Ninigret Dev. v. Narragansett Indian Wetuomuck Housing Auth., 99-1828

CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)
Writing for the CourtBefore Torruella, Chief Judge, Selya and Lipez; SELYA
Citation207 F.3d 21
Parties(1st Cir. 2000) NINIGRET DEVELOPMENT CORP., Plaintiff, Appellant, v. NARRAGANSETT INDIAN WETUOMUCK HOUSING AUTHORITY, Defendant, Appellee. Heard
Docket NumberNo. 99-1828,99-1828
Decision Date08 February 2000

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Joseph F. Dugan for appellant.

John F. Killoy, Jr., with whom Law Offices of H. Jefferson Melish was on brief, for appellee.

Before Torruella, Chief Judge, Selya and Lipez, Circuit Judges.

SELYA, Circuit Judge.

This matter requires us to explore the complex web of considerations that envelops the interrelationship between federal courts and Indian tribal courts. We conclude that the district court had subject-matter jurisdiction under 28 U.S.C. § 1331. Withal, the scope of that jurisdiction was narrow, enabling the court, in effect, only to pass upon (1) the extent of the tribal court's jurisdiction over the plaintiff's claims, and (2) the defendant's assertion that, as an arm of a federally recognized Indian tribe, the impervious shield of tribal sovereign immunity protected it from suit. We hold that the defendant waived its immunity, that the tribal exhaustion doctrine applies, and that the remaining issues in the case (including the validity vel non of the contractual forum-selection clause that the district court found to be determinative) must first be aired before the tribal court. Accordingly, we vacate the existing judgment and remand with instructions.


The Narragansett Indian tribe (the Tribe), a federally recognized tribe, established the Narragansett Indian Wetuomuck Housing Authority (the Authority) in October 1985 pursuant to a tribal ordinance. The Authority functions under regulations promulgated by the United States Department of Housing and Urban Development (HUD). See 24 C.F.R. § 1000.10 (1998) (governing establishment and operation of Indian housing authorities). In the fullness of time, the Authority and plaintiff-appellant Ninigret Development Corporation (Ninigret) -- a Rhode Island business corporation in which a member of the Tribe apparently is a principal -- embarked upon a series of business transactions.

The litigation underlying this appeal stems from one such transaction: an agreement entered into between the parties for the construction of a low-income housing development known as the Narragansett Indian Wetuomuck Community Village (the Village project). After Ninigret began work, difficulties arose in connection with the installation of water and sewerage lines. The Authority blamed the problems on faulty workmanship and insisted that Ninigret take corrective action. Ninigret demurred, asserting that it had done the work in conformance with the Authority's specifications, and that the Authority should pay for any necessary remediation. After efforts at conciliation failed, the Authority cancelled the project.

Acting pursuant to a forum-selection clause contained in the contract between the parties (quoted infra Part III(B)), the Tribal Council notified the disputants that it would hold a hearing on September 23, 1997. The Authority appeared, but Ninigret did not. The Tribal Council subsequently issued a decision in which it found, inter alia, that Ninigret had failed to fulfill its contractual obligations and, therefore, was liable for the anticipated cost of all corrective work to the water and sewerage lines. The decision concluded with a reminder that, pursuant to the contract, either party had a right to demand binding arbitration within twenty-one days.

Ninigret ignored the particular arbitration mechanism specified in the contract. Instead, it demanded either arbitration "before an unbiased third party, not related to the tribe in any manner," or an agreement that the parties bypass arbitration entirely and "resolve their disputes in Federal District Court." The Authority displayed no interest in either of these alternatives.

On March 3, 1998, Ninigret sued the Authority in Rhode Island's federal district court. In its complaint, Ninigret asserted six statements of claim against the Authority anent the Village project (e.g., breach of contract, fraud, conversion). It also asserted two causes of action related to other matters, viz., a claim sounding in fraud involving the so-called Home Improvement Project and a claim ex contractu regarding work on the Four Winds Community Center. Finally, it lodged a salmagundi of claims against a Connecticut corporation, Building Teams, Inc. (BTI), which had done some work in connection with the Village project.

The Authority moved to dismiss the complaint for want of jurisdiction under Fed. R. Civ. P. 12(b)(1). The appellant countered by filing a motion to stay proceedings pending arbitration. The district court held a consolidated hearing and reserved decision on both motions. The court then wrote a thoughtful opinion in which it held that it had jurisdiction to determine the validity and effect of the contract's forum-selection clause in respect to the claims relating to the Village project; ruled that clause enforceable; and dismissed the Village project claims because the appellant had failed to follow the clause's dictates. See Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Hous. Auth., 32 F. Supp. 2d 497, 503-06 (D.R.I. 1999).1 The court then declined to exercise supplemental jurisdiction over the claims implicating other projects, dismissing them without prejudice. See id. at 502-03. Ninigret subsequently resolved its differences with BTI, dismissed the action as to that defendant, and prosecuted this appeal.


The threshold question in this case relates to the existence vel non of subject-matter jurisdiction. We must examine two possible sources: diversity jurisdiction, see 28 U.S.C. § 1332, and federal question jurisdiction, see 28 U.S.C. § 1331. We conclude that the claim of diversity jurisdiction is ill-advised, but that federal question jurisdiction inheres (although we define its scope more narrowly than did the court below).


The appellant initially premised its suit on diversity jurisdiction. The district court rejected that theory, see Ninigret, 32 F. Supp. 2d at 502, and rightly so.

Diversity jurisdiction requires, inter alia, complete diversity of citizenship between all plaintiffs, on one hand, and all defendants, on the second hand. See Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267 (1806). An Indian tribe, however, is not considered to be a citizen of any state. See Akins v. Penobscot Nation, 130 F.3d 482, 485 (1st Cir. 1997); Romanella v. Hayward, 114 F.3d 15, 16 (2d Cir. 1997) (per curiam); Gaines v. Ski Apache, 8 F.3d 726, 729 (10th Cir. 1993). Consequently, a tribe is analogous to a stateless person for jurisdictional purposes. See 13B Charles Alan Wright et al., Federal Practice and Procedure § 3622, at 585-86 (1984). It follows that, notwithstanding the joinder of other diverse parties, the presence of an Indian tribe destroys complete diversity. See Romanella, 114 F.3d at 15-16; Calumet Gaming Group-Kansas, Inc. v. Kickapoo Tribe, 987 F. Supp. 1321, 1325 (D. Kan. 1997); cf. Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829-30 (1989) (calling a stateless person a "jurisdictional spoiler"). We see no reason why the Authority (an arm of the Tribe, not separately incorporated) should be treated any differently for jurisdictional purposes.2


At the hearing held on the Authority's motion to dismiss, the appellant posited the existence of a federal question as an alternative basis for subject-matter jurisdiction over the Village project claims. The lower court entertained the argument and, in the end, accepted it. See Ninigret, 32 F. Supp. 2d at 503. We emulate this example.

The possibility of federal question jurisdiction is all the more enigmatic because the historic interrelationship between federal courts and tribal courts is freighted with uncertainty. Still, the rudiments are reasonably clear. "The question whether an Indian tribe retains the power to compel a non-Indian . . . to submit to the civil jurisdiction of a tribal court is one that must be answered by reference to federal law . . . ." National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 852 (1985). That question, therefore, is a federal question within the purview of 28 U.S.C. § 1331. See id. In other words, "federal courts have authority to determine, as a matter 'arising under' federal law," the limits of a tribal court's jurisdiction. El Paso Natural Gas Co. v. Neztsosie, 119 S. Ct. 1430, 1437 (1999). The fact that a plaintiff's claims are not premised on federal law does not alter this result. See, e.g., National Farmers, 471 U.S. at 847, 853 (applying principle in context of personal injury claim); Crawford v. Genuine Parts Co., 947 F.2d 1405, 1406 (9th Cir. 1991) (similar); see also Duncan Energy Co. v. Three Affiliated Tribes, 27 F.3d 1294, 1295-96 (8th Cir. 1994) (applying principle in context of suit based on tribal laws).

We need not paint the lily. The short of it is that because the Authority made a colorable case for tribal court jurisdiction over Ninigret's principal claims and Ninigret disputed that proposition, the district court had authority to determine the extent of the tribal court's jurisdiction. See El Paso Natural Gas, 119 S. Ct. at 1437; Basil Cook Enters. v. St. Regis Mohawk Tribe, 117 F.3d 61, 65 (2d Cir. 1997).


Where, as here, a party to a case pending in a federal court asserts a colorable claim that a tribal court has primary jurisdiction, charting the existence and extent of that jurisdiction demands careful study of the tribal exhaustion doctrine. Before undertaking a determination of the reach of that doctrine, however, we must address the Authority's claim of tribal sovereign...

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