FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GRAND CANYON SKYWALK

DEVELOPMENT, LLC, a Nevada

limited liability company,

Plaintiff-Appellant,

v.

‘SA’ NYU WA INCORPORATED, also

named as ‘Sa’ Nyu Wa: a triballycharted corporation established

under the laws of the Hualapai

Indian Tribe; GRAND CANYON

RESORT CORPORATION, a triballychartered corporation established

under the laws of the Hualapai

Indian Tribe; RICHARD WALERMA,

SR.; WYNONA SINYELLA; RUBY

STEELE; CANDIDA HUNTER; BARNEY

ROCKY IMUS; WAYLON HONGA;

CHARLES VAUGHN, SR., each

individuals and members of the

Hualapai Tribal Council; WANDA

EASTER; JACI DUGAN, each

individuals and Hualapai Indian

Tribe employees; DUANE

YELLOWHAWK, Honorable,

individual and judge of the Hualapai

Tribe Court,

Defendants-Appellees.

No. 12-15634

D.C. No.

3:12-cv-08030-

DGC

OPINION
2 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

 This summary constitutes no part of the opinion of the court. It has

*

been prepared by court staff for the convenience of the reader.

Appeal from the United States District Court

for the District of Arizona

David G. Campbell, District Judge, Presiding

Argued and Submitted

October 19, 2012—San Francisco, California

Filed April 26, 2013

Before: Raymond C. Fisher, Richard C. Tallman,

and Consuelo M. Callahan, Circuit Judges.

Opinion by Judge Tallman

SUMMARY

*

Tribal Court Jurisdiction

Affirming the district court’s judgment in an action

concerning a dispute over a revenue-sharing contract between

a Nevada corporation and a tribally chartered corporation of

the Hualapai Indian Tribe for the building and operation of

the Grand Canyon Skywalk, the panel held that the Nevada

corporation must exhaust tribal court remedies before

proceeding in federal court on its claims challenging the

Tribe’s authority to condemn its intangible property rights in

the contract.
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 3

The panel concluded that the bad faith and futility

exceptions to the exhaustion requirement did not apply. It

held that where a tribal court has asserted jurisdiction and is

entertaining a suit, the tribal court must have acted in bad

faith for exhaustion to be excused; bad faith by a litigant

instituting the tribal court action will not suffice. The panel

held that the submitted evidence did not establish that the

tribal court operated in bad faith or was controlled by the

tribal council in its decision making. The panel also affirmed

the district court’s conclusion that the evidence did not meet

the narrow futility exception, which applies where exhaustion

would be futile because of the lack of adequate opportunity

to challenge the tribal court’s jurisdiction.

The panel held inapplicable the exhaustion exception for

cases in which the tribal court plainly lacks jurisdiction. The

panel stated that the main rule of Montana v. United States,

450 U.S. 544 (1981), that generally Indian tribes lack civil

authority over the conduct of nonmembers on non-Indian land

within a reservation, was unlikely to apply to the facts of this

case. The panel held that the district court correctly relied

upon Water Wheel Camp Recreation Area, Inc. v. LaRance,

642 F.3d 802 (9th Cir. 2011), which recognizes that a tribe’s

inherent authority over tribal land may provide for regulatory

authority over non-Indians on that land without the need to

consider Montana. Moreover, even if the tribal court were to

apply Montana’s main rule, the Nevada corporation’s

consensual relationship with the tribal corporation, or the

financial implications of their agreement, likely would place

the case squarely within one of Montana’s exceptions and

allow for tribal jurisdiction.
4 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

COUNSEL

Troy A. Eid (argued) and Jennifer Weddle, Greenberg

Traurig, LLP, Denver, Colorado; Tami Denise Cowden and

Mark Tratos, Greenberg Traurig, LLP, Las Vegas, Nevada;

and Pamela Overton, Greenberg Traurig, LLP, Phoenix,

Arizona, for Plaintiff-Appellant.

Jeffrey David Gross (argued), Paul Kipp Charlton, Glen

Hallman and Christopher W. Thompson, Gallagher &

Kennedy, P.A., Phoenix, Arizona, for Defendants-Appellees.

OPINION

TALLMAN, Circuit Judge:

We must once again address the subject of tribal court

jurisdiction over disputes arising when non-Indians choose to

do business in Indian country. Underlying this jurisdictional

question is a multi-million dollar development contract

involving the building and operation of a tourist destination

overlooking one of the world’s great wonders, the Grand

Canyon. The Skywalk is a glass-bottomed viewing platform

suspended 70 feet over the rim of the Grand Canyon with the

Colorado River flowing thousands of feet below.

Grand Canyon Skywalk Development, LLC (“GCSD”),

a Nevada corporation, entered into a revenue-sharing contract

with Sa Nyu Wa (“SNW”), a tribally chartered corporation of

the Hualapai Indian Tribe. When a dispute arose over the

contract, GCSD sued SNW in Hualapai Tribal Court to

compel arbitration. While arbitration proceeded, the

Hualapai Tribal Council exercised eminent domain and
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 5

condemned GCSD’s intangible property rights in the contract,

which practically speaking left SNW, as a tribal corporation,

in contract with the Hualapai Tribe.

GCSD responded by filing suit against SNW in the

United States District Court for the District of Arizona

seeking declaratory judgment that the Hualapai Tribe lacked

the authority to condemn its intangible property rights and

injunctive relief. The district court denied the temporary

restraining order (“TRO”) to enjoin SNW based on the

principle of comity and required GCSD to exhaust all

possible tribal court remedies before proceeding in federal

court. The district court relied on our decision in Water

Wheel Camp Recreational Area, Inc. v. LaRance, 642 F.3d

802 (9th Cir. 2011), and also concluded there was not a

sufficient basis to apply the bad faith or futility exceptions.

For the same reasons cited by the district court, we affirm.

I

On December 31, 2003, GCSD and SNW entered into a

revenue-sharing “Development and Management Agreement”

to establish a glass bridge tourist overlook and related

facilities known as the Skywalk on remote tribal land. In

addition, GCSD agreed to provide shuttle services from

locations outside the reservation to the Skywalk. The parties

signed an amended agreement on September 10, 2007, and

later created a trust to manage the shared revenues on March

10, 2010.

GCSD filed a complaint in Hualapai Tribal Court on

February 25, 2011, seeking to compel SNW to engage in

arbitration pursuant to their agreement’s dispute resolution

clause. SNW objected, but nonetheless participated, and on
6 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

February 1, 2012, an American Arbitration Association

arbitrator set deadlines for a joint prehearing schedule and

resolution of any outstanding discovery disputes, including

depositions and subpoenas.

As arbitration proceeded, the Hualapai Tribal Council

passed Resolution No. 20-2011 on April 4, 2011, enacting

§ 2.16 of the Hualapai Law and Order Code, which codified

the Tribe’s power to invoke eminent domain to condemn

property for public use. On February 7, 2012, acting under

§ 2.16, the tribal council passed Resolution No. 15-2012 to

acquire “GCSD’s contractual interest in the Skywalk

Agreement under the power of eminent domain and to do all

things necessary to accomplish th[at] purpose.” The Hualapai

Tribal Court followed by issuing a TRO against GCSD, and

SNW filed a Declaration of Taking with the tribal court.

GCSD responded on two fronts: it filed an expedited

motion for a TRO in district court to stop the eminent domain

proceedings, and it opposed the taking in Hualapai Tribal

Court. After multiple hearings, the district court denied

GCSD’s TRO by invoking the principles of comity and

ordered GCSD to exhaust tribal court remedies prior to

review in federal court. GCSD timely appealed on March 22,

2012.

II

We have jurisdiction under 28 U.S.C. § 1292(a)(1) as an

appeal from denial of injunctive relief. Although TROs are

not typically appealable interlocutory orders, we may review

a TRO that “possesses the qualities of a preliminary

injunction” where the “district court holds an adversary

hearing and the basis for the court’s order was strongly
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 7

 While appellate review of a district court’s denial of a TRO is typically 1

for an abuse of discretion, the question of tribal jurisdiction and

exhaustion of tribal remedies takes priority in this case and provides the

appropriate standard of review.

challenged.” Serv. Emps. Int’l Union v. Nat’l Union of

Healthcare Workers, 598 F.3d 1061, 1067 (9th Cir. 2010).

We review questions of tribal court jurisdiction and

exhaustion of tribal court remedies de novo and factual

findings for clear error. Smith v. Salish Kootenai Coll.,

434 F.3d 1127, 1130 (9th Cir. 2006); Philip Morris USA, Inc.

v. King Mountain Tobacco Co., 569 F.3d 932, 938 n.1 (9th

Cir. 2009).1

III

SNW argues, for the first time on appeal, that collateral

estoppel bars GCSD from raising similar jurisdictional

questions on appeal that it raised before the district court in

an earlier case dismissed without prejudice. Because

GCSD’s argument fails on the merits, we need not consider

either whether SNW waived this argument by failing to raise

it in the district court or whether collateral estoppel applies

here.

IV

Federal law has long recognized a respect for comity and

deference to the tribal court as the appropriate court of first

impression to determine its jurisdiction. See Nat’l Farmers

Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845,

856–57 (1985); Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9,

15–16 (1987);Burlington N. R.R. Co. v. Crow Tribal Council,

940 F.2d 1239, 1244–47 (9th Cir. 1991). As support for this
8 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

premise, the Supreme Court cites: (1) Congress’s

commitment to “a policyof supporting tribal self-government

and self-determination;” (2) a policy that allows “the forum

whose jurisdiction is being challenged the first opportunity to

evaluate the factual and legal bases for the challenge;” and

(3) judicial economy, which will best be served “by allowing

a full record to be developed in the Tribal Court.” Nat’l

Farmers, 471 U.S. at 856.

We have interpreted National Farmers as determining

that tribal court exhaustion is not a jurisdictional bar, but

rather a prerequisite to a federal court’s exercise of its

jurisdiction. Crow Tribal Council, 940 F.2d at 1245 n.3.

“Therefore, under National Farmers, the federal courts

should not even make a ruling on tribal court jurisdiction . . .

until tribal remedies are exhausted.” Stock West, Inc. v.

Confederated Tribes of the Colville Reservation, 873 F.2d

1221, 1228 (9th Cir. 1989). However, there are four

recognized exceptions to the requirement for exhaustion of

tribal court remedies where:

(1) an assertion of tribal jurisdiction is

motivated by a desire to harass or is

conducted in bad faith; (2) the action is

patently violative of express jurisdictional

prohibitions; (3) exhaustion would be futile

because of the lack of adequate opportunity to

challenge the court’s jurisdiction; or (4) it is

plain that no federal grant provides for tribal

governance of nonmembers’ conduct on land

covered by Montana’s main rule.

Burlington N. R.R. Co. v. Red Wolf, 196 F.3d 1059, 1065 (9th

Cir. 1999) (citations omitted). GCSD raises bad faith,
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 9

futility, and plain lack of tribal governance in support of its

position. We review each of these exceptions in turn but

ultimately conclude that none offers a sufficient basis to

avoid exhaustion of tribal court remedies in this case.

V

The Supreme Court has suggested that a federal court

need not wait until tribal remedies have been exhausted to

consider a case if “an assertion of tribal jurisdiction is

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

Nat’l Farmers, 471 U.S. at 856 n.21 (internal citation

omitted). Black’s Law Dictionary defines bad faith as

“[d]ishonesty of belief or purpose.” 149 (9th ed. 2009).

National Farmers used the passive voice and neither we, nor

the Supreme Court, have expressly stated who must act in bad

faith for it to apply. We now hold that where, as here, a tribal

court has asserted jurisdiction and is entertaining a suit, the

tribal court must have acted in bad faith for exhaustion to be

excused. Bad faith by a litigant instituting the tribal court

action will not suffice.

A

The source of the bad faith exception in the tribal court

context is National Farmers, 471 U.S. at 856 n.21, which

imported it from Juidice v. Vail, 430 U.S. 327, 338 (1977).

In Juidice, the state court issued a commitment order, and the

defendant was arrested after he failed to attend a deposition,

appear for a hearing, and pay a fine. Id. at 329–30. Rather

than appeal his case in state court, he filed a 42 U.S.C. § 1983

claim in district court. Id. at 328–30. Upon review, the

Supreme Court held that a federal court must abstain from

making a determination during a state proceeding based on
10 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

the principle of comity unless the proceeding was motivated

by a desire to harass or was conducted in bad faith. See id. at

334–38. The Court looked to the proceeding and the court

overseeing that proceeding to make its determination. See id.

at 338 (holding that the bad faith exception “may not be

utilized unless it is alleged and proved that [the State Courts]

are enforcing the contempt procedures in bad faith or are

motivated by a desire to harass”). The defendant there

alleged bad faith by the plaintiffs, which the Court explicitly

held insufficient to trigger the exception. See id. (holding

that the exception was not triggered because “[w]hile some

paragraphs of the complaint could be construed to make [bad

faith] allegations as to the creditors, there are no comparable

allegations with respect to appellant justices who issued the

contempt orders”). Analogizing to this case, it must be the

Hualapai Tribal Court that acts in bad faith to avoid the

requirement to exhaust tribal court remedies.

Additionally, a broader interpretation would unnecessarily

deprive tribal courts of jurisdiction and violate the principles

of comity that underlie the exhaustion requirement. A party

would need only allege bad faith by the opposing party, or a

third party, to remove the case to federal court. Comity

principles require that we trust that our tribal court

counterparts can identify and punish bad faith by litigants as

readily as we can. GCSD’s proposed reading of the

exception would swallow the rule and undermine the

Supreme Court’s general principle of deference to tribal

courts.

GCSD points to two Ninth Circuit cases in support of its

broader interpretation of who may act in bad faith to trigger

the exception, but neither is dispositive of the issue. In A&A

Concrete, Inc. v. White Mountain Apache Tribe, the
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 11

 The tribal council commissioned the Evaluation prepared by the 2

National Indian Justice Center.

appellants argued that enforcement of a statutory scheme had

been in bad faith. 781 F.2d 1411, 1417 (9th Cir. 1986). We

rejected the argument because there was no evidence of bad

faith in the record. See id. Similarly, in Atwood v. Fort Peck

Tribal Court Assiniboine, we considered and rejected the bad

faith exception in a single sentence by stating that “[t]here

has been no showing that [the defendant] asserted tribal

jurisdiction in bad faith or that she acted to harass [the

plaintiff].” 513 F.3d 943, 948 (9th Cir. 2008). Although both

of these decisions looked beyond the tribal court for their bad

faith analysis, the topic received only a cursory review and

was quickly dismissed. Neither case defined the scope of bad

faith, and more importantly, neither case applied the bad faith

exception. Ultimately, where a tribe has an established

judicial system as here, the interpretation most faithful to

National Farmers is that it must be the tribal court that acts

in bad faith to exempt the party from exhausting available

tribal court remedies.

B

The facts of this case do not support a finding of bad faith

on the part of the tribal court. GCSD urges us to determine

that the Hualapai Tribal Court Evaluation, the proffered

2

testimony of its author, Executive Director Joseph Myers, and

other evidence proved that the tribal court and tribal council

were inextricably intertwined such that bad faith by the tribal

council could be imputed to the tribal court. However, the

proffered evidence does not conclusively support that claim.

The majority of the statements in the Evaluation are broad

generalizations or guiding principles. Two specific findings
12 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

directly refute GCSD’s contentions: (1) “no interviewee

stated that there was any direct interference in court matters

by tribal council members;” and (2) “[t]he judiciary is

separate and apart from the tribal council.” Additionally, the

tribal council’s act of bringing in an external auditing

organization lends credibility to the tribal court system as a

whole.

GCSD challenges the district court’s refusal to hear

testimony from the Evaluation’s author, Mr. Myers. “A

district court’s evidentiary rulings should not be reversed

absent clear abuse of discretion and some prejudice.” S.E.C.

v. Jasper, 678 F.3d 1116, 1122 (9th Cir. 2012) (citation and

internal quotation marks omitted). “For us to reverse a

decision as an abuse of discretion, we must have a definite

and firm conviction that the district court committed a clear

error of judgment in the conclusion it reached.” United States

v. Comprehensive Drug Testing, Inc., 621 F.3d 1162, 1175

(9th Cir. 2010) (citation and internal quotation marks

omitted).

The district court did not abuse its discretion when it

denied GCSD’s request to introduce Mr. Myers’ testimony.

GCSD requested an emergency evidentiary hearing but failed

to notify the court of its intention to introduce witness

testimony. As a result, SNW did not have an opportunity to

subpoena defense witnesses. Out of fairness to SNW and due

to the urgency of a TRO proceeding, the court accepted only

Mr. Myers’ written report. The court reviewed the published

Evaluation and left open the possibility of an additional

evidentiary hearing if necessary.

Ultimately, the court’s denial of the admission of his

actual testimony was not an abuse of discretion because the
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 13

Evaluation documented Mr. Myers’ findings and provided a

balanced review of the Hualapai judiciary. When considered

together, the submitted evidence does not establish that the

tribal court operated in bad faith or is controlled by the tribal

council in its decision making.

VI

Futility is also a recognized exception to the requirement

to exhaust court tribal remedies. Where “exhaustion would

be futile because of the lack of adequate opportunity to

challenge the court’s jurisdiction,” a party is excused from

exhausting claims in tribal court. Red Wolf, 196 F.3d at 1065.

Generally, this exception applies narrowly to only the most

extreme cases. See Johnson v. Gila River Indian Cmty.,

174 F.3d 1032, 1036 (9th Cir. 1999) (two-year delay called

into question the possibility of tribal court remedies);

Krempel v. Prairie Island Indian Cmty., 125 F.3d 621, 622

(8th Cir. 1997) (exhaustion not required where there was no

functioning tribal court).

GCSD has failed to show that the Hualapai Tribal Court

does not offer an adequate and impartial opportunity to

challenge jurisdiction. Although Hualapai Law and Order

Code § 2.16(K) originally precluded a judge pro tem from

hearing condemnation cases, the tribal court remedied this

separation of powers issue by invalidating that section and

appointing a neutral pro tem judge to hear this case. The

Hualapai adjudicatory process has continued, as evidenced by

submitted tribal court and tribal court of appeals orders. Both
14 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

 Appellees’ outstanding Second Motion to Supplement the Record, Oct. 3

5, 2012, ECF No. 38, and Appellant’s outstanding Motion to Supplement

the Record, Oct. 15, 2012, ECF No. 39, are granted. Submitted materials

have been reviewed and were considered in this decision.

parties to this appeal are participating in those proceedings.3

The tribal court determined it has jurisdiction to review the

condemnation act under the catchall section of the Hualapai

Law and Order Code, § 3.1(d), which states: “the Tribal

Court may be guided by common law as developed by other

Tribal, federal or state courts” where no law is directly on

point. Even the Evaluation offered as evidence by GCSD as

proof of futility includes statements such as, “[t]he Hualapai

Tribal Court is a functional, established system with court

procedures” and “[t]he judiciary is separate and apart from

the tribal council.”

The submitted evidence supports the district court’s

finding that the tribal court operates independently from the

tribal council and the evidence presented does not meet the

narrow futility exception. GCSD is actively litigating its case

in Hualapai Tribal Court, contradicting its argument that it

has not had an “adequate opportunity to challenge the court’s

jurisdiction.” Red Wolf, 196 F.3d at 1065.

VII

Finally, we turn to the third issue raised on appeal,

whether the tribal court plainly lacked jurisdiction over this

case. The Supreme Court stated in Strate v. A-1 Contractors

that where “it is plain that no federal grant provides for tribal

governance of nonmembers’ conduct on land covered by

Montana’s main rule, it will be equally evident that tribal

courts lack adjudicatory authority over disputes arising from
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 15

Although GCSD raises mobilia sequuntur personam as another means 4

to preclude tribal jurisdiction in the first instance, its argument conflates

the interlocutory jurisdictional question with the merits of the

condemnation action. This opinion focuses on the jurisdictional question,

and we need not determine the situs of the contract to render our decision.

such conduct.” 520 U.S. 438, 459 n.14 (1997) (Montana

“described a general rule that, absent a different

congressional direction, Indian tribes lack civil authority over

the conduct of nonmembers on non-Indian land within a

reservation.” Id. at 446). We hold that this Strate exception

does not apply here to deny the tribal court of its initial

jurisdiction.

The tribal court does not plainly lack jurisdiction because

Montana’s main rule is unlikely to apply to the facts of this

case. Furthermore, the district court correctly relied upon

Water Wheel, which provides for tribal jurisdiction without

even reaching the application of Montana. Even if the tribal

court were to apply Montana’s main rule, GCSD’s

consensual relationship with SNW or the financial

implications of the agreement likely place it squarely within

one of Montana’s exceptions and allow for tribal

jurisdiction.4

A

Montana v. United States, 450 U.S. 544 (1981), is “the

pathmarking case concerning tribal civil authority over

nonmembers.” Strate, 520 U.S. at 445. But as the district

court properly determined, a tribe’s inherent authority over

tribal land may provide for regulatory authority over nonIndians on that land without the need to consider Montana.

See Water Wheel, 642 F.3d at 804–05. As a starting point, we
16 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

recognize “the long-standing rule that Indian tribes possess

inherent sovereign powers, including the authority to exclude,

unless Congress clearly and unambiguously says otherwise.”

Id. at 808 (citation omitted).

In Water Wheel, a non-Indian corporation entered into a

lease agreement with a group of tribes for the development

and operation of a recreational park and marina on tribal land

along the Colorado River. Id. at 805. Under the contract

Water Wheel collected fees from users and made payments

to the tribes. Id. After a dispute arose, Water Wheel stopped

making payments and refused to vacate the premises after the

lease ended. Id. The tribes filed suit in tribal court, and

Water Wheel moved to dismiss the case, arguing the court did

not have jurisdiction under Montana. Id. at 805–06. We held

that “where the non-Indian activity in question occurred on

tribal land, the activity interfered directly with the tribe’s

inherent powers to exclude and manage its own lands, and

there are no competing state interests at play, the tribe’s status

as landowner is enough to support regulatory jurisdiction

without considering Montana,” id. at 814, and unless a

limitation applies, adjudicatory jurisdiction, as well. Id. at

814–17.

Despite GCSD’s attempts to distinguish Water Wheel, the

factual differences do not diminish the reasoning or the

application of the decision here. Just as in Water Wheel,

GCSD agreed to develop and manage a tourist location on

tribal land in exchange for a fee. It is the impressive beauty

of the tribal land’s location that is the valuable centerpiece of

this controversy. Tourists visit the Skywalk because it

provides unparalleled viewing of the Grand Canyon, a

location to which the Tribe has the power to limit access

through its inherent sovereignty and the right to exclude.
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 17

Water Wheel is instructive because there, just as here, it was

access to the valuable tribal land that was the essential basis

for the agreement.

Although this case involves an intangible property right

within a contract, rather than a leasehold as in Water Wheel,

the contract in this case equally interfered with the Hualapai’s

ability to exclude GCSD from the reservation. The dispute

between GCSD and SNW over the management of the

Skywalk property resulted in the Hualapai taking drastic

measures: passing an ordinance to condemn GCSD’s property

rights, purporting to substitute theTribe in the place of GCSD

to carry out the management of the overlook, and spending

more than two years in litigation. With the power to exclude

comes the lesser power to regulate. South Dakota v.

Bourland, 508 U.S. 679, 689 (1993). Where a tribe has

regulatory jurisdiction and interests, such as those at stake

here, it is also likely to have adjudicatory jurisdiction as the

district court concluded. See Water Wheel, 642 F.3d at

814–16.

GCSD argues the Tribe waived its inherent sovereignty

when it established SNW to manage the Skywalk contract,

but that is not the case. Merrion v. Jicarilla Apache Tribe

cautioned against conflating a tribe’s agreement to contract

with a waiver of tribal sovereignty. 455 U.S. 130, 144–48

(1982). “To presume that a sovereign forever waives the

right to exercise one of its sovereign powers unless it

expressly reserves the right to exercise that power in a

commercial agreement turnsthe concept ofsovereignty on its

head . . . .” Id. at 148. GCSD relies on Merrion where the

Court stated “[w]hen a tribe grants a non-Indian the right to

be on Indian land, the tribe agrees not to exercise its ultimate

power to oust the non-Indian as long as the non-Indian
18 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

complies with the initial conditions of entry.” Id. at 144. But

that argument goes to the merits of the condemnation action

and not to the jurisdictional question before us now. Read in

its entirety, Merrion holds that unless expressly waived “in

unmistakable terms” within the contract, a tribe retains its

inherent sovereignty, and as such, the tribe may have

jurisdiction. Id. at 148.

B

Furthermore, although the main rule in Montana v. United

States is that a tribal court lacks regulatory authority over the

activities of non-Indians unless one of its two exceptions

apply, this case is not Montana. Montana, 450 U.S. at

565–66. Montana considered tribal jurisdiction over

nonmember activities on non-Indian land, held in fee simple,

within a reservation. Id. at 547, 565–66. The land underlying

this case, however, is federal Indian land held in trust for the

Hualapai Tribe. The dispute arose out of an agreement

related to the development, operations, and management of

the Skywalk, an asset located in Indian country.

With the exception of Nevada v. Hicks, 533 U.S. 353

(2001), the Supreme Court has applied Montana “almost

exclusively to questions of jurisdiction arising on non-Indian

land or its equivalent.” Water Wheel, 642 F.3d at 809. When

deciding whether a tribal court has jurisdiction, land

ownership may sometimes prove dispositive, but when a

competing state interest exists courts balance that interest

against the tribe’s. See Hicks, 533 U.S. at 360, 370. Here, as

the dispute centers on Hualapai trust land and there are no

obvious state interests at play, the Hicks exception is unlikely

to require Montana’s application. At the very least, it cannot

be said that the tribal court plainly lacks jurisdiction.
GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC. 19

C

Even if Montana applied, either of its two recognized

exceptions could also provide for tribal jurisdiction in this

case. The first exception allows “Indian tribes [to] retain

inherent sovereign power to exercise some forms of civil

jurisdiction over non-Indians on their reservations” where

nonmembers enter into “consensual relationships with the

tribe or its members, through commercial dealing, contracts,

leases, or other arrangements.” 450 U.S. at 565. The second

exception exists where the conduct of a non-Indian “threatens

or has some direct effect on the political integrity, the

economic security, or the health or welfare of the tribe.” Id.

at 566. Additionally, tribal laws may be fairly imposed on

nonmembers if the nonmember consents, either expressly or

through his or her actions. See Plains Commerce Bank v.

Long Family Land & Cattle Co., 554 U.S. 316, 337 (2008).

GCSD voluntarily entered into a contract with SNW by

signing an agreement to develop and manage the Skywalk

and both parties were represented by counsel. The scope of

the agreement was extensive, lasting more than eight years at

the time the case was filed in the district court, and with

agreed upon possible damages of up to $50 million for early

termination. The parties reviewed and signed an amended

agreement and entered into a subsequent trust years later.

While the agreement was between GCSD and SNW, and not

the Tribe directly, the first exception applies equally whether

the contract is with a tribe or its members. Montana,

450 U.S. at 565. Given the consensual nature of the

relationship between the parties and the potential economic

impact of the agreement, the tribal court could conclude it has

jurisdiction over SNW’s dispute with GCSD under either of

Montana’s exceptions.
20 GRAND CANYON SKYWALK DEV. V. ‘SA’ NYU WA INC.

Moreover, GCSD should have reasonably anticipated

being subjected to the Tribe’s jurisdiction. See Plains

Commerce, 554 U.S. at 338. Article 2, § 2.1 of the original

GCSD/SNW agreement specifies that the “Manager [GCSD]

hereby accepts its appointment as the developer and manager

of the Project and agrees to develop, supervise, manage, and

operate the Project . . . in compliance with all applicable

federal, [Hualapai] Nation, state, and local laws, ordinances,

rules, and regulations, including all employment laws and

regulations.” (emphasis added). Thus, the necessary

corollary would be that if GCSD operated in violation of the

Tribe’s laws, it could be subjected to its jurisdiction. GCSD

consented to be bound by this language when it signed the

agreement with SNW.

VIII

The judgment of the district court requiring exhaustion of

tribal court remedies prior to proceeding with the action in

federal court is AFFIRMED.