JurisdictionUnited States
Natural Resources Development in Indian Country
(Nov 2005)


Neil G. Westesen *
Crowley, Haughey, Hanson, Toole & Dietrich P.L.L.P.
Bozeman, Montana

Neil G. Westesen is a partner at the law firm of Crowley, Haughey, Hanson, Toole & Dietrich in Bozeman, Montana. Mr. Westesen practices construction law, Indian law and general civil litigation. Representative clients with Indian law matters include the BNSF Railway Company, the Northern Border Pipeline Company, and various other oil and gas companies.

He received his undergraduate degree from the University of Montana in 1988 with highest honors and his law degree from the University of Colorado in 1991, also with highest honors.

He is admitted to practice in Montana, the U.S. District Court for the District of Montana, the U.S. Court of Appeals for the Ninth Circuit, and the U.S. Supreme Court.

For centuries, Congress has recognized Indian tribes as independent sovereign nations. 1 Due to this recognized inherent sovereign power predating the existence of the United States, tribes have long been described as "domestic, dependent nations." 2 Tribal sovereignty is unique and tribes retain those attributes of sovereignty not otherwise withdrawn or surrendered by treaty, statute, or implication as a result of a tribe's dependent status. 3

Today, Indian reservation lands consist of 55.7 million acres. 4 There are more than 562 unique sovereign Indian tribes recognized by the federal government, varying in population from a few hundred members to more than 600,000. 5 Business and contractual opportunities exist in Indian Country 6 just like anywhere else in the United States. And as economic life flourishes on Indian reservation land, so do contracts between tribes and non-Indians for work on this land. Nevertheless, because of tribal sovereignty, a contract with a tribe is atypical in that it is not subject to contractual common law. Instead, contracts arising on Indian reservation land can vary with each Indian tribe.

The validity and enforceability of a contract with an Indian tribe rests with the people having tribal authority and jurisdiction over the particular Indian reservation land. Additionally, not all tribes have a constitution or formal governing body. For those that do, tribal constitutions and organic documents differ. For example, some tribal constitutions resemble federal and state constitutions while others include a traditional tribal type of government with provisions granting governing authority to a general council comprised of all tribal members. 7 Because of the various tribal governing constitutions and bodies, the authority to contract and enforce such a contract varies from tribe-to-tribe and can change in the midst of a contractual relationship. Creating a valid and enforceable contract with an Indian tribe or tribal entity for work that impacts tribal land faces several hurdles. Litigating that contract in the event of a dispute presents another set of challenges.

This paper discusses some of these hurdles and challenges. Part I addresses the issue of contracting with the right entity. Part II examines the implications a change in government leadership has on long-term contracts, including differing tax treatments afforded to a non-Indian mineral developer. Part III considers the enforceability of forum selection clauses in contracts for dispute resolution purposes. Part IV discusses the various jurisdictional options confronting a non-Indian litigant. Part V addresses the scope of tribal jurisdiction over non-Indians. Part VI analyzes the type of conduct that meets the criteria necessary for assertions of jurisdiction under the first Montana exception to the general rule that a non-Indian is not subject to tribal court jurisdiction, as set forth in Montana v. U.S. (Montana). 8 Part VII analyzes the type of conduct that meets the criteria necessary for assertions of tribal jurisdiction under the second Montana exception. Part VIII considers the scope of federal court review of any tribal court decision. Last, this paper briefly summarizes the risks, challenges, and rewards of contracting with Indian tribes.


Due diligence is necessary to ensure that any non-Indian mineral developer is contracting with an entity empowered to execute a binding agreement on behalf of a particular Indian tribe. Native American tribes are distinct, independent political entities. Tribal protocol varies greatly, depending on the particular tribe. Before committing to any contract, a mineral developer should first become familiar with the tribal system of governance in place. The developer must be certain that the contracting tribe's tribal constitution grants the contracting entity the authority to enter into the agreement and that the Indian entity truly has the authority to enter into a binding and enforceable contract.

The first step to determine whether the contract is with the entity empowered to execute a binding agreement on behalf of an Indian tribe requires a review of the tribal organic documents set forth in the tribal constitution, if there is one. Under the 1934 Indian Reorganization Act, 9 many tribes have adopted tribal constitutions similar to state and federal constitutions. These tribal constitutions identify the individuals who have authority to enter into contracts concerning tribal resources. The mineral developer must be aware of language in the tribal constitution such as "general councils" or the "tribal membership at large," which may allow an overriding majority the power to undo any decision made by the tribal governing body. 10 Another common feature of many tribal constitutions is the authority of some tribal members to "undo" tribal council actions by referendum vote. 11 It is also important to pay close attention to any "super majority" voting requirements for waivers of sovereign immunity or conveyances of any interest in tribal land.

Assuming the tribal entity with authority has given its approval to a particular agreement, the next step is to make sure that the non-Indian mineral developer is contracting with the political group that is truly empowered to make a deal for the particular tribe. Tribal politics can shift rapidly and on numerous occasions competing tribal councils or tribal leaders have claimed to act as the one true governing body for a particular tribe, when in fact it is unclear which tribal entity has actual contracting authority. 12 Unfortunately, when faced with uncertainty as to which tribal entity is truly empowered to enter into a contract on behalf of a tribe, neither the Bureau of Indian Affairs (BIA) nor state or federal courts can offer much assistance.

A Solicitor's Opinion on the true governing body or appropriate interpretation of tribal governing organic documents may be helpful in resolving the determination of who has actual tribal authority to enter into a contract on behalf of a tribe, but such an opinion will not later be binding in any court of law. The United States Supreme Court has determined that Solicitor Opinion letters are akin to policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law. 13 The courts are therefore not obligated to honor the Solicitor's Opinion. Additionally, "agency opinions, because they are not the product of the rigors of formal rulemaking, are not entitled to any deference." 14 Instead, the courts are only obligated to "respect" the opinions. 15 Because a Solicitor's Opinion does not carry the force of law and will merely warrant the "respect" of a court, a person or entity contracting with a tribe should not view a Solicitor's Opinion as a binding confirmation on how the issue might later be interpreted by any court or by another agency.

In addition to the Solicitor's Opinions, a non-Indian seeking to enter into a contract with a tribe may request from the BIA an Opinion as to who is recognized by the federal government as the official tribal governing body for the particular tribe. The BIA has, on occasion, issued such opinions. Although receiving such an Opinion may be encouraging, any non-Indian mineral developer should again be aware that the BIA does not have authority to issue a binding opinion regarding the true governing body of any tribe.

A decision of the BIA regarding tribal government can be appealed to the Interior Board of Indian Appeals (Board). However, in Brady v. Bureau of Indian Affairs, 16 the Board determined that internal tribal disputes must be resolved in tribal court or in a similar tribal forum. 17 Consequently, in Goodface v. Grassrope, 18 the Eighth Circuit held that the "BIA must sometimes, in the course of carrying out the government-to-government relationship, recognize one or the other of competing tribal governments pending the resolution of election disputes in a tribal forum." 19 Such recognition must only be made on a temporary basis, pending ultimate resolution of any dispute in the appropriate tribal forum. 20 In accordance with these holdings, the BIA can recognize one tribal governing body as the appropriate tribal government, but such recognition lasts only until a tribal judicial authority has addressed and resolved the issue. 21

For example, in Wanatee v. Bureau of Indian Affairs, 22 the Area Director of the BIA acknowledged that the process for removal of the Chief of the Sac and Fox Tribe of the Mississippi in Iowa had been satisfied and the tribe had substantially complied with its tribal constitution. 23 On appeal, the Board recognized:

It is a well-established principle of Federal law that intra-tribal disputes should be resolved in tribal forums. This rule applies with particular force to intra-tribal disputes concerning the proper composition of a tribe's governing body. . . . Where an intra-tribal...

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