Gavle v. Little Six, Inc.

• Decision Date: 31 October 1996
• Docket Number: No. C0-95-133,C0-95-133
• Citation: 555 N.W.2d 284
• Parties: Jill GAVLE, Petitioner, Appellant, v. LITTLE SIX, INC., a foreign corporation d/b/a Mystic Lake Casino, et al., Respondents.
• Court: Minnesota Supreme Court

Page 284

555 N.W.2d 284

Jill GAVLE, Petitioner, Appellant, v. LITTLE SIX, INC., a foreign corporation d/b/a Mystic Lake

Casino, et al., Respondents.

No. C0-95-133.

Supreme Court of Minnesota.

Oct. 31, 1996.

Syllabus by the Court

1. Although jurisdiction may be concurrent with that of a tribal court, state courts have subject matter jurisdiction over a cause of action involving a tribal-owned corporation and a nonmember when the alleged acts from which the cause of action arose occurred both within and outside of Indian country.

2. The affirmative defense of sovereign immunity may be extended from a tribe to a tribal business entity, if the business entity is organized for a governmental purpose and closely linked to the tribe and if the extension of immunity furthers federal policies intended to promote tribal autonomy.

3. Absent an express and unequivocal waiver of sovereign immunity, a tribal business entity possessing the affirmative defense shall not be deemed to have waived it. Registration with the Secretary of State as a foreign corporation is not such a waiver.

Heard, considered and decided by the court en banc.

OPINION

GARDEBRING, Justice.

This case is a tort action filed by appellant Jill Gavle against Little Six, Inc. (LSI) and three of its officers. The suit alleged several tortious acts, including sexual harassment, pregnancy and racial discrimination, civil rights violations and other torts, arising from her employment with LSI. The trial court granted LSI's motion for summary judgment, holding that sovereign immunity barred Gavle's claims against LSI. The court of appeals affirmed, concluding that the trial court had both subject matter and personal jurisdiction over LSI, but agreeing with the trial court that sovereign immunity was a bar to the suit. We affirm on the basis that, while state courts may have concurrent jurisdiction with tribal courts in civil matters arising both in and outside of Indian country, the sovereign immunity of the Shakopee Mdewakanton Sioux (Dakota) Community extends to LSI and is a bar to this suit in state court.

The Shakopee Mdewakanton Sioux (Dakota) Community (the Community) is a federally recognized Indian tribe. LSI, a tribal business entity incorporated under the Community corporate ordinance in 1991, has issued one share of stock owned by all voting members of the Community. LSI is registered with the state of Minnesota as a foreign corporation transacting business within the state. LSI owns a gambling casino which is in Mdewakanton Indian Country. ¹

The Community has, through the corporate ordinance, granted certain privileges and protections to LSI:

4.11 A Corporation wholly owned by the Community may assume any or all of the Community's rights, privileges and immunities (including, without limitation, sovereign immunity) concerning federal, state or local * * * jurisdiction to the same extent that the Community would have such rights, privileges, and immunities if it engaged in the activities undertaken by the Corporation.

4.12 A corporation wholly owned by the Community, shall have the power to sue and is authorized to consent to be sued in the Judicial Court of the Community, and other courts of competent jurisdiction * * *.

Shakopee Mdewakanton Sioux Community Corporation Ordinance §§ 4.11, 4.12 (amended, July 27, 1994). In turn, LSI's articles of incorporation set out the purpose of the corporation and limit both the reach of immunity extended by the Community and the extent of the corporation's ability to consent to be sued:

3.0 Purposes and Powers. The purposes for which the Corporation is organized are to engage in any lawful act or activity * * * [which seeks] to improve the business, financial or general welfare of the Corporation, the Members of the Corporation, and the Community.

3.1 Sovereign Immunity of Corporation. The Shakopee Mdewakanton Sioux Community confers on the Corporation all of the Community's rights, privileges and immunities concerning federal, state and local * * * jurisdiction, and sovereign immunity from suit * * *. Such immunity shall not extend to actions against the Corporation by the Community or Members of the Corporation.

3.2 Consent to Sue and be Sued Required. The Corporation shall have the power to sue and is authorized to consent to be sued in the Judicial Court of the Shakopee Mdewakanton Sioux Community or another court of competent jurisdiction; * * *. Consent to suit by the Corporation shall in no way extend to the Community, nor shall a consent to suit by the Corporation in any way be deemed a waiver of any of the rights, privileges and immunities of the Community.

Articles of Incorporation of Little Six, Inc. §§ 3.0, 3.1, 3.2 (Mar. 18, 1991) (hereinafter Articles of Incorporation).

LSI employed Gavle as a security guard from March 1992 to January 1993. Her job included duties at the casino (in Indian Country) and at LSI's temporary administrative offices at the Canterbury Downs complex in Shakopee, Minnesota. While Gavle's complaint details many incidents, alleged to be tortious, that occurred at the casino, it also contends that some of the allegedly tortious acts took place away from the casino, in or near Shakopee. ²

At the heart of this case is the issue of whether tribal business entities are subject to the application of state civil law in state court. To answer this question, we must analyze two related legal concepts--jurisdiction and sovereign immunity. Though it is sometimes said that state or federal courts are deprived of jurisdiction through the application of tribal sovereign immunity, the concept is more properly thought of as an affirmative defense, to be asserted by a tribe, tribal official or tribal entity as a bar to a particular lawsuit. Further, there are instances when a state or federal court may have jurisdiction over a matter involving a tribe or tribal entity, but may choose to stay its action, deferring to the concurrent jurisdiction of a tribal court. Thus, we must consider four related yet discrete issues:

a. Do Minnesota courts have jurisdiction over a tribal business entity in a civil tort matter involving actions occurring both within and outside of Indian country?

b. If Minnesota courts have such jurisdiction, must they stay their exercise of that jurisdiction in consideration of concurrent tribal court jurisdiction, under the doctrine of "infringement"?

c. If Minnesota courts have such jurisdiction and choose to exercise it, is such a suit nevertheless barred by tribal sovereign immunity?

d. If sovereign immunity would otherwise be available in this case, has it been waived by LSI's registration with Minnesota's Secretary of State as a foreign corporation?

Historical Background

To provide context for our discussion of these complex issues, we begin with some discussion of the historical relationship of Indian tribes to the state and federal governments. There are over 500 federally recognized tribes in the United States. David H. Getches, Charles F. Wilkinson, Robert A. Williams, Jr., Cases and Materials on Federal Indian Law 4 (3rd ed. 1993). Felix S. Cohen's commentary best describes the historical relationship between the United States and Indian tribes:

Indian policy is marked by idealistic periods such as the first years of the Republic, when Congress pledged that 'the utmost good faith shall always be observed toward the Indian,' and the 1930's, when a commitment was made to revive tribal governments. Other eras were less altruistic: the period of removal, when hundreds of tribes were evicted forcibly from their ancestral lands; the allotment era, which resulted in the loss of ninety million acres of tribal lands; and the termination period, when more than one hundred tribes were stripped of the federal-tribal relationship and, in most cases, of their land.

Felix S. Cohen, Handbook of Federal Indian Law 49 (1982 ed.) (hereafter Cohen, Federal Indian Law ).

In general, the federal government has viewed the Native American more as a "political entity" than as a racial minority. ³ Thus, until 1871 the United States recognized Indian tribes as possessed of the attributes of nationhood and, accordingly, concluded treaty agreements with them. Cherokee Nation v. Hitchcock, 187 U.S. 294, 305-06, 23 S.Ct. 115, 119, 47 L.Ed. 183 (1902). For over one hundred years however, this country has systematically brought the various Indian tribes under the auspices of the federal government as "domestic dependent nations." Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17, 8 L.Ed. 25 (1831). In exchange for ceded land, the federal government gave Indian tribes special status that only Congress may remove. Indian tribes are not states; nevertheless, they possess a kind of sovereignty superior to that of states but inferior to that of the federal government. Stephens v. Cherokee Nation, 174 U.S. 445, 484-86, 19 S.Ct. 722, 736-37, 43 L.Ed. 1041 (1899); see Colliflower v. Garland, 342 F.2d 369, 374-76 (9th Cir.1965). They are "subordinate and dependent nations possessed of all powers as such" and limited only "to the extent that they have expressly been required to surrender [their powers] by the superior sovereign, the United States." Native American Church of North America v. Navajo Tribal Council, 272 F.2d 131, 134 (10th Cir.1959). Thus federally recognized tribes hold certain powers and privileges allowed other sovereigns; jurisdiction over certain judicial matters and sovereign immunity are two such characteristics.

Jurisdiction

Judicial jurisdiction over matters involving Indians or Indian tribes is a function both of territory--where the matters arise--and of subject matter--what the nature of the claim is. "A court's jurisdiction may depend not only on the location of events but also on the race of the parties or the subject matter of the case." Cohen, Federal Indian Law, supra, at 281. Given the pervasive sweep of federal law in Indian matters and the...