Colombe v. Rosebud Sioux Tribe
| Decision Date | 04 April 2014 |
| Docket Number | 13–1512.,Nos. 13–1382,s. 13–1382 |
| Citation | 747 F.3d 1020 |
| Parties | Wes COLOMBE, Personal Representative of Charles Colombe, Individually and as an Officer of BBC Entertainment, Inc., a dissolved Minnesota corporation, Plaintiff–Appellant v. ROSEBUD SIOUX TRIBE; Rosebud Sioux Tribal Court; Judge Sherman Marshall, in his Official and Individual Capacities, Defendants–Appellees. Wes Colombe, Personal Representative of Charles Colombe, Individually and as an Officer of BBC Entertainment, Inc., a dissolved Minnesota corporation, Plaintiff–Appellee v. Rosebud Sioux Tribe; Rosebud Sioux Tribal Court; Judge Sherman Marshall, in his Official and Individual Capacities, Defendants–Appellants. |
| Court | U.S. Court of Appeals — Eighth Circuit |
OPINION TEXT STARTS HERE
Clint Sargent, argued, Sioux Falls, SD, for appellant.
Dana L. Hanna, argued, Rapid City, SD (on the brief), for appellee.
Before GRUENDER, BEAM, and SHEPHERD, Circuit Judges.
Charles Colombe 1 was a member of the Rosebud Sioux Tribe (“the Tribe”), and he was a shareholder, director, and officer of BBC Entertainment, Inc. (“BBC”), which managed a casino on tribal lands. After receiving an adverse ruling from the Rosebud tribal courts regarding a casino management contract, Colombe filed an action in federal court seeking to vacate the tribal court ruling and to enjoin the Tribe from continuing a second action in the Rosebud tribal courts. In the proceeding before the district court, the Tribe moved to dismiss the complaint for failure to exhaust tribal court remedies. The district court granted the motion to dismiss in part and denied the motion in part. The district court later entered summary judgment in favor of the Tribe and its officials on the remainder of the case. Colombe appeals the dismissal in part and the grant of summary judgment. The Tribe cross-appeals, arguing the district court should have dismissed the entire complaint for failure to exhaust tribal court remedies. We agree with the Tribe, and thus we reverse the district court's denial in part of the motion to dismiss. We affirm the district court in all other respects.
The Tribe owns and operates a casino on tribal trust land in South Dakota. In 1994, the Tribe entered into a five-year casino management contract with BBC. Article 6.4(c)(5) of the contract required BBC to fund an initial Operation Expense Reserve (“OER”) account. BBC, however, never made the initial contribution to the OER account. Instead, BBC and the Tribe orally agreed that BBC would contribute 7.5% of the casino's net profits to the account each month. At the conclusion of the contract, BBC withdrew $415,857 from the OER account based on its belief that it was entitled to 35% of the remaining OER account balance, a division consistent with the contract's division of net profits. The Tribe brought a breach-of-contract suit in tribal court, arguing that the oral modification was not in compliance with the Indian Gaming Regulatory Act of 1988 (“IGRA”) and IGRA's various implementing regulations.
IGRA created the statutory basis for the regulation and operation of gaming by Indian tribes. IGRA established the National Indian Gaming Commission (“NIGC”) to oversee Indian gaming. Indian tribes may enter into casino management contracts only after the NIGC Chairman has approved those contracts. Any modifications of the contracts are also subject to the NIGC Chairman's approval. The NIGC Chairman approved the casino management contract entered into by the Tribe and BBC, but the oral modification regardingthe funding of the OER account was never presented to the NICG Chairman.
The Tribe argued to the tribal court that, because the oral modification was not presented to the NIGC Chairman, the modification was void, and because BBC failed to fund the OER account as required by the contract, BBC was not entitled to any of the money in the OER account. The tribal court judge disagreed with the Tribe and found in favor of BBC. The Tribe appealed to the Rosebud Sioux Tribe Supreme Court (“Rosebud Supreme Court”). BBC did not file a cross-appeal or assign any errors to tribal court's exercise of jurisdiction. BBC stated, however, in their appellate brief that the Tribe could have complained to the NIGC and sought relief from that agency. BBC asserted that 25 U.S.C. § 2713(3) “provides the procedure applicable to violations which replaces the jurisdiction of courts.”
The Rosebud Supreme Court reversed the decision of the tribal court, holding that the oral agreement was void because it had not been approved by the NIGC Chairman. The Rosebud Supreme Court remanded the case to the tribal court to determine damages. The Tribe sought rehearing en banc of the Rosebud Supreme Court's decision to remand. The Tribe argued that remand was unnecessary because its measure of damages was the full amount BBC withdrew from the OER account. BBC argued the Rosebud Supreme Court had no jurisdiction to determine the legal validity of an oral modification because IGRA had given the NIGC exclusive jurisdiction to make such determinations. The Rosebud Supreme Court granted the rehearing en banc, but limited that rehearing to the “sole issue” of the appropriate remedy for BBC's breach of the management contract. The Rosebud Supreme Court did not address the issue of tribal jurisdiction in its order re-affirming its prior decision.
The tribal court conducted a hearing on damages, awarding final judgment against BBC in the amount of $399,353.61, plus interest accrued from August 15, 1999 in the amount of $127,793.15. BBC did not appeal the judgment to the Rosebud Supreme Court.
Due to insolvency, BBC did not pay the judgment. The Tribe then filed suit in tribal court seeking to pierce BBC's corporate veil and recover the judgment from BBC's owners—Wayne Boyd 2 and Charles Colombe. Colombe moved to dismiss the suit, claiming that the judgment was void because the tribal court had violated IGRA. He also argued that under an amendment to the Rosebud Sioux Tribe Constitution at the time judgment was entered against BBC, the tribal court had ceased to exist. The tribal court denied the motion to dismiss, and Colombe sought an interlocutory appeal to the Rosebud Supreme Court. The tribal court denied the request for an interlocutory appeal.
While the Tribe's suit seeking to pierce the corporate veil was proceeding, Colombe filed suit in federal court. Count 1 of the complaint sought de novo review of “any controversy litigated in the tribal court” and “an order from [the federal court] vacating the tribal court judgment ... on the grounds that the tribal court had no jurisdiction to rule that there had been an illegal modification of the Management Agreement.” Count 2 sought a permanent injunction against the Tribe, the tribal court, and the Tribal Court Judge Sherman Marshall from proceeding with the action to pierce the corporate veil.
The Tribe moved to dismiss the complaint, arguing, as relevant to this appeal, that Colombe and BBC had failed to exhausttribal court remedies. The district court held that BBC had exhausted tribal court remedies as to the issue of the tribal court's jurisdiction to find an illegal modification of the management contract. The court held further, however, that BBC had not exhausted any other issues pertaining to the tribal court's order after remand from the Rosebud Supreme Court because BBC failed to appeal that order.
After the district court granted the motion to dismiss in part, Colombe filed motions for reconsideration of the partial grant of the motion to dismiss and for a trial on his request for a permanent injunction. In these motions, he argued for the first time in federal court that the Rosebud tribal courts had failed to comply with certain provisions in the Tribe's amended constitution, and thus the Rosebud Supreme Court lacked authority to hear an appeal from the tribal court. The district court noted that this issue had not been exhausted because it had not yet been considered by the Rosebud Supreme Court. Accordingly, the district court denied the motions to reconsider and for trial on Colombe's request for a permanent injunction.
Colombe and the Tribe filed competing motions for summary judgment on the “sole remaining issue” following the district court's partial grant of the motion to dismiss: “Whether the Tribal Court had jurisdiction to hold that the oral modification to the NIGC-approved management contract was void.” (Doc. 66 at 6.) The district court granted summary judgment to the Tribe, holding that the NIGC chairman's exclusive authority to determine a contract's compliance with IGRA does not encompass the authority to determine the legal validity of a contract.
Colombe appeals, raising three arguments. First, he argues that the district court erred in granting summary judgment to the Tribe because according to IGRA, the Rosebud tribal courts lacked jurisdiction to consider the validity of the oral modification to the management contract. Second, Colombe argues that BBC properly exhausted its tribal court remedies regarding whether the Rosebud Supreme Court was deprived of its constitutional power to act. Finally, Colombe argues that, to the extent the district court found that he had not exhausted tribal court remedies as to some of his claims, exhaustion was impossible because of BBC's financial insolvency and futile because the Rosebud Supreme Court made clear that it was not going to consider his argument that the Rosebud tribal courts lacked jurisdiction.
The Tribe cross-appeals, contending the district court should have dismissed the entire complaint because of failure to exhaust. Specifically, BBC failed to exhaust its claim that the tribal courts lacked jurisdiction under IGRA to consider the validity of the oral modification to the management contract.
As a threshold issue, we must consider, as presented in the Tribe's...
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