The United States Supreme Court has issued its long-awaited decision in Plains Commerce Bank v. Long Family & Cattle Co., Inc. and has declined to expand the jurisdiction of tribal courts over non-members. While tribes have expressed their disappointment with the decision, it is being welcomed by non-Indians doing business on lands located within tribal reservations.
The scope of tribal court jurisdiction has been the subject of a number of cases, including the land mark decision in Montana v. United States, 450 U.S. 564. According to Montana, tribes generally do not have authority over non-Indians who come within the tribe's borders and have limited authority over activities of non-members, particularly when those activities occur on land owned in fee simple by non-Indians. There are two exceptions to the Montana rule. First, a tribe may regulate, through taxation, licensing or other means, the activities of nonmembers who enter into consensual relationships with the tribe or its members through commercial dealing, contracts, leases or other arrangements. Second, a tribe may exercise civil authority over the conduct of non-Indians on fee lands within the reservation when that conduct threatens or has some direct effect on the political integrity, the economic security or the health or welfare of the tribe.
Plains Commerce Bank owned land in fee simple within the boundaries of the Cheyenne River Sioux Reservation. The Longs, who are members of the Cheyenne River Sioux Tribe, sued the bank in tribal court alleging that the bank discriminated against them when it sold the land to non-Indians instead of to the Longs. Over the bank's objection, the tribal court concluded that it had jurisdiction and, at the conclusion of a trial, awarded to the Longs damages plus interest. The court also partially nullified the bank's sale and gave the Longs an option to purchase the portion of the land that they still occupied. After the tribal court affirmed its award, the bank filed suit in federal court alleging that the tribal court lacked jurisdiction over the Longs' discrimination claim and that the tribal court's judgment was null and void. Both the federal district court and the Eighth Circuit disagreed with the bank and upheld the tribal court's award. The Supreme Court, however, thinks differently.
In short, the Supreme Court in Plains Commerce Bank ruled that the Cheyenne River Sioux court did not have jurisdiction because tribes do not have the right to regulate nonmember activities on fee land within a tribal reservation. For a further explanation of the Court's ruling and analysis, read on.
In a defeat for the tribes (albeit by a close vote), the Supreme Court ruled that the tribal court lacked jurisdiction over the Long's discrimination claim against Plains Bank. Justice Roberts, writing for the majority, stated that "sovereignty that Indian tribes retain is of a unique and limited character" and that such sovereignty "centers on the land held by the tribe and on tribal members within the reservation." The Court noted that, under Montana and its progeny, tribes do not have plenary jurisdiction over land is held in fee by non-Indians. Montana only permits tribal regulation of nonmember conduct inside the reservation that implicates the tribe's "sovereign interests," including managing tribal land, protecting tribal self-government and controlling internal relations. As a result, tribes do not have the right to regulate the sale of fee land located within reservations.
Under the Montana exceptions, tribal laws and regulations may be applied to non-members who have consented to tribal authority, expressly or by their actions. Even then, however, because tribes are not bound by the Bill of Rights, and because nonmembers have no input into the laws and regulations governing tribal land, the regulation must stem from the tribe's inherent sovereign authority to set conditions for entry on its land, preserve self-government, or control internal relations. Further, the "conduct" covered by the second Montana exception must do more than injure a tribe to confer jurisdiction on the tribal court – it must "imperil the subsistence" of the tribal community. For this Court, then, the Montana exceptions are not to be taken lightly, and the general rule that tribes cannot exercise legislative or adjudicative authority over non-members remains alive and well.
Plains Commerce Bank provides assurance that the Supreme Court is disinclined to expand tribal court jurisdiction to nonmembers except where the party has consented or is engaging in conduct that "imperils" the tribe. Tribes, no doubt, will examine anew the activities of nonmembers on fee land within their reservations and are likely to press businesses for consents to tribal court jurisdiction as tribes develop other strategies for asserting jurisdiction over nonmembers.
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