A & A Concrete, Inc. v. White Mountain Apache Tribe

• Decision Date: 06 February 1986
• Docket Number: No. 85-2165,85-2165
• Citation: 781 F.2d 1411
• Parties: A & A CONCRETE, INC., Kayle Adams, and Sandy Adams, Plaintiffs-Appellants. v. The WHITE MOUNTAIN APACHE TRIBE, Charles A. Patterson, Violet Patterson, Kenneth Patterson, Shirley Patterson, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1411

781 F.2d 1411

A & A CONCRETE, INC., Kayle Adams, and Sandy Adams Plaintiffs-Appellants. v. The WHITE MOUNTAIN APACHE TRIBE, Charles A. Patterson Violet Patterson, Kenneth Patterson, Shirley Patterson, et al., Defendants-Appellees.

No. 85-2165.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 17, 1986.

Decided Feb. 6, 1986.

John P. Otto, Phoenix, Ariz., for plaintiffs-appellants.

Robert Alan Hershey, Tucson, Ariz., for defendants-appellees.

Appeal from the United States District Court for the District of Arizona.

Before SNEED, ANDERSON and ALARCON, Circuit Judges.

ALARCON, Circuit Judge.

Appellants A & A Concrete, Inc., Kayle Adams and Sandy Adams (collectively "appellants") appeal from the district court's grant of summary judgment in favor of appellees The White Mountain Apache Tribe (the Tribe), White Mountain Apache Development Enterprises, and individual appellees, on appellants' complaint for deprivation of civil rights, conspiracy to deprive them of their civil rights, and related pendent state tort claims. Appellants also appeal from the district court's order denying appellants' cross-motion for summary judgment predicated on res judicata and collateral estoppel grounds. Because appellants failed to exhaust their remedies in the White Mountain Tribal Court, we conclude that federal review of appellants' claims is premature and affirm.

I.

In June 1978, Kayle Adams contracted with the White Mountain Apache Development Enterprise (an economic subsidiary of the White Mountain Apache Tribe) to supply concrete to a housing project to be constructed on the Fort Apache Indian Reservation for the use of tribal members. At the formation of the contract and throughout its term, the Tribe was represented by Charles Patterson, general manager of the Development Enterprise. Pursuant to the contract, the concrete was required to conform to certain strength standards.

In late 1978, Charles Patterson bought stolen heavy construction equipment. He and Kayle Adams were arrested. In February 1979, Adams told Patterson that he was going to testify against Patterson. Patterson threatened to kick Adams off the reservation if he did so. Adams did not testify, and Patterson was subsequently acquitted of the charge.

Sometime early in 1979, the Tribe became aware that Adams had furnished substandard concrete. The substandard character of the concrete necessitated dismantling houses built on defective foundations. The Tribe withheld payment for the materials and brought an action against appellants in the tribal court for breach of contract. Appellants contend that the tribal court lawsuit was the result of a conspiracy to retaliate against Adams for threatening to testify against Patterson.

Appellants were served with the complaint by Navajo County Sheriff's deputies Charles Lane and Gene Russell, and Russell Lupe, a Whiteriver police officer and a tribal court process server. It is unclear which of these persons actually handed Adams the tribal court documents.

Upon the advice of counsel, appellants ignored the service of process and allowed the time to answer to lapse. Appellants did not enter a special appearance in tribal court or otherwise attempt to challenge the tribal court's jurisdiction. On February 6, 1980, the tribal court entered a default judgment against appellants in the amount of $250,000 plus costs and interest.

Pursuant to a writ of execution, the Chief of Police of the Whiteriver Police Department levied on two pieces of equipment belonging to appellants. The Development Enterprise purchased both items of equipment at the court-ordered sale. On the advice of counsel, appellants entered the reservation in September 1980 and removed one of the pieces of equipment.

Kayle Adams was thereafter indicted in federal district court for theft of tribal property. These charges were dismissed by Judge James A. Walsh in December 1980, on the ground that the tribal court lacked jurisdiction to enter the default judgment in the civil suit against Adams.

On November 15, 1979, appellants filed a first amended complaint in district court against the Tribe, doing business as White Mountain Apache Enterprises, the White Mountain Apache Housing Authority (charged with administering housing construction on the reservation), Charles Patterson, and a number of other individual defendants. The complaint alleged (1) conspiracy to deprive the plaintiffs of their civil right to due process; (2) deprivation of civil rights; (3) wrongful garnishment and levy of execution; (4) breach of contract; and (5) unlawful interference with plaintiffs' contract with a third party, Okland Construction. The complaint was dismissed for want of jurisdiction on February 29, 1980. On appeal, this court affirmed the dismissal of the complaint with respect to the second count and reversed and remanded the case with respect to the remaining claims. A & A Concrete, Inc. v. White Mountain Apache Tribe, 676 F.2d 1330 (9th Cir.1982) (A & A Concrete I ). The White Mountain Apache Housing Authority was subsequently dismissed as a party with prejudice.

On February 22, 1985, appellees moved for summary judgment. Appellants filed a cross-motion for summary judgment. On May 13, 1985, the district court granted appellees' motion and denied appellants' cross-motion.

II. STANDARD OF REVIEW

We review a district court's grant of summary judgment de novo. Grigsby v. CMI Corp., 765 F.2d 1369, 1373 (9th Cir.1985). We apply the same standard as that employed by the trial court under Fed.R.Civ.P. 56(c): we will affirm only if the record, read in the light most favorable to the non-moving party, reveals no genuine issues of material fact and establishes that the moving party is entitled to judgment as a matter of law. Id.

The district court's decision to deny appellants' cross-motion for summary judgment is also reviewable de novo: whether res judicata or collateral estoppel operates to bar claims is a mixed question of law and fact subject to de novo review. United States v. Geophysical Corp., 732 F.2d 693, 697 (9th Cir.1984).

III. APPELLEES' MOTION FOR SUMMARY JUDGMENT

Appellees assert three grounds in support of the district court's summary judgment award: (1) appellants failed to exhaust their remedies in tribal court and federal review is thus premature; (2) the Tribe and its employees are immune from suit; and (3) appellants have not established the existence of state action on their section 1983 claim. The district court did not specify the ground on which it granted summary judgment. We may affirm the district court on any basis fairly supported by the record. Hoohuli v. Ariyoshi, 741 F.2d 1169, 1177 (9th Cir.1984) (citing Goodisman v. Lytle, 724 F.2d 818, 820 (9th Cir.1984); United States v. 101.80 Acres of Land, 716 F.2d 714, 727 n. 24 (9th Cir.1983)). Because we conclude that summary judgment was proper on the first ground, we do not reach the second and third grounds proferred by appellees.

Appellants contend that they were excused from their obligation to exhaust their remedies in tribal court because the tribal court lacked subject matter jurisdiction to hear the instant dispute. Appellants argue that the question whether the tribal court had jurisdiction to hear the dispute is a federal question which must be resolved by the district court.

The Supreme Court addressed this issue in National Farmers Union Insurance Companies v. Crow Tribe, 471 U.S. ---, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985). In National Farmers, a Crow Indian obtained a default judgment in tribal court against a school district located within the Crow reservation for damages sustained when he was struck by a motorcycle in the school parking lot. Id., 105 S.Ct. at 2449. The school district and its insurer brought an action for injunctive relief in district court, invoking the court's federal question jurisdiction under 28 U.S.C. Sec. 1331. Id. at 2450. The district court held that the tribal court "lacked subject-matter jurisdiction over the tort that was the basis of the default judgment," and entered an injunction against execution of the tribal court judgment. Id. We reversed without reaching the merits, finding that the district court's exercise of jurisdiction could not be supported on any constitutional, statutory, or common law ground. Id. at 2450 & n. 3.

The Supreme Court held that the district court had jurisdiction under section 1331 over the federal question whether the tribal court had the power to compel a non-Indian property owner to submit to the jurisdiction of the tribal court, see id. at 2452; however, the existence and extent of a tribal court's jurisdiction requires an examination which "should be conducted in the first instance in the Tribal Court itelf." Id. at 2454. The Court opined that Congress' commitment to a policy of supporting tribal self-government and self-determination favors a rule "that will provide the forum whose jurisdiction is being challenged the first opportunity to evaluate the factual and legal bases for the challenge." 105 S.Ct. at 2454 (footnote omitted). The Court commented:

[T]he existence and extent of a tribal court's jurisdiction will require a careful examination of tribal sovereignty, the extent to which that sovereignty has been altered, divested, or diminished, as well as a detailed study of relevant statutes, Executive Branch policy as embodied in treaties and elsewhere, and administrative or judicial decisions.

Id. (footnote omitted). The Court reasoned that if such an examination were performed by the tribal court, a full record could be developed and other courts would benefit from the tribal court's expertise in the event of further judicial review. Id. Because the issue "[w]hether the federal action should be dismissed, or merely held in abeyance pending the development of further Tribal Court proceedings, is a question that should be addressed in the first instance by the...