Buchanan v. Sokaogon Chippewa Tribe

• Decision Date: 30 March 1999
• Docket Number: No. 98-C-611.,98-C-611.
• Citation: 40 F.Supp.2d 1043
• Parties: Sandy BUCHANAN, Douglas DeWalt, Norbert Polar, Norma Smith, Tina Van Zile, Individually and as Members of the Sokaogon Chippewa Housing Authority, Plaintiffs, v. SOKAOGON CHIPPEWA TRIBE, Acting by and through the Sokaogon Chippewa Community Tribal Council, Charles Fox, Acting as Chairman of the Tribal Council of the Sokaogon Chippewa Community, Peter McGeshick, Jr., Acting as Vice-President of the Tribal Council of the Sokaogon Chippewa Community, Roger McGeshick, Jr., Acting as Councilman, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

40 F.Supp.2d 1043

Sandy BUCHANAN, Douglas DeWalt, Norbert Polar, Norma Smith, Tina Van Zile, Individually and as Members of the Sokaogon Chippewa Housing Authority, Plaintiffs, v. SOKAOGON CHIPPEWA TRIBE, Acting by and through the Sokaogon Chippewa Community Tribal Council, Charles Fox, Acting as Chairman of the Tribal Council of the Sokaogon Chippewa Community, Peter McGeshick, Jr., Acting as Vice-President of the Tribal Council of the Sokaogon Chippewa Community, Roger McGeshick, Jr., Acting as Councilman, Defendants.

No. 98-C-611.

United States District Court, E.D. Wisconsin.

March 30, 1999.

Martin E. Kohler, John C. Thomure, Jr., Kohler & Hart, Milwaukee, WI, for plaintiffs.

Guy C. Charlton, Andrew H. Morgan, Charlton Law Offices, Milwaukee, WI, for defendants.

DECISION AND ORDER

CURRAN, District Judge.

Five former members of the former Sokaogon Chippewa Housing Authority (Sandy Buchanan, Douglas DeWalt, Norbert Polar, Norma Smith and Tina Van Zile) are suing the Sokaogon Chippewa Tribe; its Tribal Council; it's Chairman, Charles Fox; Vice Chairman, Peter McGeshick, Jr. and Council Member Roger McGeshick, Jr. for violations of federal and state law stemming from the operation and control of tribal housing programs. All the Plaintiffs except Douglas DeWalt are enrolled members of the Mole Lake Band of the Lake Superior Sokaogan Chippewa Community, an American Indian tribe officially recognized by the United States government. See 25 U.S.C. § 476. They were board members of the Sokaogon Chippewa Housing Authority which was created in 1964 to operate housing programs with federal funds dispensed by federal and state agencies. Plaintiff DeWalt was the Housing Authority's Executive Director.

The Plaintiffs allege that this court has jurisdiction over the subject matter of their claims pursuant to 28 U.S.C. §§ 1331, 1362, 1367, 2201 & 2202. The Defendants have contested jurisdiction by moving to dismiss.

I. FACTS

This action arose out of an ongoing dispute between two factions of the Mole Lake Band of the Sokaogon Chippewa Community which resides on a reservation located within Wisconsin. The Plaintiffs refer to themselves as "members of the Sokaogon Chippewa Housing Authority," but the Housing Authority no longer officially exists. In January of 1998, a group, including the individual Defendants in this case, assumed control of the Tribal Council following an election which the Plaintiffs consider illegal. In May of 1998, the Tribal Council dissolved the Housing Authority thereby ousting the Plaintiffs from their positions on its board. The Tribal Council, which includes Defendants Charles Fox, Peter McGeshick, Jr. and Roger McGeshick, Jr., now operates the housing programs.

The Plaintiffs claim that the Defendants have failed to maintain the housing programs' compliance with federal regulations. They say that the water system no longer meets federal Environmental Protection Agency standards. The Plaintiffs fear that this defalcation will have a negative impact on gaming and on public health.

The Plaintiffs also allege that the Defendants have failed to pay state and federal taxes on housing obligations, thereby incurring fines and impairing credit. At the time the Complaint was filed, the Plaintiffs claimed that the Tribal Council had failed to submit an annual financial plan to the federal Department of Housing and Urban Development (HUD) for approval of federal funds for the coming year's housing programs. If a plan is not timely filed, money is dispersed to other tribes and no more federal funding is available for another year.

Finally, the Plaintiffs allege that the Defendants contacted the M & I Bank where the Housing Authority maintained an account and warned the bank not to honor checks written by the former Housing Authority members and not to allow the Plaintiffs access to bank account funds. The Plaintiffs claim that, as a result, vendors and creditors have not been paid.

Based upon these allegations, the Plaintiffs have brought three claims against the Defendants.¹ In "Counts" I and II, the Plaintiffs claim that the Defendants conspired to interfere with the operations of the Housing Authority through a pattern of racketeering which has included mail fraud, conversion, threats, and civil rights violations.² They seek damages of one million dollars, trebled, a permanent injunction, and the appointment of a receiver under the Racketeering Influenced Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-68. Count III is a state law claim alleging conversion of Housing Authority funds and property.

Along with their Complaint, the Plaintiffs filed a motion for a temporary restraining order asking this court for an order restraining the Defendants from operating or exerting any control over the housing programs and appointing a receiver. See Federal Rule of Civil Procedure 65(b). On July 1, 1998, the court held a hearing on this motion, but the hearing was adjourned and the motion was denied see Order of July 16, 1998, after the Defendants challenged subject matter jurisdiction.

The Defendants then filed a motion to dismiss in which they argue that the doctrine of tribal sovereign immunity bars this action against the Tribe, the Tribal Council, and the individual tribal officials.³ See Federal Rule of Civil Procedure 12(b)(1). The Plaintiffs, in turn, contend that the Defendants have clearly waived their sovereign immunity under a Housing Authority Ordinance they enacted on April 2, 1998. The Plaintiffs also assert that resort to the tribal court would be futile because the Defendants control the court. Finally they argue that, because federal agencies and federal funds are involved with the Housing Authority, a federal court should assume jurisdiction.

II. TRIBAL SOVEREIGN IMMUNITY

Tribal sovereign immunity is a judicial doctrine which developed in the early part of this century. See Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, ___, 118 S.Ct. 1700, 1703, 140 L.Ed.2d 981 (1998). The doctrine recognizes that "Indian tribes are `distinct, independent political communities, retaining their original natural rights' in matters of local self-government." Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978) (quoting Worcester v. Georgia, 31 U.S. 515, 559, 6 Pet. 515, 559, 8 L.Ed. 483 (1832)). "Although no longer `possessed of the full attributes of sovereignty,' [the Indians] remain a `separate people, with the power of regulating their internal and social relations.'" Santa Clara Pueblo, 436 U.S. at 55, 98 S.Ct. 1670 (quoting United States v. Kagama, 118 U.S. 375, 381-82, 6 S.Ct. 1109, 30 L.Ed. 228 (1886)). Thus, courts have developed the Indian tribal sovereign immunity doctrine which holds that Indian tribes are domestic dependent nations that exercise inherent sovereign authority over their members and territories. See Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505, 509, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991). See also McClanahan v. Arizona State Tax Commission, 411 U.S. 164, 168-69, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973) (outlining the roots of the Indian sovereignty doctrine). Although the United States Supreme Court recently questioned the continuing justification for the doctrine of tribal sovereign immunity, the Court declined to overrule its precedent upholding the doctrine and chose to defer to Congress for any decision to abrogate tribal immunity. See Kiowa Tribe, 523 U.S. at ___, 118 S.Ct. at 1703-05.

"As a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity." Kiowa Tribe, 523 U.S. at ___, 118 S.Ct. at 1702. It is well-settled that a waiver of sovereign immunity cannot be implied, but must be unequivocally expressed. United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976) (quoting United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 23 L.Ed.2d 52 (1969)).

In this case the Plaintiffs argue that the Defendants waived tribal immunity by enacting the following Housing Authority Ordinance on April 2, 1998:

The council hereby gives its irrevocable consent to allowing the Authority to sue and be sued in its corporate name, upon any contract, claim or obligation arising out of its activities under this ordinance and hereby authorizes the Authority to agree by contract to waive any immunity from suit which it might otherwise have; but the Tribe shall not be liable for the debts or obligations of the Authority. Complaint at Exhibit C (Housing Authority Ordinance at Article V, ¶ 2). The Plaintiffs believe that this ordinance waives immunity for the Community, the Tribal Council, and its officials.

The Mole Lake Band's Ordinance is the type of provision which HUD requires a tribe to include in ordinances establishing its housing authority before the tribe can qualify for HUD assistance. See 24 C.F.R. § 950.126 (1998). It is identical to the ordinance considered recently by the Eighth Circuit in Dillon v. Yankton Sioux Tribe Housing Authority, 144 F.3d 581 (8th Cir.1998). In Dillon, a non-Indian brought an employment discrimination suit against the Yankton Sioux Tribe's Housing Authority. The Plaintiff cited the Eighth Circuit's decision in Weeks Construction, Inc. v. Oglala Sioux Housing Authority, 797 F.2d 668, (8th Cir.1986), for the proposition that "[a] `sue and be sued' clause such as is set forth in the tribal ordinance ... has been recognized as constituting an express waiver of sovereign immunity." Id. at 671 (citations omitted). However, the Dillon court concluded that Weeks was inapplicable because "in Weeks, and the cases cited therein, an express waiver of sovereign immunity was found in a written contract." Dillon, 144 F.3d at 583. The Dillon court explained that:

The tribal resolution quoted above specifically states that "the Authority [may] agree by contract to waive any...