868 F.3d 1189
10th Cir.2017Background
- Becker (former contractor) and the Ute Indian Tribe entered a 2005 Independent Contractor Agreement granting Becker salary plus 2% of net revenue from tribal LLCs holding trust oil-and-gas interests; dispute arose after Becker’s 2007 resignation.
- Becker sued in federal court (dismissed for lack of federal-question jurisdiction), then in Utah state court; Tribe sought to invalidate the Contract in tribal court claiming transfers of tribal trust assets lacked required federal approval.
- Becker sought federal injunctive relief to stop the tribal-court action and obtained a preliminary injunction from the district court, which found the Contract waived tribal-court jurisdiction/exhaustion.
- The Tenth Circuit panel reviewed the preliminary injunction and related dismissals: it reversed the preliminary injunction and remanded, affirmed dismissal of the Tribe’s § 1983 claims, and reversed other jurisdictional dismissals and remanded for further proceedings.
- Central legal questions: whether the tribal-exhaustion rule is jurisdictional, whether the Tribe waived exhaustion/tribal jurisdiction in the Contract (and whether the Contract is void for lack of required federal approval), and whether the Tribe may sue under 42 U.S.C. § 1983 to enjoin state-court proceedings.
Issues
| Issue | Plaintiff's Argument (Becker) | Defendant's Argument (Tribe) | Held |
|---|---|---|---|
| Is the tribal-exhaustion rule jurisdictional? | Exhaustion deprives federal court of jurisdiction to decide tribal-jurisdiction challenges. | Exhaustion is comity-based, not jurisdictional. | Not jurisdictional; exhaustion is comity-based and ordinarily requires federal courts to abstain. |
| Did the Tribe waive tribal-exhaustion and tribal-court jurisdiction in the Contract? | The Contract explicitly waived requirement to exhaust tribal remedies; waiver enforceable and severable. | Waiver invalid if the Contract is void for lack of required federal approval for transfers of tribal trust assets. | Court held Becker failed to show likelihood of success on waiver because validity of the Contract is unresolved; exhaustion should have been deferred to tribal court. |
| Are the payments to Becker a transfer of tribal trust property requiring federal approval? | Becker pointed to a BIA letter re: an amended operating agreement to suggest no approval needed (insufficient record). | Payments are akin to royalties and thus retain trust status; unapproved transfers void. | Court found record inadequate to override Tribe’s contention that the Contract (or at least the waiver) may be void for lack of federal approval. |
| Can the Tribe bring § 1983 claims to enjoin state-court proceedings? | Tribe asserted due-process violations and sought injunction under § 1983. | Tribe’s interest is sovereign (sovereignty-based), not a private “person” claim under § 1983. | § 1983 claims dismissed: Tribe is not a “person” under § 1983 when asserting sovereign interests; dismissal affirmed. |
Key Cases Cited
- Nat’l Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845 (1985) (supports comity-based tribal-exhaustion principle)
- Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9 (1987) (exhaustion required as comity, not jurisdictional prerequisite)
- Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316 (2008) (tribal-court adjudicative authority over nonmembers is a federal question)
- United States v. Noble, 237 U.S. 74 (1915) (royalties/profits issuing from Indian land retain trust character for alienation rules)
- Oneida County v. Oneida Indian Nation, 470 U.S. 226 (1985) (conveyances without sovereign consent may be void ab initio)
- Stifel, Nicolaus & Co. v. Lac du Flambeau Band of Lake Superior Chippewa Indians, 807 F.3d 184 (7th Cir. 2015) (forum-selection clause analysis; courts may assess severability of waiver clauses)
- Wells Fargo Bank, Nat’l Ass’n v. Lake of the Torches Econ. Dev. Corp., 658 F.3d 684 (7th Cir. 2011) (contract not approved as required by federal statute can be void ab initio and non-severable)
- Muscogee (Creek) Nation v. Okla. Tax Comm’n, 611 F.3d 1222 (10th Cir. 2010) (distinguishing sovereign rights from private-person rights under § 1983)
- Williams v. Lee, 358 U.S. 217 (1959) (state-court jurisdiction over reservation affairs undermines tribal self-government)