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Article 1 - Plains Commerce Bank v. Long Family Land and Cattle Company
Article 2 - Navajo Nation Enacts Tribal Superfund Law
Plains Commerce Bank v. Long Family Land and Cattle Company
August 07, 2008
Summary
U.S. Supreme Court Clarifies the Scope of Tribal Civil Jurisdiction Over Nonmembers
On June 25, 2008, the United States Supreme Court issued its decision in Plains Commerce Bank v. Long Family Land and Cattle Company, Supreme Court Cause No. 07-411.[1] The Court reversed the decision of the U.S. Court of Appeals for the Eighth Circuit[2] and held that the Cheyenne River Sioux Tribal Court lacked jurisdiction to award money damages against an off-reservation bank on claims asserted by a tribal member-owned company that the Bank discriminated against tribal members while engaging in the sale of privately owned land within the reservation. The opinion continues the Court's trend toward defining limits on tribal jurisdiction through narrow, fact-specific determinations denying tribal jurisdiction.[3]
The Court's decision provides further guidance on what types of "consensual relationships" entered into by nonmembers of an Indian tribe may support tribal judicial or regulatory jurisdiction under the standards of Montana v. United States.[4] Montana holds that, as a general rule, tribes lack jurisdiction over nonmembers. However, Montana recognized two exceptions to its general rule. First, tribal civil jurisdiction may exist over "nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements." Second, tribes may exercise civil authority over nonmembers conduct that "threatens or has some direct effect on the political integrity, the economic security, or the health and welfare of the tribe." Plains Commerce Bank focused on the first exception, relating to "consensual relationships."
Plains Commerce Bank is significant for several reasons:
- Relationship between the "consensual relationship" and the regulated "activity:" The Bank had extensive, long-term dealings with the Long Family Land and Cattle Company ("Long Company"), a North Dakota corporation, majority-owned by members of the tribe. However, the Court considered only the transaction related directly to the plaintiff's discrimination claim, the Bank's sale of non-Indian owned fee land to another non-Indian, on terms more favorable than those offered to the Indian-owned corporation. Even though the Bank acquired its fee land as part of the lengthy prior dealings with the Long Company, the majority held those dealings were not material to defining the relevant consensual relationship under Montana. A dissent by Justice Ginsburg, joined by Justices Stevens, Souter and Breyer, advocated a broader focus.
- Scope of protectable tribal interests: The Court sent ostensibly mixed messages regarding the interests tribes may protect as against nonmembers. In a holding that seems fundamental it stated that, 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."[5] To support tribal jurisdiction, a consensual relationship must relate to one of these three "sovereign interests."[6] However, it also observed 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".[7] Justice Roberts also observed a tribe may "quite legitimately seek to protect its members from noxious uses that threaten tribal welfare or security, or from nonmember conduct on the land that does the same".[8] While these examples may suggest fairly broad jurisdiction, they must be read in light of the majority's assertions that tribal jurisdiction is limited to the three "sovereign interests" and that any regulation must fall "within the limits set forth in our cases."[9] The majority observed that a transfer of land may not implicate those sovereign interests to the same degree as actual activities on the surface of the land.
- Effect of Land Transfers: The Court held that transfers of land from federal government trust status into fee ownership reduced or eliminated a tribe's sovereign interest in the lands. Land that has "been alienated from the tribal trust" is different for jurisdictional purposes because "the tribe cannot justify regulation of such land's sale by reference to its power to superintend tribal land . . . ." Consequently, the Court held that the tribe's regulatory interest in controlling the transfer of its lands was lost when the land was conveyed to non-Indians.[10] While a tribe's power to exclude non-Indians can support jurisdiction over tribal trust lands, it provides no support with respect to nonmember fee lands.
- "Commensurate consent" to support tribal jurisdiction: The Court held that tribal regulation of fee land sales "runs the risk of subjecting nonmembers to tribal regulatory authority without commensurate consent." Recognizing tribal sovereignty is "a sovereignty outside the basic structure of the Constitution . . .," and there are significant differences between tribal courts and traditional American courts, the Court held that tribal "laws and regulations may be fairly imposed on nonmembers only if the nonmember has consented, either expressly or by his actions." The majority also found it relevant whether the nonmember "may reasonably have anticipated" that its dealings would "trigger tribal authority."[11] Even if the nonmember has adequately consented, "[t]he regulation must stem from the tribe's inherent sovereign authority to set conditions on entry, preserve tribal self government, or control internal relations."[12]
Undoubtedly, these passages will become the subject of further analysis. One interpretation is that tribal jurisdiction under the "consensual relationship" exception arises only when the nonmember expressly, or perhaps impliedly, consents to the tribe's exercise of jurisdiction, as by a contract that includes provisions for exercise of tribal taxation, regulation, or tribal court jurisdiction. An alternative interpretation is that the existence of any contractual relationship could impliedly indicate the "expression" of consent to tribal jurisdiction. The former interpretation would seem the more logical in light of Justice Ginsburg's opinion, concurring and dissenting in the judgment. There, Justice Ginsburg stated that "forum selection, choice-of-law, or arbitration clauses" could have been included in an agreement that would provide for jurisdiction other than tribal jurisdiction.[13] We believe the better reading is that the mere existence of a contract or commercial relationship would not be sufficient under the Court's majority opinion to support the exercise of tribal authority.
- Montana's Second Exception: The Court reaffirmed earlier decisions requiring that impact on the "political integrity, the economic security or the health and welfare of the tribe" under Montana must be so severe as to "imperil the subsistence" of the tribal community that it would be "catastrophic."[14]
- Consent by Litigation Actions: The Court held that by asking the tribal court to appoint a process server able to serve the Bank's complaint on the Long Company in the state court eviction proceeding it initiated, the Bank did not "consent to future litigation in the Tribal Court."[15] This holding provides some support for the proposition that defending one's interests and rights in tribal courts may not subject one to tribal jurisdiction for all purposes. It also may shed light on the Court's "consensual relationship" analysis.
CONCLUSION
The Court's opinion in Plains Commerce Bank provides further guidance to those doing business with Indian Tribes and to those operating on or near Indian Reservations. However, given the narrow limitations of the facts of the case, there remain further questions to be resolved by the Court and the lower federal courts.
[1] Available at: http://www.scotusblog.com/wp/wp-content/uploads/2008/06/07-411.pdf. Modrall Sperling filed a brief amicus curiae in the case on behalf of the Association of American Railroads.
[2] 491 F.3d 878 (8th Cir. 2007).
[3] See Strate v. A-1 Contractors, 520 U.S. 438 (1997); Atkinson Trading Co. v. Shirley, 532 U.S. 645 (2001); and Nevada v. Hicks, 533 U.S. 353 (2001).
[4] 450 U.S. 544, 565 (1981).
[5] Slip Op. at 16 (Citations and quotation marks omitted).
[6] Slip Op. at 19.
[7] Slip Op. at 16.
[8] Slip Op. at 18.
[9] Id. These almost certainly are the limits defined in Montana and the cases following it. See, e.g., Strate v. A-1 Contractors, 520 U.S. at 457-59; Atkinson Trading Co. v. Shirley, 532 U.S. at 657-59; and Nevada v. Hicks, 533 U.S. at 359-73, and cases imposing other limitations on tribal jurisdiction. See, e.g., Oliphant v. Suquamish Indian Tribe, 453 U.S. 191, 209 (1978) (tribes lack criminal jurisdiction over non-Indians).
[10] Slip Op. at 17-18.
[11] Slip Op. at 19.
[12] Slip Op. at 18-19.
[13] Ginsburg, concurring and dissenting, at 5.
[14] Slip Op. at 23.
[15] Slip Op. at 23
Navajo Nation Enacts Tribal Superfund Law
August 05, 2008
Summary
On February 26, 2008, the Navajo Nation Council enacted the Navajo Nation Comprehensive Environmental Response, Compensation, and Liability Act, N.N.C. §§ 2104-2805, also known as the Navajo Superfund Law (“NSL”).
On February 26, 2008, the Navajo Nation Council enacted the Navajo Nation Comprehensive Environmental Response, Compensation, and Liability Act, N.N.C. §§ 2104-2805, also known as the Navajo Superfund Law ("NSL"). On March 10, 2008, the President of the Navajo Nation, Dr. Joe Shirley, Jr., signed the NSL. The NSL is patterned on the Federal "Superfund" law, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),[1] but contains significant differences. The NSL provides for modular or phased implementation at the discretion of the Director of the Navajo Nation EPA, so programs authorized by the statute may not be implemented immediately. However, the NSL steps beyond other, similar regulatory programs in many ways that present specific problems for industry, most significantly in its characterizing oil and gas as "hazardous substances."
Unique Provisions of The NSL
"Hazardous" Substances, Includes Petroleum and Natural GasUnlike the federal Superfund law, the NSL defines the term "hazardous substance" to include petroleum, natural gas, and natural gas liquids, in addition to generally regulating pollutants and contaminants. The NSL provides for response actions and cost recovery for the "release" of petroleum, natural gas, and natural gas liquids. A reportable quantity for release of petroleum is 25 gallons.
Cultural Resource Damages
- The NSL allows for damages to a "cultural resource" in addition to damages for injuries to natural resources. Cultural resources are defined to include "any product of human activity or any object or place given significance by human activity or belief." The federal Superfund law, by contrast, allows natural resource damage actions only.
- A separate fund is created by the NSL called the "Natural and Cultural Resources Fund" which is to be used to restore, replace or acquire natural or cultural resources which have been damaged, destroyed or otherwise lost. The funding will be from natural and cultural resource damage claims brought pursuant to the NSL.
Transportation Tariff and Registration
- The NSL provides for the establishment of a special fund called the "Hazardous Substances Fund" to fund the activities of the NSL. The funding is to provide for response actions when other sources of funds are not available at the time the action is taken. Part of the funding mechanism for the Hazardous Substances Fund is a tariff on "transporters" of hazardous substances. "Transporters" includes all transporters of petroleum and petroleum products, including natural gas, which cross the lands described in the NSL. In turn, the definition of a pipeline is not limited, but can be read to apply to all pipelines or pipe line in the ground. The tariff also can apply to petroleum treatment, storage, and disposal activities.
- The NSL provides for a rulemaking process to determine the amount of the tariff to be assessed. The assessment will be based on the quantity of hazardous substances that a transporter transport across the lands described in the NSL.
- All transporters of hazardous waste as defined by the NSL are required to register annually with the NSL program on forms to be developed and to submit registration fees.
Document Retention and Access
- The NSL requires retention of pertinent documents for years and gives the Navajo Nation EPA broad authority for information gathering including access to sites subject to the provisions of the NSL. For certain documents, the required record retention period is the 50 year period prescribed under the federal Superfund law.
Penalties
- The NSL provides for criminal and civil penalties for violations of the NSL which are broader than those applicable under federal CERCLA, including fines of up to $25,000 a day.
Regulatory Jurisdiction Extends Beyond Recognized Reservation Boundaries
- The NSL applies to a broad territorial area outside of formal reservation boundaries, including all lands within the BIA's Eastern Navajo Agency, Navajo "dependent Indian communities" and territory associated with Navajo Chapter governments.
NEXT STEPS
- The New Mexico Oil & Gas Association, along with the Colorado Oil and Gas Association and Arizona Chamber of Commerce and Industry have entered into a Tolling Agreement with the Navajo Nation, extending a deadline for the filing of actions challenging the authority of the Navajo Nation to enact the NSL.
- The agreement tolls claims of the signatories related to the NSL until August 10, 2009 to allow the parties to enter into good faith negotiations with regard to the terms of the NSL, provided negotiations are commenced prior to early August 9, 2008.
If you have questions, please contact Marte Lightstone at Modrall Sperling at (505) 848-1847 or Mlightstone@modrall.com
[1] 42 U.S.C. §§ 9601, el seq.
