Plains Commerce Bank v. Long Family

Just to be clear at the outset--this case has nothing to do with me or my family. It relates to a South Dakota Native American family which had a series of dealings with a SD bank over the years, culminating in the foreclosure and seizing of "Long land" by the bank. But the real issue in this case is a thorny one indeed--the overlapping and independent authority of tribal vs. federal courts in adjudicating claims in which one party to the claim is Native American (the Longs) and one party is a nonmember of an Indian Nation (the Bank). Let me give a few facts of this case and then discuss the most important Supreme Court precedent that helps explain the issues in this case.

Relevant Facts

In Dec. 1996 the Bank and the Long Company entered into two agreements signed at the Bank's off-reservation office: (1) a loan agreement providing that the Bank would loan money to the Long Company upon certain conditions; and (2) a two-year lease with the option for the Long Company to purchase certain ranching real estate on the Cheyenne River Sioux Tribe reservation owned by the Bank, which land had served as collateral for the Bank and was transferred to the Bank in lieu of a foreclosure by a non-tribal member.

The Long Company continued in possession of the ranching real estate during the two years of the lease, but it never exercised the option to purchase it. In 1999 the Bank moved to sell the remaining unoccupied portion of the real estate after pursuing an action for forcible entry and detainer (i.e., to get possession of the real estate). The Longs filed suit in tribal court to restrain the completion of the real estate sale. The Longs then amended their complaint and asserted several additional causes of action--including discrimination and breach of contract.

At issue for them was a letter sent by the bank that the Long's interpreted as offering less favorable terms on the ranching real estate than would be offered to non-Indian folk. These less favorable terms were based on "possible jurisdictional problems" posed the the Long Company's status as an "Indian owned entity on the reservation." Though this isn't a crystalline letter, the Long's managed to convince a tribal jury that the Bank had discriminated against them to the tune of $750,000. The facts get considerably more complicated than this, but the real issue in the case won't be the facts but rather whether the tribal court had jurisdiction to render such a judgment.

The Law of the Case--Montana

Attempting to draw the line between authority of Native American courts and Federal/State courts has always been a tricky undertaking. A few principles of what is known in the field as "Indian law" are appropriate to mention here. (1) In recognition of the status of Indian tribes as distinct cultural and political communities, the federal government has long encouraged tribal self-government. The tribes do not possess full attributes of sovereignty; the rights they retain relate to internal powers necessary to their self government which have not been withdrawn by the federal government; (2) The authority of the tribes does not, in general, reach to nontribal members. But, in Montana v. US, 450 US 544 (1981), the Supreme Court recognized two exceptions to this rule:

"A tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements. A tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct 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.

As the lower court said (491 F3d 878 (8th Cir 2007)), the unifying principle behind both exceptions is that absent express congressional delegation, a tribe has civil authority over non Indians only where such authority is "necessary to protect tribal self-government or to control internal relations." The question before the US Supreme Court is whether the tribal court's $750,000 judgment against the bank, a nontribal member, exceeds the grant of authority recognized in the language bolded above.

Answering the Question--At the 8th Circuit

The 8th Circuit had two questions to answer: (a) whether the relationship between the Bank and the Long's company was a "consensual relationship" and (b) whether the bringing and adjudicating a suit for discrimination was one of the "other means" mentioned in the first line above that was open to tribal courts to enforce this consensual relationship. The first question was relatively easy for the court to answer. A contractual relationship in a loan agreement was, in fact, a consensual relationship. But then the more difficult question followed. Is a suit for discrimination the right vehicle for a tribal court to use in enforcing the Long's rights? Is it an "other means?" Or is the tribal court's authority confined to more "regulatory" activities?

The US Supreme Court has set the context further through its Strate case (520 US 438 (1997)). In this case a nonmember brought a lawsuit in tribal court against another nonmember for injuries sustained in an accident on a state highway within an Indian reservation. Even though the defendant in that case had a "consensual relationship" with a tribe (as a subcontractor), the lawsuit didn't arise out of that relationship. Rather, it was a purely accidental encounter between two strangers. As such, the tribal court had no tort authority over the case.

But here, as the 8th Circuit argued, the Longs' discrimination claim arose directly from their preexisting commercial relationship with the bank. In this case the tribal court decided that the relationship was not one stranger to another, as in Strate, but that there was a nexus of relationship that ought to give jurisdiction to the tribal court.

The Question Before the Court--and Conclusion

With these facts and law in mind, we can now understand how the question was presented by the Bank in its Petition for Certiorari. Here is how they first stated the issue generally:

"Indian tribal courts inherently lack jurisdiction to hear claims between members and nonmembers. In Montana v. U.S., 450 U.S. 544, 565 (1981), this Court identified two narrow exceptions. The first relates to regulation of nonmembers who enter into consensual relationships with the tribe or its members. The second relates to civil authority concerning activity that directly affects the tribe's political integrity, economic security, health, or welfare. This Court, however, has never upheld tribal-court, civil-adjudicatory jurisdiction over a nonmember defendant under the first Montana exception, and expressly left this question open in Nevada v. Hicks, 533 U.S. 353, 360 (2001)."

Thus, the question is, as presented by the Bank and accepted by the Court:

"Whether Indian tribal courts have subject-matter jurisdiction to adjudicate civil tort claims as an “other means” of regulating the conduct of a nonmember bank owning fee-land on a reservation that entered into a private commercial agreement with a member-owned corporation?"

"Indian" law, like most of law, moves very slowly. I wouldn't be surprised if the Court allows this slight "expansion" of tribal court jurisdiction, even though it might be at the expense of a bank....

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