523 U.S. 751 (1998), 96-1037, Kiowa Tribe of Okla. v. Manufacturing Technologies, Inc.

Docket Nº:No. 96-1037
Citation:523 U.S. 751, 118 S.Ct. 1700, 140 L.Ed.2d 981, 66 U.S.L.W. 4384
Party Name:KIOWA TRIBE OF OKLAHOMA v. MANUFACTURING TECHNOLOGIES, INC.
Case Date:May 26, 1998
Court:United States Supreme Court
 
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523 U.S. 751 (1998)

118 S.Ct. 1700, 140 L.Ed.2d 981, 66 U.S.L.W. 4384

KIOWA TRIBE OF OKLAHOMA

v.

MANUFACTURING TECHNOLOGIES, INC.

No. 96-1037

United States Supreme Court

May 26, 1998

Argued January 12, 1998

CERTIORARI TO THE COURT OF CIVIL APPEALS OF OKLAHOMA, FIRST DIVISION

Syllabus

Petitioner, a federally recognized Indian Tribe, owns land in Oklahoma, and the United States holds land in trust for it there. After the Tribe's industrial development commission agreed to buy from respondent certain stock issued by a third party, the then-chairman of its business committee signed a promissory note, in the Tribe's name, agreeing to pay respondent $285,000 plus interest. The note recites it was signed at Carnegie, Oklahoma, where the Tribe has a complex on trust land. According to respondent, however, the note was executed and delivered in Oklahoma City, beyond tribal lands, and obligated the Tribe to make its payments in that city. The note does not specify a governing law, but provides that nothing in it subjects or limits the Tribe's sovereign rights. The Tribe defaulted on the note; respondent sued in state court; and the Tribe moved to dismiss for lack of jurisdiction, relying in part on its sovereign immunity from suit. The trial court denied the motion and entered judgment for respondent. The Oklahoma Court of Civil Appeals affirmed, holding that Indian tribes are subject to suit in state court for breaches of contract involving off-reservation commercial conduct.

Held:

Indian tribes enjoy sovereign immunity from civil suits on contracts, whether those contracts involve governmental or commercial activities and whether they were made on or off a reservation. As a matter of federal law, a tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity. See, e.g., Three Affiliated Tribes of Fort Berthold Reservation v. Wold Engineering, P. C., 476 U.S. 877, 890. Respondent's request to confine such immunity to transactions on reservations and to tribal governmental activities is rejected. This Court's precedents have not drawn those distinctions, see, e.g., Puyallup Tribe, Inc. v . Department of Game of Wash., 433 U.S. 165, 168, 172, and its cases allowing States to apply their substantive laws to tribal activities occurring outside Indian country or involving nonmembers have recognized that tribes continue to enjoy immunity from suit, see, e.g., Oklahoma Tax Comm'n v. Citizen Band of Potawatomi Tribe of Okla., 498 U.S. 505, 510. The Oklahoma

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Court of Civil Appeals' belief that federal law does not mandate such immunity is mistaken. It is a matter of federal law and is not subject to diminution by the States. e.g., Three Affiliated Tribes, supra, at 891. Nevertheless, the tribal immunity doctrine developed almost by accident: The Court's precedents reciting it, see, e.g., United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 512, rest on early cases that assumed immunity without extensive reasoning, see, e.g., Turner v. United States, 248 U.S. 354, 358. The wisdom of perpetuating the doctrine may be doubted, but the Court chooses to adhere to its earlier decisions in deference to Congress, see Potawatomi, supra, at 510, which may wish to exercise its authority to limit tribal immunity through explicit legislation, see, e.g., Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58. Congress has not done so thus far, nor has petitioner waived immunity, so it governs here. Pp. 754-760.

Reversed.

KENNEDY, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O'Connor, Scalia, Souter, and Breyer, JJ., joined. Stevens, J., filed a dissenting opinion, in which Thomas and Ginsburg, JJ., joined, post, p. 760.

R. Brown Wallace argued the cause for petitioner. With him on the briefs was Shelia D. Tims.

Edward C. DuMont argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Acting Solicitor General Dellinger, Assistant Attorney General Schiffer, Deputy Solicitor General Kneedler, and David C. Shilton.

John E. Patterson, Jr., argued the cause and filed a brief for respondent.[*]

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JUSTICE KENNEDY delivered the opinion of the Court.

In this commercial suit against an Indian Tribe, the Oklahoma Court of Civil Appeals rejected the Tribe's claim of sovereign immunity. Our case law to date often recites the rule of tribal immunity from suit. While these precedents rest on early cases that assumed immunity without extensive reasoning, we adhere to these decisions and reverse the judgment.

I

Petitioner Kiowa Tribe is an Indian Tribe recognized by the Federal Government. The Tribe owns land in Oklahoma, and, in addition, the United States holds land in that State in trust for the Tribe. Though the record is vague about some key details, the facts appear to be as follows: In 1990, a tribal entity called the Kiowa Industrial Development Commission agreed to buy from respondent Manufacturing Technologies, Inc., certain stock issued by Clinton-Sherman Aviation, Inc. On April 3, 1990, the then-chairman of the Tribe's business committee signed a promissory note in the name of the Tribe. By its note, the Tribe agreed to pay Manufacturing Technologies $285,000 plus interest. The face of the note recites it was signed at Carnegie, Oklahoma,

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where the Tribe has a complex on land held in trust for the Tribe. According to respondent, however, the Tribe executed and delivered the note to Manufacturing Technologies in Oklahoma City, beyond the Tribe's lands, and the note obligated the Tribe to make its payments in Oklahoma City. The note does not specify a governing law. In a paragraph entitled "Waivers and Governing Law," it does provide: "Nothing in this Note subjects or limits the sovereign rights of the Kiowa Tribe of Oklahoma." App. 14.

The Tribe defaulted; respondent sued on the note in state court; and the Tribe moved to dismiss for lack of jurisdiction, relying in part on its sovereign immunity from suit. The trial court denied the motion and entered judgment for respondent. The Oklahoma Court of Civil Appeals affirmed, holding Indian tribes are subject to suit in state court for breaches of contract involving off-reservation commercial conduct. The Oklahoma Supreme Court declined to review the judgment, and we granted certiorari. 521 U.S. 1117 (1997).

II

As a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity. See Three Affiliated Tribes of Fort Berthold Reservation v. Wold Engineering, P. C., 476 U.S. 877, 890 (1986); Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978); United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 512 (1940) (USF&G). To date, our cases have sustained tribal immunity from suit without drawing a distinction based on where the tribal activities occurred. In one case, a state court had asserted jurisdiction over tribal fishing "both on and off its reservation." Puyallup Tribe, Inc. v. Department of Game of Wash., 433 U.S. 165, 167 (1977). We held the Tribe's claim of immunity was "well founded," though we did not discuss the relevance of where the fishing had taken place. Id., at 168, 172. Nor have we yet drawn a distinction between governmental

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and commercial activities of a tribe. See, e.g., ibid. (recognizing tribal immunity for fishing, which may well be a commercial activity); Oklahoma Tax Comm'n v. Citizen Band of Potawatomi Tribe of Okla., 498 U.S. 505 (1991) (recognizing tribal immunity from suit over taxation of cigarette sales); USF & G, supra, (recognizing tribal immunity for coal-mining lease). Though respondent asks us to confine immunity from suit to transactions on reservations and to governmental activities, our precedents have not drawn these distinctions.

Our cases allowing States to apply their substantive laws to tribal activities are not to the contrary. We have recognized that a State may have authority to tax or regulate tribal activities occurring within the State but outside Indian country. See Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148-149 (1973); see also Organized Village of Kake v. Egan, 369 U.S. 60, 75 (1962). To say substantive state laws apply to off-reservation conduct, however, is not to say that a tribe no longer enjoys immunity from suit. In Potawatomi, for example, we reaffirmed that while Oklahoma may tax cigarette sales by a Tribe's store to nonmembers, the Tribe enjoys immunity from a suit to collect unpaid state taxes. 498 U.S., at 510. There is a difference between the right to demand compliance with state laws and the means available to enforce them. See id., at 514.

The Oklahoma Court of Civil Appeals nonetheless believed federal law did not mandate tribal immunity, resting its holding on the decision in Hoover v Oklahoma, 909 P.2d 59 (Okla. 1995), cert. denied, 517 U.S. 1188 (1996). In Hoover, the Oklahoma Supreme Court held that tribal immunity for off-reservation commercial activity, like the decision not to exercise jurisdiction over a sister State, is solely a matter of comity. 909 P. 2d, at 62 (citing Nevada v. Hall, 440 U.S. 410, 426 (1979)). According to Hoover, because the State holds itself open to breach of contract suits, it may allow its citizens to sue other sovereigns acting within the State. We

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have often noted, however, that the immunity possessed by Indian tribes is not coextensive with that of the States. See, e.g., Blatchford v. Native Village of Noatak, 501 U.S. 775 (1991). In Blatchford, we distinguished state sovereign immunity from tribal sovereign immunity, as tribes were not at the Constitutional...

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