Carl E. Gungoll Exploration Joint Venture v. Kiowa Tribe of Oklahoma

• Decision Date: 22 December 1998
• Docket Number: Nos. 87,031,87,032,s. 87,031
• Parties: CARL E. GUNGOLL EXPLORATION JOINT VENTURE, an Oklahoma partnership, Appellee, v. The KIOWA TRIBE OF OKLAHOMA, Appellant. J.B.J. Investment Corporation, a corporation, Appellee, v. The Kiowa Tribe of Oklahoma, Appellant.
• Court: Oklahoma Supreme Court

Page 442

975 P.2d 442

1998 OK 128

CARL E. GUNGOLL EXPLORATION JOINT VENTURE, an Oklahoma partnership, Appellee, v. The KIOWA TRIBE OF OKLAHOMA, Appellant.

J.B.J. Investment Corporation, a corporation, Appellee, v. The Kiowa Tribe of Oklahoma, Appellant.

Nos. 87,031, 87,032.

Supreme Court of Oklahoma.

Dec. 22, 1998.

William J. Robinson, Shirk, Work, Robinson & Work, P.C., Oklahoma City, Oklahoma, for appellee, Carl E. Gungoll Exploration Joint Venture and J.B.J. Investment Corporation, a corporation.

R. Brown Wallace, Shelia D. Tims, Andrews, Davis, Legg, Bixler, Milsten, & Price, Oklahoma City, Oklahoma, for appellant, The Kiowa Tribe of Oklahoma.

SUMMERS, V.C.J.

¶1 The Kiowa Tribe of Oklahoma appeals from two judgments rendered against it in the District Court of Oklahoma County on promissory notes executed by the Tribe. In light of a recent decision of the United States Supreme Court on the subject of Indian tribal sovereign immunity we must reverse and remand.

¶2 In Case Number 87,031 Carl Gungoll Exploration Joint Venture (Gungoll) brought suit against the Tribe to recover money owing on a promissory note. The note makes no mention of a waiver of or limit on the Tribe's right of sovereign immunity. The Tribe failed to repay the money when due. Gungoll sued and filed a motion for summary judgment. The Tribe objected, asserting as a defense the doctrine of tribal sovereign immunity. The trial court granted judgment in favor of Gungoll, and awarded attorney's fees. ¹

¶3 A similar scenario existed in case number 87,032. There J.B .J. Investment Corporation sued the Tribe in state court to recover on a note. Again, the note did not waive the sovereign immunity of the Tribe. J.B.J. filed a motion for summary judgment. The Tribe asserted that its right of sovereign immunity prevented any further action by the state court. The trial court granted summary judgment in favor of J.B.J., also awarding attorney's fees. Because of the similarity of these two cases we treat them as companion for purposes of this appeal.

¶4 The U.S. Supreme Court case above referred to causes us to reexamine our earlier legal approach to the question of tribal sovereign immunity. In Hoover v. Kiowa Tribe of Oklahoma, 909 P.2d 59 (Okl.1995), cert. denied, 517 U.S. 1188, 116 S.Ct. 1675, 134 L.Ed.2d 779 (1996), this Court held that a contract between a non-Indian and a Tribe executed outside of Indian country was enforceable against the Tribe in state court. Under facts almost exactly like those presented by the cases at bar, this Court held that sovereign immunity did not bar the suit. Relying heavily on Lewis v. Sac and Fox Tribe of Oklahoma Housing Authority, 896 P.2d 503 (Okla.1994), cert. denied, 516 U.S. 975, 116 S.Ct. 476, 133 L.Ed.2d 405 (1995), in which the Court had held that Oklahoma state courts have concurrent jurisdiction over Indian matters, this Court determined that state courts had jurisdiction to hear the matter, and that their doing so was not barred by sovereign immunity:

[W]henever Indian interests are tendered in a controversy, a state court must make a preliminary inquiry into the nature of the rights sought to be settled. Only that litigation which is explicitly withdrawn by Congress or that which infringes upon tribal self-government stands outside the boundaries of permissible state-court cognizance.

Hoover, 909 P.2d at 62, quoting Lewis v. Sac and Fox, 896 P.2d at 508.

¶5 Shortly after Hoover, this Court was again faced with a sovereign immunity issue. In First Nat'l Bank of Altus v. Kiowa, 913 P.2d at 300-301, we followed the reasoning of Hoover and Lewis, determining once again that suit in state court was not barred by the doctrine of tribal sovereign immunity. There, an intertribal committee entered into contracts with a bank, and failed to repay the loans. The bank brought suit in state court to recover on promissory notes. Quoting Lewis as authority, we stated that "state courts have inherent authority and thus are presumptively competent to adjudicate claims arising under the law of the United States." Id. at 301. We permitted the state suit to continue.

¶6 In the same year we again faced this question in Aircraft Equipment Co. v. Kiowa Tribe of Oklahoma, 921 P.2d 359 (Okla.1996). There, an aircraft company sued the Kiowa Tribe in state court for defaulting on its note. Once again we relied on Hoover and Lewis, holding that sovereign immunity did not bar the state court suit. We declined to followed the Tenth Circuit's ruling in Sac and Fox Nation v. Hanson, 47 F.3d 1061 (10th Cir.1995), which held contrary to the Hoover case, and which said that the location of the commercial activity was not determinative, and that absent waiver an Indian tribe was immune from suit in state courts. A rationale for declining to follow this federal case was that the United States Supreme Court had denied certiorari in both Hoover and Lewis.

¶7 Now, however, the United States Supreme Court has spoken on this issue, and has issued an opinion directly contrary to our language in Hoover, First National Bank of Altus, and Aircraft Equipment. In Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998) ², the manufacturing company brought suit in state court to recover on a promissory note executed by the Kiowa Tribe. The Tribe moved to dismiss based on the doctrine of sovereign immunity. The District Court denied the motion to dismiss, and granted judgment in favor of the manufacturing company. The Oklahoma Court of Civil Appeals affirmed the trial court's judgment, relying on this Court's ruling in Hoover.

¶8 The United States Supreme Court reversed the Court of Civil Appeals, holding that "tribal immunity is a matter of federal law and is not subject to dimunition by the States." Id. at 1703. "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." Id. at 1702. The Court continued by pointing out that in its cases, immunity from suit has been sustained without distinction as to where the activities occurred. Id. Nor is there to be a distinction based on whether the activities are commercial or governmental. Id. The Court reiterated that in some instances the state might have the right to demand compliance with state laws, but may have no means available to enforce those laws. Id.

¶9 The High Court acknowledged that there are reasons to doubt the wisdom of the doctrine of sovereign immunity:

In our interdependent and mobile society, however, tribal immunity extends beyond what is needed to safeguard tribal self-governance. This is evident when tribes take part in the Nation's commerce. Tribal enterprises now include ski resorts, gambling, and sales of cigarettes to non-Indians. [citations omitted] In this economic context, immunity can harm those who are unaware that they are dealing with a tribe, who do not know of tribal immunity, or who have no choice in the matter, as in the case of tort victims.

Id. at 1704. Even in light of these concerns, the High Court followed its own precedents ³ and declined to limit the doctrine, instead deferring to Congress.

¶10 It is true that this rule of law may discourage certain entities from wanting to do business with tribes, and such public policy considerations played a role in our earlier decisions. Aircraft Equipment, 921 P.2d at 361. However, the Supreme Court has noted, ⁴ as do we, that an express waiver of sovereign immunity may be inserted into the contract, and when so done the business or entity will be protected, and will have preserved its right to pursue the matter in state court.

¶11 In light of the U.S. Supreme Court's decision in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 118 S.Ct. 1700, 140 L.Ed.2d 981 ⁵, we expressly overrule Hoover v. Kiowa Tribe of Oklahoma, supra, and all language in First Nat'l Bank of Altus v. Kiowa, Comanche and Apache Intertribal Land Use Committee, supra, and Aircraft Equipment Co. v. Kiowa Tribe, supra, inconsistent with our ruling here today. ⁶

¶12 Kiowa Tribe v. Manufacturing Technologies is directly on point, and requires that the trial court's summary judgment in each case before us on appeal be reversed. These cases are remanded to the District Court of Oklahoma County with instructions to enter judgments for the Tribe under the doctrine of tribal sovereign immunity.

¶13 KAUGER, C.J., SUMMERS, V.C.J., LAVENDER, SIMMS, JJ.--concur.

¶14 HODGES, J., concurs by reason of stare decisis and concurs in deference to mandate of Kiowa Tribe v. Manufacturing Technologies, Inc., 523 U.S. 751, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998).

¶15 WATT, J.--concurs by reason of stare decisis.

¶16 HARGRAVE, OPALA, JJ.--concur in judgment.

¶17 WILSON, J.--dissents and is joined by OPALA, J.

ALMA WILSON, J., with whom OPALA, J., joins, dissenting:

¶1 The rule of stare decisis ¹ obligates the Oklahoma courts to follow Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998). In its pronouncement, Manufacturing Technologies recognized that the doctrine of tribal immunity is tenuous, ² hence every precaution against an expansive application of its ruling should be taken. ³ Accordingly, I respectfully dissent to today's overreaching application of Manufacturing Technologies.

I

THIS APPEAL SHOULD BE DISMISSED FOR LACK OF AN APPEALABLE ORDER.

¶2 Manufacturing Technologies does not require that we treat the partial summary judgment order in this case as an appealable order. ⁴ The action below was filed against the Tribe to recover the deficiency due on a promissory note and security agreement; ⁵ and against the Tribe and the members of the Kiowa Business Committee to recover damages for misrepresentation. The defendants answered contending that the claims against the Tribe and against the members of the Kiowa...