Burlington Northern R. Co. v. Crow Tribal Council

• Decision Date: 26 July 1991
• Docket Number: No. 89-35667,89-35667
• Citation: 940 F.2d 1239
• Parties: BURLINGTON NORTHERN RAILROAD COMPANY, Plaintiff-Appellee, v. CROW TRIBAL COUNCIL, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1239

940 F.2d 1239

BURLINGTON NORTHERN RAILROAD COMPANY, Plaintiff-Appellee, v. CROW TRIBAL COUNCIL, et al., Defendants-Appellants.

No. 89-35667.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 8, 1990.

Decided July 26, 1991.

Thomas E. Towe, (argued), Billings, Mont. (Sarah W. Barlow and Daniel M. Rosenfelt, Rosenfelt, Barlow & Borg, P.A., Albuquerque, N.M., on brief) for defendants-appellants.

Michael E. Webster, Crowley, Haughey, Hanson, Toole & Dietrich, Billings, Mont., for plaintiff-appellee.

Appeal from the United States District Court for the District of Montana.

Before TANG, D.W. NELSON and CANBY, Circuit Judges.

TANG, Circuit Judge:

The Crow Tribe enacted an ordinance establishing a commission to regulate railroads crossing the Crow Reservation. Burlington Northern Railroad ("BN") sought a declaratory judgment in federal court invalidating the ordinance as exceeding tribal jurisdiction. The Tribe moved for dismissal for lack of jurisdiction, and the district court denied the motion. The district court later granted default judgment to BN for the Tribe's failure to comply with an order compelling the Tribe's answers to discovery. The Tribe appeals. We vacate judgment and remand.

FACTUAL AND PROCEDURAL BACKGROUND

BN operates the only railroad line across the Crow Reservation, located in southeastern Montana. An 1889 Act of Congress established BN's right-of-way across the Reservation. 25 Stat. 660 (1889). Until 1986, BN maintained a freight station at Lodge Grass on the reservation, but it did not provide passenger service. In October Specifically, the ordinance by its terms applies to all "common carriers" or "railroad lines." Crow Trib.Ord. Sec. 4A. It empowers the Commission to investigate and hold hearings on violations of tribal law, to enforce health and safety regulations in conformity with federal law, and to prosecute violations of state and federal law. Crow.Trib.Ord. Secs. 7A, 8A, 9A, 11A. The ordinance further empowers the Commission "to compel ... railroads subject hereto to provide ... sufficient train service, both freight and passenger," and "to provide ... suitable waiting rooms for passengers and suitable rooms for freight and baggage at all stations." Crow.Trib.Ord. Sec. 10A. Next, the ordinance promulgates "Requirements for Railroads," including (1) providing regular service, (2) providing "sufficient accommodations," and (3) maintaining freight and passenger facilities. Crow Trib.Ord. Secs. 2A, 2B(1). The ordinance further states that no carrier may discontinue use of any current railroad facility without a hearing before the Commission. Crow Trib.Ord. Sec. 2B(2). The ordinance does, however, provide for exemption from the ordinance upon written request and a hearing. Crow Trib.Ord. Sec. 14A. Finally, the ordinance declares that railroad service "is vitally important to the long term development of the Crow Tribe's economic base." Crow Trib.Ord. Sec. 2A.

1982, the Crow Tribal Council adopted Resolution 83-6, thereby enacting the Crow Tribal Common Carrier Ordinance, a regulatory ordinance patterned after Montana statutes. The ordinance establishes "general duties" for common carriers operating on the Crow Reservation and a tribal regulatory commission.

Apparently the Commission did not act for three years after its creation. In December 1985 the Commission wrote to BN's vice president enclosing a copy of the ordinance and "requesting a meeting ... concerning complaints of non-compliance with the agreement with Burlington Northern Railway and the Crow Tribe." BN did not respond to the Commission's request for a meeting. Two months later, in March 1986, BN filed a complaint in federal district court seeking a declaratory judgment that the ordinance is null and void because it exceeds tribal sovereign power.

In April 1986, the Crow Tribe's attorney, N. Jean Bearcrane, filed a motion to dismiss for lack of jurisdiction. The Tribe argued that BN's complaint failed to allege a controversy ripe for adjudication, that BN lacked standing, that BN failed to exhaust tribal remedies, and that the Tribe's sovereign immunity deprived the court of jurisdiction. The district court denied the motion in January 1987.

In February 1987, the Tribe moved for a preliminary injunction to prevent BN from closing its Lodge Grass railroad station, the only station on the Crow Reservation. The Tribe based its motion on the provision of the disputed ordinance requiring maintenance of rail stations, among other facilities, unless exempted from this duty by the Commission. Crow Trib.Ord. Sec. 2B. The district court never ruled on this motion, and BN closed the station.

The Crow Tribe may not retain counsel, generally, without the written approval of the Bureau of Indian Affairs ("BIA"). 25 U.S.C. Sec. 81. On January 9, 1988, the Crow Tribal Council resolved to renew its contract with Bearcrane and Attorney Daniel Rosenfelt. On January 29, 1988, BN mailed its Second Set of Interrogatories and First Requests for Production to Bearcrane. The BIA rejected the Crow resolution to contract with Bearcrane and Rosenfelt on February 17. On March 10, Crow Tribal Chairman Richard Real Bird submitted a proposed contract with Attorney Harold G. Stanton to the BIA. In response to the BIA's objections, Stanton resubmitted a revised contract on March 23. In the meantime, the Tribe could not retain legal counsel and it did not respond to BN's discovery requests.

On March 30, 1988, Bearcrane wrote to the district court stating that her contract with the Tribe had expired and she was therefore no longer authorized to represent the Tribe. The BIA verified the expiration of counsel's contract by letter to the court on April 4. At a preliminary pretrial conference the next day, no representative of On June 15, the BIA again disapproved the Tribe's proposed attorney contract. At its July Council meeting, the Tribe passed a new attorney contract resolution. On September 7, 1988, the BIA disapproved that proposed contract. Also in September, the Tribe failed to file a status report required by the court's scheduling order. The Tribe also continued to fail to respond to BN's discovery requests. On October 8, 1988, the Tribal Council again resolved to retain counsel. On October 11, BN moved for an order compelling the Tribe's response to the discovery BN had filed in January. On November 4, the BIA disapproved the latest proposed attorney contract. On November 10, the district court granted BN's motion to compel.

the Tribe appeared. The district court ordered the conference postponed to May 3. In its order, the district court reminded "defendants [Crow Tribal Council] and their counsel of the availability of sanctions" for failure to appear. The court also reminded defendant Crow Tribal Council of the local rule requiring counsel to obtain the court's leave to withdraw as counsel of record. Both Bearcrane and Stanton appeared at the May 3 conference, though both disavowed authority to represent the Tribe.

Attorney Stanton wrote to the district court on November 14, 1988, apprising the court of the Tribe's inability to retain counsel. On November 22, the district court wrote to Stanton stating Bearcrane was still the Tribe's counsel of record and that it had received no request for a stay or continuance. ¹ At the next Tribal Council meeting, in January 1989, the Tribal Council approved a new contract. On February 14, BN moved for a default judgment for the Tribe's failure to comply with the court's order compelling discovery. On February 16, over a year after submission of the first attorney contract from the Tribe, the BIA approved the latest attorney contract. Since then, counsel retained under the contract has defended the Tribe. On August 11, 1989, the court entered a default judgment for BN from which the Tribe appeals.

DISCUSSION

The Tribe's appeal raises several meritorious objections to the district court's assumption of jurisdiction and entry of judgment in this case. We address the issues of federal jurisdiction, exhaustion of tribal remedies, and default judgment in turn, but we focus on the exhaustion issue.

I. Federal Court Jurisdiction

We review de novo a district court's determination of federal subject matter jurisdiction. Stock West, Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir.1989). We accept a district court's fact findings on jurisdictional issues unless clearly erroneous. Id.

The Tribe argues that BN's complaint failed to show standing and ripeness for federal court jurisdiction. The Tribe also contends that, even if BN's complaint evinced standing and ripeness, the controversy became moot when BN closed its Grass Lodge Station.

Despite the jurisdictional nature of these issues, we are reluctant to decide them in view of two related considerations. First, facts relevant to determining ripeness and mootness will vary with time. Cf. 13A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 3532.1, at 130 (2d ed. 1984) ("ripeness and mootness ... could be addressed as ... the time dimensions of standing"). Second, if BN must exhaust tribal remedies before proceeding in federal court, events occurring during the passage of time could well effect the outcome of jurisdictional issues. We therefore will consider the Tribe's jurisdictional

challenges only insofar as they might prevent us from reaching the exhaustion issue. We believe this to be the prudent course, as it will allow us to decide the appeal on grounds that partake of the nature of a jurisdictional bar (i.e., exhaustion of tribal remedies) while avoiding--at least for the time being--jurisdictional issues of constitutional dimension (i.e., ripeness and mootness). We recognize, however, that this course may not be appropriate in all cases. See id. at 125 (In the context of abstaining in favor of a state court, "[m]arginally ripe cases should not be...