Justices to Consider Tribal Court Jurisdiction; Fifth Circuit Allowed Lawsuit Against Retailer

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By Lawrence E. Dubé

June 15 — The U.S. Supreme Court June 15 agreed to review an appeals court decision that a tribal court of the Mississippi Band of Choctaw Indians had jurisdiction to hear the claims of a teenage tribe member who alleges he was sexually molested by the manager of a Dollar General store on the Choctaw reservation while working as an unpaid intern.

The justices will consider whether Indian tribal courts have jurisdiction to adjudicate civil tort claims against nonmembers, including as a means of regulating the conduct of nonmembers who enter into consensual relationships with a tribe or its members.

Dollar General Corp. petitioned the justices for review of the U.S. Court of Appeals for the Fifth Circuit's decision (732 F.3d 409, 2013 BL 272642 (5th Cir. 2013)) following the denial of rehearing en banc, arguing the appeals court “opens the tribal courthouse doors wide” to lawsuits against nonmembers that “have no say, directly or through legislative representation, in the laws, regulations, or court system of the Tribe.”

The Mississippi Band responded that Dollar General's argument relied on “hyperbole and speculation,” and it urged the justices to deny the company's petition. The solicitor general also opposed Supreme Court review.

Store Intern Claimed Molestation by Manager

According to the Fifth Circuit ruling and court records, Dollar General operates a store on the Choctaw reservation pursuant to a lease agreement with the tribe and a business license granted by the trial government.

In 2003, a 13-year-old tribe member went to work at the store as an unpaid intern or apprentice under an arrangement made by a tribal job program with the Dollar General store manager. The intern, identified only as John Doe in the decision, later alleged that the store manager sexually molested him.

Doe sued Dollar General and the manager in tribal court, demanding damages of $2.5 million. The company and the store manager unsuccessfully sought dismissal of the claims in the Choctaw court system, and then filed an action in the U.S. District Court for the Southern District of Mississippi against the tribe, tribal officials and Doe, seeking to enjoin further tribal court proceedings.

The district court granted summary judgment in favor of the manager, but it held that Dollar General had entered into a consensual relationship with the tribe that allowed the Choctaw court to take jurisdiction of Doe's claims that the retailer was vicariously liable for its store manager's actions, and that the company negligently hired, trained or supervised the manager.

Dollar General appealed to the Fifth Circuit.

Appeals Court Backed Tribal Court Jurisdiction

In Montana v. United States, 450 U.S. 544 (1981), the Supreme Court said the sovereign power of Indian tribes generally does not extend to nonmembers of the tribe. However, the appeals court wrote, a tribe may regulate “the activities of nonmembers who enter consensual relationships with the tribe or its member, through commercial dealing, contracts, leases, or other arrangements.”

A Fifth Circuit panel noted the nexus between Doe's placement at Dollar General and the tribe's youth program, and held 2-1 the tribal court had jurisdiction to hear the intern's claims.

The Fifth Circuit noted the nexus between Doe's placement at Dollar General and the tribe's youth program and held 2-1 the tribal court had jurisdiction to hear the intern's claims.

“Having agreed to place a minor tribe member in a position of quasi-employment on Indian land in a reservation,” the panel majority wrote, “it would hardly be surprising for [the company] to have to answer in tribal court for harm caused to the child in the course of his employment.”

In March 2014, the appeals court decided by a 9-5 vote to deny the company's petition for rehearing en banc.

Retailer Contended Due Process at Risk

In its petition for Supreme Court review, Dollar General said the justices have “repeatedly left open whether, or under what circumstances, a tribal court may exercise civil jurisdiction over nonmembers.”

Doe was entitled to litigate his claims against Dollar General in a Mississippi state court, the retailer argued, but the company said “subjecting nonmembers to tribal court jurisdiction risks serious intrusions on individual liberty, given the incomplete guarantee of Due Process protections in that forum.”

The Fifth Circuit's ruling could have “a profound and immediate impact” on “thousands of nonmember individuals and companies doing businesses on reservations,” the company said.

Conducting a business relationship with a tribal member does not reliably indicate that “businesses like petitioners have consented, in any meaningful sense, to be bound by tort rules they may be unable even to discern, or agreed to have those rules applied to them in an unfamiliar court,” Dollar General argued.

Edward F. Harold of Fisher & Phillips LLP in New Orleans is counsel of record for Dollar General Corp.

Tribe Argued No Need for High Court Intervention

Opposing the petition, the Mississippi Band of Choctaw Indians acknowledged that the Supreme Court has never held a tribal court had jurisdiction over a nonmember defendant.

However, the tribe wrote “[i]t is equally true that this Court has never held that a tribal court cannot lawfully exercise jurisdiction over civil claims filed by a tribe or its members arising from voluntary consensual relationships” formed and carried out on a reservation.

The Fifth Circuit ruling is consistent with the Supreme Court's precedent, the Mississippi Band said. The tribe argued “[o]n-reservation employment relationships between non-Indian employers and tribal member employees involve the kind of non-Indian activity which is properly subject to tribal government regulatory jurisdiction.”

The tribe argued Dollar General's warnings about increased litigation and possible due process violations in Indian courts were exaggerated, and it said: “If in this, or a different case, after trial any serious due process violations occur, this Court will have the opportunity to grant certiorari and examine the issues there presented based on what really happened.”

C. Bryant Rogers of VanAmberg, Rogers, Yepa, Abeita & Gomez, LLP in Santa Fe, N.M., is counsel of record for the Mississippi Band of Choctaw Indians.

Solicitor General Argued Against Granting Petition

The high court issued a call for the view of the solicitor general in October 2014, and the government responded by urging the court to deny Dollar General's petition for high court review.

The solicitor general said Dollar General was proposing a broad restriction on tribal courts adjudicating claims against nonmembers unless authorized by Congress, but the government argued: “There is no foundation in this Court's cases for that categorical prohibition, and it has not been endorsed (or even suggested) by any court of appeals.”

“[P]etitioners' concerns about potential unfairness in tribal-court proceedings, and about the chilling effect that jurisdictional uncertainty may have on commerce with tribes, can be addressed without the novel and categorical curtailment of tribal-court jurisdiction that petitioners now urge,” the solicitor general argued.

Solicitor General Donald B. Verrilli is counsel of record for the government.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com