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Ute Indian Tribe of Uintah and Ouray Reservation v. Lawrence

United States Court of Appeals, Tenth Circuit

August 25, 2017

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; SHAUN CHAPOOSE, Chairman of the Uintah and Ouray Tribal Business Committee; UTE ENERGY HOLDINGS, a Delaware LLC, Plaintiffs - Appellants,
HONORABLE BARRY G. LAWRENCE, District Judge, Utah Third Judicial District Court, in his individual and official capacities; LYNN D. BECKER, Defendants - Appellees.

         Appeal from the United States District Court for the District of Utah (D.C. No. 2:16-CV-00579-RJS)[*]

          Frances C. Bassett (Jeffrey S. Rasmussen, Thomas W. Fredericks, Jeremy J. Patterson, and Thomasina Real Bird, with him on the briefs), Fredericks Peebles & Morgan, Louisville, Colorado, for Ute Indian Tribe of the Uintah and Ouray Reservation, Utah, Plaintiffs-Appellants.

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

          Brent M. Johnson and Keisa L. Williams, Utah Administrative Office of the Courts, Salt Lake City, Utah, for Third-Party Defendant-Appellee, Judge Barry G. Lawrence.

          Before HARTZ and EBEL, Circuit Judges.


         This appeal arises from a contract dispute between Lynn Becker and the Ute Indian Tribe of the Uintah and Ouray Reservation.[1] Our concern, however, is not the merits of the dispute but jurisdiction. Mr. Becker, who is not an Indian, pursued his claim against the Tribe in Utah state court. The Tribe responded by filing suit in the United States District Court for the District of Utah, asserting, among other things, that the state court lacked subject-matter jurisdiction to hear the case. But the federal district court in turn held that it lacked jurisdiction to consider the Tribe's challenge to the jurisdiction of the state court. We respectfully disagree with the district court. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse and remand for further proceedings. We hold 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.

         I. BACKGROUND

         The contract at issue is the Independent Contractor Agreement (the Contract) between the Tribe and Mr. Becker, a former manager in the Tribe's Energy and Minerals Department. Mr. Becker claims that the Tribe breached the Contract by failing to pay him 2% of net revenue distributed to Ute Energy Holdings, LLC from Ute Energy, LLC. After Mr. Becker filed suit in Utah state court, the Tribe filed this suit against him and Judge Barry Lawrence, the state judge presiding over Mr. Becker's suit, seeking declarations that (1) the state court lacks subject-matter jurisdiction over the dispute, (2) the Contract is void under federal and tribal law, and (3) there is no valid waiver of the Tribe's sovereign immunity for the claims asserted in state court. The Tribe also sought a preliminary injunction ordering the defendants to refrain from further action in the state-court proceedings. The Tribe invoked jurisdiction under 28 U.S.C. § 1331 (federal-question jurisdiction) and § 1362 (federal question when suit brought by an Indian tribe). Jurisdiction under § 1331 is limited to "actions arising under the Constitution, laws, or treaties of the United States"; and jurisdiction under § 1362 requires that "the matter in controversy arise[] under the Constitution, laws, or treaties of the United States." After a hearing on the Tribe's request for a preliminary injunction, the district court concluded that it lacked subject-matter jurisdiction and dismissed the suit as moot.[2]


         We review de novo the district court's conclusion that it lacked jurisdiction. See Kaw Nation ex rel. McCauley v. Lujan, 378 F.3d 1139, 1142 (10th Cir. 2004).

         The issue before us must be examined in light of a long history of federal law regarding Indian affairs. "[T]he Constitution grants Congress broad general powers to legislate in respect to Indian tribes, powers that . . . have [been] consistently described as plenary and exclusive." United States v. Lara, 541 U.S. 193, 200 (2004) (internal quotation marks omitted). In particular, "the policy of leaving Indians free from state jurisdiction and control is deeply rooted in the Nation's history." McClanahan v. State Tax Comm'n of Ariz., 411 U.S. 164, 168 (1973) (brackets and internal quotation marks omitted). In Worcester v. State of Georgia, 31 U.S. 515 (1832), the Supreme Court considered a challenge to Georgia's attempt to regulate activity on the Cherokee Reservation. The State sought to punish a federally licensed non-Indian missionary for his refusal to leave the Reservation. Chief Justice Marshall declared that "[t]he Cherokee nation . . . is a distinct community occupying its own territory, . . . in which the laws of Georgia can have no force, " and that "[t]he whole intercourse between the United States and this nation, is, by our constitution and laws, vested in the government of the United States." Id. at 561. Although the Supreme Court has since "departed from Chief Justice Marshall's view that the laws of a State can have no force within reservation boundaries, " Nevada v. Hicks, 533 U.S. 353, 361 (2001) (brackets and internal quotation marks omitted), federal supremacy over tribes has remained a constant, see Michigan v. Bay Mills Indian Cmty., 134 S.Ct. 2024, 2030 (2014) ("[T]he tribes are subject to plenary control by Congress."); cf. United States v. Jicarilla Apache Nation, 564 U.S. 162, 175 (2011) ("Throughout the history of the Indian trust relationship, we have recognized that the organization and management of the trust is a sovereign function subject to the plenary authority of Congress.").

         Thus, federal law regulates a tribe's right to exercise authority over non-Indians. See Nat'l Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845, 851-52 (1985) (on "questions concerning the extent to which Indian tribes have retained the power to regulate the affairs of non-Indians . . ., the governing rule of decision has been provided by federal law."). With respect to tribal-court jurisdiction in particular, "whether a tribal court has adjudicative authority over nonmembers is a federal question." Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 324 (2008). When parties challenge tribal jurisdiction, "it is federal law on which they rely as a basis for the asserted right of freedom from Tribal Court interference." Nat'l Farmers Union, 471 U.S. at 853.

         Similarly, the Supreme Court has made clear that state adjudicative authority over Indians for on-reservation conduct is greatly limited by federal law. (The parties do not dispute that Mr. Becker's contract claim arose on the reservation.) The leading decision on the matter in the civil context is Williams v. Lee, 358 U.S. 217, 217-18, 223 (1959), which held that an Arizona state court could not exercise civil jurisdiction over a suit brought by a non-Indian store operator against a Navajo couple to collect on a debt incurred at a store located on the reservation. To rule otherwise, the Court said, ...

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