Otter Tail Power Company et al v. Leech Lake Band of Ojibwe et al
Filing
34
MEMORANDUM OPINION AND ORDER. 1. The Utilities' Motion for Temporary Restraining Order and Immediate Preliminary Injunctive Relief (Doc. No. 13 ) is GRANTED. a. The Tribe shall cease and desist from asserting prescriptive and permitting jurisdi ction over the Project and discontinue with any Tribal Court action asserting any prescriptive and permitting jurisdiction over the Project or otherwise interfering with the routing and construction of the transmission line.(Written Opinion). Signed by Judge Donovan W. Frank on 6/22/2011. (BJS)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Otter Tail Power Company;
Minnetonka Power Cooperative, Inc.;
ALLETE, Inc. d/b/a, Minnesota Power;
Northern States Power Company,
a Minnesota Corporation; and Great River
Energy,
Civil No. 11-1070 (DWF/LIB)
Plaintiffs,
v.
MEMORANDUM
OPINION AND ORDER
Leech Lake Band of Ojibwe, its
Reservation Business Committee, and
Reservation Business Committee Members
Arthur “Archie” LaRose, Eugene “Ribs”
Whitebird, Robbie Howe-Bebeau and Steve
White in their Official Capacities as Reservation
Committee Members,
Defendants.
________________________________________________________________________
Kevin C. Quigley, Esq., Hamilton Quigley & Twait PLC; and Michael C. Krikava, Esq.,
Samuel L. Hanson, Esq., and Thomas Erik Bailey, Esq., Briggs & Morgan, PA, counsel
for Plaintiffs.
Zenas Baer, Esq., Zenas Baer & Associates, counsel for Defendants.
________________________________________________________________________
INTRODUCTION
This matter is before the Court on a Motion for Temporary Restraining Order and
Immediate Preliminary Injunctive Relief brought by Plaintiffs (the “Utilities”). The
Utilities seek a declaration that Defendants Leech Lake Band of Ojibwe, its Reservation
Business Committee, and Reservation Business Committee Members Arthur “Archie”
LaRose, Eugene “Ribs” Whitebird, Robbie Howe-Bebeau and Steve White (collectively,
the “Tribe”) lack the authority to regulate or prohibit the Utilities’ high-voltage
transmission line construction project from Bemidji to Grand Rapids, Minnesota (the
“Project”), and therefore that the Utilities are not required to obtain the Tribe’s consent to
proceed with the Project. For the reasons set forth below, the Utilities’ motion is granted.
BACKGROUND
The Utilities provide electric service in Minnesota and various regions in other
nearby states. (Compl. ¶¶ 1-5.) The Reservation Business Committee (“Tribal Council”)
is the governing body of the Leech Lake Band of Ojibwe (“LLBO”), one of six member
Bands of the Minnesota Chippewa Tribe, a federally recognized Indian tribe pursuant to
25 U.S.C. § 479a-1. (Compl. ¶ 6.) Arthur “Archie” LaRose is the Chair of the Tribal
Council, and District Representatives Eugene “Ribs” Whitebird, Robbie Howe-Bebeau,
and Steve White are members of the Tribal Council. (Id. ¶ 7.)
In July 2009, the Minnesota Public Utilities Commission (“MPUC”) granted a
certificate of need for the Project, explaining that the Project is necessary to restore
reliable utility services to the region. (Aff. of Thomas Erik Bailey (“Bailey Aff.”) ¶ 8,
Ex. C at 4-8.)
In September 2010, the Tribe and the Utilities entered into a Settlement
Agreement. The Settlement Agreement provides, in part:
WHEREAS, Utilities have received a certificate of need from the
Minnesota Public Utilities Commission (“MPUC”) to build a 230 kV
transmission line between Bemidji, Minnesota and Grand Rapids,
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Minnesota (the “Project”) to address electric demand growth and system
reliability needs in the Bemidji and Cass Lake areas;
WHEREAS, Utilities are proposing to locate the Project within
Applicants’ Route, which is also referred to as Route 4, that bisects the
Reservation but does not cross on or over tribal trust, allottee, or private fee
lands of the Band;
WHEREAS, Utilities recognize the Band’s position that it retains
hunting and gathering rights pursuant to treaty on lands within the
Chippewa National Forest (“CNF”) other than tribal trust, allottee, and
private fee lands of the Band;
WHEREAS, the Parties differ on what if any impacts the Project
would have on tribal trust, allottee, and private fee lands of the Band, and
on lands within the CNF on which the Band may retain hunting and
gathering rights by treaty, and also differ on the value to place on any such
impacts; and
WHEREAS, the Parties recognize that the costs incurred by
Utilities in connection with this Agreement are reasonable and prudent
costs of the Project that are necessary to gain the Band’s voluntary
agreement to the Project’s construction, operation, and associated
mitigation measures, and the Parties seek through this Agreement to avoid
the considerable additional cost in time and money involved in resolving
their differences instead through litigation in regulatory and/or court
proceedings.
(Aff. of Zenas Baer in Supp. of Mot. to Dismiss (“Baer Aff. I”) ¶3(a) at Ex. 1 at 50-60.)1
The Settlement Agreement also provides that it “is a settlement of potential claims that
the Utilities dispute and therefore does not establish a consensual relationship between
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While the Utilities have consistently maintained that the Project does not cross on
or over tribal trust land, the Tribe contends that the Utilities have recognized the Tribe’s
position that it has hunting and gathering treaty rights that extend beyond tribal trust land
within the Reservation. The Tribe contends that the Settlement Agreement was
negotiated to compensate the Tribe for harm caused by the Project on such rights. The
Utilities contend that they thought they had a “nonconsensual” jurisdictional dispute
settlement, and that they entered into the Settlement Agreement to avoid litigation.
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the Band and Utilities, nor directly impact the political integrity, economic security, or
health and welfare of the Band. (Id. at 53, ¶ 7.)
In November 2010, the MPUC issued a high voltage transmission line route
permit for the placement of the Project (“Route Permit”). (Bailey Aff. ¶ 9, Ex. D.) The
approved route bisects the historical eastern and western exterior boundaries of the Leech
Lake Reservation (the “Reservation”), but does not cross over any tribal trust lands of the
LLBO or the Minnesota Chippewa Tribe. (Bailey Aff. ¶ 9, Ex. D at 60-61 (¶¶ 102-106).)
The Project was subject to environmental review by both state and federal agencies,
which was completed in September 2010. (Bailey Aff. ¶ 4.) Construction is scheduled to
begin in June or July of 2011. (Id. ¶ 5.)
In January 2011, the Bureau of Indian Affairs confirmed that the Project’s route
for the transmission lines does not affect any Tribal/Allotted Trust Lands within the
exterior Boundaries of the Leech Lake Reservation. (Bailey Aff. ¶ 10, Ex. E.) In March
2011, the Chief of Staff of the Rural Utilities Service (“RUS”) sent a letter to
Arthur “Archie” LaRose in response to the Tribe’s request that RUS cease further action
to fund the Project because RUS did not adequately consult with the Tribe. (Id. ¶ 11,
Ex. F.) In the letter, RUS rejected the request and indicated that it believed that RUS had
engaged in meaningful consultation. (Id.) The Tribe also requested that the United
States Department of Agriculture, Forest Service, Chippewa National Forest office
(“CNF”) revoke the easement. The CNF declined the request and explained that “there is
no legal basis for suspension, revocation, or immediate suspension of the easement.” (Id.
¶ 12, Ex. G.) In March 2011, the Tribe filed a petition with the MPUC to revoke the
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Route Permit, claiming that the Tribe has regulatory authority over the Utilities and that
the Utilities are required to obtain the Tribe’s consent to locate the transmission line
within the historic boundaries of the Reservation. (“Baer Aff. I ¶ 5, Ex. E.) This petition
is pending before the MPUC.
On or about April 25, 2011, the Utilities commenced this action in response to the
Tribe’s petition before the MPUC. The Utilities assert a single count for declaratory
judgment. Specifically, the Utilities seek a declaration (1) that the Utilities are not
required to obtain the LLBO’s consent, through the Tribal Counsel or otherwise, to locate
the Project within the historic boundaries of the Reservation when the Project does not
cross on or over or impact Tribal trust or allottee land; and (2) that the LLBO’s assertion
of regulatory authority over the Project constitutes an illegal restraint on alienation of
non-Indian fee simple lands within the historic exterior boundaries of the Reservation.
(Compl. ¶¶ 38-39.)
In response to the Complaint, the Tribe filed a Motion to Dismiss for Lack of
Subject Matter Jurisdiction, Failure to State a Claim Upon Which Relief Can Be Granted.
That motion is scheduled to be heard by the Court on September 16, 2011.2 The Tribe
2
The Tribe argues that the LLBO is a sovereign nation and has not consented to this
suit and therefore that this action must be dismissed for failure to state a claim and for
lack of subject matter jurisdiction. In its opposition to this motion, the Tribe offers only a
brief argument without analysis and fails to demonstrate that this suit—which seeks
prospective injunctive relief to remedy the alleged unlawful exercise of tribal court
jurisdiction—violates principles of sovereign immunity. See, e.g., Big Horn County
Elect. Coop., Inc. v. Adams, 219 F.3d 944, 954 (9th Cir. 2000) (“[S]uits for prospective
injunctive relief are permissible against tribal officers under the Ex Parte Young
framework.”). The Court will take up the Tribe’s sovereign immunity arguments on its
motion to dismiss.
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also served the Utilities with a Tribal Court complaint. (Bailey Aff. ¶ 6, Ex. B.) In the
Tribal Court complaint, the Tribe seeks to have a Tribal Court assert both adjudicatory
and regulatory authority over the Utilities and seeks a declaration that the Tribe’s consent
is required before the Utilities are authorized to cross the Tribe’s historic boundaries. (Id.
¶ 62.)
DISCUSSION
I.
Legal Standard
Under Eighth Circuit precedent, a preliminary injunction may be granted only if
the moving party can demonstrate: (1) a likelihood of success on the merits; (2) that the
movant will suffer irreparable harm absent the restraining order; (3) that the balance of
harms favors the movant; and (4) that the public interest favors the movant. See
Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981). None of the
factors by itself is determinative; rather, in each case, the factors must be balanced to
determine whether they tilt toward or away from granting injunctive relief. See West
Pub. Co. v. Mead Data Cent., Inc., 799 F.2d 1219, 1222 (8th Cir. 1986). The party
requesting the injunctive relief bears the “complete burden” of proving all of the factors
listed above. Gelco Corp. v. Coniston Partners, 811 F.2d 414, 418 (8th Cir. 1987).
II.
Likelihood of Success on the Merits
The first Dataphase factor requires that the movant establish a substantial
probability of success on the merits of its claim. See Dataphase, 640 F.2d at 114. The
Utilities assert that they will prevail on their claim that the Tribe has no regulatory
jurisdiction over the Project based on federal law under Montana v. United States, 450
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U.S. 544 (1981) and its progeny.
A.
The Tribe’s Regulatory Authority
The parties agree that the Tribe’s regulatory authority over nonmembers, such as
the Utilities, is governed by the principles set forth in Montana, which the Supreme Court
has called the “pathmarking case” on the subject. See Nevada v. Hicks, 533 U.S. 353,
358 (2001) (citing Strate v. A-1 Contractors, 520 U.S. 438, 445 (1997)). Under
Montana, the civil jurisdiction of a tribal court generally does not extend to the activities
of nonmembers of the tribe. Montana, 450 U.S. at 565. In Montana, the Supreme Court
explained with respect to nonmembers on non-Indian fee land that the “exercise of tribal
power beyond what is necessary to protect tribal self-government or to control internal
relations is inconsistent with the dependent status of the tribes, and so cannot survive
without express congressional delegation.” Id. at 564. The Supreme Court also noted two
possible exceptions, namely that a tribe may (1) regulate the activities of nonmembers
who enter into consensual relationships with the tribe or its members through commercial
dealing, contracts, leases, or other arrangements; or (2) retain inherent power to exercise
civil authority over the conduct of non-Indians on fee lands within its reservation when
the conduct threatens or has some direct effect upon the political integrity, economic
security, or health or welfare of the tribe. 450 U.S. at 565-66. In Plains Commerce Bank
v. Long Family Land and Cattle Co., 554 U.S. 316 (2008), the Supreme Court explained
that because “efforts by a tribe to regulate nonmembers . . . are presumptively invalid,” a
tribe bears the burden of showing that its assertion of jurisdiction falls within one of the
Montana exceptions. 554 U.S. at 330 (internal quotations omitted). The Supreme Court
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also noted that the exceptions to Montana are narrow ones and “cannot be construed in a
manner that would ‘swallow the rule.’” Id. (quotation omitted).
Here, it is undisputed that the Utilities are nonmembers of the Tribe. Moreover,
on the record before it, the Court concludes that the Utilities are likely to prevail in
showing that the route of the Project’s transmission line does not touch upon or cross any
tribal-owned or tribal-allottee trust lands.3 Therefore, in order for the Tribe to exercise
any regulatory or adjudicatory jurisdiction over the Utilities, they must demonstrate that
one of the Montana exceptions apply. See, e.g., Strate v. A-1 Contractors, 520 U.S. 438,
453 (1997) (noting that as to nonmembers, a tribe’s adjudicatory authority is at most as
broad as its regulatory authority).
The Tribe argues that it meets both of the exceptions under Montana and may
exercise jurisdiction over the Utilities. In particular, the Tribe argues that the Utilities
entered into a consensual relationship with the Tribe by requesting a Route Permit and
signing the Settlement Agreement. In addition, the Tribe argues that the treaty rights
bargained away in the Settlement Agreement are rights that threaten or directly affect the
3
The Tribe attests that the route of the Project’s transmission line does crossover,
impact, and touch upon “tribally owned or tribal member lands and trust lands within the
historic exterior boundaries of the Reservation.” (Aff. of Levi Brown (“Brown Aff.”)
¶¶ 7, 8.) In support, the Tribe submits evidence that the Project’s route will cross lands
owned by Tribal members. (Id.) The attached exhibits demonstrate that some tribal
members may individually hold a fee simple interest in some parcels of land on the
Project’s route. (Id.; Supp. Aff. of Erik Bailey (“Bailey Supp. Aff.”) ¶¶ 5-9, Exs. 1-5.)
The Tribe, however, does not demonstrate how it could properly exercise the power to
exclude over these parcels, and the authority cited by the Utilities supports the
proposition that the Tribe cannot exercise such power. The Supreme Court has rejected
tribal authority to regulate nonmembers’ activities on land over which the tribe could not
“assert a landowner’s right to occupy and exclude.” Nevada, 533 U.S. at 359-60.
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Tribe’s political integrity, economic security, health, or welfare. In support of both of its
arguments, the Tribe relies heavily on the parties’ execution of the Settlement
Agreement.
After reviewing the record and the relevant authority, the Court concludes that the
Utilities are likely to prevail in demonstrating that the Tribe has no regulatory jurisdiction
over the Project based on federal law under Montana and that the Tribe’s reliance on the
Settlement Agreement does not demonstrate the existence of Tribal jurisdiction. First,
the Tribe has repeatedly and consistently claimed that the Settlement Agreement is null
and void and without any legal effect. (Aff. of Zenas Baer Opposing TRO (“Baer Aff.
II”) ¶ 1, Ex. 1 at 1 (“The document you call a ‘settlement agreement’ is merely ink on
paper, not an agreement.”); at 5 (“Return to Sender – no agreement – come to the
table.”); Bailey Aff. ¶ 6, Ex. B at ¶¶ 66-69 (Trial Court Compl.); Defs.’ Mem. in Supp. of
Mot. to Dismiss (Doc. No. 8) at 6; Supp. Bailey Aff. ¶ 10, Ex. 6 (MPUC Transcript) at 11
(“[T]here’s no dispute on the tribe’s standpoint, it was never authorized.”) and 19 (“the
settlement agreement is null and void”). Based on these consistent representations, the
Court declines to allow the Tribe to rely on the Settlement Agreement to form the basis of
an alleged consensual relationship with the Utilities.4 Second, even if the Tribe had not
consistently denied the validity of the Settlement Agreement, the Settlement Agreement
expressly states that it cannot serve as a basis for a consensual relationship between the
4
Moreover, at most, the Settlement Agreement reflects the parties’ desire to settle
disputed claims (including a dispute over jurisdiction) to avoid litigation. It does not
necessarily follow that by agreeing to settle a dispute with the Tribe, the Utilities entered
into a consensual relationship.
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Tribe and the Utilities. (Baer Aff. I. ¶ 3, Ex. C at 50-60, ¶ 7.) Finally, the record
demonstrates a strong likelihood that the Utilities will be able to demonstrate that it did
not directly enter into any commercial dealings or contracts with the Tribe in connection
with the transmission line. The Tribe has not pointed to any evidence in the record that
would demonstrate otherwise. Instead, it appears that any easement rights, construction
contracts, or other agreements related to the construction of the Project are between the
Utilities and federal or state agencies or with private land owners holding fee title to nonIndian lands within the Project Route.
The Tribe also argues that it meets the second Montana exception. The Court
disagrees. The second Montana exception applies when non-Indians’ conduct menaces
the political integrity, economic security, or the health or welfare of the tribe. Montana,
450 U.S. at 566. The conduct must do more than injure the tribe—it must “imperil the
subsistence” of the tribal community. Id. Here, the Tribe asserts that the Utilities’
conduct in constructing the Project will disrupt its hunting, fishing, and gathering rights.
While the record makes clear that there will be some impact on these rights, the record
also demonstrates that the impacts will be limited in scope and duration. The Tribe has
failed to demonstrate how, under the relevant authority, the impairment of these rights via
the construction of the Project will rise to a level of disruption that will imperil the
subsistence of the Tribe’s community.
Based on the above, the Court holds that the Tribe has not met its burden of
demonstrating that either of the Montana exceptions apply.
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B.
Exhaustion of Tribal Remedies
The Tribe argues that the Utilities must exhaust their tribal remedies before filing
suit in this Court. As discussed above, it is likely that the Tribe lacks jurisdiction because
the Tribe failed to demonstrate that a Montana exception applies in this case.
Accordingly, adherence to the tribal exhaustion doctrine would serve no purpose other
than delay and therefore does not apply. Strate, 520 U.S. at 459, n.14; Nevada, 533 U.S.
at 359-60.
C.
Judicial Estoppel and Unclean Hands
The Tribe asserts that the Utilities should be judicially estopped from arguing that
no Tribal permission is required for the Project because the Utilities have agreed that they
must obtain permission and compensate the Tribe for impacts to their treaty rights caused
by the Project in previous filings with the Public Utilities Commissions. In the same
vein, the Tribe argues that the Utilities have acquiesced in the understanding that some
Tribal permission was required by entering into the Settlement Agreement, and under the
doctrine of unclean hands, cannot now claim that they had no obligation to obtain
permission to cross Reservation boundaries.
The Court concludes that the Utilities are not barred by either judicial estoppel or
the doctrine of unclean hands from asserting that no Tribal permission is required for the
Project. The record demonstrates, and the Tribe acknowledges, that the Utilities have
consistently taken the position that because the project avoids crossing on or over tribal
trust land, no Tribal permission is required. That the Utilities entered into the Settlement
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Agreement (which the Tribe has consistently maintained is null and void) does not alter
that position.
For the above reasons, the Court determines that the Utilities are likely to succeed
in demonstrating that federal law precludes the Tribe from asserting any civil authority
over the Utilities and the Project. Thus it is also likely that the Utilities will succeed on
the merits of their claim for a declaration that the Tribe lacks regulatory jurisdiction over
the Utilities’ transmission line activities at issue here. Accordingly, this factor supports
granting injunctive relief.
III.
Irreparable Harm
The Utilities must establish that irreparable harm will result if injunctive relief is
not granted and that such harm will not be compensable by money damages. See
Packard Elevator v. I.C.C., 782 F.2d 112, 115 (8th Cir. 1986). A showing of speculative
harm is insufficient to meet this burden. Id. Here, the record establishes that the Project
is necessary to restore reliable utility services to the region. Construction is scheduled to
begin this summer and the Project has a 2012 deadline for completion. Permitting the
Tribe to assert authority over the Utilities with respect to the Project would likely result
in delays or stoppages, which would ultimately affect the Utilities’ ability to meet the
needs of its electric service customers in the area. Thus, the Court concludes that the
Utilities have demonstrated that they will suffer irreparable harm absent an injunction.
IV.
Balance of Harms and Public Interest
The Court concludes that any potential harm to the Utilities in not granting their
request for injunctive relief outweighs any purported harm to the Tribe. Moreover,
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granting injunctive relief in this action would serve the public interest, as the public has
an interest in upholding established federal law, ensuring uniformity in state and federal
regulatory processes for approving utility lines not located on tribal lands, and in the
timely completion of the Project.
CONCLUSION
The Court continues to believe that it would be in the best interest of the parties to
resolve this matter without further litigation and encourages the parties to continue in its
attempts to do so. The Court is prepared to order a settlement conference with Magistrate
Judge Leo I. Brisbois if the parties feel it would serve the interest of all concerned.
Based on the files, records, and proceedings herein, and for the reasons set forth
above, IT IS ORDERED that:
1.
The Utilities’ Motion for Temporary Restraining Order and Immediate
Preliminary Injunctive Relief (Doc. No. [13]) is GRANTED.
a.
The Tribe shall cease and desist from asserting prescriptive
and permitting jurisdiction over the Project and discontinue with any Tribal
Court action asserting any prescriptive and permitting jurisdiction over the
Project or otherwise interfering with the routing and construction of the
transmission line.
Dated: June 22, 2011
s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
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