Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-03093/USCOURTS-ca8-06-03093-0/pdf.json

Nature of Suit Code: 230
Nature of Suit: Rent, Lease, Ejectment
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-3093

___________

Plains Commerce Bank, *

*

Plaintiff/Appellant, *

*

v. * Appeal from the United States

* District Court for the 

Long Family Land and Cattle * District of South Dakota.

Company, Inc.; Ronnie Long; *

Lila Long, *

*

Defendants/Appellees. *

*

_________________ *

*

Cheyenne River Sioux Tribe, *

*

Amicus Curiae - Amicus *

on Behalf of Appellee. *

___________

Submitted: March 12, 2007

Filed: June 26, 2007

___________

Before WOLLMAN, JOHN R. GIBSON, and MURPHY, Circuit Judges.

___________

MURPHY, Circuit Judge.

The Plains Commerce Bank (bank) brought this declaratory judgment action in

the federal district court against Ronnie and Lila Long and the Long Family Land and

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The Honorable Charles B. Kornmann, United States District Judge for the

District of South Dakota.

2

In his will Kenneth purported to devise his interest in the company and his land

on the reservation to his four children. Since Ronnie Long's siblings assigned their

interest to him, the Longs claim 100% ownership of the Long Company. The bank

disputes this, noting that it has filed a creditor's claim against the estate and asserting

that Kenneth's interest in the company was never distributed by the probate court. The

estate was still in probate at the time of the district court judgement.

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Cattle Company, Inc. (Long Company), seeking to have a tribal judgment of the

Cheyenne River Sioux Tribal Court of Appeals declared null and void. That judgment

upheld a jury verdict in the Longs' favor on their claim that the bank had discriminated

against them as Indians and tribal members. The bank now argues that the tribal

courts lacked jurisdiction over the Longs' discrimination claim and that it was denied

due process by the tribal proceedings. The district court1

 granted summary judgment

to the Longs, and we affirm. 

I.

The Long Company is a family farming and ranching business incorporated

under the laws of South Dakota and located on the Cheyenne River Sioux Indian

Reservation. Under its articles of incorporation, at least 51% of the company’s

outstanding shares must be Indian owned at all times, ensuring the company's

eligibility for Bureau of Indian Affairs (BIA) loan guarantees. See 25 C.F.R. § 103.7

(2000); see also id. § 103.25(b) (2006). Husband and wife Ronnie and Lila Long,

who are both enrolled members of the Cheyenne River Sioux Tribe (Tribe), own at

least 51% of the company’s shares. Ronnie Long’s father, Kenneth Long, who was

not a tribal member, owned the remaining 49% of the company’s shares until his death

in 1995. The parties disagree about whether his shares were distributed to Ronnie

Long,2

 but it is undisputed that the Longs have majority ownership of the company.

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The bank is a South Dakota corporation with its principal place of business

outside the reservation. The bank had been lending to the Long Company for many

years, and these loans were guaranteed by the BIA because of the Long Company's

Indian owned status. Kenneth, Lila, Ronnie, and Ronnie's mother Maxine, an enrolled

tribal member, also personally guaranteed loans extended to the company. Prior to

their deaths, Kenneth and Maxine Long mortgaged to the bank some 2,230 acres of

fee land inside the reservation in order to secure loans for the Long Company

operation. At the time of his death, Kenneth and the Long Company owed the bank

$750,000. 

In the spring of 1996 a bank officer came onto the reservation to inspect the

Longs' land, cattle, hay, and machinery. Thereafter, the bank and the Longs entered

into negotiations for a new loan agreement, and tribal officers and BIA employees

helped to facilitate the negotiating sessions which took place in the Tribe's offices.

The final agreement, which was signed at the bank's offices, provided that the

mortgaged land would be deeded over to the bank in consideration for cancelling

some debt and making additional loans to the Long Company for use in its ranching

operations. The Long Company was given a two year lease on the property with an

option to purchase. 

According to the Longs, the bank initially offered them more favorable terms,

proposing to sell the mortgaged land back to them with a twenty year contract for

deed. The bank later sent a letter to Ronnie Long withdrawing that offer, however,

citing "possible jurisdictional problems" posed by the Long Company's status as an

"Indian owned entity on the reservation." The Longs also claim that the bank never

provided the promised operating loans to the Long Company and as a result the

company was not able sustain its ranching operation through the particularly harsh

winter of 1996-97. 

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Because the Longs lost hundreds of livestock that winter, they were unable to

exercise their option to repurchase their land, which required full payment for the land

within sixty days of the expiration of their two year lease. When they did not vacate

the property after their lease expired in late 1998, the bank initiated state eviction

proceedings against them. The bank also asked the Cheyenne River Sioux Tribal

Court to serve the Longs with a notice to quit, but by this time the bank had already

sold 320 acres of the land to Ralph and Norma Pesicka. In June of 1999, while the

Longs continued to occupy a 960 acre parcel of the land, the bank sold the remaining

1,910 acres to Edward and Mary Maciejewski under a ten year contract for deed with

a lower interest rate than that offered to the Long Company under its lease with option

to purchase. Neither the Pesickas nor the Maciejewskis are tribal members. 

The Longs filed a complaint in tribal court alleging that the bank had

impermissibly engaged in self help measures when it sold the land while the Longs

were still in possession. The Longs moved for a restraining order to prevent the bank

from going through with the sales, and the bank moved to dismiss for lack of subject

matter jurisdiction. The tribal court denied both motions. The Longs then amended

their complaint to add their company as a plaintiff and to include a number of

additional causes of action against the bank, including breach of contract, bad faith,

and lack of consideration. 

The Longs also brought a discrimination claim, seeking to have the land sales

set aside on the ground that the sale to nonmembers “on terms more favorable” than

the bank had extended to the Longs evidenced “unequal treatment and unfair

discrimination against the Longs . . . ." The claim did not allege any statutory

violation. The Longs introduced as evidence the bank's letter explaining its reluctance

to sell the land to the Long Company on account of its status as an Indian owned

entity. The bank filed a counterclaim in the tribal court for wrongful holdover of

possession of the land, seeking damages and the Longs' eviction. While the Longs

requested that their claims be tried to a jury, the bank did not.

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The jury verdict form similarly read: “Did the Defendant Bank intentionally

discriminate against the Plaintiffs Ronnie and Lila Long based solely on their status

as Indians or tribal members in the lease with option to purchase?” 

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In a motion for summary judgment on its counterclaim, the bank conceded that

the tribal court had jurisdiction over the subject matter because enrolled tribal

members held majority ownership of the Long Company. Shortly before the jury was

charged, the bank changed its position. At that point the bank asserted in a short

colloquy with the tribal court that jurisdiction was lacking over the Longs'

discrimination claim, alleging that the claim arose under federal law and could

therefore not be heard in tribal court under Nevada v. Hicks, 533 U.S. 353 (2001).

The trial judge rejected this argument and stated, "I think we have authority to enforce

federal laws." At no time did the Longs state that their claim arose under federal law.

The bank did not challenge tribal jurisdiction over the Longs' other claims. 

A seven member jury was instructed on four of the Longs’ claims: breach of

contract, bad faith, discrimination, and improper use of self help remedies. The bank

had the opportunity to request that nonmembers or non Indians be summoned to serve

on the jury, but it made no such request. On the Longs' discrimination claim the judge

instructed the jury: "A person or entity engages in discrimination under these

instructions when that person or entity intentionally denies a privilege to a person

based solely upon that person's race or tribal identity."3

 No reference was made to any

statute or to federal law. A unanimous jury found for the Longs on all counts except

the self help claim and returned a general verdict in their favor for $750,000 in

damages plus interest. In addition, the trial court awarded the Longs the option to

purchase the 960 acres of land which they continued to occupy. The court also

dismissed the bank's counterclaim in light of the jury verdict and tribal law. 

The bank filed a post trial motion challenging tribal jurisdiction over the Longs'

discrimination claim, contending that the claim "would fall under 42 U.S.C. § 1981"

and therefore could only be adjudicated in federal or state court. The bank did not

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challenge tribal jurisdiction over the Longs' other claims, however. The trial court

denied the motion. In discussing the basis for the discrimination claim, the court

stated that the Tribe "does not appear to have specific code provisions prohibiting

private discrimination and the Court is therefore instructed to look to relevant federal

law." In the course of upholding the judgment the trial court referenced 42 U.S.C. §

2000d, a federal statute prohibiting racial discrimination in the distribution of benefits

from a federally assisted program.

The bank appealed the judgment to the tribal court of appeals which affirmed

tribal jurisdiction. The appellate court concluded that although the tribal court might

lack authority to adjudicate federal causes of action, the Longs' claim for

discrimination did not arise under federal law even if the trial judge believed that it

contained some "federal ingredients." Instead, the claim arose under the traditional

common law of the Tribe. Relying in part on an amicus brief submitted by the Tribe,

the court of appeals concluded that under traditional Lakota notions of justice, fair

play, and decency to others, discrimination because of race or tribal affiliation was

tortious conduct. It noted that the tribal code gives the tribal courts jurisdiction over

tort claims like that of the Longs. It also concluded that Supreme Court precedent

permitted the exercise of such jurisdiction over a non Indian bank because the bank

had formed a consensual relationship with members of the Tribe and because the

bank's conduct implicated the Tribe's economic security. 

The bank subsequently filed this action in federal district court seeking a

declaration that the tribal judgment was null and void and not entitled to recognition

because the tribal court lacked jurisdiction over the Longs' discrimination claim and

because the proceedings violated due process. The bank alleged that by upholding the

jury verdict on the discrimination claim on the basis of tribal law when the trial judge

believed the claim to be founded on federal law, the tribal court of appeals had

deprived it of notice and a fair opportunity to defend against the claim. 

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Both parties moved for summary judgment, and the district court granted it to

the Longs. The court concluded that the tribal courts had jurisdiction under one of the

categories of permissible tribal jurisdiction over nonmembers which were recognized

in Montana v. United States, 450 U.S. 544 (1981), because the bank had entered into

a consensual relationship with the Longs and their company. The court emphasized

that the Longs' claim arose directly out of their relationship with the bank and noted

that the bank had conceded tribal jurisdiction at an earlier point in the tribal

proceedings. The district court found no due process violation, noting that appellate

courts may affirm on any ground supported by the record and that the bank had had

a full opportunity to develop the record on the issue of discrimination.

The bank appeals from the grant of summary judgment. It argues that the

district court erred in concluding that the tribal court had jurisdiction under the

Montana exception for consensual relationships between members and nonmembers.

It contends that it formed a business relationship only with the Long Company, a

South Dakota corporation with no racial or tribal identity. The bank also argues that

the Longs' discrimination claim was federal in nature and that tribal courts may not

entertain federal causes of action even if one of the Montana exceptions is met.

Although the bank alleged in the district court that the Longs' claim arose under 42

U.S.C. § 1981, it contends on appeal that it was manifestly a § 2000d action. Finally,

the bank argues that the tribal judgment is not entitled to comity in federal court

because the proceedings denied it fundamental due process. It claims that by invoking

tribal common law to uphold the discrimination claim, the tribal court of appeals

employed a new theory of recovery and thereby deprived the bank of a fair

opportunity to defend itself. Both the Longs and the Tribe as their amicus urge us to

adopt the reasoning of the district court and affirm its judgment.

II.

We review a grant of summary judgment de novo, applying the same standard

as the district court. Passions Video, Inc. v. Nixon, 458 F.3d 837, 840 (8th Cir. 2006).

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Summary judgment is appropriate where there is no genuine material issue of fact and

the moving party is entitled to judgment as a matter of law. Id.; see also Fed. R. Civ.

P. 56(c). Whether a tribal court properly exercised jurisdiction over a claim is an issue

of federal law reviewed de novo. Duncan Energy Co. v. Three Affiliated Tribes, 27

F.3d 1294, 1300 (8th Cir. 1994); see also Nat'l Farmers Union Ins. Cos. v. Crow Tribe

of Indians, 471 U.S. 845, 852-53 (1985) (claim arises under 28 U.S.C. § 1331).

In recognition of the status of Indian tribes as distinct cultural and political

communities, see Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55 (1978), the federal

government has long encouraged tribal self government, Iowa Mut. Ins. Co. v.

LaPlante, 480 U.S. 9, 14 (1987). Although the tribes no longer possess the "full

attributes of sovereignty," United States v. Kagama, 118 U.S. 375, 381 (1886), they

nevertheless retain those internal powers necessary to their self government which

have not been withdrawn by the federal government. See United States v. Wheeler,

435 U.S. 313, 323 (1978). 

Because the authority of the tribes is founded on their "right . . . to make their

own laws and be ruled by them," tribal jurisdiction does not normally extend to the

conduct of nonmembers unless Congress has expressly granted such authority. See

Strate v. A-1 Contractors., 520 U.S. 438,446, 459 (1997), quoting Williams v. Lee,

358 U.S. 217, 220 (1959). In the watershed case of Montana v. United States,, the

Supreme Court identified two exceptions to this general principle. 450 U.S. 544

(1981).

Under Montana, tribes may exercise jurisdiction over nonmembers if they have

entered into certain kinds of consensual relationships or if they have engaged in

conduct on tribal lands which would harm tribal interests:

 A tribe may regulate, through taxation, licensing, or other means, the

activities of nonmembers who enter consensual relationships with the

tribe or its members, through commercial dealing, contracts, leases, or

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Tribes are unable to exercise criminal jurisdiction over non Indians. Oliphant

v. Suquamish Indian Tribe, 435 U.S. 191 (1978). 

5

Neither party suggests that any treaty or federal statute has directly enlarged

or contracted the inherent tribal authority under discussion.

-9-

other arrangements. A tribe may also retain inherent power to exercise

civil authority over the conduct of non-Indians on fee lands within its

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.

Id. at 565-66 (citations omitted).

The unifying principle behind both exceptions is that absent express

congressional delegation, a tribe has civil authority4

 over non Indians only where such

authority is "necessary to protect tribal self-government or to control internal

relations." Id. at 564. Although Montana specifically addressed the regulatory rather

than adjudicatory jurisdiction of tribes, see id. at 557, there is nevertheless a

presumption that if a tribe has authority under Montana to regulate the activities of a

nonmember, jurisdiction over disputes arising out of those activities exists in the tribal

courts. Strate, 520 U.S. at 453.

The Longs argue, and the district court concluded, that the Tribe's exercise of

jurisdiction over the bank falls within its inherent authority under the first Montana

exception.5 Consideration of this basis for tribal jurisdiction involves two separate

questions: whether the bank formed a consensual relationship with the Tribe or its

members and whether the tribal tort law invoked by the Longs is an appropriate "other

means" by which a tribe may regulate nonmember conduct. 

The bank argues that it never formed a consensual relationship with any tribal

member because it provided loans to the Long Company, a South Dakota corporation.

It contends that a corporation does not take on the tribal identity of its owners,

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pointing to the general principle that a corporation and its shareholders are distinct

entities, see, e.g., Dole Food Co. v. Patrickson, 538 U.S. 468, 474 (2003), and arguing

that there is no justification here to pierce the corporate veil separating the Longs and

their company. The Longs respond that the bank should not be heard to challenge the

tribal character of their company when for many years the bank took advantage of

financial incentives available to it only because the Long Company was Indian owned.

They also argue that the bank formed relationships with them as individual tribal

members.

We agree that the bank's argument ignores the broader context of its interaction

with the Long Company and with the Longs themselves. The Long Company, which

was formed to take advantage of BIA incentives for developing Indian enterprises

located on the reservation, was overwhelmingly tribal in character, as were its

interactions with the bank. See Smith v. Salish Kootenai Coll., 434 F.3d 1127, 1134-

35 (9th Cir. 2006) (en banc) (nonprofit corporation that was designated a tribal

corporation in its charter and that operated inside the reservation can be treated as a

tribal member under Montana). The bank directly benefitted from the Long

Company's status as an Indian owned business entity, see 25 C.F.R. § 103.7 (2000)

(requiring at least 51% Indian ownership), which qualified the company for BIA

guaranteed loans and allowed the bank to greatly reduce its lending risk, see id. §

103.2 (2006). The bank could not have been unaware that it might be subject to tribal

jurisdiction since in its letter to Ronnie Long withdrawing its offer to sell the land

back to the Longs, the bank alluded to the "jurisdictional" implications of the Long

Company's Indian ownership.

Moreover, the bank's loans to the Long Company were not simple corporate

transactions. The bank repeatedly interacted with Lila, Ronnie, and Maxine Long.

All three tribal members personally guaranteed the debt of the Long Company. The

bank also sought the assistance of the Tribe in renegotiating a loan agreement with the

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By this point the bank had another quite basic tie to the reservation since it had

become the owner of the Long's former land on the reservation. 

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Longs and their company, as well as in serving the Longs with notice to quit after they

were unable to exercise their option to purchase.6

 

Because the bank not only transacted with a corporation of conspicuous tribal

character, but also formed concrete commercial relationships with the Indian owners

of that corporation, we conclude that it engaged in the kind of consensual relationship

contemplated by Montana. At its heart the Montana inquiry is about tribal interests

and tribal self government. See generally Hicks, 533 U.S. 353. The Tribe's interest

in regulating commercial transactions between its members and nonmembers does not

disappear just because a corporation is also a party to those transactions. That the

Tribe was actively involved in facilitating negotiations between the Longs and the

bank confirms that the Tribe had its own interest in facilitating the commercial

endeavors of its members and in ensuring that they are not unfairly dispossessed of

reservation land.

The existence of a consensual relationship is not alone sufficient to support

tribal jurisdiction. See Strate, 520 U.S. at 457. The tribal exercise of authority must

also take the form of taxation, licensing, or "other means" of regulating the activities

of the nonmember, Montana, 450 U.S. at 565, and this regulation must have some

nexus to the consensual relationship. Atkinson Trading Co. v. Shirley, 532 U.S. 645,

656 (2001). In other words, a nonmember's consensual relationship in one area "does

not trigger tribal civil authority in another." Id.

The Supreme Court applied this limiting principle in the context of tort law in

Strate v. A-1 Contractors, 520 U.S. 438 (1997). In Strate, a nonmember brought a

lawsuit in tribal court against another nonmember for injuries sustained in an accident

on a state highway within an Indian reservation. Although the defendant in that action

had a consensual relationship with the Three Affiliated Tribes as a result of his work

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as a subcontractor for them, the lawsuit had not arisen within the context of that

relationship. Rather, it arose out of a purely accidental encounter between two

strangers. Because the tort was "distinctly non-tribal in nature," id. at 457, the tribes'

interest in regulating the conduct was correspondingly attenuated, see id. at 459.

Notably, the Court did not hold that tort law could never be an appropriate means for

tribes to regulate nonmember conduct, but rather that there was no connection

between the personal injury claim and the defendant's consensual relationship with

tribal entities. See id. at 457.

In contrast, the Longs' discrimination claim arose directly from their preexisting

commercial relationship with the bank. While the personal injury tort at issue in

Strate defined the duties of one stranger to another, the tribal tort in this case provided

a standard of conduct to govern the bank's preexisting relationship with the Longs.

Moreover, the legal obligation to refrain from discriminating on the basis of tribal

affiliation is decidedly more "tribal" than the basic personal injury law applicable in

Strate. Unlike Strate, this case is not about a tribe's power to govern nonmembers

"just because they enter the tribe's territory." See A-1 Contractors v. Strate, 76 F.3d

930, 941 (8th Cir. 1996) (characterizing central issue), aff'd, 520 U.S. 438. Rather,

this case is about the power of the Tribe to hold nonmembers like the bank to a

minimum standard of fairness when they voluntarily deal with tribal members.

In this respect we find the present situation more closely akin to the regulation

upheld in Buster v. Wright, 135 F. 947 (8th Cir. 1905), a case cited by the Court in

Montana as an illustration of the consensual relationship exception. See 450 U.S. at

566; see also Strate, 520 U.S. at 457. In Buster, this court upheld a permit tax on

nonmembers for the privilege of conducting business with members on the

reservation. After likening the permit tax to a license, we concluded that the

regulation was permissible because the tribe had inherent authority to "prescribe the

terms upon which noncitizens may transact business within its borders." 135 F. at

950. 

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Because we conclude that the case falls within the first Montana exception, we

need not address the Longs' additional argument that tribal jurisdiction would also be

appropriate under the second exception (on the ground that the bank's conduct

"threatens or has some direct effect on the political integrity, the economic security,

or the health or welfare of the tribe"). 450 U.S. at 566. 

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Here, the Tribe was doing just that and exercising its inherent authority. By

subjecting the bank to liability for violating tribal antidiscrimination law in the course

of its business dealings with the Longs, the Tribe was setting limits on how

nonmembers may engage in commercial transactions with members inside the

reservation. The fact that we are dealing with the common law of torts rather than a

licensing requirement or other statutory provision makes no substantive difference

here. Tort law is after all both a means of regulating conduct, see, e.g., W. Page

Keeton, et al., Prosser and Keeton on Torts 25 (5th ed. 1984) (Prosser), and an

important aspect of tribal governance. See Smith, 434 F.3d at 1140. As the Supreme

Court indicated in Curtis v. Loether, 415 U.S. 189 (1974), the distinction between

statutory and common law rights may be functionally irrelevant in the context of

intentional discrimination. Id. at 195 (discrimination claim for damages under the

Civil Rights Act sounds in tort for purpose of Seventh Amendment). We see no

reason why a tribal tort cannot be applied against a nonmember in that narrow set of

circumstances where the consensual relationship exception is otherwise completely

satisfied. 

We therefore conclude that under Montana, the Tribe had inherent authority to

regulate the bank's conduct arising out of its consensual relationship with the Longs

by subjecting it to liability for tortious discrimination.7

 

The bank argues that the Montana test is not dispositive of jurisdiction in this

case because even if the tribal courts would have had authority under Montana to

adjudicate a tribal law claim against it, they did not actually hear such a case. It

contends that the Longs' discrimination claim is more properly characterized as a

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The trial court noted that the "Cheyenne River Sioux Tribal Code directs this

Court to apply federal law in the absence of applicable tribal law." 

-14-

federal claim under 42 U.S.C. § 2000d. The bank also contends that the Supreme

Court's decision in Hicks, 533 U.S. 353, precludes the tribal courts from exercising

jurisdiction over a federal claim even if it falls within one of the Montana exceptions.

The Longs respond that Hicks is not implicated here because their claim arose under

tribal rather than federal law. They also add that even if they had raised a federal

claim, the holding in Hicks was sufficiently narrow that it would not bar jurisdiction

in this case. 

In Hicks, the Supreme Court held that tribal courts had no jurisdiction to hear

a § 1983 claim brought by a tribal member against state officers who had entered onto

tribal land to execute a search warrant. Id. at 374. The bank argues that Hicks

implicitly foreclosed tribal jurisdiction over other federal claims as well, including the

Longs' claim which it now characterizes as arising under § 2000d. In contrast to the

present case, however, the exercise of jurisdiction in Hicks did not fall within either

Montana exception. Id. at 359 n.3, 364. The Supreme Court has never addressed

whether tribal courts would be barred from hearing federal claims even when they

would otherwise have jurisdiction under Montana, and we need not address this open

question in this case.

We conclude that the tribal court of appeals appropriately upheld jurisdiction

on the basis of tribal rather than federal law. Although the tribal trial court offered a

post hoc federal basis for upholding the jury's verdict on the Longs' discrimination

claim and even asserted it had authority to enforce federal law against nonmembers,

a mistaken jurisdictional analysis in the trial court cannot override the Longs'

pleadings and the decision of the tribal court of appeals. Moreover, even though the

tribal court looked to federal law for guidance in upholding the verdict,8

 this would

not necessarily mean that it regarded the cause of action as arising under federal law.

Tribal law often draws upon an array of sources, from customary law to treaties, and

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the Cheyenne River Sioux are "free to borrow from the law of other tribes, states, and

the federal government." F. Cohen, Handbook of Federal Indian Law 274 (2005).

The existence of subject matter jurisdiction has traditionally depended on how

a claim was pled, not on how the claim was perceived by the trial court. See, e.g., The

Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25 (1913) ("[T]he party who brings

a suit is master to decide what law he will rely upon."); Caterpillar, Inc. v. Williams,

482 U.S. 386, 392 (1987) (as "master of the claim," plaintiff may "avoid federal

jurisdiction by exclusive reliance on state law"). There is no indication that the Longs

pled a federal cause of action, and the fact that the Longs could have pled a federal

action is immaterial. The Longs' complaint alleged that the bank had engaged in

"unequal treatment and unfair discrimination" when it granted more favorable terms

to non Indian purchasers than to the Longs, making no mention of federal law or the

elements of a particular federal claim. Cf. Wardle v. Nw. Inv. Co., 830 F.2d 118, 121-

122 (8th Cir. 1987) (failure to allege specific elements of Little Tucker Act claim

"strongly suggests" that no such claim was pled). 

The bank's argument places undue emphasis on the trial court's jurisdictional

analysis and gives too little regard to the decision of the tribal court of appeals. The

Supreme Court has made it clear that until tribal appellate courts have had the

"opportunity to review the determinations of the lower tribal courts" and to "rectify

any errors," tribal evaluation of its own jurisdiction is not complete. Iowa Mut., 480

U.S. at 16-17, quoting Nat'l Farmers, 471 U.S. at 857 (1985).

Under the exhaustion doctrine first enunciated in National Farmers, 471 U.S.

845, federal courts will not review a tribe's jurisdiction until the tribal appellate review

is complete. Iowa Mut., 480 U.S. at 17. The exhaustion requirement gives tribal

courts the opportunity "to explain to the parties the precise basis for accepting

jurisdiction" and to "provide other courts with the benefit of their expertise in such

matters in the event of further judicial review." Nat'l Farmers, 471 U.S. at 857.

Exhaustion would be a meaningless exercise if federal courts were to ignore the

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Any distinction between regulatory and adjudicative jurisdiction would be

artificial here, since the tribal courts acted in both a regulatory and adjudicatory

capacity when they determined the respective rights and duties of the parties. See

Strate, 76 F.3d at 938.

-16-

determinations of the tribal appellate court. Here, the tribal court of appeals corrected

the trial court's erroneous assumption that because the tribal code itself did not create

a cause of action for discrimination, the only source of jurisdiction would be its

authority to adjudicate federal law. "Proper respect for tribal legal institutions," Iowa

Mut., 480 U.S. at 16, requires that we not overlook the appellate court's analysis as the

bank would have us do. Since the tribal court of appeals upheld jurisdiction over a

tribal rather than federal law claim and since the Longs' claim was not pled as a

federal cause of action, we need not consider whether the tribal court would have had

jurisdiction over a federal civil rights claim.

We conclude that the Montana inquiry is dispositive of tribal court jurisdiction

over the Longs' tribal law discrimination claim. See Hicks, 533 U.S. at 358 n.2

(limiting holding to its facts). The Tribe had inherent authority to regulate the bank's

activities in connection with its consensual business relationship with the Longs and

their company. As a natural corollary, the tribal court system – the institution "best

qualified to interpret and apply tribal law," Iowa Mut., 480 U.S. at 16 – also had

jurisdiction to entertain tribal law disputes arising out of those activities.9

 See Strate,

520 U.S. at 453 (discussing presumption of coextensive adjudicative jurisdiction); see

also Martinez, 436 U.S. at 65 (recognizing tribal courts as appropriate fora for

adjudicating disputes involving interests of both Indians and non Indians). The tribal

court therefore properly exercised jurisdiction over the Longs' discrimination claim.

III.

The bank next argues that the tribal judgment is not entitled to recognition

because it was obtained in violation of due process. It objects to the decision by the

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10We have jurisdiction over the bank's due process claim whether or not it arises

under 28 U.S.C. § 1331 because it is part of the same case or controversy, see 28

U.S.C. § 1367(a), as the bank's challenge to tribal jurisdiction which arises under

federal law. See Nat'l Farmers, 471 U.S. at 852-53; see also Alternate Fuels, Inc. v.

Cabanas, 435 F.3d 855, 857 n.2 (8th Cir. 2006).

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tribal court of appeals to uphold the jury's discrimination verdict on the basis of tribal

tort law, arguing that the appellate court should have been constrained to address it

under the federal law mentioned by the trial judge. The bank contends that it did not

have proper notice that it was facing a tribal rather than a federal claim for

discrimination and therefore was denied an adequate opportunity to defend itself

against the claim. Finally, the bank suggests that it should not have been subject to

liability for a tort that had not previously been recognized.

The Longs respond that the bank had adequate notice because their complaint

was pled as a tribal law claim, the same basis upon which it was ultimately upheld.

The Longs also point out that appellate courts may and often do affirm judgments on

alternate grounds so long as doing so does not cause unfairness to the litigants. There

was no unfairness here they say, because the bank had a full opportunity to develop

the record on all elements of the tort and these elements did not materially differ from

those included in the jury instructions or verdict form. The Tribe as amicus also urges

this court not to second guess the authority or competency of its court system to

articulate the evolving principles of tribal common law.

As an initial matter we note that the bank's due process claim is quite distinct

from a traditional due process challenge. That is because the Bill of Rights and the

Fourteenth Amendment do not of their own force constrain the authority of tribes or

tribal courts.10 See Martinez, 436 U.S. at 56. Tribes are obliged to comply with the

Indian Civil Rights Act (ICRA), 25 U.S.C. §§ 1301-1303, which contains analogous

due process protections. The bank did not raise a claim under the ICRA, and even if

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it had, that statute created no private cause of action for declaratory relief in federal

court. See Martinez, 436 U.S. at 72.

The bank maintains, however, that under principles of comity a tribal judgment

should not be recognized in federal court if the tribal proceedings violated due process

of law. Comity refers to the recognition that one court affords to the decision of

another "not as a matter of obligation, but out of deference and respect." Black's Law

Dictionary 242 (5th ed. 1979). For support the bank cites the Ninth Circuit decision

in Wilson v. Marchington, 127 F.3d 805 (9th Cir. 1997), which concluded that a

federal court should recognize tribal judgments under principles of comity similar to

those which govern recognition of foreign judgments. Id. at 810; see also, e.g.,

Burrell v. Armijo, 456 F.3d 1159 (10th Cir. 2006); Mexican v. Circle Bear, 370

N.W.2d 737 (S.D. 1985). Using an analogy to Hilton v. Guyot, 159 U.S. 113 (1895),

the leading case on federal recognition of foreign judgments, the Ninth Circuit

concluded that a tribal court judgment should not be recognized if it was obtained in

violation of basic due process rights. Marchington, 127 F.3d at 810. It reasoned that

in the context of comity, due process requires that a defendant be given the

opportunity for a "full and fair trial before an impartial tribunal that conducts the trial

upon regular proceedings after proper service or voluntary appearance of the

defendant, and that there is no showing of prejudice in the tribal court or in the system

of governing laws." Id. at 811. 

This court has not had occasion to consider whether to borrow principles for

recognition of foreign judgments in considering recognition of tribal judgments, and

we need not do so in this case. Since we conclude on the basis of this record that the

tribal proceedings violated no basic tenet of due process, we need not discuss the test

articulated in Marchington. 

As the Longs point out, it is not uncommon for this court to uphold a judgment

on grounds not decided or discussed in the district court so long as those grounds are

supported by the record. See, e.g., United States v. Sager, 743 F.2d 1261, 1263 n.4

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11If the bank was convinced that it was defending against a federal claim over

which the tribal court had no jurisdiction, it could have gone immediately to federal

court to seek a declaratory judgment that the tribal courts lacked authority to hear the

case. See Hicks, 533 U.S. at 369, 374 (holding exhaustion requirement inapplicable

where jurisdiction clearly lacking).

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(8th Cir. 1984). A tribe is neither required nor expected to use the same judicial

procedures employed by federal courts, however, and federal courts must take care not

to exercise "unnecessary judicial paternalism in derogation of tribal self-governance."

Marchington, 127 F.3d at 811; see also Kremer v. Chem. Constr. Corp., 456 U.S. 461,

483 (1982) (due process dictates "no single model of procedural fairness, let alone a

particular form of procedure"). The rules that this circuit has developed for departing

from the reasoning of a lower court reflect our own balancing of considerations like

judicial economy and the interests of both parties. Cf. Singleton v. Wulff, 428 U.S.

106, 121 (1976) (decision is primarily matter of discretion for appellate court). The

tribal court of appeals is free to strike a different balance between those considerations

so long as its procedures do not deny defendants adequate notice and fair opportunity

to defend themselves. See Hilton, 159 U.S. at 167, 205.

In this case there was no deficiency in notice or opportunity to defend sufficient

to make out a due process violation. The Longs never asserted a violation of federal

law, the bank made no attempt to dismiss the discrimination claim for vagueness, and

no reference to federal law was made to the jury.11 The bank has also not shown that

it suffered prejudice as a result of having tailored its defense to a federal rather than

tribal claim. The fighting issue in the trial court was whether the bank denied the

Longs favorable terms on a deal solely on the basis of their race or tribal affiliation.

The bank had ample opportunity to present evidence that it did not give the Longs less

favorable terms than its non Indian customers or that it did so for some other

permissible reason. We discern no difference between the tribal tort of discrimination

as recognized by the tribal court of appeals and the claim as it was presented to the

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jury. The bank was therefore not denied a fair opportunity to present relevant

evidence or to defend itself. 

The bank also argues that it should not have been subject to liability under a tort

that had not previously been recognized by the tribal court of appeals. That the Longs'

discrimination claim was novel is not itself grounds for refusing comity to the

subsequent judgment where there is no indication that the court otherwise acted out

of bias or refused to follow its own law. See Prosser, supra, at 4(novelty of claim not

itself a bar to recovery). Tort law has historically developed incrementally in the

courts. See id. at 3 ("[T]he progress of the common law is marked by many cases of

first impression, in which the court has struck out boldly to create a new cause of

action, where none had been recognized before."). If the encouragement of tribal self

governance through the development of legal institutions is to remain a federal

priority, see, e.g., Iowa Mut., 480 U.S. at 16-17, then tribal appellate courts must be

given latitude to shape their own common law to respond to the cases before them, as

our own courts have done over the centuries. 

The bank has also suggested that as a non Indian company it could not obtain

a fair hearing in tribal court on a claim that it discriminated against Indians, but there

is simply no evidence to support this assertion. If the bank feared prejudice from an

all Indian jury, it could have requested that the tribal court exercise the discretion

granted to it by the tribal code to summon non Indians to serve on the jury. It made

no such request, but instead proceeded to trial without striking any jurors or

challenging the composition of the panel. Absent some indication that the tribal

courts were biased or subject to political control, we must presume the court system

to be competent and impartial. Duncan Energy, 27 F.3d at 1301. The bank has failed

to show any bias in this case.

Since the bank has failed to show that it was denied a full and fair opportunity

to be heard in tribal court, we see no reason on this record to deny comity to the

Longs' tribal judgment. 

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IV.

For the foregoing reasons, we affirm the judgment of the district court.

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