### UNITED STATES COURT OF APPEALS Tenth Circuit Byron White United States Courthouse

1823 Stout Street Denver, Colorado 80294 (303) 844-3157 Patrick J. Fisher, Jr. Elisabeth A. Shumaker Clerk Chief Deputy Clerk July 24, 1997

TO: All recipients of the captioned opinion
RE: 95-2121, Kerr-McGee v. Farley 95-2127, Kerr-McGee v. Farley June 25, 1997
Please be advised of the following correction to the captioned decision: Due to a clerical error, names of counsel appearing on the appellees’ supplemental brief were omitted from the attorney designation list. A corrected version of that page of the opinion is attached for your convenience. Very truly yours, Patrick Fisher, Clerk

Susie Tidwell Deputy Clerk encl.

## F I L E D United States Court of Appeals Tenth Circuit 

### JUN 25 1997 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

KERR-MCGEE CORPORATION, Plaintiff - Appellant, and
CYRUS FOOTE MINERALS CORPORATION; RIO ALGOM, LTD.; UMETCO MINERALS CORPORATION; UNION CARBIDE CORPORATION, Plaintiffs,

v. KEE TOM FARLEY, individually and on behalf of the Estate of Lucy K. Farley; CARMELITA FARLEY JOE; HAROLD KADY, SR., individually and on behalf of the Estate of Julia Mae Kady, Defendants - Appellees.

KERR-MCGEE CORPORATION; RIO ALGOM, LTD.; UMETCO MINERALS CORPORATION; UNION CARBIDE CORPORATION, Plaintiffs, No. 95-2121- 2 -

and
CYRUS FOOTE MINERALS CORPORATION, Plaintiff - Appellant,

v. KEE TOM FARLEY, individually and on behalf of the Estate of Lucy K. Farley; CARMELITA FARLEY JOE; HAROLD KADY, SR., individually and on behalf of the Estate of Julia Mae Kady, Defendants - Appellees. No. 95-2127

Appeal from the United States District Court for the District of New Mexico (D.C. No. CIV-95-438-MV)
Michael R. Comeau of Carpenter, Comeau, Maldegen, N ixon & Templeman, Santa Fe, New Mexico (Tom Galbraith and R. Neil Tay lor, III of Lewis & Roca, Phoenix, Arizona, and Robert N. Hilgendorf, Santa F e, New Mexico, for Appellant Cyprus Foote Minerals Corporation; Jon J. Indall and Stephen J. Lauer of Carpenter, Comeau, Maldegen, Nixon & Templeman, Santa Fe, New Mexico, for Appellant Kerr-McGee Corporation, with him on the briefs) for Appellants. Suzelle M. Smith of Howard and Smith, Los Angeles, California (Cherie V. Daut, Shiprock, New Mexico; Justin R. Melat and Rebecca A . Lorenz of Melat, Pressman, Ezell & Higbie, Colorado Springs, Colorad o, with her on the brief); and Seth R. Lesser, Richard A. Speirs, and Lisa K. Buckser of Bernstein, Litowitz, Berger & Grossmann, L.L.P., New York, New York, for Appellees.- 3 -

Before SEYMOUR , Chief Judge, LOGAN and LUCERO , Circuit Judges.

LUCERO , Circuit Judge.

This case involves the scope of the tribal exhausti on rule in the context of the Price-Anderson Act. Appellants Kerr-McGee and Cyprus Foote Minerals (collectively “Kerr-McGee”) filed a claim in the Di strict of New Mexico for a declaratory judgment and preliminary injunction, ar guing that the Navajo Tribal Court is without jurisdiction to adjudicate nucleartort claims against KerrMcGee. Applying the tribal exhaustion rule, the di strict court denied the injunction and stayed further action in federal cou rt until the tribal court ruled on jurisdiction. Our jurisdiction to hear Kerr-McGee’ s interlocutory appeal arises under 28 U.S.C. § 1292(a)(1). We affirm.

I. BACKGROUND Kerr-McGee milled uranium on the Navajo Reservationbetween 1952 and 1973, leasing land for the mill site from the tribe . Kerr-McGee sold the mill’s entire production to the federal government. In 19 95, defendants (the “Tribal Claimants”), who are members of the Navajo Tribe an d residents of the reservation, filed a complaint in Navajo Tribal Cou rt, alleging that the Kerr-- 4 -

McGee mill released vast quantities of radioactive and toxic materials, causing them injuries. Before the tribal court had proceed ed with the case, Kerr-McGee filed the instant suit. In the district court, Kerr-McGee argued that the t ribal court had no jurisdiction to consider nuclear tort claims and sh ould be enjoined in its proceedings, basing its conclusion on the Price-And erson Act, 42 U.S.C. § 2011 et seq. Kerr-McGee contends that the Price Anderson Act g rants exclusive federal jurisdiction over nuclear torts if a defend ant so wishes. The district court disagreed, finding that the Price-Anderson Act does not specifically divest tribal courts of jurisdiction over such claims. Because t here is no explicit mention of exclusive federal court jurisdiction over Price-And erson claims, the district court reasoned that the tribal court should ordinarily be given the first opportunity to determine its own jurisdiction. Moreover, because the Tribal Claimants alleged a cause of action based on torts committed on the res ervation, the district court felt no need to engage in any extended comity analysis r egarding the decision to defer to the Navajo Tribal Court. It concluded that the proper practice was to stay the federal court proceedings until the tribal court ha d determined its jurisdiction. Thereafter, the District Court of the Navajo Nation issued an order finding tribal court jurisdiction over the tort claims asse rted by the Tribal Claimants. Farley v. Kerr-McGee , No. 103-95 (Navajo D. Ct. Aug. 1, 1996). Specifi cally,- 5 -

the Navajo court held that the Price-Anderson Act d oes not preempt the Tribal Claimants’ Navajo law right to tribal court adjudic ation of the alleged torts. In fact, the Navajo court concluded that the Price-And erson Act does not apply at all to the Tribal Claimants’ suit and, therefore, triba l court jurisdiction could not interfere with Congressional intent in federal regu lation of nuclear activity. We are unaware of any appeal by Kerr-McGee of the Nava jo District Court order.
II. DISCUSSION The scope of a tribal court’s jurisdiction is a fed eral question over which federal district courts have jurisdiction. Nationa l Farmers Union Ins. Cos. v. Crow Tribe , 471 U.S. 845, 853 (1985). The district court’s d etermination of the proper scope of the tribal exhaustion rule is revie wed de novo. Texaco v. Zah , 5 F.3d 1374, 1376 (10th Cir. 1993).
A The tribal exhaustion rule was created in National Farmers , a case involving a tort suit by a tribal member against a school district and its insurer. The tribal member brought suit in tribal court, and the defendants promptly sued in federal court for a declaration that the tribal court had no jurisdiction to entertain a civil suit against a non-Indian, even w here the alleged tort took place1 In Oliphant v. Suquamish Indian Tribe , tribal courts were found to lack criminal

jurisdiction over non-Indians for crimes committed on the reservation. 435 U.S. 191, 208-12 (1978). - 6 - on the reservation. Rather than further extending the rule in Oliphant 1 to tribal jurisdiction over civil matters, the Supreme Court concluded: [T]he existence and extent of a tribal court’s juri sdiction will require a careful examination of tribal sovereignty, the extent to which that sovereignty has been altered, divested, or diminish ed, as well as a detailed study of relevant statutes, Executive Bran ch policy as embodied in treaties and elsewhere, and administrat ive or judicial decisions. National Farmers , 471 U.S. at 856. Moreover, “that examination sho uld be conducted in the first instance in the Tribal Courtitself.” Id. This rule of tribal court exhaustion is subject to a narrow set of exce ptions, including: (1) “where an assertion of tribal jurisdiction is motivated by a desire to harass or is conducted in bad faith”; (2) “where the action in tribal courts is patently violative of express jurisdictional prohibitions”; or (3) “where exhaust ion would be futile because of the lack of an adequate opportunity to challenge th e tribal court’s jurisdiction.” Id. at 857 n.21 (internal quotation and citation omitt ed). The tribal exhaustion rule was extended and explain ed in Iowa Mutual Insurance Co. v. LaPlante , 480 U.S. 9 (1987). There, the Court held that th e statute granting federal courts jurisdiction over d iversity actions, 28 U.S.C. § 1332, does not divest tribal courts of jurisdiction over acts involving non-Indians- 7 -

taking place on tribal land. With respect to the e xhaustion requirement, the Court held that “proper respect for tribal legal institut ions requires that they be given a ‘full opportunity’ to consider the issues before th em and ‘to rectify any errors.’” Id. at 16 (quoting National Farmers , 471 U.S. at 857). Because “the federal policy of promoting tribal self-government encompas ses the development of the entire tribal court system . . . exhaustion of trib al remedies means that tribal appellate courts must have the opportunity to revie w the determinations of the lower tribal courts.” Id. at 16-17. Consequently, federal courts should not intervene until the tribal courts have had a full o pportunity to evaluate jurisdiction. Id. at 17. The precise question we address is not whether the Navajo courts have jurisdiction over the claims brought by the Tribal Claimants, but whether the Price-Anderson Act so obviously preempts tribal jur isdiction that an action in tribal court “would be patently violative of expres s jurisdictional prohibitions,” and that abstention in favor of tribal exhaustion i s inappropriate. National
Farmers , 471 U.S. at 856 n.21. A substantial showing mustbe made by the party seeking to invoke this exception to the tribal exha ustion rule. See Iowa Mut. , 480 U.S. at 19 n.12 (party’s assertion that “tribal cou rt jurisdiction over outsiders ‘is questionable at best,’” insufficient to defeat the tribal exhaustion requirement). In fact, tribal courts rarely lose the first opport unity to determine jurisdiction- 8 -

because of an “express jurisdictional prohibition.” Cases in which tribal courts are not given the first opportunity to determine th eir jurisdiction typically involve situations where the federal court has exclusive ju risdiction, see Blue Legs v. Bureau of Indian Affairs , 867 F.2d 1094, 1097-98 (8th Cir. 1989), or where tribal jurisdiction is foreclosed by sovereign immunity, s ee United States v. Yakima Tribal Court , 806 F.2d 853, 860-61 (9th Cir. 1986). Kerr-McGee makes two tightly interwoven arguments i n support of its position that Price-Anderson contains an “express p rohibition” on tribal court jurisdiction despite the absence of statutory langu age explicitly addressing tribal fora. First, Kerr-McGee notes that 1988 amendments to Price-Anderson create specific procedures for adjudicating nuclear torts in federal court, and provide for an absolute right of removal to federal court. The se procedures were explicitly designed to consolidate jurisdiction over claims ar ising from a nuclear incident in a single federal forum. Allowing jurisdiction to a rise in “any one of a patchwork of tribal judicial entities that exist throughout t he West,” Appellant’s Br. at 19, would run counter to the express purposes of the Ac t as amended in 1988. Thus, the Price-Anderson Act and its amendments have expr essly provided for exclusive federal court jurisdiction in this case, and the tr ibal court’s assertion of authority is “patently violative of express jurisdictional pr ohibitions.” National Farmers , 471 U.S. at 857 n.21. Second, even if we do not re ad the Price-Anderson Act- 9 -

amendments to create exclusive federal court jurisd iction, Kerr-McGee claims that because the federal government has preempted t he entire field of nuclear torts, tribal jurisdiction, whether regulatory or a djudicatory, will not lie unless specifically provided for by statute. Under eitherargument, Kerr-McGee asserts jurisdiction is indirectly but expressly prohibited

. The Tribal Claimants dispute Kerr-McGee’s construct ion of the law. They argue that even if federal regulation has limited t ribal regulatory authority over Kerr-McGee’s uranium milling, that does not imply a djudicatory preemption in the circumstances of this case. Given Price-Anders on’s silence, civil jurisdiction over the activities of non-Indians on reservation l and should be presumed to lie with the tribal court even if Congress has chosen t o federalize the substantive law governing those activities. That presumption could be overcome, but only by an express statement removing tribal court adjudicatory authority, and PriceAnderson contains no such statement. Alternatively , plaintiffs contend that PriceAnderson does not apply to this case at all because Kerr-McGee does not have an indemnity agreement with the federal government. T o assess these various competing arguments, we turn to the genesis and dev elopment of the PriceAnderson “system” governing nuclear torts, and dete rmine how far down the road of exclusive federal court jurisdiction Congress we nt in the Price-Anderson 1988 amendments.- 10 - B The Atomic Energy Act (AEA) was created in 1954 to facilitate a transition from a federal government monopoly over the product ion and use of atomic materials to a regime in which private industry als o would have a role in their production and use. Pacific Gas & Elec. Co. v. State Energy Resources Conservation and Dev. Comm’n , 461 U.S. 190, 206-07 (1983). Limiting the states’ role in regulating atomic energy, Congress granted a federal agency, the Atomic Energy Commission (later the Nuclear Regulat ory Commission), “exclusive jurisdiction to license the transfer, de livery, receipt, acquisition, possession, and use of nuclear materials.” Id. at 207. Hazards arising from atomic radiation were made a particularly federal c oncern, as to which the states had no authority to regulate. Id. at 209-10. Accordingly, with very few exceptions, state attempts to regulate in this areaare preempted. In 1957, Congress amended the AEA through the Price -Anderson Act (PAA), creating specific protections from tort liab ility for the nuclear industry.
See Silkwood v. Kerr-McGee Corp. , 464 U.S. 238, 251 (1984). The PAA contains three distinct elements: (1) an aggregate ceiling on the liability for nuclear tort claims; (2) a “channeling of liability ” to protect private entities from liability for their indirect participation in atomi c development; and (3) an indemnification program, through which the federal government would require- 11 -

private insurance coverage to a certain level, and pay public liability claims above that amount, up to the liability ceiling created by the PAA. In re TMI Litig. Cases Consol. II (“TMI II”) , 940 F.2d 832, 852 (3d Cir. 1991). While the PAA specifically made nuclear industry liability a fede ral concern, Congress initially chose not to create a specific federal cause of act ion for nuclear torts; rather, the legislative history suggests that Congress was cont ent to allow liability to be dictated by existing causes of action. Silkwood , 464 U.S. at 252-55 (finding state punitive damages statute not preempted by the PAA). The PAA has been amended several times, further ref ining the relationship between federal and state roles regarding nuclear t orts, and the protections to be afforded private industry and the general public. Recent amendments, the Price Anderson Amendments Act of 1988, Pub. L. No. 100-40 8, 102 Stat. 1066 (1988) (“1988 Amendments”), which is the law at issue in t his case, arose out of congressional understanding that the Price-Andersonsystem “provides persons seeking compensation for injuries as a result of a nuclear incident with significant advantages over the procedures and standards for re covery that might otherwise be applicable under State tort law. . . . [It] also provides a mechanism whereby the federal government can continue to encourage pr ivate sector participation in the beneficial uses of nuclear materials.” S. Rep. No. 100-218, at 4 (1988). While not otherwise superseding the decision in Sil kwood , the 1988 Amendments- 12 -

can be read in part as a congressional response to the result in Silkwood suggesting that the PAA never preempts state puniti ve damages awards. TMI II , 940 F.2d at 870 n.3 (Scirica, J., concurring). The 1988 Amendments expand federal jurisdiction ove r claims arising out of a “nuclear incident”: With respect to any public liability action arising out of or resulting from a nuclear incident, the United States districtcourt in the district where the nuclear incident takes place . . . shall have original jurisdictionwithout regard to the citizenship of any party or the amount in controversy. Upon motion of the defendan t or of the Commission, or the Secretary, as appropriate, any s uch action pending in any State court (including any such acti on pending [on the date of the 1988 Amendments]) or United States district court shall be removed or transferred to the United States dist rict court having venue under this subsection. 42 U.S.C. § 2210(n)(2) (emphasis added). A “public liability action” is defined as “any suit asserting public liability.” 42 U.S.C . § 2014(hh). Moreover, a public liability action “shall be deemed to be an action a rising under section 2210 of this title [which creates a federal forum for suit].” I d. “Public liability” is sweeping: it encompasses anylegal liability from “nuclear incidents,” which in turn are defined in § 2014(q) to include any occurrence caus ing any personal or property damage arising out of the toxic, radioactive, explo sive or other hazardous properties of atomic or byproduct materials. 42 U. S.C. § 2014(w). The 1988 Amendments also create other federal rules with respect to public liability actions. Section 2210(n)(3) creates spec ific federal court procedures for- 13 -

dealing with a mass nuclear incident, including a m echanism to fashion a caseload management panel empowered to consolidate claims an d develop procedures for their resolution. 42 U.S.C. § 2210(n)(3). While c reating a federal cause of action over “nuclear incidents,” the 1988 Amendments expli citly state that the substantive rules of decision for a public liability action “shall be derived from the law of the State in which the nuclear incident involved occurs, unless such law is inconsistent with the provisions of such sec tion.” 42 U.S.C. § 2014(hh). From this framework, it is apparent that Congress i ntended to expand federal control over safety and liability issues in volving the nuclear industry, particularly with respect to the role of federal co urts in resolving liability. Prior to 1988, only a subclass of nuclear incidents, “ext raordinary nuclear occurrences,” triggered absolute federal rights of removal. TMI II , 940 F.2d at 853 n.18. KerrMcGee notes that defendants may now choose to have federal courts, rather than state, determine liability even though the substant ive rule of decision may derive from state law, and argues from that proposition th at, together with the creation of specific procedural mechanisms in federal courts to deal with complex or extensive nuclear incident litigation, the framewor k suggests a congressional interest in allowing litigants to make federal courts the home for such litigation. The Tribal Claimants first contend that we need noteven consider the jurisdictional provisions of the 1988 Amendments. Citing Silkwood , they assert- 14 -

that the PAA system simply does not apply to this c ase because Kerr-McGee does not have an indemnity agreement with the federal go vernment. This argument misreads Silkwood , which simply refused to apply the indemnification provisions of the PAA to the claim in that case because the de fendant lacked the necessary indemnity agreement. Silkwood , 464 U.S. at 252 n.12. Nothing in Silkwood suggests that the absence of an indemnity agreementmakes the PAA’s jurisdictional provisions inapplicable. Furthermor e, as quoted above, the jurisdictional provisions of the PAA, 42 U.S.C. §§ 2014(w), 2210(n), as amended by the 1988 Amendments, appear broad enough to create a federal forum for any tort claim even remotely involving atomic energy pr oduction. The PAA on its face provides the sole remedy for the torts alleged in this case, and we must therefore consider its jurisdictional provisions.
1 Kerr-McGee argues that the PAA’s jurisdictional andliability provisions strongly suggest Congress intended something very c lose to exclusive jurisdiction: under the 1988 Amendments, the plaint iff to a nuclear incident claim can bring her case in federal court if she wants, a nd the defendant has the absolute right of removal from state court. As the legislative history of the 1988 Amendments indicates, this jurisdictional frameworkwas intended to prevent inefficient fragmentation and inconsistent resoluti on of nuclear tort claims by- 15 -

providing for their consolidation in federal court. See O’Conner v. Commonwealth Edison Co. , 13 F.3d 1090, 1102 (7th Cir. 1994) (citing S. Rep

. No. 100-218, at 13; H.R. Rep. No. 100-104, pt. 3, at 30 (1988)). Yet, the Tribal Claimants correctly point out that the 1988 Amendme nts do not explicitly create exclusive federal court jurisdiction over nuclear incident l itigation, as Congress has created, for example, in other contexts. See, e.g. , Blue Legs , 867 F.2d at 1098 (“‘Any action [under the relevant RCRA provisi on] shall be brought in the district court for the district in which the allege d violation occurred.’” (quoting 42 U.S.C. § 6972(a)) (emphasis added)). That said, Co ngress may have intended the option of voluntary removal—which it did not provid e in RCRA—because the federal substantive rule of decision is still based in part on state law. See 42 U.S.C. § 2014(hh). It could thus be argued that st ate courts are left with jurisdiction not for federalism-driven comity reaso ns, but rather for efficiency reasons. The argument pressed by Kerr-McGee, that there exists a jurisdictional prohibition on all forums not mentioned in the 1988 Amendments, has some force. In the end, however, we are not persuaded that the PAA regime expressly prohibits the exercise of tribal jurisdiction. The PAA does not include removal from tribal courts in its jurisdictional grant, and we are unwilling to speculate on what Congress might have done with public liabilityactions commenced in the2Kerr-McGee seizes on language from Smith v. General Electric Co. , 938 F. Supp.

70, 75 (D. Mass. 1996), a district court case it brought to our attention after oral argument in this case. Smithstates that the 1988 Amendments “created a jurisprudential curiosity, an action grounded in state law committed to the exclusive jurisdiction of the federal courts.” Id. Smith , however, does not address the issue of tribal jurisdiction and cannot be read to speak to the question presented here. - 16 - tribal courts. We cannot conclude that the 1988 Am endments created an exclusive enclave of federal adjudicatory control s uch that tribal courts lack jurisdiction to decide PAA claims, even those arisi ng out of torts against tribal members on the reservation. 2 Becenti v. Vigil , 902 F.2d 777 (10th Cir. 1990), is instructive. There, we held that the federal remov al statute for claims against federal officers, 28 U.S.C. § 1442(a)(1), does not authorize removal from tribal courts. Id. at 780. The rationale for the removal statute, fo rbidding federal officers from being forced to answer for their cond uct in any but a federal forum, mirrors the PAA’s interest in allowing any party to a nuclear incident to take advantage of the federal forum. While Becenti asks whether a statute conferring jurisdiction on federal courts for certain claims f iled first in state court also includes jurisdiction for similar claims filed firs t in tribal court, here we face the question of whether a statute that almost completel y consolidates state court jurisdiction in federal courts should be read to st rip jurisdiction from tribal courts as well. We follow the rationale of Becenti and conclude that federal jurisdiction- 17 -

grants are read parsimoniously to elide collision w ith tribal court jurisdiction. Simply put, “exclusive jurisdiction” is not conferr ed unless conferred explicitly.
2 Once we conclude that the PAA’s jurisdictional prov isions do not create exclusive federal court jurisdiction over nuclear i ncidents, the Tribal Claimants urge us to apply the basic jurisdictional presumpti on of Iowa Mutual , namely that tribal civil jurisdiction over “activities of non-I ndians on reservation lands . . . presumptively lies in the tribal courts unless affi rmatively limited by a specific treaty or provision or federal statute.” Iowa Mut. , at 18 (citing Montana , 450 U.S. at 565-66) (further citations omitted). “‘Because the Tribe retains all inherent attributes of sovereignty that have not been divest ed by the Federal Government, the proper inference from silence . . . is that the sovereign power . . . remains intact.’” Id. (quoting Merrion v. Jicarilla Apache Tribe , 455 U.S. 130, 148 n.14 (1982)). Noting the PAA’s silence with respect to tribal court jurisdiction, the Tribal Claimants contend that we must presume the N avajo courts retain jurisdiction to adjudicate the tort claims. Certai nly, they argue, statutory silence cannot be converted into an “express jurisdictional prohibition” on the exercise of tribal adjudicatory authority. Relying primarily on Montana , 450 U.S. 544, Kerr-McGee urges a different presumption from silence in cases where Congress ha s comprehensively regulated3Kerr-McGee also cites UNC Resources, Inc. v. Benally , 518 F. Supp. 1046 (D. (continued...) - 18 - the field. Kerr-McGee suggests that the Iowa Mutu al presumption from silence does not apply in cases controlled by the PAA, beca use tribal adjudicatory power over such claims lies “beyond what is necessary to protect tribal self-government or to control internal relations . . . and so canno t so survive without express congressional delegation.” Montana , 450 U.S. at 564. Kerr-McGee cites to other cases in which tribes are presumed to lack jurisdic tion over nonmembers even without specific congressional language stripping t ribal authority. In South Dakota v. Bourland , 508 U.S. 679 (1993), the Court held that a tribe lacked regulatory authority to license nonmember hunters a nd fishermen for activity on reservation lands that the federal government was e xtensively regulating for public purposes. Four years earlier, in Brendale v . Confederated Tribes and Bands of the Yakima Indian Nation , 492 U.S. 408 (1989), the Court found that the tribe lacked authority to zone activities of nonmem bers on open fee lands within the reservation. Kerr-McGee argues that the PAA so extensively regulates nuclear production and development, see Pacific Gas & Elec. , 461 U.S. at 206-07, that, as in Montana , Brendale , and Bourland , whatever inherent sovereignty the tribe may have originally enjoyed in this area has been divested by congressional legislation. Thus, absent a specific grant of juri sdiction, tribal authority must be presumed absent. 33 (...continued)

Ariz. 1981) for the proposition that tribes lack jurisdiction to adjudicate claims falling within the scope of the Price-Anderson Act. This case is outdated, however, because it incorrectly predicts the outcome in National Farmers , extending the reasoning of Oliphant to civil cases (which National Farmersspecifically refused to do). CompareBenally , 518 F. Supp. at 1051 withNational Farmers , 471 U.S. at 856. Benallyalso asserted that tribal jurisdiction “conflicts with the superior federal interest in regulating the production of nuclear power.” Id. at 1052. Considering that the Benallycourt improperly weighed the tribal court’s interest, its discussion of the federal interest in Price-Anderson Act actions must be discounted.

4 On this point, the recently issued Supreme Court opinion in Strate v. A-1 Contractors , 117 S. Ct. 1404 (1997), is instructive. Reviewing Strate , this panel invited the parties to submit supplementary briefs on its significance to this case. In Strate , the Supreme Court found that, absent a treaty or statute, a tribe lacked jurisdiction to adjudicate a dispute between nonmembers of the tribe arising out of an automobile accident occurring on a state highway. Id. at 1407-08. Relying principally on Montana , the Court held that with respect to lands over which the tribe had ceded sovereign authority, tribal jurisdiction is substantially limited. Id. at 1413. After carefully reviewing Strate , we conclude it is of limited usefulness in our case. Kerr-McGee’s alleged torts did not occur on lands over which the tribe has ceded authority and control to another sovereign for an indefinite period. Here, the lease was to a private entity and for a finite period. The Supreme Court simply has not spoken to such a situation. Seeid. at 1408 (“We express no view on the governing law or proper forum when an accident occurs on a tribal road within a reservation.”)

5 In support of its contention that an “express jurisdictional prohibition” need not be quite “express,” Kerr-McGee cites Lower Brule Construction v. Sheesley’s Plumbing , 84 B.R. 638 (D.S.D. 1988). There, the district court, citing Oliphant , held that tribal (continued...) - 19 - The proper inference to be drawn from silence prese nts questions that might require reconciling two arguably divergent st rands of caselaw. 4 This is a difficult issue, and the difficulty itself belies K err-McGee’s assertion that tribal authority here would be “patently violative of expr ess jurisdictional prohibitions.” National Farmers , 471 U.S. at 856 n.21. 5 Strate v. A-1 Contractors , 117 S. Ct.5 (...continued)

exhaustion was not necessary for an adversary proceeding in bankruptcy, even if a body of bankruptcy law existed in tribal courts. This case is notable because it appears that the underlying action (involving dishonor of a note) was originally commenced in state court, and federal courts do not constitute the exclusive forum for adjudicating “non-core” proceedings instituted before the filing of the bankruptcy petition. See28 U.S.C. § 157(b)(4); In re Colorado Energy Supply, Inc. , 728 F.2d 1283, 1285-86 (10th Cir. 1984). Thus, Lower Brulecould stand for the proposition that tribal exhaustion is not necessary in areas where a federal procedure predominates. However, we find Lower Brule conclusory and unpersuasive—it assumes without analysis that a tribe has no governmental interest in a contract between the debtor and the tribe regarding a tribal housing project on the tribe’s reservation. Moreover, it appears that the district court improperly melded the question of an express jurisdictional prohibition with the recognition of comity concerns.

6Kerr-McGee, in its supplementary brief, points to the statement in Stratethat “[a]s to nonmembers, we hold, a tribe’s adjudicative jurisdiction does not exceed its legislative jurisdiction.” Strate , 117 S. Ct. at 1413. Kerr-McGee suggests that no adjudicative jurisdiction can exist in the Navajo tribal courts because the PAA preempts all tribal regulatory jurisdiction. Yet, even if the Supreme Court’s statement can be read outside of its concern for tribal jurisdiction over non-Indian fee lands, the PAA is unclear on the (continued...) - 20 - 1404 (1997), relied on by Kerr-McGee, is not a trib al exhaustion case; there, the federal plaintiffs first challenged tribal jurisdic tion in the tribal courts. See
Strate , 117 S. Ct. 1408. Thus, the federal court never s ought to identify an “express jurisdictional prohibition,” but rather wa s in the position to address whether tribal adjudicatory power remains over civi l disputes involving nonmembers on state highways within the reservation . By asking us to reach the merits of its jurisdictional challenge before it ha s run its course in the tribal courts, Kerr-McGee ignores the important congressio nal interest advanced by the tribal exhaustion rule. 66 (...continued)

extent to which state (or tribal) law may inform the issue of a nuclear tortfeasor’s liability. Pursuant to the tribal exhaustion rule, this question should first be addressed in tribal court. - 21 - Ultimately, this case requires an attempt to accomm odate two independent and important congressional concerns: comity intere sts flowing from tribal sovereignty and nuclear energy regulation. Though a close question, we cannot conclude that the 1988 Amendments, or the PAA’s sco pe generally, create an “express prohibition” to tribal court jurisdiction. Congre ss intended to control where and how nuclear incident litigation is to tak e place, but did not take the next step of specifically divesting tribal courts o f jurisdiction. While the precise scope of retained tribal jurisdiction in this case is subject to reasonable debate, tribal adjudicatory authority over this nuclear inc ident is not “patently violative of an express jurisdictional prohibition.”
C The tribal exhaustion requirement created by Nation al Farmers is based on comity concerns for Indian tribes in maintaining th eir remaining sovereignty. National Farmers recognizes that three specific interests are advan ced by proper application of the rule: (1) furthering congression al policy of supporting tribal self-government; (2) promoting the orderly administration of justice by allowing a full record to be developed in the tribal court; an d (3) obtaining the benefit of tribal expertise if further review becomes necessary. National Farmers , 471 U.S.- 22 -

at 856-57. If, as in this case, none of the Nation al Farmers exceptions is present, the court must then make an inquiry whether to abst ain based on these concerns. So long as the policies behind the tribal exhaustio n rule are served by its application, “comity requires the parties to exhaus t their tribal remedies before presenting their dispute to the district court.” Z ah , 5 F.3d at 1378. We have taken a strict view of the tribal exhaustio n rule and have held that “federal courts should abstain when a suit sufficie ntly implicates Indian sovereignty or other important interests.” Pittsbu rg & Midway Coal Mining Co. v. Watchman , 52 F.3d 1531, 1542 (10th Cir. 1995). As the Trib al Claimants correctly assert, this court at times abstains with out making a detailed comity analysis, holding that “when the dispute is a ‘rese rvation affair’ there is no discretion not to defer.” Zah , 5 F.3d at 1378 (citing Crawford v. Genuine Parts
Co. , 947 F.2d 1405, 1408 (9th Cir. 1991) (accident on the reservation involving tribal members “arises on the reservation” within m eaning of National Farmers presumptive tribal jurisdiction)). When the activi ty at issue arises on the reservation, comity concerns “almost always dictate that the parties exhaust their tribal remedies before resorting to the federal for um.” Id. Conversely, “[w]hen the dispute involves non-Indian activity occurring outside the reservation . . . the policies behind the tribal exhaustion rule are not so obviously served. Under these circumstances, we must depend on the districtcourts to examine assiduously- 23 -

the National Farmers factors in determining whether comity requires the parties to exhaust their tribal remedies before presenting the ir dispute to the federal courts.” Id. ; United States v. Tsosie , 92 F.3d 1037, 1042-43 (10th Cir 1996) (same). Here, the Tribal Claimants suggest that we need noteven weigh the comity factors because of the nature of the underlying act ion. We agree that strong tribal interests are implicated by these claims. The mill that allegedly produced the toxic and radioactive waste was located on the rese rvation pursuant to a lease with the tribe, and the alleged victims of the tortare tribal members residing on the reservation. The tribal nexus is strong, as is the interest of the tribe as a sovereign in protecting and vindicating the rights of its residents, as well as its interest as lessor of the land for the mill. Yet, Kerr-McGee’s argument that this is not a classic “reservation affair” has some force. Nuclear production is of national interest, the mill sold its entire product ion to the federal government, and the orderly administration of claims arising out of the United States’ atomic energy and weapons program implicates concerns far beyond the borders of the reservation. While the district court appeared to consider the tort claims “a reservation affair” and therefore reviewed the comi ty factors only briefly, the unique concerns implicated in this case deserve a m ore thorough comity analysis. In this case, the first factor most strongly supports abstention. If courts are to honor Congress’s commitment to tribal self-government, tribal courts must be7Currently, there appears to be litigation involving Cyprus Foote’s Uranium mines

in at least two separate Navajo tribal courts, as well as in the federal courts of the Ninth and Tenth Circuits. SeeFarley v. Kerr-McGee , No. SR-CV-103-95 (Navajo D. Ct., (continued...) - 24 - allowed to exercise their authority over mass toxic tort claims occurring within their jurisdiction and alleging injury to tribal me mbers, absent overwhelming countervailing concerns. Even Strate and Montana , cases that curtailed tribal authority over non-Indians, recognized that tribes retain a core sovereign interest in protecting the health and welfare of the tribe s uch that they may regulate nonIndians on all lands within the reservation. Strat e , 117 S. Ct. at 1415; Montana , 450 U.S. at 566. This appears to be such a case. The second factor, the orderly administration of ju stice, does not so obviously cut in favor of tribal exhaustion. The P AA, contemplating mass tort litigation arising from a nuclear incident, creates specific procedures to facilitate and consolidate adjudication of such claims. Thoug h National Farmers recognizes that allowing tribal courts to make init ial jurisdictional determinations minimizes a potential “procedural nightmare,” it is not clear that such a justification holds here. Because of Iowa Mutual ’s expansive abstention, we are required to allow full exhaustion of tribal court l itigation, potentially including litigation of the merits. Given Congress’s authori zation of specific procedures for dealing with these cases in federal court, abstaini ng in favor of the tribal court hardly seems to minimize the prospect of a “procedu ral nightmare.” 7It is7 (...continued)

District of Shiprock); Richards v. Texas Zinc , KY-CV-002-95 (Navajo D. Ct., District of Kayenta); Kerr-McGee v. Farley , No. 95-438 (D. N.M.); El Paso Natural Gas v. Neztsosie , No. 96-49/ 96-1524 (D. Ariz.). The Price-Anderson Act has instituted procedures specifically designed to avoid this sort of atomized litigation and the “procedural nightmares” attendant to it. - 25 - difficult to balance the loss of specific procedure s developed by the PAA for case consolidation and case management of cases such as these against the full record that will be developed in tribal courts by virtue o f federal court abstention. The third comity consideration, obtaining the benef it of tribal court expertise may be of value in this case. 42 U.S.C. § 2014(hh) requires that the substantive rules of decision in such actions are t o be derived from the “law of the State in which the nuclear incident involved oc curs, unless such law is inconsistent with the provisions of such section.” At oral argument, counsel for the Tribal Claimants argued that the substantive ru le of decision in this case should be derived from Navajo tribal law. Upon reviewing the comity factors, we conclude thatabstention is appropriate. Kerr-McGee contends that it is inappr opriate to analyze the tribal court jurisdiction question and the comity factors separately. Specifically, it argues that our comity analysis must consider the s trong role afforded federal courts in resolving Price-Anderson suits. We disag ree. The National Farmers framework does not accord countervailing federal co ncerns a place in the comity- 26 -

analysis. Consideration of federal jurisdictional concerns is only appropriate in the context of determining whether to engage in the comity analysis at all. It does not serve Congress’s interest in promoting development of tribal courts, see Iowa Mutual , 480 U.S. at 19, to second-guess the jurisdictiona l determinations of the Navajo district court before the tribal appellate process has run its course. The district court’s judgment is AFFIRMED.