Gustafson v. Estate of Poitra

CROTHERS, Justice,

specially concurring.

[¶ 17] The pertinent facts in this case are that Gustafson owns a fee interest in real property located within the physical boundaries of the Turtle Mountain Indian Reservation, that Gustafson is a non-Indian, that Gustafson operates a business out of a building located partially on his real estate and partially on adjoining real estate owned by Leon Poitra’s estate, that Leon Poitra was an enrolled member of the Turtle Mountain Band of Chippewa Indians and that Leon Poitra’s estate is being administered in tribal court.

[¶ 18] Gustafson alleges in his complaint that a lease exists between Gustaf-son, Leon Poitra and Linus Poitra, but “that Linus Poitra owned no interest in the building or property described in said lease; therefore, the only proper parties to the lease were [Gustafson] and Leon Poi-tra.” Gustafson also alleges he “is placing rent for the One Stop Building in a separate account until it is determined who owns the building and in what proportions, to whom rent is due, and the amount of rent due.” Gustafson requests declaratory relief setting forth the “proportionate share of ownership of the building” and for “declaration that the building shall be torn down or, in the alternative, that an Outlot for the building be created and that said building be sold to one of the parties.” Gustafson also requested cancellation of the lease and declaration of the amount of rent owed by and between the parties.

[¶ 19] Nothing on the face of the complaint suggests the parties dispute the nature and extent of land they own. In fact, Gustafson provides metes and bounds legal descriptions of the parties’ respective land holdings, and the dispute here involves only the rights and responsibilities of the parties under the lease. The majority opinion concludes the lease is subject to the tribal court’s exclusive jurisdiction, and I agree. However, I write separately because the majority’s analysis may be too limited.

[¶ 20] The United States Supreme Court decision of Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S. 316, 128 S.Ct. 2709, 171 L.Ed.2d 457 (2008), is cited by the majority. But the case is dismissed as factually distinguishable. See Majority Opinion at ¶ 12 (“The jurisdictional facts of Plains Commerce Bank are distinguished from the facts of this case, because the present case involves a lease of Indian-owned fee land and the rights attached to the lease, and Gustafson initiated this case involving Indian defendants in the state court.”).

[¶ 21] The question in Plains Commerce Bank was whether the tribal court had subject-matter jurisdiction to adjudicate a discrimination tort claim concerning a non-Indian bank’s sale of fee land within an Indian reservation. 554 U.S. at 320, 128 S.Ct. 2709. The Court held the tribal court did not have jurisdiction. Id.

[¶ 22] The Plains Commerce Bank decision instructs and guides courts on tribal court jurisdiction:

“For nearly two centuries now, we have recognized Indian tribes as ‘distinct, independent political communities,’ qualified to exercise many of the powers and prerogatives of self-government. We have frequently noted, however, that the ‘sovereignty that the Indian tribes retain is of a unique and limited character.’ It centers on the land held by the tribe and on tribal members within the reservation.

“As part of their residual sovereignty, tribes retain power to legislate and to tax activities on the reservation, including certain activities by nonmembers, to determine tribal membership, and to regulate domestic relations among members. They may also exclude outsiders from entering tribal land. But tribes do not, as a general matter, possess authority over non-Indians who come within their borders: ‘[T]he inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe.’ As we explained in Oliphant v. Suquamish Tribe, 435 U.S. 191, 98 S.Ct. 1011, 55 L.Ed.2d 209 (1978), the tribes have, by virtue of their incorporation into the American republic, lost ‘the right of governing ... person[s] within their limits except themselves.’ ”

554 U.S. at 327-28,128 S.Ct. 2709 (internal quotations and citations omitted). The United States Supreme Court concluded this introduction by stating, “This general rule restricts tribal authority over nonmember activities taking place on the reservation, and is particularly strong when the nonmember’s activity occurs on land owned in fee simple by non-Indians — what we have called ‘non-Indian fee land.’ ” Id. at 328, 128 S.Ct. 2709 (quotation omitted).

[¶ 23] The Court continued explaining a tribal court’s jurisdiction over non-Indian fee land, stating:

“Our cases have made clear that once tribal land is converted into fee simple, the tribe loses plenary jurisdiction over it. Among the powers lost is the authority to prevent the land’s sale — -not surprisingly, as ‘free alienability’ by the holder is a core attribute of the fee simple. Moreover, when the tribe or tribal members convey a parcel of fee land ‘to non-Indians, [the tribe] loses any former right of absolute and exclusive use and occupation of the conveyed lands.’ This necessarily entails ‘the loss of regulatory jurisdiction over the use of the land by others.’ As a general rule, then, ‘the tribe has no authority itself, by way of tribal ordinance or actions in the tribal courts, to regulate the use of fee land.’ ”

Plains Commerce Bank, 554 U.S. at 328-29, 128 S.Ct. 2709 (internal quotations and citations omitted).

[¶ 24] The Court then noted its precedent, Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981), permitting the exercise of tribal court subject-matter jurisdiction over non-Indian fee lands and other areas involving non-Indians:

“We have recognized two exceptions to this principle, circumstances in which tribes may exercise ‘civil jurisdiction over non-Indians on their reservations, even on non-Indian fee lands.’ First, ‘[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.’ Second, a tribe may exercise ‘civil authority over the conduct of non-Indians on fee lands within the 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.’ These rules have become known as the Montana exceptions, after the case that elaborated them. By their terms, the exceptions concern regulation of ‘the activities of nonmembers’ or ‘the conduct of non-Indians on fee land.’

“Given Montana’s ‘general proposition that the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe,’ efforts by a tribe to regulate nonmembers, especially on non-Indian fee land, are ‘presumptively invalid.’ The burden rests on the tribe to establish one of the exceptions to Montana’s general rule that would allow an extension of tribal authority to regulate nonmembers on non-Indian fee land. These exceptions are ‘limited’ ones, and cannot be construed in a manner that would ‘swallow the rule,’ or ‘severely shrink’ it.

“According to our precedents, ‘a tribe’s adjudicative jurisdiction does not exceed its legislative jurisdiction.’ We reaffirm that principle today and hold that the Tribal Court lacks jurisdiction to hear the Longs’ discrimination claim because the Tribe lacks the civil authority to regulate the Bank’s sale of its fee land.”

Plains Commerce Bank, 554 U.S. at 329-30, 128 S.Ct. 2709 (internal quotations and citations omitted).

[¶ 25] While holding that Indian tribes could not control the sale and ownership of non-Indian fee land, the Court did make clear that the tribe could regulate Indian and non-Indian “activity” and “conduct” on the land:

“Montana does not permit Indian tribes to regulate the sale of non-Indian fee land. Montana and its progeny permit tribal regulation of nonmember conduct inside the reservation that implicates the tribe’s sovereign interests. Montana expressly limits its first exception to the ‘activities of nonmembers,’ allowing these to be regulated to the extent necessary ‘to protect tribal self-government [and] to control internal relations.’

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“The distinction between sale of the land and conduct on it is well established in our precedent, as the foregoing cases demonstrate, and entirely logical given the limited nature of tribal sovereignty and the liberty interests of nonmembers. By virtue of their incorporation into the United States, the tribe’s sovereign interests are now confined to managing tribal land, ‘protecting] tribal self-government,’ and ‘controlling] internal relations.’ The logic of Montana is that certain activities on non-Indian fee land (say, a business enterprise employing tribal members) or certain uses (say, commercial development) may intrude on the internal relations of the tribe or threaten tribal self-rule. To the extent they do, such activities or land uses may be regulated. Put another way, certain forms of nonmember behavior, even on non-Indian fee land, may sufficiently affect the tribe as to justify tribal oversight. While tribes generally have no interest in regulating the conduct of nonmembers, then, they may regulate nonmember behavior that implicates tribal governance and internal relations.”

Plains Commerce Bank, 554 U.S. at 332-35, 128 S.Ct. 2709 (quotations and citations omitted).

[¶ 26] Here, although a theoretical argument could be made that the lawsuit is about ownership of real estate, Gustafson’s litigation really concerns the leasing of a building on non-Indian fee land. Plains Commerce Bank reaffirmed a long line of state and federal cases concluding tribal courts have jurisdiction over conduct and business activity engaged in by a non-Indian “who enter[ed] consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements.” 554 U.S. at 329, 128 S.Ct. 2709. On this basis, I concur with the majority opinion holding the North Dakota district court did not have jurisdiction over Gustafson’s lease-related issues because all of Gustafson’s claims arise out of the lease.

[¶ 27] Had this case actually involved a dispute over ownership of the land, we would have a very difficult case to decide. I read Plains Commerce Bank to say the tribal court would not have had jurisdiction over the dispute. The Plains Commerce Bank decision dealt with a post hoc tribal court tort action being used to attack the sale of non-Indian fee land within the reservation. When viewed through the lens of subject-matter jurisdiction, I find no meaningful legal difference between an after-the-fact tort action challenging Plain Commerce Bank’s sale of real estate and a dispute over ownership of non-Indian fee land.

[¶ 28] All of this highlights the collision course tribal and state courts appear to be on when making decisions about subject-matter jurisdiction and particularly when making decisions involving competing claims to real estate ownership. The holding in Plains Commerce Bank regarding non-Indian fee land has been discussed. By comparison, North Dakota’s precedent broadly states:

“ ‘Within Indian country state jurisdiction is preempted both by federal protection of tribal self-government and by federal statutes on other subjects relating to Indians, tribes, their property, and federal programs.’ Winer v. Penny Enters., Inc., 2004 ND 21, ¶ 10, 674 N.W.2d 9 (quoting F. Cohen, Handbook of Federal Indian Law 349 (1982) (footnotes omitted)). ‘[T]his Court has consistently held that state courts have no jurisdiction over civil causes of action involving Indians, arising within the exterior boundaries of an Indian Reservation, unless a majority of the enrolled residents of the Reservation vote to accept jurisdiction.’ Airvator, Inc. v. Turtle Mountain Mfg. Co., 329 N.W.2d 596, 600 (N.D.1983).”

State ex rel. Workforce Safety & Ins. v. JFK Raingutters, 2007 ND 80, ¶ 10, 733 N.W.2d 248.

[¶ 29] The majority holds that “[u]nder N.D.C.C. ch. 27-19, state courts may have jurisdiction over civil causes of action arising within the exterior boundaries of a reservation, if Indian citizens of the reservation have accepted state court jurisdiction.” Majority Opinion at ¶ 13 (citing Winer, 2004 ND 21, ¶ 10, 674 N.W.2d 9). The majority correctly recites our precedent, and it correctly notes the Turtle Mountain Indian Tribe has not consented to state court jurisdiction. Majority Opinion at ¶ 13.

[¶ 30] Putting all of the legal authorities together, one easily can construct an argument that neither tribal nor North Dakota courts would have had subject-matter jurisdiction over this dispute if it had been one about actual ownership of the land. This is because the Winer, Air-vator and JFK Raingutters line of cases hold North Dakota courts do not have jurisdiction over civil cases involving Indians and arising on a reservation. Yet the Plains Commerce Bank decision holds tribal courts do not have jurisdiction over suits regarding non-Indian ownership of fee land located within a reservation. Untying this Gordian knot will be left to future cases before state and federal courts, but to me it appears we have a problem looming and litigants are forewarned of the complexities of future title disputes over non-Indian fee owned land.

[¶ 31] I note in closing that the majority also cites federal and North Dakota precedent for the proposition that exercise of state court jurisdiction over non-Indian fee land ownership would undermine tribal authority. See Majority Opinion at ¶ 10. Although not the basis for the decision in Plains Commerce Bank, that Court made clear that this prong of the Montana exception has limitations:

“The second exception authorizes the tribe to exercise civil jurisdiction when non-Indians’ ‘conduct’ menaces the ‘political integrity, the economic security, or the health or welfare of the tribe.’ The conduct must do more than injure the tribe, it must ‘imperil the subsistence’ of the tribal community. 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.’

“The sale of formerly Indian-owned fee land to a third party is quite possibly disappointing to the Tribe, but cannot fairly be called ‘catastrophic’ for tribal self-government. The land in question here has been owned by a non-Indian party for at least 50 years, during which time the project of tribal self-government has proceeded without interruption. The land’s resale to another non-Indian hardly ‘imperil[s] the subsistence or welfare of the Tribe.’ Accordingly, we hold the second Montana exception inapplicable in this case.”

554 U.S. at 341, 128 S.Ct. 2709 (internal quotations and citations omitted). Time will tell whether these words are dicta or are a direction that the second Montana exception must be applied more narrowly.

[¶ 32] DALE V. SANDSTROM.