Jane Doe v. Santa Clara Pueblo: Lessons From an Indian Gaming Case for Business Transactions with Indian Tribes and Pueblos

April 20, 2007

Summary
Gaming compacts between New Mexico and the Pueblos of Santa Clara and San Felipe were at the center of disputes that the Supreme Court of New Mexico recently decided. See Jane Doe v. Santa Clara Pueblo, et al., 2007-NMSC-008 (February 23, 2007). Those compacts included a waiver of the Pueblos’ sovereignty-based immunity from suit and a forum selection clause providing for resolution of specified personal injury matters arising from negligent acts relating to Pueblo-owned casino operations in the New Mexico state courts. The decision, while addressing provisions of gaming compacts, has potential implications and lessons for other business transactions with Indian tribes and Pueblos.

Gaming compacts between New Mexico and the Pueblos of Santa Clara and San Felipe were at the center of disputes that the Supreme Court of New Mexico recently decided. See Jane Doe v. Santa Clara Pueblo, et al., 2007-NMSC-008 (February 23, 2007). Those compacts included a waiver of the Pueblos’ sovereignty-based immunity from suit and a forum selection clause providing for resolution of specified personal injury matters arising from negligent acts relating to Pueblo-owned casino operations in the New Mexico state courts. The decision, while addressing provisions of gaming compacts, has potential implications and lessons for other business transactions with Indian tribes and Pueblos.

Jane Doe arose from two cases in which casino patrons filed suit in New Mexico state court alleging negligence and other causes of action for damages for personal injuries, and asserted that the state court had jurisdiction by virtue of the waiver of immunity and forum selection clauses of the gaming compacts each Pueblo had signed with the State.

Both gaming compacts were negotiated and executed under the federal Indian Gaming Regulatory Act or “IGRA”, 25 U.S.C. §§ 2701 - 2721. The Compacts provided that each Pueblo “waives its defense of sovereign immunity in connection with any claims for compensatory damages for bodily injury or property damage. . . .” The Compacts also stated that one of its purposes is “to assure that any [visitors] who suffer bodily injury . . . have an effective remedy for obtaining fair and just compensation.”

Both Compacts also declared that personal injury actions may “proceed either in binding arbitration . . . or in a court of competent jurisdiction.” In turn, “court of competent jurisdiction” is defined to include state courts. The compacts provide that “any such claim may be brought in state district court, including claims arising on tribal land, unless it is finally determined by a state or federal court that IGRA does not permit the shifting of jurisdiction over visitors’ personal injury suits to state court.” As the New Mexico Supreme Court noted, this provision meant that state courts had jurisdiction over the specified matters unless the IGRA does not permit state courts to exercise jurisdiction.

The New Mexico Supreme Court concluded that the IGRA does not prohibit the exercise of state court jurisdiction. “We will not ignore the clear language of the Compact, nor can we relieve the parties to the Compact from their obligations thereunder.” 2007-NMSC-008, ¶ 15. “As with any other contract, the choice of words can be pivotal.” Id.

In Jane Doe, the Pueblos argued, based on “general principles of Indian law,” that state courts cannot assert jurisdiction unless Congress expressly authorizes state court jurisdiction. Id. at ¶ 17. “In other words, regardless of the Compact language and their consent . . ., the Pueblos take the position that the compact language granting state courts jurisdiction is ‘ineffective’ absent an affirmative grant of authority from Congress to do so.” Id.

The Court, therefore, considered the question “whether, without congressional authority to do so, tribes can agree to state court jurisdiction over claims that would traditionally fall to tribal courts.” Id. As a general matter, the Court noted that “tribal courts have exclusive jurisdiction over claims arising on tribal lands against tribes, tribal members, or tribal entities.” Id. at ¶ 18, citing Williams v. Lee, 358 U.S. 217, 219-20 (1959). However, according to the Court, “this principle and the cases that give rise to it do not usually involve the kind of express consent to jurisdiction shifting that the Pueblos have given by compact in the context of casino gaming.” Jane Doe at ¶ 18.

In response, the Pueblos asserted that a United States Supreme Court decision, Kennerly v. District Court, 400 U.S. 423 (1971), supports the position that Congress must provide express authorization for state court jurisdiction for a tribe’s consent to be effective. In Kennerly, the U.S. Supreme Court considered whether a Montana state court had jurisdiction over a civil suit arising on tribal lands and involving tribal members. The state court purported to act under authority provided by a federal statute, the so-called “Public Law 280.” There, even though the tribe had consented to state court jurisdiction, all the “prerequisites set forth in [Public Law 280] were not met, [and] the Supreme Court disavowed concurrent jurisdiction in state court . . . .” Jane Doe at ¶ 20, citing Kennerly, 400 U.S. at 429-30.

According to the New Mexico Supreme Court, however, Kennerly did not fully address the question presented: “Arguably, Kennerly stands more for a question of procedure: that when Congress sets forth requisite steps to implement jurisdiction shifting, then the state and the tribe must adhere strictly to those requirements. . . .Under this more limited view, Kennerly would govern what states and tribes must do when Congress has clearly spoken, but not necessarily what they must do when Congress remains reticent.” Jane Doe at ¶ 23.

As the New Mexico Supreme Court noted, citing the U.S. Supreme Court’s decision in C & L Enterprises, Inc. v. Citizen Band Potawatomi Indian Tribe of Oklahoma, 532 U.S. 411 (2001), “a separate body of federal case law has developed interpreting tribal authority in the context of consensual contracts.” Jane Doe at ¶ 25. In C & L Enterprises, the tribe signed a contract with a clear provision in which the tribe consented to arbitration for resolution of disputes, subject to state court enforcement of arbitration awards. The contract also had a choice of law provision selecting the law of the place where the project was located (in that case, off-reservation). A unanimous U.S. Supreme Court held there that the tribe’s consent was an effective waiver of immunity. C & L Enterprises, 532 U.S. at 414. As the New Mexico Court observed, that waiver of immunity was granted without any Congressional authority. Jane Doe at ¶ 26. “Taken in context, C & L Enterprises, suggests that when a sovereign tribe waives its immunity from suit, it may also choose the forum in which the resulting litigation will occur, including state court, whether or not it has express congressional authority to do so.” Id. at ¶ 27.

The Court then sought to harmonize the C & L Enterprises and Kennerly lines of authority, and considered whether the IGRA, like Public Law 280, prescribes a specific approach to obtain an effective waiver of immunity or forum selection clause or provides greater flexibility or autonomy for tribes and states to determine forum selection matters and waivers of immunity on their own terms. After consideration of IGRA and its legislative history, the Court stated that IGRA’s “compact provision allowed the tribes and states to negotiate and decide for themselves the division of civil, criminal, and regulatory responsibility.” Jane Doe at ¶¶ 33, 45. Therefore, the waiver of immunity and forum selection clauses were enforceable against the Pueblos in each of the cases involved in Jane Doe.

Lessons learned from the New Mexico Supreme Court’s discussion include:

1. Under appropriate circumstances, tribes and Pueblos may be willing to waive their immunity from suit and agree to resolution of disputes in forums other than tribal courts.

2. Clear and express waivers of immunity and forum selection clauses generally are enforceable against a tribe or Pueblo, unless Congress has provided a specific process that has not been followed strictly.

3. Parties conducting business with tribes and Pueblos should take care to determine the applicability of federal statutes that may govern or impact the validity or enforceability of waivers and forum selection clauses.

4. Parties conducting business with tribes and Pueblos also should take care to determine whether tribal or Pueblo laws impact the validity or enforceability of waivers and forum selection clauses.

Should you have questions concerning this article or about our federal Indian Law practice, please contact members of our Doing Business in Indian Country Industry Group. That Group includes Lynn H. Slade, Walter E. Stern or William C. Scott.