Justices Ponder Tribal Jurisdiction Over Dollar General

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By Jay-Anne Casuga

Dec. 7 — A tribal court of the Mississippi Band of Choctaw Indians has no jurisdiction to hear the private tort claims of a teenage tribe member who worked as an unpaid intern at a Dollar General store on the Choctaw reservation and alleged he was sexually molested by a male manager, an attorney for Dollar General argued Dec. 7 before the U.S. Supreme Court.

The justices' eventual ruling in the case could have implications for tribal sovereignty, as well as the risks employers might face in tribal courts if they choose to do business on Indian lands.

Representing Dollar General, Thomas C. Goldstein of Goldstein & Russell in Bethesda, Md., urged the justices to reverse a U.S. Court of Appeals for the Fifth Circuit decision (732 F.3d 409, 2013 BL 272642 (5th Cir. 2013)), that tribal courts have the authority to adjudicate private civil tort claims against nonmembers who enter into consensual relationships with a tribe or its members.

Goldstein asserted that in private lawsuits between tribal members and nonmembers, the nonmembers have a constitutional right to a neutral judicial forum and that tribal courts wouldn't provide the same due process protections to nonmembers as federal and state courts.

Representing the tribe, Neal K. Katyal of Hogan Lovells in Washington argued that Dollar General consented to tribal court jurisdiction when it obtained a business license and lease to operate a store on the tribe's land and participated in a tribal youth opportunity program that placed the intern at the store where he purportedly was molested.

Deputy Solicitor General Edwin S. Kneedler, arguing on behalf of the federal government, supported tribal jurisdiction in the case, arguing that due process protections provided by the federal Indian Civil Rights Act would still be available to Dollar General if it appeared before a tribal court.

Store Intern Claimed Molestation

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 youth opportunity 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, seeking damages of $2.5 million. The company and the store manager unsuccessfully sought dismissal of the claims in the Choctaw court system, and then sued 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 exercise jurisdiction over 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.

Fifth Circuit Backed Tribal Court Jurisdiction

Dollar General appealed to the Fifth Circuit, which 2-1 upheld tribal court jurisdiction over Doe's tort claims.

The appeals court observed that in Montana v. United States, 450 U.S. 544 (1981), the Supreme Court found that the sovereign power of Indian tribes generally doesn't extend to nonmembers of the tribe. The justices in that case said one exception to the principle is 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.”

In finding in favor of tribal court jurisdiction, a Fifth Circuit panel observed that Dollar General agreed to “place a minor tribe member in a position of quasi-employment on Indian land in a reservation.” As such, the panel majority said, “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.

The Supreme Court granted Dollar General's petition for review in June 2015 (114 DLR AA-1, 6/15/15).

No Mandatory Adjudicatory Authority Argued

At oral argument, Goldstein maintained that although tribes have some regulatory authority over the actions of nonmembers, depending on the nonmembers' consent, the tribes lack mandatory adjudicatory jurisdiction to decide private tort lawsuits in tribal courts such that nonmembers may be denied access to a neutral judicial forum, as required by the U.S. Constitution.

He drew an analogy with the power of states to pass tort laws, despite their inability to insist that tort cases be litigated in their own courts.

Justice Sonia Sotomayor commented that Goldstein seemed to be assuming that tribal judges would not be neutral, a point later addressed by Justice Stephen Breyer when he asked Goldstein, “what's wrong with tribal courts?”

Goldstein responded that although some tribal judiciaries have developed and established principles of procedural fairness and traditional dispute-resolution mechanisms, other have not. He added that a tribal jury potentially could be composed of tribal members who may even know the plaintiff.

At a later point, Chief Justice John Roberts asked Katyal, who represented the tribe, if the constitutional right to due process would be violated if a nonmember is subjected to a jury verdict where the jury consists solely of tribe members.

Katyal responded that there's no jury trial in the present case, but conceded it could arguably violate the U.S. Constitution's due process clause incorporated into the federal Indian Civil Rights Act, Congress could regulate all-tribal-members juries under the ICRA, he said.

Turning back to Goldstein's fairness argument, Breyer said it's his understanding that “tribal courts function perfectly well, certainly in many places.” He also posited that a nonmember who doesn't receive due process of law in a tribal court can file a complaint in federal court, similar to how a plaintiff in a state court can challenge the lack of due process at the state level.

Goldstein asserted that if Dollar General had a claim that a punitive damages award violated due process, it would be unreviewable in a tribal court, as the U.S. Constitution doesn't apply in tribal courts. If Dollar General were to collaterally attack that award in a tribal court as violative of due process, he said that is “hardly treating the tribal courts as sovereigns.”

Goldstein added that the federal court “review system” of tribal rulings is “extremely rare,” with the Choctaw Indians identifying only a single federal appeals court case that overturned a tribal ruling.

Justice Ruth Bader Ginsburg asked Goldstein what civil claims can be brought against nonmembers in tribal court.

Goldstein answered that tribal courts would have jurisdiction over civil claims subject to the contracts that allow individuals or companies to do business on a reservation, as well as claims brought by the tribe itself in the exercise of its sovereign authority, such as enforcing taxation and licensing rules.

Justice Elena Kagan observed, however, that it was “a bit of an odd argument” that “there's less of a sovereign interest in protecting your own citizens than in enforcing your licensing laws.”

Goldstein responded that Dollar General isn't making that argument and instead is contending the U.S. government never contemplated that tribal jurisdiction over a nonmember involved in a private suit was an “incidence of sovereignty.”

Lease Agreement Discussed

Breyer asked Goldstein to clarify if it's Dollar General's position that a tribal court has no jurisdiction over a nontribal member that enters tribal land, signs an agreement stating that tribal law applies and commits a tort on tribal land.

In response, Goldstein pointed out that the agreement between Dollar General and the Choctaw Indians called for the application of tribal law and not consent to a forum. The contract's terms were further limited to disputes arising from the lease and didn't encompass tort claims, he said.

From a contractual standpoint, Goldstein said, one solution going forward would be for a tribe to incorporate language in their contracts with nonmembers that they must accede to the jurisdiction of tribal courts as a condition of doing business on a reservation.

Kagan observed, however, that Dollar General too could have insisted on contractual terms that disputes must be heard in state or federal courts.

Katyal quoted language in the agreement between Dollar General and the Choctaw Indians stating that the company “shall comply with all codes and requirements of all tribal and federal rules and regulations now enforced or which may hereafter be enforced which are applicable and pertain to Dollar General's specific use of the demised premises.”

“Nobody forced Dollar General to sell to these [tribal] customers,” Katyal said. “Nobody forced Dollar General to have this youth opportunity program. And yes, like every employer in this country, when you do those things, you open yourselves up to the reasonable liability that follows.”

The Montana exception focuses on “commercial dealing, contracts, leases or other arrangements,” Justice Anthony Kennedy said. “That doesn't sound like torts to me,” he told Katyal.

Katyal countered that the high court has held that tort law is a form of regulation, and Dollar General agreed to comply with all tribal and federal rules and regulations.

Goldstein later countered that compliance with the substance of tort law isn't the same as consenting to a tribal forum.

Justice Samual Alito offered a hypothetical in which a tribe member purchases a product online from a nonmember and the product is delivered to tribal land, where it somehow injures the purchaser. Could that tribe member sue the seller for product liability in tribal courts? he asked.

Katyal said if a business intentionally sends a product to tribal lands and the product is defective, they would have consented to tribal jurisdiction to hear that tort claim because it's something that would be reasonably foreseeable.

Breyer pointed out that the present case doesn't involve product liability and instead focuses on nonmembers who enter into an explicit consensual relationship with a tribe in relation to a contract to which the alleged tort is directly related. Katyal agreed.

Alito then asked if a tribal court would have jurisdiction to hear a tribe's defamation claim against a nonmember customer who goes to an Indian casino and later alleges online that the casino cheated him.

Katyal answered that he didn't think the tribal court would have jurisdiction because the claim is not one that would be “reasonably anticipated.”

Later, Goldstein argued that the tribe's stance that jurisdiction would turn on reasonable foreseeability would be less judicially administrable than Dollar General's argument that the parties could simply place forum provisions in their contracts.

Federal Government Disagrees With Dollar General

Kneedler, arguing for the federal government, which supports tribal jurisdiction in the case, observed that Congress has placed criminal jurisdiction over crimes by non­Indians against Indians in federal courts in order to assure that defendants would have the full protection of the due process clause. However, he said, Congress has never done that with respect to civil jurisdiction.

Nevertheless, he said Congress has assured in the ICRA that protections equivalent to the due process clause are afforded to tribal nonmembers who are subject to the jurisdiction of tribal courts.

With respect to the Montana exception, Kneedler argued that high court precedent has referred to “private individuals who voluntarily submitted themselves to tribal regulatory jurisdiction by arrangements that they or their employers entered into.”

“That precisely describes the situation where you have consent here,” Kneedler said. “You have a business operating on the reservation pursuant to a tribal license, a tribal lease agreement, and this particular child was working there because of a consensual agreement.”

To contact the reporter on this story: Jay-Anne Casuga in Washington at jcasuga@bna.com.

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

For More Information 
Text of the oral argument transcript is available at http://src.bna.com/bpS.


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