American Vantage v. Table Mountain Rancheria

• Decision Date: 14 June 2002
• Docket Number: No. 00-17355.,00-17355.
• Citation: 292 F.3d 1091
• Parties: AMERICAN VANTAGE COMPANIES, INC., Plaintiff-Appellant, v. TABLE MOUNTAIN RANCHERIA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1091

292 F.3d 1091

AMERICAN VANTAGE COMPANIES, INC., Plaintiff-Appellant, v. TABLE MOUNTAIN RANCHERIA, Defendant-Appellee.

No. 00-17355.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 14, 2002.

Filed June 14, 2002.

As Amended on Denial of Rehearing July 29, 2002.

COPYRIGHT MATERIAL OMITTED

Gregory S. Cavallo, Jeffer, Mangels, Butler & Marmaro, San Francisco, CA, for the plaintiff-appellant.

Paula M. Yost, Sonnenschein Nath & Rosenthal, San Francisco, CA, for the defendant-appellee.

Appeal from the United States District Court for the Eastern District of California; Anthony W. Ishii, District Judge, Presiding. D.C. No. CV-99-05826-AWI.

Before: REINHARDT, MAGILL^* and FISHER, Circuit Judges.

FISHER, Circuit Judge.

We hold that an unincorporated Indian tribe such as appellee is not a "citizen" of a state within the meaning of the federal diversity statute, 28 U.S.C. § 1332(a)(1), and thus cannot sue or be sued in diversity. The district court's dismissal of this action for want of subject matter jurisdiction is affirmed.

FACTS AND PROCEDURAL BACKGROUND

Appellee Table Mountain Rancheria ("Table Mountain") is a federally recognized Indian tribe located in Fresno County, California, where it owns and operates a casino on reservation land. Neither the tribe nor the casino is incorporated under federal, state or tribal law. The parties entered a contract through which appellant American Vantage Companies, Inc. ("American Vantage"), a Nevada corporation, provided gaming management and consulting services to the tribe in connection with operation of the casino. The contract states that the tribe "waives its sovereign immunity from suit solely for the purposes of enforcement of the terms of this Agreement" and that "either party to this Agreement may seek appropriate relief in a United States District Court, unless the parties agree to an alternate forum, for the breach of the Agreement." The tribe also executed a promissory note in favor of American Vantage.

Table Mountain unilaterally terminated the contract in 1999, a year before its expiration, prompting American Vantage to file suit against Table Mountain in federal district court in California for breach of contract and for amounts allegedly due under the promissory note. American Vantage's complaint asserted subject matter jurisdiction solely on the basis of diversity of citizenship. The district court sua sponte dismissed the complaint without prejudice for want of subject matter jurisdiction, holding that the parties were not diverse within the meaning of § 1332(a)(1) because an Indian tribe is not a citizen of any state. The court also invited the parties to file additional pleadings setting forth a basis for jurisdiction. In response, American Vantage moved to amend its complaint and to join the casino as an additional defendant. Again, it asserted only diversity jurisdiction. The district court reiterated its ruling that diversity jurisdiction did not exist as to the tribe; ruled that the casino, an unincorporated arm of the tribe, likewise could not be sued in diversity; and dismissed the action with prejudice. American Vantage timely appealed. We have jurisdiction under 28 U.S.C. § 1291 and affirm.

STANDARD OF REVIEW

We review de novo both the district court's conclusion that it lacked subject matter jurisdiction, Linneen v. Gila River Indian Cmty., 276 F.3d 489, 492 (9th Cir.2002), and questions of statutory interpretation. Alexander v. Glickman, 139 F.3d 733, 735 (9th Cir.1998).

DISCUSSION

I. Diversity Jurisdiction

A.

We must determine whether the Table Mountain tribe or its casino, each of which is unincorporated, is subject to diversity jurisdiction.¹ The diversity statute, 28 U.S.C. § 1332, makes no mention of Indian tribes. American Vantage, however contends that an Indian tribe is subject to diversity jurisdiction under § 1332(a)(1), which creates jurisdiction over actions involving "citizens of different States."² The parties agree that American Vantage is a citizen of Nevada but dispute whether the tribe and the casino are citizens of California within the meaning of § 1332(a)(1).

Most courts to have considered the question — including the First, Second, Eighth and Tenth Circuits — agree that unincorporated Indian tribes cannot sue or be sued in diversity because they are not citizens of any state. Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Hous. Auth., 207 F.3d 21, 27 (1st Cir.2000) (holding that "the presence of an Indian tribe destroys complete diversity" because "[a]n Indian tribe ... is not considered to be a citizen of any state"); accord Romanella v. Hayward, 114 F.3d 15, 16 (2d Cir.1997) (per curiam); Gaines v. Ski Apache, 8 F.3d 726, 729 (10th Cir.1993); Standing Rock Sioux Indian Tribe v. Dorgan, 505 F.2d 1135, 1140 (8th Cir.1974); Barker-Hatch v. Viejas Group Baron Long Capitan Grande Band of Digueno Mission Indians, 83 F.Supp.2d 1155, 1157 (S.D.Cal. 2000); Calumet Gaming Group-Kansas, Inc. v. Kickapoo Tribe, 987 F.Supp. 1321, 1324-25 (D.Kan.1997) (holding that court lacked diversity jurisdiction over gaming consultant's state law claims against Indian tribe for breach of consulting agreement and default on loan); Abdo v. Fort Randall Casino, 957 F.Supp. 1111, 1112 (D.S.D.1997) (holding that neither Indian tribes nor a tribally owned and operated casino are citizens of state for purposes of diversity); cf. William C. Canby, Jr., American Indian Law 207 (3d ed.1998) [hereinafter Canby] ("An Indian tribe that is not incorporated is not a citizen of any state and cannot be sued in federal court on the basis of diversity."); Felix S. Cohen, Handbook of Federal Indian Law 372 (reprint ed.1988).

Against this weight of authority, a few district courts have decided otherwise. See Warn v. E. Band of Cherokee Indians, 858 F.Supp. 524, 526 (W.D.N.C.1994) (holding that the court had diversity jurisdiction over a breach of contract claim by a non-Indian against the tribe and tribal council members); Tribal Smokeshop, Inc. v. Alabama-Coushatta Tribes, 72 F.Supp.2d 717, 718 n. 1 (E.D.Tex.1999) (stating that Indian tribes are deemed to be citizens of the state in which they are located for the purpose of diversity jurisdiction).

American Vantage points out that the decisions underlying the majority rule offer little in the way of reasoning in support of their conclusion that an Indian tribe is not a citizen of any state. We nonetheless agree that the majority of courts have decided this question correctly and adopt the majority rule. We base our conclusion on several considerations. First, as dependent domestic sovereign nations, Indian tribes are not state citizens. Second, despite ample opportunity, Congress has not seen fit to confer state citizenship on Indian tribes. Finally, because our holding is consistent with every other circuit to address this issue, we advance the interest of uniformity in a uniquely federal area of law.

1. Dependent Domestic Sovereigns

First, the rule that a tribe is not a citizen of any state is supported by the status of Indian tribes as dependent domestic sovereigns. Tribes are, foremost, sovereign nations. They "retain[ ] their original natural rights" as "aboriginal entit[ies] antedating the federal [and state] government[s]." Romanella, 114 F.3d at 16. Second, Indian tribes are "domestic dependent nations." Okla. Tax Comm'n v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505, 509, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991). There exists a unique relationship between the federal government and Indian tribes, and the federal government possesses plenary power over tribes. See, e.g., Washington v. Confederated Bands and Tribes of Yakima Indian Nation, 439 U.S. 463, 503, 99 S.Ct. 740, 58 L.Ed.2d 740 (1979) (Marshall, J., dissenting) (describing "the unique relationship between the Federal Government and the Indian people"); United States v. Wheeler, 435 U.S. 313, 323, 98 S.Ct. 1079, 55 L.Ed.2d 303 (1978) (stating that Indian tribes' sovereignty "exists only at the sufferance of Congress and is subject to complete defeasance").

The status of Indian tribes as sovereign entities, and as federal dependents, contradicts conventional notions of citizenship in general and state citizenship in particular. A citizen is "[a] person who ... is a member of a political community, owing allegiance to the community and being entitled to enjoy all its civil rights and protections...." Black's Law Dictionary (7th ed.1999). Tribes fall outside this definition. Rather than belonging to state political communities, they themselves are "`distinct, independent political communities.'" Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978) (quoting Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 559, 8 L.Ed. 483 (1832)). Tribes also owe no allegiance to a state. Because "Congress possesses plenary power over Indian affairs," South Dakota v. Yankton Sioux Tribe, 522 U.S. 329, 343, 118 S.Ct. 789, 139 L.Ed.2d 773 (1998), Indian tribes fall under nearly exclusive federal, rather than state, control. Cf. Washington v. Confederated Tribes of Colville Reservation, 447 U.S. 134, 154, 100 S.Ct. 2069, 65 L.Ed.2d 10 (1980) ("[I]t must be remembered that tribal sovereignty is dependent on, and subordinate to, only the Federal Government, not the States"). Moreover, tribal sovereignty and federal plenary power over Indian affairs, taken together, sharply circumscribe the power of the states to impose citizen-like responsibilities on Indian tribes. See Canby, supra, at 79 (observing that tribal sovereignty has "operated to a considerable degree as a shield against intrusions of state law into Indian country"); Boyer v. Shoshone-Bannock Indian Tribes, 92 Idaho 257, 441 P.2d 167, 170 (1968) (summarizing traditional view that "state law has no force and effect, except as granted by federal law, within the territory of an Indian tribe in matters affecting Indians")....