive without
express congressional delegation.'" 533 U.S. at 359 (quoting Montana, 450 U.S. at
564); see also Plains Commerce Bank, 554 U.S. at 330 (noting that the Montana
exceptions "are limited ones, and cannot be construed in a manner that would
swallow the rule, or severely shrink it") (quotations omitted).
In Plains Commerce Bank, the Court further elucidated the circumstances
necessary for the second Montana exception to apply. There, the Court held that the
second Montana exception did not apply to a non-Indian bank's sale of land on a
tribal reservation to another non-Indian because:
The conduct must do more than injure the tribe, it must "imperil the
subsistence" of the tribal community. [Montana, 450 U.S. at 566]. One
commentator has noted that "th[e] elevated threshold for application of
the second Montana exception suggests that tribal power must be
necessary to avert catastrophic consequences." Cohen § 4.02[3][c], at
232, n.220.
Id. at 341 (emphases added).5
5
Of course, the transaction at issue in Plains Commerce Bank involved land
that non-Indians owned in fee simple both before and after the transaction, and this
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The claims and alleged conduct at issue in this case clearly do not "imperil the
subsistence" of the Tribe, and Tribal Court jurisdiction is not "necessary to avert
catastrophic consequences." Other courts have found the second Montana exception
inapplicable to conduct that was either comparable or more detrimental to a tribe's
subsistence and well-being than the conduct alleged in this case.6
court is aware that "[t]he ownership status of land" is "one factor to consider in
determining whether regulation of the activities of nonmembers is 'necessary to
protect tribal self-government or to control internal relations.'" Hicks, 533 U.S. at 360.
As noted above, however, there is scant evidence in the record what, if any, land and
facilities relevant to this case were owned by the Tribe. Nevertheless, even if the
Tribe owned all of the land and facilities relevant to this case—which is not
supported by the record—Montana would still apply, see Attorney's Process, 609
F.3d at 935–41, and our analysis would not change for the reasons stated herein.
6
See Evans v. Shoshone-Bannock Land Use Policy Comm'n, 736 F.3d 1298,
1305 (9th Cir. 2013) (holding that the second Montana exception did not apply to
non-Indian conduct that allegedly caused, among other things, "groundwater
contamination" and "improper disposal of construction debris"); MacArthur, 497 F.3d
at 1075 (holding that "[w]hile the Navajo Nation undoubtedly has an interest in
regulating employment relationships between its members and non-Indian employers
on the reservation, that interest is not so substantial in this case as to affect the
Nation's right to make its own laws and be governed by them"); Allen, 163 F.3d at
515–16 (9th Cir. 1998) (en banc) ("Having divested itself of sovereignty over the
very activities that gave rise to the civil claim, nothing in this case can be seen as
threatening self-government or the political integrity, economic security or health and
welfare of the tribe. . . . Indian tribes or their members . . . may pursue their causes
of action in state or federal court."); Otter Tail Power Co. v. Leech Lake Band of
Ojibwe, No. 11-1070 DWF/LIB, 2011 WL 2490820, at *5 (D. Minn. June 22, 2011)
(holding that the second Montana exception did not apply to nonmember conduct that
would interfere with the tribe's "hunting, fishing, and gathering rights"); Dolgencorp
Inc. v. Miss. Band of Choctaw Indians, 846 F. Supp. 2d 646, 650 (S.D. Miss. 2011)
(holding that the second Montana exception did not apply to a case in which a
nonmember of the tribe allegedly molested a minor tribe member), aff'd, 746 F.3d 167
(5th Cir. 2014).
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In sum, the Tribe members have failed to carry their burden of establishing that
either of the Montana exceptions apply. We therefore hold that the Tribal Court
lacked jurisdiction over the Tribe members' claims.
B. Default Judgment
The School District and its employees also contend that the district court erred
in not granting their motion for default judgment in the Nelson action. We review the
district court's decision for an abuse of discretion. Taylor v. City of Ballwin, Mo., 859
F.2d 1330, 1332 (8th Cir. 1988) (citation omitted).
"The Federal Rules of Civil Procedure commit the entry of a default judgment
against a party to the sound discretion of the trial court." F.T.C. v. Packers Brand
Meats, Inc., 562 F.2d 9, 10 (8th Cir. 1977) (per curiam) (citations omitted); see also
Fed. R. Civ. P. 55(b)(2). This court has recognized that default judgments are "not
favored by the law and should be a rare judicial act." In re Jones Truck Lines, Inc.,
63 F.3d 685, 688 (8th Cir. 1995) (citations and quotation marks omitted). Put simply,
there is a "judicial preference for adjudication on the merits." Johnson v. Dayton Elec.
Mfg. Co., 140 F.3d 781, 784 (8th Cir. 1998) (citations and quotation marks omitted).
There are various factors courts may consider when determining whether to
enter a default judgment, including:
[T]he amount of money potentially involved; whether material issues of
fact or issues of substantial public importance are at issue; whether the
default is largely technical; whether plaintiff has been substantially
prejudiced by the delay involved; and whether the grounds for default
are clearly established or are in doubt. Furthermore, the court may
consider how harsh an effect a default judgment might have; or whether
the default was caused by a good-faith mistake or by excusable or
inexcusable neglect on the part of the defendant.
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Briarpatch Ltd., L.P. v. Geisler Roberdeau, Inc., 513 F. Supp. 2d 1, 3 (S.D.N.Y.
2007) (alteration in original) (citation omitted).
In light of these considerations and the judicial preference for adjudication on
the merits, we conclude that the district court did not abuse its discretion in denying
the motion for default judgment. In particular, we note that the scope of Tribal Court
jurisdiction was a central issue in each of the actions brought by the School District
and its employees—including the Nelson action—and that the district court issued its
opinion with respect to Tribal Court jurisdiction shortly after denying the motion for
default judgment. It was well within the district court's discretion to choose to resolve
all of the actions in the same order.
III. Conclusion
For the foregoing reasons, and after thoroughly considering all of the parties'
contentions on appeal, we reverse the district court's decision with respect to Tribal
Court jurisdiction and remand for further proceedings. We affirm the district court's
denial of default judgment in the Nelson action.
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