Dunlevy v. Stidham

• Decision Date: 27 May 2011
• Docket Number: No. 09–5071.,09–5071.
• Citation: 640 F.3d 1140
• Parties: CROWE & DUNLEVY, P.C., Plaintiff–Appellee,v.Gregory R. STIDHAM, Defendant–Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

640 F.3d 1140

CROWE & DUNLEVY, P.C., Plaintiff–Appellee,

v.Gregory R. STIDHAM, Defendant–Appellant.

No. 09–5071.

United States Court of Appeals, Tenth Circuit.

May 27, 2011.

Michael A. Simpson (Marthanda J. Beckworth with him on the briefs) of Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., Tulsa, OK, for Defendant–Appellant.Clyde A. Muchmore (James L. Kincaid and Susan E. Huntsman on the brief) of Crowe & Dunlevy, P.C., Tulsa, OK, for Plaintiff–Appellee.Before BRISCOE, Chief Judge, SEYMOUR and LUCERO, Circuit Judges.SEYMOUR, Circuit Judge.

Judge Gregory R. Stidham of the Muscogee (Creek) Nation District Court appeals the district court's order granting preliminary injunctive relief to Crowe & Dunlevy (“Crowe”) and denying Judge Stidham's motion to dismiss. Crowe & Dunlevy, P.C. v. Stidham, 609 F.Supp.2d 1211, 1227 (N.D.Okla.2009). Because the district court correctly denied Judge Stidham's motion to dismiss and did not abuse its discretion in granting the preliminary injunction, we affirm.

I.

The pertinent facts are largely undisputed. Michael McBride, now a partner at Crowe, has long served as legal counsel to the Thlopthlocco Tribal Town (the “Thlopthlocco”). The Thlopthlocco is a federally recognized Indian tribe with its own Constitution and bylaws. It is also a tribal town of the Muscogee (Creek) Nation, another federally recognized Indian tribe. The Thlopthlocco reside on land held in trust for them by the United States, which is located within the historic boundaries of the Creek Nation. Pursuant to the Thlopthlocco Constitution, the governing body of the Thlopthlocco is its Business Committee, which has the power to transact business and to act and speak on behalf of the tribe.

The present case stems from Crowe's representation of the Thlopthlocco in the Muscogee (Creek) Nation District Court (“Muscogee District Court”) in 2007, in a case alleging that Nathan Anderson, then a member of the Thlopthlocco Business Committee, had attempted a coup d' etat, declared himself the only valid leader, and purported to appoint a new government. The Thlopthlocco asserted that Anderson and his allies (collectively, the “Anderson defendants”) had interfered with the Thlopthlocco's business interests by, among other things, accessing the Thlopthlocco's bank accounts, issuing regulations on tribal letterhead, and meddling with the Thlopthlocco's contractual relationships with various third-party service providers. The Thlopthlocco sought both declaratory and injunctive relief.

The Thlopthlocco does not have an established judicial system of its own. It has previously waived its sovereign immunity and consented to jurisdiction in the Muscogee (Creek) Nation tribal courts for the purpose of specific lawsuits directed at dual Thlopthlocco–Muscogee citizens.¹ Before filing its complaint in Muscogee District Court in this case, the Thlopthlocco granted a narrow waiver of its sovereign immunity, stating:

[T]he Thlopthlocco Tribal Business Committee does hereby waive its immunity on a limited basis only for the purpose of adjudicating this dispute only, only claims brought by the Plaintiff, Thlopthlocco Tribal Town, and only for injunctive and declaratory relief. This waiver of immunity shall not include elections disputes.Aplt. Supp.App., vol. I, at 412.

In response to the Thlopthlocco's complaint, Judge Patrick Moore of the Muscogee District Court temporarily enjoined the Anderson defendants from activities listed in the complaint, declared any official actions taken by them to be null and void, and set an evidentiary hearing. After the hearing, the court lifted the restraining order and dismissed the complaint, holding that the Creek Nation tribal court did not have jurisdiction to hear the dispute. On appeal, the Muscogee (Creek) Nation Supreme Court (“Muscogee Supreme Court”) reversed that decision and ordered that the injunction remain in effect during the pendency of the tribal court litigation. In a subsequently issued opinion, the court held:

The relationship between Thlopthlocco and the federal government is different from the relationship between Thlopthlocco and the Muscogee (Creek) Nation. Under federal law, Thlopthlocco is a reorganized Indian tribe; under tribal law, Thlopthlocco is a Muscogee (Creek) tribal town. See Thlopthlocco [ Tribal Town v. Tomah, 8 Okla. Trib. 451, 2004 WL 5744828]. The Tribal Town Constitution affects neither the status of tribal town members as citizens of the Muscogee (Creek) Nation nor the relationship of the Tribal Town to the Muscogee Nation which remains analogous to a city/state government or state/federal government relationship.

The members of Thlopthlocco Tribal Town, as citizens of the Muscogee Nation, have requested relief in the courts of the Muscogee (Creek) Nation. Neither the Town nor its members will be abandoned by the Nation's courts.

Aplt. Supp.App., vol. 4, at 01707–08

Thereafter, the Anderson defendants filed an answer claiming to be the true representatives of the Thlopthlocco. They subsequently filed a cross-claim against nine Thlopthlocco tribal members, alleging the nine cross-claim defendants had violated the Thlopthlocco Constitution by purporting to unlawfully adopt six individuals as members of the tribe and permitting them to vote in the January 27, 2007 election. They also alleged that certain of the cross-claim defendants had violated the civil rights of some of the Anderson defendants by prohibiting them from voting in the last election, and the civil rights of defendant Anderson by attempting to strip him of his authority as Town King. For relief, the Anderson defendants asked that the January 27 election be declared void and that the cross-claim defendants be enjoined from interfering with the Thlopthlocco Town government as allegedly constituted by the Anderson defendants. In a trial brief filed shortly thereafter, however, the Anderson defendants requested a new election to be overseen by the Creek Nation court.

The Thlopthlocco and the nine cross-claim defendants filed a motion to dismiss the cross-claims for lack of subject matter jurisdiction. Before further proceedings, the Anderson defendants filed a motion requesting that the Thlopthlocco be ordered to pay their legal fees from the Thlopthlocco Treasury. The Anderson defendants argued they were entitled to fees from the tribe's treasury because of the possibility that, at the end of the litigation, they might be found to represent the legitimate government of the Thlopthlocco. They asserted there was precedent for the payment of both sides' attorneys fees when there is a dispute among members of a tribe. Judge Stidham granted the motion.²

The Thlopthlocco appealed Judge Stidham's order to the Muscogee Supreme Court, which, on January 16, 2009, reversed it as premature. See id., vol. IV, doc. 96 (“January 16 Order”). The court reasoned that until the litigation was resolved, no one could know whether anyone among the litigants had the authority to spend Thlopthlocco funds. See id. In addition to denying the Anderson defendants' request for attorneys' fees, the Muscogee Supreme Court sue sponte ordered that “any attorneys' fees paid from the Thlopthlocco Treasury to the Plaintiff's counsel be returned and deposited into the Treasury.” Id. Crowe was not named in the January 16 Order. There is no dispute, however, that Crowe had been paid by the Thlopthlocco for work it performed as plaintiff's counsel during the tribal court litigation, pursuant to an engagement letter and legal services contract.

The Thlopthlocco petitioned for rehearing of the January 16 Order. It argued, among other things, that the provision of the January 16 Order requiring the refund of Crowe's fees exceeded the limited waiver of sovereign immunity the Thlopthlocco had conferred upon the Muscogee (Creek) Nation courts, and that the Muscogee Supreme Court lacked jurisdiction to interfere with the Thlopthlocco's contractual relationship with Crowe or to divest the Thlopthlocco of its authority to pay its own legal counsel pursuant to that contract. Reading the January 16 Order as a directive to the Thlopthlocco, rather than to Crowe, the Thlopthlocco observed that “additional jurisdictional and due process concerns” would have arisen if the January 16 Order had been directed to Crowe, a non-party. Id., vol. IX, doc. 154, at 3368 n.6. The Muscogee Supreme Court summarily denied the petition.

On February 5, 2009, while the Thlopthlocco's petition for rehearing was still pending, Judge Stidham issued an order purporting to effectuate the Muscogee Supreme Court's January 16 Order. Unlike the Muscogee Supreme Court, Judge Stidham directed his order to Crowe, ordering the firm “to return attorneys' fees paid from the Thlopthlocco Treasury with proof of repayment furnished to this court on or before February 20, 2009.” Id., vol. V, doc. 101, at 1844 (“February 5 Order”).

Instead of complying, Crowe filed this action seeking to enjoin Judge Stidham, in his official capacity as tribal judge, from ordering the return of Crowe's legal fees. In addition, Crowe sought an order declaring that, among other things, the Muscogee (Creek) Nation courts lacked jurisdiction to order Crowe, as a non-party and non-Indian, to return fees it had earned for services rendered to the Thlopthlocco. Simultaneously, Crowe notified the Muscogee District Court and the Muscogee Supreme Court that it was withdrawing from its representation of the Thlopthlocco due to the conflict of interest resulting from Judge Stidham's order that Crowe return its fees to the tribe.³

When no funds were returned, Judge Stidham ordered Crowe attorneys to “appear and show cause why they should not be held in indirect contempt of court” for failing to comply with his February 5 Order. Id., vol. V, doc. 111, at 2016. Apparently in response to the looming contempt proceedings, Crowe filed a motion for a preliminary injunction in the...