Indian Nations Law Update - May/June 2022

• Published date: 22 June 2022
• Subject Matter: Litigation, Mediation & Arbitration, Tax, Sovereign Immunity: Public Sector Government, Income Tax, Tax Authorities
• Law Firm: Godfrey & Kahn S.C.
• Author: Mr John Clancy and Brian Pierson

In Oertwich v. Traditional Village of Togiak, 2022 WL 951272 (9th Cir. 2022), Oertwich, a non-Native, had lived in Togiak, an Alaskan Native Village (Tribe), for over thirty years and operated the Airport Inn there. The Village had its own law enforcement officers and the State of Alaska provided law enforcement assistance through its Village Public Safety Officer (VPSO) Program. After VPSO officer alerted the Village to the arrival of a suspicious package at the airport, a Village officer opened it and discovered alcohol, whereupon the Togiak Tribal Court issued an order banishing Oertwich from the Native Village of Togiak Tribe for "possession of prohibited controlled substances." Native officers put Oertwich on a plane for Dillingham, Washington. When Oertwich returned to Togiak the following day, Village officers and a VPSO officer incarcerated him in the City of Togiak jail, bound him and placed him on a plane bound for Dillingham. Oertwich sued the Tribe, its members and its officials, alleging claims under 42 U.S.C. s. 1983, the Indian Civil Rights Act (ICRA) based on illegal search and seizure, arrest, imprisonment and banishment, unconstitutional search and seizure, arrest, imprisonment, and banishment, false imprisonment, battery, intentional infliction of emotional distress stemming from the unlawful arrest, imprisonment, and banishment. The district court dismissed, holding that certain of the plaintiff's claims failed and that others must be brought in tribal court. The Ninth Circuit affirmed in part and reversed in part, holding that (1) the claims against the Tribe were barred by sovereign immunity, (2) the tribal judges were acting in their judicial capacities and were entitled to judicial immunity, (3) the district court failed to adequately consider whether Oertwich had pleaded valid Section 1983 claims against the officers in their individual capacities, under the doctrine of Lewis v. Clarke, and Oertwich would be permitted to amend his complaint on remand.

In Rincon Mushroom Corporation of America v. Mazzetti, 2022 WL 1043451 (S.D. Cal. 2022), Rincon Mushroom Corporation of America (RMCA) owned five acres within the boundaries of the reservation of the Rincon Band of Luise'o Indians (Tribe). After the Tribe sought to regulate RMCA's mushroom business, RMCA sued tribal officials in federal court, contending that the Tribe lacked jurisdiction under the rule of Montana v. United States, which, with two exceptions, bars tribes from asserting jurisdiction over non-Indians on fee land within reservation boundaries. RMCA sought an injunction to bar defendants from enforcing tribal regulations against RMCA. The district court ruled that RMCA was required to exhaust tribal court remedies and the Ninth Circuit affirmed. The tribal court and appellate court ultimately determined that the Tribe had jurisdiction over RMCA under the second Montana exception allowing tribes to assert jurisdiction over conduct that "threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe." RMCA then renewed its suit in federal court, again asserting that the Tribe never had jurisdiction. The district court disagreed and granted judgment affirming the validity of the tribal court judgment: "The Rincon Trial Court made the following four core factual findings in its Jurisdictional Order in support of its conclusion that the Tribe had jurisdiction under Montana's second exception: (1) that Plaintiffs failed to maintain the Property; (2) that the Property constitutes a fire hazard that endangers the Tribe's casino and resort, which is located across the street from the Property and is the Tribe's primary source of income; (3) that Plaintiffs' actions and inactions have contributed to a threat of contamination to the pristine character of the Tribe's drinking water supply; and (4) that Plaintiffs' assertion of immunity from tribal jurisdiction, together with local government's demurrer, creates a lawless enclave within the reservation. ... The Court reviews these findings for clear error based on the evidence in the record before the Rincon Trial Court. ... In this case, the Property is located in close proximity to two important tribal resources'the Tribe's water supply and its casino and resort. ... The activities that the Tribe seeks to regulate'such as the storage of various flammable materials and the presence of tanks and vehicles without adequate disposal systems'are the same types of activities that have previously resulted in groundwater contamination and large fuel explosions on the Property.

In Bonner v. Williams, 2022 WL 1078608 (D. Ore. 2022), Bonner sued Williams, an Umatilla Tribal Police Department officer, and Demary, a Housing Coordinator with the Confederated Tribes of the Umatilla Indian Reservation, in federal court under 42 U.S.C. ' 1983, contending they conducted an illegal search of his residence and, in addition, that Demary discriminated against Bonner because of his race and harassed Bonner's wife. The court dismissed for failure to state a claim: "Section 1983 claims alleging the deprivation of rights under color of Tribal law 'cannot be maintained in federal court.' Evans v. McKay, 869 F.2d 1341, 1347 (9th Cir. 1989). Instead, a plaintiff asserting ' 1983 claims against a Tribal official must show that the Tribal official 'may fairly be said to be a state actor.' Id. This requirement is satisfied where, for example, Tribal officials acted 'in concert with officers of the state' or acted as enforcers of state or local authority. Id. at 1348. Similarly, a Tribal official does not act under color of federal law for the purposes of an action under Bivens v. Six Unknown Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971), the federal-defendant equivalent to ' 1983, unless there is 'some interdependence between the federal government' and the Tribal official; in other words, unless there is a 'symbiotic relationship' between federal and Tribal officers. Bressi v. Ford, 565 F.3d 891, 898 (9th Cir. 2009). ... The allegations in plaintiff's Complaint do not give rise to a reasonable inference that any defendant acted in concert with state or federal officials."

In Duggan v. Martorello, 2022 WL 952187 (D. Mass. 2022), Duggan and others sought to bring a class action lawsuit against Martorello and his company, Eventide Credit Acquisitions, LLC (Eventide), contending that the defendants violated Massachusetts usury laws by offering high-interest loans over the internet purportedly made by the Lac Vieux Desert Chippewa tribe and its lending arm, Big Picture Loans, LLC, under tribal law. After the plaintiffs settled with the Tribe and Big Picture, Martello moved to dismiss on the ground that the tribal entities were necessary parties under Fed. R. Civ. Proc. 19 and could not be joined because they enjoyed sovereign immunity. Martello contended that proceeding in the absence of the tribal entities could prejudice their interests by undermining the legal basis for their internet lending activities. The district court denied the motion: "As presently plead, it does not appear that a judgment in Duggan's favor on her declaratory judgment claim would necessarily prohibit Big Picture Loans or the other Tribal Entities from carrying out their lending activities or collecting on their existing loans. The issue presented is whether such activities can be carried out by Martorello and Eventide, and whether these defendants can make use of the protections afforded to the Tribe under the Loan Agreements. ... The defendants also ... contend that the Tribe's economic interest in the continued operations of Big Picture Loans' lending operations, and the interest in avoiding a judgment that would negatively impact its lending business, further supports its status as a necessary party in this case. ... This court finds these arguments unpersuasive. The Tribal Entities' decision to settle Duggan's claims against them, instead of remaining in the case and defending those claims on the grounds of sovereign immunity, defeats the defendants' argument that litigating without them will impair or impede those parties' interests." See also, Duggan v. Martorello, 2022 WL 952183 (D. Mass. 2022) (denying motion to dismiss for lack of personal jurisdiction.)

In Nicholson v. Stitt, 2022 WL 1151153 (Okla. 2022), plaintiffs, citizens of the Cherokee Nation of Oklahoma, had paid fines and fees in connection with criminal cases brought against them by the State of Oklahoma for offense committed within was thought, at the time of their convictions, to be the former Muscogee Creek Indian reservation. After the U.S. Supreme Court held in McGirt v. Oklahoma that the Creek reservation had never been disestablished, as previously supposed, the plaintiffs sued to recover fines and fees that they had paid to the state and municipal governments. The district court dismissed their claims and the Oklahoma Supreme Court affirmed: "Plaintiffs' claims for money had and received are premised on the belief their state and municipal court convictions and sentences are void. ... Plaintiffs must prove their convictions and sentences have been overturned to recover on their claim for money had and received. Plaintiffs' claims clearly bear a relationship to their convictions and sentences. The assertions made by Plaintiffs in their petition, their briefs responding to the State and Municipalities' motions to dismiss, and at the hearing indicate their convictions have not been vacated. ... An action for money had and received arises when one has received money which in equity and good conscience should...