GM 13-090

Fifth Circuit Upholds Tribal Court Jurisdiction Over Non-Indian Corporation for Civil Tort Claim

On October 3, 2013, the U.S. Court of Appeals for the Fifth Circuit issued a decision, favorable to tribes, which affirmed tribal court jurisdiction over a non-Indian corporation for purposes of a civil tort action. Dolgencorp, Inc. v. Mississippi Band of Choctaw Indians, No. 12-60668. The case involved a claim brought by a minor tribal member against Dolgencorp, Inc. and one of Dolgencorp’s employees – both non-Indian – in tribal court. Dolgencorp operates a general store on the Mississippi Choctaw Reservation under a lease and business license from the Tribe, on land held in trust for the Tribe by the United States. The minor had been placed for an unpaid internship in the store after Dolgencorp agreed to participate in the Tribe’s job training program for youth.

The tort claim alleged that the employee molested the minor tribal member and that Dolgencorp had been negligent in hiring, training, or supervising the employee. Dolgencorp and the employee sought dismissal of the action in tribal court on the basis that the court lacked jurisdiction over them. The tribal court held that it had jurisdiction, and Dolgencorp then filed suit in federal district court seeking to stop the tribal court proceedings. When the district court denied Dolgencorp’s motions to enjoin the tribal court, Dolgencorp appealed to the Fifth Circuit. A three-judge panel affirmed, with one dissenting opinion.

The Fifth Circuit majority opinion is notable for its interpretation and application of Supreme Court precedent on tribal civil jurisdiction over non-Indians, in particular the important case of Montana v. United States (1981). In that case, the Supreme Court significantly curtailed tribal civil regulatory jurisdiction over non-Indians, ruling that, at least on non-Indian fee lands, tribes generally lack inherent regulatory authority over non-Indians. However, the Supreme Court recognized two exceptions: first, the Court held that a tribe may exercise regulatory jurisdiction over non-Indians “who enter into consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements.” Second, the Court held that tribal regulatory jurisdiction also extends to non-members when their conduct “threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.” In the years since Montana was decided, the Supreme Court and other courts have tended to apply the Montana rule precluding jurisdiction broadly, and to construe its two exceptions narrowly.

In this case, both the district court and the Fifth Circuit held that the tribal court had jurisdiction to hear the tort claim under the first Montana exception, since the non-Indian corporation had willingly participated in the Tribe’s job training program. The Fifth Circuit majority also found, as required by Montana, that there was a sufficient connection between the minor’s tort claims and the consensual relationship to justify tribal court jurisdiction to hear the tort claims. The opinion stated: “In essence, a tribe that has agreed to place a minor tribal member as an unpaid intern in a business located on tribal land on a reservation is attempting to regulate the safety of the child’s workplace. … The fact that the regulation takes the form of a tort duty that may be vindicated by individual tribe members in tribal court makes no difference.”

The majority rejected the dissent’s main argument that Supreme Court precedent requires that the consensual relationship specifically “implicate tribal governance and internal relations.” The dissent pointed to language from the Montana opinion itself, stating that tribes do not retain the right to “exercise … tribal power beyond what is necessary to protect tribal self-government or to control internal relations … ” and from language in a subsequent Supreme Court decision, Plains Commerce Bank v. Long Family Land & Cattle Co. (2008). Significantly, the majority disagreed and instead adopted the district court’s holding that, “under Montana, ‘disputes arising from member-nonmember or tribe-nonmember consensual relationships are deemed as a matter of law to impact tribal rights of self-government sufficient to permit the exercise of tribal court jurisdiction to adjudicate such disputes.’ ”

The majority opinion also disagreed with the dissent’s view that tribal court jurisdiction over non-Indians is not necessarily permitted under the Montana exceptions, since the Montana opinion involved tribal regulatory authority, not tribal court jurisdiction. Rather, the majority held that, if the Tribe could exercise regulatory jurisdiction over the non-member corporation under Montana, the tribal court could also exercise civil jurisdiction to hear tort claims for the same activity. Though the dissent was concerned that non-Indian parties might not have access to tribal tort law (which may rely on tribal custom), the majority opinion found that, in this particular case, Dolgencorp could have easily anticipated that the conduct alleged (molestation of a child) would be actionable under tribal law.

Please let us know if we may provide additional information about the recent Fifth Circuit decision.