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Big Horn County Electric Cooperative, Inc. v. Big Man

United States District Court, D. Montana, Billings Division

August 15, 2018

BIG HORN COUNTY ELECTRIC COOPERATIVE, INC., Plaintiff,
v.
ALDEN BIG MAN, et al, Defendants.

          FINDINGS AND RECOMMENDATIONS OF U.S. MAGISTRATE JUDGE

          TIMOTHY J. CAVAN UNITED STATES MAGISTRATE JUDGE

         Before the Court are defendant Alden Big Man's Motion to Dismiss Plaintiff's Complaint (Doc. 31), and defendants Unknown Members of Crow Tribal Health Board, the Hon. Chief Justice Joey Jayne, and the Hon. Justices Leroy Not Afraid and Kari Covers Up's (collectively, “Tribal Defendants”) Motion to Dismiss the Complaint for Declaratory and Injunctive Relief (Doc. 33) (collectively, the “Motions”). The Motions each seek the dismissal in full of the Complaint for Declaratory Relief and Injunctive Relief (Doc. 1) (the “Complaint”) filed by plaintiff Big Horn County Electric Cooperative, Inc. (“BHCEC”). After thorough examination of the Complaint and the parties' briefing on the instant Motions, the Court recommends that the Motions be GRANTED.

         I. Pertinent Facts

         The following pertinent facts are taken from BHCEC's Complaint and documents referenced in and attached to the Complaint, and are assumed to be true for the purposes of the instant Motions. See U.S. v. Ritchie, 342 F.3d 903, 907-908 (9th Cir. 2003) (a court may consider documents attached to a complaint without converting a motion to dismiss into a motion for summary judgment).

         BHCEC is a non-Indian Montana corporation with its principal place of business in Hardin, Montana. (Doc. 1 at ¶ 3.) BHCEC delivers electric energy and services to its members, at least some of whom are enrolled members of the Crow Indian Tribe residing within the boundaries of the Crow Indian Reservation (the “Reservation”). Defendant Big Man is a Crow tribal member who receives electric energy services from BHCEC within the boundaries of the Reservation, pursuant to a Membership Agreement between Big Man and BHCEC. (Id. at ¶¶ 3-4.)

         In January 2012, Big Man became delinquent in payment to BHCEC, and, following notice to Big Man, BHCEC disconnected Big Man's electric service. (Id. at ¶ 15.) Big Man filed suit against BHCEC in Crow Tribal Court (the “Tribal Court”) on May 2, 2012, alleging that BHCEC “violated Crow law” when it terminated his service. Specifically, Big Man alleged that BHCEC violated Crow Law and Order Code 20-1-110, which prohibits the termination of residential utility services during the winter months (November 1 to April 1). (Id. at ¶¶ 16-17; Doc. 34 at 7.) Following summary judgment motions from both Big Man and BHCEC, the Crow Trial Court entered summary judgment in favor of BHCEC on the grounds that it lacked subject matter jurisdiction, and dismissed Big Man's claims accordingly. (Doc. 1-7.) Big Man timely appealed to the Apsaalooke Appeals Court (the “Appellate Court”).

         In a lengthy opinion (see Docs. 1-4, 1-5), the Appellate Court reversed the Tribal Court, finding in pertinent part that the Tribal Court had not conducted sufficient fact-finding with respect to the relevant jurisdictional issues. The Appellate Court further found that the Tribal Court erred in concluding that it did not have jurisdiction under recognized exceptions to the general rule that tribal courts do not have subject matter jurisdiction over suits involving non-Indians. (Doc. 1-5 at 8-12) (discussing exceptions recognized Montana v. U.S., 450 U.S. 544 (1981)). Then, in its conclusion, the Appellate Court stated: “[t]his Court rules that the Crow trial court has subject matter jurisdiction over this matter consistent with this opinion.” Id. at 16. It then remanded the case to the Tribal Court “to rule on the non-jurisdictional merits, ” and to “conduct further proceedings consistent with the Crow Rules of Civil Procedure.” Id.

         BHCEC thereafter filed the instant suit, seeking a declaratory judgment that the Tribal Court does not have subject matter jurisdiction over Big Man's lawsuit against BHCEC, and an injunction prohibiting the Crow Tribe from attempting to regulate BHCEC's actions in the context of Big Man's lawsuit and otherwise. (Doc. 1 at ¶¶ 32-44.)[1] The Motions seeking to dismiss BHCEC's lawsuit followed.

         II. Legal Standard

         Previously, motions to dismiss for failure to exhaust have been treated as unenumerated Fed.R.Civ.P. 12(b) motions. See Wyatt v. Terhune, 315 F.3d 1108, 1119 (9th Cir. 2003) (“the failure to exhaust non-judicial remedies that are not jurisdictional should be treated as a matter in abatement, which is subject to an unenumerated motion to dismiss.”). Relying on Wyatt, this standard has been applied to motions to dismiss for failure to exhaust tribal court remedies. See e.g. Dish Network Corp. v. Tewa, 2012 WL 5381437, *2 (D. Ariz. Nov. 1, 2012). Applying this standard, “the court may look beyond the pleadings and decide disputed issues of fact.” Wyatt, 315 F.3d at 1119-20.

         Following the U.S. Supreme Court's decision in Jones v. Bock, 549 U.S. 199 (2007), however, the Ninth Circuit has concluded that Wyatt is no longer good law. Albino v. Baca, 747 F.3d 1162, 1169 (9th Cir. 2014). Nevertheless, the Court has stated that exhaustion should typically be decided at the outset of the litigation. Id. at 1170. When the “failure to exhaust is clear from the face of the complaint, a defendant may successfully move to dismiss under Rule 12(b)(6) for failure to state a claim.” Id. at 1169. Otherwise, the issue must be decided on a motion for summary judgment, with disputed factual issues to be resolved by the court. Id. at 1170.

         In this case, the relevant documents necessary to determine the exhaustion issue are referenced in and attached to BHCEC's Complaint. Therefore, in this instance the Court can determine the exhaustion issue under Fed.R.Civ.P. 12(b)(6) for failure to state a claim.

         III. Discussion

         A. Exhaustion

         The Tribal Defendants assert in their Motions that BHCEC has not exhausted available Tribal Court remedies, and contend that exhaustion is required before this Court can properly review the question of tribal jurisdiction.

         BHCEC maintains, on the other hand, that exhaustion is not required in this situation, since this case falls within recognized exceptions to the exhaustion requirement. Moreover, even if exhaustion is required, BHCEC asserts that tribal court remedies have been fully exhausted, and the question of tribal court jurisdiction is ripe for this Court's review.

         The determination of tribal court jurisdiction over non-Indians is a question of federal law properly determined by federal courts under 28 U.S.C. § 1331. Natl. Farmers Union Ins. Companies v. Crow Tribe of Indians, 471 U.S. 845, 852-53 (1985). “As a matter of comity, however, federal courts generally decline to entertain challenges to a tribal court's jurisdiction until the tribal court has had a full opportunity to rule on its own jurisdiction.” Elliott v. White Mountain Apache Tribal Court, 566 F.3d 842, 844 (9th Cir. 2009), cert. denied, 558 U.S. 1024 (2009). “A district court has no discretion to relieve a litigant from the duty to exhaust tribal remedies prior to proceeding in federal court.” Allstate Indemnity Co. v. Stump, 191 F.3d 1071, 1073 (9th Cir. 1999) (citations omitted).

         Following this policy “will provide the forum whose jurisdiction is being challenged the first opportunity to evaluate the factual and legal bases for the challenge.” Natl. Farmers Union, 471 U.S. at 856-57. It will also promote the “orderly administration of justice in the federal court . . . by allowing a full record to be developed in the Tribal Court.” Id. As to this consideration, the Ninth Circuit has recognized that “the Tribe itself is in the best position to develop the necessary factual record for disposition on the merits.” Burlington Northern R. Co. v. Crow Tribal Council, 940 F.3d 1239, 1246 (9th Cir. 1991).

         B. Exhaustion Exceptions

         The Supreme Court has recognized four exceptions to the exhaustion requirement:

(1) when an assertion of tribal court jurisdiction is “motivated by a desire to harass or is conducted in bad faith”; (2) when the tribal court action is “patently violative of express jurisdictional prohibitions”; (3) when “exhaustion would be futile because of the lack of an adequate opportunity to challenge the [tribal] court's jurisdiction”; and (4) when it is “plain” that tribal court jurisdiction is lacking, so that the exhaustion requirement “would serve no purpose other than delay.”

Elliott, 566 F.3d at 847 (quoting Nevada v. Hicks,533 U.S. 353, 369 (2001)). In this case, BHCEC asserts the first, second and fourth exceptions apply to ...


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