TTEA v. Ysleta Del Sur Pueblo

• Decision Date: 19 July 1999
• Docket Number: No. 98-50582,98-50582
• Citation: 181 F.3d 676
• Parties: (5th Cir. 1999) T T E A, A Texas Corporation Plaintiff-Appellant, v. YSLETA DEL SUR PUEBLO; JOSE G SIERRA, Presiding Judge of the Ysleta Del Sur Pueblo; ANGELA R LUHAN, Associate Judge of the Isleta Pueblo; The Tribal Court of the Ysleta Del Sur PueblO Defendants-Appellees
• Court: U.S. Court of Appeals — Fifth Circuit

Page 676

181 F.3d 676 (5th Cir. 1999)

T T E A, A Texas Corporation Plaintiff-Appellant, v. YSLETA DEL SUR PUEBLO; JOSE G SIERRA, Presiding Judge of the Ysleta Del Sur Pueblo; ANGELA R LUHAN, Associate Judge of the Isleta Pueblo; The Tribal Court of the Ysleta Del Sur PueblO Defendants-Appellees

No. 98-50582

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

July 19, 1999

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeal from the United States District Court for the Western District of Texas

Before POLITZ, HIGGINBOTHAM, and DAVIS, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Today we again take up the long saga of this country's relationship with Indian country, drawing on a body of law more stable than the conflicting shifts in governmental policy on which it lies--but bearing scars of these shifts in its own ambiguities. TTEA, a Texas corporation, seeks to counter rulings of a tribal court in its dispute with the Ysleta del Sur Pueblo Indian Tribe over a contract. We examine the jurisdiction of the district court and of the tribal court, finding only the latter properly exercised.

I

Under its contract with the Tribe, TTEA managed a smoke shop on the Pueblo's reservation in El Paso beginning on November 1, 1994. TTEA was responsible for improving, managing, operating, and marketing the smoke shop, and was obliged to pay the Tribe at least $3000 per month, depending on sales. The contract also gave TTEA a right of first refusal to sell gasoline products. The Tribe was entitled to terminate with thirty days notice only under certain conditions.

On April 14, 1997, six months before the contract would have expired, the governing body of the tribe, the Tribal Council, declared the agreement void. The Secretary of the Interior had never approved the contract, and the Tribal Council concluded that under 25 U.S.C. 81, it was therefore invalid. Three days later, the Tribe filed a suit in tribal court seeking both a declaration that the agreement was void and a refund of money it had paid to TTEA. TTEA's answer denied the applicability of the statute and that the Tribe had paid it any money under the agreement. TTEA also filed a counterclaim, with most of the asserted damages attributable to an alleged breach of the right of first refusal to sell gasoline products; a motion to dismiss for lack of subject matter jurisdiction; and a demand for trial by jury.

Without a hearing, the tribal court entered an order. The order declared that the court had jurisdiction over the matter. It concluded that the contract was subject to 81 and invalid because it was not signed by the Interior Secretary. The court acknowledged that although the parties had not specified which party was responsible for obtaining approval from the Bureau of Indian Affairs, the greater share of the responsibility rested on the Tribe. Nonetheless, it held TTEA legally responsible.

TTEA petitioned for appeal in the tribal court, decrying the absence of a hearing or presentation of evidence. The tribal court, per the same judge who issued the initial ruling, vacated that ruling, but then concluded that there was no genuine issue of material fact about whether the contract was void, granted partial summary judgment to the Tribe on its liability claim, and dismissed all counterclaims. The court indicated that it would proceed to an evidentiary determination of the Tribe's remaining damage claims.

TTEA subsequently brought this action, claiming federal question jurisdiction. It requested that the district court retain jurisdiction over the complaint filed in the tribal court and enjoin its further prosecution. Further, it asked for a declaratory judgment that 81 was inapplicable and that the tribe had violated its status as a tribe by illegally engaging in gaming operations, thus estopping it from asserting its 81 defense. The Tribe moved to dismiss for lack of personal jurisdiction, for lack of subject matter jurisdiction, and for failure to state a claim.

The district court dismissed the action with prejudice. First, it dismissed defendant tribal court officials Jose G. Sierra and Angela R. Luhan, on the ground that those officials were acting in their official capacities within the scope of their authority. Second, it found the tribe shielded from suit on the contract by the doctrine of sovereign immunity and that there was accordingly no subject matter jurisdiction. Third, it found TTEA without standing to complain of the Tribe's gaming activities.

TTEA filed a timely notice of appeal. Abandoning its gaming-related challenge, TTEA argues that the district court should have addressed the scope and applicability of 81 and the subject matter jurisdiction of the tribal court.

II

We begin, as we must, with the district court's subject matter jurisdiction. We agree that the Tribe has sovereign immunity from an award of damages only. We find, however, that the remaining claims have no jurisdictional support.

A.

The Supreme Court recently held that, absent congressional abrogation, tribal sovereign immunity extends even to actions on contracts between the Tribe and others. See Kiowa Tribe v. Manufacturing Tech., Inc., 118 S. Ct. 1700 (1998). Though recognizing "reasons to doubt the wisdom of perpetuating the doctrine," id. at 1704, a six-Justice majority concluded that narrowing of tribal sovereign immunity should be left to Congress, see id. at 1705.

Kiowa, however, was an action for damages, not a suit for declaratory or injunctive relief. This difference matters. In Puyallup Tribe v. Washington Game Department, 433 U.S. 165, 171 (1977), the Court reaffirmed that "whether or not the Tribe itself may be sued in a state court without its consent or that of Congress, a suit to enjoin violations of state law by individual tribal members is permissible." Though the defendants in Puyallup were not tribal officials, the Court cited it the next Term in finding a tribal governor not immune from a suit seeking declaratory and injunctive relief against enforcement of a tribal ordinance. See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 59 (1978). Years later, Justice Stevens suggested that tribal sovereign immunity might not extend "to claims for prospective equitable relief against a tribe." Oklahoma Tax Commission v. Potawatomi Indian Tribe, 498 U.S. 510, 515 (1991) (Stevens, J., concurring).

The distinction between a suit for damages and one for declaratory or injunctive relief is eminently sensible, and nothing in Kiowa undermines the relevant logic. State sovereign immunity does not preclude declaratory or injunctive relief against state officials. See Ex Parte Young, 209 U.S. 123 (1908). There is no reason that the federal common law doctrine of tribal sovereign immunity, a distinct but similar concept, should extend further than the now-constitutionalized doctrine of state sovereign immunity. Cf. Seminole Tribe v. Florida, 517 U.S. 44 (1996). In any event, Santa Clara Pueblo controls. Thus, while the district court correctly dismissed the damages claim based on sovereign immunity, tribal immunity did not support its order dismissing the actions seeking declaratory and injunctive relief.

B.

We would be obliged nonetheless to affirm the district court if it did not have subject matter jurisdiction over TTEA's equitable claims. Of course an absence of immunity does not ensure jurisdiction. In Santa Clara Pueblo, the Supreme Court, despite finding no immunity, found a lack of subject matter jurisdiction. Subject matter jurisdiction in that suit was claimed under the Indian Civil Rights Act of 1968, 25 U.S.C. 1301-1303. Assessing the factors enumerated in Cort v. Ash, 422 U.S. 66 (1975), the Court found that this statute did not provide for an implied right of action. See 436 U.S. at 60-66.

The federal courts do not have jurisdiction to entertain routine contract actions involving Indian tribes. See Gila River Indian Community v. Henningson, Durham & Richardson, 626 F.2d 708 (9th Cir. 1980); Mescalero Apache Tribe v. Martinez, 519 F.2d 479 (10th Cir. 1975). Nor can the possibility that the Tribe might invoke 81 as a defense to TTEA's action confer federal jurisdiction. Under the well-pleaded complaint rule, an anticipatory federal defense is insufficient for federal jurisdiction. See, e.g., Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908).

With ever duller prospects, TTEA claims subject matter jurisdiction under the federal declaratory judgment statute, 28 U.S.C. 2201. The declaratory judgment statute offers no independent ground for jurisdiction. Rather, it permits the award of declaratory relief only when other bases for jurisdiction are present. See, e.g., Jones v. Alexander, 609 F.2d 778 (5th Cir. 1980).

To establish an independent basis for jurisdiction, however, the plaintiff need not show that it would state a claim absent the declaratory judgment statute. Rather, it may show that there would be jurisdiction over a claim again it. A leading treatise explains:

If the Jones Company sues for a declaratory judgment that its patent is valid and being infringed by a device manufactured by Smith, the federal claim necessarily appears on the face of the complaint and the suit is one that Jones Company could have brought in federal court by a coercive action for damages or injunction.

The matter is somewhat more difficult if the suit is for a declaratory judgment that the defending party does not have a federal right. . . . [I]t now seems settled that Smith can sue for a declaratory judgment of invalidity or noninfringement.

10B Charles A. Wright et al., Federal Practice and Procedure 2767, at 651 (1998).

This lucid explanation has a foundation, if not an unambiguous endorsement, in the jurisprudence of the Supreme Court. In Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 19 (1983), the Court noted that "[f]ederal courts have regularly taken original...