Tribal Smokeshop v. Alabama-Coushatta Tribes

• Decision Date: 31 August 1999
• Docket Number: No. 9:99-CV-26.,9:99-CV-26.
• Citation: 72 F.Supp.2d 717
• Parties: TRIBAL SMOKESHOP, INC a/k/a Tribal Smokeshop Incorporated; Tribal Partners, Inc.; and Huntsville Wholesale Grocers, Inc. v. ALABAMA-COUSHATTA TRIBES OF TEXAS Acting By and Through its TRIBAL COUNCIL; Clayton Silistine, Acting as Chief of the Tribe; Clem Sylestine Acting as Chief of the Tribe; Morris Bullock, Individually and as Tribal Council; Kevin Battise, Individually and as Tribal Council; Melinda Sylestine, Individually and as Tribal Council; Sidney Poncho, Individually and as Tribal Council; Perry Williams Individually and as Tribal Council and Edwin Battise, Individually and as Tribal Council.
• Court: U.S. District Court — Eastern District of Texas

Page 717

72 F.Supp.2d 717

TRIBAL SMOKESHOP, INC a/k/a Tribal Smokeshop Incorporated; Tribal Partners, Inc.; and Huntsville Wholesale Grocers, Inc. v. ALABAMA-COUSHATTA TRIBES OF TEXAS Acting By and Through its TRIBAL COUNCIL; Clayton Silistine, Acting as Chief of the Tribe; Clem Sylestine Acting as Chief of the Tribe; Morris Bullock, Individually and as Tribal Council; Kevin Battise, Individually and as Tribal Council; Melinda Sylestine, Individually and as Tribal Council; Sidney Poncho, Individually and as Tribal Council; Perry Williams Individually and as Tribal Council and Edwin Battise, Individually and as Tribal Council.

No. 9:99-CV-26.

United States District Court, E.D. Texas, Tyler Division.

August 31, 1999.

James D. Hurst, Huntsville, TX, for plaintiffs.

Russell D. Leachman, Diamond Rash Gordon & Jackson, El Paso, TX, for defendants.

MEMORANDUM OPINION

COBB, District Judge.

On or about October 15, 1998, the Tribal Council Chairman of the Alabama-Coushatta tribe and a non-Indian corporation entitled the Tribal Smokeshop, Inc., a/k/a Tribal Partners, Inc., entered into a written contractual agreement to build and operate a commercial venture on tribal lands. On or about November 20, 1998, the Alabama-Coushatta Council declared the agreement null and void allegedly because it had not been approved by the Secretary of the Interior pursuant to 25 U.S.C. § 81. Shortly thereafter, on November 24, 1998, plaintiffs alleged via letter to the defendants that the cancellation of the agreement was wrongful. Defendants then filed an Original Complaint in the Tribal Court of the Alabama-Coushatta Tribes of Texas. Before adjudication of the matter in Tribal Court, plaintiffs filed a complaint in this court seeking relief on breach of contract and conversion. Plaintiffs later amended this complaint twice to include a violation of 25 U.S.C. § 1302 and to include a claim that federal question jurisdiction existed. In response, defendants filed a 12(b) Motion to Dismiss for lack of personal jurisdiction due to sovereign immunity of Indian tribes, lack of subject matter jurisdiction due to the tribal exhaustion rule and lack of diversity.¹

Plaintiffs seek monetary damages only for breach of contract and conversion claims against the tribe and the tribal council individually.

ANALYSIS

The Alabama-Coushatta are a federally recognized Indian tribe within the meaning of the Constitution and Laws of the United States. 25 U.S.C. § 731 et seq. (the Restoration Act).

"Indian tribes are `domestic dependent nations' that exercise inherent sovereign authority over their members and territories." Oklahoma Tax Comm'n v. Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505, 509, 111 S.Ct 905, 112 L.Ed.2d 1112 (1991). Pursuant to federal law, Indian tribes are protected from suit by sovereign immunity. Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978). The only exception to this rule are instances in which Congress has authorized the suit or immunity has been waived by the tribe. Kiowa Tribe v. Manufacturing Technologies 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998).

Plaintiff first claims that torts, specifically conversion, are not precluded by sovereign immunity citing the Kiowa decision — this interpretation is incorrect. Nothing in Kiowa could be construed to limit sovereign immunity to contractual claims in fact, the Court expanded the scope of sovereign immunity by including contracts made off the reservation for governmental or commercial activities. Id. at 760, 118 S.Ct. 1700. The court made no distinction between tort and contract claims in applying sovereign immunity. "As a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity." Kiowa, 523 U.S. at 754, 118 S.Ct. 1700. To be sure, other courts have applied sovereign immunity to tort claims. See e.g., Schantz, 502 F.2d at 67 (barring a tort action stemming from an automobile accident); Elliott v. Capital Int'l Bank & Trust, Ltd., 870 F.Supp. 733 (E.D.Tex.1994) (holding sovereign immunity barred suit where plaintiff was "bilked out of $200,000").

Alternatively, Plaintiff claims that the tribe waived its sovereign immunity by "agreeing to a method of calculating damages contained in the agreement." (Plaintiff's Response to Motion to Dismiss, p. 2). However, a waiver of sovereign immunity by the tribe must be clear and unequivocal to be effective. Oklahoma Tax Comm'n v. Potawatomi Tribe, 498 U.S. 505, 509, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991); Santa Clara, 436 U.S. at 58, 98 S.Ct. 1670; Fletcher v. United States, 116 F.3d 1315, 1324 (10th Cir.1997). Waivers of sovereign immunity cannot be implied. Here, the parties contractually agreed on a damages clause in the contract. While courts have held that arbitration clauses have constituted waivers of immunity, those clauses themselves are clear and unambiguous as to the waiver. See e.g., Altheimer & Gray v. Sioux Mfg. Corp., 983 F.2d 803, 812 (7th Cir.1993) (finding waiver where letter of intent specifically provided sovereign immunity would be waived as to contract claims); Tamiami Partners v. Miccosukee Tribe of Indians, 788 F.Supp. 566, 568 (S.D.Fla. 1992) (waiver where contract specifically granted the United States District Court for the Southern District of Florida jurisdiction to enforce the arbitration clause of a contract). Plaintiff does not assert that any other act of the defendants constituted a clear and unambiguous waiver. A mere agreement as to liquidated damages without more does not constitute a waiver of sovereign immunity.

Plaintiff also argues its cause of action for conversion raises a federal question under 25 U.S.C. § 1302(8) of the Indian Civil Rights Act of 1968 (herein referred to as the "ICRA") (prohibiting Indian tribes from denying "to any person within its jurisdiction the equal protection of its laws or deprive any person of liberty or property without due process of law"). If the provision applied, it would be a congressional waiver of sovereign immunity. However, the alleged violation is not actionable under this section as mere contract claims do not constitute federal questions.² The purpose of the ICRA was to strengthen tribal self-government and to guarantee basic civil rights. Santa Clara Pueblo v. Martinez, 436 U.S. 49, 62, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978). In order to protect the civil rights of Native Americans, the ICRA scheme mandates that tribal courts apply a modified version of the Bill of Rights listed in § 1302 in addition to tribal laws and customs. Thus, in Santa Clara, the Court noted that a federal court remedy for an ICRA violation would be at odds with the policy for self-government. Id. at 64, 98 S.Ct. 1670. Thus, the ICRA does not provide a private cause of action against Indian tribes. Id., at 59, 98 S.Ct. 1670; see also Runs After v. United States, 766 F.2d 347, 352 (8th Cir.1985) (noting that actions seeking relief for tribal deprivations of rights other than habeas corpus must be resolved through tribal forums).

Recently, the Fifth Circuit in TTEA v. Ysleta Del Sur Pueblo, 181 F.3d 676 (5th Cir.1999) held that while sovereign immunity bars suits against the tribe, it did not bar suits against tribal officials for declarative and injunctive relief. The court noted that tribal sovereign immunity should have the same limits as state sovereign immunity. Id. at 680; see e.g., Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). Thus, claims for declaratory and injunctive relief against tribal officials (in their official capacities) are allowed, but claims for monetary damages remain barred by sovereign immunity. Ysleta, at 680. The Fifth Circuit relied on the Supreme Court's earlier decision in Puyallup Tribe v. Department of Game of the State of Washington, 433 U.S. 165, 171, 97 S.Ct. 2616, 53 L.Ed.2d 667 (1977) which permitted suits to enjoin tribal members from violating state law. Here the plaintiffs seek only monetary damages from a breach of contract and not declarative or injunctive relief so the exception carved out by Ysleta offers no relief to the plaintiff.

Plaintiff attempts to circumvent this by asserting claims against the tribal counsel individually. Tribal counsel, like state officials, are protected by sovereign immunity. See Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 148, 102 S.Ct. 894, 71 L.Ed.2d 21 (1982) (applying state and federal sovereign immunity rules to determine whether tribe had waived its sovereign immunity); Fletcher, 116 F.3d at 1324 (finding individual tribal counsel members were entitled to sovereign immunity in their official capacities). Here, Plaintiff claims tribal counsel did not follow tribal procedure in declaring the contract null and void and thus the individual counsel members are subject to suit because they exceeded the scope of their official capacity. Even if it is true that defendants acted without following the proper formalities, the defendants nevertheless were acting as the decision making body of the tribe. Plaintiffs assert individual defendants, who make up the tribal council, conspired to breach the contract. First, members of a tribal council cannot conspire amongst themselves. See Runs After, 766 F.2d at 354. Second, even if plaintiffs asserted valid claims as to conspiracy and tortious interference with contract, these causes of action do not raise federal questions — they are Texas state law claims.

The court finds that there is no federal question jurisdiction in the present case. Since there is no diversity jurisdiction, there is no basis for federal jurisdiction in this case.

Tribal Exhaustion Requirement

In the alternative, even if there is federal question jurisdiction, this court would still be required to dismiss the case under the Tribal exhaustion rule. See National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 857,...