Agri West v. Koyama Farms, Inc.

96-067

No. 96-067

IN THE SUPREME COURT OF THE STATE OF MONTANA

1997

AGRI WEST, a Montana Partnership,

Plaintiff and Respondent,

vs.

KOYAMA FARMS, INC., a Montana
corporation,

Defendant and Appellant.

APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Big Horn,
The Honorable Robert W. Holmstrom, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Charles F. Moses, Moses Law Firm, Billings, Montana;
Harold G. Stanton, Hardin, Montana

For Respondent:

Robert J. Waller, Billings, Montana

Submitted on Briefs: September 5, 1996

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (1 of 8)4/11/2007 1:53:51 PM
 96-067

Decided: February 20, 1997
Filed:

__________________________________________
Clerk

Justice James C. Nelson delivered the Opinion of the Court.

This is an appeal from the Thirteenth Judicial District Court,
Big Horn County. The District Court, after assuming jurisdiction,
granted Plaintiff Agri West's motion for summary judgment and
subsequently entered judgment for Agri West, awarding damages.
From this judgment, Defendant Koyama Farms, Inc. appeals. We
reverse and remand.

The following issues were raised on appeal:

1. Whether the District Court erred in sustaining the
jurisdiction of the State District Court where the case between the
parties was pending in the Crow Tribal Court?

2. Whether the District Court erred in finding jurisdiction
in the State District Court where the subject matter of the action
affected office and competent leases on the Crow Indian
Reservation?

3. Whether the District Court erred in refusing to recognize
the preemption doctrine and that this case was governed by federal
statutes and regulations involving the leasing of Indian lands on
the Crow Indian Reservation?

4. Whether the District Court erred in actually applying
State law to the facts and circumstances of this case?
FACTUAL AND PROCEDURAL BACKGROUND
Agri West, is a Montana partnership engaged in farming
operations in Big Horn County, including farming on the Crow
Reservation. All Agri West partners are non-Indians. Koyama
Farms, Inc. (Koyama) is a Montana corporation with its principal
place of business in Big Horn County. Koyama is also engaged in
farming operations on the Crow Reservation. All of Koyama's
stockholders are non-Indian.
In August 1990, the Bureau of Indian Affairs (BIA) notified
Agri West that Agri West was the high bidder on leases for specific
tracts of land within the Crow Reservation and awarded Agri West
five-year leases covering the subject allotments commencing October

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (2 of 8)4/11/2007 1:53:51 PM
 96-067

1, 1990. Pursuant to this notification, Agri West began farming
certain Indian trust allotments on the Crow Reservation in the fall
of 1990. Agri West paid the rentals and planted a winter crop on
the land in October 1990. The BIA prepared the leases and
submitted them to Agri West for signature in February 1991. Agri
West executed the leases and returned those to the BIA along with
payment of the filing fees. During the summer/fall of 1991, Agri
West harvested the 1991 winter wheat crop and planted a new crop.
Additionally, Agri West paid the annual lease rental on October 1,
1991.
While these farming operations were underway, Agri West's
leasing agent attempted to obtain signed copies of the leases from
the BIA. However, the BIA informed Agri West's leasing agent that
the allotments should have been leased as "competent" leases rather
than BIA "office" leases. Accordingly, "competent" leases were
prepared for signature by the Indian land owners and those owners
were contacted to obtain their signatures.
In August 1992, Agri West harvested the 1992 winter wheat crop
and planted a new crop in September 1992. In October 1992, one of
the Indian landowners came to Agri West's leasing agent's office to
request payment on the annual lease rental. Agri West's leasing
agent gave the landowner copies of the "competent" leases and
advised the land owner that Agri West would pay the rentals when
the "competent" leases had been signed and returned. Later in
October 1992, Agri West learned that the "competent" leases were
executed in favor of Koyama. These leases were dated October 16,
1992, with effective dates of December 1, 1992.
Agri West continued to care for its crop throughout the fall
of 1992 and the spring of 1993. On July 16, 1993, Koyama filed a
civil complaint against Agri West in the Crow Tribal Court
requesting an injunction be issued against Agri West. On August
10, 1993, prior to the time Agri West intended to begin harvesting,
Koyama obtained an ex parte temporary restraining order from the
Crow Tribal Court restraining Agri West from exercising dominion
and control over the trust property and from harvesting the crop on
that property. Subsequently, Koyama entered the property,
harvested the crop and transported it to a storage facility in Big
Horn County, off the Crow Reservation, where it remains.
On August 18, 1993, Agri West filed a complaint against Koyama
in the Montana Thirteenth Judicial District Court claiming
ownership of the 1993 winter wheat crop. On June 14, 1994, the
District Court denied Koyama's motion to dismiss for lack of
subject matter jurisdiction. Specifically, the District Court
ruled that the state court had jurisdiction and was not preempted
by federal law and that the exercise of jurisdiction would not
infringe upon the right of the members of the Crow Tribe to make
their own laws and be ruled by them. On March 21, 1995, the
District Court granted Agri West's summary judgment, concluding

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (3 of 8)4/11/2007 1:53:51 PM
 96-067

that Agri West was the proper owner of the 1993 crop and that
Koyama had converted that crop. On April 17, 1995, Koyama filed an
amended complaint in the Crow Tribal Court. Subsequently, the
District Court held a hearing concerning Agri West's damages.
After the hearing, the District Court awarded Agri West damages in
its judgment dated January 16, 1996. From this judgment, Koyama
appeals. We reverse and remand.
STANDARD OF REVIEW
We review a district court's conclusions of law to determine
whether the court's interpretation of the law is correct. Carbon
County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898
P.2d 680, 686 (citing Steer, Inc. v. Department of Revenue (1990),
245 Mont. 470, 474-75, 803 P.2d 601, 603).
In this case, the District Court concluded that its assumption
of jurisdiction over an action involving a dispute between two non-
Indian parties arising out of activities on the Crow Reservation
was proper despite the Crow Tribal Court's previous assertion of
jurisdiction over the case. We review this conclusion of law to
determine whether the District Court properly interpreted the law
governing state/tribal civil jurisdiction.
DISCUSSION
Whether the District Court erred in sustaining the
jurisdiction of the State District Court where the case between the
parties was pending in the Crow Tribal Court?

We hold that the District Court erred by sustaining
jurisdiction in this action when the Crow Tribal Court had
previously assumed jurisdiction over the parties and the subject
matter of the dispute between Koyama and Agri West, and we reverse
the District Court's legal conclusion to the contrary. Because
this issue is dispositive, we will not address the remaining three
issues raised on appeal.
On June 14, 1994, the District Court denied Koyama's motion to
dismiss for lack of subject matter jurisdiction. In denying the
motion, the District Court addressed the issue "whether tribal
court jurisdiction preempts state court jurisdiction in a dispute
between two non-Indian parties arising out of activities on Indian
lands." The District Court noted that Montana has never assumed
civil jurisdiction over Indian tribes pursuant to 25 U.S.C. 1322,
or any predecessor statute. Furthermore, the court acknowledged
that, absent this assumption of jurisdiction, civil jurisdiction
over activities on reservation lands involving non-Indians as well
as Indians presumptively lies in the tribal court.
To determine whether Agri West had overcome this presumption,
the District Court employed the White Mountain Apache Tribe v.
Bracker jurisdiction test to determine whether state jurisdiction
was proper. See Marriage of Wellman (1993), 258 Mont. 131, 137,
852 P.2d 559, 563 (citing White Mountain Apache Tribe v. Bracker

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (4 of 8)4/11/2007 1:53:51 PM
 96-067

(1980), 448 U.S. 136, 142, 100 S.Ct. 2578, 2583, 65 L.Ed.2d 665,
672). After lengthy analysis, the District Court determined that
state jurisdiction over this case was not preempted by federal law
and did not infringe upon the right of reservation Indians to make
their own laws and be ruled by them. Therefore, the District Court
concluded that state jurisdiction over this action was proper.
Subsequently, on March 21, 1995, the District Court granted
Agri West's motion for summary judgment, again asserting that state
jurisdiction over this case was proper, and holding that Agri West
was the owner of the winter wheat crop and that Koyama had
converted the crop. Based on this determination, the District
Court awarded Agri West damages in its judgment dated January 16,
1996.
Koyama argues that even if this case involved an issue over
which the state and tribal courts shared concurrent jurisdiction,
the District Court erred by sustaining jurisdiction because an
identical case was pending in the Crow Tribal Court. Koyama
contends that the first court to exercise concurrent jurisdiction
retains jurisdiction to dispose of the entire case. Koyama asserts
that the state of Montana has never asserted civil jurisdiction
over the Crow tribal lands under 25 U.S.C. 1322 and 28 U.S.C.
1360, and, therefore, the Crow Tribal Court has primary and
exclusive jurisdiction over this controversy because it involves
the leasing of Indian trust property.
Agri West responds that the issue in this case is not who
possessed a valid lease for farming certain Indian trust property.
Instead, Agri West contends that the controversy simply involves
two non-Indians and concerns who is entitled to ownership of the
1993 winter wheat crop, presently located off the Crow Reservation.
Agri West asserts that the rule of priority as to questions of
concurrent jurisdiction does not apply here because no identity of
parties, subject matter or relief exists between the two cases.
Furthermore, even if the priority rule was originally applicable,
it no longer applied once Koyama removed the crop from the
reservation because that act divested the Crow Tribal Court of
concurrent jurisdiction. Agri West, therefore, argues that the
District Court properly assumed jurisdiction over this action.
We note that Koyama filed a civil complaint against Agri West
in the Crow Tribal Court on July 16, 1993, requesting that the
Tribal Court enjoin Agri West from exercising any dominion or
control over the leased trust property and from harvesting any crop
on the property. On August 10, 1993, the Crow Tribal Court issued
a temporary restraining order and an order to show cause against
Agri West. Only after the Crow Tribal Court assumed jurisdiction
over this action by issuing the temporary restraining order did
Agri West file a complaint against Koyama in the State District
Court on August 18, 1993, for resolution of ownership of the crop.
In response to this complaint, the District Court assumed

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (5 of 8)4/11/2007 1:53:51 PM
 96-067

jurisdiction despite the Crow Tribal Court's previous assumption of
jurisdiction over this action. After reviewing the record and
considering Montana law relating to state/tribal civil
jurisdiction, we conclude that the District Court erred by
sustaining jurisdiction in this action when the Crow Tribal Court
had previously exercised jurisdiction over the action.
It is well settled that Indian tribes retain their inherent
sovereign powers until Congress acts to circumscribe such powers.
Wellman, 852 P.2d at 562 (citing United States v. Wheeler (1978),
435 U.S. 313, 323, 98 S.Ct. 1079, 1086, 55 L.Ed.2d 303, 313).
Under Public Law 280, codified at 28 U.S.C. 1360, Congress
authorized state governments to unilaterally assume jurisdiction
over civil causes of action to which a tribal member was a party
and which arose within the boundaries of an Indian reservation.
Subsequently, under the 1968 Indian Civil Rights Act, Congress
repealed this authorization to unilaterally assume civil
jurisdiction and thereafter required the consent of the majority of
adult enrolled tribal members before a state could assume
jurisdiction. Wellman, 852 P.2d at 562.
Montana has not assumed civil jurisdiction on the Crow
Reservation under Public Law 280 and the Indian Civil Rights Act.
See Wellman, 852 P.2d at 562-63. Absent this assumption of
jurisdiction, civil jurisdiction over activities of non-Indians as
well as Indians on reservation lands lies presumptively in the
tribal court. Wellman, 852 P.2d at 563 (citing Fisher v. District
Court (1976), 424 U.S. 382, 96 S.Ct. 943, 47 L.Ed.2d 106).
Furthermore, we routinely treat tribal court judgments with the
same deference shown decisions of foreign nations, as a matter of
comity. Wippert v. Blackfeet Tribe (1982), 201 Mont. 299, 304, 654
P.2d 512, 515 (citing State ex rel. Stewart v. District Court
(1980), 187 Mont. 209, 609 P.2d 290; In re Marriage of Limpy
(1981), 195 Mont. 314, 636 P.2d 266)(other citations omitted).
In both Stewart and Limpy we applied the doctrine of
abstention, as a matter of comity. In Stewart, because the Crow
Tribal Code gave the Crow Tribal Court exclusive jurisdiction over
dissolution of marriage actions between tribal members residing
within the exterior boundaries of the reservation, we held that as
a matter of comity we should abstain from asserting jurisdiction
over actions of this kind. Stewart, 609 P.2d at 292. By doing so,
we hoped to "reduce the 'inter-governmental friction' likening the
'competing interests' of the State and the tribes to a 'Pullman
type abstention situation.'" Stewart, 609 P.2d at 292 (citations
omitted).
Subsequently, in Limpy, we again applied the doctrine of
abstention as a matter of comity by deferring to a Northern
Cheyenne advisory opinion holding that the Northern Cheyenne Tribal
Court had exclusive jurisdiction over dissolution of marriage
actions between members of the Tribe residing within the

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (6 of 8)4/11/2007 1:53:51 PM
 96-067

Reservation. Limpy, 636 P.2d at 269. In fact, we abstained
despite the fact that the Northern Cheyenne Tribal Court had not
attempted to exercise jurisdiction over the specific case then on
appeal. Rather, we noted that the tribal court had exercised
jurisdiction in similar cases which indicated "a disposition to
preempt State jurisdiction." Limpy, 636 P.2d at 269. Furthermore,
we could find no policy reason to justify a state court's
assumption of jurisdiction to the exclusion of the tribal court.
Limpy, 636 P.2d at 269.
The procedural history of the case before us is analogous to
that of Stewart and Limpy. As discussed above, when a tribal court
asserts jurisdiction over certain causes of action, we defer to
that assertion by applying the doctrine of abstention as a matter
of comity. If the parties contest the tribal court's assertion of
jurisdiction, then it is appropriate that they raise and litigate
that issue in the tribal court. A court has the judicial power to
rule on the question of its own jurisdiction. Karr v. Karr (1981),
192 Mont. 388, 407, 628 P.2d 267, 277. We conclude that, in the
case at bar, the Crow Tribal Court explicitly asserted jurisdiction
over this action by issuing a temporary restraining order against
Agri West. Therefore, just as in Stewart and Limpy, abstention as
a matter of comity is proper under the procedural history of this
case.
Furthermore, we reject Agri West's argument that, under the
procedural history of this case, the Crow Tribal Court lost
jurisdiction over Koyama and Agri West when the crop was removed
from the Crow Reservation. Koyama initiated this action in the
Crow Tribal Court and the Crow Tribal Court responded by assuming
jurisdiction and issuing a temporary restraining order against Agri
West, preventing Agri West from harvesting the 1993 winter wheat
crop. The fact that Koyama harvested this crop on the reservation,
but then stored it off the Crow Reservation did not automatically
divest the Crow Tribal Court of the jurisdiction which it had
already asserted. Again, if Agri West contests the jurisdiction of
the Crow Tribal Court to rule on the ownership of the crop then
this jurisdictional issue must be litigated in the court that first
asserted jurisdiction--i.e., the Crow Tribal Court--and not in the
State courts.
Accordingly, we hold that the District Court erred by
sustaining jurisdiction in this action when the Crow Tribal Court
had previously assumed jurisdiction over the parties and the
subject matter of the dispute between Koyama and Agri West.
Reversed and remanded for further proceedings consistent with
this opinion.

/S/ JAMES C. NELSON

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (7 of 8)4/11/2007 1:53:51 PM
 96-067

We Concur:

/S/ KARLA M. GRAY
/S/ TERRY N. TRIEWEILER
/S/ W. WILLIAM LEAPHART

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/96-067%20Opinion.htm (8 of 8)4/11/2007 1:53:51 PM