Annis v. Dewey County Bank

• Decision Date: 15 December 1971
• Docket Number: Civ. No. 71-34C.
• Citation: 335 F. Supp. 133
• Parties: Delbert ANNIS, Plaintiff, v. DEWEY COUNTY BANK, Defendant.
• Court: U.S. District Court — District of South Dakota

335 F. Supp. 133

Delbert ANNIS, Plaintiff, v. DEWEY COUNTY BANK, Defendant.

Civ. No. 71-34C.

United States District Court, D. South Dakota, Central Division.

December 15, 1971.

Charles M. Thompson, of Martens, Goldsmith, May, Porter & Adam, Pierre, S. D., for plaintiff.

Andrew Aberle, Timber Lake, S. D., and Joseph H. Barnett, of Siegel, Barnett, Schutz & O'Keefe, Aberdeen, S. D., for defendant.

MEMORANDUM DECISION.

NICHOL, Chief Judge.

On August 3, 1971, judgment was entered in favor of defendant, Dewey County Bank, against plaintiff, Delbert Annis, in the eighth judicial circuit of the state of South Dakota. The judgment was on two notes given by plaintiff to the defendant on February 10, 1970, totaling $65,750.00¹ plus $7,714.66 interest. These notes were executed and were to be paid in Timber Lake, South Dakota, which is not on Indian reservation land. On the same date plaintiff signed a security agreement naming 277 head of mixed cattle, 75 horses and other property as collateral. This security agreement was subsequently accepted and approved by the Bureau of Indian Affairs and by the Cheyenne River Sioux Tribal Council.

All of the secured property is located on the Cheyenne River Sioux Indian Reservation whereon plaintiff, an enrolled member of the Cheyenne River Sioux Tribe, resides. Plaintiff's ranch and his livestock are all located within the closed portion² of that reservation.

In May of 1971, the Dewey County sheriff attempted to attach the plaintiff's livestock. He and defendant's agents rounded up plaintiff's cattle in approximately five hours driving them about two miles until they were stopped by the plaintiff.

On May 24, 1971, this Court granted plaintiff a temporary restraining order prohibiting the defendant or its agents from foreclosing on plaintiff's livestock. This order has been continued up to the date of this memorandum decision.

The plaintiff is seeking a permanent injunction enjoining the defendant and South Dakota state officials from coming onto the closed portions of the reservation to enforce the South Dakota state court judgment by attaching plaintiff's cattle. Plaintiff also seeks damages for the loss of weight to his cattle, loss of reputation and credit in the community and mental suffering and anguish arising from the attempted attachment and its surrounding circumstances. Defendant has counterclaimed for the money owing on the judgment obtained in state court or the value of the notes with interest. In addition defendant seeks damages for mental suffering and anguish and punitive damages.

This court obtains jurisdiction under 28 U.S.C.A. § 1343 and 42 U.S.C.A. § 1983.

The main thrust of plaintiff's argument is that while the state courts may have the authority to adjudicate the rights of the parties, the state authorities have no power to enforce state judgments on the closed portions of the Indian reservations. South Dakota's Enabling Act, S.D.Comp.Laws Ann. vol. 1 at 183 (1967) disclaims jurisdiction over Indian land. In the words of S.D.Const. art. XXII: "Indian lands shall remain under the absolute jurisdiction and control of the Congress of the United States. . . ." Thus South Dakota has had no jurisdiction over Indian land.

The United States Congress provided a method for states to obtain jurisdiction over Indian land in an Act of Aug. 15, 1953, Sec. 7, 67 Stat. 588, 590. Pursuant to this authority South Dakota passed in 1953 S.D.Comp.Laws Ann. Secs. 1-1-12 to 16 (1967) giving South Dakota criminal and civil jurisdiction over Indian lands provided the additional costs could be passed on to the federal government. In re High Pine, 78 S.D. 121, 99 N.W.2d 38 (1959), held that statute inoperative since the conditional terms were not accepted by the federal government. That statute was also repealed by S.D.Comp.Laws Ann. Sec. 1-1-20 (1967). Again in 1961 the South Dakota legislature attempted to obtain jurisdiction by passing S.D.Comp.Laws Ann. Secs. 1-1-18 to 21 (1967). Similarly this statute never became effective since the governor's consent and federal assumption of costs required by S.D. Comp.Laws Ann. Sec. 1-1-21 (1967) were never obtained. In re Hankins, 80 S.D. 435, 125 N.W.2d 839 (1964).

The last attempt at obtaining jurisdiction was in 1963 when the legislature passed ch. 467 (1963) S.D.Laws 522. This attempt was rejected in the 1964 referendum election. S.D.Comp.Laws Ann., Table of Omitted Provisions, vol. 1 at 969 (1967).

In 1968 Congress changed the requirements for a state acquiring jurisdiction by adding that approval of the affected Indian tribes be obtained. 25 U.S.C.A. §§ 1322(a and b), 1326. Both parties stipulated that no election had been held by the adult enrolled Indians of the Cheyenne River Sioux Tribe granting the state jurisdiction.

Any alleged approval of the security agreement in question by the tribal council cannot operate as a grant of jurisdiction. Kennerly v. District Court of the Ninth Judicial District of Montana, 400 U.S. 423, 91 S.Ct. 480, 27 L.Ed.2d 507 (1971). It is clear that neither South Dakota nor the Cheyenne River Sioux Tribe has complied with the strict congressional procedures. As stated in Crow Tribe of Indians v. Deernose, Mont., 487 P.2d 1133, 1134 (1971), "Absent specific Congressional authorization coupled with strict compliance with its terms, state courts acquire no jurisdiction, they assert." The United States Supreme Court in Kennerly v. District Court of the Ninth Judicial District of Montana, 400 U.S. 423, 429, 91 S.Ct. 480, 483, 27 L.Ed.2d 507 (1971), has unequivocally stated:

the tribal consent that is prerequisite to the assumption of state jurisdiction under the provisions of title IV of the Act (25 U.S.C.A. Sec. 1326) must be approved or manifested by majority vote of the enrolled Indians within the affected area of Indian Country. Legislative action by the tribal council does not comport with the explicit requirements of the Act. (emphasis added)

The South Dakota Supreme Court has twice held that South Dakota courts have no jurisdiction over a cause of action arising within Indian Country involving an enrolled Indian. Kain v. Wilson, 83 S.D. 482, 161 N.W.2d 704 (1968); Smith v. Temple, 82 S.D. 650, 152 N.W.2d 547 (1967). This rule of law has been firmly established since the United States Supreme Court in Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959), held that state courts had no jurisdiction over suits against enrolled Indian defendants involving commercial transactions. See also Kennerly v. District Court of the Ninth Judicial District of Montana, 400 U.S. 423, 91 S.Ct. 480, 27 L.Ed.2d 507 (1971).

The defendant claims state court jurisdiction on two grounds. First, defendant seeks to distinguish the above cited cases pointing to the fact that all of the following occurred off the reservation: (1) plaintiff's signing of the security agreement; (2) plaintiff's breach; and (3) service of state court process. This argument fails to recognize that the actual attachment by state officials must be made on the reservation and state officials have no jurisdiction on Indian reservations either to serve process on an enrolled Indian or to enforce a state judgment. Commissioner of Taxation v. Brun, 286 Minn. 43, 174 N.W.2d 120, 126 (1970); Jordan v. O'Brien, 70 S.D. 393, 401, 18 N.W.2d 30, 33 (1945).

Secondly, defendant argues that the 1957 Congressional repeal of 18 U.S.C.A. Sec. 1157³ impliedly authorized members of the Indian tribes to mortgage livestock similar to the 25 U.S.C.A. Sec. 483a authorization to mortgage trust property with the approval of the Secretary of the Interior. Defendant then points to the Bureau of Indian Affairs and tribal approval of the security agreement here in question. Defendant makes reference to 47 Indian Affairs Manual, paragraphs 5.1, 5.3, 5.4(A), 5.4(C), 5.7 and 5.10, pointing out that defendant has complied with the Department of Interior's instructions on securing a security interest in cattle on the Indian reservation in compliance with South Dakota law. All this shows is that enrolled reservation Indians can give valid security interests in their cattle located within the closed portions of the reservation. However, nothing in this argument extends state jurisdiction onto the Indian reservations. Kennerly v. District Court of the Ninth Judicial District of Montana, 400 U.S. 423, 91 S. Ct. 480, 27 L.Ed.2d 507 (1971); Crow Tribe of Indians v. Deernose, Mont., 487 P.2d 1133 (1971). As noted earlier, only strict compliance with 25 U.S.C.A. Secs. 1322(a and b), 1326, can grant jurisdiction to the states over Indian lands. Therefore the state officials have no power or jurisdiction to enforce the state court judgment on the reservation. A permanent injunction is granted prohibiting any officers of the state of South Dakota from enforcing the state court judgment entered against the plaintiff, Delbert Annis, on the Cheyenne River Sioux Indian Reservation.

The question now arises as to whether or not this court, since it has jurisdiction, may allow the defendant to recover on its counterclaim. It is a well established rule of law that jurisdiction over compulsory counterclaims is ancillary to the original jurisdiction of federal courts and, therefore, no independent grounds for federal jurisdiction are necessary for a compulsory counterclaim. United States for the Use & Benefit of D'Agostino Excavators v. Heyward-Robinson Co., 430 F.2d 1077, 1081 (2d Cir. 1970), cert. denied, 400 U.S. 1021, 91 S. Ct. 582, 27 L.Ed.2d 636 (1971); United Artists Corp. v. Masterpiece Productions, Inc., 221 F.2d 213, 216 (2d Cir. 1955); Holsten Import Corp. v. Rheingold Corp., 285 F.Supp. 607, 608 (S.D. N.Y.1968); Princess Fair Blouse, Inc. v. Viking Sprinkler Co., 186 F.Supp. 1, 4 (M.D.N.C.1960); United States v. Shafter, 49 F.R.D. 164 (S.D.N.Y.1969), aff'd 424 F.2d 281 (2d Cir. 1970); Berger v. Reynolds Metals Co., 39 F.R.D. 313, 315-16 (E.D.Pa.1966).

Rule...