IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-40088
COMSTOCK OIL & GAS INC., Successor by merger
to Black Stone Oil Company; ORYX ENERGY
COMPANY; SUN OPERATING LIMITED
PARTNERSHIP,
Plaintiffs-Appellees-Appellants,
versus
ALABAMA AND COUSHATTA INDIAN TRIBES
OF TEXAS; ET AL,
Defendants,
ALABAMA AND COUSHATTA INDIAN TRIBES
OF TEXAS,
Defendant-Appellee,
MORRIS R. BULLOCK, Individually and as Member of
the Tribal Council of the Alabama and Coushatta Indian
Tribes of Texas; PERRY D. WILLIAMS, Individually
and as Member of the Tribal Council of the Alabama and
Coushatta Indian Tribes of Texas; MELINDA L. SYLESTINE,
Individually and as Member of the Tribal Council of the
Alabama and Coushatta Indian Tribes of Texas; KEVIN P.
BATTISE, Individually and as Member of the Tribal
Council of the Alabama and Coushatta Indian Tribes of Texas;
MCCLAMROCH BATTISE, Individually and as Member of
the Tribal Council of the Alabama and Coushatta Indian Tribes
of Texas; SIDNEY PONCHO, Individually and as Member of
the Tribal Councilof the Alabama and Coushatta Indian Tribes
of Texas; EDWIN D. BATTISE, Individually and as Member
of the Tribal Council of the Alabama and Coushatta Indian
Tribes of Texas,
Defendants-Appellants.
Appeals from the United States District Court
for the Eastern District of Texas
August 27, 2001
Before POLITZ, DeMOSS, and STEWART, Circuit Judges.
CARL E. STEWART, Circuit Judge:
This case arises from a dispute regarding the validity of oil and gas leases entered into by the
Alabama and Coushatta Indian Tribes of Texas (“the Tribe”), Comstock Oil and Gas Company, and
Kerr-McGee Corporation1 ( collectively “the oil companies”). Defendants-Appellants ( “the tribal
council members”) contend that the district court prematurely ruled on the existence and jurisdiction
of the tribal court and thereby erro neously prevented the oil companies from exhausting their
remedies in the tribal court. The tribal council members also argue that the district court lacked
subject matter jurisdiction to hear the oil companies’ claims and that the court erred in ruling that the
tribal council members were not entitled to sovereign immunity. The oil companies allege that the
district court erred in concluding that the Tribe was, however, entitled to sovereign immunity and by
consequently dismissing their claims against the Tribe. For the reasons assigned herein, we affirm
the district court in part, reverse in part, and remand.
FACTUAL AND PROCEDURAL BACKGROUND
The Tribe is federally recognized under the Alabama and Coushatta Indian Tribes of Texas
Restoration Act. See 25 U.S.C. §§ 731-737. As such, it controls lands set aside and held in trust for
1
Kerr-McGee Corporation is the successor to Oryx Energy Company and the General Partner
of Sun Operating Limited Partnership.
2
it as a reservation. 25 U.S.C. §§ 733(a), 736(a). Between 1979 and 1993, the Tribe signed nine oil
and gas exploration leases with the oil companies granting the right to explore and produce
hydrocarbons. Two of the leases were negotiated and executed by the Bureau of Indian Affairs
(“BIA”) pursuant to the Indian Mineral Development Act of 1982. See 25 U.S.C. §§ 2101-2108.
The State of Texas executed the remaining seven leases before the effective date of the Alabama and
Coushatta Indian Tribes of Texas Restoration Act, and the BIA approved them.
On October 26, 1998, the Tribe and seven tribal council members filed suit in the United
States District Court for the Eastern District of Texas, Lufkin Division, against the oil companies.
Alleging that certain oil and gas leases were void because t he Secretary of the Interior had not
approved them, the Tribe and the tribal council members sought to cancel the leases. In addition,
they claimed that the leases were void for deficiencies in production and that the oil companies had
misappropriated natural gas liquids extracted from tribal lands. They sought damages in excess of
$100,000,000, but dismissed the federal action on December 18, 1998.
On that same date, the Tribe filed suit in a tribal court that was formed after the Tribe initially
filed suit in federal court. Again, the Tribe sought to have the leases declared null and void because
of deficiencies in execution or production. In the alternative, the Tribe claimed that the leases were
void because they had not been approved by the Secretary of the Interior pursuant to 25 U.S.C. § 81.
On February 9, 1999, naming the Tribe and tribal council members as defendants, the oil
companies filed a motion for a declaratory judgment that the tribal court is nonexistent and that the
disputed leases are in full effect. In response, the defendants moved to dismiss on three grounds.
First, they claimed that the oil companies’ declaratory judgment action sought to adjudicate the same
facts as the tribal court action. Second, they asserted that sovereign immunity deprived the court of
3
personal jurisdiction over the Tribe and the tribal council members in their official capacities. Finally,
the tribe and tribal council members contended that the district court lacked subject matter
jurisdiction because the oil companies failed to exhaust their tribal remedies.
The district court made the following conclusions. Neither the Tribe nor Congress waived
the Tribe’s sovereign immunity. Thus, with respect to the Tribe, the court dismissed the oil
companies’ motion for declaratory judgment for lack of personal jurisdiction. However, the court
failed to extend the Tribe’s sovereign immunity to the individual tribal council members and
accordingly denied the motion seeking to dismiss them for lack of personal jurisdiction. In addition,
the court determined that the tribal court was improperly constituted, that the doctrine of exhaustion
of remedies was, therefore, inapplicable, and that the exhaustion doctrine did not bar the court’s
exercise of subject matter jurisdiction. The tribal council members now appeal these findings, and
the oil companies cross-appeal the district court’s conclusion that the Tribe was entitled to sovereign
immunity.
DISCUSSION
I. Sovereign Immunity
A. Tribal Council Members
This Court reviews de novo whether an official is entitled to sovereign immunity. Beck v.
Tex. State Bd. of Dental Exam’rs, 204 F.3d 629, 633 (5th Cir. 2000); see also Baker Elec. Coop., Inc.
v. Haske, 28 F.3d 1466, 1471 (8th Cir. 1994)(stating that immunity of tribal officials is subject to de
novo review).
The district court relied on TTEA v. Ysleta Del Sur Pueblo, 181 F.3d 676 (5th Cir. 1999), in
ruling that the tribal council members were not entitled to sovereign immunity against the oil
4
companies’ declaratory judgment suit. But the tribal council members assert that this reliance was
misplaced and attempt to distinguish not only TTEA but also Puyallup Tribe, Inc. v. Department of
Game of State of Washington, 433 U.S. 165, 97 S. Ct. 2616, 53 L. Ed. 2d 667 (1977), and Santa
Clara Pueblo v. Martinez, 436 U.S. 49, 98 S. Ct. 1670, 56 L. Ed. 2d 106 (1978). They argue that
in each of those cases, the plaintiffs sought to enjoin the defendant tribal officials from carrying out
or enforcing allegedly unconstitutional or illegal acts or from overstepping their jurisdictional
mandate. In the present dispute, the tribal council members contend that they were acting lawfully
on behalf of the Tribe and, thus, derivatively enjoy the tribe’s sovereign immunity.2
The tribal council members have merely presented an encore argument before this court.
Upon initially addressing this argument, the district court aptly expressed the error of the tribal
council members’ position. Comstock, 78 F. Supp. 2d 589, 593 (E.D. Tex. 1999)(“Recent authority
within the Fifth Circuit, binding on this court, indicates the Defendants’ position is in error.” (citing
TTEA v. Ysleta Del Sur Pueblo, 181 F.3d 676 (5th Cir. 1999)). We agree with the district court.
The tribal council members have incorrectly characterized the import and applicability of
TTEA to the case at bar. It is binding authority on this dispute. Therefore, the sundry cases that the
tribal council members cite from other circuits to buttress their immunity claim, based on their
allegedly having been acting within the scope of their authority, are unpersuasive and irrelevant. The
district court correctly concluded that the tribal council members were not entitled to tribal sovereign
immunity because, in the Fifth Circuit, tribal officials are not immune from suits for declaratory and
2
The tribal council members rely on a collage of non-binding cases to support this contention.
See, e.g., Snow v. Quinault Indian Nation, 709 F.2d 1319, 1321 (9th Cir. 1983)(stating that “tribal
immunity extends to tribal officials acting in their representative capacity and within the scope of their
authority”); Imperial Granite Co. v. Pala Band of Mission Indians, 940 F.2d 1269, 1271 (9th Cir.
1991).
5
injunctive relief. TTEA , 181 F.3d at 680-81 (reasoning that the “distinct but similar concept” of
tribal sovereign immunity should not extend “further than the now-constitutionalized doctrine of
sovereign immunity,” which encompasses the proposition that: “State sovereign immunity does not
preclude declaratory or injunctive relief against state officials”). Thus, the district court did not err
in concluding that the tribal council members are not entitled to sovereign immunity against the oil
companies’ declaratory judgment action.
B. Tribe
1. Jurisdiction
Citing Swint v. Chambers County Commission, 514 U.S. 35, 51, 115 S. Ct. 1203, 131 L. Ed.
2d 60 (1995), the oil companies contend that the district court’s interlocutory order holding that the
Tribe is immune from suit is “inextricably intertwined” with the tribal council members’ appellate
issues because they involve the same law and facts. Because the oil companies sought declaratory
judgment against the Tribe and the tribal council members, they assert that TTEA is relevant to the
resolution of both parties’ inquiries. The oil companies argue that this court should, therefore,
exercise its pendent jurisdiction to review their cross-appeals challenging the Tribe’s sovereign
immunity.
The Tribe counters that the analysis of its immunity as a sovereign entity is separate from any
determination of whether the tribal council members are entitled to immunity based on having acted
within the scope of their authority. It additionally asserts that this case does not present “rare and
unique” circumstances sufficient to invoke this court’s pendent jurisdiction. See Gros v. City of
Grand Prairie, 209 F.3d 431, 436 (5th Cir. 2000)(“Pendent appellate jurisdiction should be exercised
only in ‘rare and unique’ circumstances.”). Finally, the Tribe contends that the oil companies’ cross-
6
appeals are not in the interest of judicial economy and that this court lacks jurisdiction over them
because a grant of sovereign immunity is capable of being fully and effectively reviewed upon final
judgment. Burge v. Parish of St. Tammany, 187 F.3d 452, 467 (5th Cir. 1999).
We agree that the district court’s tribal immunity ruling does not fit within the collateral order
doctrine,3 but find the oil companies’ jurisdictional arguments compelling. Specifically, under TTEA,
the appropriate question for both the Tribe and the tribal council members is whether the oil
companies sought declaratory or injunctive relief. The record demonstrates an irrefutably affirmative
response. Because the sovereign immunity challenges of the oil companies and the tribal council
members stem from the same underlying lawsuit and involve overlapping issues of law and fact, we
find that this case presents rare and unique circumstances sufficient for this court to exercise its
pendent jurisdiction.
2. Analysis
This Court reviews de novo the district court’s conclusions about sovereign immunity. Kelly
v. Syria Shell Petroleum Dev., 213 F.3d 841, 845 (5th Cir. 2000).
The district court failed to address the Tribe’s sovereign immunity claim pursuant to TTEA.
Relying on Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 118 S. Ct.
1700, 140 L. Ed. 2d 981 (1998), it noted that: “‘As a matter of federal law, an Indian tribe is subject
to suit only where Congress has aut horized the suit or the tribe has waived its immunity.’”
Comstock, 78 F. Supp. 2d at 592 (quoting Kiowa, 118 S.Ct. at 1702). The district court further
3
See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S. Ct. 1221, 1225-1226, 93
L.Ed. 1528 (1949)(stating that conclusive decisions that resolve important issues apart from an
action’s underlying merits and that are effectively unreviewable on appeal from final judgment may
be immediately appealed).
7
reasoned that Kiowa stands for the proposition that tribal immunity is applicable to contracts,
including mineral leases. Id. Finding neither Congressional authorization nor express tribal waiver
of immunity, the district court held that the Tribe continued to enjoy sovereign immunity and, thus,
could not be properly brought before the court. Id.
We note, however, that in TTEA, this court aptly distinguished Kiowa as an action for
damages rather than one for injunctive or declaratory relief and reasoned that: “This difference
matters.” TTEA, 181 F.3d at 680. Reviewing the district court’s grant of the Tribe’s motion to
dismiss for lack of personal and subject matter jurisdiction, this court found that “the Tribe ha[d]
sovereign immunity from an award of damages only.” Id. Accordingly, it concluded that, “while the
district court correctly dismissed the damages claim based on sovereign immunity, tribal immunity
did not support its order dismissing the actions seeking declaratory and injunctive relief.” Id. at 680-
81.
In the case sub judice, the oil companies sought declaratory relief against the Tribe. TTEA
is, therefore, dispositive on the issue of the tribe’s asserted immunity. As such, we find that the
district court erroneously concluded that the Tribe was entitled to sovereign immunity against the oil
companies’ claims for equitable relief.4
II. Subject Matter Jurisdiction
A. Standard of Review
4
We pretermit the oil companies’ alternative argument that the Tribe waived its immunity by
filing suit in federal court before seeking adjudication of its claims in the tribal court.
8
This court reviews legal determinations regarding the subject matter jurisdiction of a district
court de novo. United States v. Alvarado, 201 F.3d 379, 381 (5th Cir. 2000); United States v.
Urrabazo, 234 F.3d 904, 906 (5th Cir. 2000).
B. Exhaustion of Remedies
Relying on National Farmers Union Insurance Co. v. Crow Tribe of Indians, 471 U.S. 845,
105 S. Ct. 2447, 85 L. Ed. 2d 818 (1985), the tribal council members claim that the district court
could only properly review the tribal court’s jurisdiction after the tribal court had received a full and
fair opportunity to determine its own jurisdiction. See id. at 856 (stating that “policy favors a rule
that will provide the forum whose jurisdiction is being challenged the first opportunity to evaluate the
factual and legal bases for the challenge” and that “[e]xhaustion of tribal court remedies . . . will
encourage tribal courts to explain the precise basis for accepting jurisdiction”). Thus, the tribal
council members contend that the district court erred by not staying its consideration of the tribal
court’s existence and jurisdiction until after the oil companies had completely adjudicated their claims
before the tribal court. The oil companies counter that, pursuant to 28 U.S.C. § 1331, the district
court had jurisdiction to determine the tribal court’s jurisdiction. See Nat’l Farmers, 471 U.S. at 852
(“The question whether an Indian tribe retains the power to compel a non-Indian . . . to submit to the
civil jurisdiction of a tribal court is one that must be answered by reference to federal law and is a
‘federal question’ under § 1331.”). They also note that tribal courts are generally allowed t o
determine the existence and extent of their jurisdiction before federal courts adjudicate the issue only
as a matter of comity.
We find the latter argument availing because exhaustion of remedies is prudential and not
jurisdictional. Strate v. A-1 Contractors, 520 U.S. 438, 453, 117 S. Ct. 1404, 137 L. Ed. 2d 661
9
(1997)(“[T]his Court recognized . . . that the exhaustion rule stated in Nat’l Farmers was ‘prudential,’
not jurisdictional.”); TTEA, 181 F.3d at 683 (“The exhaustion rule is prudential rather than
jurisdictional.”). The district court found that the Tribe’s constitution and bylaws, as amended June
20, 1990, contained no provisions for the creation of a judiciary and that no evidence supports a
finding that the constitution was properly amended to allow for the formation of a tribal judiciary.
Comstock, 78 F. Supp. 2d at 600. Thus, the tribal judicial code, which was adopted after the Tribe
dismissed its federal claim, impermissibly created the tribal court. See id.
Our review of the record supports the district court’s findings. Because no tribal court
properly existed, exhaustion was imprudent in the present dispute. Id. at 597 (agreeing that “if no
tribal court exists, exhaustion of remedies is inapplicable”); see also Johnson v. Gila River Indian
Cmty., 174 F.3d 1032, 1036 (9th Cir. 1999)(holding that exhaustion is not required when there is a
doubt that a functioning tribal court exists); Krempel v. Prairie Island Cmty., 125 F.3d 621, 622 ( 8th
Cir. 1997)(stating that “if there is no functioning tribal court, exhaustion would be futile”). Therefore,
the district court did not err by exercising its jurisdiction to determine the existence and jurisdiction
of the tribal court and in ruling that the oil companies were not required to exhaust their remedies in
the tribal court before seeking a declaratory judgment in federal court.
C. Oil and Gas Mineral Leases
Based on the extensive regulatory scheme involved in the administration of oil and gas leases
on tribal lands, the district court opined that its authority to adjudicate the instant dispute was “beyond
question.” Comstock, 78 F. Supp. at 595 (citing The Indian Mineral Development Act of 1982, 25
10
U.S.C. §§ 2101-2108, C.F.R. Part 225, The Indian Mineral Leasing Act of 1938, 25 U.S.C. §§ 396a-
396d, and 25 C.F.R. §§ 211.19-.21).5
The tribal council members argue that under TTEA, the district court lacked jurisdiction to
hear the oil companies’ declaratory judgment action because the contested oil and gas leases were
mere contracts. See TTEA, 183 F.3d at 681 (“The federal courts do not have jurisdiction to entertain
routine contract actions involving Indian Tribes.”). Moreover, they claim the district court should
have exercised federal question jurisdiction over the oil companies’ declaratory judgment action only
if the statutory provisions provided the tribe with an unambiguous right to sue the oil companies.
Because the federal statutes and regulations governing tribal oil and gas leases provide no such express
right, the tribal council members contend that those provisions cannot furnish a basis for federal
question jurisdiction over the oil companies’ declaratory judgment action. See id. (“‘Federal 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 present
a federal question.’”)(quoting Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 20,
103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983)). The tribal council members further contend that, under
TTEA, the district court lacked subject matter jurisdiction because the oil companies’ declaratory
judgment action involved no statute that provides for an implied right of action.
The oil companies counter that important distinctions exist between TTEA and the case at bar.
They first observe that the declaratory judgment plaintiff in TTEA asserted jurisdiction based on the
5
The district court reasoned that it additionally had jurisdiction under the Declaratory Judgment
Act, 28 U.S.C. § 2201. Comstock, 78 F. Supp. at 595. This conclusion was, however, erroneous.
See TTEA, 181 F.3d at 681 (“The declaratory judgment statute offers no independent ground for
jurisdiction.”).
11
inapplicability of 25 U.S.C. § 81, which requires the Secretary of Interior to approve certain contracts
between Indian tribes and non-members. See TTEA, 181 F.3d at 680. This court ultimately found
that assertion inadequate to establish subject matter jurisdiction. Id. at 681 (reasoning that “the
possibility that the Tribe might invoke § 81 as a defense to TTEA’s action” cannot bestow federal
jurisdiction because, “[u]nder the well-pleaded complaint rule, an anticipatory federal defense is
insufficient for federal jurisdiction”). Second, the oil companies charge that unlike the smoke shop
agreements at issue in TTEA, the contested oil and gas leases are not “routine contracts.” They note
that, although a precise definition for the term has not been established, the cases on which this court
relied in TTEA to make the routine contract pronouncement each involved an action between an
Indian tribe and non-members that was governed by general common law principles of contract. See
Gila River Indian Cmty. v. Hennigson, Durham & Richardson, 626 F.2d 708 (9th Cir. 1980)(involving
a suit for negligent design under an architectural design contract); Mescalero Apache Tribe v.
Martinez, 519 F.2d 479 (10th Cir. 1975)(adjudicating a suit for breach of a construction contract).
Finally, relying on Rainbow Resources, Inc. v. Calf Looking, 521 F. Supp. 682 (D. Mont. 1981),6 the
oil companies propound that the statutes regulating oil and gas mineral leases on tribal lands are
indeed sufficient to provide for an implied right of action in federal courts.
6
In Rainbow Resources, Inc., the plaintiff oil lessee, Rainbow Resources, Inc. (“Rainbow”),
sought to block enforcement of a temporary restraining order issued in the Blackfeet Tribal Court,
which prohibited Rainbow’s removal of its equipment from the leased lands. Rainbow Resources,
Inc., 521 F. Supp. at 682. The court concluded that: “Congress has chosen to grant exclusive
authority for the regulation, administration and supervision of oil and gas leases on lands allotted to
. . . Indians to the Secretary of the Interior. . . .[I]mplicit in this congressional act is a cause of action
for declaratory and injunctive relief relating to enforcement of the regulations prescribed under 26
U.S.C. [§§] 396[a-396d].” Id. at 684.
12
The tribal council members’ contentions are unavailing. In Tenneco Oil Co., v. Sac & Fox
Tribe of Indians of Oklahoma, 725 F.2d 572, 574 (10th Cir. 1984), Tenneco Oil Company (“Tenneco”)
acquired an interest in an oil and gas lease with the Sac and Fox Tribe. The Sac and Fox Tribe
subsequently enacted several ordinances designed to impose licensing, organizational, and taxation
requirements on Tenneco and attempted to cancel Tenneco’s lease. Id. Tenneco sued for declaratory
and injunctive relief in federal court, but the district court granted the Sac and Fox Tribe’s motion to
dismiss, which alleged sovereign immunity and asserted that no federal question had been raised. Id.
On appeal, the Tenth Circuit reasoned that Tenneco’s claim had raised a federal question. Id.
at 575. It noted that, by its express terms, the lease provided that it “‘shall be subject to the
regulations of the Secretary of Interior now or hereafter in force . . . .’” Id. (citation omitted). It
further opined that “the Tribal Leasing Act itself defers to and recites that it is intended to supplement
the supervisory power of the Secretary of the Interior” and, therefore, held that federal question
jurisdiction was present. Id.
Two years later, the court approvingly cited Tenneco during its discussion of another case that
raised a jurisdictional issue regarding tribal oil and gas leases. See Superior Oil Co. v. United States,
798 F.2d 1324 (10th Cir. 1986). The Tenth Circuit emphasized its holding in Tenneco that federal
question jurisdiction was present based on federal regulation of oil and gas leases. Id. at 1330. The
court concluded, however, that exercise of that federal jurisdiction is proper only “after all available
remedies have first been exhausted in the tribal court, unless exhaustion would be futile.” Id. at 1331.
We agree with Tenneco and Superior. The federal regulations and statutes governing tribal
oil and gas leases are adequate to invoke federal question jurisdiction over the instant dispute between
13
the Tribe and oil companies.7 Moreover, this extensive regulatory scheme demonstrates that tribal oil
and gas leases represent a very specialized subset of contracts and, therefore, compels the conclusion
that they belie characterization as routine contracts. This is a significant distinction. Thus, we do not
contradict the reasoning of TTEA8 by adopting the rationale of our sister circuit and holding that the
district court properly exercised jurisdiction over the oil companies’ declaratory judgment action.
CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s ruling that the tribal court was not
created in accordance with federally mandated procedures, that the illegitimately formed tribal court
could not exercise jurisdiction over the instant tribal oil and gas lease dispute, that the oil companies
were, therefore, not required to exhaust their remedies before the non-existent tribal court, and that
the tribal council members are not entitled to sovereign immunity against the oil companies’
declaratory judgment action in federal court. But we REVERSE the district court’s ruling that the
Tribe is entitled to sovereign immunity from the oil companies’ suit and REMAND for proceedings
consistent with this opinion.
REVERSED in part, AFFIRMED in part, and REMANDED.
7
See Chuska Energy Co. v. Mobil Exploration & Producing N. Am., Inc., 854 F.2d 727, 729-30
th
(5 Cir. 1988)(observing that federal jurisdiction over the parties’ case, which concerned an alleged
breach of an oil and gas assignment involving Indian lands, would have been permissible “if Chuska
had sued the Secretary of the Interior to approve the agreement or the Navajos to enforce the
agreement”).
8
See TTEA, 181 F.3d at 681 (“The federal courts do not have jurisdiction to entertain routine
contract actions involving Indian tribes.”)(emphasis added).
14