No
No. 98-111
IN THE SUPREME COURT OF THE STATE OF MONTANA
1998 MT 161
JAMES D. THOMPSON, JULIA R. THOMPSON,
and CUSTER BATTLEFIELD TRADING COMPANY,
a Montana corporation,
Plaintiffs/Respondents,
vs.
CROW TRIBE OF INDIANS, DENIS ADAMS,
Tax Commissioner of the Crow Tribal Tax
Commission, TYRONE TEN BEAR, Chairman of
the Crow Tribal Tax Commission, and the CROW
TRIBAL TAX COMMISSION,
Defendants/Appellants.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Big Horn,
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The Honorable David J. Cybulski, Judge presiding.
COUNSEL OF RECORD:
For Appellant
Dale T. White, Fredericks, Pelcyger, Hester & White, Louisville, Colorado; Majel Russell,
Crow Tribal Legal Department, Billings, Montana
For Respondent:
Jay F. Lansing, Moses Law Firm, Billings, Montana
Submitted on Briefs: June 18, 1998
Decided: June 25, 1998
Filed:
__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.
¶1 This is an appeal from the District Court's Order and Memorandum filed
January 13, 1998, in the Thirteenth Judicial District Court, Big Horn County,
granting summary judgment to Respondents (hereinafter collectively referred to as
Thompsons); denying summary judgment to Appellants (hereinafter collectively
referred to as the Tribe); and voiding three Tribal tax liens. Also raised on appeal is
the trial court's denial of the Tribe's motion to dismiss based on, among other
grounds, the Tribe's sovereign immunity from suit. We reverse and remand for entry
of an order of dismissal consistent with this opinion.
Background
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¶2 Thompsons brought this action against the Tribe in state district court seeking to
cancel resort tax liens imposed by the Tribe on the gross receipts of Thompsons'
business, Custer Battlefield Trading Company. While Thompsons are not members
of the Crow Tribe, their business is located and conducted within the exterior
boundaries of the Crow Indian Reservation and within Big Horn County. The resort
tax was adopted by the Crow Tribal Council, was approved by the Area Director of
the Bureau of Indian Affairs and is imposed on the consumers of the goods and
services provided by Thompsons' business. The Crow Tribal Taxation Code (CTTC)
authorizes and directs the various Tribal officials to administer and enforce
collection of the tax. Thompsons are required under the CTTC to collect the tax on
behalf of the Tribe and to remit tax payments to the Tribe along with reporting
forms.
¶3 As a result of Thompsons' alleged failure to comply with these requirements, the
Tribe, under other provisions of the CTTC, filed with the Big Horn County Clerk
and Recorder three liens against Thompsons' business property for in excess of
$200,000 in taxes claimed by the Tribe. The three liens, filed April 25, 1996, July 25,
1996, and September 23, 1997, are the subject of litigation in Crow Tribal Court.
¶4 Thompsons filed their action underlying this appeal in state district court on
September 12, 1996, seeking to void and to cancel of record the tax liens. An initial
motion to dismiss based on lack of subject matter jurisdiction and sovereign
immunity filed by the Tribe was denied by the trial court. Thereafter, the Tribe
answered and, ultimately, the court disposed of the case and voided the Tribe's tax
liens on cross motions for summary judgment. This appeal followed.
Issues
¶5 The Tribe raises three issues on appeal.
¶6 1. Whether the Tribe and its officials have waived immunity from being sued by
Thompsons in state district court?
¶7 2. Whether the state district court possessed subject matter jurisdiction over
Thompsons' cause of action?
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¶8 3. Whether the Tribe's tax liens may be voided and canceled under the provisions
of § 27-1-433, MCA?
¶9 We will address Issue 1. Because this issue is dispositive, we will not address
Issues 2 or 3.
Standard of Review
¶10 Where there are no genuine issues of material fact in dispute, we simply review,
de novo, the district court's grant and denial of the parties' cross motions for
summary judgment to determine whether the court's decision was correct as a
matter of law. Rule 56(c), M.R.Civ.P.; Seypar, Inc. v. Water and Sewer Dist. No. 363,
1998 MT 149, ¶ 21, ___ Mont. ___, ¶ 21, ___ P.2d ___, ¶ 21, ___ St.Rep.___, ¶ 21
(citations omitted). Similarly, a court's determination of a motion to dismiss based on
a claim of sovereign immunity is a legal question over which our review is plenary.
See Wippert v. Blackfeet Tribe (1993), 260 Mont. 93, 859 P.2d 420.
Discussion
¶11 Before proceeding with our discussion of the merits of the sovereign immunity
issue, we must first address Thompsons' argument that the Tribe did not properly
preserve this issue for appeal. Thompsons contend that this Court has no jurisdiction
to decide this cause because the Tribe appealed only the trial court's denial of its
cross motion for summary judgment (which did not address sovereign immunity)
and did not appeal the court's prior denial of its motion to dismiss (which was
premised on, among other things, the Tribe's immunity from suit). We conclude that
Thompsons' argument is without merit.
¶12 Sovereign immunity is in the nature of a jurisdictional defense which may be
considered by a court on its own motion or at the behest of a party. It is well-settled
that defenses that go to a court's jurisdiction may be raised at any time by the parties
or by the court, sua sponte. Westlands Water Dist. v. Firebaugh Canal (9th Cir. 1993),
10 F.3d 667, 673; Wippert, 260 Mont. at 102, 859 P.2d at 425; Larrivee v. Morigeau
(1979), 184 Mont. 187, 191-92, 602 P.2d 563, 565-66; and Rule 12(h)(3), M.R.Civ.P.
Jurisdictional defenses implicate the fundamental power and authority of the court
to determine and hear an issue and, thus, transcend procedural considerations. Once
a court determines that it lacks jurisdiction, then it can take no further action in the
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case other than to dismiss it. Wippert, 260 Mont. at 102, 859 P.2d at 425 (citations
omitted).
¶13 Despite that the Tribe's notice of appeal did not refer to the District Court's
denial of its motion to dismiss, the sovereign immunity issue was not only raised in
the trial court and determined there, but this issue has also been raised and briefed
on appeal. Accordingly, this question having been raised and being purely one of law,
it is not only proper, but necessary, that we address and resolve it.
¶14 Turning, then, to the merits of this issue, the District Court rejected the Tribe's
claim of sovereign immunity on the basis that the Tribe's conduct was either "outside
the scope of the Tribe's sovereignty" or "beyond their authority." Specifically, the
court ruled that in filing its liens directly in the office of the county clerk and
recorder, the Tribe engaged in conduct not authorized by Montana law. The case
law, however, dictates our holding that the trial court erred in its rejection of the
Tribe's sovereign immunity defense.
¶15 In Anderson v. Engelke, 1998 MT 24, ___ Mont. ___, 954 P.2d 1106, 55 St.Rep.
86, we quoted Wilson v. Marchington (9th Cir.1997), 127 F.3d 805, 813, which, in
turn, quoted Oliphant v. Suquamish Indian Tribe (1978), 435 U.S. 191, 206, 98 S.Ct.
1011, 1020, 55 L.Ed.2d 209, for the proposition that "Indian law is uniquely federal
in nature, having been drawn from the Constitution, treaties, legislation and an
'intricate web of judicially made Indian law.'" Anderson, ¶ 15. One such doctrine of
Indian law firmly rooted in the federal jurisprudence is that, with few exceptions,
Indian tribes retain sovereign immunity from suit in state courts. Subsequent to the
completion of briefing in the case sub judice, the United States Supreme Court
handed down another decision reaffirming its commitment to this legal principle.
¶16 In Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc. (1998), ___ U.S.
___, 118 S.Ct.1700, ___L.Ed.2d ___, the non-Indian respondent corporation sued the
Kiowa Tribe (Kiowa) in Oklahoma state court to obtain judgment on an unpaid
promissory note executed by the Kiowa in favor of the corporation. While there was
some dispute in the facts, it appears that the various courts accepted the respondent
corporation's position that the note was executed and delivered off the reservation
and that payments were to be made by the Kiowa off the reservation. The Kiowa
moved to dismiss based on lack of subject matter jurisdiction, relying in part on its
sovereign immunity from suit. The state appellate court affirmed the trial court in
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ruling that the Kiowa were subject to suit in state court for breaches of contract
involving off-reservation commercial conduct. The United States Supreme Court
granted certiorari. Kiowa Tribe, 118 S.Ct. at 1702.
¶17 In reversing Oklahoma's courts, the Supreme Court reaffirmed its prior
decisions holding that, as a matter of federal law, an Indian tribe is subject to suit
only where Congress has authorized the suit or where the tribe has waived sovereign
immunity. In so ruling, the Court specifically rejected the respondent corporation's
request that tribal immunity from suit be confined to transactions on the reservation
and to tribal governmental activities. Kiowa Tribe, 118 S.Ct. at 1702-03 (citations
omitted).
¶18 Specifically, the Court noted that its prior cases which sustained tribal immunity
from suit had neither drawn distinctions based upon where the tribal activities
occurred nor based upon distinctions between governmental activity versus
commercial activity. While acknowledging that state substantive law may regulate
tribal activities outside the reservation, the Court, nonetheless, noted that this "is not
to say that a tribe no longer enjoys immunity from suit . . . [t]here is a difference
between the right to demand compliance with state laws and the means available to
enforce them." Kiowa Tribe, 118 S.Ct. at 1703 (citations omitted).
¶19 Moreover, the Supreme Court observed that since Indian tribes were not
participants in the Constitutional Convention and were "thus not parties to the
'mutuality of . . . concession' that 'makes the States' surrender of immunity from suit
by sister States plausible[,]'" tribal sovereign immunity from suit is not coextensive
with state sovereign immunity and is not subject to diminution by the states. Kiowa
Tribe, 118 S.Ct. at 1703 (citations omitted).
¶20 We conclude that Kiowa Tribe, and the precedent cited therein, controls the
disposition of the sovereign immunity issue in the case at bar. First, we are not cited
to any federal authority whereby Congress has extinguished tribal sovereign
immunity from suit on the basis that the Tribe filed tribal tax liens off-reservation
with a county recording officer. Second, there is nothing in the record of this case
that would lead us to the conclusion that the Tribe waived its defense of sovereign
immunity by engaging in this conduct. In point of fact, while an Indian tribe may
waive sovereign immunity, an expression of waiver must be unequivocal; waiver will
not be implied. Santa Clara Pueblo v. Martinez (1978), 436 U.S. 49, 58, 98 S.Ct. 1670,
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1677, 56 L.Ed.2d 106. No such unequivocal expression of waiver of sovereign
immunity is demonstrated here, even remotely. Third, the fact that the Tribe's action
in filing its tax liens occurred off-reservation is of no consequence as regards its
defense of sovereign immunity from suit. Kiowa Tribe, 118 S.Ct. at 1703. Finally,
whether the Tribe's conduct was authorized by Montana law, as it contends, or
unauthorized, as Thompsons argue and as the trial court ruled, is immaterial in the
context of the Tribe's sovereign immunity defense. As the Supreme Court observed
in Kiowa Tribe, "[t]here is a difference between the right to demand compliance with
state laws and the means available to enforce them." Kiowa Tribe, 118 S.Ct. at 1703.
Simply put, the Tribe's immunity from suit having not been congressionally
abrogated nor unequivocally waived, the Tribe is immune from suit in state court
and the District Court was without jurisdiction to entertain Thompsons' cause of
action much less rule on the merits of their claims.
¶21 In reaching this conclusion, and in relying on Kiowa Tribe as the United States
Supreme Court's most recent decision on the doctrine of tribal sovereign immunity,
it nevertheless bears noting that our own jurisprudence is in accord. In Wippert, we
held that sovereign immunity barred a declaratory judgment action in state court
against the Blackfeet Tribe by ranchers who borrowed money from this tribe.
Wippert, 260 Mont. at 108, 859 P.2d at 429. Citing federal precedent, this Court, as
did the Supreme Court in Kiowa Tribe, acknowledged that "[w]ithout tribal consent
or congressional authorization, an Indian tribe is exempt from suit . . . [and that] . . .
[a] tribe may consent to suit only by an unequivocally express waiver of its sovereign
immunity." Wippert, 260 Mont. at 104, 859 P.2d at 426. Accordingly, the legal
principles set out in Kiowa Tribe are in no way a departure from the already-
established law and precedent of this Court.
¶22 Nonetheless, Thompsons also argue that even if the Tribe is immune from suit,
the Tribal officials named as defendants in their cause of action are not. Thompsons
cite Puyallup Tribe v. Washington Game Dep't (1977), 433 U.S. 165, 97 S.Ct. 2616, 53
L.Ed.2d 667, and Imperial Granite Co. v. Pala Band of Indians (9th Cir 1991), 940
F.2d 1269, for the proposition that individual tribal officials may not share in the
tribe's sovereign immunity from suit when such officials act beyond their authority.
We do not read Puyallup as supporting this argument, however. Puyallup simply held
that tribal sovereign immunity did not protect individual tribal members from state
court process in connection with fishing activities conducted by such members off the
reservation. Puyallup, 433 U.S. at 171-73. The Court did not address the
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fundamentally different issue of the applicability of tribal sovereign immunity to
persons acting as officials or agents of the tribe in their conduct of the tribe's
business off the reservation.
¶23 As to Imperial Granite, the court did agree that tribal officials may lose their
entitlement to the immunity of the sovereign when acting beyond their authority.
Imperial Granite, 940 F.2d at 1271. Nonetheless, while this rule may apply when
tribal officials exceed the scope of their representational capacity or delegated
authority, the rule is different where a governmental employee commits a mistake
that is arguably a mistake of fact or law when acting as the government's agent.
United States v. Yakima Tribal Court (9th Cir. 1986), 806 F.2d 853, 859 (citations
omitted). "Official action is still action of the sovereign, even if it is wrong, if it ‘do
[es] not conflict with the terms of [the officer's] valid statutory authority. . . .’"
Yakima Tribe, 806 F.2d at 860 (quoting Larson v. Domestic & Foreign Commerce
Corp. (1949), 337 U.S. 682, 695, 69 S.Ct. 1457, 1464, 93 L.Ed. 1628). Moreover, a
governmental official's scope of authority "turns on whether the government official
was empowered to do what he did; i.e., whether, even if he acted erroneously, it was
within the scope of his delegated power." Yakima Tribe, 806 F.2d at 860 (quoting
Pennhurst State School & Hospital v. Halderman (1984), 465 U.S. 89, 112 n.22, 104 S.
Ct. 900, 914, n.22, 79 L.Ed.2d 67). Accordingly, when tribal officials act in their
official capacity and within the scope of their authority they are immune, Imperial
Granite, 940 F.2d at 1271 (citations omitted), even if they act in error, Yakima Tribe,
806 F.2d. at 860.
¶24 Here (and without deciding that the Tribal officials were or were not committing
a mistake of fact or law or that they were or were not acting in error) there is nothing
in the record that leads to a conclusion that the Tribal officials were acting outside
their official capacities or that they were acting beyond the scope of their official
duties and in excess of their powers under the CTTC. Again, in the context of tribal
sovereign immunity, the issue is not whether Montana law permits or prohibits the
filing of tribal tax liens directly with the county recording official, but rather whether
the Tribe's officials were acting within the scope of their representational or
delegated authority as agents of the Tribe in filing the Tribe's tax liens in accordance
with Tribal law. Since they were acting in that capacity in this case, the Tribe's
sovereign immunity insulates the Tribal officials from suit in state court to the same
extent that the Tribe itself is immune.
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¶25 Finally, without citation of authority, Thompsons suggest that since they were
not seeking monetary damages in their suit against the Tribe, but were simply
requesting cancellation of the Tribe's tax liens, sovereign immunity should not apply.
We are unaware of any legal basis for this argument. Indeed, Kiowa Tribe, would
appear to reject any such distinction in the same manner that the Supreme Court
rejected distinctions based on off-reservation versus on-reservation conduct and
based on governmental versus commercial activity. Moreover, in Wippert, we applied
the doctrine of sovereign immunity in a case in which there was no money damage
claim against the Blackfeet Tribe. Accordingly, we reject this argument, as well.
¶26 In summary, the doctrine of tribal sovereign immunity from suit bars
Thompsons' state court action against the Tribe and against the Tribal officials in
this case. The District Court was without jurisdiction to entertain Thompsons' cause
of action or to rule on the merits of their claims. The court should have taken no
action other than to dismiss Thompsons' complaint and first amended complaint.
Wippert, 260 Mont. at 102, 859 P.2d at 425. We hold that the court erred as a matter
of law in failing to do so.
¶27 Reversed and remanded for entry of an order of dismissal consistent with this
opinion.
/S/ JAMES C. NELSON
We Concur:
/S/ J. A. TURNAGE
/S/ JIM REGNIER
/S/ TERRY N. TRIEWEILER
/S/ WILLIAM E. HUNT, SR.
/S/ W. WILLIAM LEAPHART
/S/ KARLA M. GRAY
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