Becker v. UTE Indian Tribe of the Uintah & Ouray Reservation

• Decision Date: 03 August 2021
• Docket Number: Nos. 18-4030 & 18-4072,s. 18-4030 & 18-4072
• Parties: Lynn D. BECKER, Plaintiff Counterclaim Defendant - Appellee, v. UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, a federally chartered corporation and a federally recognized Indian tribe, et al., Defendants Counterclaimants Third-Party Plaintiffs - Appellants, v. Judge Barry G. Lawrence, Third-Party Defendant - Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

11 F.4th 1140

Lynn D. BECKER, Plaintiff Counterclaim Defendant - Appellee,

v.UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, a federally chartered corporation and a federally recognized Indian tribe, et al., Defendants Counterclaimants Third-Party Plaintiffs - Appellants,

v.

Judge Barry G. Lawrence, Third-Party Defendant - Appellee.

Nos. 18-4030 & 18-4072

United States Court of Appeals, Tenth Circuit.

FILED August 3, 2021

Frances C. Bassett and Thomasina Real Bird (Thomas W. Fredericks and Jeremy J. Patterson, with them on the briefs), Fredericks Peebles & Morgan LLP, Louisville, Colorado, appearing for Appellants Ute Indian Tribe of the Uintah and Ouray Reservation.

Nancy J. Sylvester (Brent M. Johnson, with her on the briefs), Administrative Office of the Courts, Utah District Court, Salt Lake City, Utah, appearing for Appellee Barry G. Lawrence.

David K. Isom, Isom Law Firm, PLLC, Salt Lake City, Utah, appearing for Appellee Lynn D. Becker.

Before MORITZ, BRISCOE, and EID, Circuit Judges.

ORDER

This matter is before us on the Ute Indian Tribe's Motion for Clarification. Upon careful consideration, the motion is granted. Our August 3, 2021 opinion is withdrawn and replaced by the attached revised opinion effective nunc pro tunc to the date the original opinion was filed.

BRISCOE, Circuit Judge.

These appeals stem from an Independent Contractor Agreement (the Agreement) entered into by the Ute Indian Tribe of the Uintah and Ouray Reservation (the Tribe) and a non-Indian, Lynn D. Becker (Becker). Becker alleges that the Tribe breached the Agreement and owes him a substantial amount of money under the terms of the Agreement. The Tribe disputes Becker's allegations and asserts a host of defenses, including, in part, that the Agreement is void both because it was never approved by the Department of the Interior and because it purported to afford Becker an interest in Tribal trust property.

The dispute between Becker and the Tribe regarding the Agreement has spawned five separate lawsuits in three separate court systems. Becker first filed suit in federal district court against the Tribe alleging claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. That suit was dismissed, however, for lack of subject matter jurisdiction. Becker then filed suit in Utah state district court alleging the same claims against the Tribe. After seventeen months of litigation in the Utah state courts, the Tribe, frustrated with the Utah state courts’ refusal to dismiss Becker's suit for lack of subject matter jurisdiction, filed suit in federal district court seeking to enjoin the Utah state court proceedings. The Tribe also filed suit in Tribal Court seeking a declaration of the Agreement's invalidity. Becker responded by filing his own suit in federal district court seeking to enjoin the Tribal Court proceedings.

Currently before us are two appeals filed by the Tribe challenging interlocutory decisions issued by the district court in Becker's most recent federal action, including a decision by the district court to preliminarily enjoin the Tribal Court proceedings and to preclude the Tribal Court's orders from having preclusive effect in other proceedings.¹ Exercising jurisdiction over these appeals pursuant to 28 U.S.C. § 1291, we conclude that the tribal exhaustion rule requires Becker's federal lawsuit to be dismissed without prejudice. Consequently, we reverse the district court's decision preliminarily enjoining the parties from proceeding in the Tribal Court action and enjoining the Tribal Court's orders having preclusive effect in other proceedings, and we remand to the district court with directions to dismiss Becker's federal lawsuit without prejudice.

I

a) The Tribe's oil and gas interests

The Tribe operates its own tribal government, including an Energy and Minerals Department, and oversees approximately 1.3 million acres of trust lands, some of which contain significant oil and gas deposits. According to the Tribe, revenue from the development of those oil and gas deposits constitutes the primary source of the Tribe's income, which is in turn used to fund the Tribe's government and its health and social welfare programs for tribal members.

Prior to late 2001, the Tribe's Business Committee managed the Tribe's oil and gas deposits in a "passive" manner. ECF No. 251 at 7. This meant that the Tribe would wait for oil and gas companies to contact the Bureau of Indian Affairs (BIA) for permission to enter into an oil and gas lease or development agreement on Tribal lands, and then the Tribe would allow the BIA to finalize all such agreements on the Tribe's behalf.

On December 4, 2001, the Tribe's Business Committee adopted Ordinance 01-007, which reflected the Business Committee's decision to change its "management of the Tribe's assets, revenues and expenses from a passive to an active management methodology, targeting ... optimal use and deployment of its resources to increase and diversify revenues for the benefit of the Tribe and the Membership." Id . (quotation marks omitted). Under this active management methodology, the Business Committee intended to actively market the Tribe's mineral assets to industry.

Ordinance 01-007 authorized the Tribe's financial advisor, John Jurrius, to develop an active management methodology and a long-term financial plan to assist the Business Committee in active management of the Tribe's oil and gas deposits. Jurrius used the power and authority he was granted under Ordinance 01-007 to, among other things, restructure the Tribe's Energy and Minerals Department and begin to actively market the Tribe's mineral assets to developers.

b) The beginning of Becker's work for the Tribe

In the early 2000's, Becker worked as a consultant for a private company and, in that role, worked on projects involving the Tribe. Those projects included creating the Tribe's land database and mapping system and their land administration system.

In February 2004, Jurrius recommended that the Business Committee approve hiring Becker as a contractor to the Tribe. The Business Committee, at its February 24, 2004 meeting, voted unanimously to adopt Jurrius's recommendation and hire Becker to oversee the Tribe's Energy and Minerals Department. At that time, the Business Committee envisioned hiring Becker on a temporary basis and then contracting with him on a longer-term basis.

Becker began working with the Tribe in that role on or about March 1, 2004.

c) The Agreement

On April 27, 2005, the Tribe, including its subsidiaries and affiliates, entered into an "INDEPENDENT CONTRACTOR AGREEMENT" (the Agreement) with Becker. Appeal No. 18-4013, Aplt. App., Vol. V at 854. The Agreement was retroactively made effective as of March 1, 2004.

Article 1 of the Agreement, entitled "Description of Services," stated, in pertinent part, that Becker was "currently ... serving as Land Division Manager of the Energy and Minerals Department" and "agree[d] to hold th[at] Position pursuant to the terms of th[e] Agreement." Id. Article 3 of the Agreement stated that Becker would "perform the Services" called for in the Agreement "as an independent contractor and not as an employee of the Tribe." Id. at 855.

The "Contract Term" was defined in "Exhibit A – Services" to the Agreement. Id. at 856. Exhibit A stated that Becker "w[ould] be retained by the Tribe for an initial period of twenty-four (24) months commencing with the Contract Date of th[e] Agreement[, which was March 1, 2004,] and for an unlimited number of additional twelve (12) month periods thereafter ... , unless and until th[e] Agreement [wa]s terminated as provided for [t]herein." Id. at 864. Article 5 of the Agreement mimicked this language, providing, in pertinent part, that "[a]t the end of the Contract Term, th[e] Agreement w[ould] renew automatically for an unlimited number of successive one year terms unless one Party g[ave] the other Party written notice of termination no later than thirty days before the end of a yearly Contract Term ...." Id. at 856.

Exhibit B to the Agreement, entitled "PARTICIPATION PLAN," provided, in pertinent part:

1. In recognition of [Becker's] services, [Becker] shall receive a beneficial interest of two percent (2%) of net revenue distributed to Ute Energy Holding, LLC from Ute Energy, LLC (and net of any administrative costs of Ute Energy Holdings) ....

2. In the future, a) if the Tribe participates in any projects involving the development, exploration and/or exploitation of minerals in which the Tribe has any participating interest and/or earning rights, or similar commercial interests and [Becker] is providing services under this agreement, and b) the Tribe elects not to place such interests in Ute Energy Holding, LLC, then [Becker] shall receive a two percent (2%) beneficial net revenue interest in such assets, provided however, that in the event the Tribe should enter into an agreement under which the Tribe would be required to pay any project costs or expenses without the benefit of financing or a form of carried interest, then [Becker] agrees that in the event [Becker] elects to participate in such projects, [Becker] shall in the same manner as the Tribe pay two percent (2%) of any project costs and expenses and receive the net revenue attributable to such participation interest.

....

4. If, at any time, [Becker] wishes to sell [his] Rights, [Becker] agrees to notify the Tribe of his intention. The Tribe shall have 60 days to exercise this preferential right to purchase with a bona fide, market value offer to purchase on the same terms and conditions that any legitimate offer would entail.

Id. at 866.

Article 21, entitled "Governing Law and Forum," stated:

This Agreement and all disputes arising hereunder shall be subject to, governed by and construed in accordance with the laws of the State of Utah. All disputes arising under or relating to this Agreement shall be resolved in the United States District

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