In its next term, the United States Supreme Court will hear its first case addressing the limits of tribal jurisdiction in seven years, having granted a petition for a writ of certiorari to Dolgencorp and its parent company, Dollar General Corporation (collectively, “Dolgencorp”), in Dollar Gen. Corp. v. Mississippi Band of Choctaw Indians.^[1] The Supreme Court will review whether 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.^[2]

The Supreme Court’s decision could affect businesses engaged in economic development activities on tribal lands. An adverse ruling for tribal interests could significantly curtail — or eliminate altogether — efforts by tribes to exercise jurisdiction over nonmember defendants in tribal courts.

The Supreme Court first recognized that there are circumstances in which an Indian tribe can exercise civil jurisdiction over nonmembers in Montana v. United States.^[3] In that case, the Supreme Court created two exceptions to the general rule that Indian tribes cannot exercise civil jurisdiction over nonmembers.^[4] The first Montana exception — known as the consensual relationship exception — provides that “[a] tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members through commercial dealing, contracts, leases, or other arrangements.”^[5]

In the 35 years since Montana, the Supreme Court has never held a tribal court had jurisdiction over a nonmember defendant in any context, leaving the question of whether tribal courts may ever exercise civil jurisdiction over nonmembers unanswered.^[6] The Supreme Court now appears ready to answer that question.

Dolgencorp operates a Dollar General store located on land held in trust by the United States for the Mississippi Band of Choctaw Indians.^[7] The store operates pursuant to a lease agreement with the tribe and a business license issued by the tribe. John Doe, a young tribe member, sued both the store’s manager and Dolgencorp in tribal court, alleging various theories of negligence and vicarious liability on the grounds that he was sexually molested while working at the store as part of a youth job training program operated by the tribe.

Dolgencorp and the manager challenged the tribal court’s subject-matter jurisdiction. After the Choctaw Supreme Court held that subject-matter jurisdiction existed as to both Dolgencorp and the manager under Montana’s first exception, they filed suit in the U.S. District for the Southern District of Mississippi against various tribal entities, as well as Doe and his parents, to enjoin the tribal court action.

The crux of the dispute is over the meaning and import of Plains Commerce Bank v. Long Family Land & Cattle Co.,^[8] the last Supreme Court case to consider the limits of tribal jurisdiction. Although the Supreme Court granted certiorari in Plains Commerce to decide precisely the question at issue — whether Montana’s undefined “other means” include adjudicating civil tort claims in tribal court — the Court resolved the case on other grounds.

Dolgencorp contends Plains Commerce narrowed Montana’s first exception, such that only those consensual relationships that are evaluated and determined to have an impact on tribal self-government or internal relations trigger tribal jurisdiction. According to Dolgencorp, because the consensual relationship at issue does not implicate those interests, Montana’s first exception does not apply.

By contrast, the tribal defendants maintain that Plains Commerce left the basic Montana framework intact, and that “no showing is required to be made beyond the existence of the consensual relationship which supports a finding of consent to tribal jurisdiction, and the nexus between the consensual relationship and exertion of tribal authority.”^[9]

The District Court agreed with the tribal defendants’ argument, and granted summary judgment in their favor. On appeal, the Fifth Circuit Court of Appeals applied Montana’s framework and post-Montana jurisprudence, and affirmed the District Court’s decision.^[10]

The Court found an “obvious nexus” between Dolgencorp’s participation in the youth program and the tribe’s interest in protecting its own children on its own land by regulating the safety of the child’s workplace. The Court rejected Dolgencorp’s argument that Plains Commerce narrowed Montana’s consensual relationship exception by requiring an additional showing that the specific relationship implicates tribal governance and internal relations. Instead, the Court found it permissible to focus at a higher level of generality to determine an activity’s impact.

In his dissent, Fifth Circuit Judge Smith emphasized two arguments. First, Judge Smith agreed with Dolgencorp that Montana’s narrow exception only applies when the conduct at issue falls within a tribe’s authority to “protect tribal self-government or to control internal relations.”^[11] Second, even if that threshold inquiry had been satisfied, an insufficient nexus exists between Dolgencorp’s participation in the youth program and the full body of Indian tort law. Judge Smith opined that “[b]ecause Dolgencorp could not have anticipated that its consensual relationship with Doe would subject it to any and all tort claims actionable under tribal law, there is an insufficient nexus to satisfy Montana’s first exception.”^[12] Judge Smith maintained that Montana’s first exception “envisages discrete regulations consented to ex ante,” rather than the majority’s “unprecedented after-the-fact imposition of an entire body of tort law based on Dolgencorp’s participation in a brief, unpaid internship program.”^[13]

The tribe faces an uphill battle in the Supreme Court. Since 2005, when John G. Roberts became the Chief Justice of the United States Supreme Court, tribal interests have won just two cases, compared to nine defeats.^[14] The current Supreme Court has been deemed the most pro-business since at least World War II.^[15] Further, as the Supreme Court itself acknowledged in 2001, it has never found that a tribal court had jurisdiction over a nonmember defendant, regardless of the context.

The Supreme Court’s decision to grant certiorari may be a reflection of its political makeup. Unsurprisingly, much is at stake for both big business and tribal interests, as businesses facing potential liability may simply withdraw from doing business with tribes in “communities in which unemployment is already high and access to commercial services (like low-cost merchandise stores) is low.”^[16]

While the Supreme Court has never held that a tribal court has jurisdiction over a nonmember defendant, in the Fifth Circuit’s view, every circuit court to consider the question has either held or assumed that tribal courts may exercise jurisdiction over tort claims against nonmembers under Montana’s first exception.^[17]

The Department of Justice (DOJ) also weighed in, filing an amicus brief taking the tribe’s side. In contending that the Fifth Circuit correctly decided the issue, the DOJ asserted that the tribe has jurisdiction over Doe’s claims because the tribe has jurisdiction to regulate conduct occurring on tribal trust land irrespective of Montana’s general rule or its exceptions.^[18]

Given the current political climate of the Supreme Court, the case is ripe for resolving the confusion Montana’s consensual relationship exception has caused. Notwithstanding the DOJ’s firm stance behind the tribe, the Supreme Court may reverse the Fifth Circuit’s decision.

Depending on the breadth and depth of the Supreme Court’s holding, such a ruling could certainly impact those doing business in Indian country.

Notes:

^[1] 135 S. Ct. 2833 (2015).
^[2] Petition for Writ of Certiorari, Dollar General Corp. v. The Mississippi Band of Choctaw Indians, 2014 WL 2704006, at ii (U.S.).
^[3] Montana v. United States, 450 U.S. 544 (1981).
^[4] Id. at 565–66.
^[5] Id. at 565 (emphasis added).
^[6] Nevada v. Hicks, 533 U.S. 353, 358 n.2 (2001).
^[7] Dolgencorp Inc. v. Mississippi Band of Choctaw Indians, 846 F. Supp. 2d 646, 648 (S.D. Miss. 2011).
^[8] 554 U.S. 316 (2008).
^[9] 846 F. Supp. 2d at 653.
^[10] Dolgencorp, Inc. v. Mississippi Band of Choctaw Indians, 746 F.3d 167, 171 (5th Cir. 2014).
^[12] Id. at 181.
^[13] Id. at 182.
^[14] Supreme Court agrees to hear first tribal jurisdiction case in years, INDIANZ.COM (June 15, 2015), http://www.indianz.com/News/2015/017845.asp?print=1.
^[15] See e.g., Adam Liptak, Corporations Find a Friend in the Supreme Court, THE NEW YORK TIMES (May 4, 2013), http://www.nytimes.com/2013/05/05/business/pro-business-decisions-are-defining-this-supreme-court.html?_r=0.
^[16] Id. at 17.
^[17] Dolgencorp, Inc., 746 F.3d at 173 n.3.
^[18] Brief for the United States as Amicus Curiae, Dollar General Corp. v. Mississippi Band of Choctaw Indians, 2015 WL 2228553, at 9–10 (U.S.).