Graham v. Applied Geo Technologies, Inc.

593 F.Supp.2d 915

Johnny L. GRAHAM, Plaintiff v. APPLIED GEO TECHNOLOGIES, INC. d/b/a Chahta Enterprise, Allen Hines, Tim Nelson, Michael Miller, and Sandra Booker, in their Individual and Official Capacities as President, Director of Administration, Vice President of Operations, and Senior Quality Manager, Respectively, Defendants.

Civil Action No. 4:08CV26TSL-LRA.

United States District Court, S.D. Mississippi, Eastern Division.

December 19, 2008.

COPYRIGHT MATERIAL OMITTED

Amanda Green Alexander, Edward Owens Watson, Alexander & Watson, PA, Jackson, MS, for Plaintiff.

Herbert C. Ehrhardt, Jennifer R. Chrestman, Timothy W. Lindsay, Ogletree, Deakins, Nash, Smoak & Stewart, PC, Ridgeland, MS, Carl Bryant Rogers, Van Amberg, Rogers, Yepa, Abeita and Gomez, LLP, Santa Fe, NM, for Defendants.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This cause is before the court on the motion of defendants Applied Geo Technologies, Inc. (AGT), Allen Hines, Tim Nelson, Michael Miller and Sandra Booker to dismiss plaintiff's complaint for failure to exhaust tribal remedies in the courts of the Mississippi Band of Choctaw Indians. Plaintiff Johnny L. Graham has responded to the motion and the court, having considered the memoranda of authorities, together with attachments, submitted by the parties, concludes that the motion should be granted.

Defendant AGT was established by the Mississippi Band of Choctaw Indians as a for-profit "tribal entity" for the purpose of competing for federal contracts as a prime contractor. Plaintiff Johnny Graham, an African-American employee of AGT, filed this lawsuit in this court against AGT and four of its managers for alleged race discrimination and retaliation in violation of Title VII, 42 U.S.C. § 2000e et seq., and 42 U.S.C. § 1981.¹ Defendants have moved to dismiss or stay plaintiff's suit based on the tribal exhaustion doctrine.

In National Farmers Union Insurance Cos. v. Crow Tribe of Indians, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985), the case in which the Supreme Court established the tribal exhaustion doctrine, the Court held that the extent of tribal sovereignty is a matter of federal law for the purposes of 28 U.S.C. § 1331 and therefore, federal courts have subject matter jurisdiction under § 1331 to determine whether a tribal court has exceeded its lawful jurisdiction. But the Court also held that as a matter of comity, before a party may challenge the tribal court's jurisdiction in federal court, he must first exhaust his remedies in the tribal court. Id. at 855-57, 105 S.Ct. at 2453-54. The Court explained its reasoning and the policy considerations supporting its decision as follows:

[T]he existence and extent of a tribal court's jurisdiction will require a careful examination of tribal sovereignty, the extent to which that sovereignty has been altered, divested, or diminished, as well as a detailed study of relevant statutes, Executive Branch policy as embodied in treaties and elsewhere, and administrative or judicial decisions.

We believe that examination should be conducted in the first instance in the Tribal Court itself. Our cases have often recognized that Congress is committed to a policy of supporting tribal self-government and self-determination. That policy favors a rule that will provide the forum whose jurisdiction is being challenged the first opportunity to evaluate the factual and legal bases for the challenge. Moreover the orderly administration of justice in the federal court will be served by allowing a full record to be developed in the Tribal Court before either the merits or any question concerning appropriate relief is addressed. The risks of ... [a] "procedural nightmare" ... will be minimized if the federal court stays its hand until after the Tribal Court has had a full opportunity to determine its own jurisdiction and to rectify any errors it may have made.

Id. at 856-57, 105 S.Ct. at 2454.

The Supreme Court reaffirmed the tribal exhaustion doctrine in Iowa Mutual Insurance Co. v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987). There, the Court extended the doctrine to diversity cases, and in doing so, reiterated the bases for the doctrine, observing that "Indian tribes retain `attributes of sovereignty over both their members and their territory' to the extent that sovereignty has not been withdrawn by federal statute or treaty," id. at 14, 107 S.Ct. at 975 (quoting United States v. Mazurie, 419 U.S. 544, 557, 95 S.Ct. 710, 42 L.Ed.2d 706 (1975)), that "[t]ribal courts play a vital role in tribal self-government, and the Federal Government has consistently encouraged their development," id. at 14, 107 S.Ct. at 975, and that "unconditional access to the federal forum would place it in direct competition with the tribal courts, thereby impairing the latter's authority over reservation affairs." Id. at 15, 107 S.Ct. at 976. Thus, the Court held, "the federal policy supporting tribal self-government directs a federal court to stay its hand in order to give the Tribal Court a `full opportunity to determine its own jurisdiction.'" Id. at 16, 107 S.Ct. at 976 (quoting National Farmers, 471 U.S. at 857, 105 S.Ct. at 2454).

In sum, "while the federal courts ultimately have jurisdiction to determine the limits of a tribal court's jurisdiction, the tribal exhaustion rule holds that tribal courts, which `play a vital role in tribal self-government,' must be permitted the first opportunity to resolve challenges to their jurisdiction without federal court interference." Williams-Willis v. Carmel Financial Corp., 139 F.Supp.2d 773, 777 (S.D.Miss.2001) (citing Iowa Mutual, 480 U.S. at 14, 107 S.Ct. at 976, and Strate v. A-1 Contractors, 520 U.S. 438, 451, 117 S.Ct. 1404, 1411, 137 L.Ed.2d 661 (1997)). See also Basil Cook Enters., Inc. v. St. Regis Mohawk Tribe, 117 F.3d 61, 65 (2d Cir.1997) (under doctrine of exhaustion of tribal remedies, "parties who challenge, under federal law, the jurisdiction of a tribal court to entertain a cause of action must first present their claim to the tribal court before seeking to defeat tribal jurisdiction in any collateral or parallel federal court proceeding"). Moreover, while the tribal exhaustion rule is "prudential rather than jurisdictional, `[e]xhaustion is mandatory ... when a case fits within the policy.'" Malaterre v. Amerind Risk Mgmt., 373 F.Supp.2d 980, 983 (D.N.D.2005) (citing Gaming World Int'l, Ltd. v. White Earth Band of Chippewa, 317 F.3d 840, 849 (8th Cir.2003)).²

"[W]hen a colorable claim of tribal court jurisdiction has been asserted, a federal court may (and ordinarily should) give the tribal court precedence and afford it a full and fair opportunity to determine the extent of its own jurisdiction over a particular claim or set of claims." Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Housing Auth., 207 F.3d 21, 31 (1st Cir. 2000). The issue here, then, is whether a colorable claim of tribal court jurisdiction has been asserted.

"The tribal exhaustion doctrine is not ... applicable to every case to which a tribe or a tribe member is a party." Bank One, N.A. v. Lewis, 144 F.Supp.2d 640, 643-644 (S.D.Miss.2001), aff'd sub nom., Bank One v. Shumake, 281 F.3d 507 (5th Cir.2002); see also Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Housing Auth., 207 F.3d 21, 31 (1st Cir.2000) ("[T]he tribal exhaustion doctrine does not apply mechanistically to every claim brought by or against an Indian tribe."). In Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981), the Supreme Court set forth the "general proposition" that "the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe." 450 U.S. at 565, 101 S.Ct. at 1258 (emphasis added). The Court recognized two exceptions to this "main rule," as follows: Tribes may exercise civil jurisdiction over nonmembers when (1) nonmembers "enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements"; or (2) nonmembers engage in conduct on fee lands within a tribal reservation that "threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe." Id. at 565-66, 101 S.Ct. at 1258. Thus, while a tribal court generally does not have jurisdiction over nonmember parties, there is an exception in that the tribe may regulate activities of nonmembers who enter consensual relationships with the tribe or its members through commercial dealing, contracts, leases, or other arrangements. TTEA v. Ysleta del Sur Pueblo, 181 F.3d 676 (5th Cir.1999) (citing Montana).

"Civil disputes arising out of the activities of non-Indians on reservation lands almost always require exhaustion if they involve the tribe." Ninigret Dev. Corp., 207 F.3d at 32. See Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959) (stating that the Court has "consistently guarded the authority of Indian governments over their reservations...."); Smith v. Salish Kootenai College, 434 F.3d 1127 (9th Cir.2006) (en banc) (explaining that tribal courts may exercise jurisdiction where nonmembers are the plaintiffs and the claims arise out of commercial activities within the reservation); Elliott v. White Mountain Apache Tribal Court, No. CIV 05-4240-PCT-MHM, 2006 WL 3533147, 3 (D.Ariz. Dec. 6, 2006) (noting that in determining tribal jurisdiction, courts look first to the party status of the nonmember, i.e., whether the nonmember is a plaintiff or defendant in tribal court, and second, "perhaps to a lesser extent, whether the events giving rise to the cause of action occurred within the reservation").

Indeed, plaintiff does not dispute that a claim against a tribal defendant on a cause of action arising on reservation lands in connection with a consensual relationship entered with the tribe, including an employment relationship, is subject to the rule of...