Merit Management Group v. Ponca Tribe of Indians of Oklahoma

Filing 32

WRITTEN Opinion entered by the Honorable Elaine E. Bucklo on 4/19/2011: Mailed notice(mpj, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Elaine E. Bucklo

CASE NUMBER

08 C 825

CASE
TITLE

Sitting Judge if Other
than Assigned Judge

DATE

4/19/2011

Merit Management Group v. Ponca Tribe of Indians of
Oklahoma

DOCKET ENTRY TEXT

Motion by Defendant Ponca Tribe of Indians of Oklahoma to vacate [22] is
granted. The case is dismissed for lack of subject-matter jurisdiction.

O[ For further details see text below.]

Docketing to mail notices.

STATEMENT
Defendant Ponca Tribe of Indians of Oklahoma (“the Tribe”) moves
pursuant to Fed. R. Civ. P. 60(b)(4) to vacate the default judgment entered
against it in this Court on September 5, 2008. For the reasons discussed
below, the motion is granted.
In January 2005, plaintiff Merit Management Group (“Merit”) agreed to
loan the Tribe $122,500.
When the Tribe allegedly failed to repay the
amount due under the terms of the agreement, Merit filed suit in this Court
for breach of contract. In doing so, Merit invoked the court’s diversity
jurisdiction. Despite being served with process and receiving notice of the
proceedings, the Tribe never answered or responded to the suit.
In
September 2008, I entered a default judgment against the Tribe in the amount
of $158,896.10 (plus additional amounts for legal fees and costs).
In
February 2011, after Merit filed an action in Western District of Oklahoma
to enforce the judgment, the Tribe filed the instant motion in this Court
seeking to vacate the judgment. The Tribe claims that the judgment is void
because subject-matter jurisdiction was lacking over Merit’s suit.
It is well-settled “that Federally recognized Indian tribes enjoy
sovereign immunity from suit because they are ‘domestic dependent nations’
that exercise inherent sovereign authority over their members and
territories.” Big Horn County Elec. Co-op., Inc. v. Adams, 219 F.3d 944,
954 (9th Cir. 2000). As a result, tribes are not citizens of states and,
accordingly, are not subject to diversity jurisdiction.
See, e.g.,
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STATEMENT
Auto-Owners Ins. Co. v. Tribal Court of Spirit Lake Indian Reservation, 495
F.3d 1017, 1020 (8th Cir. 2007) (“[A]n Indian tribe is not a citizen of any
state and cannot sue or be sued in federal court under diversity
jurisdiction.”); see also Frazier v. Brophy, 358 Fed. App’x. 212, 213 (2d
Cir. 2009); Ninigret Development Corp. v. Narragansett Indian Wetuomuck
Housing Authority, 207 F.3d 21, 27 (1st Cir. 2000); CTGW, LLC v. GSBS, PC,
No. 09-cv-667-bbc, 2010 WL 2739963, at (W.D. Wis. July 12, 2010) (collecting
cases). Thus, “[a]bsent congressional or tribal consent to suit, state and
federal courts have no jurisdiction over Indian tribes; only consent gives
the courts the jurisdictional authority to adjudicate claims raised by or
against tribal defendants.” George v. Sycuan Casino, 19 Fed. App’x. 623,
624 (9th Cir. 2001) (quotation marks omitted).
Courts have repeatedly
emphasized that any waiver of sovereign immunity must be clear and
unambiguous. See, e.g., Nanomantube v. Kickapoo Tribe in Kansas, 631 F.3d
1150, 1152 (10th Cir. 2011) (“[T]he waiver or abrogation of sovereign
immunity must be unequivocally expressed rather than implied.”) (quotation
marks omitted).
Merit argues that the Tribe consented to being sued by virtue of an
“exclusivity agreement” that the parties signed in connection with the loan
transaction. In particular, Merit cites section 5 of the agreement, which
in relevant part provides:
(a) Limited Waiver of Sovereign Immunity. The parties acknowledge
that the Tribe is a federally recognized Indian Tribe and that
the Tribe and its instrumentalities possess sovereign immunity
from unconsented suit and other legal proceedings. Nothing in
this Agreement shall be deemed to be a waiver of any Tribal
Party’s sovereign immunity, except as provided in this Section 5.
Notwithstanding the foregoing, with respect to all Claims, the
Tribe hereby irrevocably waives its sovereign immunity and the
sovereign immunity of all other Tribal Parties, and all defenses
based thereon, to permit as provided in this Section: (i) the
adjudication or enforcement of Claims in any federal or state
court of competent jurisdiction sitting in the State of Oklahoma
and all courts to which appeals therefrom may be taken (each, a
“Non-Tribal Court”), (ii) the arbitration of Claims as provided
in Section 5(e), and (iii) judicial proceedings before any NonTribal Court or before any court or other forum of the Tribe of
competent jurisdiction (each, a “Tribal Court”) to determine the
arbitrability of such Claim pursuant to this Section 5, or to
enforce, modify, or vacate any arbitration award arising from
such arbitration. The Tribe hereby irrevocably consents to the
jurisdiction and venue of all Non-Tribal Courts and Tribal
Courts.
Exclusivity and Dispute Resolution Agreement (Doc. 29-1) ¶ 5(a).
Merit seizes on the provision’s final sentence, “[t]he Tribe hereby
irrevocably consents to the jurisdiction and venue of all Non-Tribal Courts
and Tribal Courts,” as evidence that the Tribe has completely waived its
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STATEMENT
sovereign immunity. When read in its entirety, however, it is clear that
the terms “tribal court” and “non-tribal court” are defined in specific
terms. In particular, a “non-tribal court” is, by definition, applicable
only to courts located in Oklahoma (i.e., “any federal or state court of
competent jurisdiction sitting in the State of Oklahoma and all courts to
which appeals therefrom may be taken.”). And if, as Merit claims, the Tribe
intended categorically to waive its sovereign immunity, it is difficult to
understand why it should have included it in a provision bearing the
heading, “Limited Waiver of Sovereign Immunity.”
In consenting to
jurisdiction in all “non-tribal courts,” therefore, the Tribe did not waive
sovereign immunity except in Oklahoma.
Merit advances a number of additional arguments, but these are
unavailing. For example, Merit argues that the consent provision in the
exclusivity agreement is permissive, not mandatory. According to Merit,
many circuits have held that whereas a “mandatory forum selection clause has
express language limiting the action to the courts of a specific locale
which is clear, unequivocal and mandatory,” a “permissive forum selection
clause authorizes jurisdiction or venue in a selected forum, but does not
prohibit litigation elsewhere.” Resp. at 6. However, Merit does little to
explain why the agreement’s waiver clause should be regarded as permissive
rather than mandatory. In any case, this is hardly the kind of unambiguous
waiver necessary for a Tribe to consent to suit.
Merit further maintains that “it could be argued that since we are
dealing with an Indian Tribe that does not technically ‘reside’ within any
particular state, the jurisdiction of any federal district court over an
Indian Tribe that waives its sovereign immunity is the same.” Resp. at 5.
“In other words,” Merit explains, “just as two parties cannot contractually
confer jurisdiction to a federal court, there is no case that holds that an
Indian Tribe can contractually limit the jurisdiction of all federal courts
(in favor of one particular federal district) once sovereign immunity has
been waived.” Id. Merit fails to cite a single case in support of this
claim. In fact, case authority runs to the contrary. Cf. Missouri River
Services, Inc. v. Omaha Tribe of Nebraska, 267 F.3d 848, 852 (8th Cir. 2001)
(“Because a waiver of immunity is altogether voluntary on the part of a
tribe, it follows that a tribe may prescribe the terms and conditions on
which it consents to be sued, and the manner in which the suit shall be
conducted. In addition, if a tribe does consent to suit, any conditional
limitation it imposes on that consent must be strictly construed and
applied.”) (quotation marks, citations, and brackets omitted).
Finally, Merit argues that it would “not be fair to Merit or the
federal court system’s integrity to grant this Motion because of the Tribe’s
abuse of the system and disregard for its fundamental obligations of
contract and law.” Pl.’s Resp. at 3.
Nevertheless, the law is clear:
courts have repeatedly affirmed that challenges based on subject-matter
jurisdiction can be raised at any time.
See, e.g., Henderson ex rel.
Henderson v. Shinseki, 131 S. Ct. 1197, 1202 (2011) (“Objections to
subject-matter jurisdiction, however, may be raised at any time. Thus, a
party, after losing at trial, may move to dismiss the case because the trial

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STATEMENT
court lacked subject-matter jurisdiction.”); United States v. Aloysius, 101
Fed. App’x. 947, 949 n.3 (5th Cir. 2004)(although appellant did not move
until 2003 to set aside 1994 order vacating his naturalization, there is no
time limit on an attack of a judgment as void); O’Rourke Bros. Inc. v.
Nesbitt Burns, Inc., 201 F.3d 948, 950 (7th Cir. 2000) (“Rule 60(b)(4) . .
. provides for relief from a judgment if the judgment is void. Such relief
is available at any time.”) (quotation marks omitted).
Notably, while
motions under many of Rule 60(b)’s other subsections must be brought within
a “reasonable time” (not to exceed one year), motions alleging that a
judgement is void under Rule 60(b)(4) are not subject to such a requirement.
See Fed. R. Civ. P. 60(c)(1); see also Charles Alan Wright, Arthur R.
Miller, and Mary Kay Kane, 11 Fed. Prac. & Proc. Civ. § 2862 (2d ed.)
(“[T]here is no time limit on an attack on a judgment as void. The one-year
limit applicable to some Rule 60(b) motions is expressly inapplicable, and
even the requirement that the motion be made within a ‘reasonable time,’
which seems literally to apply to motions under Rule 60(b)(4), cannot be
enforced with regard to this class of motion. A void judgment cannot acquire
validity because of laches on the part of the judgment debtor.”).
In short, the Tribe has shown that the default judgment entered
against it was void for lack of subject-matter jurisdiction. As a result,
the Tribe’s motion to vacate is granted. The case is dismissed.

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