Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_12-cv-08077/USCOURTS-azd-3_12-cv-08077-0/pdf.json

Nature of Suit Code: 490
Nature of Suit: Cable/ Satellite TV
Cause of Action: 28:2201 Declaratory Judgment

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Dish Network Corporation, a Nevada 

corporation; Dish Network, L.L.C., a 

Colorado limited liability company; and 

Dish Network Service, L.L.C., a Colorado 

limited liability company, 

Plaintiffs, 

v. 

Eric Tewa, Sr., in his official capacity as 

Chief Revenue Officer of the Hopi Tribe 

Office of Revenue Commission, an agency 

of a federally-recognized Indian tribe; 

Lamar Keevama, in his official capacity as 

Deputy Commissioner of the Hopi Tribe 

Office of Revenue Commission, an agency 

of a federally-recognized tribe; and Merwin 

Kooyahoetma, in his official capacity as 

Deputy Commissioner of the Hopi Tribe 

Office of Revenue Commission, an agency 

of a federally recognized Indian tribe, 

Defendants.

No. CV 12-8077-PCT-JAT

ORDER 

 Pending before the Court is Defendants’ Motion to Dismiss Complaint Pursuant to 

Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Doc. 24). The Court now rules 

on the Motion. 

I. BACKGROUND1

The Dish Network Corporation (“Dish Parent”), Dish Network, L.L.C. (“Dish 

 

1

 The facts set forth in this Background section are as alleged in the Complaint (Doc. 1). 

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Provider”), and Dish Network Service, L.L.C. (“Dish Service”) (collectively, the “Dish 

Plaintiffs”) filed this action seeking declaratory and injunctive relief. Dish Network, 

L.L.C., a subsidiary of Dish Network Corporation, provides Direct Broadcast Satellite 

television service (the “Satellite Service”) to about fourteen million households across the 

United States, including providing such service to a small number of persons (around 

900) who reside on the reservation of the Hopi Tribe. (Doc. 1 at ¶¶ 2, 13). 

 The satellite programming is transmitted to Dish subscribers by a number of 

satellites, none of which is located on the Hopi Reservation. (Doc. 1 at ¶ 13). The 

programming is uplinked to the satellites from Dish uplink centers in Cheyenne, 

Wyoming and Gilbert, Arizona, among others, none of which is situated on the 

Reservation. (Id.). Programming networks travel to these uplink centers from various 

locations, none of which is on the Hopi Reservation. (Id.). 

 Dish Network, L.L.C. provides its service pursuant to licenses issued by the 

Federal Communications Commission (the “FCC”). (Id. at ¶ 14). When Subscribers to 

the Satellite Service (“Dish Subscribers”) enter into a subscription agreement with Dish 

Network, L.L.C., they are provided a satellite dish receiver, which is usually attached to 

the roof of their residence and oriented toward a satellite signal, and a set top box to 

decode the signal, which is attached to their television set. (Id. at ¶ 15). To arrange for 

Satellite Service, prospective Dish Subscribers must contact Dish at one of its locations, 

none of which are located on the Hopi Reservation. (Id.) Likewise, Dish Subscribers 

submit payments for the Satellite Service to Dish Network, L.L.C. at one of its locations, 

none of which are located on the Hopi Reservation. (Id.). 

 Dish Network Service, L.L.C. provides installation service for Dish Subscribers, 

including those located on the Hopi Reservation. (Id. at ¶ 16). Dish Network Service, 

LLC’s only contact with Dish subscribers on the Hopi Reservation is to enter the Hopi 

Reservation to install the satellite dish receiver and the decoder box on the subscriber’s 

residence. (Id. at ¶ 16). Dish Network Corporation is the holding corporation of Dish 

Network, L.L.C. and has no contact with or presence on the Hopi Reservation. (Id. at ¶ 

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17). 

 In 2009, the Hopi Tribe Office of Revenue Commission (the “Hopi Revenue 

Commission”) informed Dish Service that it had to apply for and obtain a license to do 

business on the Hopi Reservation and pay an annual fee pursuant to Hopi Tribal 

Ordinance 17A (“Ordinance 17A”). (Id. at ¶ 18). Dish Service contended that it should 

not need to obtain the license or pay the fee because Ordinance 17A is preempted by 

section 303(v) of the Communications Act of 1934, as amended, and local fees or taxes 

on direct-to-home satellite services are preempted by section 152 of the Communications 

Act of 1934, as amended. (Id. at ¶ 19).2

 

 Based on Dish Service’s refusal to obtain the license and pay the fee, the Hopi 

Revenue Commission filed a lawsuit (the “Tribal Court lawsuit”) against Dish Parent and 

Dish Service in the Hopi Tribal Court seeking an injunction requiring Dish Parent and 

Dish Service to obtain a business license and to pay an annual fee and damages. (Id. at ¶ 

20). 

 Dish Parent and Dish Service allege that the Hopi Tribal Court lacks subject 

matter jurisdiction over them pursuant to Montana v. United States, 450 U.S. 544 (1981). 

(Id. at ¶ 26). 

 The Dish Plaintiffs seek (1) a declaratory judgment that Hopi Tribal Ordinance 

17A is preempted by 47 U.S.C. § 303(v) and all fees imposed under Ordinance 17A are 

preempted by 47 U.S.C. § 152; (2) a declaratory judgment that Ordinance 17A is invalid 

and inapplicable as to the Dish Plaintiffs; (3) that Defendants lack authority to lawfully 

apply and enforce Ordinance 17A against the Dish Plaintiffs; (4) an injunction enjoining 

Defendants from applying or enforcing Ordinance 17A against the Dish Plaintiffs; and 

(5) an injunction enjoining Defendants from continuing to prosecute the Tribal Court 

lawsuit in Hopi Tribal Court. (Id. at ¶¶ 27-33). 

 

2

 For the purposes of this Order, section 303(v) of the Communications Act of 

1934, as amended, and section 152 of the Communications Act of 1934, as amended, are 

referred to collectively herein as the “Communications Act.” 

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 Defendants now move to dismiss the Dish Plaintiffs’ Complaint pursuant to 

Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants argue that the Dish 

Plaintiffs’ claims are not yet ripe because the Dish Plaintiffs have failed to exhaust their 

tribal court remedies and, thus, this case should be dismissed pursuant to Federal Rule of 

Civil Procedure 12(b)(1). Defendants further argue that the Complaint should be 

dismissed for failure to state a claim upon which relief can be granted pursuant to Federal 

Rule of Civil Procedure 12(b)(6) because preemption under the Communications Act 

does not apply to Indian tribes. 

 Simplified, the Complaint in this case essentially asks this Court to adjudicate two 

issues. The first is whether, under the facts of this case, the Hopi Tribal Court has 

adjudicative authority over the nonmember Dish Plaintiffs. The second is whether the 

Hopi Revenue Commission may regulate the activities of and impose taxes on the Dish 

Plaintiffs based on the relationship between Dish Provider and certain members of the 

Hopi Reservation. Defendants argue that this Court cannot answer either question until 

the Hopi Tribal Court has the opportunity to decide whether it has jurisdiction over the 

Dish Plaintiffs in the first instance. 

 Although Defendants characterize their challenge to the Dish Plaintiffs’ failure to 

exhaust their administrative remedies as a lack of subject matter jurisdiction and move 

under Federal Rule of Civil Procedure 12(b)(1) for dismissal, Defendants’ motion, in 

substance, is not a challenge to the Court’s subject matter jurisdiction. Rather, it is clear 

that “whether a tribal court has adjudicative authority over nonmembers is a federal 

question” and this Court has subject matter jurisdiction to consider that issue. Plains 

Commerce Bank v. Long Family Land and Cattle Co., 554 U.S. 316, 324 (2008) (internal 

citations omitted). Rather, Defendants’ motion to dismiss for failure to exhaust tribal 

court remedies should be treated as an unenumerated 12(b) motion. See Wyatt v. 

Terhune, 315 F.3d 1108, 1119 (9th Cir. 2003) (“the failure to exhaust nonjudicial 

remedies that are not jurisdictional should be treated as a matter in abatement, which is 

subject to an unenumerated motion to dismiss.”). On such a motion, “the court may look 

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beyond the pleadings and decide disputed issues of fact.” Id. at 1119-20. Defendants 

have the burden of raising and proving non-exhaustion of the claims. Id. at 1113. 

II. WHETHER EXHAUSTION IS REQUIRED 

 “A tribal court’s jurisdiction over nonmembers of the tribe is limited. As a matter 

of comity, however, federal courts generally decline to entertain challenges to a tribal 

court’s jurisdiction until the tribal court has had a full opportunity to rule on its own 

jurisdiction.” Elliott v. White Mountain Apache Tribal Court, 566 F.3d 842, 844 (9th Cir. 

2009), cert. denied, 130 S.Ct. 624 (2009); see Nat’l Farmers Union Ins. Cos. v. Crow 

Tribe of Indians, 471 U.S. 845, 856 (1985) (“policy favors a rule that will provide the 

forum whose jurisdiction is being challenged the first opportunity to evaluate the factual 

and legal bases for the challenge”).3

 “A district court has no discretion to relieve a 

 

3

 The Supreme Court in National Farmers explained the policy behind requiring 

exhaustion of tribal court remedies as follows: 

We believe that examination should be conducted in the 

first instance in the Tribal Court itself. Our cases have often 

recognized that Congress is committed to a policy of 

supporting tribal self-government and self-determination. 

That policy favors a rule that will provide the forum whose 

jurisdiction is being challenged the first opportunity to 

evaluate the factual and legal bases for the challenge. 

Moreover the orderly administration of justice in the federal 

court will be served by allowing a full record to be developed 

in the Tribal Court before either the merits or any question 

concerning appropriate relief is addressed. The risks of the 

kind of “procedural nightmare” that has allegedly developed 

in this case will be minimized if the federal court stays its 

hand until after the Tribal Court has had a full opportunity to 

determine its own jurisdiction and to rectify any errors it may 

have made. Exhaustion of tribal court remedies, moreover, 

will encourage tribal courts to explain to the parties the 

precise basis for accepting jurisdiction, and will also provide 

other courts with the benefit of their expertise in such matters 

in the event of further judicial review. 

471 U.S. at 856-857 (footnotes omitted). 

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litigant from the duty to exhaust tribal remedies prior to proceeding in federal court.” 

Allstate Indemnity Co. v. Stump, 191 F.3d 1071, 1073 (9th Cir. 1999) (internal citation 

omitted). 

 However, the Supreme Court has recognized four exceptions to the exhaustion 

requirement: 

 (1) when an assertion of tribal court jurisdiction is 

“motivated by a desire to harass or is conducted in bad faith”; 

(2) when the tribal court action is “patently violative of 

express jurisdictional prohibitions”; (3) when “exhaustion 

would be futile because of the lack of an adequate 

opportunity to challenge the [tribal] court’s jurisdiction”; and 

(4) when it is “plain” that tribal court jurisdiction is lacking, 

so that the exhaustion requirement “would serve no purpose 

other than delay.” 

Elliott, 566 F.3d at 847 (quoting Nevada v. Hicks, 533 U.S. 353, 369 (2001)). In this 

case, there is no suggestion that the assertion of tribal court jurisdiction is motivated by a 

desire to harass or conducted in bad faith or that exhaustion would be futile because of 

the lack of an adequate opportunity to challenge the tribal court’s jurisdiction. Rather, 

the Dish Plaintiffs argue that the tribal court action is “patently violative of express 

jurisdictional prohibitions” and it is “plain” that tribal court jurisdiction is lacking and the 

exhaustion requirement “would serve no purpose other than delay.” 

 A. Whether the Tribal Court Action is “Patently Violative of Express Jurisdictional Prohibitions” 

The Dish Plaintiffs argue that the Tribal Court action is patently violative of 

express jurisdictional prohibitions because the Communications Act expressly reserves 

regulatory jurisdiction to the Federal Communications Commission (the “FCC”) and 

Ordinance 17A is an attempt to regulate non-member activity on Indian land, which is 

preempted by the Communications Act. 

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 Ordinance 17A4 would require the Dish Plaintiffs, among other things, to obtain a 

license, post a bond, pay licensing fees, pay a gross receipts tax, pay other fees or taxes as 

deemed appropriate by the Hopi Tribal Council, consent to the jurisdiction of Hopi Tribal 

Courts, make disclosure statements and translate such statements orally into the 

“appropriate language,” format customer bills in a specified manner, stop provision of 

Satellite services if the Chief Revenue Officer finds that Dish Provider is not “adequately 

serving the economic needs of the community,” and attend the Hopi Tribe’s public 

meetings at the request of a “tribal official designated by the governing body” to respond 

to customer inquiries. 

 The Dish Plaintiffs argue that these regulations and taxation are preempted by 47 

U.S.C.A. section 303(v) and 47 U.S.C.A. section 152 note. 47 U.S.C.A. section 303 

provides, in relevant part, 

 Except as otherwise provided in this chapter, the 

Commission from time to time, as public convenience, 

interest, or necessity requires, shall -- . . . Have exclusive 

jurisdiction to regulate the provision of direct-to-home 

satellite services. As used in this subsection, the term “directto-home satellite services” means the distribution or 

broadcasting of programming or services by satellite directly 

 

4

 The Court notes that the Dish Plaintiffs argue that Ordinance 17A does not 

apply to them because Ordinance 17A defines “Reservation Business” as “any business 

that engages at a fixed location within the jurisdiction of the Hopi Reservation in the sale 

or purchase of goods or services or consumer credit transactions with Indians and is not a 

financial institution operating under the laws of the United States.” § 17.1.5(k). The 

Dish Plaintiffs argue that it does not engage in business at a fixed location on the Hopi 

Reservation because it has absolutely no presence on the Hopi Reservation with the 

exception of Dish Service entering the Reservation solely to install the satellite dish 

receiver and the decoder box at the subscriber’s residence. In Response, Defendants 

argue that each subscriber’s residence is the fixed location at which the Dish Plaintiffs are 

engaged in “Reservation Business.” 

The Court does not at this time decide this argument, because, as discussed more 

fully below, the Tribal Court will have the opportunity to interpret its own statute in the 

first instance. 

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to the subscriber’s premises without the use of ground 

receiving or distribution equipment, except at the subscriber’s 

premises or in the uplink process to the satellite. 

47 U.S.C.A. § 303(v). 

 Further, 47 U.S.C.A. section 152 provides, in relevant part, 

“(a) Preemption.--A provider of direct-to-home satellite 

service shall be exempt from the collection or remittance, or 

both, of any tax or fee imposed by any local taxing 

jurisdiction on direct-to-home satellite service. 

“(b) Definitions.--For the purposes of this section-- 

“(1) Direct-to-home satellite service.--The term ‘direct-tohome satellite service’ means only programming transmitted 

or broadcast by satellite directly to the subscribers’ premises 

without the use of ground receiving or distribution equipment, 

except at the subscribers’ premises or in the uplink process to 

the satellite. 

“(2) Provider of direct-to-home satellite service.--For 

purposes of this section, a ‘provider of direct-to-home 

satellite service’ means a person who transmits, broadcasts, 

sells, or distributes direct-to-home satellite service. 

“(3) Local taxing jurisdiction.--The term ‘local taxing 

jurisdiction’ means any municipality, city, county, township, 

parish, transportation district, or assessment jurisdiction, or 

any other local jurisdiction in the territorial jurisdiction of the 

United States with the authority to impose a tax or fee, but 

does not include a State. 

“(4) State.--The term ‘State’ means any of the several States, 

the District of Columbia, or any territory or possession of the 

United States. 

“(5) Tax or fee.--The terms ‘tax’ and ‘fee’ mean any local 

sales tax, local use tax, local intangible tax, local income tax, 

business license tax, utility tax, privilege tax, gross receipts 

tax, excise tax, franchise fees, local telecommunications tax, 

or any other tax, license, or fee that is imposed for the 

privilege of doing business, regulating, or raising revenue for 

a local taxing jurisdiction. 

“(c) Preservation of State authority.--This section shall not 

be construed to prevent taxation of a provider of direct-tohome satellite service by a State or to prevent a local taxing 

jurisdiction from receiving revenue derived from a tax or fee 

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imposed and collected by a State. 

47 U.S.C.A. § 152 note. 

 The Dish Plaintiffs argue that Ordinance 17A plainly attempts to regulate directto-home satellite services and that this regulation is preempted by 47 U.S.C.A. section 

303(v), which gives exclusive jurisdiction over the regulation of direct-to-home satellite 

services to the FCC. The Dish Plaintiffs further argue that, because a Tribe’s 

adjudicatory jurisdiction cannot exceed its regulatory jurisdiction, the tribal court action 

is patently violative of express jurisdictional prohibitions. The Dish Plaintiffs also argue 

that the Hopi Reservation is plainly “any other local jurisdiction in the territorial 

jurisdiction of the United States with the authority to impose a tax or fee” within the 

definition of “local taxing jurisdiction” in 47 U.S.C.A. § 152 note, and, thus, is without 

authority to impose taxes on the Dish Plaintiffs. 

 In response, Defendants argue that the Communications Act does not apply to 

Indian tribes. Defendants also argue that, even if the Communications Act does apply to 

Indian Tribes, the Hopi Tribe may still impose a tax on the Dish Plaintiffs because 47 

U.S.C.A. §152 note does not prevent taxation by the Hopi Tribe on the Dish Plaintiffs.5

 

 First, it is true that “a tribe’s adjudicative jurisdiction does not exceed its 

legislative jurisdiction.” Plains Commerce Bank v. Long Family Land and Cattle Co., 

554 U.S. 316, 329 (2008). The Dish Plaintiffs argue that, because it is clear that the 

Communications Act preempts the tribe’s legislative jurisdiction, the Tribal Court action 

is patently violative of express jurisdictional prohibitions. 

 The Court disagrees. The Dish Plaintiffs appear to read a broader rule into the 

“patently violative of express jurisdictional prohibitions” exception than has been applied 

by the United States Supreme Court or the Ninth Circuit Court of Appeals. Rather, it 

 

5

 Defendants only address the enforceability of a tax should the Court find that 

the Communications Act applies to Indian Tribes. Defendants do not address the 

enforceability of the remainder of Ordinance 17A on the Dish Plaintiffs should the Court 

find that the Communications Act applies to Indian tribes. 

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appears that this exception only applies when the legislation at issue speaks directly to a 

court’s adjudicatory jurisdiction over a dispute. 

 For instance, in El Paso Natural Gas Co. v. Neztsosie, which the Dish Plaintiffs 

cite in support of their argument, one of the issues that the Supreme Court addressed was 

whether exhaustion was required when two members of the Navajo Nation sued El Paso 

Natural Gas Corporation and one of its subsidiaries, Rare Metal Corporation, claiming 

that El Paso and Rare Mineral operated open uranium mines on the Reservation, which 

allegedly contaminated the members’ drinking water and caused them injuries. 526 U.S. 

473, 476 (1999). The Court examined what it deemed an “unusual preemption 

provision” in the Price-Anderson Act, which transformed “any public liability action 

arising out of or resulting from a nuclear accident” into a federal action. Id. at 484 (citing 

42 U.S.C. § 2210(n)(2)). 

 Because of this transformation, the Act not only gave a district court original 

jurisdiction over such a claim, but provided for removal to federal court as of right if a 

putative Price-Anderson action was brought in state court. Id. In light of these unique 

jurisdictional provisions, the Court then had to decide whether deference to the tribal 

court on the issue of exhaustion was necessary where the same deference would not be 

accorded to the state court. Id. at 485. The Court answered in the negative, finding that 

“[a]ny generalized sense of comity toward nonfederal courts is obviously displaced by 

the provisions for preemption and removal from state courts, which are thus accorded 

neither jot nor tittle of deference.” Id. at 486. 

 Accordingly, the Court found, where the legislation contained an express 

preference for federal court adjudication notwithstanding the normal comity given to 

state court decisions, such comity would also not be necessary with regard to tribal court 

exhaustion of the jurisdictional question. Importantly, however, the Court recognized 

that this situation was limited to such facts and expressly conceded that normally 

exhaustion would be necessary, even where defendants in a tribal court action raised a 

federal preemption defense: 

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This is not to say that the existence of a federal preemption 

defense in the more usual sense would affect the logic of 

tribal exhaustion. Under normal circumstances, tribal courts, 

like state courts, can and do decide questions of federal law, 

and there is no reason to think that questions of federal 

preemption are any different. 

Id. at 486 n.7 (citing Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978)). 

 In this case, the Dish Plaintiffs have pointed to no provision in the 

Communications Act that expressly reserves adjudicatory jurisdiction to any claims that 

may relate to the Communications Act to federal courts. In light of the Neztsosie Court’s 

caveat that a tribal court can normally decide whether its jurisdiction is preempted by 

federal legislation in the first instance and the policies behind requiring tribal court 

exhaustion, to allow the tribal court to rule on its jurisdiction in the first instance, the 

Court finds that the “patently violative of jurisdictional prohibitions” exception to 

exhaustion does not apply in this case.6

 

 B. Whether it is Plain that Tribal Court Jurisdiction is Lacking and the Exhaustion Requirement would Serve No Purpose other 

 than Delay 

 To determine whether it is “plain” that tribal jurisdiction is lacking, the Court 

determines whether jurisdiction is “colorable” or “plausible.” Allstate, 191 F.3d at 1075. 

“If jurisdiction is ‘colorable’ or ‘plausible,’ then the exception does not apply and 

exhaustion of tribal court remedies is required.” Elliott, 566 F.3d at 848 (internal 

quotation marks and citation omitted). 

 Defendants argue that they have made a colorable argument that the tribal court 

has jurisdiction over the Dish Plaintiffs because, under Montana, 450 U.S. at 544, (1) a 

tribe may regulate the conduct of non-members relating to a consensual relationship 

between the nonmember and the tribe or its members and (2) a tribe may regulate 

 

6

 This analysis solely addresses whether tribal court exhaustion is required in this 

case and is in no way intended to decide or comment upon the merits of whether the 

Communications Act preempts tribal court jurisdiction in this case. 

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nonmember conduct that threatens or has some direct effect on the political integrity, the 

economic security, or the health or welfare of the tribe. Defendants argue that the facts of 

this case fall within both of the Montana exceptions and, thus, the tribe has the power to 

regulate the activities of the Dish Plaintiffs. Accordingly, Defendants argue, that because 

“where tribes possess authority to regulate the activities of non-members, civil 

jurisdiction over disputes arising out of such activities presumptively lies in the tribal 

courts,” Strate v. A-1 Contractors, 520 U.S. 438, 453 (1997), the Tribal Court has 

jurisdiction over the Dish Plaintiffs. 

 In response, the Dish Plaintiffs argue that neither Montana exception applies to 

this case. The Dish Plaintiffs further argue that, even if a Montana exception applied to 

this case, because Congress has the ability to limit the jurisdiction of the Tribal Court, 

and has expressly done so through the Communications Act, 47 U.S.C.A. section 303(v) 

and 47 U.S.C.A. section 152, the Tribal Court lacks jurisdiction over this case. The Dish 

Plaintiffs further argue that, even though the Communications Act does not expressly 

apply to Indian tribes, general federal statutes are presumed to apply to Indian tribes, and 

thus, the Communications Act divests the Hopi Tribe of both regulatory and adjudicatory 

authority over the Dish Plaintiffs. 

 It is important to note that this Order is solely limited to deciding the issue of 

whether Tribal Court exhaustion is required in this case. For the following reasons, the 

Court finds that Tribal Court exhaustion on the issue of jurisdiction is required in this 

case. Thus, the Court again notes that this opinion is not intended to decide the merits of 

the issue of whether the Communications Act preempts tribal regulatory or adjudicatory 

authority over the Dish Plaintiffs. 

 1. Whether Tribal Court Jurisdiction is Colorable or 

 Plausible 

 a. The Montana Rule and its Progeny 

In analyzing whether a tribe can exercise regulatory authority over a non-member, 

a Court must always begin with “the general proposition that the inherent sovereign 

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powers of an Indian tribe do not extend to the activities of non-members of the tribe.” 

Montana, 544 U.S. at 565. However, “Indian tribes retain inherent sovereign power to 

exercise some forms of civil jurisdiction over non-Indians on their reservations, even on 

non-Indian fee lands.” Id. First, “[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 other 

arrangements.” Id. (internal citations omitted). Second, “[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 566 

(internal citations omitted). However, outside of these two exceptions, “the tribes’ 

inherent sovereignty does not give them jurisdiction to regulate the activities of 

nonmembers.” Philip Morris USA, Inc. v. King Mountain Tobacco Co., Inc., 569 F.3d 

932, 938 (9th Cir. 2009) (internal citation omitted). 

 b. Whether Tribal Court Jurisdiction is Colorable or 

 Plausible under the Montana Exceptions 

 With regard to the first Montana exception, in this case, Defendants argue that the 

Dish Plaintiffs entered into consensual relationships with members of the Hopi Tribe, 

through contracts governing Dish’s provision of satellite television to those members. 

Indeed, in Big Horn Electric Cooperative, Inc. v. Adams, 219 F.3d 944 (9th Cir. 2000), 

the Ninth Circuit Court of Appeals found that an almost identical relationship to the 

relationship between nonmember Dish Provider and certain members of the Hopi Tribe 

gave rise to a consensual relationship. Specifically, in Big Horn, Big Horn, a nonmember 

company “entered into contracts with tribal members for the provision of electrical 

services.” 219 F.3d at 951. The Ninth Circuit Court of Appeals found that “Big Horn’s 

voluntary provision of electrical services on the Reservation did create a consensual 

relationship.” Id. (internal citation omitted). As in Big Horn, in this case, Dish Provider 

entered into contracts with tribal members for the provision of satellite television 

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services,7 which gave rise to a consensual relationship between Dish Provider and 

members of the Hopi reservation. 

Once the Court finds the required consensual relationship, for the first Montana

exception to apply, there must also be some nexus between the regulation sought to be 

imposed on the nonmember and the consensual relationship. Philip Morris USA, Inc., 

569 F.3d at 942 (“Atkinson teaches that under the first Montana exception, a tribe has 

authority to tax a nonmember where the tax has a nexus to the ‘consensual 

relationship.’”) (citing Atkinson Trading Co. v. Shirley, 532 U.S. 645 (2001)). Likewise, 

“a tribal court has jurisdiction over a nonmember only where the claim has a nexus to the 

consensual relationship between the nonmember and the disputed commercial contacts 

with the tribe.” Id. at 942. 

 In this case, Defendants have made a plausible, colorable argument, for the 

purposes of Tribal Court exhaustion, that there is nexus between the regulations sought to 

be imposed on the Dish Plaintiffs and the consensual relationship between Dish Provider8

and the Hopi tribal members.9

 

7

 Although Dish argues that Defendants have failed to prove that it entered into 

contracts with any tribal members for the provision of satellite services, Dish does not 

deny that it did enter into such contracts. Further, in its Complaint, Dish admits that it 

provides Satellite service to about 900 residents on the Hopi Reservation. Doc. 1 at ¶ 13. 

While the Court acknowledges that Defendants have not shown that any of those 900 

residents are actually members of the Hopi Tribe, Dish does not argue or show that those 

900 residents are not members of the Hopi Tribe. Accordingly, for the purposes of this 

Order, the Court assumes that Dish has entered into consensual relationships with some 

members of the Hopi tribe for the provision of satellite services on the Hopi Reservation. 

8

 The Court does not have enough information regarding the relationships 

between the Dish Plaintiffs (Dish Provider, Dish Servicer, and Dish Parent) or the nature 

of the contract entered into between Dish Provider and the tribal members to determine if 

the tribal court’s jurisdiction is plausible as to Dish Parent and Dish Servicer. However, 

in light of the rest of the Court’s analysis, the Court finds that this issue can properly be 

addressed in the first instance by the Tribal Court in its jurisdictional analysis. 

9

 Defendants have failed to make any plausible or colorable argument that the 

second Montana exception is applicable to this case. “[U]nless the drain of the 

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 c. The Effect of a Preemption Defense on the Colorable/Plausible Analysis

The Dish Plaintiffs argue that, regardless of whether one of the Montana 

exceptions applies, the Tribal Court plainly lacks jurisdiction because the regulations and 

taxation contained in Ordinance 17A are preempted by 47 U.S.C.A. section 303(v) and 

47 U.S.C.A. section 152. The Dish Plaintiffs are correct that Congress can divest the 

tribe of any regulatory or adjudicatory authority over nonmembers even when one of the 

Montana exceptions applies. See, e.g., William C. Canby, Jr., American Indian Law in a 

Nutshell 310 (5th ed. 2009) (“The federal power to regulate Indian affairs is plenary; it is 

limited only by the constitutional restraints applicable to all federal activity. In the 

exercise of this power, the federal government may wholly preempt the regulatory power 

of both the states and the tribes.”). 

 Defendants argue that the Communications Act does not apply to Indian tribes. 

The Dish Plaintiffs point to no provision in the Communications Act expressly stating the 

intention of Congress that the Communications Act should apply to Indian tribes. 

However, a federal statute of general applicability that is silent on the issue of 

applicability to Indian tribes applies to Indian tribes unless 

(1) the law touches exclusive rights of self-governance in 

purely intramural matters; (2) the application of the law to the 

tribe would abrogate rights guaranteed by Indian treaties; or 

(3) there is proof by legislative history or some other means 

that Congress intended the law not to apply to Indians on their 

reservations. 

Donovan v. Coeur d’Alene Tribal Farm, 751 F.2d 1113, 1119 (9th Cir. 1985) (internal 

quotations and citation omitted). Accordingly, to determine whether the Tribal Court’s 

 

nonmember’s conduct upon tribal services and resources is so severe that it actually 

‘imperils’ the political integrity of the Indian tribe,” the second Montana exception does 

not apply. Burlington Northern Santa Fe Railroad Co. v. The Assiniboine and Sioux 

Tribes of the Fort Peck Reservation, 323 F.3d 767, 768 n.15 (9th Cir. 2003). Defendants 

have made no showing, plausible or otherwise, that the Dish Plaintiffs conduct in this 

case is a severe drain on tribal services and resources such that it imperils the political 

integrity of the Indian tribe. 

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regulatory and adjudicatory authority is preempted by the Communications Act, a Court 

must first determine whether the Communications Act, a law of general applicability, 

applies to Indian tribes. This requires the Court to analyze the test set forth in Donovan. 

The Dish Plaintiffs make a plausible argument10 that none of the exceptions set forth in 

Donovan apply to the Communications Act and, thus, the preemption provisions set forth 

in the Communications Act must apply to the Hopi Tribe in this case.11 

 In light of the necessity of applying the Donovan test to determine whether the 

Tribal Court has adjudicatory jurisdiction in this case, “the existence and extent of a tribal 

court’s jurisdiction will require a careful examination of tribal sovereignty, the extent to 

which that sovereignty has been altered, divested, or diminished, as well as a detailed 

study of relevant statutes, Executive Branch policy as embodied in treaties and elsewhere, 

and administrative or judicial decisions.” Neztososie, 526 U.S. at 483-84. In such 

situations, comity requires exhaustion of Tribal Court remedies “because Congress is 

committed to a policy of supporting tribal self-government which favors a rule that will 

provide the forum whose jurisdiction is being challenged the first opportunity to evaluate 

the factual and legal bases for the challenge.” Id. at 484 (quoting National Farmers, 471 

U.S. at 856). Accordingly, in this case, the Court finds that comity requires the Hopi 

Tribal Court be afforded the opportunity to evaluate the factual and legal bases for the 

challenges to its jurisdiction in the first instance and, thus, exhaustion of tribal court 

 

10 As such, the Dish Plaintiffs have stated a claim upon which relief can be 

granted in their Complaint and Defendants Motion to Dismiss pursuant to Federal Rule of 

Civil Procedure 12(b)(6) is denied. 

11 In fact, whether the Communications Act would be found to apply to Indian 

tribes has been the subject of considerable debate. See, e.g., John C. Miller and 

Christopher P. Guzelian, A Spectrum Revolution: Deploying Ultrawideband Technology 

on Native American Lands, 11 COMMLAW CONSPECTUS 277 (2003); Jennifer L. King, 

Increasing Telephone Penetration Rates and Promoting Economic Development on 

Tribal Lands: A Proposal to Solve the Tribal and State Jurisdictional Problems, 53 FED.

COMM. L.J. 137 (Dec. 2000). 

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remedies is required.12

 IV. CONCLUSION 

When the Court determines that exhaustion is appropriate, it is in the Court’s 

discretion to either dismiss the case or stay the action while tribal court remedies are 

exhausted. See Atwood v. Fort Peck Tribal Court Assiniboine and Sioux Tribes, 513 F.3d 

943, 948 (9th Cir. 2008). Exercising this discretion, the Court will dismiss this case 

without prejudice to Plaintiffs re-filing once they have exhausted their tribal court 

remedies. 

 

12 The Court notes that the Dish Plaintiffs argue that there is an additional 

exception to tribal court exhaustion, which was carved out by the United States Supreme 

Court in Nevada v. Hicks, 533 U.S. 353, 369 (2001). In Hicks, the Supreme Court 

conducted a merits analysis as to whether the tribal court lacked jurisdiction over state 

officers for causes of action relating to their performance of official duties. Id. at 369. 

After finding that the tribal court did lack jurisdiction over such causes of action, 

the Court next addressed whether the petitioners “were required to exhaust their 

jurisdictional claims in Tribal Court before bringing them in Federal District Court.” Id. 

The Hicks Court found that three of the exceptions to exhaustion (bad faith, patently 

violative of express jurisdictional prohibitions, and futility) did not apply. The Court 

then turned to the final exception (“when . . . it is plain that no federal grant provides for 

tribal governance of nonmembers’ conduct on land covered by Montana’s main rule, so 

the exhaustion requirements would serve no purpose other than delay”) and stated that 

such exception “too is technically inapplicable.” Id. (internal quotations and citations 

omitted). Nonetheless, the Hicks Court found that the “reasoning behind” the fourth 

exception: “where it is clear that the tribal court lacks jurisdiction” and “tribal court 

exhaustion would serve no purpose other than delay” applied because the court had 

already determined that the tribal court lacked jurisdiction over state officials for causes 

of action relating to their performance of official duties, and, thus, exhaustion before the 

tribal court was unnecessary. 

First, it is not clear if the Hicks Court intended to carve out a fifth exception to the 

exhaustion requirement. Second, even if that was the intention of the Hicks Court, if this 

Court were to find that tribal court exhaustion were not required in this case because this 

Court is capable of first conducting a merits analysis of the tribal court’s jurisdiction and 

thus, requiring the tribal court to do so “would serve no purpose other than delay,” such a 

holding would essentially eviscerate the comity doctrine and the reasoning behind it. 

Accordingly, because, unlike in Hicks, it is not clear that the tribal court lacks jurisdiction 

in this case, this “exception” to the exhaustion requirement is likewise inapplicable. 

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Based on the foregoing, 

IT IS ORDERED that Defendants’ Motion to Dismiss Complaint Pursuant to 

Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Doc. 24) is granted in part and 

denied in part as follows: 

 Defendants’ Motion to Dismiss Complaint Pursuant to Federal Rules of Civil 

Procedure 12(b)(6) is denied. 

 Defendants’ unenumerated 12(b) Motion to Dismiss for Failure to Exhaust Tribal 

Court Remedies is granted. This case is dismissed without prejudice to Plaintiffs re-filing 

once they have exhausted their tribal court remedies as set forth herein. The Clerk of the 

Court shall close this case and enter judgment accordingly. 

 Dated this 1st day of November, 2012. 

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