Whiteco Metrocom v. Yankton Sioux Tribe

• Decision Date: 12 October 1995
• Docket Number: No. CIV 94-4259.,CIV 94-4259.
• Parties: WHITECO METROCOM DIVISION OF WHITECO INDUSTRIES, INC., a Corporation, Plaintiff, v. YANKTON SIOUX TRIBE, Defendant.
• Court: U.S. District Court — District of South Dakota

902 F. Supp. 199

WHITECO METROCOM DIVISION OF WHITECO INDUSTRIES, INC., a Corporation, Plaintiff, v. YANKTON SIOUX TRIBE, Defendant.

No. CIV 94-4259.

United States District Court, D. South Dakota, Southern Division.

October 12, 1995.

Jack Gunvordahl, Gunvordahl & Gunvordahl, Burke, SD and Stanley E. Whiting, Winner, SD, for Plaintiff.

Charles Thomas Abourezk, Abourezk Law Offices, Rapid City, SD, for Defendant.

MEMORANDUM OPINION AND ORDER

PIERSOL, District Judge.

Plaintiff brought suit against the Defendant Tribe for breach of contract pursuant to seven contracts entered into between Plaintiff and the Tribe's Ft. Randall Casino for billboards to be placed along public highways in an effort to generate business for the Casino. The contracts were signed by the general manager of the Casino on June 4 and September 10 of 1993, and approximately six months later, the Tribe informed Plaintiff that the Yankton Sioux Tribe Business and Claims Committee had not approved the contracts prior to signing, and, therefore, the contracts were "terminated." Doc. 7 at Ex. B. Plaintiff brought the instant action for monies owed under the contracts. Doc. 1. The Tribe moves for dismissal on the grounds of sovereign immunity. Doc. 3.

The Tribe's Motion to Dismiss raises two jurisdictional questions for the Court. First, whether this Court or a tribal court must hear this issue and, second, whether this action is barred by the doctrine of sovereign immunity.

DISMISSAL PURSUANT TO RULE 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) provides for dismissal of an action whenever the court lacks jurisdiction over the subject matter. The Eighth Circuit has distinguished between facial and factual 12(b)(1) motions, stating the standards applicable to motions to dismiss in each instance. In this case, we are concerned with a factual motion:

Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction — its very power to hear the case — there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.

Osborn v. United States, 918 F.2d 724, 730 (8th Cir.1990); Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir.1993).

SUBJECT MATTER JURISDICTION

Federal Courts have original jurisdiction in cases "arising under the Constitution, laws or treaties of the United States." 28 U.S.C. § 1331, and in cases in which there is diversity of citizenship and the matter in controversy exceeds the statutory amount, 28 U.S.C. § 1332. Plaintiff argues that this Court has jurisdiction in this contract dispute pursuant to 28 U.S.C. § 1332 and 25 C.F.R. Part 11.

Diversity jurisdiction does not exist. Section 1332 requires that the parties be "citizens of different states." Although Plaintiff has attempted to demonstrate diversity by alleging in its Complaint that Plaintiff is incorporated in Nebraska and that "Defendant is an Indian Tribe with its principal place of business in South Dakota," Doc. 1 at ¶ 4, it is well settled that "Indian tribes are not citizens of any state for purposes of diversity jurisdiction." Gaines v. Ski Apache, 8 F.3d 726, 729 (10th Cir.1993) (citations omitted). Additionally, the Tribe pleads it is organized pursuant to Section 16 of the Indian Reorganization Act, 25 U.S.C. § 476, and has never incorporated under 25 U.S.C. § 477.¹ Doc. 4 at 1. As a "Section 16" entity, the Tribe is not a citizen of any state for purposes of diversity jurisdiction. Standing Rock Sioux Indian Tribe v. Dorgan, 505 F.2d 1135, 1140 (8th Cir.1974); Gaines, 8 F.3d at 729; Veeder v. Omaha Tribe of Nebr., 864 F.Supp. 889, 898-901 (N.D.Iowa 1994).

Plaintiff bases its second argument for federal jurisdiction on 25 C.F.R. § 11.104(b). National Farmers Union Ins. Co. v. Crow Tribe holds that questions of tribal court jurisdiction over non-Indians should first be addressed in tribal court. 471 U.S. 845, 856, 105 S.Ct. 2447, 2454, 85 L.Ed.2d 818 (1985). Plaintiff argues that it cannot bring suit in the tribal forum because § 11.104(b) requires a Tribe with a C.F.R. court to pass a resolution permitting the Tribe to be sued in that court, and the Yankton Sioux Tribe has never passed such a resolution. Therefore, Plaintiff argues it must pursue its rights in the federal forum because the tribal forum is closed to it.

The Tribe's response to the argument that there is no tribal forum is that "The Yankton Sioux Tribe converted its tribal court system from a `CFR Court' to a tribal court of general jurisdiction in June of 1994." Doc. 4 at 2. This assertion, standing alone and unsupported by any evidence, is an insufficient defense to Plaintiff's claim that jurisdiction does not exist in a tribal forum. Federal regulations provide:

The regulations in this part shall continue to apply to tribes listed under § 11.100(a) until a law and order code which includes the establishment of a court system has been adopted by the tribe ... and the Assistant Secretary — Indian Affairs ... has received a valid tribal enactment identifying the effective date of the code's implementation, and the name of the tribe has been deleted from the listing of Courts of Indian Offenses under § 11.100(a).

25 C.F.R. § 11.100(c) (1994). The Tribe has made no showing that it has met the requirements of § 11.100(c) and, as of this date,² 25 C.F.R. § 11.100(a)(2) retains "Yankton Sioux Tribe (South Dakota)" as one of the tribes to whom the regulations governing Courts of Indian Offenses apply.

The Tenth Circuit has defined one narrow exception³ to the tribal court exhaustion doctrine of National Farmers Union, 471 U.S. at 856, 105 S.Ct. at 2454. In Dry Creek Lodge, Inc. v. Arapahoe & Shoshone Tribes, the court assumed jurisdiction over plaintiffs' constitutional claims because diversity was lacking and plaintiffs had been denied access to the tribal C.F.R. court. 623 F.2d 682, 685 (10th Cir.1980), cert. denied, 449 U.S. 1118, 101 S.Ct. 931, 66 L.Ed.2d 847 reh'g denied, 450 U.S. 960, 101 S.Ct. 1421, 67 L.Ed.2d 385 (1981) (Dry Creek II). The court stated:

There has to be a forum where the dispute can be settled.... There must exist a remedy for parties in the position of plaintiffs to have the dispute resolved in an orderly manner. To hold that they have access to no court is to hold that they have constitutional rights which have no remedy.

Id. The Court declines to follow the Dry Creek exception. This is a simple contract dispute and raises no issues of constitutional magnitude. See Gila River Indian Community v. Henningson, Durham & Richardson, 626 F.2d 708, 714-15 (9th Cir.1980) (finding no federal jurisdiction for simple breach of contract claim brought by Tribe), and Mescalero Apache Tribe v. Martinez, 519 F.2d 479, 481 (10th Cir.1975) (same). It is doubtful that the Dry Creek exception is the law in this Circuit under any circumstances, but that remains to be determined.

Plaintiff also argues that federal question jurisdiction exists for any contract dispute under the Indian Gaming Regulatory Act IGRA, 25 U.S.C. § 2701 et seq. IGRA does not create a private cause of action for individuals. Tamiami Partners, Ltd. v. Miccosukee Tribe, 63 F.3d 1030, 1049 (11th Cir. 1995).

Because I find the Court has no original or diversity jurisdiction in this matter, I do not reach the question of whether the Tribe may utilize the defense of sovereign immunity, except to comment briefly. The Eighth Circuit has held that nothing except an express waiver will satisfy the Supreme Court's mandate in Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 1677, 56 L.Ed.2d 106 (1978), stating that a waiver of sovereign immunity "cannot be implied but must be unequivocally expressed." American Indian Agric. Credit Consortium v. Standing Rock Sioux Tribe, 780 F.2d 1374, 1375 (8th Cir.1985). If this Court had jurisdiction, and if the Tribe was a private party, the facts of this case would create a strong case for the application of the doctrine of estoppel. The misrepresentations on the Credit Application which was signed by the general manager, that the Casino was incorporated by the State of South Dakota and that the general manager had authority to enter into contracts on behalf of the Casino would give support to an estoppel argument by a private party. However, the mandate of Santa Clara Pueblo is clear, and even if the facts supporting a finding of estoppel are present, as...