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Ute Indian Tribe of Uintah and Ouray Reservation v. Lawrence

United States Court of Appeals, Tenth Circuit

November 7, 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,
v.
HONORABLE BARRY G. LAWRENCE, District Judge, Utah Third Judicial District Court, in his individual and offical 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 Defendant-Appellee, Lynn D. Becker.

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

          Before HARTZ and EBEL, Circuit Judges.

         This matter is before the court on appellee Lynn D. Becker's Petition for Panel Rehearing and Request for Rehearing En Banc. We also have a response from the appellants.

         Upon consideration, that part of the petition seeking panel rehearing is granted in part and only to the limited extent of the changes made to the attached revised Opinion. The request for panel rehearing is otherwise denied. The clerk is directed to file the amended decision attached to this order effective today's date.

         The Petition and the response were also circulated to all the judges of the court who are in regular active service and who are not recused. See Fed. R. App. P. 35(a). As no judge on the original panel or the en banc court requested that a poll be called the request for en banc rehearing is denied.

          ORDER

          HARTZ, CIRCUIT JUDGE.

         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]

         II. DISCUSSION

         We review de novo the district court's conclusion that it lacked jurisdiction. See Kaw Nation ex rel. McCauley v. ...


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