Ute Indian Tribe of the Uintah v. Lawrence

• Decision Date: 06 January 2022
• Docket Number: No. 18-4013,18-4013
• Citation: 22 F.4th 892
• Parties: UTE INDIAN TRIBE OF THE UINTAH AND OURAY RESERVATION, a federally recognized Indian Tribe and a federally chartered corporation; Uintah and Ouray Tribal Business Committee; Ute Energy Holdings, a Delaware LLC, Plaintiffs - Appellants, v. Barry G. LAWRENCE, District Judge, Utah Third Judicial District Court, in his individual and official capacities; Lynn D. Becker, Defendants - Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

22 F.4th 892

UTE INDIAN TRIBE OF THE UINTAH AND OURAY RESERVATION, a federally recognized Indian Tribe and a federally chartered corporation; Uintah and Ouray Tribal Business Committee; Ute Energy Holdings, a Delaware LLC, Plaintiffs - Appellants,

v.Barry G. LAWRENCE, District Judge, Utah Third Judicial District Court, in his individual and official capacities; Lynn D. Becker, Defendants - Appellees.

No. 18-4013

United States Court of Appeals, Tenth Circuit.

FILED January 6, 2022

Frances C. Bassett and Thomasina Real Bird (Thomas W. Fredericks and Jeremy J. Patterson, with them on the briefs), Fredericks Peebles & Morgan LLP, Louisville, Colorado, for Plaintiffs-Appellants.

David K. Isom, Isom Law Firm PLLC, Salt Lake City, Utah, for Defendant-Appellee Lynn D. Becker.

Nancy J. Sylvester (Brent M. Johnson, with her on the brief), Administrative Office of the Courts, Utah District Court, Salt Lake City, Utah, for Defendant-Appellee Judge Barry G. Lawrence.

Before MORITZ, BRISCOE, and EID, Circuit Judges.

MORITZ, Circuit Judge.

This appeal marks the latest chapter in a long-running contract dispute between the Ute Indian Tribe of the Uintah and Ouray Reservation (the Tribe)¹ and Lynn Becker, a non-Indian. The contract concerned Becker's work marketing and developing the Tribe's mineral resources on the Ute reservation. Almost seven years ago, Becker sued the Tribe in Utah state court for allegedly breaching the contract by failing to pay him a percentage of certain revenue the Tribe received from its mineral holdings. Later, the Tribe filed this lawsuit, challenging the state court's subject-matter jurisdiction under federal law. The district court denied the Tribe's motion for a preliminary injunction against the state-court proceedings, and the Tribe appeals.

We reverse and hold that the Tribe is entitled to injunctive relief. The district court's factual findings establish that Becker's state-court claims arose on the reservation because no substantial part of the conduct supporting them occurred elsewhere. And because the claims arose on the reservation, the state court lacks subject-matter jurisdiction absent congressional authorization. But contrary to the district court's ruling, 25 U.S.C. § 1322 does not provide such authorization. Section 1322 requires tribal consent to state-court jurisdiction, and tribal consent is obtained only by holding a special election under 25 U.S.C. § 1326. Here, the Tribe never provided such consent. Thus, the Tribe succeeds on the merits of its claim that the state court lacks subject-matter jurisdiction. The Tribe further satisfies the other requirements for obtaining injunctive relief. Accordingly, under the particular circumstances of this appeal, we close this chapter in Becker's dispute with the Tribe by ordering the district court to permanently enjoin the state-court proceedings.

Background

The contract dispute at the heart of this appeal has spawned lawsuits in federal, state, and tribal court. Our court alone has issued four separate opinions. See Becker v. Ute Indian Tribe of the Uintah & Ouray Rsrv. , 770 F.3d 944 (10th Cir. 2014) ( Becker I ); Becker v. Ute Indian Tribe of the Uintah & Ouray Rsrv. , 868 F.3d 1199 (10th Cir. 2017) ( Becker II ); Ute Indian Tribe of the Uintah & Ouray Rsrv. v. Lawrence , 875 F.3d 539 (10th Cir. 2017) ( Lawrence ); Becker v. Ute Indian Tribe of the Uintah & Ouray Rsrv. , 11 F.4th 1140 (10th Cir. 2021) ( Becker III ).² Those opinions provide detailed accounts of both the underlying contract dispute and the dense procedural history that followed. We therefore provide an abridged version of this history, covering only the events relevant to the appeal before us.

Becker's formal relationship with the Tribe began in 2004, when the Tribe hired him to help market and develop the Tribe's vast mineral resources. During Becker's time working for the Tribe, those resources were located exclusively within the borders of the Ute reservation. Becker and the Tribe executed a contract, which we refer to as "the Agreement," under which Becker would receive for his services an annual salary and 2% of certain revenue the Tribe accrued through its various mineral holdings. After Becker and the Tribe terminated their relationship in late 2007 or early 2008, a dispute arose over the Tribe's purported failure to pay Becker the 2% interest. So in 2014, Becker sued the Tribe in Utah state court for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment.³ Judge Barry Lawrence denied the Tribe's motion to dismiss for lack of subject-matter jurisdiction and eventually set the case for trial.

In June 2016, about a year after Judge Lawrence denied the Tribe's motion to dismiss the state-court action, the Tribe filed this federal lawsuit against Becker and Judge Lawrence, challenging in part the state court's subject-matter jurisdiction under federal law. Initially, the district court determined that it lacked federal subject-matter jurisdiction to consider the Tribe's challenge and dismissed the case. We reversed and remanded for further proceedings, holding that "the Tribe's claim—that federal law precludes state-court jurisdiction over a claim against Indians arising on the reservation—presents a federal question that sustains federal jurisdiction." Lawrence , 875 F.3d at 540.

On remand, the Tribe reasserted its position that the state court lacked subject-matter jurisdiction in a motion for both preliminary and permanent injunctions against the state-court proceedings. Rather than take up those motions, the district court sua sponte directed the parties to address a different issue, resulting in an order that purported to avoid consideration of the Tribe's motions on supplemental-jurisdiction grounds.⁴

The Tribe then filed this appeal, but we abated it, instructing the district court to follow Lawrence ’s mandate and "decide the Tribe's request for injunctive relief against the state[-]court proceedings." App. vol. 8, 1541. The district court ultimately denied a preliminary injunction, finding that the Tribe was unlikely to succeed on the merits of its claim that the Utah state court lacks jurisdiction. In so doing, it reasoned that even assuming Becker's claims involve events that occurred on the reservation, a federal statute authorizes state-court jurisdiction over such claims.⁵ See 25 U.S.C. § 1322.

We then lifted the abatement. But following oral argument, we abated the appeal for a second time, ordering the district court to make supplemental factual findings on the issue it had merely assumed—whether Becker's state-court claims arose from events that occurred on the reservation. The district court eventually issued supplemental findings⁶ and certified the supplemental record to this court. Having lifted the second abatement, we now resolve the Tribe's appeal.

Analysis

We review the district court's decision to deny a preliminary injunction for abuse of discretion. See Crowe & Dunlevy, P.C. v. Stidham , 640 F.3d 1140, 1157 (10th Cir. 2011). The district court abuses its discretion if it "commits a legal error," if it "relies on clearly erroneous factual findings," or if "there is no rational basis in the evidence for its ruling." Id. (quoting Davis v. Mineta , 302 F.3d 1104, 1111 (10th Cir. 2002) ).

To obtain a preliminary injunction, the moving party must show that (1) it is substantially likely to prevail on the merits; (2) it will suffer irreparable harm without the injunction; (3) this threatened injury outweighs the harm that granting the injunction may cause the opposing parties; and (4) the injunction will not adversely affect the public interest. Becker II , 868 F.3d at 1202. Here, the district court concluded that the Tribe failed the first requirement—it had not shown a substantial likelihood of success on its claim that federal law precludes the state court from exercising jurisdiction over Becker's lawsuit. On appeal, the Tribe challenges that conclusion, arguing that it can show even more than a likelihood of success on the merits—it can show actual success on the merits. The Tribe further argues that it satisfies the remaining injunction requirements and thus asks, as a remedy, that we order the district court to grant a permanent injunction.

I. The State Court's Jurisdiction

The Tribe argues that the Utah state court lacks subject-matter jurisdiction over Becker's lawsuit as a matter of federal law. Admittedly, federal law usually plays a limited role in assessing whether a state court has jurisdiction because state courts, as courts of general jurisdiction, can hear a wide variety of cases. 13 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3522 (3d ed. 2021) ("Most state courts are courts of general jurisdiction, and the presumption is that they have subject matter jurisdiction over any controversy unless a showing is made to the contrary."); cf. Aldinger v. Howard , 427 U.S. 1, 15, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976) ("[F]ederal courts, as opposed to state trial courts of general jurisdiction, are courts of limited jurisdiction marked out by Congress."). But this general jurisdiction does not necessarily hold true when a case involves a tribe or its members. Instead, state courts’ "adjudicative authority over Indians for on-reservation conduct is greatly limited by federal law." Lawrence , 875 F.3d at 542.

These limits reflect a longstanding federal policy—enforceable against the states under the federal government's plenary and exclusive constitutional authority "to legislate in respect to Indian tribes"—of "leaving Indians free from state jurisdiction and control." Id. at 541–42 (first quoting United States v. Lara , 541 U.S. 193, 200, 124 S.Ct. 1628, 158 L.Ed.2d 420 (2004), and then quoting McClanahan v. State Tax Comm'n of Ariz. , 411 U.S. 164, 168, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973) ); see also Williams v. Lee , 358 U.S. 217, 220, 223, 79 S.Ct. 269, 3 L.Ed.2d...