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Prior to the founding of Hobbs Straus, Jerry Straus was lead Washington, D.C. counsel in the first large scale case for the restoration of historic Indian land – the restoration of the 48,000 acre Blue Lake lands to the Taos Pueblo.

GENERAL MEMORANDUM 11-081

GENERAL MEMORANDUM 11-081
Federal Court of Appeals Upholds Tribal Court Jurisdiction Over a Non-Indian Corporation and Its Non-Indian Owner on Tribal Lands

The U.S. Court of Appeals for the Ninth Circuit has held that the Colorado River Indian Tribes' Tribal Court properly exercised jurisdiction over Water Wheel Camp Recreational Area, Inc. and its non-Indian owner in a lawsuit brought by the Tribes for failure to pay rent on a lease of tribal land within the reservation, and for trespass by remaining in possession after the lease expired. Water Wheel Camp Recreational Area, Inc. v. LaRance, Nos. 09-17349, 09-17357 (9th Cir. June 10, 2011). Specifically, the Court held that the Tribes' inherent authority to exclude a non-Indian from tribal land provided regulatory jurisdiction on tribal lands, at least where no competing state interests were at play. The Court further held that, absent such competing state interests, regulatory jurisdiction on tribal lands is not limited by the Montana rule, because that case dealt with regulatory jurisdiction over non-Indians on non-Indian owned fee land within the reservation, not Indian-owned lands.

In 1975, Water Wheel Camp Recreation Area, Inc. (Water Wheel) and the Colorado River Indian Tribes (CRIT or Tribes) entered into a 32-year business lease of 26 acres of tribal land within the reservation along the Colorado River. Water Wheel operated a recreation resort on the leased tribal land. The lease called for renegotiation of the minimum base rent after 25 years to more accurately reflect current market value, but when it was time for renegotiation CRIT and Water Wheel failed to reach an agreement. Subsequently, Water Wheel stopped making payments as required by the lease. When the lease expired in 2007, Water Wheel and its non-Indian owner failed to vacate the property and instead continued to operate Water Wheel without paying any rent to the Tribes.

CRIT filed suit against Water Wheel and its owner in the CRIT Tribal Court, asking for eviction, unpaid rent, damages from the Tribes' loss of use of their property, and attorney's fees. Water Wheel argued that under Montana the Tribal Court lacked jurisdiction over Water Wheel and its non-Indian owner. The Tribal Court determined jurisdiction was proper and ruled in favor of CRIT on all claims. The Tribal Court of Appeals affirmed the decision.
While the case was pending in Tribal Court, Water Wheel and its owner filed suit in Arizona U.S. District Court, seeking a declaration that the Tribal Court lacked jurisdiction over Water Wheel and its owner. The District Court analyzed the jurisdictional issue under Montana. In Montana, the U.S. Supreme Court held a tribe lacks regulatory jurisdiction over a non-Indian on non-Indian fee land within a reservation unless one of two exceptions exists: (1) the non-Indian entered a "consensual relationship" with the tribe, or (2) the conduct of the non-Indian threatens or has some direct effect on the political integrity, economic security, or health or welfare of the tribe.

The District Court concluded that the Tribal Court had jurisdiction over Water Wheel under Montana's first exception, which requires a consensual relationship between the parties. However, the District Court also concluded that the Tribal Court did not have jurisdiction over the non-Indian owner of Water Wheel because his relationship with the CRIT was not voluntary.

On appeal, the Ninth Circuit determined that the Tribal Court properly exercised jurisdiction over Water Wheel, but held, contrary to the U.S. District Court, that regulatory jurisdiction questions on tribal lands, absent sufficient competing state interests, were not to be analyzed under the Montana framework. Instead of applying the Montana framework, the Court determined that CRIT's inherent authority to exclude non-Indians from tribal land provided regulatory jurisdiction on tribal lands, and that there were no competing state interests at play that might otherwise trigger the application of Montana.

The Court further determined that in addition to regulatory jurisdiction, the Tribes also had adjudicative jurisdiction (that is, tribal court jurisdiction) in light of Supreme Court precedent recognizing tribes' inherent civil authority over non-Indian conduct on Indian-owned land within the reservation, and congressional interest in promoting tribal self-government. This is an excellent decision for Indian Country.

The owner may ask the U.S. Supreme Court to review the Ninth Circuit's decision, but the likelihood that the Court would accept the case, much less reverse it, seems low on the facts of the case.

Please let us know if we may provide additional information regarding this important case.

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All at 503-242-1745

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