CHAPTER 9 FROM MONTANA TO PLAINS COMMERCE BANK AND BEYOND: THE SUPREME COURT'S VIEW OF TRIBAL JURISDICTION OVER NON-MEMBERS

• Jurisdiction: United States

Natural Resources Development on Indian Lands
(Mar 2011)
CHAPTER 9
FROM MONTANA TO PLAINS COMMERCE BANK AND BEYOND: THE SUPREME COURT'S VIEW OF TRIBAL JURISDICTION OVER NON-MEMBERS
Neil G. Westesen
Crowley Fleck PLLP
Bozeman, Montana

NEIL G. WESTESEN is a Partner in the firm's Litigation Department at Crowley Fleck PLLP in their Bozeman office. His practice focuses on construction law where he represents architects, engineers, owners and contractors. In addition, he has a significant Indian law practice representing industry clients in negotiations with and litigation against Indian tribes. He also has represented various product manufacturers in both product liability litigation and dealer defense. He has also served on the firm's three person Executive Committee for four years and is presently on that committee. Mr. Westesen joined the firm in 1991 following graduation with highest honors from the University of Colorado in Boulder. While in Colorado, he clerked for a water law firm with an emphasis on interstate water disputes. He graduated from the University of Montana in 1988 also with highest honors. After joining the firm, Mr. Westesen co-authored a paper entitled "Coal Mining on Indian Lands: A Study in Permits, Plans and Paperwork" presented at the 1992 ABA conference on Natural Resources Management and Environmental Enforcement on Indian Lands. He also co-chaired the Rocky Mountain Mineral Law Foundation seminar on Natural Resources Development on Indian Land in 2006. He has spoken to various meetings of attorneys and industry professionals. Mr. Westesen is presently the case note editor for Montana and Wyoming for Construction, the ABA's Journal for the Committee on Construction Litigation. He also serves as the Montana liaison to the DRI's Products Liability Committee. Mr. Westesen is a trial attorney working in civil litigation, construction law and Indian law.

I. INTRODUCTION

For many non-Indian developers of tribal minerals, there is no more terrifying news than the announcement that the company has been sued in tribal court. Horror stories of multi-million dollar judgments,¹ unfamiliar laws,² and limited appeal rights in tribal or federal court³ immediately come to mind. Second guessing about the failure to negotiate an appropriate dispute resolution clause in the haste to get a development agreement in place will immediately occur. Questions about who is licensed to practice where, what the rules of procedure in tribal court really are, and, most likely, how can we get out of this situation, will all arise. The question clients typically ask and lawyers are supposed to answer is whether the tribal court really has jurisdiction over a non-Indian defendant. The classic lawyer answer is, "It depends." This paper will trace the evolution of tribal court jurisdiction over non-Indians and specifically look at the circuitous route the Supreme Court's analysis has taken from Montana v. United States, 450 U.S. 544 (1981) through the recent Plains Commerce Bank v. Long Family Land & Cattle Co., Inc., 554 U.S. 316 (2008) decision. The paper will then make some predictions about the future scope of tribal court jurisdiction over non-Indians in the context of mineral development.

There have been a number of papers presented on this general topic over the past years, including several prepared for the Rocky Mountain Mineral Law Foundation.⁴ This paper will

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attempt to build upon that scholarship and update it with some more recent interpretations of the Plains Commerce Bank case.

II. FACTUAL BACKGROUND

There are approximately 260 tribes with federal reservations in the United States. The geographic center of Indian Country within the lower 48 states is slightly west of Denver, Colorado.⁵ Consequently, a significant number of Indian law cases are heard by the Eighth, Ninth, and Tenth Circuits. The total acreage of land within federal Indian reservations is approximately 52,500,000 acres, not counting lands in Alaska conveyed as part of the Alaskan Native Claims Settlement Act.⁶ Tribal lands contain tremendous natural resources. In a report that is now over 30 years old, the 1977 American Indian Policy Review Commission noted:

Indian oil and gas reserves amount to approximately 3% of the United States total reserves. This was broken down into 40 reservations in 17 states. The estimate on oil reserves as of November 1973, was approximately 4.2 billion barrels with gas resources at about 17.5 trillion cubic feet. There is also an estimation of approximately 100-200 billion tons of identified coal reserves located on 33 reservations in 11 states. This was approximately 7-13% of the United States identified coal resources of 1.581 billion tons. A report by the Federal Trade Commission shows that Indian lands have the potential of containing more than 1/10th of the United States currently minable coal reserves.⁷

More recently, in 2001, production from Indian lands totaled 13.1 billion barrels of oil, 280 billion cubic feet of gas, and 29.4 million tons of coal. As of 2003, there were 1.81 million acres of actively leased oil, gas, and coal in various phases of exploration and development. Production of energy minerals from Indian tribes continues to represent over 10 percent of the total Federal onshore production. It is estimated that an additional 15 million acres of undeveloped energy resources is located on individual and tribal land.⁸ Indian reservations contain large reserves of oil and gas. The Department of Energy has recently estimated 890 million barrels of oil and natural gas liquids, and 5.5 trillion cubic feet of gas are located on tribal

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lands.⁹ As a result, "[t]he potential of Indian energy resources is vast."¹⁰ Significantly, "Indian lands made up less than 5% of land area in the United States, but it is estimated that about 10% of the Nation's traditional and renewable energy resources are on Indian lands."¹¹

Surface ownership on top of the tribal mineral resource is complicated. Reservations are checker boarded as a result of the General Allotment Act of 1887.¹² Various surplus land acts, by which Congress ratified agreements with different tribes to sell off "surplus" lands, further eroded the tribal land base and created significant non-Indian surface ownership within, or in close proximity to, most Indian reservations.¹³ Through allotment and surplus land sales, the total quantity of Indian land holdings was cut from 138 million acres in 1857 to 48 million acres in 1934. Of the residual lands, nearly half, or approximately 20 million acres, were deemed desert or semi-desert. Between 1887 and 1934, more than 80% of the land value belonging to all Indians was lost to non-Indian ownership.¹⁴ The result of these policies is checker board surface land ownership, split mineral estates, fractionated ownership of non-tribal, individually owned Indian land, and a recipe for jurisdictional confusion that Congress and the Courts are still unraveling. It is against this background that the Supreme Court's Indian law jurisprudence must be applied.

III. SOME "ANCIENT" HISTORY

The federal government, either through Congressional act or federal court decision, has long been the ultimate arbiter of all Indian law questions. As Chief Justice Marshall announced in 1823, "Conquest gives a title which the Courts of the conqueror cannot deny whatever the private and speculative opinions of individuals may be, respecting the original justice of the claim which has been successfully asserted .... It is not for the Courts of this country to question the validity of this title or sustain one which is incompatible with it."¹⁵ The federal government and federal courts, as tools of the "Conqueror," are the ultimate decision makers with respect to

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Indian land and policy. Right or wrong, the federal courts typically respect and enforce the rules of the federal government.

This rule of federal supremacy over Indian law matters announced in Johnson v. McIntosh was further cemented in Cherokee Nation v. Georgia.¹⁶ There the Court first characterized Indian tribes as "domestic dependent nations." "[T]hey are in a state of pupilage. Their relations to the United States resemble that of a ward to his guardian."¹⁷ Again, after conquest, it is the guardian who makes the rules.

Only the federal government can alienate Indian land according to Article 1, Section 8 of the United States Constitution.¹⁸ By conquest, Indian tribes lost this ability. Critically, Justice Johnson's concurrence in Cherokee Nation recognized that even though an Indian tribe cannot dispose of its own land without the blessing of the federal government, there remains one respect in which Tribes remain a true sovereign - "[T]heir right of personal self-government has never been taken from them . . . ."¹⁹ This retained power to self-govern, first recognized in 1831, eventually becomes an important part of any analysis of a tribe's assertion of personal jurisdiction over non-Indians.

Justice Marshall crystallized these concepts in Worcester v. Georgia, 31 U.S. 515 (1832). He first noted, in reviewing the 1785 Treaty of Hopewell, "The third article of Hopewell acknowledges the Cherokees to be under the protection of the United States of America, and of no other power."²⁰ He then confirmed the limited rights retained by tribes as a result of this protected status:

The treaty of Holston, negotiated with the Cherokees in July 1791; thus explicitly recognising the national character of the Cherokees, and their right of self government; this guarantying their lands; assuming the duty of protection, and of course pledging the faith of the United States for that protection; has been frequently renewed, and is now in full force.²¹

Again, the power to self-govern was seen as the most important aspect of retained sovereignty. Justice Marshall went on to emphasize the power of the tribes over all...