Sac and Fox Tribe of Mississippi in Iowa v. Bear

• Decision Date: 15 April 2003
• Docket Number: No. C03-28 LRR.,C03-28 LRR.
• Citation: 258 F.Supp.2d 938
• Parties: SAC AND FOX TRIBE OF THE MISISSIPPI IN IOWA; Alex Walker, Jr.; Frank Wanatee, Jr.; Lyle Walker; Aaron Walker; Calvin Johnson, Sr.; Vern Jefferson; and Talbert Davenport, Sr., Plaintiffs, v. Homer BEAR, Jr.; Wayne Pushetonequa; Harvey Davenport, Jr.; Ray A. Young Bear; Frank Black Cloud; Keith Davenport; Deron Ward; Wells Fargo Bank Iowa, N.A.; State Bank of Toledo; Home Federal Savings Bank, Defendants.
• Court: U.S. District Court — Northern District of Iowa

Page 938

258 F.Supp.2d 938

SAC AND FOX TRIBE OF THE MISISSIPPI IN IOWA; Alex Walker, Jr.; Frank Wanatee, Jr.; Lyle Walker; Aaron Walker; Calvin Johnson, Sr.; Vern Jefferson; and Talbert Davenport, Sr., Plaintiffs, v. Homer BEAR, Jr.; Wayne Pushetonequa; Harvey Davenport, Jr.; Ray A. Young Bear; Frank Black Cloud; Keith Davenport; Deron Ward; Wells Fargo Bank Iowa, N.A.; State Bank of Toledo; Home Federal Savings Bank, Defendants.

No. C03-28 LRR.

United States District Court, N.D. Iowa, Cedar Rapids Division.

April 15, 2003.

Dennis Wayne Johnson, Angela Ellen Dralle, Dorsey & Whitney, Des Moines, IA, Mark A Jarboe, Dorsey & Whitney, Minneapolis, MN, for Plaintiffs.

Charles E Gribble, Parrish Kruidenier Moss Dunn, Montgomery Boles & Gribble, LLP, Des Moines, IA, for Defendants.

MEMORANDUM OPINION AND ORDER

READE, District Judge.

This matter is before the Court pursuant to plaintiffs' Motion for a Temporary Restraining Order [docket no. 2]. The Court held a hearing on April 10, 2003.

FACTS

Plaintiff Sac and Fox Tribe of the Mississippi in Iowa operates, among other things, the Meskwaki Casino near Tama, Iowa. The governing body of the Tribe is the Sac and Fox Tribal Council (the "Tribal Council"). Plaintiffs Alex Walker, Jr., Frank Wanatee, Jr., Lyle Walker, Aaron Walker, Calvin Johnson, Sr., Vera Jefferson and Talbert Davenport, Sr., are the elected Tribal Council of the Sac and Fox Tribe (the "Elected Tribal Council"). Pursuant to the Tribe's Constitution, the members of the Elected Tribal Council were each elected to four-year terms which have not yet expired.

Due to allegedly illegal acts by certain members of the Elected Tribal Council, several tribal members circulated petitions to recall each of the seven members of the Elected Tribal Council. Article XII of the Tribe's Constitution authorizes recall petitions. Under Article XII, if a recall petition is signed by no less than thirty percent of the eligible voters at the last general election, a recall election must be held. Defendants contend that they submitted to the Elected Tribal Council a recall petition with the requisite signatures of thirty percent of the eligible voters of the Tribe. Defendants allege that in spite of this, the Elected Tribal Council refused to conduct a recall election, in violation of the Tribal Constitution and in disregard of the advice of its legal counsel. Plaintiffs contend they did not hold a recall election because they questioned the validity of the petitions. The Bureau of Indian Affairs has refused to involve itself in what it characterizes as an "internal tribal matter." The Court notes that the Tribe's Constitution does not create tribal courts. The Tribe's Constitution grants dispute resolution power to the Tribal Council.

After the Elected Tribal Council refused to hold a recall election, the hereditary chief of the Tribe, in accordance with the traditional governance of the Tribe, appointed Homer Bear, Jr., Wayne Pushetonequa, Harvey Davenport, Jr., Ray A. Young Bear, Frank Black Cloud, Keith Davenport and Deron Ward to the Tribal Council (the "Appointed Tribal Council"). On approximately March 26, 2003, the Appointed Tribal Council seized control of the tribal center and other tribal facilities. The Appointed Tribal Council notified Wells Fargo Bank Iowa, N.A. and the State Bank of Toledo, the banks holding the Tribe's casino revenues, that the Elected Tribal Council was no longer in control of the funds of the Tribe. Wells Fargo Bank, N.A. has frozen the Tribe's accounts. The State Bank of Toledo has continued to process payroll checks for the Meskwaki Casino. Payroll checks were issued to casino employees as regularly scheduled on April 10, 2003 after both sides of this controversy, through counsel, agreed to allow the bank to do so.

On April 8, 2003, plaintiffs filed with this Court a Complaint for Declaratory Judgment and Injunctive Relief [docket no. 1]. In their Complaint, plaintiffs ask that this Court issue a judgment settling this tribal dispute by declaring which Tribal Council is in control of the Tribe and the casino revenues.

LEGAL ANALYSIS

Before turning to the substantive issues raised by the parties, the Court must first determine whether there is subject matter jurisdiction in this case. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998); Bender v. Williamsport Area Sch. DisL, 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986). Plaintiffs bear the burden of establishing the existence of subject matter jurisdiction. See Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990).

Diversity jurisdiction is not available here under 28 U.S.C. § 1332 because Indian tribes are neither foreign states, Cherokee Nation v. State of Georgia, 30 U.S. (5 Pet.) 1, 16-18, 8 L.Ed. 25 (1831), nor citizens of any state, Standing Rock Sioux Indian Tribe v. Dorgan, 505 F.2d 1135, 1140 (8th Cir.1974). Therefore, federal jurisdiction, if any, must arise under the Court's federal question jurisdiction.

Plaintiffs advance three theories in support of their position that this Court has federal question jurisdiction over this action. They claim that federal question jurisdiction exists pursuant to: (1) the United States' general trust responsibilities; (2) the Indian Gaming Regulatory Act, 25 U.S.C. § 2701, et seq. ("IGRA"); and (3) the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. ("RICO"). In response, defendants argue that this Court does not have subject matter jurisdiction because plaintiffs are asking that the Court interpret the Tribe's Constitution and because the action is essentially an intra-tribal dispute.

Federal question jurisdiction is defined as follows:

The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

28 U.S.C. § 1331. A district court may exercise federal question jurisdiction if the court is satisfied that the claim is one "`arising under' federal law." National Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845, 850, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985); Iowa Mgmt. & Consultants, Inc. v. Sac & Fox Tribe of the Mississippi in Iowa, 207 F.3d 488, 489 (8th Cir.2000).

In Three Buoys Houseboat Vacations U.S.A., Ltd. v. Morts, 878 F.2d 1096 (8th Cir.1989), the Eighth Circuit Court of Appeals observed that there is "no `single, precise definition'" of whether a cause of action "arises under" federal law, but that "`the phrase "arising under" masks a welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system.' " Id. at 1100 (quoting Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986)).

In Gully v. First Nat'l Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 81 L.Ed. 70 (1936), the Supreme Court considered whether the action in dispute arose under federal law for purposes of applying 28 U.S.C. §§ 1331 and 1441 (district court's original and removal jurisdiction of actions "arising under" the Constitution, laws, or treaties of the United States). The Court explained:

How and when a case arises "under the Constitution or laws of the United States" has been much considered in the books. Some tests are well established. To bring a case within the statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiffs cause of action.... The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another.... A genuine and present controversy, not merely a possible or conjectural one, must exist with reference thereto ... and the controversy must be disclosed upon the face of the complaint, unaided by the answer or by the petition for removal.... Indeed, the complaint itself will not avail as a basis of jurisdiction in so far as it goes beyond a statement of the plaintiffs cause of action and anticipates or replies to a probable defense.

Id. at 112-13, 57 S.Ct. 96. See also Ultramar Am., Ltd. v. Dwelle, 900 F.2d 1412, 1414 (9th Cir.1990) (whether a claim is one "arising under" federal law depends on whether federal law is "a necessary element of one of the well-pleaded claims," citing Franchise Tax Bd. of State of Col. v. Construction Laborers Vacation Trust, 463 U.S. 1, 13, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)).

A. General Trust Responsibility

Plaintiffs allege that they are the beneficiaries of the "trust responsibility" imposed on the federal government by federal common law.¹ However, plaintiffs have not alleged a specific cause of action in relation to this "trust responsibility." Rather, in their Complaint, plaintiffs merely state "[t]he lands of the Meskwaki Settlement are held in trust by the United States for the benefit of the Tribe." In United States v. Mitchell, 463 U.S. 206, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) (Mitchell II), the Supreme Court listed the three elements of a common-law trust: (1) a trustee; (2) a beneficiary; and (3) a trust corpus. Casino revenues do not constitute property held in trust by the federal government, but are instead tribal property. See Smith v. Babbitt, 875 F.Supp. 1353, 1369 (D.Minn.1995); Vizenor v. Babbitt, 927 F.Supp. 1193, 1203 (D.Minn.1996). Even if plaintiffs had properly plead a claim based on this trust responsibility, the Court finds that there is no trust corpus on which such a claim could be based.

A fiduciary relationship may be created because of the federal government's elaborate regulation of Indian resources, even if there is no express trust relationship. In Mitchell II, the Supreme Court found that specific language in statutory and regulatory provisions may directly support the existence of a fiduciary duty, as the...