Oglala Sioux Tribe v. Schwarting

• Decision Date: 01 October 2012
• Docket Number: No. 4:12–CV–3027.,4:12–CV–3027.
• Citation: 894 F.Supp.2d 1195
• Parties: OGLALA SIOUX TRIBE, Plaintiff, v. Jason SCHWARTING, et al., Defendants.
• Court: U.S. District Court — District of Nebraska

894 F.Supp.2d 1195

OGLALA SIOUX TRIBE, Plaintiff,

v.Jason SCHWARTING, et al., Defendants.

No. 4:12–CV–3027.

United States District Court,

D. Nebraska.

Oct. 1, 2012.

Amy S. Jorgensen, C. Thomas White, Thomas M. White, White, Jorgensen Law Firm, Omaha, NE, for Plaintiff.

Robert S. Keith, Timothy R. Hook, Engles, Ketcham Law Firm, Jerald L. Rauterkus, Patrick R. Guinan, Erickson, Sederstrom Law Firm, Omaha, NE, Joseph M. Aldridge, Stephen L. Ahl, Wolfe, Snowden Law Firm, Colin A. Mues, Randall L. Goyette, Baylor, Evnen Law Firm, Lincoln, NE, for Defendants.

MEMORANDUM AND ORDER

JOHN M. GERRARD, District Judge.

The plaintiff, the Oglala Sioux Tribe, has sued several manufacturers, distributors, and retailers of beer and other alcoholic beverages, for damages arising out of the sale of alcohol in Whiteclay, Nebraska, for consumption on the nearby Pine Ridge Indian Reservation. The defendants have filed motions to dismiss the Tribe's complaint, arguing that it fails to state a claim for relief. But the initial question for the Court is whether the Tribe's complaint states a claim that belongs in federal court.

The Court is in no position, procedurally or factually, to question many of the allegations made in the Tribe's complaint. There is, in fact, little question that alcohol sold in Whiteclay contributes significantly to tragic conditions on the Reservation. And it may well be that the defendants could, or should, do more to try and improve those conditions for members of the Tribe. But that is not the same as saying that a federal court has jurisdiction to order them to do so. Whatever merits the Tribe's claims may have, they are not claims that involve a question of federal law. They involve state law, and federal courts lack jurisdiction to decide them. Therefore, the Tribe's claims will be dismissed without prejudice to potentially reasserting them in state court.

BACKGROUND

The Tribe is the federally recognized tribe of the Lakota people, and it controls the Reservation. Filing 109 at 1–2.¹ The defendants are all in the business of manufacturing, distributing, or selling beer and other alcohol. Filing 109 at 2. Whiteclay is a small village near the Reservation border—but outside it, so the Tribe cannot enforce tribal laws in Whiteclay. ² Filing 109 at 4–5. Possession, sales, and consumption of alcohol are illegal on the Reservation, but sales are permitted in Whiteclay. Filing 109 at 5.

Beer sales in Whiteclay are far beyond what might be reasonably expected for a village of its size: Whiteclay has a legal population of 12 people, but in 2010 nearly 5 million 12–ounce servings of beer were sold there. Filing 109 at 5. Most of that beer was sold to residents of the Reservation,and much of it was illegally consumed on the Reservation. Filing 109 at 6. Alcoholism is rampant on the Reservation. Filing 109 at 6–7. The associated effects on the health of the Tribe, its social structures, and its economy, are well documented and need not be restated in detail here. See filing 109 at 6–8.

The Tribe's complaint identifies several claims for relief that, according to the Tribe, are supported by those facts. The first claim for relief, “persons acting in concert,” (a/k/a civil conspiracy) alleges that the defendants are engaged in a common enterprise to sell beer through Whiteclay “in amounts that cannot be legally sold, consumed or possessed under the laws of the State of Nebraska and the [Tribe].” And because much of that beer is smuggled onto the Reservation and unlawfully consumed or resold there, the Tribe also alleges that the defendants' conduct is “in breach of their duties under the law of the State of Nebraska, the [Tribe] and the United States of America.” Filing 109 at 9.

The relevant federal law is identified in the Tribe's second claim for relief: 18 U.S.C. § 1161, by which “Congress ‘delegated authority to the States as well as to the Indian tribes to regulate the use and distribution of alcoholic beverages in Indian country.’ ” City of Timber Lake v. Cheyenne River Sioux Tribe, 10 F.3d 554, 556 (8th Cir.1993). Generally, the introduction of alcohol into “Indian country” is prohibited by federal law. See18 U.S.C. §§ 1154, 1156, 3113, 3488, and 3669; see also City of Timber Lake, 10 F.3d at 557. Pursuant to § 1161, state and tribal governments may effectively legalize alcohol, but such has not been done on the Reservation. Filing 109 at 10. The Tribe alleges a civil conspiracy to violate § 1161.

In its third claim for relief, the Tribe seeks an injunction limiting the amount of alcohol that can be sold in Whiteclay, alleging that the State of Nebraska is either unwilling or unable to enforce laws regarding the sale of alcohol in Whiteclay for delivery to the Reservation. Filing 109 at 10–12. The Tribe's fourth claim for relief accuses the defendants of creating a public nuisance, based upon the effects of alcohol use on the Reservation, and the Tribe's fifth and final claim for relief accuses the defendants of creating a private nuisance interfering with the Tribe's ability to develop Reservation land. Filing 109 at 12–13.

The defendants have filed motions to dismiss pursuant to Rule 12(b)(6) and, in one instance, Rule 12(b)(1) as well. Generally characterized, the defendants contend that the Tribe lacks standing to sue, that the allegations of concerted action among the defendants are lacking, that there is no private right of action under § 1161, and that the allegations of public and private nuisance are insufficient. Filings 114, 115, 116, 118, 120, 121, 122, 125, 129, and 131. This case is before the Court now on those motions. But the Court does not reach their merits because, as explained below, the Court finds it lacks jurisdiction to do so.

ANALYSIS

It is well established that a court has a special obligation to consider whether it has subject-matter jurisdiction in every case. Hart v. United States, 630 F.3d 1085, 1089 (8th Cir.2011). This obligation includes the concomitant responsibility to consider the court's subject-matter jurisdiction sua sponte where the court believes jurisdiction may be lacking. Id.

“[I]t is clear that an Indian tribe is not a citizen of any state and cannot sue or be sued in federal court under diversity jurisdiction.” Standing Rock Sioux Indian Tribe v. Dorgan, 505 F.2d 1135, 1140 (8th Cir.1974); accord Auto–Owners Ins. Co. v. Tribal Ct. of the Spirit Lake Indian Res., 495 F.3d 1017, 1020 (8th Cir.2007); see28 U.S.C. § 1332(a)(1). Nor are Indian tribes ³ foreign states. Auto–Owners Ins. Co., 495 F.3d at 1021 (citing Gaming World Int'l v. White Earth Band of Chippewa Indians, 317 F.3d 840, 847 (8th Cir.2003)); see§ 1332(a)(4).

Because diversity jurisdiction is unavailable, federal jurisdiction in this case must rest, if at all, on the existence of a federal question. The Tribe's complaint cites 28 U.S.C. § 1362, which confers the Court with “original jurisdiction of all civil actions, brought by any Indian tribe or band with a governing body duly recognized by the Secretary of the Interior, wherein the matter in controversy arises under the Constitution, laws, or treaties of the United States.” And § 1362 is obviously relevant here. But § 1362 is better explained by reference to the more familiar, general federal-question jurisdiction conferred by 28 U.S.C. § 1331. So, the Court will first consider whether there is a federal question in this case within the meaning of § 1331. Then, the Court will return to § 1362.

28 U.S.C. § 1331

Section 1331 provides that a federal district court “shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” A suit arises under the law that creates the cause of action. Mims v. Arrow Fin. Servs., ––– U.S. ––––, 132 S.Ct. 740, 748, 181 L.Ed.2d 881 (2012). So generally, when federal law creates a private right of action and furnishes the substantive rules of decision, the claim arises under federal law, and district courts possess federal-question jurisdiction under § 1331. Mims, 132 S.Ct. at 748–49. In such an instance, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action. Phillips Petroleum, 415 U.S. at 127, 94 S.Ct. 1002.

Or, a state-law claim can give rise to federal-question jurisdiction so long as it appears from the complaint that the right to relief depends upon the construction or application of federal law. Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 312–13, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005). But such federal question jurisdiction is limited to state-law claims that “ ‘really and substantially’ ” involve a dispute or controversy respecting the validity, construction, or effect of federal law. Id. at 313, 125 S.Ct. 2363. In other words, the plaintiff's right to relief must necessarily depend on resolution of a substantial question of federal law. Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 690, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). The Supreme Court has repeatedly cautioned that in such cases, federal jurisdiction demands not only a contested federal issue, but a substantial one, indicating a serious federal interest in claiming the advantages thought to be inherent in a federal forum. Grable & Sons, 545 U.S. at 313, 125 S.Ct. 2363 (collecting cases). And the presence of a tribal sovereign as a party is not by itself sufficient to raise a federal question. See Peabody Coal Co. v. Navajo Nation, 373 F.3d 945, 949 (9th Cir.2004).

The basis for federal jurisdiction proffered by the Tribe—and the only real candidate presented by the Tribe's allegations—is § 1161. As noted above, there are several statutes—primarily §§ 1154 and 1156—that make the introduction of alcohol into Indian country a criminal offense. And § 1161 suspends the operation of those statutes where state and tribal governments act to...