Kerr-McGee Corp. v. Farley

• Decision Date: 25 June 1997
• Docket Number: KERR-M,95-2127,Nos. 95-2121,s. 95-2121
• Citation: 115 F.3d 1498
• Parties: 27 Envtl. L. Rep. 21,522, 97 CJ C.A.R. 1085, 97 CJ C.A.R. 1376 cGEE CORPORATION, Plaintiff--Appellant, and Cyrus Foote Minerals Corporation; Rio Algom, Ltd.; Umetco Minerals Corporation; Union Carbide Corporation, Plaintiffs, v. Kee Tom FARLEY, individually and on behalf of the Estate of Lucy K. Farley; Carmelita Farley Joe; Harold Kady, Sr., individually and on behalf of the Estate of Julia Mae Kady, Defendants--Appellees.cGEE CORPORATION; Rio Algom, Ltd.; Umetco Minerals Corporation; Union Carbide Corporation, Plaintiffs, and Cyrus Foote Minerals Corporation, Plaintiff--Appellant, v. Kee Tom FARLEY, individually and on behalf of the Estate of Lucy K. Farley; Carmelita Farley Joe; Harold Kady, Sr., individually and on behalf of the Estate of Julia Mae Kady, Defendants--Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1498

115 F.3d 1498

27 Envtl. L. Rep. 21,522, 97 CJ C.A.R.

1085, 97 CJ C.A.R. 1376

KERR-McGEE CORPORATION, Plaintiff--Appellant,

and

Cyrus Foote Minerals Corporation; Rio Algom, Ltd.; Umetco

Minerals Corporation; Union Carbide Corporation, Plaintiffs, v. Kee Tom FARLEY, individually and on behalf of the Estate of

Lucy K. Farley; Carmelita Farley Joe; Harold Kady, Sr.,

individually and on behalf of the Estate of Julia Mae Kady,

Defendants--Appellees.

KERR-McGEE CORPORATION; Rio Algom, Ltd.; Umetco Minerals

Corporation; Union Carbide Corporation, Plaintiffs, and Cyrus Foote Minerals Corporation, Plaintiff--Appellant, v. Kee Tom FARLEY, individually and on behalf of the Estate of

Lucy K. Farley; Carmelita Farley Joe; Harold

Kady, Sr., individually and on behalf of

the Estate of Julia Mae Kady,

Defendants--Appellees.

Nos. 95-2121, 95-2127.

United States Court of Appeals Tenth Circuit.

June 25, 1997.

Michael R. Comeau of Carpenter, Comeau, Maldegen, Nixon & Templeman, Santa Fe, New Mexico (Tom Galbraith and R. Neil Taylor, III of Lewis & Roca, Phoenix, Arizona, and Robert N. Hilgendorf, Santa Fe, New Mexico, for Plaintiff-Appellant Cyprus Foote Minerals Corporation; Jon J. Indall and Stephen J. Lauer of Carpenter, Comeau, Maldegen, Nixon & Templeman, Santa Fe, New Mexico, for Plaintiff-Appellant Kerr-McGee Corporation, with him on the briefs), for Plaintiffs-Appellants.

Suzelle M. Smith of Howard and Smith, Los Angeles, California (Cherie V. Daut, Shiprock, New Mexico; Justin R. Melat and Rebecca A. Lorenz of Melat, Pressman, Ezell & Higbie, Colorado Springs, Colorado, with her on the brief); and Seth R. Lesser, Richard A. Speirs, and Lisa K. Buckser of Bernstein, Litowitz, Berger & Grossmann, L.L.P., New York City, for Defendants-Appellees.

Before SEYMOUR, Chief Judge, LOGAN and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

This case involves the scope of the tribal exhaustion rule in the context of the Price-Anderson Act. Appellants Kerr-McGee and Cyprus Foote Minerals (collectively "Kerr-McGee") filed a claim in the District of New Mexico for a declaratory judgment and preliminary injunction, arguing that the Navajo Tribal Court is without jurisdiction to adjudicate nuclear tort claims against Kerr-McGee. Applying the tribal exhaustion rule, the district court denied the injunction and stayed further action in federal court until the tribal court ruled on jurisdiction. Our jurisdiction to hear Kerr-McGee's interlocutory appeal arises under 28 U.S.C. § 1292(a)(1). We affirm.

I. BACKGROUND

Kerr-McGee milled uranium on the Navajo Reservation between 1952 and 1973, leasing land for the mill site from the tribe. Kerr-McGee sold the mill's entire production to the federal government. In 1995, defendants (the "Tribal Claimants"), who are members of the Navajo Tribe and residents of the reservation, filed a complaint in Navajo Tribal Court, alleging that the Kerr-McGee mill released vast quantities of radioactive and toxic materials, causing them injuries. Before the tribal court had proceeded with the case, Kerr-McGee filed the instant suit.

In the district court, Kerr-McGee argued that the tribal court had no jurisdiction to consider nuclear tort claims and should be enjoined in its proceedings, basing its conclusion on the Price-Anderson Act, 42 U.S.C. § 2011 et seq. Kerr-McGee contends that the Price Anderson Act grants exclusive federal jurisdiction over nuclear torts if a defendant so wishes. The district court disagreed finding that the Price-Anderson Act does not specifically divest tribal courts of jurisdiction over such claims. Because there is no explicit mention of exclusive federal court jurisdiction over Price-Anderson claims, the district court reasoned that the tribal court should ordinarily be given the first opportunity to determine its own jurisdiction. Moreover, because the Tribal Claimants alleged a cause of action based on torts committed on the reservation, the district court felt no need to engage in any extended comity analysis regarding the decision to defer to the Navajo Tribal Court. It concluded that the proper practice was to stay the federal court proceedings until the tribal court had determined its jurisdiction.

Thereafter, the District Court of the Navajo Nation issued an order finding tribal court jurisdiction over the tort claims asserted by the Tribal Claimants. Farley v. Kerr-McGee, No. 103-95 (Navajo D. Ct. Aug. 1, 1996). Specifically, the Navajo court held that the Price-Anderson Act does not preempt the Tribal Claimants' Navajo law right to tribal court adjudication of the alleged torts. In fact, the Navajo court concluded that the Price-Anderson Act does not apply at all to the Tribal Claimants' suit and, therefore, tribal court jurisdiction could not interfere with Congressional intent in federal regulation of nuclear activity. We are unaware of any appeal by Kerr-McGee of the Navajo District Court order.

II. DISCUSSION

The scope of a tribal court's jurisdiction is a federal question over which federal district courts have jurisdiction. National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 853, 105 S.Ct. 2447, 2452, 85 L.Ed.2d 818 (1985). The district court's determination of the proper scope of the tribal exhaustion rule is reviewed de novo. Texaco v. Zah, 5 F.3d 1374, 1376 (10th Cir.1993).

A

The tribal exhaustion rule was created in National Farmers, a case involving a tort suit by a tribal member against a school district and its insurer. The tribal member brought suit in tribal court, and the defendants promptly sued in federal court for a declaration that the tribal court had no jurisdiction to entertain a civil suit against a non-Indian, even where the alleged tort took place on the reservation. Rather than further extending the rule in Oliphant ¹ to tribal jurisdiction over civil matters, the Supreme Court concluded:

[T]he existence and extent of a tribal court's jurisdiction will require a careful examination of tribal sovereignty, the extent to which that sovereignty has been altered, divested, or diminished, as well as a detailed study of relevant statutes, Executive Branch policy as embodied in treaties and elsewhere, and administrative or judicial decisions.

National Farmers, 471 U.S. at at 855-56, 105 S.Ct. at 2453-54. Moreover, "that examination should be conducted in the first instance in the Tribal Court itself." Id. This rule of tribal court exhaustion is subject to a narrow set of exceptions, including: (1) "where an assertion of tribal jurisdiction is motivated by a desire to harass or is conducted in bad faith"; (2) "where the action in tribal courts is patently violative of express jurisdictional prohibitions"; or (3) "where exhaustion would be futile because of the lack of an adequate opportunity to challenge the tribal court's jurisdiction." Id. at 857 n. 21, 105 S.Ct. at 2454 n. 21 (internal quotation and citation omitted).

The tribal exhaustion rule was extended and explained in Iowa Mutual Insurance Co. v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987). There, the Court held that the statute granting federal courts jurisdiction over diversity actions, 28 U.S.C. § 1332, does not divest tribal courts of jurisdiction over acts involving non-Indians taking place on tribal land. With respect to the exhaustion requirement, the Court held that "proper respect for tribal legal institutions requires that they be given a 'full opportunity' to consider the issues before them and 'to rectify any errors.' " Id. at 16, 107 S.Ct. at 977 (quoting National Farmers, 471 U.S. at 857, 105 S.Ct. at 2454). Because "the federal policy of promoting tribal self-government encompasses the development of the entire tribal court system ... exhaustion of tribal remedies means that tribal appellate courts must have the opportunity to review the determinations of the lower tribal courts." Id. at 16-17, 107 S.Ct. at 977. Consequently, federal courts should not intervene until the tribal courts have had a full opportunity to evaluate jurisdiction. Id. at 17, 107 S.Ct. at 977.

The precise question we address is not whether the Navajo courts have jurisdiction over the claims brought by the Tribal Claimants, but whether the Price-Anderson Act so obviously preempts tribal jurisdiction that an action in tribal court "would be patently violative of express jurisdictional prohibitions," and that abstention in favor of tribal exhaustion is inappropriate. National Farmers, 471 U.S. at 856 n. 21, 105 S.Ct. at 2454 n. 21. A substantial showing must be made by the party seeking to invoke this exception to the tribal exhaustion rule. See Iowa Mut., 480 U.S. at 19 n. 12, 107 S.Ct. at 978 n. 12 (party's assertion that "tribal court jurisdiction over outsiders 'is questionable at best,' " insufficient to defeat the tribal exhaustion requirement). In fact, tribal courts rarely lose the first opportunity to determine jurisdiction because of an "express jurisdictional prohibition." Cases in which tribal courts are not given the first opportunity to determine their jurisdiction typically involve situations where the federal court has exclusive jurisdiction, see Blue Legs v. Bureau of Indian Affairs, 867 F.2d 1094, 1097-98 (8th Cir.1989), or where tribal jurisdiction is foreclosed by sovereign immunity, see United States v. Yakima Tribal Court, 806 F.2d 853, 860-61 (9th Cir.1986).

Kerr-McGee makes two tightly interwoven arguments in support of its position that Price-Anderson contains an "express prohibition" on tribal court jurisdiction despite the absence of statutory language explicitly addressing tribal fora. First, Kerr-McGee notes that 1988 amendments to Price-Anderson create specific procedures for adjudicating nuclear torts in federal court, and provide for an absolute right of removal to federal court. These procedures were explicitly designed to consolidate jurisdiction over claims arising from a nuclear incident in a single federal forum....