IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-50582
T T E A, A Texas Corporation
Plaintiff-Appellant,
v.
YSLETA DEL SUR PUEBLO; JOSE G SIERRA, Presiding Judge of the Ysleta
Del Sur Pueblo; ANGELA R LUHAN, Associate Judge of the Isleta
Pueblo; THE TRIBAL COURT OF THE YSLETA DEL SUR PUEBLO
Defendants-Appellees
Appeal from the United States District Court
for the Western District of Texas
July 19, 1999
Before POLITZ, HIGGINBOTHAM, and DAVIS, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
Today we again take up the long saga of this country’s
relationship with Indian country, drawing on a body of law more
stable than the conflicting shifts in governmental policy on which
it lies--but bearing scars of these shifts in its own ambiguities.
TTEA, a Texas corporation, seeks to counter rulings of a tribal
court in its dispute with the Ysleta del Sur Pueblo Indian Tribe
over a contract. We examine the jurisdiction of the district court
and of the tribal court, finding only the latter properly
exercised.
I
Under its contract with the Tribe, TTEA managed a smoke shop
on the Pueblo’s reservation in El Paso beginning on November 1,
1994. TTEA was responsible for improving, managing, operating, and
marketing the smoke shop, and was obliged to pay the Tribe at least
$3000 per month, depending on sales. The contract also gave TTEA a
right of first refusal to sell gasoline products. The Tribe was
entitled to terminate with thirty days notice only under certain
conditions.
On April 14, 1997, six months before the contract would have
expired, the governing body of the tribe, the Tribal Council,
declared the agreement void. The Secretary of the Interior had
never approved the contract, and the Tribal Council concluded that
under 25 U.S.C. § 81, it was therefore invalid. Three days later,
the Tribe filed a suit in tribal court seeking both a declaration
that the agreement was void and a refund of money it had paid to
TTEA. TTEA’s answer denied the applicability of the statute and
that the Tribe had paid it any money under the agreement. TTEA also
filed a counterclaim, with most of the asserted damages
attributable to an alleged breach of the right of first refusal to
sell gasoline products; a motion to dismiss for lack of subject
matter jurisdiction; and a demand for trial by jury.
Without a hearing, the tribal court entered an order. The
order declared that the court had jurisdiction over the matter. It
concluded that the contract was subject to § 81 and invalid because
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it was not signed by the Interior Secretary. The court
acknowledged that although the parties had not specified which
party was responsible for obtaining approval from the Bureau of
Indian Affairs, the greater share of the responsibility rested on
the Tribe. Nonetheless, it held TTEA legally responsible.
TTEA petitioned for appeal in the tribal court, decrying the
absence of a hearing or presentation of evidence. The tribal
court, per the same judge who issued the initial ruling, vacated
that ruling, but then concluded that there was no genuine issue of
material fact about whether the contract was void, granted partial
summary judgment to the Tribe on its liability claim, and dismissed
all counterclaims. The court indicated that it would proceed to an
evidentiary determination of the Tribe’s remaining damage claims.
TTEA subsequently brought this action, claiming federal
question jurisdiction. It requested that the district court retain
jurisdiction over the complaint filed in the tribal court and
enjoin its further prosecution. Further, it asked for a
declaratory judgment that § 81 was inapplicable and that the tribe
had violated its status as a tribe by illegally engaging in gaming
operations, thus estopping it from asserting its § 81 defense. The
Tribe moved to dismiss for lack of personal jurisdiction, for lack
of subject matter jurisdiction, and for failure to state a claim.
The district court dismissed the action with prejudice.
First, it dismissed defendant tribal court officials Jose G. Sierra
and Angela R. Luhan, on the ground that those officials were acting
3
in their official capacities within the scope of their authority.
Second, it found the tribe shielded from suit on the contract by
the doctrine of sovereign immunity and that there was accordingly
no subject matter jurisdiction. Third, it found TTEA without
standing to complain of the Tribe’s gaming activities.
TTEA filed a timely notice of appeal. Abandoning its gaming-
related challenge, TTEA argues that the district court should have
addressed the scope and applicability of § 81 and the subject
matter jurisdiction of the tribal court.
II
We begin, as we must, with the district court’s subject matter
jurisdiction. We agree that the Tribe has sovereign immunity from
an award of damages only. We find, however, that the remaining
claims have no jurisdictional support.
A.
The Supreme Court recently held that, absent congressional
abrogation, tribal sovereign immunity extends even to actions on
contracts between the Tribe and others. See Kiowa Tribe v.
Manufacturing Tech., Inc., 118 S. Ct. 1700 (1998). Though
recognizing “reasons to doubt the wisdom of perpetuating the
doctrine,” id. at 1704, a six-Justice majority concluded that
narrowing of tribal sovereign immunity should be left to Congress,
see id. at 1705.
Kiowa, however, was an action for damages, not a suit for
declaratory or injunctive relief. This difference matters. In
4
Puyallup Tribe v. Washington Game Department, 433 U.S. 165, 171
(1977), the Court reaffirmed that “whether or not the Tribe itself
may be sued in a state court without its consent or that of
Congress, a suit to enjoin violations of state law by individual
tribal members is permissible.” Though the defendants in Puyallup
were not tribal officials, the Court cited it the next Term in
finding a tribal governor not immune from a suit seeking
declaratory and injunctive relief against enforcement of a tribal
ordinance. See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 59
(1978). Years later, Justice Stevens suggested that tribal
sovereign immunity might not extend “to claims for prospective
equitable relief against a tribe.” Oklahoma Tax Commission v.
Potawatomi Indian Tribe, 498 U.S. 510, 515 (1991) (Stevens, J.,
concurring).
The distinction between a suit for damages and one for
declaratory or injunctive relief is eminently sensible, and nothing
in Kiowa undermines the relevant logic. State sovereign immunity
does not preclude declaratory or injunctive relief against state
officials. See Ex Parte Young, 209 U.S. 123 (1908). There is no
reason that the federal common law doctrine of tribal sovereign
immunity, a distinct but similar concept, should extend further
than the now-constitutionalized doctrine of state sovereign
immunity. Cf. Seminole Tribe v. Florida, 517 U.S. 44 (1996). In
any event, Santa Clara Pueblo controls. Thus, while the district
court correctly dismissed the damages claim based on sovereign
5
immunity, tribal immunity did not support its order dismissing the
actions seeking declaratory and injunctive relief.
B.
We would be obliged nonetheless to affirm the district court
if it did not have subject matter jurisdiction over TTEA’s
equitable claims. Of course an absence of immunity does not ensure
jurisdiction. In Santa Clara Pueblo, the Supreme Court, despite
finding no immunity, found a lack of subject matter jurisdiction.
Subject matter jurisdiction in that suit was claimed under the
Indian Civil Rights Act of 1968, 25 U.S.C. §§ 1301-1303. Assessing
the factors enumerated in Cort v. Ash, 422 U.S. 66 (1975), the
Court found that this statute did not provide for an implied right
of action. See 436 U.S. at 60-66.
The federal courts do not have jurisdiction to entertain
routine contract actions involving Indian tribes. See Gila River
Indian Community v. Henningson, Durham & Richardson, 626 F.2d 708
(9th Cir. 1980); Mescalero Apache Tribe v. Martinez, 519 F.2d 479
(10th Cir. 1975). Nor can the possibility that the Tribe might
invoke § 81 as a defense to TTEA’s action confer federal
jurisdiction. Under the well-pleaded complaint rule, an
anticipatory federal defense is insufficient for federal
jurisdiction. See, e.g., Louisville & Nashville R. Co. v. Mottley,
211 U.S. 149, 152 (1908).
With ever duller prospects, TTEA claims subject matter
jurisdiction under the federal declaratory judgment statute, 28
6
U.S.C. § 2201. The declaratory judgment statute offers no
independent ground for jurisdiction. Rather, it permits the award
of declaratory relief only when other bases for jurisdiction are
present. See, e.g., Jones v. Alexander, 609 F.2d 778 (5th Cir.
1980).
To establish an independent basis for jurisdiction, however,
the plaintiff need not show that it would state a claim absent the
declaratory judgment statute. Rather, it may show that there would
be jurisdiction over a claim again it. A leading treatise
explains:
If the Jones Company sues for a declaratory judgment that
its patent is valid and being infringed by a device
manufactured by Smith, the federal claim necessarily
appears on the face of the complaint and the suit is one
that Jones Company could have brought in federal court by
a coercive action for damages or injunction.
The matter is somewhat more difficult if the suit is
for a declaratory judgment that the defending party does
not have a federal right. . . . [I]t now seems settled
that Smith can sue for a declaratory judgment of
invalidity or noninfringement.
10B Charles A. Wright et al., Federal Practice and Procedure §
2767, at 651 (1998).
This lucid explanation has a foundation, if not an unambiguous
endorsement, in the jurisprudence of the Supreme Court. In
Franchise Tax Board v. Construction Laborers Vacation Trust, 463
U.S. 1, 19 (1983), the Court noted that “[f]ederal courts have
regularly taken original jurisdiction over declaratory judgment
suits in which, if the declaratory judgment defendants brought a
coercive action to enforce its rights, that suit would necessarily
7
present a federal question.” Ultimately, the Court found no
jurisdiction in a case literally meeting this description, but on
narrow grounds. Specifically, the Court, “with an eye to
practicality and necessity,” id. at 20, refused to allow a state to
sue for a declaration that federal law did not preempt its
regulations, because states “have a variety of means by which they
can enforce their own laws in their own courts,” id. at 21.
The Court would not have needed to reach this narrow issue if
it had concluded that Skelly Oil Co. v. Phillips Petroleum Co., 339
U.S. 667 (1950), applied. Skelly Oil, as summarized in Franchise
Tax Board, “has come to stand for the proposition that if, but for
the availability of the declaratory judgment procedure, the federal
claim would arise only as a defense to a state created action,
jurisdiction is lacking.” 463 U.S. at 16. The Court thus found
Skelly Oil “not directly controlling.” Id. at 15. The reason it
presumably was not controlling is that in Franchise Tax Board, the
declaratory defendant would have had an action under federal law.
The reasoning in and structure of Franchise Tax Board thus strongly
suggest that the Court’s allusion to federal district courts’
taking jurisdiction in such circumstances was approving. Leading
commentators come to the same tentative conclusion. See Richard H.
Fallon et al., Hart and Wechsler’s The Federal Courts and the
Federal System 946 (4th ed. 1996).
TTEA’s task then is to point to a federal claim against it by
the Tribe. The general grant of jurisdiction over suits brought by
8
tribes, 28 U.S.C. § 1362, adds nothing to our immediate question.
Under § 1362, “[t]he district courts shall have original
jurisdiction of all civil actions, brought by any Indian tribe or
band with a governing body duly recognized by the Secretary of the
Interior, wherein the matter in controversy arises under the
Constitution, laws, or treaties of the United States.” The “arising
under” language is same as that found in 28 U.S.C. § 1331, the
general grant of federal question jurisdiction.
C.
TTEA’s best hope is § 81 itself. If § 81 gave the Tribe a
right to sue TTEA, we would hold that TTEA could sue for
declaratory judgment that the Tribe stated no claim. The story,
though, is not so simple. Section 81 specifies an unusual
mechanism for enforcing its provisions. It is a qui tam suit “in
the name of the United States in any court of the United States,”
with one-half of proceeds going to the Treasury for the tribe’s
benefit. See, e.g., Creek Nation v. United States, 93 Ct. Cl. 1,
11 (1941) (interpreting 25 U.S.C. § 81). We see little to support
a judicial judgment that Congress intended other means of
enforcement or protection. A tribe thus could not sue under § 81
except as a relator on the same terms as any other plaintiff.
The question thus arises: Can the Tribe be a proper
declaratory judgment defendant when the plaintiff technically would
be the United States in a § 81 action? The role of the United
States under § 81 is central to the policy it enforces. The
9
statute is unabashedly paternalistic, protecting Indians from ill
considered contracts. It is unsurprising that its enforcement
mechanism is equally paternalistic, using the intermediary of the
government to protect Native Americans thought unable to protect
themselves. We may wince at this statutory design today, but we
cannot craft it anew.
The statute reflects the trust relationship between tribes and
the federal government. See generally American Indian Law Deskbook
8-12 (2d ed. 1998) (discussing the trust relationship). The
federal government presumably would have a fiduciary duty with
respect to its portion of the funds recovered. Cf. Navajo Tribe of
Indians v. United States, 624 F.2d 981, 987 (Ct. Cl. 1980)
(“[W]here the Federal Government takes on or has control or
supervision over tribal monies or properties, the fiduciary
relationship normally exists with respect to such monies or
properties . . . even though nothing is said expressly in the
authorizing or underlying statute . . . .”).
But this does not make the invocation of the United States’s
name a mere formality. Indeed, in a recent case involving § 81,
the Seventh Circuit rejected a standing challenge based on the non-
Indian relators’ having no connection whatsoever with the
contracts, because the United States was the plaintiff, and it had
standing. See United States ex rel. Hall v. Tribal Dev. Corp., 49
10
F.3d 1208, 1211-15 (7th Cir. 1995);1 cf. United States ex rel.
Mosay v. Buffalo Bros. Management, Inc., 20 F.3d 739 (7th Cir.
1994) (holding that tribal members may sue as relators). Congress
wished to protect tribes by aligning them with the federal
government in court and supporting them with an army of federal
relators. We cannot allow evasion of this protection by permitting
TTEA to sue the Tribe for a declaratory judgment under § 81, when
the Tribe could not even bring an action in its own name under that
section.
III
Independent of the issue of the district court’s jurisdiction
over TTEA’s attempt to secure a ruling on § 81, it has (and, on
appeal, we have) subject matter jurisdiction to determine whether
the tribal court was improperly exercising jurisdiction over the §
1
The Supreme Court has granted certiorari on the question
whether the federal government’s power to sue state courts in
federal court notwithstanding the Eleventh Amendment, cf. United
States v. Mississippi, 380 U.S. 128, 140 (1965), is transferable to
qui tam relators acting in its name. See United States v. State of
Vt. Agency of Natural Resources, 162 F.3d 195 (2d Cir. 1998), cert.
granted, 119 S. Ct. 2391 (U.S. June 24, 1999) (No. 98-1828). Even
Judge Weinstein, who dissented from the panel opinion, did not
dispute that a relator can have standing to sue on behalf of the
United States. See id. at 224 (Weinstein, J., dissenting) (“[T]he
notion of a qui tam relator ‘standing in the shoes of’ the United
States may be sufficient to confer standing”). This, however, may
be because he was bound by prior circuit precedent. See United
States ex rel. Kreindler & Kreindler v. United Technologies Corp.,
985 F.2d 1148, 1154 (2d Cir. 1993).
In any event, neither the standing nor the sovereign immunity
issue is directly relevant here. If the Supreme Court’s decision
rendered § 81 incapable of enforcement in federal courts, that
would only solidify our holding that the courts do not have
jurisdiction to grant TTEA declaratory relief.
11
81 claim. In National Farmers Union Insurance Co. v. Crow Tribe of
Indians, 471 U.S. 845, 852 (1985), the Supreme Court held that
“whether an Indian tribe retains the power to compel a non-Indian
property owner to submit to the civil jurisdiction of a tribal
court is . . . a ‘federal question’ under § 1331.” It thus affirmed
the district court’s conclusion that its jurisdiction was properly
invoked under § 1331 to determine “whether a tribal court has
exceeded the lawful limits of its jurisdiction.” Id. at 853.
A.
Before we can reach this jurisdictional issue, however, we
must consider whether the district court should have abstained from
evaluating the tribal court’s jurisdiction, because TTEA has not
yet exhausted tribal remedies. The Supreme Court has found that a
federal court should “stay[] its hand until after the Tribal Court
has had a full opportunity to determine its own jurisdiction and to
rectify any errors it may have made.” Id. at 857 (footnotes
omitted); see also Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 17
(1987) (noting that the tribal appellate courts should initially be
permitted to review the tribal trial court’s rulings).
The exhaustion rule is prudential rather than jurisdictional.
See Strate v. A-1 Contractors, 117 S. Ct. 1404, 1412 (citing Iowa
Mutual, 480 U.S. at 20 n.14). Thus, if the tribal courts have
already fully reviewed the jurisdictional issue, the federal court
need not hold off review until after an assessment of damages in a
subsequent trial phase. In Iowa Mutual, the record revealed that
12
appellate review remained available. See 480 U.S. at 17 (citing
the appellate review section of the applicable tribal code). The
record in this case does not include a copy of the tribal code that
would permit assessment of whether further tribal court review of
the jurisdictional determination is possible.
Ordinarily, we might assume that postjudgment appellate review
remains available in the tribal courts, but TTEA has already filed
what it labeled as an “appeal” challenging subject matter
jurisdiction. That motion was denied by the same judge who issued
the initial order. Absent any reason to believe that TTEA could
appeal the jurisdictional determination once again at the
conclusion of the damages proceeding, we hold that the district
court properly chose not to abstain from assessing the tribal
court’s jurisdiction.
B.
A tribal court generally does not have jurisdiction over non-
Indian defendants. See Montana v. United States, 450 U.S. 544, 565
(1981). There is, however, an important exception. A tribe may
regulate the activities of nonmembers who enter consensual
relationships with the tribe or its members through commercial
dealing, contracts, leases, or other arrangements. See id. at 565-
66; see also Strate, 117 S. Ct. at 1415. The cases that the
Supreme Court has cited as illustrating this exception do not
include any contractual arrangements between the tribe and a
nontribal party, such as the one here. Nonetheless, this case fits
13
so squarely within the Supreme Court’s delineation of the
exception, which is phrased to cover “consensual relationships with
the tribe or its members,” id. (emphasis added), that it must be
applicable here.
A tribal court therefore ordinarily would have jurisdiction
over this transaction. However, the civil jurisdiction of the
tribal courts can be limited by congressional act. See, e.g., Iowa
Mutual, 480 U.S. at 18 (noting that civil jurisdiction over non-
Indians on reservation lands “presumptively lies in the tribal
courts unless affirmatively limited by a specific treaty provision
or federal statute”). TTEA does not argue that § 81 itself
abrogates tribal jurisdiction, and for good reason. The
enforcement mechanism states that a relator “may” bring an action
in a court of the United States, but does not explicitly create
exclusively federal jurisdiction. In Charles Dowd Box Co. v.
Courtney, 368 U.S. 502 (1962), the Supreme Court refused to find
exclusively federal jurisdiction in a similarly worded statute.
Section 81 thus does not overcome the presumption of concurrent
state (and here, tribal) jurisdiction.
TTEA, however, submits that the Restoration Act, 25 U.S.C. §§
1300g to 1300g-7, which deals directly with the Ysleta Tribe,
abrogates tribal jurisdiction. Specifically, it cites § 1300g-
4(f), which provides, “The State shall exercise civil and criminal
jurisdiction within the boundaries of the reservation as if such
14
State had assumed such jurisdiction with the consent of the tribe
under sections 1321 and 1322 of this title.”
The Tribe’s claim is that the mandatory “shall exercise”
language imports exclusive state jurisdiction, leaving the tribal
courts no role at all. To assess this contention, we must examine
25 U.S.C. § 1322:
The consent of the United States is hereby given to any
State not having jurisdiction over civil causes of action
between Indians or to which Indians are parties which
arise in the areas of Indian country situated within such
State to assume, with the consent of the tribe occupying
the particular Indian country or part thereof which would
be affected by such assumption, such measure of
jurisdiction over any or all such civil causes of action
arising within such Indian country or any part thereof as
may be determined by such State to the same extent that
such State has jurisdiction over other civil causes of
action, and those civil laws of such State that are of
general application to private persons or private
property shall have the same force and effect within such
Indian country or part thereof as they have elsewhere
within that State.
§ 1322(a). We must ask whether § 1300g-4(f) deprives the tribal
courts of jurisdiction over generally applicable contract law, and,
if so, whether § 1322 applies to actions involving tribes, or only
actions involving Indians.
We conclude that § 1300g-4(f), through § 1322(a), does not
deprive tribal courts of concurrent jurisdiction over such matters.
A treatise on Indian law explains by discussing Public Law 83-280,
67 Stat. 588 (1953), which established the original version of what
is now § 1322(a):
The civil law provisions of Public Law 280 expressly
preserve the legislative authority of tribes where not
15
inconsistent with applicable state civil law. The
wording of the section shows that its purpose is to
require that such tribal laws be recognized in state
courts, but nothing in the wording of either the civil or
criminal provisions of Public Law 280 or its legislative
history precludes concurrent tribal court authority. The
basic intent of the criminal law section was to
substitute state for federal jurisdiction under the
Indian Country Crimes Act and the Indian Major Crimes
Act. [Because] these two statutes do not preclude
concurrent tribal jurisdiction, neither should Public Law
280.
Felix Cohen, Handbook of Federal Indian Law ch. 6, § B4, at 344
(1982); see also Walker v. Rushing, 892 F.2d 672, 675 (8th Cir.
1990) (following this analysis in allowing concurrent tribal
criminal jurisdiction); Confederated Tribes of the Colville
Reservation v. Superior Court,945 F.2d 1138, 1140 n.4 (9th Cir.
1991).
The amendments to Public Law 280 served only to increase
tribal autonomy by requiring tribal consent before a state could
assume concurrent jurisdiction. See generally S. REP. NO. 721, 90th
Cong. (1968), reprinted in 1968 U.S.C.C.A.N. 1837, 1865-66. Though
the Restoration Act obviates this consent requirement, it cannot be
read as establishing exclusive state jurisdiction. We are aware
that the Tenth Circuit recently concluded that a statute which
similarly gave states jurisdiction “as if” through § 1322 provided
jurisdiction exclusive of federal involvement. See United States
v. Burch, 169 F.3d 666, 669 (10th Cir. 1999). As Professor Cohen’s
reasoning demonstrates, however, this does not mean that state
court jurisdiction under Public Law 280 is exclusive of tribal
16
jurisdiction. We thus find that the tribal court did not violate
federal law in exercising subject matter jurisdiction.
IV
In sum, we hold that the federal district court correctly
concluded that it has no jurisdiction to entertain TTEA’s action on
the contract against the Tribe. The district court erred in
refusing to examine the tribal court’s jurisdiction under the
Restoration Act, but TTEA’s action for injunctive relief against
the tribal court should have been dismissed anyway, for failure to
state a claim. For TTEA, all may not be lost; we take no position
on the deference due the judgment of the tribal court in collection
proceedings in state or federal court.
Our conclusion, though flowing from principles of tribal
sovereignty, could make it more difficult for tribes to find
entities willing to contract with them. Yet we recognize that
tribes can, like Ulysses, tie their hands to the mast and thus
resist the sirens. Sovereign immunity can be waived, and the
federal and state courts await to resolve disputes if tribes’
contractual partners insist on such protection.
AFFIRMED.
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