IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 98-50582

 

T T E A, A Texas Corporation

Plaintiff-Appellant,

v.

YSLETA DEL SUR PUEBLO; JOSE G SIERRA, Presiding Judge of the Ysleta

Del Sur Pueblo; ANGELA R LUHAN, Associate Judge of the Isleta

Pueblo; THE TRIBAL COURT OF THE YSLETA DEL SUR PUEBLO

Defendants-Appellees

 

Appeal from the United States District Court

for the Western District of Texas

 

July 19, 1999

Before POLITZ, HIGGINBOTHAM, and DAVIS, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Today we again take up the long saga of this country’s

relationship with Indian country, drawing on a body of law more

stable than the conflicting shifts in governmental policy on which

it lies--but bearing scars of these shifts in its own ambiguities.

TTEA, a Texas corporation, seeks to counter rulings of a tribal

court in its dispute with the Ysleta del Sur Pueblo Indian Tribe

over a contract. We examine the jurisdiction of the district court

and of the tribal court, finding only the latter properly

exercised.
2

I

Under its contract with the Tribe, TTEA managed a smoke shop

on the Pueblo’s reservation in El Paso beginning on November 1,

1994. TTEA was responsible for improving, managing, operating, and

marketing the smoke shop, and was obliged to pay the Tribe at least

$3000 per month, depending on sales. The contract also gave TTEA a

right of first refusal to sell gasoline products. The Tribe was

entitled to terminate with thirty days notice only under certain

conditions.

On April 14, 1997, six months before the contract would have

expired, the governing body of the tribe, the Tribal Council,

declared the agreement void. The Secretary of the Interior had

never approved the contract, and the Tribal Council concluded that

under 25 U.S.C. § 81, it was therefore invalid. Three days later,

the Tribe filed a suit in tribal court seeking both a declaration

that the agreement was void and a refund of money it had paid to

TTEA. TTEA’s answer denied the applicability of the statute and

that the Tribe had paid it any money under the agreement. TTEA also

filed a counterclaim, with most of the asserted damages

attributable to an alleged breach of the right of first refusal to

sell gasoline products; a motion to dismiss for lack of subject

matter jurisdiction; and a demand for trial by jury.

Without a hearing, the tribal court entered an order. The

order declared that the court had jurisdiction over the matter. It

concluded that the contract was subject to § 81 and invalid because
3

it was not signed by the Interior Secretary. The court

acknowledged that although the parties had not specified which

party was responsible for obtaining approval from the Bureau of

Indian Affairs, the greater share of the responsibility rested on

the Tribe. Nonetheless, it held TTEA legally responsible.

TTEA petitioned for appeal in the tribal court, decrying the

absence of a hearing or presentation of evidence. The tribal

court, per the same judge who issued the initial ruling, vacated

that ruling, but then concluded that there was no genuine issue of

material fact about whether the contract was void, granted partial

summary judgment to the Tribe on its liability claim, and dismissed

all counterclaims. The court indicated that it would proceed to an

evidentiary determination of the Tribe’s remaining damage claims.

TTEA subsequently brought this action, claiming federal

question jurisdiction. It requested that the district court retain

jurisdiction over the complaint filed in the tribal court and

enjoin its further prosecution. Further, it asked for a

declaratory judgment that § 81 was inapplicable and that the tribe

had violated its status as a tribe by illegally engaging in gaming

operations, thus estopping it from asserting its § 81 defense. The

Tribe moved to dismiss for lack of personal jurisdiction, for lack

of subject matter jurisdiction, and for failure to state a claim.

The district court dismissed the action with prejudice.

First, it dismissed defendant tribal court officials Jose G. Sierra

and Angela R. Luhan, on the ground that those officials were acting
4

in their official capacities within the scope of their authority.

Second, it found the tribe shielded from suit on the contract by

the doctrine of sovereign immunity and that there was accordingly

no subject matter jurisdiction. Third, it found TTEA without

standing to complain of the Tribe’s gaming activities.

TTEA filed a timely notice of appeal. Abandoning its gamingrelated challenge, TTEA argues that the district court should have

addressed the scope and applicability of § 81 and the subject

matter jurisdiction of the tribal court.

II

We begin, as we must, with the district court’s subject matter

jurisdiction. We agree that the Tribe has sovereign immunity from

an award of damages only. We find, however, that the remaining

claims have no jurisdictional support.

A.

The Supreme Court recently held that, absent congressional

abrogation, tribal sovereign immunity extends even to actions on

contracts between the Tribe and others. See Kiowa Tribe v.

Manufacturing Tech., Inc., 118 S. Ct. 1700 (1998). Though

recognizing “reasons to doubt the wisdom of perpetuating the

doctrine,” id. at 1704, a six-Justice majority concluded that

narrowing of tribal sovereign immunity should be left to Congress,

see id. at 1705.

Kiowa, however, was an action for damages, not a suit for

declaratory or injunctive relief. This difference matters. In
5

Puyallup Tribe v. Washington Game Department, 433 U.S. 165, 171

(1977), the Court reaffirmed that “whether or not the Tribe itself

may be sued in a state court without its consent or that of

Congress, a suit to enjoin violations of state law by individual

tribal members is permissible.” Though the defendants in Puyallup

were not tribal officials, the Court cited it the next Term in

finding a tribal governor not immune from a suit seeking

declaratory and injunctive relief against enforcement of a tribal

ordinance. See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 59

(1978). Years later, Justice Stevens suggested that tribal

sovereign immunity might not extend “to claims for prospective

equitable relief against a tribe.” Oklahoma Tax Commission v.

Potawatomi Indian Tribe, 498 U.S. 510, 515 (1991) (Stevens, J.,

concurring).

The distinction between a suit for damages and one for

declaratory or injunctive relief is eminently sensible, and nothing

in Kiowa undermines the relevant logic. State sovereign immunity

does not preclude declaratory or injunctive relief against state

officials. See Ex Parte Young, 209 U.S. 123 (1908). There is no

reason that the federal common law doctrine of tribal sovereign

immunity, a distinct but similar concept, should extend further

than the now-constitutionalized doctrine of state sovereign

immunity. Cf. Seminole Tribe v. Florida, 517 U.S. 44 (1996). In

any event, Santa Clara Pueblo controls. Thus, while the district

court correctly dismissed the damages claim based on sovereign
6

immunity, tribal immunity did not support its order dismissing the

actions seeking declaratory and injunctive relief.

B.

We would be obliged nonetheless to affirm the district court

if it did not have subject matter jurisdiction over TTEA’s

equitable claims. Of course an absence of immunity does not ensure

jurisdiction. In Santa Clara Pueblo, the Supreme Court, despite

finding no immunity, found a lack of subject matter jurisdiction.

Subject matter jurisdiction in that suit was claimed under the

Indian Civil Rights Act of 1968, 25 U.S.C. §§ 1301-1303. Assessing

the factors enumerated in Cort v. Ash, 422 U.S. 66 (1975), the

Court found that this statute did not provide for an implied right

of action. See 436 U.S. at 60-66.

The federal courts do not have jurisdiction to entertain

routine contract actions involving Indian tribes. See Gila River

Indian Community v. Henningson, Durham & Richardson, 626 F.2d 708

(9th Cir. 1980); Mescalero Apache Tribe v. Martinez, 519 F.2d 479

(10th Cir. 1975). Nor can the possibility that the Tribe might

invoke § 81 as a defense to TTEA’s action confer federal

jurisdiction. Under the well-pleaded complaint rule, an

anticipatory federal defense is insufficient for federal

jurisdiction. See, e.g., Louisville & Nashville R. Co. v. Mottley,

211 U.S. 149, 152 (1908). 

With ever duller prospects, TTEA claims subject matter

jurisdiction under the federal declaratory judgment statute, 28
7

U.S.C. § 2201. The declaratory judgment statute offers no

independent ground for jurisdiction. Rather, it permits the award

of declaratory relief only when other bases for jurisdiction are

present. See, e.g., Jones v. Alexander, 609 F.2d 778 (5th Cir.

1980). 

To establish an independent basis for jurisdiction, however,

the plaintiff need not show that it would state a claim absent the

declaratory judgment statute. Rather, it may show that there would

be jurisdiction over a claim again it. A leading treatise

explains:

If the Jones Company sues for a declaratory judgment that

its patent is valid and being infringed by a device

manufactured by Smith, the federal claim necessarily

appears on the face of the complaint and the suit is one

that Jones Company could have brought in federal court by

a coercive action for damages or injunction.

The matter is somewhat more difficult if the suit is

for a declaratory judgment that the defending party does

not have a federal right. . . . [I]t now seems settled

that Smith can sue for a declaratory judgment of

invalidity or noninfringement.

10B Charles A. Wright et al., Federal Practice and Procedure §

2767, at 651 (1998).

This lucid explanation has a foundation, if not an unambiguous

endorsement, in the jurisprudence of the Supreme Court. In

Franchise Tax Board v. Construction Laborers Vacation Trust, 463

U.S. 1, 19 (1983), the Court noted that “[f]ederal courts have

regularly taken original jurisdiction over declaratory judgment

suits in which, if the declaratory judgment defendants brought a

coercive action to enforce its rights, that suit would necessarily
8

present a federal question.” Ultimately, the Court found no

jurisdiction in a case literally meeting this description, but on

narrow grounds. Specifically, the Court, “with an eye to

practicality and necessity,” id. at 20, refused to allow a state to

sue for a declaration that federal law did not preempt its

regulations, because states “have a variety of means by which they

can enforce their own laws in their own courts,” id. at 21.

The Court would not have needed to reach this narrow issue if

it had concluded that Skelly Oil Co. v. Phillips Petroleum Co., 339

U.S. 667 (1950), applied. Skelly Oil, as summarized in Franchise

Tax Board, “has come to stand for the proposition that if, but for

the availability of the declaratory judgment procedure, the federal

claim would arise only as a defense to a state created action,

jurisdiction is lacking.” 463 U.S. at 16. The Court thus found

Skelly Oil “not directly controlling.” Id. at 15. The reason it

presumably was not controlling is that in Franchise Tax Board, the

declaratory defendant would have had an action under federal law.

The reasoning in and structure of Franchise Tax Board thus strongly

suggest that the Court’s allusion to federal district courts’

taking jurisdiction in such circumstances was approving. Leading

commentators come to the same tentative conclusion. See Richard H.

Fallon et al., Hart and Wechsler’s The Federal Courts and the

Federal System 946 (4th ed. 1996).

TTEA’s task then is to point to a federal claim against it by

the Tribe. The general grant of jurisdiction over suits brought by
9

tribes, 28 U.S.C. § 1362, adds nothing to our immediate question.

Under § 1362, “[t]he district courts shall have original

jurisdiction of all civil actions, brought by any Indian tribe or

band with a governing body duly recognized by the Secretary of the

Interior, wherein the matter in controversy arises under the

Constitution, laws, or treaties of the United States.” The “arising

under” language is same as that found in 28 U.S.C. § 1331, the

general grant of federal question jurisdiction. 

C.

TTEA’s best hope is § 81 itself. If § 81 gave the Tribe a

right to sue TTEA, we would hold that TTEA could sue for

declaratory judgment that the Tribe stated no claim. The story,

though, is not so simple. Section 81 specifies an unusual

mechanism for enforcing its provisions. It is a qui tam suit “in

the name of the United States in any court of the United States,”

with one-half of proceeds going to the Treasury for the tribe’s

benefit. See, e.g., Creek Nation v. United States, 93 Ct. Cl. 1,

11 (1941) (interpreting 25 U.S.C. § 81). We see little to support

a judicial judgment that Congress intended other means of

enforcement or protection. A tribe thus could not sue under § 81

except as a relator on the same terms as any other plaintiff.

The question thus arises: Can the Tribe be a proper

declaratory judgment defendant when the plaintiff technically would

be the United States in a § 81 action? The role of the United

States under § 81 is central to the policy it enforces. The
10

statute is unabashedly paternalistic, protecting Indians from ill

considered contracts. It is unsurprising that its enforcement

mechanism is equally paternalistic, using the intermediary of the

government to protect Native Americans thought unable to protect

themselves. We may wince at this statutory design today, but we

cannot craft it anew.

The statute reflects the trust relationship between tribes and

the federal government. See generally American Indian Law Deskbook

8-12 (2d ed. 1998) (discussing the trust relationship). The

federal government presumably would have a fiduciary duty with

respect to its portion of the funds recovered. Cf. Navajo Tribe of

Indians v. United States, 624 F.2d 981, 987 (Ct. Cl. 1980)

(“[W]here the Federal Government takes on or has control or

supervision over tribal monies or properties, the fiduciary

relationship normally exists with respect to such monies or

properties . . . even though nothing is said expressly in the

authorizing or underlying statute . . . .”). 

But this does not make the invocation of the United States’s

name a mere formality. Indeed, in a recent case involving § 81,

the Seventh Circuit rejected a standing challenge based on the nonIndian relators’ having no connection whatsoever with the

contracts, because the United States was the plaintiff, and it had

standing. See United States ex rel. Hall v. Tribal Dev. Corp., 49
1The Supreme Court has granted certiorari on the question

whether the federal government’s power to sue state courts in

federal court notwithstanding the Eleventh Amendment, cf. United

States v. Mississippi, 380 U.S. 128, 140 (1965), is transferable to

qui tam relators acting in its name. See United States v. State of

Vt. Agency of Natural Resources, 162 F.3d 195 (2d Cir. 1998), cert.

granted, 119 S. Ct. 2391 (U.S. June 24, 1999) (No. 98-1828). Even

Judge Weinstein, who dissented from the panel opinion, did not

dispute that a relator can have standing to sue on behalf of the

United States. See id. at 224 (Weinstein, J., dissenting) (“[T]he

notion of a qui tam relator ‘standing in the shoes of’ the United

States may be sufficient to confer standing”). This, however, may

be because he was bound by prior circuit precedent. See United

States ex rel. Kreindler & Kreindler v. United Technologies Corp.,

985 F.2d 1148, 1154 (2d Cir. 1993).

In any event, neither the standing nor the sovereign immunity

issue is directly relevant here. If the Supreme Court’s decision

rendered § 81 incapable of enforcement in federal courts, that

would only solidify our holding that the courts do not have

jurisdiction to grant TTEA declaratory relief.

11

F.3d 1208, 1211-15 (7th Cir. 1995);1 cf. United States ex rel.

Mosay v. Buffalo Bros. Management, Inc., 20 F.3d 739 (7th Cir.

1994) (holding that tribal members may sue as relators). Congress

wished to protect tribes by aligning them with the federal

government in court and supporting them with an army of federal

relators. We cannot allow evasion of this protection by permitting

TTEA to sue the Tribe for a declaratory judgment under § 81, when

the Tribe could not even bring an action in its own name under that

section.

III

Independent of the issue of the district court’s jurisdiction

over TTEA’s attempt to secure a ruling on § 81, it has (and, on

appeal, we have) subject matter jurisdiction to determine whether

the tribal court was improperly exercising jurisdiction over the §
12

81 claim. In National Farmers Union Insurance Co. v. Crow Tribe of

Indians, 471 U.S. 845, 852 (1985), the Supreme Court held that

“whether an Indian tribe retains the power to compel a non-Indian

property owner to submit to the civil jurisdiction of a tribal

court is . . . a ‘federal question’ under § 1331.” It thus affirmed

the district court’s conclusion that its jurisdiction was properly

invoked under § 1331 to determine “whether a tribal court has

exceeded the lawful limits of its jurisdiction.” Id. at 853.

A.

Before we can reach this jurisdictional issue, however, we

must consider whether the district court should have abstained from

evaluating the tribal court’s jurisdiction, because TTEA has not

yet exhausted tribal remedies. The Supreme Court has found that a

federal court should “stay[] 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.” Id. at 857 (footnotes

omitted); see also Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 17

(1987) (noting that the tribal appellate courts should initially be

permitted to review the tribal trial court’s rulings).

The exhaustion rule is prudential rather than jurisdictional.

See Strate v. A-1 Contractors, 117 S. Ct. 1404, 1412 (citing Iowa

Mutual, 480 U.S. at 20 n.14). Thus, if the tribal courts have

already fully reviewed the jurisdictional issue, the federal court

need not hold off review until after an assessment of damages in a

subsequent trial phase. In Iowa Mutual, the record revealed that
13

appellate review remained available. See 480 U.S. at 17 (citing

the appellate review section of the applicable tribal code). The

record in this case does not include a copy of the tribal code that

would permit assessment of whether further tribal court review of

the jurisdictional determination is possible.

Ordinarily, we might assume that postjudgment appellate review

remains available in the tribal courts, but TTEA has already filed

what it labeled as an “appeal” challenging subject matter

jurisdiction. That motion was denied by the same judge who issued

the initial order. Absent any reason to believe that TTEA could

appeal the jurisdictional determination once again at the

conclusion of the damages proceeding, we hold that the district

court properly chose not to abstain from assessing the tribal

court’s jurisdiction.

B.

A tribal court generally does not have jurisdiction over nonIndian defendants. See Montana v. United States, 450 U.S. 544, 565

(1981). There is, however, an important exception. A tribe may

regulate the activities of nonmembers who enter consensual

relationships with the tribe or its members through commercial

dealing, contracts, leases, or other arrangements. See id. at 565-

66; see also Strate, 117 S. Ct. at 1415. The cases that the

Supreme Court has cited as illustrating this exception do not

include any contractual arrangements between the tribe and a

nontribal party, such as the one here. Nonetheless, this case fits
14

so squarely within the Supreme Court’s delineation of the

exception, which is phrased to cover “consensual relationships with

the tribe or its members,” id. (emphasis added), that it must be

applicable here.

A tribal court therefore ordinarily would have jurisdiction

over this transaction. However, the civil jurisdiction of the

tribal courts can be limited by congressional act. See, e.g., Iowa

Mutual, 480 U.S. at 18 (noting that civil jurisdiction over nonIndians on reservation lands “presumptively lies in the tribal

courts unless affirmatively limited by a specific treaty provision

or federal statute”). TTEA does not argue that § 81 itself

abrogates tribal jurisdiction, and for good reason. The

enforcement mechanism states that a relator “may” bring an action

in a court of the United States, but does not explicitly create

exclusively federal jurisdiction. In Charles Dowd Box Co. v.

Courtney, 368 U.S. 502 (1962), the Supreme Court refused to find

exclusively federal jurisdiction in a similarly worded statute.

Section 81 thus does not overcome the presumption of concurrent

state (and here, tribal) jurisdiction.

TTEA, however, submits that the Restoration Act, 25 U.S.C. §§

1300g to 1300g-7, which deals directly with the Ysleta Tribe,

abrogates tribal jurisdiction. Specifically, it cites § 1300g4(f), which provides, “The State shall exercise civil and criminal

jurisdiction within the boundaries of the reservation as if such
15

State had assumed such jurisdiction with the consent of the tribe

under sections 1321 and 1322 of this title.” 

The Tribe’s claim is that the mandatory “shall exercise”

language imports exclusive state jurisdiction, leaving the tribal

courts no role at all. To assess this contention, we must examine

25 U.S.C. § 1322:

The consent of the United States is hereby given to any

State not having jurisdiction over civil causes of action

between Indians or to which Indians are parties which

arise in the areas of Indian country situated within such

State to assume, with the consent of the tribe occupying

the particular Indian country or part thereof which would

be affected by such assumption, such measure of

jurisdiction over any or all such civil causes of action

arising within such Indian country or any part thereof as

may be determined by such State to the same extent that

such State has jurisdiction over other civil causes of

action, and those civil laws of such State that are of

general application to private persons or private

property shall have the same force and effect within such

Indian country or part thereof as they have elsewhere

within that State.

§ 1322(a). We must ask whether § 1300g-4(f) deprives the tribal

courts of jurisdiction over generally applicable contract law, and,

if so, whether § 1322 applies to actions involving tribes, or only

actions involving Indians.

We conclude that § 1300g-4(f), through § 1322(a), does not

deprive tribal courts of concurrent jurisdiction over such matters.

A treatise on Indian law explains by discussing Public Law 83-280,

67 Stat. 588 (1953), which established the original version of what

is now § 1322(a):

The civil law provisions of Public Law 280 expressly

preserve the legislative authority of tribes where not
16

inconsistent with applicable state civil law. The

wording of the section shows that its purpose is to

require that such tribal laws be recognized in state

courts, but nothing in the wording of either the civil or

criminal provisions of Public Law 280 or its legislative

history precludes concurrent tribal court authority. The

basic intent of the criminal law section was to

substitute state for federal jurisdiction under the

Indian Country Crimes Act and the Indian Major Crimes

Act. [Because] these two statutes do not preclude

concurrent tribal jurisdiction, neither should Public Law

280.

Felix Cohen, Handbook of Federal Indian Law ch. 6, § B4, at 344

(1982); see also Walker v. Rushing, 892 F.2d 672, 675 (8th Cir.

1990) (following this analysis in allowing concurrent tribal

criminal jurisdiction); Confederated Tribes of the Colville

Reservation v. Superior Court,945 F.2d 1138, 1140 n.4 (9th Cir.

1991).

The amendments to Public Law 280 served only to increase

tribal autonomy by requiring tribal consent before a state could

assume concurrent jurisdiction. See generally S. REP. NO. 721, 90th

Cong. (1968), reprinted in 1968 U.S.C.C.A.N. 1837, 1865-66. Though

the Restoration Act obviates this consent requirement, it cannot be

read as establishing exclusive state jurisdiction. We are aware

that the Tenth Circuit recently concluded that a statute which

similarly gave states jurisdiction “as if” through § 1322 provided

jurisdiction exclusive of federal involvement. See United States

v. Burch, 169 F.3d 666, 669 (10th Cir. 1999). As Professor Cohen’s

reasoning demonstrates, however, this does not mean that state

court jurisdiction under Public Law 280 is exclusive of tribal
17

jurisdiction. We thus find that the tribal court did not violate

federal law in exercising subject matter jurisdiction.

IV

In sum, we hold that the federal district court correctly

concluded that it has no jurisdiction to entertain TTEA’s action on

the contract against the Tribe. The district court erred in

refusing to examine the tribal court’s jurisdiction under the

Restoration Act, but TTEA’s action for injunctive relief against

the tribal court should have been dismissed anyway, for failure to

state a claim. For TTEA, all may not be lost; we take no position

on the deference due the judgment of the tribal court in collection

proceedings in state or federal court.

Our conclusion, though flowing from principles of tribal

sovereignty, could make it more difficult for tribes to find

entities willing to contract with them. Yet we recognize that

tribes can, like Ulysses, tie their hands to the mast and thus

resist the sirens. Sovereign immunity can be waived, and the

federal and state courts await to resolve disputes if tribes’

contractual partners insist on such protection.

AFFIRMED.