• A Long Way to Go: Supreme Court Holds Tribal Court Lacks Jurisdiction to Regulate the Sale of Fee Land
  • July 31, 2008 | Author: Aubrey Seffernick
  • Law Firm: Miller Nash LLP - Seattle Office
  • In a 5-4 decision, the U.S. Supreme Court held that a tribal court does not have jurisdiction to regulate the sale of fee land by a non-Indian bank to non-Indians. Plains Commerce Bank v. Long Family Land & Cattle Co., No. 07-411, 554 U.S. __ (June 25, 2008). The Long Family Cattle Company, a tribally owned business, deeded its land to the bank to avoid foreclosure. In exchange, the bank agreed to forgive some of the debt on the property, lease back the land to the Longs for two years, and give the Longs the option to buy back the property at the end of the two years. This deal was negotiated between the bank, tribal officers, and Bureau of Indian Affairs employees. When severe storms hit the Midwest, killing a majority of the Longs’ cattle, they were unable to buy back the property, and the bank sold the land to non-Indians. The Longs alleged that the bank sold the land to non-Indian buyers on more favorable terms than it offered the tribal company. The Longs sued in the Cheyenne River Sioux tribal court, where a jury awarded the company $750,000, concluding that the bank had discriminated against the Longs based on their Indian status.

    Although Indian tribal courts generally cannot hear disputes between tribal members and nonmembers, an exception enables a tribe to regulate nonmembers who willingly enter agreements with tribes or their members. Montana v. United States, 450 U. S. 544 (1981). This exception is known as the "consensual relationship" exemption and has allowed tribes to levy taxes on non-Indian businesses operating within a reservation and to regulate nonmembers hunting and fishing on fee land within the reservation. But in this case, the court narrowly applied the exception, foreclosing tribal jurisdiction over nonmember sales of fee land. Writing for the majority, Justice John Roberts concluded that the sale of non-Indian fee land is not an "activity" that triggers tribal jurisdiction over nonmembers. "The distinction between sale of the land and conduct on it is well-established in our precedent . . . and entirely logical given the limited nature of tribal sovereignty and the liberty interests of nonmembers." Slip op. at 16.

    Relying on policy goals that Congress adopted with the General Allotment Act, Justice Roberts concluded that it "defies common sense to suppose that Congress meant to subject non-Indians to tribal jurisdiction simply by virtue of the nonmember’s purchase of land in fee simple." Id. at 19 (internal quotation marks and citation omitted). Ignoring the bank’s nearly 20-year relationship with the Longs, the Court continued that "[i]f Congress did not anticipate tribal jurisdiction would run with the land, we see no reason why a nonmember would think so either." Id.

    In dissent, Justice Ruth Bader Ginsburg argued that "[t]he Federal Government and every State, county, and municipality can make nondiscrimination the law governing contracts generally, and real property transactions in particular. Why should the Tribe lack comparable authority to shield its members against discrimination by those engaging in on-reservation commercial relationships—including land-secured lending—with them?" Dissent, slip op. at 8. But for now, tribal courts will not be afforded comparable jurisdiction. And tribes will have to continue to brace against attempts to shrink the parameters of their sovereignty.