American Indian Agr. Credit Consortium, Inc. v. Standing Rock Sioux Tribe

• Decision Date: 31 December 1985
• Docket Number: No. 85-5209,85-5209
• Citation: 780 F.2d 1374
• Parties: AMERICAN INDIAN AGRICULTURAL CREDIT CONSORTIUM, INC., Appellee, v. STANDING ROCK SIOUX TRIBE, Standing Rock Sioux Tribal Council, Chairman of the Standing Rock Sioux Tribal Council, and Standing Rock Sioux Credit Committee, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1374

780 F.2d 1374

AMERICAN INDIAN AGRICULTURAL CREDIT CONSORTIUM, INC., Appellee, v. STANDING ROCK SIOUX TRIBE, Standing Rock Sioux Tribal Council, Chairman of the Standing Rock Sioux Tribal Council, and Standing Rock Sioux Credit Committee, Appellants.

No. 85-5209.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 12, 1985.

Decided Dec. 31, 1985.

William R. Perry, Washington, D.C., for appellants.

Thomas W. Fredericks, Boulder, Colo., for appellee.

Before HEANEY, JOHN R. GIBSON and FAGG, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

In Santa Clara Pueblo v. Martinez, 436 U.S. 49, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978), the Supreme Court reaffirmed the long-standing rule that a waiver of the sovereign immunity from suit traditionally enjoyed by Indian tribes "cannot be implied but must be unequivocally expressed." Id. at 58, 98 S.Ct. at 1677. In this action the district court found that appellant Standing Rock Sioux Tribe had "clearly and unequivocally indicate[d] " its consent to suit on a loan from the American Indian Agricultural Credit Consortium, Inc., and on this basis concluded that Standing Rock effectively had waived its sovereign immunity. ¹ Because we conclude that nothing short of an express waiver satisfies the Santa Clara Pueblo standard, and that Standing Rock did not expressly waive its sovereign immunity, we must reverse.

Consortium is a non-profit corporation composed of 15 Indian tribes, including Standing Rock, whose purpose is to aid individual tribe members through the advancement of low interest agricultural assistance loans. In 1978, member tribes' ranchers faced cattle feed shortages and accompanying financial strain brought on by unexpectedly severe winter weather. To expedite relief, Consortium agreed, upon a request by Standing Rock, to advance loans in block form to the member tribes, who in turn would disburse the funds to their individual ranchers. Standing Rock's tribal council then authorized its tribal chairman to secure a loan from Consortium. ²

On February 15, 1978, a loan of approximately $80,000 was obtained on a promissory note signed by the tribal chairman. The loan was to be repaid in seven years with one percent annual interest. The promissory note provided Consortium, upon Standing Rock's default, with several remedies, including the right to charge interest on the principal balance, "in addition to such other and further rights and remedies provided by law." It also provided for reimbursement of attorney fees incurred in collection efforts. The note further stated that the rights and obligations under it would be subject to the law of the District of Columbia. ³ Nowhere, however, did the note expressly speak to Standing Rock's consent to suit or to waiver of immunity from suit. ⁴ Upon receipt of the loan, Standing Rock disbursed the funds to individual tribe members, who signed promissory notes with security interests in its favor. Standing Rock, however, did not establish a collection program, as it had indicated it would, and has failed to make any repayment to Consortium. ⁵

In October 1982, Consortium brought this action seeking recovery on the loan. Standing Rock responded with a motion to dismiss asserting that the action was an unconsented suit barred by tribal sovereign immunity. ⁶ The district court denied the motion, and summary judgment was entered against Standing Rock. This appeal followed.

I.

We begin our discussion, as did the district court, with a reiteration of the principles announced by the Supreme Court in Santa Clara Pueblo v. Martinez, 436 U.S. 49, 98 S.Ct. 1670, 56 L.Ed.2d 106. In Santa Clara Pueblo, the plaintiff, a female member of the tribe, and her daughter brought suit alleging that a tribal ordinance violated the equal protection clause of the Indian Civil Rights Act of 1968, 25 U.S.C. Secs. 1301-03 (1982). The ordinance at issue denied tribal membership and consequent property rights to the children of female tribe members who married outside the tribe, but extended membership to children of similarly situated male members. Id. at 51, 98 S.Ct. at 1673. The Court held that plaintiffs' suit was barred. Indian nations, the Court explained, possess "the common-law immunity from suit traditionally enjoyed by sovereign powers," id. at 58 (citing, e.g., United States v. United States Fidelity & Guaranty, 309 U.S. 506, 512-13, 60 S.Ct. 653, 656, 84 L.Ed. 894 (1940)). The Court continued that sovereign immunity cannot be waived by implication; rather, waiver must be "unequivocally expressed." Id. 436 U.S. at 58-59, 98 S.Ct. at 1677. Since neither the Indian Civil Rights Act itself nor its legislative history contained such an unequivocal expression, the Court concluded, Santa Clara Pueblo was immune from suit. Id. at 72, 98 S.Ct. at 1684. ⁷

The district court in this action acknowledged the Santa Clara Pueblo standard, but distinguished the case. The court opined that the strict express waiver standard, employed to determine whether Congress had authorized a private action based on a statute, need not be applied in evaluating a waiver of sovereign immunity by a tribe itself. The court gave two reasons. First, while a finding of waiver in a statute would affect an entire class of cases, a similar finding in an agreement covering a single transaction would not threaten such widespread interference with tribal autonomy. Second, a waiver based on congressional action, because it is externally imposed, more severely impinges on tribal autonomy than does a waiver by the tribe itself, and therefore should be more reluctantly found. The court warned additionally that "application of the strict 'express' waiver standard in cases of individual waivers by the Tribes would restrict a Tribe's ability to enter into commercial dealing with outsiders, and in some cases, unjustly deprive outsiders of the benefit for which they lawfully contracted, a by-product of which, is worse relations between Indian and non-Indian communities." Slip op. at 5-6.

The district court thus determined that Standing Rock's sovereign immunity to suit on the promissory note should be deemed waived if Standing Rock had "clearly and unequivocally indicate[d]" its willingness to expose itself to suit on the note. Slip op. at 6. In so doing, the court carved out a position different from the "unequivocally expressed" standard of Santa Clara Pueblo. Based on the terms of the note, which reserved to Consortium "rights and remedies provided by law" should collection efforts be required, and which contained an attorney fee provision and a choice of law clause, the court concluded that Standing Rock gave clear indication that it expected suit in the event of default. The court held, therefore, that Standing Rock effectively had waived its sovereign immunity.

There is much appeal to the district court's desire to make Standing Rock face up to its promise. We would have no difficulty implying from the language in the tribal resolution and promissory note, and from the circumstances surrounding Standing Rock's explicit authorization of the loan and receipt of the funds, a waiver of sovereign immunity. We believe this is in essence what the district court did when it concluded that Standing Rock had "unequivocally indicate[d]" its consent to suit. However, it is evident that the district court's legal conclusion runs directly counter to the rule of Santa Clara Pueblo and the body of cases on which it is based.

The principle that Indian nations possess sovereign immunity has long been part of our jurisprudence. United States v. Kagama, 118 U.S. 375, 382, 6 S.Ct. 1109, 1113, 30 L.Ed. 228 (1886); Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 519, 8 L.Ed. 483 (1832); accord Namekagon Development Co. v. Bois Forte Reservation Housing Authority, 517 F.2d 508 (8th Cir.1975). Indian tribes enjoy immunity because they are sovereigns predating the Constitution, United States v. United States Fidelity & Guaranty Co., 309 U.S. at 512-13, 60 S.Ct. at 656; Turner v. United States, 248 U.S. 354, 357-58, 39 S.Ct. 109, 110, 63 L.Ed. 291 (1919), and because immunity is thought necessary to promote the federal policies of tribal selfdetermination, economic development, and cultural autonomy. See generally, F. Cohen, Handbook on Federal Indian Law 324-28 (1982); Note, In Defense of Tribal Sovereign Immunity, 95 Harv.L.Rev. 1058, 1073 (1982). That sovereign immunity can be surrendered only by express waiver enjoys similarly ancient pedigree. Price v. United States and Osage Indians, 174 U.S. 373, 375-76, 19 S.Ct. 765, 766, 43 L.Ed. 1011 (1899); Beers v. Arkansas, 61 U.S. (20 How.) 527, 529, 15 L.Ed. 991 (1857) ("[A]s this permission is altogether voluntary on the part of the sovereignty, it follows that it may prescribe the terms and conditions on which it consents to be sued, and the manner in which the suit shall be conducted * * *."); accord Santa Clara Pueblo v. Martinez, 436 U.S. at 58-59, 98 S.Ct. at 1677. We steadfastly have applied the express waiver requirement irrespective of the nature of the lawsuit. See, e.g., Fontenelle v. Omaha Tribe, 430 F.2d 143 (8th Cir.1970) (suit to quiet title). And indeed, this court long ago settled that these principles apply in contract actions against Indian tribes. Thebo v. Choctaw Tribe, 66 F. 372 (8th Cir.1895) (suit to recover on a contract for payment of attorney fees); accord Adams v. Murphy, 165 F. 304 (8th Cir.1909). Other courts concur. E.g., Ramey Construction Co. v. Apache Tribe, 673 F.2d 315 (10th Cir.1982) (construction contract); United States v. Oregon, 657 F.2d 1009 (9th Cir.1981) (fishing conservation agreement). We therefore must reject, on the basis of overwhelming precedent alone, the district court's conclusion that the sovereign immunity of an Indian nation need not be expressly waived, but can be waived by implication, in contract actions.

We recognize, of course, that the values of stability and judicial...