957 P.2d 81 (Okla. 1998), 87139, Hoover v. Kiowa Tribe of Okl.

Docket Nº:87139.
Citation:957 P.2d 81
Party Name:Robert M. HOOVER, Jr., Appellee, v. The KIOWA TRIBE of OKLAHOMA, Appellant.
Case Date:March 17, 1998
Court:Supreme Court of Oklahoma

Page 81

957 P.2d 81 (Okla. 1998)

Robert M. HOOVER, Jr., Appellee,



No. 87139.

Supreme Court of Oklahoma.

March 17, 1998.

Page 82

As Corrected March 24, 1998 and April 13, 1998.

R. Brown Wallace, Oklahoma City, for appellant.

William J. Robinson, Oklahoma City, for appellee.


¶1 In Hoover v. Kiowa Tribe of Oklahoma, 909 P.2d 59 (Okla.1995), cert. denied 517 U.S. 1188, 116 S.Ct. 1675, 134 L.Ed.2d 779 (1996) (Hoover I ), we rejected the argument of appellant, Kiowa Tribe of Oklahoma (the Tribe), that the common law doctrine of tribal sovereign immunity bars the exercise of jurisdiction by the state courts of Oklahoma over an action against the Tribe for damages arising out of an alleged breach of contract. Hoover I followed LEWIS V. THE SAC AND FOX TRIBE OF OKLAHOMA HOUSING AUTHORITY, 896 P.2D 503 (OKLA.1994),1 cert. denied 516 U.S. 975, 116 S.Ct. 476, 133 L.Ed.2d 405 (1995), and held that a contract executed outside of Indian country between an Indian tribe and a non-Indian is enforceable in state court. 2

¶2 In this appeal we again consider the jurisdictional challenge. We conclude that economic activity within the state of Oklahoma by a federally recognized Indian tribe residing within the state is subject to the laws of Oklahoma and the Tribe is subject to suit in state court on the same terms as any other person. We find that the appellant/Tribe has admitted the material facts essential to appellee/Hoover's state-law contract claim for recovery of damages and hold that appellee is entitled to summary judgment as a matter as of law.

  1. The proceedings.

    ¶3 Hoover I held that the Tribe could be sued in state court and reversed the district court's dismissal. On remand, Robert M. Hoover, Jr. (Hoover), moved for summary judgment, asserting that all material facts are undisputed and that he is entitled to judgment on the promissory note in the amount of $142,499.00 as a matter of law. 3 In opposition to summary judgment, the Tribe admitted that the promissory note was executed by the chairman of its business committee 4 as consideration for the purchase

    Page 83

    of shares in the Oklahoma corporation and that the note is in default as a result of payments not being made, and again pressed its tribal sovereign immunity defense. The Tribe contended that: 1) as a federally recognized Indian tribe, it is immune from suit for damages; 2) its sovereign immunity was expressly reserved in the promissory note and security agreement; and, 3) Hoover failed to present any evidence that the Tribe waived its sovereign immunity or consented to be sued.

    ¶4 The district court sustained Hoover's summary judgment motion, granted Hoover judgment in the amount of $142,499.00, and awarded Hoover attorney fees. In its petition in error, the Tribe expresses its intent to preserve its jurisdictional defense pending a petition for writ of certiorari to the United States Supreme Court. It urges an exception to the "settled law of the case" doctrine 5 that a prior decision is not controlling if it is found to be erroneous and will result in manifest injustice . 6 This exception hinged on reversal of Hoover I by the United States Supreme Court, which denied the Tribe's petition for certiorari. 7

  2. The Tribe's argument on summary judgment.

    ¶5 The Tribe argued that a federally recognized tribe 8 may not be summoned into Oklahoma courts in a suit for damages because of inherent tribal sovereignty as recognized in Santa Clara Pueblo v. Martinez, 436 U.S. 49, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978). In that case, Martinez sued the Santa Clara Pueblo Indian Tribe in federal district court seeking declaratory and injunctive relief against enforcement of a tribal ordinance which denied tribal membership to children of female members who marry outside the tribe. Recognizing that Indian tribes retain their original natural rights in matters of tribal self-government, the Santa Clara Pueblo Court refused to find an implicit federal district court remedy against the tribe or an officer of the tribe to redress an equal protection claim to tribal membership pursuant to the Indian Civil Rights Act of 1968, 25 U.S.C. §§ 1301-1303. 9

    ¶6 The Tribe also argued that Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991), recognizes its inherent tribal sovereignty as a shield from suit

    Page 84

    for damages in the absence of clear waiver or explicit congressional consent. In that case, the Oklahoma Tax Commission assessed the Potawatomi Tribe for delinquent taxes which the Tribe had failed to pay on cigarettes sold to tribal members and non-members at the Tribe's convenience store on Indian country land. Concluding that tribal immunity protected the tribe from direct state taxation on activities occurring within Indian country, the Court observed that the doctrine does not shield individual tribal agents and officers. In his concurring opinion in the Citizen Band Potawatomi case, Justice Stevens expressed doubt that tribal immunity extends to cases arising from a tribe's commercial activity outside its own territory. 10

    ¶7 Neither the Santa Clara Pueblo case nor the Citizen Band Potawatomi case holds that a federally recognized Indian tribe is immune from suits for damages. This controversy arises out of the Tribe's economic activity rather than tribal relations activity that affects the integrity of the Tribe as a distinct cultural entity, and hence it is not analogous to the controversy in Santa Clara Pueblo v. Martinez. This controversy arises out of the Tribe's activity outside of Indian country, and hence it is not analogous to the balancing of state/tribal powers within Indian country in Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe.

    ¶8 The Tribe also contended that summary judgment is erroneous because the material fact of the Tribe's consent to suit was not proven. According to the Tribe, Hoover agreed that the Tribe was not relinquishing its sovereign right to be immune from suit for damages 11 and Hoover failed to prove the fact of the Tribe's consent to be sued. 12 The essence of this argument is that the Tribe has an original natural right 13 not to be summoned into state court to answer for any wrong it may have allegedly caused to another when it engages in economic activity in this state. The effect of this argument would be that the Tribe can cause no legally cognizable damages in its activity for economic gain conducted outside of Indian country. This would be so if the Tribe may not be summoned into state court for damages arising out of a state-law contract action because of tribal immunity, nor into federal court in the absence of diversity of citizenship 14 or a federal question. 15

    Page 85

    ¶9 The breadth of the inherent tribal rights urged by the Tribe--tribal immunity greater than the sovereign immunity of this State or our federal Union--presents a significant challenge to our state/federal relationship as well as our state/tribal relationships. We are behooved to further examine the Tribe's claim of inherent tribal sovereignty at any stage of the proceedings. 16 Deciding that tribal sovereignty was not a bar to state-court jurisdiction over this cause, Hoover I 17 said:

    As we explained in Lewis and we reiterate, "[W]henever Indian interests are tendered in a controversy, a state court must make a preliminary inquiry into the nature of the rights sought to be settled. Only that litigation which is explicitly withdrawn by Congress or that which infringes upon tribal self-government stands outside the boundaries of permissible state-court cognizance." Lewis, 896 P.2d at 508, footnote omitted. Accordingly, we hold that a contract between an Indian tribe and a non-Indian is enforceable in state court when the contract is executed outside of Indian Country.

    ¶10 Further study convinces us that no injustice has been done by our former decision 18 and today's opinion is a clarification of our decision in Hoover I. We begin with WORCESTER V. THE STATE OF GEORGIA, 31 U.S. 515, 6 PET. 515, 8 L.ED. 405 (1832)19, and the early acts of Congress which set Oklahoma apart, in many aspects, from the body of general principles of Indian common law developed in the Worcester progeny. 20

  3. Worcester v. The State of Georgia.

    ¶11 The seminal case of Worcester v. The State of Georgia pronounced the common law notion of the Indian tribes' retained original natural right of self-government within Indian country as respected Indians. The notion is based on the European principles of discovery which underlie our constitutional provision that all intercourse with the Indians shall be carried on exclusively by Congress. 21 It is that when our nation was formed the government of the United States assumed a protectorate relationship with the Indian tribes or nations and the dependent Indian tribes or nations retained their original natural right of self-government over Indians within Indian country by consent of the dominant sovereign nation of the United States.

    ¶12Worcester settled a dispute concerning state/tribal powers within Indian country in favor of the dominant federal government. On appeal from criminal convictions and sentences in Georgia courts, Worcester concluded it had jurisdiction to determine whether the acts of Georgia, which abolished Cherokee law and parceled out the Cherokee country among neighboring counties in the state and subjected the inhabitants to Georgia law, were repugnant to the Constitution, laws and

    Page 86

    treaties of the United States. Worcester held that Georgia's legislation extending its jurisdiction over the Cherokee nation and Cherokee country interfered with the relations established between the United States and the Cherokee nation, the regulation of which is committed exclusively to the federal government under settled...

To continue reading