Val/Del, Inc. v. Superior Court In and For Pima County, 2

• Decision Date: 02 January 1985
• Docket Number: No. 2,CA-SA,2
• Citation: 145 Ariz. 558,703 P.2d 502
• Parties: VAL/DEL, INC., a Delaware corporation, Petitioner, v. SUPERIOR COURT of the State of Arizona, In and For the COUNTY OF PIMA, Honorable Lillian S. Fisher, a Judge thereof, Respondents, and PASCUA YAQUI TRIBE, Real Party in Interest. 133.
• Court: Arizona Court of Appeals

Page 502

703 P.2d 502

145 Ariz. 558

VAL/DEL, INC., a Delaware corporation, Petitioner, v. SUPERIOR COURT of the State of Arizona, In and For the COUNTY OF PIMA, Honorable Lillian S. Fisher, a Judge thereof, Respondents and PASCUA YAQUI TRIBE, Real Party in Interest.

No. 2 CA-SA 133.

Court of Appeals of Arizona Division 2.

Jan. 2, 1985.

Reconsideration Denied March 1, 1985.

Review Denied May 29, 1985.

Molloy, Jones, Donahue, Trachta, Childers & Mallamo, P.C. by John F. Molloy and David A. McEvoy, Tucson, for petitioner

Lansdale & Kneip, P.C. by Jack L. Lansdale, Jr., Tucson, and Ussery & Parrish, P.A. by L. Lamar Parrish, John J. Carmody, Jr., and Catherine Baker Stetson, Albuquerque, for real party in interest.

OPINION

BIRDSALL, Chief Judge.

This special action has been taken from the trial court's dismissal of the petitioner's complaint. We have accepted jurisdiction because the petitioner's remedy by appeal is not adequate and because the question presented is a matter of great significance to those who may desire to do business with the respondent tribe. See State ex rel. Corbin v. Superior Court of Maricopa County, 138 Ariz. 500, 675 P.2d 1319 (1984); University of Arizona Health Sciences Center v. Superior Court of the County of Maricopa, 136 Ariz. 579, 667 P.2d 1294 (1983).

On January 11, 1984, the real party in interest Pascua Yaqui Tribe and Val/Del, Inc., the petitioner, entered into an agreement whereby Val/Del was to manage the tribe's newly established bingo operation. The agreement called for Val/Del to be retained on an exclusive basis to finance, manage, and operate the bingo operation for the tribe for a seven-year period commencing January 1, 1984. On or about May 13, 1984, the tribe apparently excluded petitioner's employees and managers from the property, alleging the existence of certain defaults by petitioner under the management agreement.

On June 27, 1984, petitioner filed its complaint in the present lawsuit in Pima County Superior Court seeking to have the arbitration clause of the agreement enforced. Service was made upon the tribe on June 27, 1984, and its motion to dismiss was filed July 9 and granted on August 7. The court found that the Pascua Yaqui Indian Tribe is a federally recognized tribe entitled to sovereign immunity and cannot be sued without having waived such immunity or otherwise granted its consent to suit. Although the trial court found that the tribe had consented to having a lawsuit between the parties tried in its tribal court, it held that the arbitration clause in the subject contract was not a legally sufficient waiver of sovereign immunity to permit the action in state court and dismissed the complaint.

The powers of Indian tribes have been described as "inherent powers of a limited sovereignty which has never been extinguished." F. Cohen, Handbook of Federal Indian Law 122 (U.N.M. ed. 1971). Before the Europeans arrived, Indian tribes were self-governing sovereign political entities. See McClanahan v. State Tax Commission of Arizona, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973). One of the inherent powers possessed by Indian tribes like all sovereign bodies, was immunity from suit. In Santa Clara Pueblo v. Martinez, 436 U.S. 49, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978), Justice Marshall stated the basis of this immunity:

"Indian tribes have long been recognized as possessing the common-law immunity from suit traditionally enjoyed by sovereign powers.... This aspect of tribal sovereignty, like all others, is subject to the superior and plenary control of Congress. But 'without congressional authorization' the 'Indian Nations are exempt from suit.' " 436 U.S. at 58, (citations omitted).

Arizona courts have also recognized the doctrine of tribal sovereign immunity. In Morgan v. Colorado River Indian Tribe, 103 Ariz. 425, 443 P.2d 421 (1968), our supreme court held that state courts did not have jurisdiction over an Indian tribe which had allegedly committed a tort while engaging in a business enterprise in the State of Arizona but outside the boundaries of the tribal lands. The court held that the Colorado River Indian Tribe was a sovereign immune from suit and could not be subjected to the jurisdiction of Arizona courts without its consent or the consent of Congress. A similar result was reached in White Mountain Apache Indian Tribe v. Shelley, 107 Ariz. 4, 480 P.2d 654 (1971), and both cases were noted in the recent Division One case of S. Unique, Ltd. v. Gila River Pima-Maricopa Indian Community, 138 Ariz. 378, 674 P.2d 1376 (App.1983).

We note here that sovereign immunity as discussed in these cases seems to be limited to decisions wherein jurisdiction of state and federal courts was thwarted. However, since one of the primary purposes of the doctrine of sovereign immunity is to protect tribal trust property from encumbrances, Atkinson v. Haldane, 569 P.2d 151 (Alaska, 1977), it must necessarily mean freedom from suit regardless of where the suit is brought. The immunity of Indian tribes, however, is not absolute. United States v. Oregon, 657 F.2d 1009 (9th Cir.1981). It exists only at the sufferance of Congress and is subject to complete defeasance. United States v. Wheeler, 435 U.S. 313, 98 S.Ct. 1079, 55 L.Ed.2d 303 (1978). Either explicit congressional authority or consent of a tribe is necessary to find a waiver of the immunity. United States v. Oregon, supra.

Petitioner's first point of attack is that the tribe does not enjoy sovereign immunity since it does not possess the requisite characteristics of a sovereign Indian nation as set forth in regulations promulgated by the Department of Interior. See 25 C.F.R. Part 83. The procedures established in those regulations, which petitioner alleges must be met before a tribe will be accorded federal recognition and therefore enjoy immunity from suit, include:

"(a) [T]he petitioner [tribe] has been identified from historical times until the present on a substantially continuous basis, as 'American Indian' or 'aboriginal.'

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(b) Evidence that a substantial portion of the petitioning group inhabits a specific area or lives in a community viewed as American Indian and distinct from other populations in the area, and that its members are descendants of an Indian tribe which historically inhabited a specific area.

(c) A statement of facts which establishes that the petitioner has maintained tribal political influence or other authority over its members as an autonomous entity throughout history until the present." 25 C.F.R. § 83.7.

Petitioner presented to the trial court two books ¹ by Dr. Edward H. Spicer as authority for the proposition that the Pascua Yaqui Tribe would not qualify for federal recognition under the Code of Federal Regulations requirements. Spicer was an acknowledged authority on the history of the Pascua Yaquis, and his books establish that the Yaquis do not have single roots but are a historically mixed-blood people who lived in western Mexico on the Gulf of California from approximately the 1600's to the present. Beginning in the late 1880's, small groups came from time to time across the international border to Arizona and California. Therefore, petitioner argues, since the Pascua Yaquis are not indigenous to this area, but rather are immigrants from Mexico, and because Dr. Spicer's books show that the tribe has not attempted to revive any system of government their predecessors may have established in Mexico, they would not qualify for federal recognition under 25 C.F.R. § 83.7. We cannot fault this conclusion and, in essence, neither does the tribe.

The tribe relies instead on 25 U.S.C. §§ 1300f-1300f(2), which were adopted by Congress in 1978 and in which Congress recognized the Pascua Yaqui Indian people and declared them eligible

"for the services and assistance provided to Indians because of their status as Indians or through any department, agency, or instrumentality of the United States, or under any statute of the United States." 25 U.S.C. § 1300f(a)

Additionally, Congress provided that certain provisions of 25 U.S.C. §§ 461-492 entitled "Protection of Indians and Conservation of Resources," would be extended to the Pascua Yaqui Indian people. Included in that subchapter is § 479, the definition section, which recognizes the term Indian as referring to all persons of Indian descent who are members of any recognized Indian tribe now under federal jurisdiction. The Supreme Court of Alaska, in Atkinson v. Haldane, supra, was presented with a similar situation involving the Metlakatla community. The court found that, although the Metlakatla community had come to Alaska from British Columbia, that that was not a significant factor in view of the fact that the community had been recognized by the federal government as an organized tribe and thus should be given the protections accorded other tribes. The court stated:

"[The tribe asks] application of the principle that tribes under the tutelage of the United States are immune from suit in the absence of congressional consent....

Thus, we conclude that the Metlakatla Indian Community, despite its unique history, is entitled to sovereign immunity.... The Community has been recognized by the United States government as an Indian tribe and has been treated accordingly. Once the executive branch has determined that the Metlakatla Indian Community is an Indian tribe, which is a nonjusticiable political question, the Community is entitled to all of the benefits of tribal status. The Supreme Court of the United States declared in U.S. Fidelity [United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894 (1940) ] that one of those benefits is tribal sovereign immunity in the absence of congressional waiver. Court decisions from United States v. Kagama, 118 U.S. 375, 6 S.Ct. 1109, 30 L.Ed. 228 (1886) to McClanahan v. State Tax Commission, 411 U.S. 164, 170-72, 93...