Babbitt Ford, Inc. v. Navajo Indian Tribe

• Decision Date: 14 July 1981
• Docket Number: No. CIV 80-686 PCT CAM,CIV 80-925 PHX CAM.,CIV 80-686 PCT CAM
• Citation: 519 F. Supp. 418
• Parties: BABBITT FORD, INC., an Arizona Corporation, Plaintiff, v. The NAVAJO INDIAN TRIBE, Through Its Chairman, Peter MacDonald, et al., Defendants. GURLEY MOTOR COMPANY, a New Mexico Corporation, Plaintiff, v. Peter MacDONALD, individually and in his official capacity as Chairman of the Navajo Tribal Council, et al., Defendants.
• Court: U.S. District Court — District of Arizona

519 F. Supp. 418

BABBITT FORD, INC., an Arizona Corporation, Plaintiff, v. The NAVAJO INDIAN TRIBE, Through Its Chairman, Peter MacDonald, et al., Defendants.

GURLEY MOTOR COMPANY, a New Mexico Corporation, Plaintiff, v. Peter MacDONALD, individually and in his official capacity as Chairman of the Navajo Tribal Council, et al., Defendants.

Nos. CIV 80-686 PCT CAM, CIV 80-925 PHX CAM.

United States District Court, D. Arizona.

July 14, 1981.

COPYRIGHT MATERIAL OMITTED

Gerald W. Nabours, Mangum, Wall, Stoops & Warden, Flagstaff, Ariz., for Babbitt Ford, Inc.

Alvin H. Shrago, Evans, Kitchel & Jenckes, Phoenix, Ariz., for Gurley Motor Co.

Williby E. Case, Jr., Katherine Ott, Vlassis & Ott, Phoenix, Ariz., for Navajo Indian Tribe, Peter McDonald, Navajo Tribal Courts, Nelson J. McCabe, Navajo Tribal Police, Wilbur Kellogg.

John A. MacKinnon, Elizabeth Bernstein, DNA-Peoples Legal Services, Inc., Tuba City, Ariz., for Tom Sellers and Lorraine Sellers, husband & wife; Barney Joe and Alice Joe, husband and wife.

T. W. Shumway, St. George, Utah, for amicus curiae.

OPINION AND ORDER

MUECKE, Chief Judge.

Plaintiffs herein are automobile dealers. Plaintiff Babbitt Ford (Babbitt) is an Arizona corporation doing business in Flagstaff, Arizona. Plaintiff Gurley Motor Company (Gurley) is a New Mexico Corporation doing business in Gallup, New Mexico.¹

By virtue of their close proximity to the Navajo Indian Reservation, both plaintiffs enjoy a significant business from members of the Navajo Tribe. From time to time, plaintiffs' Navajo customers have defaulted on their obligations.² In such instances, plaintiffs have exercised their rights under state law and have peacefully repossessed their vehicles.

In 1968, the Navajo Tribal Council enacted 7 N.T.C. § 607, which provides as follows:

§ 607. Repossession of personal property

The personal property of Navajo Indians shall not be taken from land subject to the jurisdiction of the Navajo Tribe under the procedures of repossession except in strict compliance with the following:

(1) Written consent to remove the property from land subject to the jurisdiction of the Navajo Tribe shall be secured from the purchaser at the time repossession is sought. The written consent shall be retained by the creditor and exhibited to the Navajo Tribe upon proper demand.

(2) Where the Navajo refuses to sign said written consent to permit removal of the property from land subject to the jurisdiction of the Navajo Tribe, the property shall be removed only by order of a Tribal Court of the Navajo Tribe in an appropriate legal proceeding.

To enforce the above provision, the Tribal Council enacted §§ 608 and 609:

§ 608. Violations — Penalty

(a) Any nonmember of the Navajo Tribe, except persons authorized by Federal law to be present on Tribal land, found to be in wilful violation of 7 N.T.C. § 607 may be excluded from land subject to the jurisdiction of the Navajo Tribe in accordance with procedure set forth in 17 N.T.C. §§ 1903-1906.

(b) Any business whose employees are found to be in wilful violation of 7 N.T.C. § 607 may be denied the privilege of doing business on land subject to the jurisdiction of the Navajo Tribe.

(c) Any Indian who violates any provision of 7 N.T.C. § 607 shall be guilty of a crime, and upon conviction shall be punished by a fine of not more than $100.

§ 609. Civil Liability

Any person who violates 7 N.T.C. § 607 and any business whose employee violates such section is deemed to have breached the peace of the lands under the jurisdiction of the Navajo Tribe, and shall be civilly liable to the purchaser for any loss caused by the failure to comply with 7 N.T.C. §§ 607-609.

If the personal property repossessed is consumer goods (to wit: goods used or brought for use primarily for personal, family or household purposes), the purchaser has the right to recover in any event an amount not less than the credit service charge plus 10% of the principal amount of the debt or the time price differential plus 10% of the cash price.

Purchaser means the person who owes payment or other performance of an obligation secured by personal property, whether or not the purchaser owns or has rights in the personal property.

Plaintiffs argue that 7 N.T.C. § 607 et seq. constitutes an attempt by an Indian tribe to assert civil and criminal jurisdiction over a non-Indian and that, as such, these ordinances are invalid and unenforceable. Plaintiffs move for a declaratory judgment to this effect and further, for an order permanently enjoining defendants from attempting to enforce their ordinances.

Present Status

On February 9, 1981, this Court held oral argument on the following motions: plaintiff Babbitt's motion for preliminary injunction (filed August 27, 1980), defendant Seller's and defendant Joe's motion to dismiss Babbitt's complaint (filed September 29, 1980), defendant Navajo Tribe's motion to dismiss Babbitt's complaint (filed October 7, 1980), and defendant Navajo Tribe's motion to dismiss plaintiff Gurley's complaint (filed January 9, 1981).

At the Court's suggestion, plaintiff Babbitt and the defendants agreed that Babbitt's motion for preliminary injunction could be treated as a request for a permanent injunction under Rule 65(a)(2), Federal Rules of Civil Procedure.

Following argument, the parties were given the opportunity to submit additional briefs. Several such briefs have been filed, and this matter is now ready for disposition.³

Issues

The primary questions raised in defendants' motions to dismiss are:

(a) whether plaintiffs' claims are ripe for adjudication;

(b) whether plaintiffs' complaints allege a sufficient basis for federal jurisdiction;

(c) whether plaintiffs' claims are barred by sovereign immunity;

(d) whether plaintiffs' complaints state a claim upon which relief can be granted.

Case or Controversy

It is undisputed that two of Babbitt's Navajo customers have obtained tribal court judgments against Babbitt pursuant to 7 N.T.C. § 609. Although plaintiff Gurley cannot say as much, it does allege that "over the last two months, a number of Indians, whose motor vehicles have been repossessed, have threatened to initiate civil litigation against plaintiff in tribal court." Gurley Complaint at ¶ 19.

The Tribe argues that Gurley has failed to state a case or controversy for the reason that Gurley has not been the subject of a § 609 judgment. Babbitt's complaint is alleged to be deficient for the reason that the Indians who have obtained § 609 judgments have not successfully executed them. Neither of the Tribe's contentions can be sustained.

In order to satisfy the case or controversy requirement imposed by Art. III of the Constitution, plaintiffs are under a burden to

"`allege some threatened or actual injury resulting from the putatively illegal action ....' Linda R. S. v. Richard D., 410 U.S. 614, 617, 93 S.Ct. 1146, 1148, 35 L.Ed.2d 536 (1973). There must be a `personal stake in the outcome' such as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions. Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962).... It must be alleged that the plaintiff `has sustained or is immediately in danger of sustaining some direct injury' as the result of the challenged ... conduct. Massachusetts v. Mellon, 262 U.S. 447, 488, 43 S.Ct. 597, 601, 67 L.Ed. 1078 (1923). The injury or threat of injury must be both `real and immediate,' not `conjectural' or hypothetical." Golden v. Zwickler, 394 U.S. 103, 109-110, 89 S.Ct. 956, 960, 22 L.Ed.2d 113 (1969).

O'Shea v. Littleton, 414 U.S. 488, 491, 494, 94 S.Ct. 669, 673, 675, 38 L.Ed.2d 674 (1974).

From the foregoing language, it is apparent that Babbitt's allegations that it has suffered two § 609 judgments satisfy Article III. Babbitt need not allege actual and direct injury in order to state a case or controversy. It is enough that injury be imminent. See e. g. Babbitt v. United Farm Workers, 442 U.S. 289, 99 S.Ct. 2301, 60 L.Ed.2d 895 (1979); Pennsylvania v. West Virginia, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117 (1923).

Since Gurley has been able to avoid § 609 litigation, this Court's conclusions as to Babbitt do not necessarily end the inquiry. Nevertheless, Gurley's complaint cannot be viewed in a vacuum. In light of the Babbitt judgments, for the Tribe to argue that Babbitt's co-plaintiff is not threatened with similar treatment seems frivolous. Moreover, Gurley has alleged that it has been subjected to harassment by defendant Tribe and that tribal members have threatened litigation. Viewed in this context, Gurley stands in substantially the same position as Babbitt.

Subject Matter Jurisdiction

The Ninth Circuit's most recent analysis of federal jurisdiction over disputes between Indians and non-Indians appeared in Trans-Canada Enterprises Ltd. v. Muckleshoot Indian Tribe, 634 F.2d 474 (1980). At issue in Trans-Canada was the Tribe's ability to enforce a business licensing ordinance against certain non-Indians by means of a civil enforcement action in Tribal Court. In response to the Tribe's attempts, the non-Indians brought suit in federal district court seeking injunctive and declaratory relief. The Ninth Circuit refused assistance, holding that plaintiffs had not carried their burden of establishing federal jurisdiction.

Trans-Canada is relevant to the present case in that it disposes of two of plaintiffs' jurisdictional contentions: federal question jurisdiction under Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946), and statutory jurisdiction under the Indian Civil Rights Act, 25 U.S.C. §§ 1301-1303.⁴

Unlike plaintiffs in Trans-Canada, however, plaintiffs in this case have alleged jurisdiction pursuant to 28 U.S.C. § 1331, the general federal question statute. The Trans-Canada Court specifically withheld comment on whether § 1331 would have vested the...