633 F.3d 680 (8th Cir. 2011), 08-3949, Amerind Risk Management Corp. v. Malaterre

Docket Nº:08-3949.
Citation:633 F.3d 680
Opinion Judge:BEAM, Circuit Judge.
Party Name:AMERIND RISK MANAGEMENT CORPORATION, Appellant, v. Myrna MALATERRE; Carol Belgarde; Lonnie Thompson, Appellees.
Attorney:Lee Bergen, argued, Earl Mettler, on the brief, Albuquerque, NM, for appellant. Daniel Joseph Dunn, argued, Fargo, ND, Thomas A. Dickson, on the brief, Bismarck, ND, for appellee.
Judge Panel:Before BYE, BEAM, and SHEPHERD, Circuit Judges. BEAM, Circuit Judge, concurring specially. BYE, Circuit Judge, dissenting.
Case Date:February 15, 2011
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 680

633 F.3d 680 (8th Cir. 2011)

AMERIND RISK MANAGEMENT CORPORATION, Appellant,

v.

Myrna MALATERRE; Carol Belgarde; Lonnie Thompson, Appellees.

No. 08-3949.

United States Court of Appeals, Eighth Circuit.

February 15, 2011

Submitted: Oct. 22, 2009.

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[Copyrighted Material Omitted]

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Lee Bergen, argued, Earl Mettler, on the brief, Albuquerque, NM, for appellant.

Daniel Joseph Dunn, argued, Fargo, ND, Thomas A. Dickson, on the brief, Bismarck, ND, for appellee.

Before BYE, BEAM, and SHEPHERD, Circuit Judges.

BEAM, Circuit Judge.

Amerind Risk Management Corporation (Amerind) is a federally chartered corporation that assumed the rights and obligations of its tribally chartered predecessor, also named Amerind Risk Management Corporation (ARMC). Amerind appeals the federal district court's adverse grant of summary judgment in this declaratory judgment action. Amerind sought a determination in federal district court that the Turtle Mountain Tribal Court (Tribal Court) lacked jurisdiction over tort litigation between Amerind and three enrolled members of the Turtle Mountain Band of Chippewa Indians (Tribe), and requested an order enjoining the plaintiffs from proceeding in the Tribal Court. The district court held that, although Amerind was a nonmember of the Tribe, the Tribal Court had jurisdiction over the tort litigation based on ARMC's contractual relationship with the Turtle Mountain Housing Authority (TMHA), an entity of the Tribe.

We hold that the Tribal Court does not have jurisdiction over the plaintiffs' direct suit against Amerind because Amerind is entitled to tribal immunity and the plaintiffs have failed to meet their burden of showing that Amerind waived such immunity. Accordingly, we reverse the district court and remand with directions to enjoin the plaintiffs from proceeding against Amerind in Tribal Court.

I. BACKGROUND

In 1986, at the encouragement of the United States Department of Housing and Urban Development, ARMC was incorporated under the laws of the Red Lake Band of Chippewa Indians as a self-insurance risk pool for Indian Housing Authorities and Indian tribes. TMHA joined the ARMC risk pool and, on December 28, 2001, ARMC issued TMHA a " Certificate of Coverage" and a " Scope of Coverage" document outlining TMHA's property damage and personal injury coverage from January 1, 2002, through December 31, 2002.

On October 19, 2002, a fire destroyed a house on the Turtle Mountain Indian Reservation being leased from TMHA, killing two house guests and seriously injuring a third. Three enrolled members of the Tribe— Myrna Malaterre and Carol Belgarde, mothers of the deceased house guests; and Lonnie Thompson, the injured house guest (plaintiffs) 1— brought a wrongful death and personal injury action against TMHA in the Tribal Court. The complaint was amended on September 5, 2003, to include ARMC as a defendant. ARMC filed a motion to dismiss, challenging the Tribal Court's jurisdiction on the basis of tribal sovereign immunity. While the case was pending in Tribal Court, the Department of the Interior issued a federal corporate charter incorporating Amerind

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pursuant to 25 U.S. C. § 477.2 The charter was effective upon ratification by the Charter Tribes— the Red Lake Band of Chippewa Indians, the Confederated Salish and Kootenai Tribes of the Flathead Reservation, and the Pueblo of Santa Ana. By April 15, 2004, all three Charter Tribes passed resolutions ratifying Amerind's federal charter. Notably, the federal charter gave Amerind the power " [t]o acquire the rights and assets and assume the obligations and liabilities of [ARMC]."

On July 1, 2004, the plaintiffs filed a declaratory judgment action in federal district court seeking a determination that the ARMC self-insurance policy covered their claims. Amerind filed a motion to dismiss, asserting that the plaintiffs failed to exhaust their tribal remedies and, alternatively, that Amerind was entitled to tribal sovereign immunity as a § 477 corporation. The federal district court dismissed the case without prejudice, holding that pursuant to the tribal exhaustion doctrine, the Tribal Court should be given the first opportunity to address the factual and legal issues presented in the case, including the tribal sovereign immunity issue. Malaterre v. Amerind Risk Mgmt., 373 F.Supp.2d 980, 982 n. 3, 985-86 (D.N.D.2005)( Amerind I ). The court noted that " [i]f needed, the parties can return to this forum for any further litigation." Id. at 986. Thus, the parties returned to the Tribal Court.

On October 20, 2005, the plaintiffs filed a stipulation to dismiss TMHA with prejudice in the Tribal Court. The Tribal Court granted the motion, leaving Amerind as the sole defendant in the case. Amerind then filed a motion to dismiss, asserting inter alia that it was entitled to tribal sovereign immunity as a § 477 corporation, and that the plaintiffs' action could not proceed directly against Amerind because they were not parties to ARMC's contract with TMHA. The Tribal Court denied Amerind's motion to dismiss, holding that Amerind was not entitled to sovereign immunity because it " does not stand in the same position as TMHA or the [Tribe]." The court also held that the plaintiffs could proceed directly against Amerind because, under Turtle Mountain tribal law, claimants may proceed directly against an insurer if the insured was required by federal law to obtain insurance designed to protect the public against losses. The Tribal Court's decision did not address Amerind's specific contention that it was entitled to sovereign immunity in its own right as a § 477 corporation. Amerind appealed to the Turtle Mountain Tribal Court of Appeals (Tribal Court of Appeals).

Before the Tribal Court of Appeals, Amerind again asserted that it was entitled to sovereign immunity as a § 477 corporation, and that the plaintiffs were prohibited from maintaining a direct suit against Amerind. The Tribal Court of Appeals

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affirmed the Tribal Court's denial of Amerind's motion to dismiss, reasoning that Amerind was not entitled to share in TMHA's sovereign immunity, and that tribal law permitted the plaintiffs' direct suit. Like the Tribal Court, the Tribal Court of Appeals failed to specifically discuss Amerind's status as a § 477 corporation and whether Amerind was entitled to sovereign immunity in its own right.

On September 4, 2007, Amerind commenced a declaratory judgment action in federal district court, seeking a determination that the Tribal Court exceeded its jurisdiction by exercising authority over Amerind, a nonmember of the Tribe, under Montana v. United States, 450 U.S. 544, 565, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981). Amerind also sought to enjoin the plaintiffs 3 from pursuing their tort action directly against Amerind in Tribal Court. Amerind filed a motion for summary judgment on June 24, 2008. Inexplicably, Amerind failed to raise the tribal immunity issue in either its complaint or in its motion for summary judgment. Nevertheless, the plaintiffs' response to Amerind's motion for summary judgment outlined provisions in the Scope of Coverage agreement that allegedly waived ARMC's, and by extension Amerind's, sovereign immunity. The plaintiffs' response also rhetorically inquired, " Why does AMERIND argue that it is entitled to sovereign immunity when the policy clearly states otherwise?" and asserted that " neither AMERIND nor TMHA is entitled to raise sovereign immunity as a defense to the [plaintiffs'] claims."

The district court denied Amerind's motion for summary judgment, concluding that under Montana, the Tribal Court had jurisdiction over Amerind because ARMC entered into a consensual contractual relationship with TMHA to insure TMHA against personal injury and property loss. Amerind Risk Mgmt. Corp. v. Malaterre, 585 F.Supp.2d 1121, 1130 (D.N.D.2008) (Amerind II). The court also incorporated the Tribal Court of Appeals' decision by reference and sua sponte granted summary judgment in favor of the plaintiffs, directing the parties to litigate the plaintiffs' suit in the Tribal Court. Id. The district court did not address whether the doctrine of tribal sovereign immunity affected the Tribal Court's jurisdiction— an issue raised in Amerind I, discussed in the Tribal Court of Appeals' incorporated decision, and addressed in the plaintiffs' response to Amerind's motion for summary judgment.

Amerind appeals, asserting in part that the Tribal Court lacked jurisdiction over Amerind under Montana. Amerind did not raise the tribal immunity issue in its appellate brief, and we directed the parties to address whether tribal immunity barred the plaintiffs' action against Amerind in the Tribal Court. See Taylor v. Alabama Intertribal Council Title IV J.T.P.A., 261 F.3d 1032, 1034 (11th Cir.2001) (per curiam) (We may " sua sponte conduct an inquiry into whether a party enjoys Indian sovereign immunity, as this consideration determines whether a court has jurisdiction to hear an action." ).

II. DISCUSSION

We have held that tribal sovereign immunity is a threshold jurisdictional question.4

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Hagen v. Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040, 1044 (8th Cir.2000). " Indian tribes have long been recognized as possessing the common-law immunity from suit traditionally enjoyed by sovereign powers." 5 Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978). Thus, " [a]s 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." Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998). " A waiver of sovereign immunity may not be implied, but must...

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