Title: HOOVER v. KIOWA TRIBE OF OKLAHOMA
Citation: 1998 OK 23, 69OBJ1007, 957 P.2d 81
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: March 17, 1998

HOOVER v. KIOWA TRIBE OF OKLAHOMA Annotate this Case HOOVER v. KIOWA TRIBE OF OKLAHOMA 1998 OK 23 957 P.2d 81 69 OBJ 1007 Case Number: 87139 Decided: 03/17/1998 Modified: 04/13/1998 Mandate Issued: 04/17/1998 Supreme Court of Oklahoma ROBERT M. HOOVER, JR. Appellee, vs. THE KIOWA TRIBE OF OKLAHOMA, Appellant. APPEAL FROM THE DISTRICT COURT IN OKLAHOMA COUNTY THE HONORABLE JAMES B. BLEVINS, DISTRICT JUDGE ¶0 Appellant entered into a contractual arrangement for the purchase of 5,000 shares of stock in the Clinton-Sherman Aviation, Inc., from appellee, executing a promissory note for the full purchase price of the stock and a security interest in the stock. Upon appellant's failure to make the payments as promised, appellee conducted a public sale of the stock and sued appellant to recover damages for breach of contract. The district court in Oklahoma County dismissed the contract action and this Court reversed. Hoover v. Kiowa Tribe of Oklahoma, JUDGMENT OF THE DISTRICT COURT AFFIRMED. R. Brown Wallace, Oklahoma City, Oklahoma, for appellant. William J. Robinson, Oklahoma City, Oklahoma, for appellee. ALMA WILSON, Justice: ¶1 In Hoover v. Kiowa Tribe of Oklahoma, ¶2 In this appeal we again consider the jurisdictional challenge. We conclude that economic activity within the state of Oklahoma by a federally recognized Indian tribe residing within the state is subject to the laws of Oklahoma and the Tribe is subject to suit in state court on the same terms as any other person. We find that the appellant/Tribe has admitted the material facts essential to appellee/Hoover's state-law contract claim for recovery of damages and hold that appellee is entitled to summary judgment as a matter as of law. I. The proceedings. ¶3 Hoover I held that the Tribe could be sued in state court and reversed the district court's dismissal. On remand, Robert M. Hoover, Jr. (Hoover), moved for summary judgment, asserting that all material facts are undisputed and that he is entitled to judgment on the promissory note in the amount of $142,499.00 as a matter of law. ¶4 The district court sustained Hoover's summary judgment motion, granted Hoover judgment in the amount of $142,499.00, and awarded Hoover attorney fees. In its petition in error, the Tribe expresses its intent to preserve its jurisdictional defense pending a petition for writ of certiorari to the United States Supreme Court. It urges an exception to the "settled law of the case" doctrine II. The Tribe's argument on summary judgment. ¶5 The Tribe argued that a federally recognized tribe ¶6 The Tribe also argued that Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe, ¶7 Neither the Santa Clara Pueblo case nor the Citizens Band Potawatomi case holds that a federally recognized Indian tribe is immune from suits for damages. This controversy arises out of the Tribe's economic activity rather than tribal relations activity that affects the integrity of the Tribe as a distinct cultural entity, and hence it is not analogous to the controversy in Santa Clara Pueblo v. Martinez. This controversy arises out of the Tribe's activity outside of Indian country, and hence it is not analogous to the balancing of state/tribal powers within Indian country in Oklahoma Tax Commission v. Citizens Band Potawatomi Indian Tribe. ¶8 The Tribe also contended that summary judgment is erroneous because the material fact of the Tribe's consent to suit was not proven. According to the Tribe, Hoover agreed that the Tribe was not relinquishing its sovereign right to be immune from suit for damages ¶9 The breadth of the inherent tribal rights urged by the Tribe tribal immunity greater than the sovereign immunity of this State or our federal Union presents a significant challenge to our state/federal relationship as well as our state/tribal relationships. We are behooved to further examine the Tribe's claim of inherent tribal sovereignty at any stage of the proceedings. As we explained in Lewis and we reiterate, "[W]henever Indian interests are tendered in a controversy, a state court must make a preliminary inquiry into the nature of the rights sought to be settled. Only that litigation which is explicitly withdrawn by Congress or that which infringes upon tribal self-government stands outside the boundaries of permissible state-court cognizance." Lewis, ¶10 Further study convinces us that no injustice has been done by our former decision III. Worcester v. The State of Georgia. ¶11 The seminal case of Worcester v. The State of Georgia pronounced the common law notion of the Indian tribes' retained original natural right of self-government within Indian country as respected Indians. The notion is based on the European principles of discovery which underlie our constitutional provision that all intercourse with the Indians shall be carried on exclusively by Congress.21 It is that when our nation was formed the government of the United States assumed a protectorate relationship with the Indian tribes or nations and the dependent Indian tribes or nations retained their original natural right of self-government over Indians within Indian country by consent of the dominant sovereign nation of the United States. ¶12 Worcester settled a dispute concerning state/tribal powers within Indian country in favor of the dominant federal government. On appeal from criminal convictions and sentences in Georgia courts, Worcester concluded it had jurisdiction to determine whether the acts of Georgia, which abolished Cherokee law and parceled out the Cherokee country among neighboring counties in the state and subjected the inhabitants to Georgia law, were repugnant to the Constitution, laws and treaties of the United States. Worcester held that Georgia's legislation extending its jurisdiction over the Cherokee nation and Cherokee country interfered with the relations established between the United States and the Cherokee nation, the regulation of which is committed exclusively to the federal government under settled principles of constitutional law. ¶13 Worcester observed that from time immemorial the Indian nations were considered as "distinct, independent political communities, retaining their original natural rights as the undisputed possessors of the soil, with the single exception of that imposed by the irresistible power which excluded them from intercourse with any other European potentate than the first discoverer of the coast of the particular region claimed."22 Pursuant to the principles of discovery, Great Britain purchased the soil and the alliance of the Indians, but did not interfere with their self-government as respected Indians only; the Indian nations were bound to the British crown as dependent allies, receiving their supplies and protection from, and confining their trade to, Great Britain, without surrendering the right of self-government on subjects not connected with trade; and, the Indian nations or tribes assumed the relationship with the United States that they had with Great Britain. ¶14 In his concurring opinion in Worcester, Justice McLean further explained that, as to Indian sovereignty, the Indians had the right of occupancy but the fee to the land was considered to be in the government and the Indians had the right of self-government with attributes of sovereignty, but the sovereignty of the country existed only in the government.23 Justice McLean observed that Indian country was separated from the states by the consent of the states in adopting the constitution and that the United States Congress has always had the exclusive power to confine or even abrogate the Indian nations' right of self-governance.24 IV. The Organic Act of 1890. ¶15 Exercising its exclusive power, Congress set aside Indian Territory for the use of various Indian tribes or nations, specifying the area within Indian Territory to be occupied by each tribe or nation.25 Each tribe possessed the assigned land in common for all its members and had exclusive control over the Indians within the tribal boundaries.26 Subsequently, Congress abrogated the tribes' exclusive control over Indians and Indian country when it established Oklahoma Territory and subjected the individual Indians to the governments of the United States, even though the tribes retained the right of tribal self-governance. ¶16 The Oklahoma Organic Act of May 2, 189027 permitted all Indians inhabiting Indian Territory to participate in the governments of the Union, as citizens of the United States, without forfeiting their natural right of tribal self-governance. The Organic Act divided Indian Territory into Oklahoma Territory and Indian Territory. It established a territorial government for Oklahoma Territory.28 In Oklahoma Territory, voting and office-holding were available to all adult male residents who were citizens of the United States or who had declared their intention to become citizens, and these rights could not be denied on the basis of race or color.29 The jurisdiction of the courts in Oklahoma Territory was extended over all Indians inhabiting the territories.30 In Indian Territory, United States citizenship was available to any member of Indian tribes31 and the jurisdiction of the United States court was expanded to all civil cases, except cases over which the tribal courts had exclusive jurisdiction.32 ¶17 As anticipated by Justice McLean in Worcester, Congress had moved toward amalgamation of the native American Indians into the governments of the Union in Oklahoma Territory and Indian Territory.33 In Oklahoma Territory and Indian Territory, Congress abandoned the system of tribal possession and control of Indian country when it imposed its territorial governments over Indians, but it continued the tribes' control over intra-tribal relations and controversies arising between Indians of the same tribe. That is, Congress did not interfere with the tribes' original natural right of self-government as respected Indians only. V. Allotment of tribal lands, final disposition of the Five Civilized Tribes, and the proposed state of Sequoyah. ¶18 To carry out the policy of assimilation, Congress moved to convey ownership of Indian country to the individual Indians. During the 1890's, individual Indians selected their allotments out of tribal lands and became citizens of the United States.34 On October 6, 1892, the confederated Kiowa, Comanche, and Apache tribes surrendered their rights in the assigned tribal lands to the United States so that the lands could be allotted to the members of the confederated tribes in severalty, with fee simple title to be conveyed 25 years thereafter.35 On June 6, 1900, Congress provided for the allotment of the Comanche, Kiowa and Apache tribes' land in severalty to the members.36 ¶19 The Five Civilized Tribes in Indian Territory agreed to the allotment of their tribal lands in preparation for statehood, and in 1893, the Dawes Commission was established to facilitate the allotment of the lands of the Five Civilized Tribes. ¶20 Congressional policy of assimilation set Oklahoma apart from other states where Congress preserved designated Indian country within the boundaries of the pre-statehood territories. The differences are obvious from a comparison of the enabling legislation and state constitutions. VI. The Enabling Act and Oklahoma Constitution. ¶21 The first section of the Oklahoma's Enabling Act recognized the superior, plenary power of the federal government over the rights and property of Indians. ¶22 The second section of Oklahoma's Enabling Act provided that all male persons over the age of 21-years, who are citizens of the United States or who are members of any Indian nation or tribe in said Indian Territory and Oklahoma and resided therein for at least six months preceding are qualified to vote and eligible to serve as delegates to the constitutional convention and specified the number of delegates to be elected by vote or party convention in each of the former tribal territories ¶23 The third section of Oklahoma's Enabling Act also required that the people inhabiting Oklahoma must "forever disclaim all right and title in and to . . . lands lying within the said limits owned or held by any Indian, tribe, or nation." ¶24 As required by the Enabling Act, the Constitution of Oklahoma, Art. I, § 3 disclaims forever all right and title to all lands lying within the limits of Oklahoma and owned or held by any Indian, tribe, or nation. It also disclaims all right and title to and jurisdiction over any unappropriated public lands ¶25 Having provided for the assimilation of the Indians in Oklahoma Territory and Indian Territory into the governments of the federal union, Congress amended the Enabling Act to transfer causes, proceedings, and matters, civil or criminal, pending in the federal courts to the courts of the State of Oklahoma without regard to whether the controversy arose in Indian country. VII. Oklahoma statehood. ¶26 In organizing Oklahoma Territory, the European discovery principles of separation and protection gave way to this nation's policy of assimilation. From the formation of Oklahoma Territory until Oklahoma statehood, Congress moved to assimilate the individual tribal members into the governments of the federal Union. Indian country was allotted and Indians were granted citizenship. Congress enabled the inhabitants of Oklahoma and Indian Territory, expressly including Indians, to form a constitution and state government. The state government formed in the Constitution of the State of Oklahoma, together with the Schedule attached thereto, was to function for the benefit of all Oklahoma citizens, including Indian citizens. At statehood, tribal existence continued and the tribes retained the right to settle controversies between members of the same tribe and controversies that arise between members of the same tribe while sustaining their tribal relations. ¶27 The citizens, Indian and non-Indian, inhabiting the State of Oklahoma were included within state government and required to forever disclaim any right or title in lands owned or held by Indians or tribes or unallotted or unappropriated tribal lands, which were to be held in trust for the benefit of members of the tribes by the United States and not as public lands and the state government in Oklahoma could not alter the Indians' proprietary right or title to such land. With the exceptions of intra-tribal affairs and proprietary right and title to lands owned or held by Indians or tribes, by Proclamation of Statehood signed by President Theodore Roosevelt on November 16, 1907, the State of Oklahoma was admitted into the Union on an equal footing with the original states. VIII. Other Congressional Acts. ¶28 Through the process of assimilation, Oklahoma Indian tribes continued as distinct cultural entities, but not as separate political entities.64 In 1936, Congress provided that Indian tribes in Oklahoma could organize by adopting constitutions and by-laws and that the tribal organization could have all the powers of a body corporate under the laws of the state of Oklahoma.65 The Oklahoma Indian Welfare Act allowed any tribe in Oklahoma to establish a mechanism for tribal autonomy, with powers cognizable under Oklahoma law. ¶29 In Oklahoma Tax Commission v. United States, 319 U.S. 598 , 63 S. Ct. 1284, 87 L. Ed. 1612 (1943), the Supreme Court discussed the status of the tribes in Oklahoma after the Oklahoma Indian Welfare Act. The Court noted that although Worcester v. The State of Georgia had held that a state might not regulate the conduct of persons in Indian territory on the theory that Indian tribes were separate political entities with all the rights of independent status, that condition had not existed in Oklahoma for a number of years. The Court observed that "there are remnants of the form of tribal sovereignty, [but the Oklahoma Indians] have no effective tribal autonomy" and "they are actually citizens of the State with little to distinguish them from all other citizens except for their limited property restrictions and their tax exemptions."66 Recognition that former Indian country was included within the boundaries of the State of Oklahoma and that state laws of general application to private persons had the same force and effect over the Indian citizens, with the exception of the property restrictions and tax exemptions on Indian property, is implicit in Oklahoma Tax Commission v. United States. ¶30 Ten years later in Public Law 83-280 (P.L. 280),67 Congress extended state jurisdiction over Indians and Indian country in six states68 and consented to the assumption of jurisdiction over Indians and Indian country in all other states.69 Legislative history reveals that the Department of the Interior informed Congress that Oklahoma disclaimed jurisdiction over Indians within Indian country as did Arizona, Montana, New Mexico, North Dakota, South Dakota, Utah, and Washington.70 In response to the Interior Department's inquiry of Oklahoma regarding the enactment of Public Law 83-280, Governor Johnston Murray wrote:71 When Oklahoma became a state, all tribal governments within its boundaries became merged in the state and the tribal codes under which the tribes were governed prior to statehood were abandoned and all Indian tribes, with respect to criminal and civil causes, came under state jurisdiction. . . Public Law No. 280 will not in any [way] affect the Indian citizens of this state. ¶31 The unique history of Oklahoma statehood has been obscured by application of P.L. 280 to Oklahoma as a disclaimer state72 together with the definition of "Indian Country" in the Major Crimes Act.73 This body of federal common law metes out state/tribal rights and powers over activities occurring in "Indian country."74 The federal common law, however, has not established a principle that Indian tribes have an inherent right to be immune from state court jurisdiction over its activities outside of Indian country. ¶32 Our independent research reveals no federal legislation immunizing the Tribe's economic activity involved herein from state court jurisdiction on the same terms as any other person. And, recent pronouncements of the United States Supreme Court support our original holding in Hoover I. IX. Recent Supreme Court jurisprudence. ¶33 The recent pronouncements on inherent tribal rights and powers have been rendered in the context of tribal jurisdiction over non-Indians in Indian country. These opinions are instructive in determining the breadth of the inherent tribal rights which the Tribe asserts as a sovereign immunity defense to this suit for breach of contract damages. ¶34 In Strate v. A-1 Contractors, ___ U.S. ____, 117 S. Ct. 1404, 137 L. Ed. 2d 661 (1997),75 the unanimous Court concluded that the tribe's adjudicative jurisdiction does not exceed its legislative jurisdiction and the tribes' civil authority does not extend to activities of nonmembers on non-Indian fee lands, unless authorized by treaties or statutes or the two exceptions in Montana v. United States, 450 U.S. 544 , 101 S. Ct. 1245, 67 L. Ed. 2d 493 (1981).76 Montana enunciated two exceptions to the general principle that inherent tribal powers and rights beyond what is necessary to protect tribal self-government or control internal relations is inconsistent with the dependent status of the tribe and cannot survive without express congressional delegation. The Montana exceptions are that an Indian tribe retains the inherent power to exercise civil jurisdiction over non-Indians on the reservation (in Indian country) where: 1) the non-Indian enters a consensual relationship with the tribe or tribal members through commercial dealings, contracts, leases, or other arrangements; or 2) the non-Indian conduct threatens or has direct effect on the political integrity, economic security or health or welfare of tribe.77 ¶35 Strate As to nonmembers, we hold, a tribe's adjudicative jurisdiction does not exceed its legislative jurisdiction. Absent congressional direction enlarging tribal-court jurisdiction, we adhere to that understanding. Subject to controlling provisions in treaties and statutes, and the two exceptions identified in Montana, the civil authority of Indian tribes and their courts with respect to non-Indian fee lands generally "do[es] not extend to the activities of nonmembers of the tribe." ¶36 Strate explained that where tribal court jurisdiction is grounded exclusively on the concept of retained or inherent power, then: 1) the facts must bring the matter within one of the two Montana exceptions; 2) the element of on-reservation or within tribal boundaries is critical to the Montana exception relating to activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements on non-Indian land within reservation; and, 3) the Montana consensual relationship exception, includes activity such as a) on-reservation sales transactions between nonmember and member, b) tax on nonmember property within boundaries of reservation, c) tax on nonmember privilege of doing business within tribe's borders, and d) tax on on-reservation cigarette sales to non-members.80 Strate further explained that key to the second Montana exception, non-Indian activity that threatens or has some direct effect on the political integrity, the economic security, health or welfare of the tribe, is whether the activity interferes with the tribe's retained power a) to punish tribal offenders, b) to determine tribal membership, c) to regulate domestic relations among members, and d) to prescribe rules of inheritance for members.81 ¶37 We find no support in Strate for the Tribe's contention that it retains inherent powers and rights of sovereignty, and thus sovereign immunity, when it ventures outside of Indian country and enters into a contractual relationship with a non-Indian. Following the teachings of Strate, the Tribe's retained inherent powers and rights dissipate when: 1) it is outside of Indian country and enters into consensual economic activity with non-tribal members; or 2) it engages in activity with non-tribal members that does not directly affect retained tribal power to punish tribal offenders, to determine tribal membership, or to regulate domestic relations among members. The fact that a money judgment might indirectly impact tribal programs does not remove the instant case from the main rule of Montana that inherent tribal powers and rights beyond what is necessary to protect tribal self-government or control internal relations is inconsistent with the dependent status of the Tribe and cannot survive without express congressional delegation. X. Conclusion. ¶38 The Tribe's contention that it retains inherent powers and rights of sovereignty, and thus sovereign immunity, when it ventures anywhere in the State of Oklahoma and enters into a contractual relationship is inconsistent with Oklahoma's historical relationship with Indian tribes located in Oklahoma. The remnants of tribal sovereignty retained by the Oklahoma tribes at statehood did not provide a cloak of immunity from state court jurisdiction for damages caused by a tribe when it engages in economic activity in the state of Oklahoma. We view the legal status of the Tribe in its contractual relationship with Hoover to be that of a private party and subject to the jurisdiction of this state.83 Accordingly, we are satisfied no injustice has been done by our decision in Hoover I. JUDGMENT OF THE DISTRICT COURT AFFIRMED. HODGES, HARGRAVE, OPALA, and ALMA WILSON, JJ., concur. LAVENDER and SIMMS, JJ., concur by reason of stare decisis. WATT, J., concurs in result. KAUGER, C.J., and SUMMERS, V.C.J., dissent. FOOT