Opinion ID: 3029762
Heading Depth: 3
Heading Rank: 1

Heading: Consensual Relations Exception

Text: Tribes retain the power to “regulate, through taxation, licensing, or other means, the activities of nonmembers who 314 FORD MOTOR CO. v. TODECHEENE enter consensual relations with the tribe or its members, though commercial dealings, contracts, or other arrangements.” Montana, 450 U.S. at 565. Navajo Nation and the Todecheenes argue that Ford, through its subsidiary, Ford Credit, had a consensual commercial relationship with the Navajo Nation because of the lease-purchase agreements with the Tribe for vehicles (including the Ford Expedition driven by Todecheene).5 [4] Generally, a fairly direct link between the asserted commercial relationship and the lawsuit is required to support the assertion of tribal jurisdiction. In Strate, the Supreme Court determined that the consensual relationship exception did not apply even though A-1 Contractors (which owned one of the vehicles involved in the accident) was engaged in subcontract work on the reservation and therefore had a consensual relationship with the Tribe. The Court explained that the party with connections to the Tribe was not a party to the subcontract, “and the Tribes were strangers to the accident.” 520 U.S. at 457 (citation, internal quotation marks and alteration omitted). The Court determined that the contractual relationship was not the type the Court had in mind when it decided Montana. Id. (listing situations fitting within the exception, including lawsuits arising out of on-reservation sales transactions between members and nonmembers; a permit tax on nonmember-owned livestock within the reservation; a privilege tax on businesses within the reservation; and a tax upon on-reservation cigarette sales); see also Atkinson, 532 U.S. at 656 (“Montana’s consensual relationship exception requires that the tax or regulation imposed by the Indian tribe have a nexus to the consensual relationship itself.”); cf. FMC, 905 F.2d at 1314-15 (holding that tribe had jurisdiction to enforce tribal employment ordinance on nonmember employer operating a plant on non-Indian land within the reservation when the 5 This analysis assumes, without deciding, that Ford Credit is the agent or alter ego of Ford. FORD MOTOR CO. v. TODECHEENE 315 employer had extensive agreements with the tribe, including one relating to employment). [5] The contract between Ford Credit and the Tribe was a financing agreement for purchased vehicles. Ford Credit retained a security interest in the Ford Expedition until the loan was paid in full. The contract also contained a forum selection clause stating that “[a]ll actions which arise out of this Lease or out of the transactions it represents shall be brought in the courts of the Navajo Nation.” This clause does not appear to cover a product liability tort action. Rather it seems to be directed toward contract disputes (“actions which arise out of this Lease”). [6] This case falls close to the facts of Strate. Although the Ford Expedition was financed through the contract, Todecheene was not a party to the contract and this action involves her parents’ lawsuit against Ford, not any lawsuit initiated by the Tribe. In addition, although “but for” the lease agreement Todecheene would not have been driving the Ford Expedition, this product liability action is considerably removed from the agreement itself. See County of Lewis v. Allen, 163 F.3d 509, 515 (9th Cir. 1998) (en banc) (characterizing the consensual relation cases as “involv[ing] either direct regulation by a tribe of non-Indian activity on the reservation or lawsuits between a private party and the tribe or tribal members arising from an on-reservation transaction or agreement”) (citation omitted). The consensual relations exception recognizes that tribes have jurisdiction to regulate consensual relations “through taxation, licensing, or other means.” Montana, 450 U.S. at 565. The question here is whether “other means” includes tort law. Tort law does constitute a form of regulation. See Young v. Anthony’s Fish Grottos, Inc., 830 F.2d 993, 1000 (9th Cir. 1987) (recognizing that the implied covenant tort regulates the employment relationship); see also Hodges v. Delta Airlines, Inc., 44 F.3d 334, 337-38 (5th Cir. 1995) (state tort law may 316 FORD MOTOR CO. v. TODECHEENE result in “indirect regulatory impact”). But the Supreme Court in Strate appears to have required that the regulation be more directly connected to the contract itself.6 It would not be illogical to say that Ford agreed to finance the purchase of the Expedition, that the Expedition possibly had a defect, and that the tribe thus has jurisdiction to adjudicate Ford’s liability. But one would be hard-pressed to argue convincingly that the product liability action has a direct nexus to the lease itself. It appears somewhat arbitrary to conclude that the Tribe has a greater interest in regulating product defects in vehicles it leases (for which there is a contract between the Tribe and Ford Credit) than in vehicles it purchases for cash (for which there would be no contract with Ford Credit). [7] As the Supreme Court stated so aptly in Atkinson, “[a] nonmember’s consensual relationship in one area thus does not trigger tribal civil authority in another — it is not ‘in for a penny, in for a pound.’ ” 532 U.S. at 656 (citation and internal quotation marks omitted). We agree with the district court 6 Construing the Montana exception is obviously not an exercise in statutory construction. Nevertheless, when the Supreme Court construes statutory language, it generally follows the interpretative maxim ejusdem generis. This canon instructs that “[w]here general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words.” Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 114-115 (2001) (internal citations and quotation marks omitted). Following this interpretive approach, only forms of regulation similar in nature to taxation and licensing would come within the catch-all phrase “other means.” Taxation and licensing are direct forms of tribal involvement with the transaction (either by collecting money from it or by authorizing it through a license). The strongest case for the Todecheenes would be that product liability law directly regulates this transaction by ensuring that Ford is selling a non-defective product. But that interpretation threatens to swallow the rule, because it is difficult to envision how the Tribe has a greater interest in regulating defective products that enter the reservation through lease or financing contracts than those that enter the reservation unaccompanied by the execution of a contract. More distinctly, enforcement through the prolonged and uncertain vehicle of litigation is worlds apart from taxation and licensing mechanisms. FORD MOTOR CO. v. TODECHEENE 317 that the existence of the financing agreement did not support application of the consensual relations exception.