United Keetoowah Band of Cherokee Indians v. State of Okl. ex rel. Moss

• Decision Date: 14 March 1991
• Docket Number: No. 87-2797,87-2797
• Citation: 927 F.2d 1170
• Parties: The UNITED KEETOOWAH BAND OF CHEROKEE INDIANS, Plaintiff-Appellant, v. The STATE OF OKLAHOMA, ex rel. Davis MOSS, District Attorney of Tulsa County, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1170

927 F.2d 1170

The UNITED KEETOOWAH BAND OF CHEROKEE INDIANS, Plaintiff-Appellant, v. The STATE OF OKLAHOMA, ex rel. Davis MOSS, District Attorney of Tulsa County, Defendants-Appellees.

No. 87-2797.

United States Court of Appeals Tenth Circuit.

March 14, 1991.

Martin E. Seneca, Jr., Reston, Va., for plaintiff-appellant.

M. Denise Graham, Asst. Dist. Atty., Tulsa, Okl., for defendants-appellees.

Before HOLLOWAY, Chief Judge, and McWILLIAMS and BRORBY, Circuit Judges.

HOLLOWAY, Chief Judge.

I

Plaintiff-Appellant, United Keetoowah Band of Cherokee Indians ("UKB" or "tribe"), appeals the final judgment, permanent injunction and order entered by the United States District Court for the Northern District of Oklahoma. ¹ The district court's order enjoined the tribe from further operation of its Horseshoe Bend Bingo hall, a high stakes bingo enterprise, situated on a restricted Indian allotment.

This action arose in response to efforts by the State of Oklahoma to enforce its gaming laws against Horseshoe Bend Bingo. The hall is located on a leased portion of property owned by the plaintiff, Cordelia Tyner, ² who at the behest of her son, George Washington, granted permission to construct and operate gaming on her land.

In October of 1986, the District Attorney for Tulsa County obtained a search warrant covering the Horseshoe Bend Bingo hall in order to seize gambling paraphernalia. Under the warrant the Tulsa County sheriff entered the premises and confiscated boxes of "pull tabs" and other gaming material allegedly used in violation of Oklahoma's gambling laws. ³ The State brought suit in state court seeking to enjoin Washington, and others involved in the management and operation of Horseshoe Bend Bingo, from operation of the enterprise as violative of Okla.Stat. tit. 21, Secs. 995.1-995.18 (1981 & Supp.1986). ⁴ In response, the UKB and Mrs. Tyner brought the instant action in federal court, seeking a declaratory judgment that the State was without jurisdiction to enforce its laws on the restricted allotment, and an injunction against all pending and future proceedings by the State under its gambling laws. Mrs. Tyner was dismissed from the suit, see Order, dated April 29, 1987, and that decision is not appealed.

The State counterclaimed, requesting a declaration of its jurisdiction over the restricted allotment, and seeking an injunction pursuant to Title 25, U.S.C. Sec. 81 against further operation of the game until it was brought into compliance with federal law. ⁵ Bench trial proceedings were conducted in June and September of 1987. On October 29, 1987, the district court issued detailed Findings of Fact ("FF") and Conclusions of Law ("CL"). The following day, the court permanently enjoined the State from exercising criminal jurisdiction over the allotment, and likewise enjoined the UKB from further operation of gaming activities on the Tyner allotment. See Amended Permanent Injunction, dated October 30, 1987. The following additional facts were found by the district court and are not in dispute:

Mrs. Tyner, an enrolled member of the Cherokee Nation of Oklahoma, was allotted a parcel of real property by the Cherokee Nation in 1905. This land is a restricted Indian allotment. ⁶ Mrs. Tyner has twelve children, among them, George Washington and Rachel Dake. Washington received permission from his mother to construct and operate a bingo enterprise on a portion of her restricted allotment. To that end, Washington invested $10,000 of his own money, and further obtained partial financing by promissory notes given to family and friends. These notes provided for a 100% return-on-investment with repayment completed within 120 days. Washington also hired Gary Allen, a non-Indian, to serve as accountant for the bingo enterprise.

After unsuccessfully approaching the Delaware and Cherokee Nation tribes, Washington approached plaintiff UKB to obtain its participation in, and assertion of tribal sovereign power over, the bingo venture. In June 1986, the UKB's Tribal Council agreed to lease some of Mrs. Tyner's allotment and participate in the bingo enterprise. Some time later, Washington and some of his siblings joined the UKB. ⁷ On August 1, 1986, a lease was executed between the UKB and Mrs. Tyner for part of her allotment for the purpose of conducting "commercial businesses, including bingo, food service, giftshop and related recreational businesses[.]" See Brief of Appellee, Addendum D. The lease was submitted to the Bureau of Indian Affairs ("BIA") for approval, but no action by BIA was ever taken.

The bingo enterprise, denominated Horseshoe Bend Bingo, opened to the public on October 23, 1986. Gaming at the hall included bingo, keno, and the sale of pull tabs. Washington was general manager. Keetoowahs comprised the majority of the employees; however, members of the Tyner family were given preferential hiring over all others. One-fourth of the employees were members of the Tyner family, including all twelve of Mrs. Tyner's children. Allen was the only non-Indian employed.

Several months after the bingo hall's opening, Washington was elected to the Tribal Council. He enjoyed substantial power over the bingo venture, including hiring decisions, and shared with Dake the oversight of all bank accounts which serviced funds by and for the enterprise. Washington, however, is the only member of the UKB Tribal Council with signatory authority on the bank accounts. No tribal representatives supervise the counting procedures at Horseshoe Bend Bingo.

Under a verbal agreement between Mrs. Tyner and the UKB, Mrs. Tyner was to receive 90% of the net profits, the remaining 10% going to the UKB for the first six months of operations or until Mrs. Tyner received $232,000. Thereafter, under a Joint Venture Agreement ("JVA") between Mrs. Tyner and the UKB, the percentages changed to 75% and 25%, respectively. As defined by the JVA, net profit is any money remaining after the payment of operating expenses, including salaries and debt service on the promissory notes. The JVA was never submitted to the BIA for approval. Prior to the district court's injunction, Mrs. Tyner had received very little money, and the UKB had received only $10,600 as an "advance" on profits.

II

As a threshold matter, the State raises a jurisdictional question. The State charges that the district court lacked subject matter jurisdiction over this cause under 28 U.S.C. Sec. 1362, citing Enterprise Electric Co. v. Blackfeet Tribe of Indians, 353 F.Supp. 991 (D.Mont.1973). ⁸ There a Montana corporation sued the tribe for money due under a contract for electrical work on a tribal center. The district court dismissed, holding that Sec. 1362 provides limited jurisdiction in actions brought by an Indian tribe. Neither the opinion in Blackfeet Tribe, nor the State's argument based on it explain why Sec. 1362 does not cover this matter other than to assert that the Act's scope is "limited." We are persuaded that an action such as this by a tribe asserting its immunity from the enforcement of state laws is a controversy within Sec. 1362 jurisdiction as a matter arising under the Constitution, treaties or laws of the United States. See Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463, 472-73, 96 S.Ct. 1634, 1640-41, 48 L.Ed.2d 96 (1976); Seminole Tribe of Florida v. Butterworth, 491 F.Supp. 1015, 1017-18 (S.D.Fla.1980), aff'd on other grounds, 658 F.2d 310 (5th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1717, 72 L.Ed.2d 138; Cheyenne- Arapaho Tribes v. State of Oklahoma, 618 F.2d 665, 666 (10th Cir.1980).

The State's argument implies that by incorporating, the UKB no longer functions as a "tribe" for purposes of Sec. 1362. See Appellee's Brief at 9-11. True, the UKB is a federally chartered corporation, ⁹ but as the district court correctly noted, "the formulation [sic] of the corporation does not affect the power of the tribe to act in a governmental capacity." CL No. 14, citing Cohen's Handbook of Federal Indian Law, Ch. 6, Sec. A4c (Strickland, ed.1982). There is no indication in the pleadings or briefs that the tribe comes before the federal court in any manner other than as a sovereign entity, and the plain language of Sec. 1362 applies to "any Indian tribe or band with a governing body duly recognized by the Secretary of the Interior[.]" The Department of the Interior expressly recognizes the UKB as a governing body. See Department of Interior Notice, Indian Entities Recognized and Eligible to Receive Services from the United States Bureau of Indian Affairs, 53 Fed.Reg. 52829-02 (1988).

In sum, Sec. 1362 serves as an adequate jurisdictional grant for this Indian gaming case where the tribe asserts its claim of immunity from state regulation. See, e.g., Lac du Flambeau Band of Lake Superior Chippewa Indians v. Wisconsin, 743 F.Supp. 645, 646 (D.Wis.1990).

III

A

Our remaining analysis is shaped significantly by the State's election not to appeal any substantive aspect of the decision below. Adversely to the State, the district court ruled that "Oklahoma has no criminal jurisdiction over the [Tyner] restricted allotment," CL No. 16, and that the State's counterclaim is without merit because "[a] lease of third party lands is insufficient to state a claim under 25 U.S.C. Sec. 81." CL No. 18 (citation omitted). Since the State has not cross-appealed, these decisions restrict the scope of this appeal so that the State and the district attorney of Tulsa County now come before this Court purporting only to enforce federal, and not Oklahoma, laws. ¹⁰ Furthermore, the State's election not to appeal necessarily limits the State's arguments to supporting application of the Assimilative Crimes Act, 18 U.S.C. Sec. 13--the only other federal law expressly at issue in the record below. See, e.g., Swarb v. Lennox, 405 U.S. 191, 201, 92 S.Ct. 767, 772, 31 L.Ed.2d 138 (1972) ("In the absence of a cross appeal, the opposition is in no...