Tenth Circuit Overrules Oklahoma Appellate Court Regarding Determination of What is Indian Country

            Criminal cases frequently are test cases for what is and what is not considered Indian Country in Oklahoma.  If specific land is Indian Country, then the tribe or federal government maintains criminal jurisdiction in Oklahoma.  If, it is not Indian Country, then arguably the tribe has no jurisdiction and the federal government would not maintain any jurisdiction unless the crime were federal in nature. (For example, a civil rights violation or mail fraud).

            In Wagnan v. Trammell, Case No. 11-7072, the 10^th Circuit Court of Appeals recently granted a writ of habeas corpus, essentially overruling the Oklahoma Court of Criminal Appeals (“OCOCA”) regarding its determination that the land where the crime committed was not Indian Country.  In determining that the land was Indian Country, and hence the criminal defendant should have been tried in federal court (rather than State District Court), the 10^th Circuit reviewed federal statutes regarding the alienation of Indian lands in Oklahoma.  The pertinent federal laws required the United States government via the Secretary of the Interior to approve of conveyances by an Indian of restricted lands.  In many instances, these conveyances were not approved by the Secretary of the Interior or his designee, or were not properly approved.  The result: the conveyance was void.   For the specific land at issue, the 10^th Circuit ruled that the applicable regulation to obtain approval for the conveyance was not followed, hence no approval. The 10^th Circuit stated:

 Any doubts on this score, we believe, are removed by examining the relevant federal regulations in place at the time of the 1970 state court proceeding. At that time, there was a federal regulation in place, 25 C.F.R. § 121.34, that mandated the submission of a specific application form in order to obtain Secretarial approval for sales of restricted lands. Section 121.34, entitled “Removal of restrictions, application,” provided as follows:  Application for the removal of restrictions and for approval of sales of lands must be made in triplicate on approved form Five Civilized Tribes, 5-484, and submitted to the superintendent for the Five Civilized Tribes or any field clerk. These forms will be furnished free of charge by the superintendent or field clerk. 25 C.F.R. § 121.34 (1970). Although this regulation did not expressly reference the 1945 Act, it clearly appears to have been intended to encompass sales of purchased interests in allotments. Notably, there is no suggestion by respondent, nor any evidence in the record indicating, that Kizzie or the Housing Authority complied with this regulation by filing an application for approval of the sale of the Tract to the Housing Authority.

            If native restricted land was not indeed conveyed outside of the restrictions on alienation, then the land retains its character as Indian Country.  This could apply to a great amount of land within Oklahoma.  As is usual, the only way to determine the status of any particular land will be a search of its chain of title and a review of any documents purporting to remove restrictions or instances where the Department of the Interior purports to provide consent to a conveyance.  The 10^th Circuit’s decision in Wagnan highlights there may be a great deal more Indian Country in Oklahoma than previously thought. The same rules would apply to civil as to criminal jurisdiction. And more importantly, land for which the Department of the Interior did not consent to a conveyance, would be land which was Indian Country prior to 1988 and hence capable of being used for gaming under the Indian Gaming Regulatory Act.  This decision could open the door to more casinos in more places in Oklahoma.

            The 10^th Circuit declined to address another issue which could drastically increase the amount of land which is Indian Country in Oklahoma.  The Court declined to determine whether or not a mineral estate renders a tract of land “Indian Country” for the purpose of 18 U.S.C. § 1151.  The Seminole Nation as amicus noted a conflict of recent authority within the 10^th Circuit regarding this issue. The question is not insignificant. Indeed, in  Oklahoma Tax Commission v. Osage Nation one of the arguments in favor of Indian Country status for Osage County is the fact that mineral estate remains restricted.  The 10^th Circuit affirmed the Northern District of Oklahoma in deciding that the existence of a native mineral estate was not controlling, as no surface estate in the land was reserved to the Osage Nation or its tribal members. Osage Nation v. Oklahoma Tax Commission, 597 F.Supp.2d  1250, 1259 (N.D. Okla. 2009), aff’d Osage Nation v. Irby, 597 F.3d 1117 (10th Cir. 2010). The Seminole Nation claims this is at conflict with the 10^th Circuit’s holding in Hydro Res., Inc. v. U.S. E.P.A., 608 F.3d 1131 (10th Cir. 2010), in which the panel held that a mere right of way running across land is sufficient to render that land Indian Country.  The Tenth Circuit in that case ruled, “To be sure, Congress sought to mitigate, to a degree, the checkerboarding created by the allotment system by extending federal jurisdiction over “all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same.” 18 U.S.C. § 1151(c).” Id. at 1159.  The Seminole Nation supports that if the mineral estate is in fact restricted, that the property itself is sufficiently restricted to render it Indian Country for the purposes criminal (and hence civil) jurisdiction.  If successful this argument would also dramatically increase the amount of land designated as Indian Country within Oklahoma and throughout the United States.

Conclusion:

            More land is Indian Country in Oklahoma than previously known. If specific land was not properly conveyed with Secretarial approval then it remains Indian Country and was Indian Country prior to 1988 for gaming purposes.  Furthermore, if the 10^th Circuit or Supreme Court directly considers that a native mineral interest is sufficient to render land Indian Country, then that same land would have been Indian Country prior to 1988 for gaming purposes.  The Wagnan decision likely increases the amount of Indian Country available in Oklahoma for gaming and other economic development purposes.

The Tenth Circuit's decision is available at: http://www.ca10.uscourts.gov/opinions/11/11-7072.pdf

Oklahoma Tribe and gaming operation allege breach of contract to purchase

Global Gaming Solutions, an arm of the Chickasaw Nation, filed suit against the owner of DiamondJacks casinos.  Global Gaming claims wants a declaratory judgment that it did not breach an agreement to purchase the casinos, while the casino owner wants to retain Global’s investment and claims it is in breach.  The full AP story can be viewed at this link.

Tenth Circuit Clips Sovereign Immunity Again

      The Tenth Circuit Court of Appeals decided Sommerlot v. Cherokee Nation Distributors, Inc., et al, on July 27, 2012 (Case No. 10-6157).  In a surprising turn of events, the Circuit held that because one of the defendants was formed under state law (rather than tribal law) - that it could not possibly hold the tribe’s sovereign immunity - even if the Indian tribe were the sole owner.  The Circuit plainly held that its recently announced subordinate economic entity doctrine was wholly inapplicable to any tribal entity formed under state law. Breakthrough Management Group, Inc. v. Chuckansi Gold Casino & Resort, 629 F.3d 1173 (10th Cir. 2010) (setting forth subordinate economic entity test).  The result, is that any tribal entity formed under  federal law, state law, or the law of another tribe, or a foreign nation, will not hold the tribe’s sovereign immunity from suit.   The most interesting part of the case, though, is why the Tenth Circuit issued its holding regarding the inapplicability of the economic entity doctrine at all. The Circuit ended up ruling in favor of the tribally-owned entities - because the issue was not preserved properly for appeal.  But, if the issue was not preserved for appeal - then why didn’t the court simply decline to issue an opinion as to the merits? Answer, the panel wanted to use this opportunity to send a message. It has been a difficult few years for tribal entities at the Tenth Circuit, and this opinion appears to be further indication that it is only going to get tougher.

Are Indian Tribes immune to suits brought under section 1926(b)?

    In Oklahoma at least one Indian tribe owns a rural water district. And several other Indian tribes may seek to expand water service in their tribal lands or get into the business. In Freemanville Water Systems v. Poarch Band of Creek Indians, et al., (07-CV-688) the U.S. District Court for the Southern District of Alabama held that Indian tribes are immune to claims brought under 7 U.S.C. § 1926(b).  Section 1926(b) provides monopoly protection for rural water districts’ territories, if the rural water district is indebted to the federal government. There are exceptions, and overlaps, and uncertainty as to where rural water districts are often physically able to supply water, resulting in a large amount of litigation over the past thirty years, which shows no signs of abating.

    In the Freemanville case, the Tribe intended to develop its own water system on and off of tribal lands in the same territory presently served by the rural water district. There was no question, on the motion to dismiss phase that Freemanville Water was entitled to monopoly protection.  And the monopoly protection emanates from a federal statute of general applicability. However, the Court quoted the U.S. Supreme Court, in that there is a difference between a law’s application and the ability to enforce the law through the Courts. And there is. Just because a law exists does not mean there is a corresponding legal remedy. And that is the situation with 1926(b), as Congress in the Rural Development Act has not waived tribal sovereign immunity.  And clearly, the Tribe at issue in the case had not waived its sovereign immunity. Therefore, while the monopoly law applies (at least outside of tribal lands), a rural water district has no method to enforce it.  I do not believe this would be the result under present Tenth Circuit law in Oklahoma.

    The Freemanville motion to dismiss was decided on January 7, 2008. Since that date the federal appellate courts are exploring more carefully whether equitable claims, such as the ones in Freemanville for injunctive relief can proceed absent a waiver of tribal sovereign immunity.  The Freemanville court cited Puyallup Tribe, Inc. v. Department of Game, 433 U.S. 165, 172 (1977) wherein the U.S. Supreme Court held that an injunction against a Tribe to enforce fishing restrictions on and off its reservation violated tribal sovereign immunity. However, that case, which went to the Supreme Court several times (the cited case is actually Puyallup III) involved treaty rights. But more importantly, the Tribe itself was the defendant in the Washington state court system.  Under the doctrine of Ex Parte Young and the Tenth Circuit’s application of that doctrine to Indian tribes in Crowe & Dunlevy v. Stidham, Freemanville could have sued the tribal chairman or other office-holders in their official capacities to enforce their federal statutory rights for prospective injunctive relief. The reasoning is that a waiver of sovereign immunity is not necessary at all for a suit which is limited to prospective injunctive relief to stop an on-going violation of a federal law. Money damages are not available under Ex Parte Young. But, if a rural water district in Oklahoma seeks to avoid tribal encroachment, it will likely make use of Crowe & Dunlevy v. Stidham.

    In Freemanville, the rural water district appealed to the Eleventh Circuit Court of Appeals. The Eleventh Circuit affirmed the judgment of the District Court in all respects on April 28, 2009. The Circuit court carefully examined the Rural Water Development Act to find a waiver of sovereign immunity, and like the trial court, it did not find one in 1926(b). The rural water district never sought leave to amend to sue the tribal government officials under Ex Parte Young.  As a result, that issue was never raised.

Freemanville District Court Opinion

Are Construction Liens Available in Indian Country?

Oklahoma provides significant protection for contractors and material providers for construction projects.  An unpaid contractor may file what is known as a mechanics and materialman’s lien. 42 O.S. § 141 et seq. The lien then provides that when the property is sold (or-refinanced) that the lien-holder will be paid depending upon the priority of the lien and the availability of funds. A lien holder may also foreclose upon the lien and force a judicial sale of the property.  The lien provides priority, not from the date of filing, but from the date that the first material was provided or service performed. Fourth Nat’l. Bank of Tulsa v. Appleby, 1993 OK 53, ¶ 9, 864 P.2d 827. And naturally, the lien holder also retains all rights to an in personam judgment against whoever contracted to pay for the work and material.

But in Indian Country, a right created by Oklahoma statutes to a construction lien, does not apply.  Indian Country lies within the jurisdiction of a sovereign tribal government a state’s law will only apply with specific Congressional authorization. Congress has not stated that state-law lien rights apply. There is nothing, however, to prevent a Tribe from legislating its own lien process and rights. In such a scenario, the Tribe would have to provide a method to file the lien with the tribal government or court to provide a central place for interested parties to research lien filings. But, even if a Tribe did legislate and create a registry for lien flings there would be two additional hurdles. First, all land within the jurisdiction of the an Indian tribe is restricted in some fashion. Much of it is trust land where title is held by the United States for the benefit of the  Tribe. If the Tribe were to allow a lien-filing on its own land, the contract approving that lien would likely have to be approved by the Bureau of Indian Affairs under 25 U.S.C. § 81 which requires the U.S. to approve of mortgages on Indian lands. Second, if it is owned by an Indian tribal member and not the Tribe or the United States, it is likely still restricted against alienation to non-Indians, meaning that Bureau of Indian Affairs would again have to approve.  Finally, even if the Tribe and Bureau of Indian Affairs approved of the creation of a lien on land owned by the Tribe (or the U.S. for benefit of the Tribe), a lien itself is not likely a clear waiver of sovereign immunity by the Tribe.  Meaning, that judicial foreclosure in tribal court may not be available, depending upon how the tribal court interprets a tribal statute providing for lien rights.

The end-result. When entering into contracts to perform construction on Indian Country, a construction company or material provider should understand that state-law lien rights do not apply. The contractor should further endeavor to determine what rights, if any, exist under tribal law, and ensure that its contracts provide for remedies in the proper tribal forum.

Investors sue Law Firm over Unapproved Management Contract

As you will recall, the Seventh Circuit, in its recent Lake of the Torches decision, affirmed the federal district court's  holding that a bond indenture worth $50 million was an unapproved management contract. While the Circuit remanded for consideration of certain equitable claims, the fact remains that the contract remains void and there is no apparent method for the investors to obtain redress on $46 million of unpaid bonds. In late January, the investors took action, and sued the Law Firm for allegedly giving assurances that the bond indenture was a valid and enforceable contract.

The news coverage can be found at: http://www.jsonline.com/business/suit-filed-in-tribal-bond-deal-5d3sj17-137801053.html

Towards a Carcieri Fix - Are We There Yet?

On October 13, 2011, Assistant Secretary Echo Hawk testified before the Senate Committee on Indian Affairs in support of the proposed legislation “fixing” the Carcieri decision (Carcieri v. Salazar, 129 S.Ct. 1058 (2009)) by allowing the Bureau of Indian Affairs (BIA) to place land into trust for all federally recognized tribes.

The Assistant Secretary testified in part as follows:

In April of this year, the United States Government Accountability Office (GAO) stated that the uncertainty in accruing land in trust for tribes, as a result of the Carcieri decision, is a barrier to economic development in Indian Country. When asked to identify the “key” issue that must be “resolved first” to ease impediments to job growth in Indian Country, GAO stated that the uncertainty in taking land-in-trust has to be resolved. Moreover, GAO predicted that until the uncertainty created by the Carcieri decision is resolved, Indian tribes would be asking Congress for tribe-specific legislation to take land in trust, rather than submitting fee-to-trust applications to the Department. The Department understands that this prediction is coming true, and Indian tribes are asking their Members of Congress for legislation to take land in trust. Thus, instead of a uniform fee-to-trust process under the Indian Reorganization Act, a variety of tribe specific fee-to-trust laws could lead to a patchwork of laws that could be difficult for the Department to administer.

The webcast of his testimony is available at Echo Hawk Senate Testimony and Webcast

What does this mean for Oklahoma? A number of Tribes were not recognized in 1934. (In fact, in Oklahoma most tribes fall under the Oklahoma Indian Welfare Act of 1936 which was similar to the Indian Reorganization Act of 1934). However, as noted by Justice Breyer in his concurrence, the BIA can still place land into trust for Tribes which should have had federal recognition in 1934 – just that the BIA didn’t know it.  (And naturally Oklahoma Indian Welfare Act tribes should meet this test, if applied). As a result of the Carcieri decision, tribes not recognized by 1934 must prove that they should have been recognized in 1934 (which has been done) but that leads to greater legal expense and confusion. Not exactly an ideal environment. Nor is it fair, as Indian tribes, according to the Supreme Court, may be treated unequally under the law.  A fix is clearly needed – and Republicans, Democrats, and the President seem to be in favor of it.  Yet, it has been almost two years since the Supreme Court created this uncertainty and nothing has been done.