Weeks Const., Inc. v. Oglala Sioux Housing Authority

• Decision Date: 29 July 1986
• Docket Number: Nos. 85-5129,85-5130,s. 85-5129
• Citation: 797 F.2d 668
• Parties: WEEKS CONSTRUCTION, INC., Appellant, v. OGLALA SIOUX HOUSING AUTHORITY, United States of America, and Department of Housing and Urban Development, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 668

797 F.2d 668

WEEKS CONSTRUCTION, INC., Appellant, v. OGLALA SIOUX HOUSING AUTHORITY, United States of America and Department of Housing and Urban Development, Appellees.

Nos. 85-5129, 85-5130.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 13, 1985.

Decided July 29, 1986.

John Burnett, Rapid City, S.D., for appellant.

Mary Maywalt, Denver, Colo., for U.S.

James F. Wagenlander, Denver, Colo., for Oglala.

Before LAY, Chief Judge, FAGG, Circuit Judge, and ROSENBAUM, ^* District Judge.

LAY, Chief Judge.

Weeks Construction, Inc. ("Weeks") appeals the district court's ¹ order dismissing Weeks' breach of contract actions against the Oglala Sioux Housing Authority ("the Housing Authority") and against the United States and the Department of Housing and Urban Development ("HUD") for lack of jurisdiction. We affirm the decision of the district court.

The Housing Authority was created by Oglala Sioux tribal ordinance to develop and administer housing projects on the Pine Ridge Indian Reservation in South Dakota. Weeks, a Montana corporation, contracted with the Housing Authority to build housing units on the reservation. Funds for construction of the housing units for which Weeks contracted were provided pursuant to an annual contributions contract executed between HUD and the Housing Authority.

Contractual disputes arose between Weeks and the Housing Authority during construction of the housing; the Housing Authority eventually declared Weeks in default. Weeks filed suit in federal court against the Housing Authority for money damages for breach of contract. Weeks also sued the United States and HUD on the grounds that both are liable for any amounts owed Weeks by the Housing Authority under the contract. Upon separate motions of the Housing Authority and the United States and HUD, the district court dismissed the suits for lack of jurisdiction. The district court found that federal jurisdiction over the Housing Authority could be based neither on a federal question nor on diversity of citizenship. It then found that the Oglala Sioux Tribal Court must initially determine whether it has jurisdiction over Weeks' suit against the Housing Authority. The district court also found that jurisdiction over Weeks' claims against the United States and HUD lies exclusively with the Claims Court. This appeal followed.

I. Federal Jurisdiction over the Housing Authority

Waiver of sovereign immunity

Weeks contends that federal jurisdiction over this action exists because the "sue and be sued" clause contained in the tribal ordinance chartering the Housing Authority represents a waiver of sovereign immunity, does not limit that waiver of immunity to any particular court, and therefore is a consent to be sued in any forum. The Housing Authority does not dispute that it is amenable to suit, but maintains that its waiver of sovereign immunity cannot confer subject matter jurisdiction on the federal district court.

Indian tribes have long been recognized as possessing the common-law immunity from suit traditionally enjoyed by sovereign powers. Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 1677, 56 L.Ed.2d 106 (1978) (citing, inter alia, Puyallup Tribe, Inc. v. Department of Game of Washington, 433 U.S. 165, 172-73, 97 S.Ct. 2616, 2621, 53 L.Ed.2d 667 (1977)). This immunity from suit derives from the position of the Indian tribes as once--independent nations with "inherent powers of a limited sovereignty which has never been extinguished." See United States v. Wheeler, 435 U.S. 313, 322, 98 S.Ct. 1079, 1085, 55 L.Ed.2d 303 (1978) (quoting F. Cohen, Handbook of Federal Indian Law 122 (1948)). It has been held that a housing authority, established by a tribal council pursuant to its powers of self-government, is a tribal agency. Dubray v. Rosebud Housing Authority, 565 F.Supp. 462, 465-66 (D.S.D.1983). As an arm of tribal government, a tribal housing authority possesses attributes of tribal sovereignty, id., and suits against an agency like the Housing Authority normally are barred absent a waiver of sovereign immunity. Cf. Wilson v. Turtle Mountain Band of Chippewa Indians, 459 F.Supp. 366, 368-69 (D.N.D.1978) (suit against tribal housing authority under the Indian Civil Rights Act, 25 U.S.C. Secs. 1301-03, barred by tribe's sovereign immunity).

Waiver of sovereign immunity by an Indian tribe recently has been addressed by this court. In American Indian Agricultural Credit Consortium, Inc. v. Standing Rock Sioux Tribe, 780 F.2d 1374 (8th Cir.1985), in the context of a breach of an action by a non-Indian against an Indian tribe seeking recovery on a loan, we reiterated that to be effective a tribe's waiver of sovereign immunity must be unequivocally expressed. American Indian Agricultural Credit, 780 F.2d at 1378 (following Santa Clara Pueblo v. Martinez, 436 U.S. at 58-59, 98 S.Ct. at 1677). The tribal ordinance chartering the Housing Authority provides, as part of the Housing Authority's powers, that

[t]he Council hereby gives its irrevocable consent to allowing the Authority to sue and be sued in its corporate name, upon any contract, claim or obligation arising out of its activities under this ordinance and hereby authorizes the Authority to agree by contract to waive any immunity from suit which it might otherwise have; but the Tribe shall not be liable for the debts or obligations of the Authority, except insofar as expressly authorized hereafter by the Council.

Ordinance Chartering the Oglala Sioux Housing Authority, Article V, Sec. 2 (1976). ² A "sue and be sued" clause such as is set forth in the tribal ordinance quoted above has been recognized as constituting an express waiver of sovereign immunity. See, e.g., American Indian Agricultural Credit, 780 F.2d at 1379 (quoting with approval the "sue or be sued" clause at issue in Namekagon Development Co., Inc. v. Bois Forte Reservation Housing Authority, 395 F.Supp. 23 (D.Minn.1974) (Heaney, J., sitting by designation), aff'd 517 F.2d 508 (8th Cir.1975); Maryland Casualty Co. v. Citizens National Bank of West Hollywood, 361 F.2d 517, 521-22 (5th Cir.), cert. denied, 385 U.S. 918, 87 S.Ct. 227, 17 L.Ed.2d 143 (1966) (tribal corporation validly waived sovereign immunity through use of "sue and be sued" clause, though waiver qualified to bar attachment of property).

However, the Housing Authority's waiver of sovereign immunity under the tribal ordinance's "sue and be sued" language does not by fiat confer jurisdiction on the federal courts. Weeks' reliance on authority that states that an Indian tribe's consent to suit is not limited to suit in tribal court but could extend to suit in federal court, see Namekagon, 395 F.Supp. at 28-29, to demonstrate that the Housing Authority's waiver makes it universally amenable to suit in any forum Weeks selects is misplaced. Mere consent to be sued, even consent to be sued in a particular court, does not alone confer jurisdiction upon that court to hear a case if that court would not otherwise have jurisdiction over the suit. See R.C. Hedreen Co. v. Crow Tribal Housing Authority, 521 F.Supp. 599, 606 (D.Mont.1981) (upon express waiver of sovereign immunity, suit may be brought in any court of competent jurisdiction) (emphasis added); cf. Nelson v. Dubois, 232 N.W.2d 54, 57 (N.D.1975) (in suit by non-Indians against Indian for tort arising on reservation, Indian defendant's consent to state court as forum was insufficient to confer jurisdiction if state court otherwise found to lack jurisdiction over action). But see Three Affiliated Tribes of the Fort Berthold Reservation v. Wold Engineering, --- U.S. ----, 106 S.Ct. 2305, 90 L.Ed.2d 881 (1986) (reversing North Dakota Supreme Court's determination that state court jurisdiction over Indian was lacking). The Housing Authority's waiver only nullifies the Housing Authority's use of sovereign immunity as a possible defense to Weeks' breach of contract action. That waiver of immunity does not determine in what forum a suit against the Housing Authority may properly be brought. It is therefore necessary to separately determine whether the federal court has subject matter jurisdiction over this suit.

Federal question jurisdiction

Under 28 U.S.C. Sec. 1331, a federal district court has "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. Sec. 1331 (1980). A non-frivolous claim of a right or remedy under a federal statute is sufficient to invoke federal question jurisdiction. Northwest South Dakota Production Credit Association v. Smith, 784 F.2d 323, 325 (8th Cir.1986). However, the fact that the Housing Authority is created by and operates on behalf of an Indian tribe is not alone sufficient to find the existence of a federal question. See Martinez v. Southern Ute Tribe, 249 F.2d 915, 917 (10th Cir.1957), cert. denied, 356 U.S. 960, 78 S.Ct. 998, 2 L.Ed.2d 1067 (1958) (federal question jurisdiction does not exist merely because an Indian is a party or because the suit involves Indian property or contracts). Rather, the rights which Weeks seeks to enforce are based on its construction contract with the Housing Authority, interpretation of which is governed by local, not federal, law. See Begay v. Kerr-McGee Corp., 682 F.2d 1311, 1315, (9th Cir.1982); Schantz v. White Lightning, 502 F.2d 67, 69 (8th Cir.1974); Superior Oil Co. v. Merritt, 619 F.Supp. 526, 529 (D.Utah 1985). Because Weeks' breach of contract claim does not require interpretation of the validity, construction or effect of federal law, no subject matter jurisdiction over the Housing Authority based on a federal question exists here. ³

Diversity jurisdiction

A federal court has original jurisdiction over a civil action if the parties are of diverse state citizenship and the courts of the state in which the federal court sits can entertain the suit. ⁴ See 28 U.S.C. Sec. 1332(a)(1) (1976); Woods v. Interstate...