Plains Commerce Bank v. Long Family--Indian Law--Decision of June 25

In this Indian Law (the way it is designated in American law) case, the Court held, 5-4, that the Native American tribal court exceeded its jurisdiction by awarding damages for discrimination against a member of the tribe (the Long Family) by a bank which allegedly had made it harder for Native Americans to buy property than non-Native Americans. On the issue of whether the bank had standing to pursue its claim in the federal court system, all nine members of the Court were in agreement--they did. This case, as my summary says, implicates important aspects of Indian Law and especially the principle of how broadly the tribal courts can reach into the affairs of non-tribal entities.

With this as a background, the following factual and then legal summary ought to be, if not hyaline, at least translucent.

Background Facts

"Petitioner Plains Commerce Bank (Bank), a non-Indian bank, sold land it owned in fee simple on a tribal reservation to non-Indians. Respondents the Longs, an Indian couple who had been leasing the land with an option to purchase, claim the Bank discriminated against them by selling the parcel to nonmembers of the Tribe on terms more favorable than the Bank offered to sell it to them. The couple sued in Tribal Court, asserting, inter alia, discrimination, breach-of-contract, and bad-faith claims. Over the Bank's objection, the Tribal Court concluded that it had jurisdiction and proceeded to trial, where a jury ruled against the Bank on three claims, including the discrimination claim. The court awarded the Longs damages plus interest. In a supplemental judgment, the court also gave the Longs an option to purchase that portion of the fee land they still occupied, nullifying the Bank's sale of the land to non-Indians. After the Tribal Court of Appeals affirmed, the Bank filed suit in Federal District Court, contending that the tribal judgment was null and void because, as relevant here, the Tribal Court lacked jurisdiction over the Longs' discrimination claim. The District Court granted the Longs summary judgment, finding tribal court jurisdiction proper because the Bank's consensual relationship with the Longs and their company (also a respondent here) brought the Bank within the first category of tribal civil jurisdiction over nonmembers outlined in Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493. The Eighth Circuit affirmed, concluding that the Tribe had authority to regulate the business conduct of persons voluntarily dealing with tribal members, including a nonmember's sale of fee land."

After arguing that the bank had Article III standing to pursue this challenge, a point on which the Court was unanimous, Chief Justice Roberts turned to the substantive part of the case, whether the Tribal Court had jurisdiction to adjudicate a discrimination claim concerning the non-Indian Bank's sale of its fee land. In short, the Tribal Court didn't have this jurisdiction.

"The general rule that tribes do not possess authority over non-Indians who come within their borders, Montana v. United States, 450 U.S. 544, 565, 101 S.Ct. 1245, restricts tribal authority over nonmember activities taking place on the reservation, and is particularly strong when the nonmember's activity occurs on land owned in fee simple by non-Indians, Strate v. A-1 Contractors, 520 U.S. 438, 446, 117 S.Ct. 1404, 137 L.Ed.2d 661. Once tribal land is converted into fee simple, the tribe loses plenary jurisdiction over it. See County of Yakima v. Confederated Tribes and Bands of Yakima Nation, 502 U.S. 251, 267-268, 112 S.Ct. 683, 116 L.Ed.2d 687. Moreover, when the tribe or its members convey fee land to third parties, the tribe “loses any former right of absolute and exclusive use and occupation of the conveyed lands.” South Dakota v. Bourland, 508 U.S. 679, 689, 113 S.Ct. 2309, 124 L.Ed.2d 606. Thus, “the tribe has no authority itself ... to regulate the use of fee land.” Brendale v. Confederated Tribes and Bands of Yakima Nation, 492 U.S. 408, 430, 109 S.Ct. 2994, 106 L.Ed.2d 343. Montana provides two exceptions under which tribes may exercise “civil jurisdiction over non-Indians on their reservations, even on non-Indian fee lands,” 450 U.S., at 565, 101 S.Ct. 1245: (1) “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,” ibid.; and (2) a tribe may exercise “civil authority over the conduct of non-Indians on fee lands within the 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 566, 101 S.Ct. 1245. Neither exception authorizes tribal courts to exercise jurisdiction over the Longs' discrimination claim."

The essence of the Court's decision was that the Tribal Court lacked jurisdiction to hear a discrimination claim against the Bank because at issue was the sale of the Bank's fee land, which doesn't fit into the exceptions recognized in the Montana case.

"The Tribal Court lacks jurisdiction to hear that claim because the Tribe lacks the civil authority to regulate the Bank's sale of its fee land, and “a tribe's adjudicative jurisdiction does not exceed its legislative jurisdiction,” Strate, supra, at 453, 117 S.Ct. 1404. Montana does not permit tribes to regulate the sale of non-Indian fee land. Rather, it permits tribal regulation of nonmember conduct inside the reservation that implicates the tribe's sovereign interests. 450 U.S., at 564-565, 101 S.Ct. 1245. With only one exception, see Brendale, supra, this Court has never “upheld under Montana the extension of tribal civil authority over nonmembers on non-Indian land,” Nevada v. Hicks, 533 U.S. 353, 360, 121 S.Ct. 2304, 150 L.Ed.2d 398. Nor has the Court found that Montana authorized a tribe to regulate the sale of such land. This makes good sense, given the limited nature of tribal sovereignty and the liberty interests of nonmembers. Tribal sovereign interests are confined to managing tribal land, see Worcester v. Georgia, 6 Pet. 515, 561, 8 L.Ed. 483, protecting tribal self-government, and controlling internal relations, see Montana, supra, at 564, 101 S.Ct. 1245. Regulations approved under Montana all flow from these limited interests. See, e.g., Duro v. Reina, 495 U.S. 676, 696, 110 S.Ct. 2053, 109 L.Ed.2d 693. None of these interests justified tribal regulation of a nonmember's sale of fee land. The Tribe cannot justify regulation of the sale of non-Indian fee land by reference to its power to superintend tribal land because non-Indian fee parcels have ceased to be tribal land. Nor can regulation of fee land sales be justified by the Tribe's interest in protecting internal relations and self-government. Any direct harm sustained because of a fee land sale is sustained at the point the land passes from Indian to non-Indian hands. Resale, by itself, causes no additional damage. Regulating fee land sales also runs the risk of subjecting nonmembers to tribal regulatory authority without their consent. Because the Bill of Rights does not apply to tribes and because nonmembers have no say in the laws and regulations governing tribal territory, tribal laws and regulations may be applied only to nonmembers who have consented to tribal authority, expressly or by action. Even then the regulation must stem from the tribe's inherent sovereign authority to set conditions on entry, preserve self-government, or control internal relations. There is no reason the Bank should have anticipated that its general business dealings with the Longs would permit the Tribe to regulate the Bank's sale of land it owned in fee simple. The Longs' attempt to salvage their position by arguing that the discrimination claim should be read to challenge the Bank's whole course of commercial dealings with them is unavailing. Their breach-of-contract and bad-faith claims involve the Bank's general dealings; the discrimination claim does not. The discrimination claim is tied specifically to the fee land sale. And only the discrimination claim is before the Court."

In brief, the conduct covered by the Montana exception must not simply injure a Tribe; it must "imperil the subsistence" of that Tribe. Here we are splitting hairs, but that is the stuff of judicial determination. The Tribe lost, which will, I am sure, set off all kinds of objections and regret in the tribal structures not only in South Dakota but throughout this land, but the Court has spoken, if only by 5-4 margin [now, in the last few days of the term, the 5-4 cases are many...].

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