Ninth Circuit Holds Takings Case Must Proceed Through Tribal Court


An eminent decision out of the Ninth Circuit United States Court of Appeals is not a common occurrence.  A Ninth Circuit eminent domain decision dealing with intangible property is even less common.  Yet, on April 26, 2013, the Ninth Circuit took it even one step further, issuing an eminent domain decision dealing with intangible property in which the condemning authority is an Indian Tribe.

Having explained just how rare it is to see this type of decision, I now need to make a confession.  While the Ninth Circuit decision arises out of an eminent domain action in which an Indian Tribe is condemning intangible property, the decision itself is actually about exhaustion.  I know, big let down.  Specifically, the Ninth Circuit addressed whether a non-Indian must exhaust tribal court remedies before proceeding in federal court.  In this case, the Ninth Circuit answered yes.  See Grand Canyon Skywalk Development v. Sa Nyu Wa, No. 12-15634 (9th Cir. 2013).

Grand Canyon Skywalk Development ("GCSD"), a Nevada corporation, and Sa Nyu Wa, a tribally chartered corporation of the Hualapai Indian Tribe, entered into a revenue sharing agreement with respect to the management and operation of The Skywalk, a glass-bottomed viewing platform suspended 70 feet over the rim of the Grand Canyon.  After a dispute arose between the parties, GCSD filed a complaint in Hualapai Tribal Court to compel arbitration.  While Sa Nyu Wa eventually agreed to participate in the arbitration, shortly thereafter the Hualapai Tribal Council passed a resolution codifying their right to condemn property for public use, and a second resolution authorization the acquisition of GCSD's contractual interest in the revenue sharing agreement.  

GCSD responded by filing a complaint in federal court and a request for temporary restraining order enjoining the tribal court eminent domain proceedings.  The district court denied GCSD's request and dismissed the action, holding that GCSD was required to exhaust tribal court remedies before seeking relief in federal court.  The Ninth Circuit affirmed, explaining that because the principles of comity require federal courts to generally defer to "the tribal court as the appropriate court of first impression," a party should be required to exhaust tribal court remedies except when:

(1) an assertion of tribal jurisdiction is motivated by a desire to harass or is conducted in bad faith; (2) the action is patently violative of express jurisdictional prohibitions; (3) exhaustion would be futile because of the lack of adequate opportunity to challenge the court's jurisdiction; or (4) it is plain that no federal grant provides for tribal governance of nonmembers' conduct on land covered by Montana's main rule.

The Ninth Circuit held that GCSD failed to adequately demonstrate that any of these exceptions applied, and therefore affirmed the district court's dismissal.   

Thus, it appears that the exceedingly rare takings decision, the one I built up so much in my introduction, isn't quite ripe yet.  That said, since this is the closest instance of such a decision that I can recall, can you really blame me for leading with that hook? 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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