Attorney's Process And Investigation Serv. Inc v. Sac & Fox Tribe Of The Miss. In Iowa

• Decision Date: 07 July 2010
• Docket Number: No. 09-2605.,09-2605.
• Parties: ATTORNEY'S PROCESS AND INVESTIGATION SERVICES, INC., Plaintiff-Appellant,v.SAC & FOX TRIBE OF the MISSISSIPPI IN IOWA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

609 F.3d 927

ATTORNEY'S PROCESS AND INVESTIGATION SERVICES, INC., Plaintiff-Appellant,v.SAC & FOX TRIBE OF the MISSISSIPPI IN IOWA, Defendant-Appellee.

No. 09-2605.

United States Court of Appeals Eighth Circuit.

Submitted: April 13, 2010.

Filed: July 7, 2010.

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David Bruce Salmons, argued, Washington, DC, Richard S. Fry, Mark L. Zaiger, and Diane Kutzko, Cedar Rapids, IA, and Bryan M. Killian, Washington, DC, on the brief, for Appellant.

Steven Forrest Olson, argued, Jeffrey S. Rasmussen, on the brief, Bloomington, MN, for Appellee.

Before WOLLMAN, MURPHY, and SHEPHERD, Circuit Judges.

MURPHY, Circuit Judge.

After Attorney's Process and Investigation Services, Inc. (API), a Wisconsin corporation which provides security and consulting services to casino operators, was sued in tribal court by the Sac and Fox Tribe of the Mississippi in Iowa (the Tribe), API brought this action seeking a declaratory judgment that the tribal court lacked jurisdiction and an order compelling arbitration. The Tribe's lawsuit in tribal court alleged that API committed torts while seizing control of tribal facilities on the Sac and Fox reservation under a contract signed by Alex Walker, Jr., the former Chairman of the Tribal Council.

The district court required API first to exhaust its remedies in tribal court in accord with Nat'l Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985). After API returned to federal court, the district court concluded that the tribal courts did have jurisdiction over the Tribe's claims under federal law, that the validity of the API contract was a question of tribal law, and that it should accordingly defer to the tribal court finding that Walker had not had authority to bind the Tribe. The district court therefore denied API's motion for summary judgment and granted the Tribe's motion to dismiss. API appeals.

In the course of considering the issues before us we first examine the factual background of the litigation before proceeding to address the initial federal law question of whether the tribal courts have jurisdiction over the Tribe's lawsuit against API. We then turn to API's claim that it is entitled to arbitration under its contract with Walker. Finally, we summarize our conclusions and judgment. We affirm in part and reverse in part.

I.

The Sac and Fox Tribe of the Mississippi in Iowa is a federally recognized Indian tribe which owns and operates the Meskwaki Bingo Casino Hotel. The casino operation is located in Tama, Iowa on the Tribe's trust lands, known as the Meskwaki Settlement. The Tribe's governing body is a seven member council. The tribal economy depends on the casino, which the Tribe has operated for approximately fifteen years, and which generates millions of dollars in annual revenue.¹

During the spring and summer of 2003, two groups were competing for control of the tribal government, the Tribe's finances, and the casino.² One group was led by Walker, who had been Chairman of the Tribal Council before the other group organized in opposition. Members of the Tribe who were dissatisfied with Walker's leadership challenged his legitimacy in September 2002 by submitting petitions demanding his recall and also that of the rest of his council. According to the tribal constitution a special election is to be called upon receipt of such petitions, but the Walker Council did not call an election. That left the petitioning tribal members without further legal recourse since there was not yet a tribal court.

The opposition to the Walker Council was led by the hereditary chief of the Tribe, Charles Old Bear. Invoking retained traditional power to form a new tribal government, Chief Old Bear appointed seven new council members. A majority of tribal members signed a declaration supporting Old Bear's actions, and at a general meeting of the tribal membership he administered oaths of office to the new council. Thereafter at another general meeting of the Tribe, a majority agreed that the members of the Walker faction were not “persons of honor, law abiding, and of good character” as the tribal constitution requires of office holders. The Bear Council and its supporters then proceeded to occupy the casino and the tribal government offices at the Tribe's community center. A special election was held on May 22, 2003, at which the Bear Council received a large majority of the votes.

The Walker Council refused to step down, however, and a standoff ensued. Since the Bureau of Indian Affairs (BIA) did not act immediately on the results of the May special election, its prior recognition of the Walker Council as the governing body remained in place and the casino was closed by the National Indian Gaming Commission (NIGC). The Walker group then turned to litigation in an attempt to oust the Bear Council from the casino and the tribal government, but the federal courts declined to intervene because federal “jurisdiction does not exist to resolve an intratribal leadership dispute.” Meskwaki Casino Litig., 340 F.3d at 766.

The month after the Bear Council won the tribal election on May 22, 2003, Walker brought API into the picture. Putatively acting as council chairman, he executed a contract with API in June 2003. Under their contract API agreed to “perform services directly relating to the investigation of a takeover by dissidents at the Tribe's facility located on the Tribe's reservation lands,” including “[i]nvestigation of individuals involved in the unlawful acts against the Tribal Government.” The agreement further indicated that API was to undertake various projects related to security, such as “[d]eveloping a security plan for the re-opening of the Tribe's Gaming Facility.” The signatories agreed to arbitrate all disputes arising out of the contract.

API took the actions that eventually led to this litigation on October 1, 2003. Near dawn on that day, as the Bear Council and its supporters continued their occupation of the casino and tribal government offices, a group of approximately 30 API agents forced their way into the buildings. The two facilities are located on tribal trust land about 2.5 miles apart and are connected by a tribal road. Some of the API personnel were armed with batons, and at least one carried a firearm. They seized sensitive confidential information from both facilities related to the Tribe's gaming operations and finances. The record does not disclose what other services API may have performed under the June 2003 contract.

The Walker Council never regained control of the tribal government or the casino after API's forceful intervention. In special elections held in the fall of 2003 the Bear Council prevailed again, and in November it was recognized by the BIA as the duly elected tribal government. Based on the BIA's action, the NIGC lifted its closure order for the casino in December 2003, and the Tribe reopened the casino.

The Tribe brought its tort action against API in the tribal trial court in August 2005, alleging that in the course of its raid on tribal facilities API had caused some $7,000 in property damage, wrongfully seized confidential information related to the Tribe's gaming operations and finances, and committed intentional torts against tribal members, including assaults, batteries, and wrongful imprisonments.³ Based on these allegations the Tribe's complaint made claims for trespass to tribal land and chattels and misappropriation of tribal trade secrets. It also made a claim for conversion of $1,022,171.26 in tribal funds paid to API under its contract with Walker. For these acts the Tribe sought compensatory and punitive damages. API moved to dismiss, arguing that the tribal courts lacked subject matter jurisdiction and that it had a valid contract requiring arbitration.

Shortly thereafter API filed this action in the federal district court seeking a declaration that the tribal court lacked subject matter jurisdiction and an order compelling arbitration under the contract signed by Walker. API moved for a preliminary injunction against further proceedings in the tribal court. The district court denied that motion and stayed the action pending API's exhaustion of remedies in the tribal courts. See Nat'l Farmers Union, 471 U.S. at 857, 105 S.Ct. 2447 (holding that federal court should not consider a challenge to tribal court jurisdiction until remedies are exhausted in tribal courts). The parties then directed their attention to proceedings in the tribal trial court.

The Tribal Court of the Sac and Fox Tribe was established by the Tribal Council in 2004. It consists of a trial court and a court of appeals. The court organization, rules of procedure, and related provisions are contained in Title 5 of the Tribal Code. The Tribal Court currently has one Chief Justice of the Court of Appeals and three trial court judges, one of whom serves as chief judge. None of the judges is a member of the Sac and Fox Tribe. All are enrolled members of other tribes.⁴

After concluding that it had subject matter and personal jurisdiction, the tribal trial court denied API's motion to dismiss. It also determined that as a matter of tribal law Alex Walker, Jr. and his council had been removed from office before June 2003. Walker therefore had been without authority to bind the Tribe to the contract he entered into with API. See Sac and Fox Tribe of the Mississippi in Iowa v. Attorney's Process and Investigation Servs., Inc., No. API-CV-DAMAGES-2005-01, at 10-12 (Sac and Fox Tribe of the Mississippi in Iowa Tribal Court Mar. 26, 2008). For that reason the arbitration agreement could not be enforced.

The tribal court of appeals affirmed, holding that “the Hereditary Chief's actions of April 14, 2003 at the General Council and the Special Election on May 22, 2003 were sufficient to effect a change in Tribal leadership” and that Walker's agreement with API was therefore invalid....