UTE Indian Tribe of the Uintah v. Lawrence, Case No. 2:16–cv–00579

CourtUnited States District Courts. 10th Circuit. United States District Court of Utah
Writing for the CourtClark Waddoups, United States District Judge
Citation312 F.Supp.3d 1219
Decision Date30 April 2018
Docket NumberCase No. 2:16–cv–00579
Parties UTE INDIAN TRIBE OF the UINTAH and Ouray Reservation, et al., Plaintiffs, v. Honorable Barry G. LAWRENCE, District Judge, Utah Third Judicial District, and Lynn D. Becker, Defendants.

312 F.Supp.3d 1219

UTE INDIAN TRIBE OF the UINTAH and Ouray Reservation, et al., Plaintiffs,
v.
Honorable Barry G. LAWRENCE, District Judge, Utah Third Judicial District, and Lynn D. Becker, Defendants.

Case No. 2:16–cv–00579

United States District Court, D. Utah, Central Division.

Signed April 30, 2018


312 F.Supp.3d 1221

Frances C. Bassett, Jeffrey S. Rasmussen, Jeremy J. Patterson, Thomasina Real Bird, Fredericks Peebles and Morgan LLP, Louisville, CO, J. Preston Stieff, J. Preston Stieff Law Offices, Salt Lake City, UT, Attorneys for Plaintiffs.

David K. Isom, Isom Law Firm, Salt Lake City, UT, Attorneys for Defendant Becker.

Brent M. Johnson, Nancy J. Sylvester, Administrative office of the Courts, Salt Lake City, UT, Attorneys for Defendant Barry G. Lawrence.

MEMORANDUM DECISION AND ORDER DENYING PRELIMINARY INJUNCTION

Clark Waddoups, United States District Judge

TABLE OF CONTENTS

Introduction...1222

Procedural Background...1223

Preliminary Injunction Standard...1225

I. Substantial Likelihood of Success...1226

A. State Court Subject Matter Jurisdiction...1226

1. The Tribe Is Not Required to Hold a Special Election to Selectively Consent...1229

2. Becker's Independent Contractor Agreement Did Not Involve Trust Property...1236

B. February 28, 2018 Tribal Court Decision...1236

1. Background...1236

2. The Tribal Court's February 28 Opinion Does Not Have Preclusive Effect...1240

C. Becker's Independent Contractor Agreement Is Valid...1244

1. The Proceeds to be Distributed to Becker Are Not Trust Property Under Federal Law...1248

a. Provision 1 of the Participation Plan Does Not Involve Trust Interests...1249

• Original Operating Agreement...1251

• Amended and Restated Operating Agreement...1252

• Exploration and Development Agreements...1254

• Liquidation and the Second Amended and Restated Operating Agreement...1255

b. Provisions 2, 3, & 4 of the Participation Plan Do Not Involve Trust Interests...1256

• Tribal Court Decision...1257

c. State Court Jurisdiction Is Not Preempted Because Contract Revenue Is Not Trust Property Under Federal Law...1258

2. Becker's Independent Contractor Agreement Is Valid Under Tribal Law...1258

a. The Tribe Validly Waived Sovereign Immunity Under Tribal Law...1259

• First Tribal Court Order...1263

• Second Tribal Court Decision...1264

b. The Ute Business Committee's Pattern and Practice Affirmed the Validity of the Waiver...1265

c. Contract Is Valid Under Other Tribal Law...1267
312 F.Supp.3d 1222
d. The Tribe Has Waived the Exhaustion Requirement...1269

II. Conclusion...1270

INTRODUCTION

This case arises from the uncertainty inherent in the overlapping jurisdictional reach of the Utah state courts and the Ute tribal courts when a dispute arises between the Tribe and a non-Indian under a series of complex commercial contracts that create an issue of whether there is an enforceable waiver of sovereign immunity. The case puts at issue the interests of three sovereigns: the United States, the state of Utah, and the Ute Tribe. It is undisputed that Congress, exercising its power as the sovereign, has and may grant—as well as limit—the authority of both the state and the Tribe to exercise their separate jurisdictional authority. And the boundaries of that authority have and continue to evolve.

Traditionally, state courts have general subject matter jurisdiction to resolve disputes that arise within the state's boundaries. When Congress, as the sovereign, has not waived immunity or reserved to the federal courts exclusive jurisdiction in certain areas, the state court's jurisdiction extends to disputes arising within the state's geographic boundaries. Similarly, the doctrine of tribal immunity preempts state court jurisdiction for disputes arising within tribal boundaries. The scope and breadth of tribal immunity and preemption have evolved and continue to evolve, both by congressional action and court decisions. This case requires the court to determine the circumstances under which such tribal sovereign immunity preempting state court jurisdiction may be waived.

Inherent in the recognition of tribal sovereign immunity is the goal of supporting tribal self-governance and control over the Tribe's property, assets, and the management of tribal affairs. The tribal lands have been held in trust by the federal government for the benefit of the tribal members. To avoid misappropriation and abuse, the federal government, as the guardian for the tribal members, has been required to approve alienation of trust assets. As valuable resources have been found on tribal lands, the motivation for non-Indians to engage in corruption and deceit to deprive tribal members of the value of these resources has often been astounding and a sad commentary on the development of the West's natural resources.1

The natural and appropriate response by the tribes has been to be increasingly vigilant and zealous in asserting and protecting their right to control their own affairs. The principal legal mechanism has been for the tribes to assert their rights to sovereign immunity, arguing that disputes over trust assets must be resolved in tribal courts. The tribes, however, have also recognized the value of participating in the commercial development of their resources. These commercial transactions by their very nature are often complex and require significant capital contribution from non-Indian entities. These commercial arrangements, as is customary in all similar complex transactions, require agreements between the parties on how disputes will be resolved, and by which courts. In this case, the agreements have ripened the uncertainty about the overlapping jurisdiction of the state and tribal courts, and about when and under what

312 F.Supp.3d 1223

circumstances tribal sovereign immunity comes into play. The very nature of the agreements themselves requires the parties to determine whether sovereign immunity has been waived and the jurisdiction of the state courts recognized.

The Indian tribes rightly are strongly motivated to enjoy the fullest protection possible to control the resolution of such disputes. Similarly, non-Indians are also appropriately motivated to protect the value of their capital and labor investments. The motivations and intentions of both sides are understandable and cannot be faulted. This case requires the court to resolve how those interests, in compliance with existing law, statutes, and agreements, should be resolved.

For the reasons stated below, the court concludes that this contract dispute should be resolved in Utah state court and the pending action in the Ute Tribal Court enjoined. The court reaches this conclusion after reviewing hundreds of pages of briefing, considering extensive oral argument, and conducting a careful analysis of a record of more than 5,000 pages. The transaction is complex and the parties' attempts to simplify in order to support their positions have sometimes missed the essential facts and terms upon which the decision must be based.

To address these issues, the court has been required to provide detail and analysis beyond what would be typical or even desired on a motion for preliminary injunction. The detailed analysis has been necessary, however, to fairly and adequately address the facts and legal issues raised. Because of the complexity of the agreements, laws, and issues, the court provided the parties with a draft copy of this memorandum decision as a tentative ruling and held an additional hearing on Friday, April 13, 2018, for the parties to address any errors or misunderstanding in the draft decision. The final decision incorporates relevant issues raised by the parties.

PROCEDURAL BACKGROUND

This action is before the court on the tribal parties' motion for a preliminary and/or permanent injunction against Mr. Lynn Becker and Judge Barry G. Lawrence proceeding in the matter of Becker v. Ute Indian Tribe et al , Case No. 140908394, Third Judicial District Court, Salt Lake County.2 (ECF No. 54.) A brief history of how this court came to consider this motion is set forth in the Memorandum Decision and Order Granting Temporary Restraining Order dated February 17, 2018.3 (ECF No. 85.) The motion concerns the provisions of Article 23 of Becker's Independent Contractor Agreement and its implications for the jurisdictional conflict and the issue of tribal exhaustion. In its entirety, Article 23 states:

Article 23. Limited Waiver of Sovereign Immunity; Submission to Jurisdiction.

If any Legal Proceeding (definition follows) should arise between the Parties hereto, the Tribe agrees to a limited waiver of the defense of sovereign immunity,
312 F.Supp.3d 1224
to the extent such defense may be available, in order that such legal proceeding be heard and decided in accordance with the terms of this Agreement. For purposes of this Agreement, a "Legal Proceeding" means any judicial, administrative, or arbitration proceeding conducted pursuant to this Agreement and relating to the interpretation,
...

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1 practice notes
  • Simpson Holdings, L.C. v. Buchanan, Case No. 1:18-CV-86 TS-PMW
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Utah
    • November 13, 2018
    ...LLC, 776 F.3d 1175, 1176 (10th Cir. 2015). 5. Docket No. 17, at 3. 6. Ute Indian Tribe of the Uintah & Ouray Reservation v. Lawrence, 312 F. Supp. 3d 1219, 1264-65 (D. Utah 2018) (quoting Gonzalez-Alarcon v. Macias, 884 F.3d 1266, 1272 (10th Cir. 2018)) (alterations omitted). 7. Docket No. ......
1 cases
  • Simpson Holdings, L.C. v. Buchanan, Case No. 1:18-CV-86 TS-PMW
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Utah
    • November 13, 2018
    ...LLC, 776 F.3d 1175, 1176 (10th Cir. 2015). 5. Docket No. 17, at 3. 6. Ute Indian Tribe of the Uintah & Ouray Reservation v. Lawrence, 312 F. Supp. 3d 1219, 1264-65 (D. Utah 2018) (quoting Gonzalez-Alarcon v. Macias, 884 F.3d 1266, 1272 (10th Cir. 2018)) (alterations omitted). 7. Docket No. ......

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