Bank One, N.A. v. Lewis

• Decision Date: 20 February 2001
• Docket Number: CIV. A. No. 4:00CV132LN.
• Citation: 144 F.Supp.2d 640
• Parties: BANK ONE, N.A., Plaintiff, v. Brainard LEWIS, Defendant.
• Court: U.S. District Court — Southern District of Mississippi

144 F.Supp.2d 640

BANK ONE, N.A., Plaintiff, v. Brainard LEWIS, Defendant.

CIV. A. No. 4:00CV132LN.

United States District Court, S.D. Mississippi, Eastern Division.

February 20, 2001.

William H. Leech, Mark H. Tyson, McGlinchey Stafford, Jackson, MS, for Plaintiff or Petitioner.

Roman A. Shaul, Beasley, Allen, Crow, Methvin, Portis & Miles, Montgomery, AL, C. Bryant Rogers, Roth, VanAmberg, Rogers, Ortiz, Fairbanks & Yepa, LLP, Santa Fe, NM, Brian D. Dover, Jordan & Dover, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION AND ORDER

LEE, District Judge.

Defendant Brainard Lewis has filed a motion to remand or, alternatively, dismiss on the basis of the tribal exhaustion doctrine, which motion is opposed by plaintiff Bank One, N.A. Having considered the memoranda of authorities, together with attachments, submitted by the parties, the court concludes that the tribal exhaustion doctrine does apply, and that therefore, this case should be dismissed.

The facts pertinent to the present motion are, briefly, as follows. On July 11, 2000, defendant, a duly enrolled member of the Mississippi Band of Choctaw Indians, filed suit against Bank One in the Tribal Court of the Mississippi Band of Choctaw Indians (Tribal Court) seeking damages and injunctive relief based on allegations of improper conduct on the part of Bank One in connection with its financing of a home satellite system purchased by defendant. Specifically, defendant alleged that in March 1995, when a door-to-door salesman came to his home on the Choctaw Indian Reservation attempting to sell him a home satellite system, he agreed to purchase the system based on the salesman's representations as to the cost and terms of financing. He charged, however, that the representations were false and fraudulent, and contended, more particularly, that Bank One, financed the transaction through a "bogus" credit card, and that it concealed and fraudulently failed to disclose material information regarding the credit transaction, including the nature of the credit, the number of payments, the amount of each payment, the amount financed, the total finance charge, the total of payments and the total sales price.

Upon receiving notice of the Tribal Court action, Bank One promptly filed its complaint in this court under § 4 of the Federal Arbitration Act (FAA), 9 U.S.C. § 4, seeking to compel arbitration of defendant's claims, asserting that the claims advanced by defendant against Bank One in Tribal Court are subject to a valid and binding arbitration agreement which is a part of defendant's credit card agreement with Bank One. Immediately upon being served with process in this action, defendant moved the court to dismiss the case, or to remand it to Tribal Court, to which subject matter jurisdiction is clearly conferred by the Choctaw Tribal Code, § 1-2-5 2, since he is a duly enrolled member of the Mississippi Band of Choctaw Indians and lives within the exterior boundaries of the Choctaw Indian Reservation, and since the claims giving rise to his cause of action against Bank One occurred wholly within the exterior boundaries of the Choctaw Indian Reservation. Defendant submits that if there were any doubt as to the Tribal Court's jurisdiction, then pursuant to the tribal exhaustion doctrine, this court would be obliged to allow the Tribal Court to have the first opportunity to rule on the question of its jurisdiction. The court agrees, and concludes that the case should be dismissed so that the parties may present their positions for consideration by the Tribal Court.

Under the tribal exhaustion rule, as formulated by the Supreme Court in National Farmers Union Insurance Co. v. Crow Tribe, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985), and Iowa Mutual Insurance Co. v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987), "when a colorable claim of tribal court jurisdiction has been asserted, a federal court may (and ordinarily should) give the tribal court precedence and afford it a full and fair opportunity to determine the extent of its own jurisdiction over a particular claim or set of claims." Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Housing Auth., 207 F.3d 21, 31 (1st Cir.2000); see also Bowen v. Doyle, 230 F.3d 525, 529 (2d Cir.2000) ("when the jurisdiction of the tribal court is challenged, `the Tribal Court itself must be permitted to determine the issue `in the first instance.'") (quoting National Farmers, 471 U.S. at 855, 105 S.Ct. 2447, 85 L.Ed.2d 818); Basil Cook Enters., Inc. v. St. Regis Mohawk Tribe, 117 F.3d 61, 65 (2d Cir.1997) (under the doctrine of exhaustion of tribal remedies, "parties who challenge, under federal law, the jurisdiction of a tribal court to entertain a cause of action must first present their claim to the tribal court before seeking to defeat tribal jurisdiction in any collateral or parallel federal court proceeding.").

The tribal exhaustion requirement is not jurisdictional, but rather is a "prudential" rule pursuant to which a federal court, in view of comity considerations, "should to stay its hand `until after the Tribal Court has had a full opportunity to determine its own jurisdiction.'" Strate v. A-1 Contractors, 520 U.S. 438, 449, 117 S.Ct. 1404, 1411, 137 L.Ed.2d 661 (1997) (quoting National Farmers, 471 U.S. at 857, 105 S.Ct. at 2454); Iowa Mutual, 480 U.S. at 16 n. 8, 107 S.Ct. at 976 n. 8 (stating that "[e]xhaustion is required as a matter of comity, not as a jurisdictional prerequisite"). This rule is based on "the Federal Government's longstanding policy of encouraging tribal self-government," Iowa Mutual, 480 U.S. at 14, 107 S.Ct. at 975, and "reflects the fact that Indian tribes retain `attributes of sovereignty over both their members and their territory' to the extent that sovereignty has not been withdrawn by federal statute or treaty," id, at 14, 107 S.Ct. at 975 quoting United States v. Mazurie, 419 U.S. 544, 557, 95 S.Ct. 710, 42 L.Ed.2d 706 (1975); see also National Farmers, 471 U.S. at 856, 105 S.Ct. at 2454 ("Our cases have often recognized that Congress is committed to a policy of supporting tribal self-government and self-determination."). Thus, while the federal courts ultimately have jurisdiction to determine the limits of a tribal court's jurisdiction, the tribal exhaustion rule holds that tribal courts, which "play a vital role in tribal self-government," must be permitted the first opportunity to resolve challenges to their jurisdiction without federal court interference.¹ Iowa Mutual, 480 U.S. at 14, 107 S.Ct. at 976; Strate, 520 U.S. at 451, 117 S.Ct. at 1412 (Court in Iowa Mutual held that "[r]espect for tribal self-government made it appropriate `to give the tribal court a full opportunity to determine its own jurisdiction.'"); Basil Cook Enters., 117 F.3d at 65 (noting that the exhaustion requirement "promotes tribal autonomy and dignity"). This is so whether the federal court's jurisdiction is sought to be invoked on the basis of a federal question under 28 U.S.C. § 1331, or diversity of citizenship under § 1332. See Strate, 520 U.S. at 451, 117 S.Ct. at 1412 (respect for tribal self-government "[is] equally in order whether federal-court jurisdiction rest[s] on § 1331 (federal question) or on § 1332 (diversity of citizenship)"); Iowa Mutual, 480 U.S. at 16, 107 S.Ct. at 976 ("In diversity cases, as well as federal-question cases, unconditional access to the federal forum would place it in direct competition with the tribal courts, thereby impairing the latter's authority over reservation affairs."); Tillett v. Lujan, 931 F.2d 636, 640 (10th Cir.1991) (tribal exhaustion rule provides that "as a matter of comity, a federal court should not exercise jurisdiction over cases arising under its federal question or diversity jurisdiction, if those cases are also subject to tribal jurisdiction, until the parties have exhausted their tribal remedies.").²

The tribal exhaustion doctrine is, not, however, applicable to every case to which a tribe or a tribe member is a party, and thus it must be determined whether the circumstances of this case are such as to invoke the requirement of tribal exhaustion. In Iowa Mutual, the Court explained that because "`[t]ribal authority over the activities of non-Indians on [nonalienated] reservation lands is an important part of tribal sovereignty,' ... `civil jurisdiction over such activities presumptively lies in the tribal courts unless affirmatively limited by a specific treaty provision or federal statute.'" Iowa Mutual, 480 U.S. at 18, 107 S.Ct. at 977; see also Williams v. Lee, 358 U.S. 217, 223, 79 S.Ct. 269, 272, 3 L.Ed.2d 251 (1959) (declaring tribal jurisdiction exclusive over lawsuit arising out of on-reservation sales transaction between nonmember plaintiff and member defendants); Ninigret Dev. Corp., 207 F.3d at 32 "Civil disputes arising out of the activities of non-Indians on reservation lands almost always require exhaustion if they involve the tribe (or a tribe member)". And although there is generally no tribal jurisdiction over non-Indians for activities off the reservation or on non-Indian fee lands in the absence of a federal statute or treaty granting such authority, Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981), there are specific circumstances in which such jurisdiction does exist:

A tribe may regulate, through taxation, Licensing or other means, the activities of nonmembers who enter into consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements. A tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.

450 U.S. at 565-66, 101 S.Ct. 1245. See TTEA v. Ysleta del Sur Pueblo, 181 F.3d 676, 684 (...