No. 96-1037 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1996 KIOWA TRIBE OF OKLAHOMA, PETITIONER v. MANUFACTURING TECHNOLOGIES, INC. ON PETITION FOR A WRIT OF CERTIORARI TO THE OKLAHOMA COURT OF APPEALS BRIEF FOR THE UNITED STATES AS AMICUS CURIAE WALTER DELLINGER Acting Solicitor General LOIS J. SCHIFFER Assistant Attorney General EDWIN S. KNEEDLER Deputy Solicitor General EDWARD C. DUMONT Assistant to the Solicitor General DAVID C. SHILTON ELIZABETH ANN PETERSON Attorneys Department of Justice Washington, D.C. 20530-0001 (202)514-2217 ---------------------------------------- Page Break ---------------------------------------- QUESTION PRESENTED Whether the sovereign immunity from suit ac- corded to Indian Tribes as a matter of federal law bars an action brought in state court to recover money damages for a breach of contract arising out of com- mercial activity undertaken by the Tribe outside Indian country. (I) TABLE OF CONTENTS Page Statement . . . . 1 Discussion . . . . 5 Conclusion . . . . 20 TABLE OF AUTHORITIES Cases: Aircraft Equip. Co. v. Kiowa Tribe of Okla.: 921 P.2d 359 (Okla. 1996) . . . . 4, 7-8, 12, 15, 16, 18 No .86,184 (Okla. May 6, 1997) . . . . 9, 18 Blatchford v. Native Village Noatak, 501 U.S. 775 (1991) . . . . 5, 13 Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1 (1831) . . . . 1, 13, 14 Crow Dog, Ex parte, 109 U.S. 556(1883) . . . . 2 DeCoteau v. District County Court, 420 U.S. 425 (1975) . . . . 16 DeFeo v. Ski Apache Resort, 904 P.2d 1065 (Ct. App.), cert. denied, 903 P.2d 844(N.M. 1995). . . . 17 Elliott v. Capital Int'l Bank &Trust, Ltd., 870 F. Supp. 733(E.D. Tex. 1994), aff'd, 102 F.3d 549 (5th Cir. 1996) . . . . 17 Escondido Mut. Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765 (1984) . . . . 14 First Nat'l Bank in Altus v. Kiowa, Comanche, & Apache Intertribal Land Use Comm., 913 P.2d 299 (Okla. 1996) . . . . 4, 9 Gavle v. Little Six, Inc., 555 N.W. 2d 284 (Minn. 1996), petition for cert. pending, No. 96-1215 . . . . 16, 19 Henry v. First Nat'l Bank of Clarksdale v. Mississippi Action for Progress, Inc., 595 F.2d 291 (5th Cir. 1979), cert. denied, 444 U.S. 1074 (1980) . . . . 18 Hoover v. Kiowa Tribe of Okla., 909 P.2d 59 (Okla. 1995), cert. denied, 116 S. Ct. 1675 (1996) . . . . 4-5, 6, 7, 8, 11, 12, 18 ---------------------------------------- Page Break ---------------------------------------- IV Cases-Continued Page Lewis v. Sac & Fox Tribe of Okla. Hous. Auth., 896 P.2d 503 (Okla. 1994), cert. denied 116 S. Ct. 476 (1995) . . . . 6, 7, 8, 16 Lone Wolf v. Hitchcock, 187 U.S. 553 (1903) . . . . 2 Maricopa County v. Valley Nat'l Bank, 318 U.S. 357 (1943) . . . . 18 Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973) . . . . 8, 12 Morgan v. Colorado River Indian Tribe, 443 P.2d 421 (Ariz. 1968) . . . . 16 Morton v. Mancari, 417 U.S. 535 (1974) . . . . 14 National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845 (1985) . . . . 14 Nevada v. Hall, 440 U.S. 410 (1979) . . . . 7, 13, 15 North Sea Prods., Ltd. v. Clipper Seafoods Co., 595 P.2d 938 (Wash. 1979) . . . . 16 Oklahoma Tax Comm'n v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505 (1991) . . . . 5, 9, 10, 11, 12, 14, 19 Oklahoma Tax Comm'n v. Graham, 489 U.S. 553 838 (1989) . . . . 6, 16 Organized Village of Kake v. Egan, 369 U.S. 60 (1962) . . . . 12 Padilla v. Pueblo of Aconza, 754 P.2d 845 (N.M. 1988), cert. denied, 490 U.S. 1029 (1989 . . . . 7, 8, 17 Pueblo of Acoma v.. Padilla, 490 U.S. 1029 (1989) . . . . 17 Puyullup Tribe, Inc. v. Department of Game, 433 U.S. 165 (1977) . . . . 5, 11, 12 Ramey Constr. Co. v. Apache Tribe of Mescalero Reservation, 673 F.2d 315 (10th Cir. 1982) . . . . 11 Richardson v. Mt. Adams Furniture, 980 F.2d 590 (9th Cir. 1992), cert. denied, 510 U.S. 1039 (1994). . . . 17 Sac & Fox Nation v. Hanson, 47 F.3d 1061 (10th Cir.), cert. denied, 116 S. Ct. 57 (1995) . . . . 8, 15, 16, 18 Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) . . . . 5 ---------------------------------------- Page Break ---------------------------------------- V Cases-Continued: Seneca-Cayuga Tribe of Okla. v. Oklahoma ex rel.. Thompson, 874 F.2d 709 (10th Cir. 1989) . . . . 11 Thebo v. Choctaw Tribe, 66 F. 372 (8th Cir. 1895) . . . . 5 Three Affiliated Tribes v. Weld Eng'g, 476 U.S. 877 (1986) . . . . 5 Turner v. United States, 248 U.S. 354 (1919) . . . . 5 United States v. Alabama, 313 U.S. 274 (1941) . . . . 18 United States v. U.S. Fidelity & Guar. Co., 309 U.S. 506.(1940). . . . 5, 14 United States v. Wheeler, 435 U.S. 313 (1978) . . . . 14 Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480 (1983) . . . . 15 Weeks Constr., Inc. v. Oglala Sioux Hous. Auth, 797 F.2d 668 (8th Cir. 1986) . . . . 11 White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980) . . . . 13, 14 Williams v. Lee, 358 U.S. 217 (1959). . . . 19 Treaties, statutes and regulation Treaty with the Camanches, Etc., July 27, 1853, 10 Stat. 1013 . . . . 1 Treaty with the Camanches and Kioways, Oct. 18, 1865, 14 Stat. 717 . . . . 1 Treaty with the Kiowa, Etc., May 26, 1837, 7 Stat. 533 . . . . 1 Treaty with the Kiowa Indians, Oct. 21, 1987, 15 Stat. 589 . . . . 1, 2 Treaty with the Kiowas and Camanches, Oct. 21, 1867, 15 Stat. 581 . . . . 1, 2 Anti-Injunction Act, 28 U.S.C. 2283 . . . . 17, 18 Federally Recognized Indian Tribe List Act of 1994: 25 U.S.C. 479a . . . . 2 25 U.S.C. 479a-1 . . . . 2 Foreign Sovereign Immunities Act of 1976, 28 U.S.C. 1604 . . . . 15 ---------------------------------------- Page Break ---------------------------------------- VI Statutes and regulation-Continued: Indian Reorganization Act of 1934, 25 U.S.C. 461 et seq.: 16,25 U.S.C. 476 . . . . 10, 11 17,25 U.S.C. 477 . . . . 10 Indian Self-Determination and Education Assistance Act, 25 U.S.C. 450 et seq . . . . 14 25 U.S.C. 450n . . . . 14 Indian Tribal Justice Act, 25 U.S.C. 3601(2) . . . . 14 Native American Housing Assistance and Self- Determination Act of 1996, Pub. L. No. 104-330, 2(3), 110 Stat. 4017 (to be codified at 25 U.S.C. 4101(3)) . . . . 14 Oklahoma Indian Welfare Act, ch. 831, 53, 49 Stat. 1967 . . . . 10, 11 Oklahoma Indian Welfare Act, 25 U.S.C. 501 et seq.: 25 U.S.C. 503 . . . . 10 25 U.S.C. 504-505 . . . . 10 25 C.F.R. 83.2 . . . . 2 Miscellaneous: 61 Fed. Reg. 58,211,58,213 (1996) . . . . 2 ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1996 No. 96-1037 KIOWA TRIBE OF OKLAHOMA, PETITIONER v. MANUFACTURING TECHNOLOGIES, INC. ON PETITION FOR A WRIT OF CERTIORARI TO THE OKLAHOMA COURT OF APPEALS BRIEF FOR THE UNITED STATES AS AMICUS CURIAE This brief is submitted in response to the Court's invitation to the Acting Solicitor General to express the views of the United States. STATEMENT 1. The United States entered into its first treaty with the Kiowa Nation of Indians in 1837. 7 Stat. 533. Later treaties with the Kiowa were concluded in 1853 (10 Stat. 1013), 1865 (14 Stat. 717), and 1867 (15 Stat. 581, 589). Those treaties effectively recognized the Kiowa as a domestic dependent nation and established a relationship of trust and protection between the Tribe and the United States. See Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1831) (Indian tribes (1) ---------------------------------------- Page Break ---------------------------------------- 2 "may * * * be denominated domestic dependent nations," whose "relation to the United States resem- bles that of a ward to his guardian"); cf. Ex parte Crow Dog, 109 U.S. 556,571-572(1883) (recognizing original status and rights of Indian Tribes). To this day, the United States continues to recognize the Kiowa Tribe of Oklahoma as having "the immuni- ties and privileges available to * * * federally ac- knowledged Indian tribes by virtue of their govern- ment-to-government relationship with the United States as well as the responsibilities, powers, limita- tions and obligations of such tribes." 61 Fed. Reg. 58,211, 58,213 (1996) (quoting 25 C.F.R. 83.2); see also 25 U.S.C. 479a, 479a-1. 1 In its 1867 treaties with the Kiowa, Comanche and Apache Tribes, 15 Stat. 581, 589, the United States set aside, from the original tribal lands, well over 2,000,000 acres as a permanent reservation for the Tribes. See Lone Wolf v. Hitchcock, 187 U.S. 553 (1903) (describing history). Through later shifts in law and policy, however, the United States largely abrogated those treaties, and divested the Kiowa Tribe of the majority of the reserved lands, in ex- change for allotments of land to individual members of the Tribe and cash compensation to be held in trust for the Tribe by the United States. Ibid. We are in- formed that the Tribe today owns approximately 1,200 acres of land in Oklahoma, much of it in scattered parcels, as well as an interest in approximately 3,000 acres of land held by the United States in trust for the Kiowa, Comanche and Apache Tribes. ___________________(footnotes) 1 We are informed that the Tribe presently has approxi- mately 10,000 enrolled members, of whom a smaller number are actively involved in tribal affairs. ---------------------------------------- Page Break ---------------------------------------- 3 2. The record in this case is sparse. It appears that a tribal entity known as the Kiowa Industrial Devel- opment Commission entered into a letter agreement dated March 19, 1990, in which it agreed to purchase stock then held by respondent in an Oklahoma corpo- ration known as Clinton-Sherman Aviation, Inc. See Pet. App. 2; Pet. on Prom. "-Note 1; Answer of Def. Kiowa Tribe 1; Def. Kiowa Tribe's Br. in Opp. to Pltf's Mot. for Summ. J. (Opp. Summ. J.) 1. On April 3, 1990, the then-Chairman of the Tribe's Business Committee signed, in the name of the Tribe, a short- term promissory note (the Note) promising to pay respondent $285,000, with interest at an annual rate of 10% in the ordinary course and 15% after any default. Judgment 1 (Oct. 30, 1995); Note 1-2 (attached as Exh. A to Pet. on Prom. Note); Opp. Summ. J. L The face of the Note indicates that it was signed at Carnegie, Oklahoma, where the Tribe maintains a Tribal Complex on land held in trust for the Tribe by the United States. Note 1-2; see Mot. to Dismiss 1. Respondent's petition seeking enforcement of the Note alleges (at 2), however, that the Note was "executed and delivered to [respondent] in Oklahoma City," and petitioner does not appear to have con- tested that allegation. Unless otherwise directed, payments were to be made at respondent's offices in Oklahoma City. Note 1. In a paragraph entitled "Waivers and Governing Law," the Note fails to spec- ify a particular governing law, but it explicitly pro- vides: "Nothing in this Note subjects or limits the sovereign rights of the Kiowa Tribe of Oklahoma." Note 2. The Note called for only two payments, to be made 30 and 90 days after the Note was signed. Note 1. The Tribe did not make either payment. Judgment 1. It ---------------------------------------- Page Break ---------------------------------------- 4 further appears, from the decision in a related case, that a similar financial undertaking given by the Tribe in connection with the acquisition of additional shares of Clinton-Sherman Aviation was secured by the acquired shares, which subsequently proved to be worthless. Pet. App. 3; Hoover v. Kiowa Tribe of Okla., 909 P.2d 59,60 & n.3 (Olda. 1995), cert. denied, 116 S. Ct. 1675 (1996); see also Aircraft Equip. Co. v. Kiowa Tribe of Okla., 921 P.2d 359, 360 & n.1 (Okla. 1996) (default by Tribe on assumption and guaranty of pre-existing promissory note). 3. Three years after payment was due, respondent sued the Tribe in state court seeking judgment on the Note. Pet. App. 2 Pet. on Prom. Note (filed Aug. 24, 1993). The Tribe moved to dismiss for lack of juris- diction, in part on the ground that the Tribe had never waived its sovereign immunity from suit, and there- fore could not be sued for money damages. See Pet. App. 2; Mot. to Dismiss 1. The court denied that mo- tion ( see Opp. Summ. J. 2 n.1), and the Tribe answered, again asserting its immunity from suit (Answer 2). The court granted respondent's motion for summary judgment, awarding respondent a total of $445,471 in principal and accrued interest, together with attor- neys' fees and costs. Judgment 1-2. The Oklahoma Court of Appeals affirmed. Pet. App. 1-4. The court rejected the Tribe's sovereign immu- nity argument on the authority of Hoover v. Kiowa Tribe of Oklahoma, supra, and First National Bank in Altus v. Kiowa, Comanche and Apache Inter- tribal Land Use Committee, 913 P.2d 299 (1996), in which the Oklahoma Supreme Court held that "a con- tract between an Indian tribe and a non-Indian is en- forceable in state court when the contract is executed outside of Indian Country." Hoover, 909 P.2d at 62. ---------------------------------------- Page Break ---------------------------------------- 5 In this case, the Oklahoma Supreme Court declined discretionary review. See Pet. 2. DISCUSSION In this and related cases, the courts of the State of Oklahoma have asserted jurisdiction over actions for money damages brought directly against an Indian Tribe. That assertion conflicts with decisions of this Court, the federal courts of appeals, and courts of last resort in other States. Review by this Court is necessary to resolve that conflict and to correct a serious error of federal law that fails to respect the sovereign status of Indian Tribes and threatens their economic well-being. 1. In Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505, 509 (1991), this Court reaffirmed that "[s]uits against Indian tribes are * * * barred by sovereign immunity absent a clear waiver by the tribe or congressional abrogation." That statement reflects longstanding precedent. Blatchford v. Native Village of Noatak, 501 U.S. 775, 782 (1991) ('We have repeatedly held that Indian tribes enjoy immunity against suits by States."); Santa Clara Pueblo v. Martinez, 436 U.S. 49,58 (1978) ("Indian tribes have long been recognized as possessing the common-law immunity from suit traditionally enjoyed by sovereign powers."); see also Three Affiliated Tribes v. Weld Eng'g, 476 U.S. 877, 890-891 (1986); Puyallup Tribe, Inc. v. Department of Game, 433 U.S. 165, 172-173 (1977); United States v. U.S. Fidelity & Guar. Co., 309 U.S. 506, 512 (1940); Turner v. United States, 248 U.S. 354, 358 (1919); Thebo v. Choctaw Tribe, 66 F. 372, 374-376 (8th Cir. 1895). ---------------------------------------- Page Break ---------------------------------------- 6 2. In this case, petitioner has not waived its tribal sovereign immunity. Indeed, the promissory note on which respondent sued explicitly provides that "[n]othing in this Note subjects or limits the sover- eign rights of the Kiowa Tribe of Oklahoma." Note 2. Nor has there been any suggestion that Congress has abrogated the Kiowa Tribe's immunity in any respect that is relevant to this case. Nonetheless, the state court of appeals held that "[a]s the law now exists in Oklahoma, there appears no doubt that the promis- sory note at issue may be enforced in state court, the doctrine of sovereign immunity notwithstanding." Pet. App. 4. a. The court of appeals relied (Pet. App. 3) on the decision rendered by the Supreme Court of Oklahoma in a case with essentially identical facts, involving the Kiowa Tribe and arising out of the same trans- action. Hoover v. Kiowa Tribe of Okla., 909 P.2d 59, 60& n.3 (1995), cert. denied, 116 S. Ct. 1675 (1996). In Hoover, the Oklahoma Supreme Court first noted that a state court has jurisdiction to consider the merits of a tribal sovereign immunity defense raised in litigation that is otherwise properly before the court. Id. at 61 (citing Oklahoma Tax Comm'n v. Graham, 489 U.S. 838 (1989)). The court then refer- red to its earlier decision in Lewis v. Sac and Fox Tribe of Oklahoma Housing Authority, 896 P.2d 503 (1994), cert. denied, 116 S. Ct. 476 (1995), which held (id. at 507-512) that the Oklahoma courts are gener- ally empowered to decide civil cases arising within their territorial jurisdiction, whether those cases are governed by federal or state law. Although the Lewis court recognized that a special jurisdictional inquiry was appropriate "whenever Indian interests are ten- dered in a controversy," it held that "[o]nly that ---------------------------------------- Page Break ---------------------------------------- 7 litigation which is explicitly withdrawn by Congress or that which infringes upon tribal self-government stands outside the boundaries of permissible state- court cognizance." Id. at 508. Lewis did not address the question of sovereign immunity, which was not asserted before the state supreme court in that case. 896 P.2d at 506 n. 15, 511 & n.59; Hoover, 909 P.2d at 61. In deciding that issue, Hoover cited approvingly the New Mexico Supreme Court's decision in Padilla v. Pueblo of Acorns, 754 P.2d 845, 850-851 (1988), cert. denied, 490 U.S. 1029 (1989), which held that a New Mexico court could decide a claim brought against a Tribe by a private party alleging a breach of contract in connection with off-reservation commercial activity undertaken by the Tribe. Hoover adopted Padilla's reasoning that a forum State's decision to recognize a Tribe's sover- eign immunity from suit on claims arising within the usual territorial and subject-matter jurisdiction of the state courts was no different from the forum State's decision to accord another State immunity from claims arising out of activity undertaken by the other State within the forum State's territory. Hoover, 909 P.2d at 62; see Padilla, 754 P.2d at 850-851. Citing this Court's decision in Nevada v. Hall, 440 U.S. 410 (1979), Padilla held that that decision was "solely a matter of comity." 754 P.2d at 850. Because Oklahoma, like New Mexico, allows its courts to entertain suits against itself for breach of contract, Hoover concluded that "a contract between an Indian tribe and a non-Indian is enforceable in state court when the contract is executed outside of Indian Country." 909 P.2d at 62. b. The Oklahoma Supreme Court reaffirmed Hoo- ver in Aircraft Equipment Co. v. Kiowa Tribe of ---------------------------------------- Page Break ---------------------------------------- 8 Oklahoma (Aircraft Equipment I), 921 P.2d 359 (1996), another case arising (like this case and Hoo- ver) out of petitioner's purchase of the shares of Clinton-Sherman Aviation (see id. at 360 & n.1). The dissent in Aircraft Equipment I (id. at 362-363) argued that the court's position "contravene[d] the mainstream of contemporary sovereign immunity jurisprudence" and conflicted directly with decisions of two federal courts of appeals. Although the major- ity acknowledged a conflict with the Tenth Circuit's decision in Sac and Fox Nation v. Hanson, 47 F.3d 1061, cert. denied, 116 S. Ct. 57 (1995), it dismissed that decision as "a federal court's pronouncement on a state law question" that "lacks the force of authori- ty." Aircraft Equip: I, 921 P.2d at 361. Pointing out that its decisions in Lewis and Hoover were based in large part on its reading of this Court's cases, the court in Aircraft Equipment I quoted the statement in Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148-149 (1973), that "[a]bsent. express federal law to the contrary, Indians going beyond reservation boundaries have generally been held subject to non- discriminatory state law otherwise applicable to all citizens of the State." Aircraft Equip. I, 921 P.2d at 361-362. The court concluded that "[h]aving cited those cases [in Hoover], and given the fact that the Supreme Court of the United States has chosen not to grant certiorari to review either the Hoover or Lewis opinions, [the court would] decline to follow the reasoning of the 10th Circuit." Id. at 362. Finally, the Oklahoma Supreme Court recently upheld the right of Aircraft Equipment Co. to enforce its state judgment against petitioner using the reme- dies ordinarily available to judgment creditors in state court, including invoking state judicial power to ---------------------------------------- Page Break ---------------------------------------- 9 seize tribal tax revenues. Aircraft Equip. Co. v. Kiowa Tribe of Okla., No. 86,184, (May 6, 1997). Finding "no merit to the Tribe's argument that Lewis, Hoover, and Aircraft [Equipment] I are con- trary to federal law," slip op. 117, the court held (again over a dissent based on tribal sovereign immunity) that any burden on petitioner was "legally permis- sible where the Tribe ventured outside its Indian country, engaged in commercial activity for economic gain, and created a contract controversy which was ultimately settled in [state] court" (id. at 10). See also First Nat'l Bank in Altus v. Kiowa, Comanche and Apache Intertribal Land Use Comm., 913 P.2d 299, 301 (Okla. 1996) (finding Hoover "dispositive of the question presented"). 3. The state court of appeals was therefore correct to hold (Pet. App. 4) that it was required to assert jurisdiction over petitioner in this case, "[a]s the law now exists in Oklahoma." The Oklahoma rule cannot, however, be reconciled with this Court's cases con- cerning tribal sovereign immunity. a. Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe makes clear that tribal sovereign immunity bars an action for monetary relief, even if the action is based on a Tribe's commercial dealings with nonmembers. In Potawa- tomi, Oklahoma sought to recover $2.7 million from the Citizen Band Potawatomi Indian Tribe for taxes on cigarettes sold to nonmembers by a store owned and operated by the Tribe. See 498 U.S. at 507. This Court held that the Tribe could be required to collect state taxes on future cigarette sales to nonmembers, but that tribal sovereign immunity barred a money judgment against the Tribe for unpaid taxes on past sales. Id. at 509-511, 514. ---------------------------------------- Page Break ---------------------------------------- 10 In Potawatomi, the Court specifically refused Oklahoma's invitation "to construe more narrowly, or abandon entirely, the doctrine of tribal sovereign immunity." 498 U.S. at 510. The State argued that "tribal business activities * * * are now so detached from traditional tribal interests that the tribal-sover- eignty doctrine no longer makes sense: and that the doctrine therefore "should be limited to the tribal courts and the internal affairs of tribal government." Ibid. In rejecting that argument, the Court observed that Congress "has always been at liberty to dispense with * * * tribal immunity or to limit it," and "has occasionally authorized limited classes of suits against Indian tribes," but that it has never author- ized actions to enforce tax assessments, and has "consistently reiterated its approval of the immunity doctrine." Ibid. 2 The Court concluded that, although ___________________(footnotes) 2 Congress has provided for suits against Indian Tribes in connection with commercial activities under certain limited circumst ances, which are not alleged to obtain in this case. In the Indian Reorganization Act of 1934 (IRA), 25 U.S.C. 461 et seq., Congress authorized most Tribes to adopt constitutions for the conduct of their governments (IRA 516, 25 U.S.C. 476) and to receive separate charters of incorporation to enable them to engage in business activities through separate entities (IRA 17, 25 U.S.C. 477). The Oklahoma Indian Welfare Act (OIWA), ch. 831, 3, 49 Stat. 1967 (1936), authorizes Oklahoma Tribes to adopt constitutions and to receive corporate charters equiva- lent to those issued under the IRA. 25 U.S.C. 503. Charters of incorporation issued under Section 17 of the IRA often contain a clause expressly allowing the corporation to sue or be sued. Similarly, the OIWA authorizes any ten or more individual Oklahoma Indians to form a cooperative association chartered by the Secretary of the Interior, and the Act expressly provides that such an association "may sue and be sued" in state or federal court. 25 U.S.C. 504-505. Some courts have construed "sue or be sued" clauses in IRA charters to waive the ---------------------------------------- Page Break ---------------------------------------- 11 the State might have alternative methods of collecting the taxes at issue, there was "no doubt that sovereign immunity bar[red] the State from pursuing the most efficient remedy" by bringing suit directly against the Tribe. Id. at 514. b. The Oklahoma Supreme Court's decisions deny- ing immunity to petitioner rely heavily on the fact that the transaction giving rise to this litigation was evidently negotiated, and the relevant documents were allegedly signed, within the State's territorial jurisdiction and not on land held by or for the Tribe or its members. See, e.g., Hoover, 909 P.2d at 61-62. This Court has previously refused to draw such a distinction for purposes of tribal sovereign immunity from suit. In Puyallup Tribe, Inc. v. Department of Game, a Tribe challenged a state court's judgment that asserted "jurisdiction to regulate the fishing activities of the Tribe both on and off its reservation." ___________________(footnotes) immunity of the incorporated entity from suit. See, e.g., Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 671 (8th Cir. 1986). Any such waiver is limited, however, to the business dealings and assets of the corporation, and does not extend to the Tribe in its sovereign capacity. See, e.g., Seneca- Cayuga Tribe of Okla. v. Oklahoma ex rel. Thompson, 874 F.2d 709, 715 n.9 (l0th Cir. 1989); Ramey Constr. Co. v. Apache Tribe of Mescalero Reservation, 673 F.2d 315, 320 (l0th Cir. 1982). Indeed, the absence of any similar authorization (by chart er or statute) to sue the tribal governments organized under Section 3 of the OIWA (or Section 16 of the IRA) rein- forces the conclusion that those governments remain protected by the established rule of sovereign immunity. In this case, the promissory note on which respondents sued was signed in the name of the Tribe by the chairman of its governing Business Committee, and there is no question of waiver because the Note specifically reserved the Tribe's "sovereign rights." Note 2; Opp. Summ. J. 1. ---------------------------------------- Page Break ---------------------------------------- 12 433 U.S. at 167. This Court held that a claim of sovereign immunity was "well founded" to the extent that it was "advanced on behalf of the Tribe, rather than the individual [Indian] defendants." Id. at 167- 168; see id. at 172-173. Accordingly, the Court. held that "the portions of the state-court order that involve[d] relief against the Tribe itself must be vacated in order to honor the Tribe's valid claim of immunity." Id. at 173. In reaching that conclusion, the Court did not distinguish the Tribe's activities on reservation land from those occurring elsewhere, observing simply that, "[a]bsent an effective waiver or consent, it is settled that a state court may not exercise jurisdiction over a recognized Indian tribe." Id. at 172. The Oklahoma Supreme Court relied on cases such as Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973), and Organized Village of Kake v. Egan, 369 U.S. 60 (1962). See Hoover, 909 P.2d at 61 (quoting Mescalaro and Kake); Aircraft Equip. I, 921 P.2d at 361-362 & n.2 (same). Those cases hold that a State may have authority to tax or regulate Tribes or indi- vidual Indians who engage in conduct (such as operat- ing a ski resort, as in Mescalero, or fishing, as in Kake) within the State but outside Indian country. As Potawatomi makes clear (see 498 U.S. at 514), however, there is a difference between the right to de- mand compliance with state law and the means that may be available to enforce such compliance. Neither Mescalero nor Kake discusses enforcement, or men- tions tribal immunity from suit. This Court's later decisions in Potawatomi and Puyallup address those issues, and they hold that neither a valid state tax nor a valid state fishing regulation may be enforced in a suit brought directly against an affected Tribe. ---------------------------------------- Page Break ---------------------------------------- 13 c. This Court's decision in Nevada v. Hall, 440 U.S. 410 (1979), is not to the contrary. In that case, the California courts asserted jurisdiction over the State of Nevada, based on conduct by a Nevada agent within California's territorial jurisdiction. The Court noted that, in the absence of any other source of controlling federal law, any restriction on California's judicial power would have to be found in the federal Constitution. See id. at 414 & n.5. The Court held, however, that the constitutional compact generally leaves each State free to decide, as a matter of policy and comity, whether and on what terms to accord its sister States immunity from suit in its courts. Id. at 418-427. Indian Tribes, however, "are not States, and the differences in the form and nature of their sover- eignty make it treacherous" to reason too quickly by analogy. White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 143 (1980); see also Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 15-20 (1831) (Tribes are neither "States" nor "foreign States" for purposes of Article III, but "may, more correctly, perhaps, be denominated domestic dependent nations"); compare Blatchford, 501 U.S. at 781-782 (a Tribe may not sue a State in federal court, as another State might do; the mutual cession of jurisdiction by the States to the federal sovereign does not apply to suits by or against Tribes, "as it would be absurd to suggest that the tribes surrendered immunity in a convention to which they were not even parties"). Unlike the two States involved in Nevada v. Hall, the State of Oklahoma and the Kiowa Tribe involved in this case are both subject to a body of federal constitutional, statutory, and com- mon law that controls the question of tribal sovereign immunity. ---------------------------------------- Page Break ---------------------------------------- 14 As "domestic dependent nations" (Potawatomi, 498 U.S. at 509, quoting Cherokee Nation, 30 U.S. (5 Pet.) at 17), the Tribes "occupy a unique status under our law" (National Fawners Union ins. Cos. v. Crow Tribe, 471 U.S. 845, 851 (1985)). See also, e.g., United States v. Wheeler, 435 U.S. 313, 322-323 (1978); Morton v. Mancari, 417 U.S. 535, 551-552 (1974); United States v. U.S. Fidelity & Guar. Co., 309 U.S. at 512-513. Although the Tribes "retain some of the inherent powers of the self-governing political com- munities that were formed long before Europeans first settled in North America" (National Fanners Union Ins. Cos., 471 U.S. at 851), their right to self- government "is ultimately dependent on and subject to the broad power of Congress" (White Mountain Apache, 448 U.S. at 143). See also, e.g., Escondido Mut. Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765, 787 n.30 (1984); Wheeler, 435 U.S. at 323. On the other hand, Congress has recognized that "the United States has a trust responsibility * * * that includes the protection of the sovereignty of each tribal government." 25 U.S.C. 3601(2). 3 Consistent with that policy, Congress has not abrogated, but rather has confined, the sovereign immunity of Indian Tribes horn suit. See 25 U.S.C. 450n (nothing in the Indian Self-Determination and Education As- sistance Act, 25 U.S.C. 450 et seq., which establishes a ___________________(footnotes) 3 See also, e.g., Native American Housing Assistance and Self-Determination Act of 1990, Pub. L. No. 104-330, 2(3), 110 Stat. 4017 ( to be codified at 25 U.S.C- 4101(3)) ("[Tlhe Constitu- tion of the United States invests the Congress with plenary power over the field of Indian affairs, and through treaties, statutes, and historical relations with Indian tribes, the United States has undertaken a unique trust responsibility to protect and support Indian tribes and Indian people."). ---------------------------------------- Page Break ---------------------------------------- 15 framework of financial assistance for Tribes, is to be construed as "affecting, modifying, diminishing, or otherwise impairing the sovereign immunity from suit enjoyed by an Indian tribe"). As a matter of both plenary power and special responsibility, the legal status of the Indian Tribes-including their immu- nity from suit-is a matter of federal law. These bedrock principles of federal law, and the vesting of plenary power over Indian affairs in the United States rather than in the States, establish that the immunity of a Tribe from suit in state court is not a mere matter of "comity" for each State to decide, unlike in Nevada v. Hall. 4 Congress could, of course, if it chose, render the Tribe amenable to suit in state court on commercial contracts signed outside of Indian country. But it has not done so. In the ab- sence of affirmative congressional action, or consent by the Tribe, the rule of this Court's cases is that the Tribe is immune from suit for money damages. 4. As the Oklahoma Supreme Court has acknowl- edged (Aircraft Equip. I, 921 P.2d at 361-362), Okla- homa's assertion of jurisdiction over damage suits against petitioner arising out of its commercial ac- tivities outside Indian country conflicts directly with the Tenth Circuit's decision in Sac and Fox Nation v. Hanson. In Hanson, the federal court of appeals affirmed the entry of an injunction against Oklahoma state court proceedings that sought money damages or indemnification from an Indian Tribe on the basis ___________________(footnotes) 4 Similarly, the amenability of a foreign nation to suit in state court is a matter of federal law, to be determined by the political Branches in the exercise of their plenary powers over foreign affairs. See 28 U.S.C. 1604; Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480,486-489,493,497 (1983). ---------------------------------------- Page Break ---------------------------------------- 16 of contractual and statutory claims arising out of a tribal business venture outside the Tribe's own territory. See 47 F.3d at 1065 ("Without an explicit waiver, the Nation is immune from suit in state court-even if the suit results from commercial activity occurring off the Nation's reservation."). 5 Hanson is consistent with this Court's cases con- cerning tribal sovereign immunity, and with the decisions of most other appellate courts that have considered the matter of state-court jurisdiction over suits against Tribes. See Gavle v. Little Six, Inc., 555 N.W.2d 284, 290 (Minn. 1996) (immunity from damage suit arising from operation of casino, where alleged acts took place both within and outside Indian country), petition for cert. pending, No. 96-1215 (filed Jan. 29, 1997); North Sea Prods., Ltd. v. Clippcr- Seafoods Co., 595 P.2d 938, 941 (Wash. 1979) (Tribe did not waive its immunity from state garnishment action by engaging in commercial conduct off the reservation); Morgan v. Colorado River Indian Tribe, 443 P.2d 421, 423-424 (Ariz. 1968) (immunity from suit for damages arising from accident at ___________________(footnotes) 5 The state supreme court incorrectly characterized Hanson as "a federal court's pronouncement on a state law question." Aircraft Equip. I, 921 P.2d at 361. As we have ex- plained, the question of tribal immunity from suit is one of federal law. The state court is generally correct, however, that it has concurrent. (rather than subordinate) jurisdiction over many questions of federal law, including the question of state-court. jurisdiction in the face of a claim of tribal immu- nity. See generally Lewis, 896 P.2d at 507-509 Oklahoma Tax Comm'n v. Graham, supra. That is why the conflict between the decisions is equivalent to a conflict in the courts of ap- peals for purposes of this Court's discretionary review. See DeCoteau v. District County Court, 420 U.S. 425, 430-431 (1975). ---------------------------------------- Page Break ---------------------------------------- 17 amusement park operated by Tribe outside its reservation); see also Elliott v. Capital Int'l Bank & Trust, Ltd., 870 F. Supp. 733, 735 (E.D. Tex. 1994) (immunity where officer of bank chartered and owned by Tribe allegedly defrauded plaintiff outside Indian country), aff'd, 102 F.3d 549 (5th Cir. 1996) (Table); but see Padilla v. Pueblo of Acoma, supra. The Okla- homa decisions rejecting Hanson and adopting the reasoning of the New Mexico Supreme Court in Padilla v. Pueblo of Acoma have deepened a preexist- ing conflict on this issue. See Pueblo of Acoma v. Padilla, 490 U.S. 1029 (1989) (White, J., dissenting from denial of certiorari); DeFeo v. Ski Apache Re- sort, 904 P.2d 1065, 1069 (Ct. App.) (recognizing incon- sistency between Padilla and federal decisions), cert. denied; 903 P.2d 844 (N.M. 1995) (Table). That ripe and square conflict distinguishes the situation in this case from that in Richardson v. Mt. Adams Furni- ture, 980 F.2d 590 (1992), cert. denied, 510 U.S. 1039 (1994), in which we suggested (92-1398 U.S. Br. at 14- 19) that the Court deny review of the Ninth Circuit's decision on a similar issue (tribal immunity from suit by a bankruptcy trustee against a tribal business to set aside a transfer that occurred outside Indian country). The conflict is, moreover, one that warrants reso- lution by this Court. Because Oklahoma is within the Tenth Circuit, Tribes are now subject to conflicting rules on a fundamental legal question of tribal amena- bility to suit. When a Tribe is sued in state court, the Anti-Injunction Act (28 U.S.C. 2283), principles of federal abstention, and the lower federal courts' lack of jurisdiction to review final state judgments (see Pet. App. 11-13) will stand as significant barriers to a Tribe's ability to gain vindication of its federal rights ---------------------------------------- Page Break ---------------------------------------- 18 in federal court. 6 Oklahoma Tribes (and other Tribes doing business in Oklahoma) are therefore largely deprived of the immunity guaranteed to them by federal law and neither Tribes nor their potential commercial counterparties can be certain what law will apply to prospective contractual arrangements. Finally, as the state supreme court's most recent Aircraft Equipment decision underscores, the state courts' holdings leave petitioner subject to attach- ment or garnishment of tribal tax revenues or other tribal funds. Such attachment represents a signifi- cant interference with the Tribe's essential govern- mental functions. In addition, as petitioner points out (Pet. 13), the practical difficulty of separating tribal finds from federal program funds provided by the United States for administration by the Tribe- which are unquestionably immune from garnish- ment-has already led to direct and material interfer- ence with federal programmatic interests.7 ___________________(footnotes) 6 In Hanson, the court declined to consider the effect of the Anti-Injunction Act on the ground that the defendant had waived reliance on that Act by failing to raise it in the district court. 47 F.3d at 1062-1063. 7 With respect to the immunity of property in which the United States has an interest, see generally Maricopa County v. Valley Nat'1 Bank, 318 U.S. 357, 362 (1943); United States v. Alabama, 313 U.S. 274, 282-283 (1941); Henry v. First Nat'l Bank of Clarksdale v. Mississippi Action for Progress, Inc., 595 F.2d 291,308-309 (5th Cir. 1979), cert. denied, 444 U.S. 1074 (1980). The United States Attorney's Office for the Western District of Oklahoma has already been directly and substan- tially involved in two separate actions, removed by the United States to federal court, seeking to gain the release of federal program funds improperly frozen by local banks in response to state court orders issued to enforce the judgments in the Hoover and Aircraft Equipment actions. Carl E. Gungoll ---------------------------------------- Page Break ---------------------------------------- 19 These consequences are incompatible with the spe- cial protection afforded Indian Tribes under federal law, and with "Congress' desire to promote the goal of Indian self-government, including its overriding goal of encouraging tribal self-sufficiency and economic development." Potawatomi, 498 U.S. at 510 (internal quotation marks omitted). This Court should there- fore grant review of the Oklahoma courts' "doubt- ful determination of [this] important question of state power over Indian affairs." Williams v. Lee, 358 U.S. 217, 218 (1959). 8 ___________________(footnotes) Exploration Joint Venture v. Kiowa Tribe of Okla., No. CIV-96- 2059-T (W.D. OkIa.) (awaiting stipulation as to separation of federal and tribal funds); Hoover v. Kiowa Tribe of Okla., No. CIV-96-1624-L (W.D. Okla.) (motion to remand to state court pending). 6 We note that the pending certiorari petition in Citizen Potawatomi Nation v. C&L Enterprise, Inc., No. 96-1721 (filed Apr. 25, 1997), presents essentially the same question as this case, while the petition in Gavle v. Little Six, Inc., No. 96-1215 (filed Jan. 29, 1997), presents similar questions concerning the immunity of a business corporation owned by a Tribe and organized under tribal law. The interposition of a corporate entity in No. 96-1215 somewhat complicates the immunity issue in that cast and in No. 96-1721, the issue of waiver is clouded by the existence of a potentially unclear choice-of-law clause. See 96-1721 Pet. App. at 23 ("Project" defined as building to be constructed); id. at 46 (contract governed by "law of the place where the Project is located"); 96-1721 Pet. at 4 n.2 (building located on "restricted Indian land" owned by the Tribe). This case thus appears to be the better vehicle for resolution of the conflict among state and federal courts on the immunity question. ---------------------------------------- Page Break ---------------------------------------- 20 CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. WALTER DELLINGER Acting Solicitor General LOIS J. SCHIFFER Assistant Attorney General EDWIN S. KNEEDLER Deputy Solicitor General EDWARD C. DUMONT Assistant to the Solicitor General DAVID C. SHILTON ELIZABETH ANN PETERSON Attorneys JUNE 1997 ---------------------------------------- Page Break ---------------------------------------- APPENDIX Section 1097 of Title 20 (1988) provides: 1097. Criminal penalties (a) In general Any person who knowingly and willfully embezzles, misapplies, steals, or obtains by fraud, false state- ment, or forgery any funds, assets, or property pro- vided or insured under [Title IV] shall be fined not more than $10,000 or imprisoned for not more than 5 years, or both but if the amount so embezzled, mis- applied, stolen, or obtained by fraud, false statement, or forgery does not exceed $200, the fine shall not be more than $1,000 and imprisonment shall not exceed one year, or both. (b) Assignment of loans Any person who knowingly and willfully makes any false statement, furnishes any false information, or conceals any material information in connection with the assignment of a loan which is made or insured under [Title IV] shall, upon conviction thereof, be fined not more than $1,000 or imprisoned not more than one year, or both. (c) Inducements to lend or assign Any person who knowingly and willfully makes an unlawful payment to an eligible lender under part B of this subchapter as an inducement to make, or to acquire by assignment, a loan insured under that part shall, upon conviction thereof, be fined not more than $1,000 or imprisoned not more than one year, or both. (1a) ---------------------------------------- Page Break ---------------------------------------- 2a (d) Obstruction of justice Any person who knowingly and willfully destroys or conceals any record relating to the provision of assistance under [Title IV] with intent to defraud the United States or to prevent the United States from enforcing any right obtained by subrogation under this part, shall upon conviction thereof, be fined not more than $10,000 or imprisoned not more than 5 years, or both.