Blazing a Trail through Tribal Court

Adam D. Melton

When a surety elects to bond a project that is on Indian lands, it must recognize that at some point it will likely end up litigating in tribal court.

Adam Melton presented this paper at the 2007 National Bond Claims Association Conference.

Tribal courts are significantly different than state and federal courts and are highly unpredictable. In order to safely navigate the treacherous waters that a practitioner faces, the practitioner must expect the unexpected and prepare accordingly. That preparation begins with a complete understanding of a tribe’s sovereign immunity, of the tribal court’s jurisdiction over the surety, and an understanding that tribal court is a very different forum than he is used to.

I. “What do you mean there’s no waiver of sovereign immunity clause? Now what do we do?”

As a surety practitioner, these are not questions one ever wants asked. Construction on Indian Lands[1] is at an all-time high for some tribes. With the growth of Indian Gaming following the 1988 passage of the Indian Gaming Regulatory Act, 25 U.S.C. §2701 et seq., otherwise financially distressed tribes suddenly have the resources to construct schools, police and fire stations, general infrastructures such as utilities and roads, gas stations, casinos, resorts, golf courses, and a multitude of other projects. Indeed, in 2006, 225 tribes in 28 states used Indian Gaming to generate a staggering $25.7 billion dollars in gross revenue.[2] This explosion in revenue has been, and will continue to be, a profitable market for contractors and sureties alike. However, when bonding a project on Indian Lands with an Indian tribe as an owner-obligee several unique issues arise, and they all can be traced back to confusions over the sovereign yet dependent relationship Indian tribes have with the United States government.

Concepts of an Indian tribe’s sovereignty, unfamiliarity with tribal courts, and a general fear of litigating against a team with a decided home court advantage can cause even the most seasoned surety and construction lawyer to panic. We as attorneys are creatures of habit and routine. We simply know what to expect when an action is filed in a federal court or in a state court. We know and understand the applicable Rules of Procedure, Rules of Evidence, and Local Rules of Practice. Even if we have not appeared before a particular judge, we have a good idea of how a hearing is going to proceed. Most importantly, when we encounter a new legal problem, we all know where we can go to find the answer. But when faced with litigating in a tribal court against an Indian tribe who has not waived its sovereign immunity, all of our experience and routine flies out the window. Litigating in a tribal court is challenging. With a clear understanding of Indian tribes and their judicial systems, it is possible for the practitioner to overcome the many pitfalls he faces.

In this paper, I will provide a brief overview of key issues that arise when forced into litigation against an Indian tribe arising out of a construction project on Indian Lands. This paper will not provide a detailed discussion of the legal basis for a tribe’s existence, its ability to regulate and tax activities occurring on Indian Lands, the extent of a tribe’s sovereignty, nor other practical construction issues such as permitting and determining the applicable building codes – though a brief discussion of some of these points must be included to provide the necessary background to understand the issues confronting a litigant in a tribal court. Rather, this paper is written from the surety’s perspective, assumes that there is no “waiver of sovereign immunity”, assumes that a dispute has arisen out of a construction project on Indian Lands whose owner is an Indian tribe, and assumes that the surety is forced to litigate at least a portion of a claim against that tribe in tribal court. It is my hope that this paper will provide the practitioner a convenient starting point for understanding the unique circumstances involved when litigating in tribal court. 

II. “OK. So there isn’t a waiver of sovereign immunity clause. Does that mean that we cannot file suit in federal and state court?”

A. A Brief Explanation of Sovereign Immunity 

This will come as a shock to nobody – Indian tribes’ existence in what is now the United States predates European exploration and discovery, predates English colonialism, predates the post-Revolution creation of this country, and predates the ratification of the Constitution. While Indian history is long, tortured, and often tragic, it is in this history that the roots of “sovereign immunity” can be found. As succinctly stated by Justice Black in Williams v. Lee, 358 U.S. 217, 218, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959):

“[O]riginally the Indian tribes were separate nations within what is now the United States. Through conquest and treaties they were induced to give up complete independence and the right to go to war in exchange for federal protection, aid, and grant of land.”

As “separate nations” Indian tribes are “distinct, independent political communities”, “possessing attributes of sovereignty over both their members and their territory”, with the power to self-govern, self-regulate, make and enforce their own substantive law, and possess “the common-law immunity from suit traditionally enjoyed by sovereign powers.” Worcester v. Georgia, 31 U.S. 515, 6 Pet. 515, 8 L.Ed. 483 (1832); United States v. Wheeler, 435 U.S. 313, 323, 98 S.Ct. 1079, 55 L.Ed.2d 303 (1978); Santa Clara Pueblo v. Martinez, 436 U.S. 49, 59, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978). A tribe’s sovereignty is subject to the superior and plenary control of Congress. Santa Clara Pueblo, 436 U.S. at 59. However, at least as far as the federal courts are concerned, immunity from suit and other aspects of sovereignty extend only to federally recognized tribes. Kahawaiolaa v. Norton, 386 F.3d 1271, 1273 (9th Cir. 2004). A complete list of all federally recognized tribes can be found at 68 Fed.Reg. 68180 (Dec. 5, 2003). A handful of state-recognized tribes, which are not federally recognized, do possess some aspects of sovereignty. See Schaghitcoke Tribal Nation v. Harrison, 826 A.2d 1102 (Conn. 2003). Additionally, a few tribes that are neither state nor federally recognized tribes may still retain some sovereign powers. Bottomly v. Passamaquoddy Tribe, 599 F.2d 1061 (1st Cir. 1979). Accordingly, the practitioner should check the status of the tribe with whom his client has dealings to ensure that the tribe actually does possess immunity from suit. Unless Congress has expressly provided that a tribe may be sued under a particular circumstance, a tribe is immune from suit until the tribe expressly waives its “sovereign immunity.” The practical effect is that the tribe will most likely be successful in using its “sovereign immunity” as a defense to any lawsuit in any forum regardless of the nature of the relief sought.[3]

B. Can a State Court Exercise Jurisdiction Over the Tribe?

Even without a waiver of sovereign immunity, a practitioner may find himself adverse to an Indian tribe in state court. The natural question arises, can the state court exercise jurisdiction over the tribe. To answer this deceptively complex question, it is necessary to determine (1) whether the plaintiff is an Indian or non-Indian, (2) whether the defendant is an Indian or non-Indian, and (3) whether the cause of action arose on or off Indian Lands. Below is a brief description of the four most common types of state court litigation that a surety may face related to a project on Indian Lands.

1. Non-Indian vs. Indian Arising on Indian Lands: Tribal courts have exclusive jurisdiction over suits by a non-Indian plaintiff against an Indian-defendant arising out of actions occurring on Indian Lands. Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959)(holding that Navajo Tribal Court has exclusive jurisdiction over a lawsuit filed by a non-Indian plaintiff to collect a debt incurred by an Indian defendant on the reservation.) The Williams v. Lee decision is critical to the surety bonding a construction contract for a project on Indian Lands because, if the surety (a non-Indian) wished to assert a claim against the tribal owner-obligee (an Indian) both federal and state courts will dismiss or stay any lawsuit and defer to the jurisdiction of the tribal courts.

2. Indian vs. Non-Indian Arising on Indian Lands: Though the tribal court will have concurrent jurisdiction over the claims, if an Indian-plaintiff elects to sue a non-Indian defendant in a state court on claims arising on Indian Lands, the state court may exercise its jurisdiction to hear and determine the case. See Three Affiliated Tribes of the Fort Berthold Reservation v. Wold Engineering, 467 U.S. 138, 104 S.Ct. 2267, 81 L.Ed.2d 113 (1984) Thus, in the construction/surety context, if the Tribal owner-obligee filed suit in state court against the surety, the state court would have jurisdiction over the case even though the tribal court would also have concurrent jurisdiction. Moreover, at least one state court decision held that, where an Indian litigant files suit in a state court at the same time a tribal court proceeding is on-going, the state court is neither bound by the doctrine of exhaustion of remedies nor must it stay its proceeding to allow the tribal court to decide the scope of its jurisdiction. Astorga v. Wing, 118 P.3d 1103 (Ariz.App. 2005). But see Matsch v. Prairie Island Indian Community, 567 N.W.2d 276, 278 (Minn.App. 1997)(holding that state court must dismiss its action once the tribal court, which had concurrent jurisdiction over the action, ruled on the merits).

3. Non-Indian vs. Non-Indian Arising on Indian Lands: For the surety, this type of suit would most likely occur when it is sued by a non-Indian subcontractor on a payment bond issued for an Indian project. A state court will always have jurisdiction over this type of action, but, because the action arises out of activities occurring on Indian Lands, the tribal court also has concurrent jurisdiction. Even though it is unlikely that two non-Indian litigants will voluntarily elect to resolve their dispute in the tribal court forum, a practitioner must understand the effect of a parallel action in tribal court. In that situation, some state courts will hear and determine the dispute between the two non-Indians. Astorga v. Wing, 118 P.3d 1103 (Ariz.App. 2005). Others may elect to model their proceedings after federal courts and will stay or dismiss the proceeding. Matsch v. Prairie Island Indian Community, 567 N.W.2d 276, 278 (Minn.App. 1997).

4. Indian or Non-Indian vs. Non-Indian which Does Not Arise on Indian Lands: State courts have jurisdiction over non-Indian defendants, whether the plaintiff is an Indian or non-Indian if the cause of action does not arise on the reservation. See e.g. Smith Plumbing Co. v. Aetna Casualty & Surety Co., 149 Ariz. 524, 531, 720 P.2d 499, 506 (1986). Further, the tribal court generally does not have jurisdiction over a claim against a non-Indian which does not arise on Indian Lands. Strate v. A-1 Contractors, 520 U.S. 438, 453, 117 S.Ct. 1404, 137 L.Ed.2d 661 (1997) (holding that a tribe’s adjudicative jurisdiction cannot exceed its legislative jurisdiction); Montana v. U.S., 450 U.S. 544, 565, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981)(Noting that “the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe.”). Thus, to the extent that the surety embroiled in a lawsuit against an Indian tribe can fashion an argument that the claim arose from off-reservation conduct, the surety may be able to preclude the tribal court from exercising jurisdiction over the claim and could convince the state court that any concerns about deferring to the discretion of the tribal court need not be acted upon. But, as is discussed more fully in Section II(D) below, the tribal court may still have jurisdiction over a surety’s off-reservation actions when the surety has entered into a “consensual relationship” with the tribe due to the issuance of a performance or payment bond.

C. Can a Federal Court Exercise Jurisdiction Over the Tribe?

Federal courts are extremely deferential to tribal courts and are extremely reluctant to hear and determine a dispute involving an Indian tribe. Because of the strong federal policy promoting Indian self-government, the practitioner must be doubly careful to ensure that an action brought in federal court will remain in federal court.

First, issues of sovereign immunity are still overriding. Even if a state court has jurisdiction over a lawsuit as described above, and even if the tribal plaintiff elects to file suit in state court, thus effectively waiving its sovereign immunity to a state court proceeding, the tribe will not be deemed to have waived its sovereign immunity from suit in federal court. Big Horn County Elec. Coop., Inc. v. Adams, 219 F.3d 944, 955 (9th Cir. 2000). The practitioner should not assume that a proper state court action will remain free and clear of the reaches of tribal court if the unwary litigant removes the action to federal court. In Crawford v. Genuine Parts Co., Inc., 947 F.2d 1405, 1408 (1991), the Ninth Circuit made clear that the federal court will still defer to the tribal court, and will still require exhaustion of tribal remedies even if a state court action is proper prior to its removal to the federal court based upon diversity of citizenship.

Second, even if an action involving a non-Indian and Indian is originally brought in district court, federal subject matter jurisdiction requirements must still be met. The fact that a litigant is an Indian, or the fact that the claim arose on the reservation does not create a federal question. As such, federal jurisdiction of most cases involving Indians and non-Indians are based upon diversity of citizenship pursuant to 28 USC §1332(a). Individual Indians are considered citizens of the state in which they reside whether they live on or off the reservation. A tribe, however, is not considered a foreign state, nor is it deemed a citizen of any state unless it is incorporated in a state. Therefore, the unincorporated tribe cannot be sued in federal court under diversity jurisdiction. Standing Rock Sioux Indian Tribe v. Dorgan, 505 F.2d 1135, 1140 (8th Cir.1974)( “[A]n Indian tribe is not a citizen of any state and cannot sue or be sued in federal court under diversity jurisdiction.”); Gaming World Int'l v. White Earth Band of Chippewa Indians, 317 F.3d 840, 847 (8th Cir.2003) (“Diversity jurisdiction is not available here under 28 U.S.C. § 1332 because Indian tribes are neither foreign states nor citizens of any state.”); Auto-Owners Ins. Co. v. Tribal Court of the Spirit Lake Indian Reservation, 2007 WL 2189094, *2 (8th Cir. 2007)(“[N]o diversity jurisdiction exists as a basis for subject matter jurisdiction because Tate Topa – a sub-entity of the Spirit Lake Sioux Tribe – is considered a part of the Indian tribe.”); Cherokee Nation v. State of Ga., 30 U.S. 1, 16-18, 8 L.Ed. 25 (1831)(holding that Indian tribes are not foreign states).

Third, federal courts retain the power to review de novo a tribal court’s exercise of its jurisdiction over non-Indians. See, National Farmers Union Ins. v. Crow Tribe, 471 U.S. 845, 850, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985)(jurisdiction of tribal court over non-Indian is a matter of federal law subject to review under 28 U.S.C. § 1331); Iowa Mutual Ins. Co. v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987)(tribal court’s determination of jurisdiction is ultimately subject to federal review); (Smith v. Salish Kootenai College, 434 F.3d 1127, 1130 (9th Cir., 2006)(jurisdiction of tribal court is a federal question, which federal courts review de novo). However, federal courts will not review a tribal court proceeding until the litigants have exhausted all tribal remedies. See Section IV(E). In other words, where the action arises out of the activities of non-Indians on reservation lands, “[c]onsiderations of comity require the exhaustion of tribal remedies before the claim may be addressed by the district court.” Wellman v. Chevron U.S.A., Inc., 815 F.2d 577, 578 (9th Cir. 1987). Thus, where there is even a possibility of concurrent actions, one in federal court and one in tribal court, a federal court will stay its proceeding until the tribal court determines all jurisdictional issues. Wellman v. Chevron U.S.A., Inc., 815 F.2d at 578 (Indian contractor could not bring suit directly in federal court against non-Indian defendant when tribal court had concurrent jurisdiction); See also National Farmers Union Ins., 471 U.S. 845 (1985); Iowa Mutual Ins. Co., 480 U.S. 9 (1987).

The extreme reluctance of federal courts to exercise jurisdiction is best illustrated by the Wellman v. Chevron U.S.A., Inc. case. In Wellman, an Indian plaintiff sued a non-Indian defendant in the District Court for the District of Montana under a breach of contract theory related to work performed on the Blackfeet Reservation. Interestingly, and apparently over the objection of the Indian plaintiff, the Ninth Circuit ruled that the District Court should have dismissed the lawsuit because jurisdiction over suits such as this “presumptively lies in the tribal courts unless limited by federal statute or specific treaty provision.” Id. at 578. In other words, according to the Ninth Circuit, a District Court shall not hear and determine a lawsuit voluntarily brought before it by an Indian plaintiff, where that lawsuit involves a breach of contract occurring on Indian Lands, because the lawsuit could have been filed in tribal court.

In summary, even if a district court has original jurisdiction over a dispute, and despite the fact that the federal courts retain the ultimate power to review a tribal court’s assertion of its jurisdiction, federal policy supporting tribal self-government requires a federal court to stay its proceeding in order to give the tribal court a full opportunity to determine its own jurisdiction.

D. Does the Tribal Court Have Jurisdiction Over a Surety?

To answer this question, it is absolutely critical to determine whether the cause of action arises out of activities occurring on or off Indian Lands. It is highly unlikely that the surety will be embroiled in litigation with an Indian tribe or its members in a context arising out of something other than bonding an on-reservation project. Because of the narrow scope of this paper, I will not provide a detailed analysis of all possible types of claims and circumstances under which a particular tribal court may assert its jurisdiction over a nonmember. However, it is critical to recognize two key points.

First, as was discussed in Section II(B) above, civil jurisdiction presumptively lies in tribal courts over activities of a non-Indian which occurred on Indian Lands. Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412, 1419 (8th Cir.1996)( “[W]e start with the premise that civil jurisdiction over the activities of non-Indians on reservation lands presumptively lies in tribal courts, unless affirmatively limited by a specific treaty provision or federal statute.”). For such on-reservation activities, federal courts require that all tribal remedies be exhausted before exercising their own jurisdiction over the matter. In National Farmers Union, Ins., the Supreme Court made clear that this exhaustion requirement is only tempered when the assertion of tribal jurisdiction is “motivated by a desire to harass or is conducted in bad faith, or where the action is patently violative of express jurisdictional prohibitions, or where exhaustion would be futile because of the lack of an adequate opportunity to challenge the court’s jurisdiction.” 471 U.S. at 856 (1985). See also Strate v. A-1 Contractors, 520 U.S. 438, 117 S.Ct. 1404, 137 L.Ed.2d 661 (1997); Iowa Mutual Ins. Co., 480 U.S. 9 (1987). Suffice it to say that, for on-reservation activities, a tribal court will have jurisdiction over a non-Indian and the exercising of that jurisdiction will be upheld on federal review absent extraordinary circumstances.

Second, where a surety bonds an on-reservation project, the tribal court will likely have jurisdiction over the surety for off-reservation activities that arise from that “consensual relationship.” In Montana v. United States, referred to in later decisions as the “pathmarking case concerning tribal civil authority of nonmembers”, the Supreme Court recognized that “the inherent sovereign powers” of an Indian tribe (i.e. those not expressly conferred to it through a specific congressional act or treaty) do not extend to the activities of non-members of the tribe occurring off Indian Lands. 450 U.S. at 565. Instead, the Court indicated that a tribe may regulate such activities of non-Indians only in two limited situations. First, the tribe may regulate the activities of non-Indians who “enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements”. Second, the activities of a non-Indian may be regulated “when the conduct of non-Indians…threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.” 450 U.S. at 565-566. In other words, in the absence of applicable statutory or treaty provision, an Indian tribe is without any power to regulate the activities of a non-Indian occurring on non-Indian Lands, unless one of the two exceptions exist. These two exceptions to a tribe’s regulatory or legislative power over a non-Indian were extended to a tribe’s adjudicatory authority in Strate v. A-1 Contractors, 520 U.S. at 453 (“Subject to controlling provisions in treaties and statutes, and the two exceptions identified in Montana, the civil authority of Indian tribes and their courts with respect to non-Indian fee lands generally does not extend to the activities of nonmembers of the tribe”).

Based on the standard set forth in Montana and Strate, a tribal court likely has jurisdiction over a tribe’s claims against a surety who bonded an on-reservation project. It would be quite a stretch to argue that a surety who has bonded an on-reservation project has undertaken any acts on Indian Lands that “threatens the political integrity, economic security, or health or welfare of the tribe.” Thus, the second Montana exception will likely not apply to any construction/surety dispute. However, this does not exclude application of the first exception concerning “consensual relationships.”

Where a surety issues performance and payment bonds to the benefit of the tribe related to an on-reservation project, the surety will likely be subject to the jurisdiction of the tribal court due to the “consensual relationship with the tribe…through commercial dealings.” Fidelity and Guaranty Ins. Co. v. Bradley, 212 F.Supp.2d 163, 167 (W.D.N.C., 2002). The jurisdiction will extend not only to claims by and between the surety and the Indian owner-obligee, but also to more peripheral causes of action such as indemnification suits brought by the surety against its indemnitors. Bradley, 212 F.Supp.2d at 167 (holding that the tribal court had jurisdiction over an indemnification claim brought by a surety against its Indian principal due to the “consensual relationship” which arose from the contractual relationship with the principal for a project on Indian Lands and because of the issuance of a performance bond for the benefit of the tribe). It is important to remember that the tribal court’s exercise of jurisdiction under the Montana “consensual relationship” exception will likely bring the surety within the boundaries of the tribal court’s jurisdictional reach for activities that occurred off of Indian Lands that are related to that “consensual relationship.” It is not a necessary prerequisite that the surety, its agents or representatives, to have ever stepped foot on Indian Lands.

When the surety is faced with the possibility of having to litigate in tribal court, the practitioner would be wise to examine the nature of the dispute to determine if, under federal law, the tribal court’s assertion of jurisdiction over the surety is legally valid. In addition, the practitioner should also examine the applicable tribal code because some tribal codes provide that jurisdiction over a non-Indian in a civil action may not be asserted by a tribal court absent consent of the non-Indian. However, a typical “jurisdiction” tribal code is Section 1.301 of the Gila River Indian Community’s Community Court’s Rules and Procedures which provides that the tribal court has jurisdiction over any civil matter in which “one of the parties is a resident of the reservation or does business within the reservation or which arises from an event that has occurred within the reservation.” Nevertheless, even if there is a favorable code provision, it is likely that a surety would be deemed to have consented to the tribal court’s jurisdiction by electing to bond an on-reservation project.

III. “But, we have an arbitration clause. The tribe can’t just ignore that, can they?”

Though it may be difficult to convince a tribe to contract away its sovereign immunity, most construction contracts entered into with an Indian tribe obligee do contain arbitration clauses – typically requiring all disputes under the contract to be arbitrated before the American Arbitration Association (“AAA”).[4] During construction, if a dispute arises with the Indian tribe, the natural inclination of the surety will be to file a demand for arbitration. However, in my experience, tribes often rely upon their sovereign immunity and refuse, often illegally, to arbitrate disputes pursuant to the terms of their own contract. Moreover, rather than availing themselves to the AAA or other arbitration forum, a tribe may instead file an action in tribal court to enjoin the arbitration proceeding and to litigate the dispute in the tribal court.

Nevertheless, the surety should file a demand for arbitration because the tribal obligee may concede to the arbitration. But if the tribe refuses to arbitrate, ignoring its own contractual obligations, and if the tribe seeks to enjoin the arbitration proceeding through the tribal court, several questions arise: Does the tribal court have jurisdiction to enjoin the arbitration? Can the surety compel the tribe to arbitrate? If so, in what forum must the motion to compel be filed? Can the surety seek relief in federal court to enjoin the tribal court proceeding?

A. Jurisdiction of Tribal Court Over the AAA

Any action brought by a tribe in tribal court to enjoin an arbitration presupposes that the tribal court has jurisdiction over the AAA and its jurisdiction extends to the conduct of the AAA. The same standard enunciated in Montana and discussed above is applicable for purposes of determining whether the tribal court has jurisdiction over the AAA. In order for the tribal court to have jurisdiction, the AAA must have engaged in “consensual relationships with the tribe or its members”.[5] This creates an interesting issue and one may be too quick to instinctually dismiss the notion that a tribal court could or would enjoin the AAA.

Unfortunately, there is case precedent that supports the notion that a tribal court has jurisdiction to enjoin both a surety and the AAA so as to stay arbitration proceedings. In Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412 (8th Cir. 1996), a casino management company sued tribal entities seeking to compel arbitration. Prior to the district court action, the management company submitted its demand for arbitration to the AAA pursuant to the express arbitration provision and waiver of sovereign immunity contained in the contract between the parties. In turn, the tribe filed an action in tribal court seeking a declaration that the contract was null and void and an injunction against pending arbitration proceedings. The management company moved to dismiss the tribal action for lack of jurisdiction and opposed the injunction. Nonetheless, the Tribal Judge found that the tribal court had jurisdiction and issued an injunction enjoining both the management company and the AAA. The management company, in turn, filed its district court action seeking to enjoin the tribal court proceedings and compel arbitration. The district court denied the management company’s request. On appeal, the Eighth Circuit did not address the issue of tribal jurisdiction over the AAA. However, the Court did consider arguments by the management company concerning enforcement of arbitration, only to find against enforcement. Id. at 1421. Relying heavily on the exhaustion doctrine, the Court stayed the management company’s motion pending exhaustion of all tribal remedies.

Extending Three Affiliated Tribes in Gaming World Int'l, 317 F.3d at 851-852, the Eighth Circuit stated:

Our decision in [Three Affiliated Tribes] and those cases decided by the Fifth, Ninth, and Second Circuits teach that exhaustion should be required when a party tries to avoid tribal court jurisdiction by seeking an order to compel arbitration in federal court. This is especially true if the underlying dispute involves activities undertaken by tribal government within reservation lands. Failure to require exhaustion in these circumstances would undermine the important federal policy to foster tribal self government through the development of tribal courts as enunciated in [National Farmers] and [Iowa Mutual].

The Three Affiliated Tribes and Gaming World Int’l cases are troubling for the reason that the Eighth Circuit has refused to enjoin tribal proceedings or compel arbitration, and, instead, stayed the federal action pending exhaustion of tribal proceedings. Thus, as a consequence, the tribes were able to enjoin arbitration and litigate in tribal court despite a clear contractual agreement to arbitrate. However, it is important to keep in mind that neither the non-Indian plaintiff nor the AAA in Three Affiliated Tribes specifically appealed or challenged the tribal court’s decision enjoining arbitration. Instead, the non-Indian plaintiff simply filed suit in district court and requested an injunction enjoining the tribal court and compelling arbitration. Thus, the Eighth Circuit never directly addressed the issue of the tribal court’s jurisdiction to enjoin the AAA, preferring only to stay its proceeding until all tribal remedies had been exhausted.

Additionally, the author knows of no reported decision from any other jurisdiction that expressly holds that a tribal court has jurisdiction to enjoin an arbitration proceeding. One could argue that, after a demand for arbitration is filed by the surety, by engaging the tribe in the arbitration proceeding, the AAA entered into a “consensual relationship” with the tribe sufficient to support the tribal court’s exercise of jurisdiction over the surety pursuant to the first Montana exception. On the other hand, a consensual relationship is a two-way street and, where the tribe refuses to arbitrate and seeks relief in tribal court, the surety should argue that the tribe has not consented to or recognized the validity of the AAA proceedings, therefore no “consensual relationship” exists.

It is also important to note that even if a tribal court refuses to enjoin a AAA proceeding, the tribe very well could seek and obtain a similar injunction in federal court, which, as was made clear in Gaming World Int’l and Three Affiliated Tribes, does have jurisdiction to stay arbitrations. Moreover, because strong federal precedent uniformly supports the exhaustion of tribal remedies, it is probable that the federal court would issue an order in favor of the tribe staying arbitration. Gaming World Int’l, 317 F.3d at 851; Three Affiliated Tribes, 93 F.3d at 1420-1421.

B. Filing a Motion to Compel Arbitration in Tribal Court

A federal court’s authority to compel arbitration is based upon the Federal Arbitration Act (“FAA”), which may not apply to claims against an Indian tribe. For example, courts have held that in order for a district court to compel arbitration agreed upon in a contract, the federal court must have an independent basis of jurisdiction over the motion to compel. The fact that the FAA is at issue does not create a “federal question.” Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 25 (2nd Cir. 2000)(Stating that it “is well-settled that the FAA does not confer subject matter jurisdiction on the federal courts even though it creates federal substantive law.”) citing Southland Corp. v. Keating, 465 U.S. 1, 16 n. 9, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984); Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n. 32, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Wisconsin v. Ho-Chunk Nation, 463 F.3d 655, 659 (7th Cir. 2006). However, at least one court has found that the federal court does have jurisdiction over a motion to compel arbitration which does not involve federal questions because refusing to arbitrate is a “manifest disregard of the federal laws.” Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 27 (2nd Cir. 2000)(Holding that “the simple presence of federal claims in the arbitration itself [is] insufficient as an independent basis for federal jurisdiction,” but exercising jurisdiction because the complaint alleged a “manifest disregard of federal law.”). Additionally, as discussed earlier in this paper, diversity jurisdiction may not be found because unincorporated Indian tribes are not citizens of any state, nor are they a foreign nation. Recognizing the issues that are confronted when trying to bring an Indian tribe within the jurisdictional reach of federal courts, and remembering the federal courts’ strong policy of deferring to tribal courts and requiring the exhaustion of tribal remedies, a motion to compel arbitration will likely not be successful in federal court. For this reason, any motion to compel arbitration filed by a surety should be filed in tribal court.

The troubling aspect about this, of course, is the surety is asking the tribal court to step aside and allow the financial interests of its own tribe to be conclusively determined by a judicial body other than itself. Moreover, even if the tribal court is willing to do this, and even if the tribe does not seek injunctive relief through federal court, without a waiver of sovereign immunity, the tribe cannot be forced to arbitrate or litigate the dispute. Indeed, the Navajo Supreme Court has held that a non-Indian cannot sue the tribe even in its own tribal court where there is no waiver of sovereign immunity. TBI Contractors, Inc. v. Navajo Tribe, 16 Ind.L.Rep. 6017 (Navajo Sup.Ct. 1988). Thus, it is possible that the surety could be entirely precluded from asserting any affirmative claims against the tribal obligee. However, in reality, most tribes will actively participate in litigation in their own forum, and will abide by the orders of the tribal court. Moreover, at least one tribe has its own arbitration law, so the practitioner should consult the applicable Tribal Code to determine what the tribe’s rules are related to arbitrating disputes. See The Cherokee Code: Published by Order of the Tribal Council of the Eastern Band of Cherokee Indians, Chapter 94.

Regardless of whether the tribe with whom the reader is dealing has its own arbitration rules or not, it is critical to remember that, in order to preserve a surety’s ability to appeal the issue to federal courts, you must exhaust all available tribal remedies, and the first step to exhausting all tribal remedies is seeking relief from the tribal court. The surety’s appeal rights are more fully discussed in Section IV(E) below.

C. Using the Bankruptcy Court to Escape from Tribal Court

There is one final forum available to the surety and the creative practitioner which the surety may be able to use to avoid litigating in tribal court. That forum is bankruptcy court. In many instances where a surety is called upon to act under its payment and performance bonds, the bond principal is simply financially incapable of performing its contractual obligations. In such a situation, the bond principal may seek bankruptcy relief. While it is well beyond the scope of this paper to discuss the full effect upon a surety of its principal’s bankruptcy proceeding, in the limited context of litigating against an Indian tribe, it can be a blessing in disguise. The debtor-principal’s bankruptcy proceeding can be used by the surety to preclude the tribal court from exercising jurisdiction over causes of action that affect the debtor or the debtor’s estate.

Even though federal courts retain original jurisdiction over disputes with Indian tribes, they refuse to exercise their jurisdiction due to the tribal exhaustion doctrine. Interestingly, however, federal courts which have addressed the issue have unanimously held that the exhaustion doctrine does not apply to bankruptcy or bankruptcy-related actions. See, In re Davis Chevrolet, Inc., 282 B.R. 674 (D.Ariz. 2002)(Chapter 7 debtor did not have to satisfy tribal exhaustion requirement, as prerequisite to trustee’s pursuit of claims against Indian tribe); Chickaway v. Bank One Dayton, N.A., 261 B.R. 646 (S.D.Miss. 2001)(the exhaustion rule did not apply so as to preclude bankruptcy court from removing bankruptcy related claims from tribal courts); In re Haines, 233 B.R. 480, 484 (D.Mont.1999)(“[I]n the unique realm of bankruptcy, the Court finds that the exhaustion rule…simply does not apply”); Lower Brule Construction Co. v. Sheesley’s Plumbing & Heating Co., Inc., 84 B.R. 638, 641-642 (D.S.D.1988)(“Because application of the exhaustion rule to cases filed in bankruptcy court would not serve the interests of comity or judicial economy and would be an exercise in futility, the Court holds that the exhaustion rule does not apply”). Accordingly, the exhaustion doctrine does not preclude a bankruptcy court from issuing orders staying tribal actions and removing bankruptcy related claims from tribal courts. Indeed, 11 U.S.C. §105(a) grants the bankruptcy court broad power to issue any “order, process, or judgment that is necessary or appropriate to carry out the provisions of [the bankruptcy code].”

The basis for the tribal exhaustion doctrine being inapplicable in bankruptcy matters is essentially three-fold. First, the rule of tribal exhaustion is prudential (i.e. a matter of comity), not jurisdictional. In re Davis, 282 B.R. at 84 citing Strate v. A-1 Contractors, 520 U.S. 438, 117 S.Ct. 1404, 1412 (1997). In other words, federal courts retain jurisdiction over a tribal court’s exercising of its own jurisdiction, they simply elect to stay its hand and defer to the tribal court to allow it to make the initial determination of the scope of its own jurisdiction. Second, the civil jurisdiction of tribal courts does not extend to bankruptcy proceedings. Lower Brule Construction Co., 84 B.R. at 641. Third, and most importantly, the exhaustion doctrine does not apply to cases involving matters for which Congress has expressed an “unmistakable preference for a federal forum”, such as in the area of bankruptcy. Davis, 282 B.R. at 686; Chickaway, 261 B.R. at 652 citing El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 119 S.Ct. 1430, 1437 (1999). Undoubtedly, Congress has expressed a clear preference for litigating claims that directly affect the debtor or the debtor’s estate in a federal forum (i.e. bankruptcy courts). Therefore, to the extent that claims arising out of the contract between a debtor-principal, a surety, and a tribal obligee affect the debtor’s estate, the bankruptcy court will be receptive to a motion to compel arbitration.

The practitioner must recognize, however, that the remedy it seeks (compelling arbitration) may not be the remedy the bankruptcy court grants. To the extent that the claim to be arbitrated, or tried in the tribal court, is a “core” proceeding under 28 U.S.C. §157(b)(2), the bankruptcy court will exercise its exclusive jurisdiction over the matter and will issue orders effectively enjoining the tribal court proceeding, will not compel arbitration, and instead will transfer the case to the bankruptcy court. In re Zimmerman, 341 B.R. 77 (N.D.Ga.Bankr. 2006)(Bankruptcy court may determine, with respect to the Code provision implicated by "core" proceeding pending before it, that Congress intended to override the Federal Arbitration Act's general policy favoring the enforcement of arbitration agreements, where proceeding involves provisions of the Code that inherently conflict with the Arbitration Act, or where arbitration of claim will necessarily jeopardize objectives of the Code); In re Chorus Data Systems, Inc., 122 B.R. 845 (D.N.H.Bankr. 1990)(Only proper inquiry for bankruptcy court, in deciding whether to enforce arbitration clause in debtor's contracts, is whether text or purposes of bankruptcy code would be violated so significantly by enforcing arbitration clause that it can fairly be said that Congress would not have intended those provisions or purposes to be overridden by the Federal Arbitration Act; bankruptcy court must make good faith effort to balance competing policies of federal statutes, and must not define "conflict" so broadly as to swallow up policies underlying the Federal Arbitration Act). A non-exhaustive list of types of “core” proceedings is provided in 28 U.S.C. §157(b)(2), but “core” proceedings are typically those that do not have any basis outside the bankruptcy code. In re Gardner, 913 F.2d 1515, 1518 (10th Cir.1990)(holding that core proceedings are those which have no existence outside the bankruptcy). Though the bankruptcy court may not elect to compel arbitration over a “core” proceeding, but instead transfer the proceeding to the bankruptcy court, the bankruptcy court is certainly a more preferable forum for deciding the merits of the dispute than is the tribal court.

It is extremely unlikely, however, that any claim by and between the surety and Indian tribe would be considered a “core” proceeding to the principal-debtor’s bankruptcy case because those claims would be brought by a non-debtor plaintiff against a non-debtor defendant seeking remedies available outside of bankruptcy court. As such, to the extent that a surety’s claims against a tribe allege that the tribe breached the debtor-principal’s contract, those claims will be considered non-core. In re Wood, 825 F.2d 90, 97 (5th Cir.1987)(holding that state law contract actions are non-core even though they may have an effect on estate assets); In re Castlerock Properties, 781 F.2d 159, 162 (9th Cir.1986)(holding that pre-petition state court contract action was non-core). If a surety’s claim is a non-core proceeding, the bankruptcy court will have jurisdiction over the proceeding if it “relates to” the bankruptcy proceeding. 28 U.S.C. § 157(c)(1). A proceeding is related to a bankruptcy if the outcome of the proceeding “could conceivably have [an] effect on the estate being administered in bankruptcy.” In re Gardner, 913 F.2d at 1518 quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3rd Cir.1984). A claim brought by a surety against an obligee will affect the debtor-principal’s estate because the result of the claim will either increase or decrease the amount of the surety’s bond loss which, accordingly, increases or decreases the amount of the surety’s claim against the bankruptcy estate. Therefore, assuming the tribal court matter is a non-core proceeding over which the bankruptcy court has “related to” jurisdiction, the bankruptcy court has the authority to stay the proceeding and compel immediate arbitration. In re Midwest Communications Corp., 144 B.R. 354 (E.D.Ky.Bankr. 1992)(Debtor's non-core adversary proceeding alleging default on two prepetition purchase agreements for services would be stayed pending arbitration pursuant to agreements' binding arbitration clauses); Wisconsin v. Ho-Chunk Nation, 463 F.3d 655, 659 (7th Cir. 2006)(Court may issue “an order compelling arbitration only when the federal district court would have jurisdiction over a suit on the underlying dispute.”); but see In re Oakwood Acceptance Corp., 308 B.R. 81, 85-86 (D.N.M.Bankr. 2004)(Bankruptcy court exercised its “related to” jurisdiction over a non-core proceeding but nevertheless remanded the proceeding to the Navajo tribal court because the “action has a long history in the Navajo courts” and “the Plaintiff has not shown that the case cannot be timely adjudicated in the tribal forum.”).

Though it is well beyond the scope of this paper to fully explore the unique tools available to the practitioner by virtue of the bond-principal’s bankruptcy proceeding, the practitioner must be aware that the practical effect of the bankruptcy court not having its hands tied with the tribal exhaustion doctrine is significant. Whether the claim to be arbitrated is a “core” proceeding or a “non-core” proceeding, the bankruptcy court should exercise its jurisdiction to stay the tribal court proceeding and either hear the case itself or compel the parties to arbitrate.

IV. “Looks like we are stuck in tribal court. What can I expect?”

A. Establishment of Tribal Courts

Many, but by no means all, tribes have established a tribal court. Using the term “court” may be a misnomer as that term connotes a near uniform image in the minds of all practitioners of a formal forum, presided over by a judge, with a clear understanding of the rules of procedure. Contrary to the practitioner’s expectations, a tribal “court” may indeed be nothing more than a council of tribal leaders. No matter how informal or inadequate the tribal “court” may seem to the outsider, the Supreme Court has recognized that “[n]on-judicial tribal institutions…[are] competent law-applying bodies.” Santa Clara Pueblo, 436 U.S. at 66. It is therefore incumbent to understand not only the basis for being in tribal court in the first place (as discussed above) but also understand the field on which the legal game will be played.

Tribal courts are separate courts, created by a sovereign nation, and are not required to act in accordance with long-standing legal principles such as due process and the Bill of Rights. The Indian Civil Rights Act of 1968 does extend certain constitutional protections to tribal courts however, the statute’s reach is limited to habeas corpus proceedings. 25 U.S.C. §1301 et seq.

To be certain, most tribes wealthy and sophisticated enough to engage in large scale commercial construction will have an established tribal court. As mentioned above, federal courts hold that jurisdiction over non-Indian activities occurring on Indian Lands presumptively lies in tribal courts. However, a tribe’s constitution, charter, or code may set different jurisdictional limits. Accordingly, once the practitioner accepts the fact that he will be litigating in tribal court, and after analyzing the tribal court’s jurisdiction under federal law, he must carefully study the applicable tribal charter, constitution, and code to ensure that the tribe has not limited its court’s jurisdictional reach.

B. Admission to Practice

In order to represent a client in a tribal court, the practitioner must be admitted to practice in that court. Typically, admission is done by filing a motion for pro hac vice admission pursuant to a particular provision of the applicable tribal code. Although this may seem like a routine procedural hurdle, it is not. Some tribes do not allow attorneys to represent clients in tribal court on civil actions at all. See for example, Law and Order Code of the Fort McDowell Yavapai Community, Arizona, Sec. 1-25 (“Attorneys shall not be permitted to appear as legal counsel in any civil action or proceeding” except in certain proceedings involving juveniles). In such a situation, the surety would be represented by a tribal advocate who may or may not be an “attorney” who attended law school and passed the bar of some jurisdiction. This “No Attorneys Rule” can be enforced to the extreme. In one matter that I was working on, we represented a client litigating in a tribal court which had a “No Attorney Rule.” We retained a tribal advocate and immediately began preparing substantive motions arguing that the tribal court did not have jurisdiction over the client. An attorney from my firm attended the hearing on the motion, but simply sat in the audience. The court required all people in the courtroom to announce - parties, advocates, and members of the audience. When the attorney from my firm announced his name, the tribal judge inquired as to whether he was an attorney. He said that he was, but indicated that he was simply there to observe. The tribal judge ordered the attorney to leave the courtroom, indicating that he had no right to witness the proceedings.

Though the above anecdote is certainly the exception rather than the rule, the surety can be in for a rude awakening if it assumes that its attorney can represent its interests in tribal court. By and large however, most tribes do provide a code provision allowing attorneys to represent clients in civil actions. For example, the Oglala Sioux Tribe: Law and Order Code, Chapter 14, Rule 2, titled “Attorneys” states: “Any party to any case before the Oglala Sioux Tribal Court may employ an attorney to present his case. Such attorney may or may not be a person admitted to any State or Federal Bar…”

In addition to codifying the rule that attorneys may represent clients in civil proceedings, tribes typically codify the procedure by which admission will be granted. A good example is found in The Law and Order Code of the Ute Indian Tribe of the Uintah and Ouray Reservation, Chapter 5, §1-5-4, titled “Procedure for Admission” which provides for the admission upon verifying that the attorney is a member in good standing of any state’s bar, that will subscribe to the honor oath, and will represent indigent defendants when asked to do so.

Even if a particular tribal court does not have a “No Attorney Rule”, tribal courts have been known to condition pro hac vice admission of attorneys on a variety of things. For example, the Navajo courts often admit attorneys with the condition that the attorney is required to take on one pro bono case at the court’s discretion. Perhaps taking their cue from the Navajo, the Ute tribe specifically provides in their code that an attorney will be admitted to represent a client in a civil action provided that the attorney agrees to represent indigent defendants. See The Law and Order Code of the Ute Indian Tribe of the Uintah and Ouray Reservation, Chapter 5, §1-5-4, “Procedure for Admission.” The price for representing a surety in tribal court could very well be the later representation of an indigent defendant accused of committing an on-reservation crime.

C. Applicable Law

After being admitted to practice in a particular tribal court, the single most critical issue that requires immediate resolution is to determine what law will apply to the proceeding. Indian tribes are not subject to the United States Constitution. United States v. Wheeler, 435 U.S. 313 (1978)(holding that Double Jeopardy Clause did not bar prosecution in both tribal court and federal court); Native Am. Church v. Navajo Council, 272 F.2d 131, 134-135 (holding that First Amendment does not apply to Indian tribes). But, the United States through Congress has plenary power over the tribes to diminish tribal sovereignty by legislation. Johnson v. M’Intosh, 21 U.S. (8 Wheat.) 543 (1823)(holding that the “doctrine of discovery” necessarily diminished the sovereignty of the tribes); United States v. Santa Fe Pac. R.R. Co., 314 U.S. 339, 353-354 (1941)(indicating that Congress must clearly express its intent to reduce Indian rights). Accordingly, the practitioner’s initial inquiry should be to determine whether Congress has passed any law that may be relevant to the litigation and may limit the tribal court’s adjudicatory powers, such as those found in 25 U.S.C. §1, et seq. Unfortunately, in a typical matter involving construction on Indian Lands, no such law exists. Moreover, treaties with the particular tribe should also be examined as they may contain law relevant to a proceeding in tribal court.

The practitioner next would be wise to consult the applicable tribal code, tribal charter and tribal constitution enacted pursuant to the Indian Reorganization Act, 25 U.S.C. §461 et seq. Each tribe’s code is unique to that tribe and is based in part upon the traditions, cultures, and religious values of that tribe. Many tribal codes contain provisions that define the sources of law applicable to hearings occurring within their court. These “governing law” provisions nearly universally state that the law of the tribe, including tribal case law, supersedes federal and state law. For example, section 1-2-11 of the Colville Tribal Law and Order Code, titled “Applicable Law” succinctly states:

In all cases the Court shall apply, in the following order of priority unless superseded by a specific section of the Law and Order Code, any applicable laws of the Colville Confederated Tribes, tribal case law, state common law, federal statutes, federal common law and international law.

Other tribes’ “governing law” provisions are more onerous and specifically state that the court will apply tribal traditions, customs and usages to the extent that the particular issue is not addressed in the tribal constitution or tribal code. Some tribes have gone so far as to explicitly codify that tribal elders may be called upon to advise the court about the tribe’s customs and traditions. Resolution No. L-AS-93-44 of the Absente Shawnee Tribe of Indians of Oklahoma provides a good example:

The Courts shall apply the Tribal Constitution, and the provisions of all statutory law heretofore or hereafter adopted by the Tribe. In matters not covered by Tribal Statute, the Court shall apply traditional tribal customs and usages, which shall be called the Common Law. When in doubt as to the Tribal Common Law, the Court may request the advice of counselors and tribal elders familiar with them. In any dispute not covered by the Tribal Constitution, Tribal Statute, or Tribal Common Law, the Court may apply any laws of the United States or any State which would be cognizable in the courts of general jurisdiction therein, and any regulation of the Department of Interior which may be of general or specific applicability. Upon this Code becoming effective, neither Part 11 of Title 25 of the Code of Federal Regulations, except those Sections thereof which are effective when the Tribe receives certain funding from the Bureau of Indian Affairs, nor State law shall be binding upon the Court unless specifically incorporated into tribal law by Tribal Statute or be a decision of the Tribal Courts adopting some federal or state law as Tribal Common Law. (emphasis added).

It is, perhaps, common sense that the law of its forum will be primarily relied upon and will be applied by a tribal court. Actually applying that law, however, presents additional problems to the practitioner. Although locating the tribe’s code and constitution is a relatively simple task, the same cannot be said for tribal case law or common law. Very few tribes publish a reporter of tribal court opinions and, even if the opinions are available, there is no practical way for the practitioner to truly understand a tribe’s customs and traditions that may affect the interpretation of a particular opinion to the practitioner’s case.[6] For this reason, even in cases where an attorney may represent a client in a civil action in tribal court, the practitioner should consult with an experienced tribal advocate for assistance with locating tribal court opinions and understanding tribal customs and traditions.

D. Practical Differences

The organization and sophistication of Indian tribes are too varied to provide an overview of all practical differences that a practitioner may encounter with all Indian tribes. While it is impossible to anticipate all of the practical differences between litigating in a tribal court and litigating in a state or federal court, it is necessary to highlight a few critical points generally unaddressed by case law.

Tribal judges presiding over a case typically are not trained attorneys. Indeed, most tribal codes provide that a judge need only be of a certain age, familiar with the tribe’s customs and laws, and of good moral character. For example the Law and Order Code of the Fort McDowell Yavapai Community, Arizona, Section 1-18(A), “Qualifications for Judges” provides:

“No person shall be eligible for judicial office unless all of the following qualifications are met: (1) He is Thirty (30) years of age or older, (2) He is a graduate from high school or has obtained a GED and is proficient in reading, writing and speaking the English language, (3) He has never been convicted of a felony in any court in any jurisdiction, and, within one (1) year of the date of an application filed with the Council, has not been convicted of a serious misdemeanor in any court of any jurisdiction. A serious misdemeanor shall be considered to be, for purposes of this section, behavior proscribed by Chapter 6 of this Code or equivalent proscribed behavior in any other jurisdiction, (4) He is of good moral character, (5) He consents to undergo such training as the Council or the President specifies, and (6) Any person shall be eligible to serve as Chief Judge, Associate Judge or Juvenile Court Judge, whether or not he is a resident of the Reservation.”

While one should not underestimate the knowledge and skill of a non-lawyer judge, the practitioner must be aware that the judge will almost assuredly not act like a typical state court judge. Indeed, evidentiary objections, to the extent they are applicable in a tribal court proceeding, may be denied simply because the objection does not seem fair.

Understanding the judge who will be presiding over your case is certainly important. However, it is equally important to understand the rules by which the trial will proceed. Most tribal codes provide that the tribe’s own rules of evidence and rules of procedure will apply. Some tribe’s codes also indicate that the Federal Rules of Evidence and Procedure may also apply. For example, Oglala Sioux Tribe: Law and Order Code, Chapter 2, Section 20.9, “Trial Procedure” states that “the rules of evidence to be followed by the Court and all other details of judicial procedure may be set out in Rules of Court or Federal Rules of Civil Procedures in the absence of Tribal rules.” Differences in the rules of procedure or evidence can be startling, and the practitioner must not expect his tribal court trial to be governed by rules similar to his trials in other courts.

Asking a non-lawyer judge to apply a hodgepodge collection of rules gleaned from the tribal code and federal law can lead to questionable rulings. Though a poor decision on evidentiary or other issues may be grounds for appeal, the practitioner cannot assume that a record of the proceeding will be kept. In many tribal courts, despite an applicable code provision indicating that proceedings will be recorded, it is still difficult to obtain a full written transcript of a hearing. Generally, trials will be transcribed, but courts often fail to record conversations with counsel and pre-trial rulings. In another matter I worked on, a tribal court denied our motion to dismiss for lack of jurisdiction. The ruling occurred orally, in open court, two years after the motion was filed. The judge failed to provide any basis for his decision either in writing, or in court on the record, and simply told the parties that the motion was denied. To make matters worse, the hearing in which the motion was denied was not transcribed in any way. The record upon which to base the appeal was scant, at best, making an appeal nearly a practical impossibility. If at all financially reasonable, the practitioner should retain his own court reporter to be present and transcribe every court proceeding. He simply cannot rely upon the tribal court to appreciate the very important function of keeping a record.

Finally, the practitioner cannot assume that the tribal court will abide by the same general timeline that exists in state and federal courts. A matter in tribal court may linger for many months, or years, without any legal activity, only to be scheduled for trial with just a moments notice. In that same matter in which the tribal court denied our motion to dismiss after it was pending for two years, the court scheduled a trial to begin just one month later. The case had been in limbo for two years, no discovery had been completed due to the pending motion to dismiss, and the parties were instructed that a trial would begin whether the parties were ready or not. We had no choice but to settle. A wise practitioner will prepare for trial to begin at a moments notice, despite the absence of a typical discovery schedule, lest he risk his own unfavorable settlement

E. Appeal Rights – Tribal Exhaustion Doctrine

The existence of tribal court jurisdiction over a non-Indian is a “federal question” within the scope of 28 U.S.C. 1331, and the exertion of that jurisdiction is ultimately subject to federal review. Iowa Mutual Ins. Co., 480 U.S. at 15. Despite this fact, however, appealing a tribal court decision to the federal court is cannot be though of as a safe fall back position. In addition to practical complications such as the lack of a transcript, or a failure of a tribal judge to explain its rulings, a federal court’s scope of review is limited to the legality of the tribal court’s assertion of jurisdiction. While that review will be de novo, the practitioner must recognize that a federal court will not overturn a decision on the merits if it concludes that the tribal court properly exercised its jurisdiction. The goal for the practitioner, therefore, is properly obtaining federal court review of the tribal court’s erroneous assertion of its jurisdiction without being forced to try the case on the merits in tribal court. Standing in his way is the tribal exhaustion doctrine which requires a non-Indian litigant to exhaust its tribal remedies before the federal court will exercise its own jurisdiction to review the tribal court’s decisions. This begs the question, what does it mean to exhaust all available tribal remedies? If the dispute is one of law and/or procedure, is the non-Indian litigant nevertheless forced to try the case on the merits in tribal court before federal relief is available? Will a federal court exercise jurisdiction if the tribal court of appeals declines to hear a matter?

In order to understand what remedies must be exhausted, it is necessary to first understand exactly what the tribal exhaustion doctrine is. The tribal exhaustion doctrine is based on “a policy of supporting tribal self-government and self-determination,” and it is prudential, rather than jurisdictional. National Farmers Union Ins. Co., 471 U.S. at 856; Iowa Mutual Ins. Co., 480 U.S. at 20 n. 14. When a case fits within the policy, exhaustion is mandatory, whether or not an action is actually pending in a tribal court. Duncan Energy Co. v. Three Affiliated Tribes, 27 F.3d 1294, 1300 (8th Cir.1994); Burlington N. R.R. Co. v. Crow Tribal Council, 940 F.2d 1239, 1245 (9th Cir.1991). Moreover, the doctrine applies even though the contested claims are to be defined substantively by state or federal law. Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Housing Auth., 207 F.3d 21, 31-32 (1st Cir. 2000)(“Civil disputes arising out of the activities of non-Indians on reservation lands almost always require exhaustion if they involve the tribe.” (Citations omitted)); United States v. Tsosie, 92 F.3d 1037, 1041 (10th Cir.1996) (“[T]he exhaustion rule does not require an action to be pending in tribal court.”); Crawford, 947 F.2d at 1407; Tom's Amusement Co. Inc. v. Cuthbertson, 816 F.Supp. 403 (W.D.N.C.1993). But see Garcia v. Akwesasne Housing Auth., 268 F.3d 76, 82-83 (2nd Cir.2001)(noting that the existence of a tribal court to which deference should be granted was doubtful and declining to defer to exhaustion before the tribal council). The legal scope of the doctrine is a matter of law to be reviewed de novo. See Bowen v. Doyle, 230 F.3d 525, 530 (2d Cir. 2000); U.S. v. Tsosie, 92 F.3d at 1041; Gaming World Intern., Ltd., 317 F.3d at 849.

Unfortunately, no case provides anything more than general guidelines for determining whether a particular litigant has exhausted all tribal remedies. In fact, it appears that the courts look to the facts of each individual case and make their determinations on a case by case basis. Nevertheless, in the National Farmers Union Ins. Co. and Iowa Mutual Ins. Co. cases, the United States Supreme Court has provided two helpful requirements.

1) The litigant must exhaust all available tribal remedies.

2) The tribal appellate court must be given the opportunity to review a tribal court’s determinations.

The following four cases illustrate a non-Indian litigant availing itself to the tribal court procedures in an increasing amount, prior to seeking federal court review. All four cases rely on the two requirements listed above to analyze whether the particular litigant in each case had exhausted its tribal remedies. Collectively, these cases suggest that a surety must dispute a tribal court’s jurisdiction at the tribal court level and seek review with the tribal appellate court before a federal court will choose to exercise its independent jurisdiction to review the appropriateness of the tribal court’s assertion of jurisdiction over the case.

The first case is Ninigret Development Corp. v. Narragansett Indian Wetuomuck Housing Authority, 207 F.3d 21 (1st Cir. 2000), which disturbingly suggests that a trial on the merits may be a necessary prerequisite to obtaining federal court review of jurisdictional and procedural issues. The First Circuit states: “As a matter of comity, it is for the tribal court, in the first instance, (a) to determine the contours of its own jurisdiction, and if it determines that it has the authority to proceed, (b) to effectuate its jurisdictional determination by adjudicating the merits of the claims.” (emphasis added). Id. at 35. The Court goes on to comment that “should the case return to the federal court, all preserved jurisdictional issues…are subject to plenary district court review…nevertheless, as long as the tribal court has properly defined its own jurisdiction, respect for the tribal court system will bar the relitigation of merits-related issues that were presented to and decided by that court.” Id.

Ninigret Development Corp. strongly suggests that the doctrine of tribal exhaustion requires a non-Indian litigant to try its case on the merits in tribal court before availing itself to the federal courts for a review of the tribal court’s jurisdictional determinations. However, it should be noted that the Court never holds that a trial on the merits is a necessary step to exhausting tribal remedies. The reason they never reached this precise question was because, in the case, the non-Indian litigant failed to attend a hearing before the tribal council, failed to argue against the tribal court’s jurisdiction at the tribal court level, and, obviously, failed to seek appellate review in the tribal court of appeals. In short, the non-Indian litigant never availed himself to the tribal judicial process at all. The non-Indian litigant simply failed to exhaust any tribal remedies, and certainly did not exhaust all tribal remedies.

Unlike the non-Indian litigant in the Ninigret Development Corp. case, the non-Indian litigant in the Iowa Mutual Ins. Co. case did contest the tribal court’s jurisdiction in tribal court. 480 U.S. at 12. However, after the tribal court ruled against the non-Indian litigant, rather than appealing the issue to the tribal court of appeals, the non-Indian litigant filed a federal court action seeking review of the tribal court’s jurisdictional decision.

Ultimately, the Supreme Court concluded that the non-Indian litigant had not exhausted all of the tribal remedies. Said the Court: “[a]t a minimum, exhaustion of tribal remedies means that tribal appellate courts must have the opportunity to review the determinations of the lower tribal courts.” Id. at 17. Here, because the non-Indian litigant did not attempt to obtain tribal appellate court review, it was clear that he had not exhausted all of the tribal court remedies. “Until appellate review is complete, the Blackfeet Tribal Courts have not had a full opportunity to evaluate the claim and federal courts should not intervene.” Id.

It appears that the applicable tribal rules of procedure did not allow for an interlocutory appeal, accordingly tribal appellate review was only available after a trial on the merits. Id. This may have accounted for the non-Indian litigant’s fatal decision to fail to seek tribal appellate review. Though mentioning this procedural nuance, the Supreme Court did not comment upon whether the non-Indian litigant was required to litigate the case on the merits in the tribal court, and then seek tribal appellate review of the jurisdictional issue, before seeking federal relief. Nor did the Court provide any guidance as to how their decision may have been effected had the non-Indian litigant sought tribal appellate review (in the form of an interlocutory appeal) only to have the appellate court refuse to hear the appeal. It simply concluded that “at a minimum, exhaustion of tribal remedies means that tribal appellate courts must have the opportunity to review the determinations of the lower tribal courts.”

The final two cases discuss the exhaustion requirement in the context of an interlocutory appeal prior to a trial on the merits. Both cases conclude that a trial on the merits is not a prerequisite to satisfying the exhaustion requirement. Though these cases stand for the proposition that a trial on the merits is not a necessary prerequisite for federal review, the cases involved actual tribal appellate court review.

The first case is Tunica-Biloxi Indians of Louisiana v. Pecot, 351 F.Supp.2d 519, 524 (W.D.La. 2004). In this case, the Indian tribe sued several non-Indian subcontractors in tribal court for damages arising out of the faulty construction of a casino. The tribe then sought relief in the state court in the form of a declaratory judgment declaring that the tribal court had exclusive jurisdiction over the case. This state court matter was quickly removed to federal court. The federal court concluded that it would abstain “pending further tribal proceedings,” and stayed its own proceedings. The parties then litigated the tribal court’s jurisdiction at the tribal court level. The tribal court concluded that it had jurisdiction and refused to certify the issue for appeal. Nevertheless, despite the refusal of the tribal court to certify the issue for appeal, and despite the tribe’s rules of procedure not allowing for interlocutory appeals, the non-Indian defendants applied for “extraordinary writs” to the tribal court of appeals who chose to entertain the issue, and ultimately concluded that the tribal court did have jurisdiction. Defendants then moved for summary judgment in the federal court matter seeking the lifting of the stay and an injunction enjoining the tribal court action due to lack of jurisdiction. The tribe objected arguing that the tribal remedies had not been exhausted because there had been no trial on the merits.

The district court concluded that it was proper for it to review the tribal court’s jurisdictional decisions because the non-Indian litigants had exhausted all tribal remedies. The court affirmatively stated that “the tribal exhaustion doctrine applies until appellate review is complete. A trial on the merits, however, is not required to satisfy the tribal exhaustion doctrine.” Tunica-Biloxi Indians of Louisiana, 351 F.Supp.2d at 524, citing Enlow v. Moore, 134 F.3d 993 (10th Cir. 1998).

In applying this standard, the court concluded that “not only did it have the opportunity to review the determination of the tribal court, the [tribal] appellate court actually reviewed the determination.” Id. at 524. This suggests that the Iowa Mutual Ins. Co. standard is satisfied if the tribal appellate court had “the opportunity to review the determination of the tribal court.” Clearly, this decision stands for the proposition that tribal remedies have been exhausted if the tribal appellate court has actually reviewed the tribal court’s jurisdictional and procedural decisions, even if the tribal court has not made any decisions on the merits. Nevertheless, it is safe to say that even if interlocutory appeal is not provided for by the tribal rules of procedure, and even if the tribal court refuses to certify an issue for appeal, in order to exhaust all tribal remedies, a surety should nevertheless seek tribal appellate review.

The last illustrative case is Enlow v. Moore, 134 F.3d 993, 995-996 (10th Cir. 1998), a case heavily relied upon by the Tunica-Biloxi court. In Enlow, the Indian tribe sued a non-Indian defendant in tribal court over a boundary dispute. The non-Indian defendant moved to dismiss for lack of jurisdiction in the tribal court. The tribal court denied his motion. The non-Indian defendant then filed an interlocutory appeal, allowable under the applicable tribal rules of procedure, to the tribal appellate court which affirmed the tribal court’s ruling. The tribal appellate court also actually decided the merits of the case even though there were no factual inquires made at the tribal court level. The non-Indian defendant promptly sought review in district court which ultimately concluded that he had not exhausted his tribal remedies because the tribal court had not yet decided the merits.

The Tenth Circuit reversed, holding that the district court was in err when it concluded that tribal remedies were not exhausted because the merits had not yet been decided. The Court affirmatively stated, “we conclude that the highest tribal court had the ‘opportunity to review the determinations of the lower tribal court’, thus exhausting [defendant’s] tribal court remedies.” Enlow, 134 F.3d at 996, citing Iowa Mutual Ins. Co. v. LaPlante, 480 U.S. at 17. In so holding, the Court relied heavily upon the fact that the tribal appellate court, in deciding the jurisdictional issue, ultimately decided the merits of the case as well. As such, a trial on the merits was unnecessary because the merits had already been decided.

Simplifying the cited case law, the following is known about federal review of tribal court’s jurisdictional decisions before there has been a trial on the merits in tribal court.

(1) A litigant has not exhausted his tribal remedies if he failed to make the jurisdictional argument at the tribal court level. Ninigret Development Corp., 207 F.3d at 35.

(2) A litigant has not exhausted his tribal remedies if he has litigated the issue at the tribal court level, but has not sought tribal appellate review due to the fact that interlocutory appeal was not allowed under the tribal rules of procedure. Iowa Mutual Ins. Co., 480 U.S. at 17.

(3) A litigant has exhausted his tribal remedies when the tribal appellate court renders a decision on the issue of jurisdiction, even though the interlocutory appeal was not provided for by the rules of procedure and even though the tribal court judge did not certify the issue for appeal. Tunica-Biloxi Indians of Louisiana v. Pecot, 351 F.Supp.2d at 524.

(4) A litigant has exhausted his tribal remedies if the tribal appellate court has actually decided the jurisdictional issues and rendered an opinion on the merits of the case, usurping the tribal court’s authority to hold a trial. Enlow v. Moore, 134 F.3d at 995-996.

Most tribal rules of procedure do not allow for interlocutory appeals. It is therefore quite likely that, assuming the tribal court rules against a surety’s initial motion, the tribal court will refuse to certify this issue for appeal. It is also likely that, even if the surety seeks “extraordinary writs”, as was done in the Tunica-Biloxi Indians case, the tribal court of appeals will refuse to entertain the issue until after the appeal is properly before it following a trial on the merits. As such, the surety will find itself in the “no man’s land” between cases numbers 2 and 3 illustrated above - being denied pre-trial tribal appellate review of jurisdiction despite its efforts to obtain appellate review.

Using the above cases as guidelines, it is clear that the surety must, at a minimum, argue before the tribal court that the tribal court does not have jurisdiction. If the tribal court rules against the surety, it must then seek appellate review with the tribal court of appeals. Even if this is technically an impermissible interlocutory appeal, it is possible that the tribal appellate court will render a decision. If it does, undoubtedly, the surety would have exhausted all tribal remedies and would be entitled to federal review.

It is not clear whether the federal courts would conclude that all tribal remedies had been exhausted if the tribal appellate court refuses to hear the issue, or disallows the appeal. Nor is it clear whether a non-Indian litigant will be deemed to have exhausted all tribal remedies where the tribal court ruled against the litigant on jurisdictional issues, has yet to decide the merits of the case, and where there does not exist a tribal appellate court. Basil Cook Enterprises, Inc. v. St. Regis Mohawk Tribe, 117 F.3d 61, 68 (2nd Cir. 1997)(“Whether the decision by the tribal court constitutes exhaustion for the purposes of National Farmers depends on the procedures that exist at tribal law to challenge the ruling. . .and the Tribe’s conception of an appealable order.) citing Iowa Mutual Ins. Co. In either situation, the surety should be able to seek federal court review by arguing in good faith that the highest level of tribal court certainly had the “opportunity” to review the jurisdictional issue, and that the surety has exhausted all “available tribal remedies” for that issue.

A practitioner must not forget, however, that even if all tribal remedies have been exhausted, and even if a federal court elects to review the tribal court proceeding, the review will be limited to whether the tribal court’s exercise of jurisdiction was appropriate. If the tribal court had jurisdiction over the proceeding, and if it acted in accordance with its jurisdiction, the federal courts will generally not overturn a tribal court decision on the merits. The tribal court decision will be granted at least comity in state or federal courts and may be res judicata. Thus, even where the practitioner believes that the tribal court does not have jurisdiction over his client, it is critical to litigate the matter fully, to ensure a result on the merits as favorable as possible. The practitioner cannot expect to get a second bite at the apple in federal court.

F. Enforcing a Judgment Against a Tribe

A final comment must be made concerning enforcing a judgment against an Indian tribe. If the reader is lucky enough to obtain a judgment against a tribe, it will be quite difficult to enforce that judgment, no matter in what forum the judgment was obtained. This difficulty exists for a number of reasons. Primarily, however, the difficulty lies in the fact that a judgment cannot be enforced by liening the Indian Lands through the use of a state’s lien laws. See e.g. U.S. v. Chinburg, 224 F.2d 177 (10th Cir. 1955)(holding that a house built by an allottee on land held in trust by the United States was not subject to Wyoming’s mechanic’s lien law). Indeed, Congress has expressly provided that title to Indian Lands cannot be affected absent a “treaty or convention entered into pursuant to the constitution.” 25 U.S.C. §177. The Supreme Court extended the application of anti-alienation laws to land held in fee simple by a tribe in U.S. v. Candelaria, 271 U.S. 432, 46 S.Ct. 561, 70 L.Ed. 1023 (1926). See also Alonzo v. U.S., 249 F.2d 189 (10th Cir. 1957)(holding that anti-alienation law applies to off-reservation lands purchased by a tribe). More problematic, even if the Indian Lands could be encumbered, at least one federal court has ruled that state officials do not have the power to enforce state court judgments on Indian Lands. Annis v. Dewey County Bank, 335 F.Supp. 133, 136 (D.S.D. 1971).

Moreover, the practitioner must not assume that a waiver of sovereign immunity in the tribe’s contract necessarily allows execution of a judgment against the tribe. See Maryland Casualty Co. v. Citizens National Bank, 361 F.2d 517 (5th Cir. 1965); Aircraft Equipment Co. v. Kiowa Tribe, 2 P.3d 338 (Okla. 2000)(concluding that judgment creditor could not garnish tribal accounts because tribe was entitled to its sovereign immunity). Indeed the Tenth Circuit held that because the Navajo code did not provide for a garnishment proceeding, a judgment creditor could not garnish the wages of a Navajo member who was employed by a non-Indian corporation on Indian Lands. Joe v. Marcum, 621 F.2d 358, 362 (10th Cir. 1980). Despite the fact that the loan was obtained off the reservation, and despite the fact that the Navajo tribal member’s employer was a non-Indian, the Tenth Circuit believed that the state’s garnishment proceeding “impinges upon tribal sovereignty” and would “thwart the Navajo policy not to allow garnishment.” Joe, 621 F.2d at 362.

Accordingly, if judgment against a tribe is to be enforced, absent an express waiver of sovereign immunity allowing for the enforcement of a judgment in state or federal court, the practitioner’s only resort is to the tribe’s law - he must seek enforcement in the tribal court. Babbitt Ford, Inc. v. Navajo Indian Tribe, 710 F.2d 587 (9th Cir. 1983)(a non-Indian must comply with tribal laws when executing a state court judgment on the reservation). Some tribe’s codes have provisions related to executing judgments. See Maryland Casualty Company v. Citizens Nat. Bank of West Hollywood, 361 F.2d 517 (5th Cir. 1966). Many do not. Other tribes, such as the Cherokee, have adopted state statutes for enforcing judgments. Cherokee Nation v. Nations Bank, N.A., 67 F.Supp.2d 1303 (E.D.Okla. 1999). Many have not. Enforcing a judgment against a tribe will largely be dependent upon the tribe with whom one is dealing. To the fullest extent possible, the surety would be wise to understand the prospects of enforcing a judgment against a particular tribe before electing to bond a project on that tribe’s land.

Perhaps to avoid the problems with enforcing a judgment against an Indian tribe, some sureties have begun requiring, as a condition to bonding an on-reservation project, that the Indian tribe deposit the entire contract balance into an escrow account managed by a third party. Obviously, this money will not compensate the surety for extra work that had to be performed, and will not avoid the many problems it will face when litigating a dispute against an Indian tribe, but at least it provides a pot of money up to the contract balance to pay for work performed on the project.

V. Concluding Remarks

When a surety elects to bond a project that is on Indian lands, it must recognize that at some point it will likely end up litigating in tribal court. Tribal courts are significantly different than state and federal courts and are highly unpredictable. In order to safely navigate the treacherous waters that a practitioner faces, the practitioner must expect the unexpected and prepare accordingly. That preparation begins with a complete understanding of a tribe’s sovereign immunity, of the tribal court’s jurisdiction over the surety, and an understanding that tribal court is a very different forum than he is used to. Volumes can be written on each and every issue briefly touched upon in this paper, and this paper should not be viewed as an exhaustive scholarly analysis of Indian Law. It is my hope, however, that this paper can be used by the practitioner as both a roadmap of questions that will be encountered throughout the tribal litigation process and as a springboard for discovering the answers to those questions. . u

Useful Resources

The following websites provide a great deal of information about many tribes, including online versions of tribal codes.

1. Native American Constitution and Law Digitization Project

2. National Indian Library

3. Tribal Court Clearinghouse

4. National Tribal Justice Resource Center