United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 97-1242

___________ Hornell Brewing Co., doing business * as Ferolito, Vultaggio and Sons, Inc.; * Heileman Brewing Co., Inc.; John * Ferolito, Individually; Don Vultaggio, * Individually, * * Plaintiffs-Appellees, * * v. * Appeals from the United States * District Court for the The Rosebud Sioux Tribal Court; * District of South Dakota. Hon. Stanley Whiting, Pro-Tem * Tribunal Judge; * * Defendants, * * Seth H. Big Crow, Sr., as Administrator * of the Estate of Tasunke Witko, a/k/a * Crazy Horse and as a member of and * representative of the class of heirs of * said estate, * * Defendant-Appellant, *

------------------------------------------------ * Rosebud Sioux Tribe, * * Amicus Curiae. *-2- ___________ No. 97-1243

___________ Hornell Brewing Co., doing business * as Ferolito, Vultaggio and Sons, Inc.; * Heileman Brewing Co., Inc.; John * Ferolito, Individually; Don Vultaggio, * Individually, * * Plaintiffs-Appellees, * * v. * * The Rosebud Sioux Tribal Court; * Hon. Stanley Whiting, Pro-Tem * Tribunal Judge; * * Defendants-Appellants, * * Seth H. Big Crow, Sr., as Administrator * of the Estate of Tasunke Witko, a/k/a * Crazy Horse and as a member of and * representative of the class of heirs of * said estate, * * Defendant, *

------------------------------------------------ * Rosebud Sioux Tribe, * * Amicus Curiae. *-3- ___________ No. 97-1244

___________ Hornell Brewing Co., doing business * as Ferolito, Vultaggio and Sons, Inc.; * Heileman Brewing Co., Inc.; John * Ferolito, Individually; Don Vultaggio, * Individually, * * Plaintiffs-Appellants, * * v. * * The Rosebud Sioux Tribal Court; * Hon. Stanley Whiting, Pro-Tem * Tribunal Judge; Seth H. Big Crow, Sr., * as Administrator of the Estate of * Tasunke Witko, a/k/a Crazy Horse and * as a member of and representative of the * class of heirs of said estate, * * Defendants-Appellees, * *

------------------------------------------------ * Rosebud Sioux Tribe, * * Amicus Curiae. *

___________ Submitted: November 17, 1997 Filed: January 14, 1998

___________ Before BOWMAN, LAY, and MURPHY, Circuit Judges.

___________The Rosebud Sioux Reservation is located in South Dakota. 1 In 1992, Congress enacted a statute banning the use of the name Crazy Horse 2 onthe label of any distilled spirit, wine, or malt beverage product. See Pub. L. No

. 102-39 3 § 633, 106 Stat. 1729. In 1993, the United States District Court for th e Eastern District of New York concluded the statute violates the First Amendment o f the Constitu tion. See Hornell Brewing Co. v. Brady , 819 F. Supp. 1227, 1245-4 6 (E.D.N.Y. 1993). -4- LAY, Circuit Judge.
Tasunke Witko, als o known as Crazy Horse, was a renown and beloved leader of the Oglala Sioux. He died in 1877. The Lakota people revere Crazy Horse as a spiritual and political leader. We take judicial notice of the fact that on January 15 , 1982, the United States Postal Service issued a stamp honoring Crazy Horse, and there is a national Crazy Horse Monument under construction in South Dakota. Crazy Horse o pposed the use of alcohol by his people. Seth H. Big Crow, Sr.,
a descenda nt of Crazy Horse, acting as administrator of Crazy Horse’s Estat e (“Estate”), brought suit in the Rosebud Sioux Tribal Court contesting the use of th e 1 Crazy Horse name by Hornell Bre wing Co., doing business as Ferolito, Vultaggio and Sons , Inc., Heileman Brewing Co., Inc., and John Ferolito and Don Vultaggi o (“Breweries”). The Estate challenged the Breweries’ use of the Crazy Horse name in the manufacture, sale, and distribution of an alcoholic beverage called “The Original Crazy Hors e Malt Liquor” (“Crazy Horse Malt Liquor”). The complaint asserte d 2 de famation, violation of the Estate’s right of publicity, and negligent and intentiona l inflictionof emotional distress. The complaint also alleged violations of the Lanham Act, see 15 U.S.C. §§ 1051-1128 (1994), and the Indian Arts and Crafts Act, see 25 U.S. C. §§ 305- 305e (1994). The Estate sought injunctive and declaratory relief, a s well as damages.The Rosebud Sioux Supreme Court observed: 3
In t he advertising label affixed to each bottle of th e “Original Crazy Horse Malt Liquor,” Defendants clearl y exalt an d direct their activities to the forum. The labe l ornately proclaims: The Black Hills of Dakota, steeped in th e history of the American West, home of Proud IndianNations. A land where imaginatio n conjures up im ages of blue clad Pony Soldiers and magnificent

Native American Warriors, A land still rutted with wagon tracks of intrepi d pioneers. A land where

wailful winds whisper of Sitting Bull, Crazy Horse and Custer. A land of character, of bravery, of tradition. A land t hat truly speaks of the spirit that i s America. J.A. at 198. The Estate alleged a cause of action under section 1125(a) of the Lanham Act, 4 which provides:

(1) Any person who, on or in connection with any goods o r -5- On October 25, 1994, the tribal judge, Honorable Stanley E. Whiting, Pro-Tem Tribunal Judge of the Rosebud Sioux Tribal C ourt, dismissed the Estate’s action on the grounds that the tribal court lacked personal jurisdiction over the Breweries, and i t lacked subject matter jurisdiction over the Estate’s claims. J.A. at 13-34. The Estate appealed the dismissal of its complaint to the Rosebud Sioux Supreme Court. OnMay 1, 1996, the Rosebud Sioux Supreme Court held the Breweries ha d suff icient contacts with the Rosebud Sioux Reservation to uphold service of process, 3 and the Estate had established “prima facie” subject-matter j urisdiction. Id. at 187-214. The tribal supreme court also held that the tribal court improperly dismissed the Estate’s Lanham Act claim. Id. at 216-17. The tribal supreme court held, however, 4services, or any container for goods, uses in commerce any word, term,

name, sy mbol, or device, or any combination thereof, or any fals e desi gnationof origin, false or misleading description of fact, or false o r misleading representation of fact, which—

(A) is l ikely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin , spon sorship, or approval of his or her goods, services, o r commercial activities by another person, or (B) in commercial advertising or promotion , misrepresents the nature, characteristics, qualities, o r geogr aphic origin of his or her or another person’s goods , services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 15 U.S.C. § 1125(a).

-6- that the Estate did not have standing to sue under the Indian Arts and Crafts Act. Id.Section 305e(c)(1) of the Indian Arts and Crafts Act of 1990 expressly p rovides: 5 (c) Persons who may initiate civil actions (1) A civil action under subsection (a) of this section may be commenced-- (A) by the Attorney General of the Unite d St ates upon request of the Secretary o f the Interior on behalf of an Indian wh o is a member of an Indian tribe or o n beha lf of an Indian tribe or Indian art s and crafts organization; or (B) by an Indian tribe on behalf of itself, an Indian who is a member of the tribe, or on beh alf of an Indian arts and craft s organization. 25 U.S.C. § 305e(c)(1). Ther eafter, the Rosebud Sioux Tribe filed a motion in the tribal court fo r 6 permi ssive joinder as a co-plaintiff under the Rosebud Sioux Tribe Law and Orde r Code, Ru les of Civil Procedure, Rule 20(a). The Tribe asserted an independent right of action under the Indian Arts and Crafts Act. The tribal court granted the Tribe' s motion to join as a co-plaintiff. See J.A. at 241. The Rosebud Sioux Tribe was not joined as a party. It appears in the present 7 appeal as Amicus Curiae.

-7- at 214-16. The Rosebud Sioux Supreme Court then remanded the case to the tribal

5 court for a “prompt trial on the merits.” Id. at 217. 6

In July 1996, the Breweries filed suit in the United States District Court for the District of South Dakota against the Estate, the Rosebud Sioux Tribal Court, and the 7Ho norable Charles B. Kornmann, United States District Judge for the District 8 of South Dakota.

-8- tribal court judge, seeking declaratory and injunctiv e relief. The Breweries asserted the tribal court had neither personal jurisdiction over the Breweries, nor subject-matte r jurisdict ionover the Estate’s claims. The district court enjoined the Rosebud Siou x 8 Tr ibal Court from conducting any further proceedings on the merits of the case. J.A. at 391 ( Hornell Brewing Co. v. Rosebud Sioux Trib al Court , Civ. No. 96-3028 (D.S.D. Dec. 3, 1996)). The district court disagreed with the rationale the Rosebud Siou x Supreme Court had used to find subject matter jurisdiction over the Estate’s claims.Montan ais the initial Supreme Court case addressing the civil authority tribes 9 may ex ercise over nonmembers carrying on activities within a reservation. Se e Montana , 450 U.S. at 544. The Montana Court determined the authority of the Crow Tribe to regulate hunting and fishing by non-Indians on lands within the Tribe’ s reservation owned in fee simple by non-Indians. The Court concluded the Tribe did not have the authority to regulate nonmembers in these particular circumstances but di d state: To be sure, Indian tribes retain inherent sovereign power to exercise some forms of civil jurisdiction ov er non-Indians on their reservations, even on non-Indianfee lands. A tribe may regulate, through taxation, licensing, or oth er means, the activities of nonmembers who enter consensua l relat ionships with the tribe or its members, through commercial dealing, contracts, leases, or other arrang ements. A tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has som e direct effect on the political integrity , the economic security, or the health or welfare of the tribe. Id. at 565- 66 (citations omitted). This passage thus describes two exceptions to th e general rul e that Indian tribes may not exercise civil authority over the conduct o f nonmembers on alienated, non-Indian land within a reservation.

-9- In its discussion of subject matter jurisdiction, the Rosebu d Sioux Supreme Court firstheld Montana v. United States , 450 U.S. 544 (1981), inapplicable to this case. 9 J.A. at 209. The tribal supreme court said Montana dealt only with questionsI n

the original tribal court decision, the tribal court did not conduct a n 10 evidenti ary hearing but found The Estate had established a prima facie case o f jurisdiction. The Rosebud Sioux Supreme Court faulted the tribal court for no t sep arating the discussions of personal and subject matter jurisdiction. The suprem e court, although remanding the case for “pro mpt trial on the merits,” did state that upon re mand, “if there [were] any subsequent questions of credibility or fact,” the plaintiff must establish the “jurisdictional facts” by a preponderance of evidence. J.A. at 187.

-10- of st atutory construction, is specifically limited to fee lands, and is properly limited to questions of tribal regulatory and legislative authority and not to questions of triba l adjudicatory authority. Id. at 207-10. The tribal supreme court also held that even if Montana were applicable to this case, the Breweries’ conduct satisfied both of th e Montana exceptions. Id. at 210. The tribal s upreme court stated the Breweries’ failure to ent er into a consensual relationship with the Estate for the use of the name an d reputatio n of Crazy Horse satisfies the first exception. Id. at 211. The tribal supreme court further stated that the Breweries’ conduct sat isfies the second exception, because the Tribe’s health and welfare depend upon the Tribe’s ability to provide a forum for resolution of the Breweries’ allegedly harmful conduct. Id. at 212.
The U nited States District Court for the District of South Dakota disagreed , fi nding Montana

directly applicable to this case, and stated that because neithe r Mont ana exception was met in this case, the tribal courts lacked subject matte r jurisdi ctionover the Estate’s claims. J.A. at 387-88. The district court concluded , however, the Breweries had not exhausted their remedies, “because the tribal court should be given the first full opportunity to determine whether [the Estate] ha s established the jurisdictional facts by a prep onderance of the evidence, as distinguished from merely establishing a prima facie case of jurisdiction.” Id. at 386. The district 10 court entered an order enjoining the tribal court from proceedingAlthough the Tribe has now made a claim over the same subject matter in the 11 tribal court, it is not a party to this appeal. Nonetheless, the preliminary injunctio n issu ed by the district court enjoined the tribal court from exercising subject matte r jurisdiction as to the claim made by the Tribe against all of the non-Indian defendants.

-11- on the merits. Id. at 391. It remanded the case to the tribal court for the limited purpose of conduc ting an evidentiary hearing on the issues of personal and subject matte r jurisdiction. Thus, under the district court’s order, this case has been remanded to tribal court for further proceedings as to both personal and sub ject matter jurisdiction, and the tribal court is enjoined from proceeding on the merits of this case. Id. at 391-92.
The tribal court, tribal judge, and the Estate have now appealed the issuance of the preliminary injunction, pursuant to 28 U.S.C. § 1292(a)(1). They arg ue the Rosebud Sioux Tribal Court has inherent and exclusive jurisdiction over the personal property rig hts vested in the Estate. The Breweries have cross-appealed, asserting the orde r remanding the case for evidentiary hearings on jurisdiction should be vacated, and this court should hold that the tribal court lacks subject matter jurisdiction. Although th e parties assert differing viewpoints as to whether the district court properly issued a pre liminary injunction, we need not review this holding since, as we discuss infra , we find the tribal court lacks subject matter jurisdicti on over the Estate’s claims against the non-Indian Breweries. 11

We begin our discussion of subject matter jurisdiction by noting that, “absen t express authorization by federa l statute or treaty, tribal jurisdiction over the conduct of nonmembers exists only in limited circumstances.” Strate v. A-1 Contractors , ___ U.S. ___, 117 S. Ct. 1404, 1409 (1997) (citing Oliphant v. Suquamish Indian Tribe ,There is no federal s tatute or treaty conferring subject matter jurisdiction over 12 the Estate’s claims to the tribal court.

-12- 435 U.S. 191 (1978) and Montana v. United States , 450 U.S. 544 (1981)). India n 12 trib es do, however, “retain inherent sovereign power to exercise some forms of civi l juri sdiction over non-Indians on their reservations .” Montana , 450 U.S. at 56 5 (emphasis added). The operative phrase is “on their reservations.” Neither Montana
nor its progeny purports to allow Indian tribes to exercise civil jurisdiction over th e activities or conduct of non-Indians occurring outside their reservations

. The activities at issue in this case are the Breweries’ manufacture, sale, an d distr ibutionof Crazy Horse Malt Liquor. It is undisputed that the Breweries do no t conduct those activities on the Rosebud Sioux Reservation or within South Dakota

. Thus, because the conduct and activities at issue here did not occur on the Rosebu d Sioux Reservation, we do not believe Mo ntana < s discussion of activities of non-Indians on fee land within a reservation is relevant to the facts of this case. More importantly, the parties fai l to cite a case in which the adjudicatory power of the tribal court vested
over act ivity occurring outside the confines of a reservation. The mere fact that a member of a

tribe or a tribe itself has a cultural interest in conduct occurring outside a
res ervation does not create jurisdiction of a tribal court under its powers of limite d inherentso vereignty. The analysis of Montana , and the cases the Montana Court discu ssed, expressly or implicitly recognize tribes’ limited authority over activity occurring within the reservation and tribes’ lack of authority “to de termine their external relations.” Montana , 450 U.S. at 564 (quoting United St ates v. Wheeler , 435 U.S. 313, 326 (1 978)). As Montana emphasizes, “exercise of tribal power beyond what i s necessary to protect tribal self-government or to control i nternal relations is inconsistent wi ththe dependent status of the tribes, and so cannot survive without expres s Congressional delegation.” Id.-13-

At the time of the t

ribal court proceedings, as well as at the time of the issuance of the dist rict court’s injunction, neither the parties nor the various tribunals directl y involved in this case had the benefit of the United States Supreme Court’s recen t decisio n in Strate v. A-1 Contractors . Once again, however, the facts of Strate , lik e Montana , relate to use by non-Indians of fee lands within a reservation. Strate does , howev er, harmonize Montana with other cases addressing tribal civil authority ove r nonmembers. See Strate , 117 S. Ct. at 1409-14.

I n Strate , Lyle Stockert, a non-Indian driver of a truck owned by A- 1 Contractors, a non-Indian company, collided with the automobile of Gisela Fredericks,
a non-Indi an widow of a deceased member of the Three Affiliated Tribes of the Fort BertholdIndian Reservation. Id. at 1408. The collision occurred on a state highway that c rossed through reservation land. Fredericks filed a personal injury suit in triba l court, and the tribal court concluded it had jurisdictio n to adjudicate Fredericks’ claims. Id. Shortly thereafter, Stockert and A-1 Contractors filed suit in fed eral district court, seek ing a declaratory judgment that, as a matter of federal law, the tribal court lacked jurisdictionto adjudicate the claims. Id. The district court concluded the tribal court had civil jurisdiction over Fredericks’ claims ag ainst Stockert and A-1 Contractors, and on cross-motions for summary judgment, it dismissed the suit. Id. at 1409. A divided panel of the Court of Appeals for the Eighth Circuit affirmed. Id. Fol lowing a rehearing en banc, and in an eight- to-four decision, the Eighth Circuit Court of Appeals reversed the district court’s judgment, concluding that under Montana , the tribal court lacke d subject matter jurisdiction over the dispute. Id.
The United States Supreme Court affirmed the en banc decision. The Court equated the state-held highw ay to non-Indian fee land and concluded the Montana rule and its two exceptions g overned the issue of jurisdiction. Id. at 1414. With respect to Montana , the Court stated:-14-

Mont ana thus described a general rule that, absent a differen t congressional direction, India n tribes lack civil authority over the conduct of n onmembers on non-Indian land within a reservation, subject to tw o exceptions: The first exception relates to nonmembers who ente r consensu al relationships with the tribe or its members; the secon d con cerns activity that directly affects the tribe’s political integrity , economic security, health, or welfare.
Strate , 117 S. Ct. at 1409-10. The Court concluded neither Montana exceptio n conferred tribal court jurisdiction over Fredericks’ claims. Id. at 1415-16. In finding that the claims arising from this particular automobile accident did not fall within the reach of the tribal court’s adjudicatory power, the Court also discussed the exhaustion requirement now well-established in the cases of National F armers Union In s. Cos. v. Crow Tribe , 471 U.S. 845 (1985), and Iowa Mutual Ins. Co. v. LaPlante , 48 0 U.S. 9 (1987). Id. at 1410-13. In doing so, the Court made clear that th e exhaustion rule is based upon “prudential” policies and is not jurisdict ional. Id. at 1413. We need not

further elaborate on the detailed analysis of the Strate case other than to emphasize the Court’s admonition set forth in footnote 14 at page 1416, wherein th e Court observed:
When, as in this case, it is plain that no federal grant provides for triba l governance of nonmembers’ conduc t on land covered by Montana ’s main rule, it will be equally evident that tribal c ourts lack adjudicatory authority over disputes arising from such conduct. As in cr iminal proceedings, state or f ederal courts will be the only forums competent to adjudicate thos e disputes. Therefore , when tribal-court jurisdiction over an action such as this one is challenged in federal court, the ot herwise applicable exhaustion requirem ent, must give way, for it would serve no purpose other tha n delay.
Strate , 117 S. Ct. at 1416 n.14 (citations omitted).-15-

Suffice it to say neither the tribal court nor the Estate claim that the first exception of Montana , regarding nonmembers entering c onsensual relationships with a tribe or its members, applies in this case. Thus, the primary issue the parties raise on appeal relates to Montana ’s second exception, namely that the activity engaged in by the nonmember Bre weries “directly affects the tribe’s political integrity, economic security, health, or welfare.” Stra

te , 117 S. Ct. at 1410. As we have noted, however, we deem this issue misleading. It is a fundamental fact in the present case that the Breweries do not manufacture, sell, or distribute Crazy Horse Malt Liquo r on the Reservation . The tribal court asserts that the Breweries do engage in the sale of other beverages, including some alcoholic beverages, on

the Reservation. We find, as did the district court, that this argument is irrelevant. This is not the activity for which complaint is made. The only grounds upon which the Ro sebud Sioux Supreme Court asserted subject matter jurisdiction was that the Brewerie s’ conduct affects the health and welfare of the Tribe in that the Trib e should be able to provide a forum for resolution of harm suffered by its members on the Reservation. The district court rejected this reasoning and stated: If providing a forum for its members would be a sufficient reason to confer subject matter jurisdiction upon the tribal courts when a tribal member is a part y to a lawsuit, it follows that the tribal courts would always hav e civil subject matter jurisdiction ov er non-Indians. There would have been no reas on for the discussion in Montana regarding the broad general rule of no civil jurisdiction over non-Indians and the two narrow exceptions to that general rule. Therefore, this Court does not agree that the secon d Montana exception provides tribal civil subject matter j urisdiction over the brewing companies in this case, under the present record. J.A. at 388. We agree with this conclusion.-16-

On appe al, the tribal court also asserts that although Crazy Horse Malt Liquo r was not so ld on the Rosebud Sioux Reservation, it was advertised outside th e Reservation and on the Internet (available to tribal members on the Reservation), and therefore, it had a direct effect upon tribal members. We find this contention specious. A d vertising outside the Reservation and on the Internet does not fall within the rubric of directly affecting the health and welfare of the Tribe. The Inter net is analogous to the
use of the airwaves for national broadcasts over which the Tribe can claim n o proprietary interest, and it cannot be said to constitute non-Indian use of Indian land. Following the admonition of the Supreme Court in Strate , we think it plain that the Breweries’ conduct outside the Rosebud Sioux Reservation does not fall within the Tribe’s inh erent sovereign authority. We deem it clear the tribal court lack s adjudicatory authority over disputes arising fro m such conduct. We emphasize that our decision in this case does not turn upon the merits of the claims asserted by the Estate. The Estate and other interested parties may as sert these claims in federal district court. Our holding relates solely to the adjudicatory authority of the tribal court.
Under the circumstances, we see no need for further exhaustion. We therefore vacate the order of remand for further exhau stion. In view of our holding that the tribal
co urt lacks adjudicatory authority, we also see no further need for the preliminary injun ctionthe district court issued. We are confident that all the parties will b e governed by the law of the case. We therefore order the preliminary injunctio n dissolved.

For the foregoing reasons, the judgment of the district court is hereby vacated , and the case is remanded to the district court with instructions that the district court amend its judgment to hold that the Rosebud Sioux Tribal Court lacks adjudicatory-17-

authority o ver the dispute arising from the Breweries’ use of the Crazy Horse name in the manu facturing, sale and distribution of Crazy Horse Malt Liquor outside th e Rosebud Sioux Reservation.
IT IS SO ORDERED. A true copy.

Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.