Kumar v. Schildt et al

Filing 24

ORDER: IT IS ORDERED that Defendants' 12 Motion to Dismiss is GRANTED. The Clerk of Court is directed to enter Judgement accordingly. This case will be closed. Signed by Judge Brian Morris on 9/19/2022. (ACC)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION
PARDEEP KUMAR,
Plaintiff,
vs.

CV-22-54-GF-BMM

ORDER

VIOLET SCHILDT and
PATRICK W. SCHILDT
(a/k/a PATRICK W. SCHILDT,
JR.), individually and d/b/a
GLACIER WAY C-STORE, LLC,
DARRYL LACOUNTE, Director of
Bureau of Indian Affairs for the
Department of Interior,
Defendants.

INTRODUCTION
Defendants Patrick W. Schildt and Violet Schildt (collectively “Schildts”)
have filed a Motion to Dismiss for lack of jurisdiction. (Doc. 12.) Plaintiff Pardeep
Kumar (“Kumar”) opposes this motion. (Doc. 16.) The Court held a hearing on this
motion on August 15, 2022. (Doc. 20.)

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FACTUAL AND LEGAL BACKGROUND
Schildts entered into a Contract for Deed (“the Contract”) with Kumar on
March 31, 2020, to sell trust land to Kumar located within the exterior boundaries
of the Blackfeet Reservation. (Doc. 4-1 at 2.) The Contract provided that Kumar
would purchase Schildts’ business—Glacier Way C-Store, LLC (“the Subject
Property”)—including the real estate, inventory, equipment, and supplies therein.
(Id. at 3.)
The Contract provided that Schildts would finance the purchase for the total
amount of $1,100,000. (Id.) Kumar made the required down payment of $50,000,
has paid all monthly installments, and otherwise has complied fully with the
Contract. (Id.) Schildts agreed, in return, to provide for Kumar’s quiet use and
enjoyment of the Subject Property. (Id.)
Kumar has paid $314,000 under the Contract, including the down payment
of $50,000 and monthly installments through May 20, 2022. (Id.) Kumar also has
invested approximately $1,200,000 in the Subject Property via improvements and
inventory. (Id.) Violet Schildt has removed $66,920.02 to date from Kumar’s
account used for food stamp receipts. (Id.)
The Subject Property is held in trust under the provisions of the Act of June
18, 1934 (48 Stat. 984) or the Act of June 26, 1936 (49 Stat. 1967). (Id. at 4.)
These federal laws require Schildts, who are enrolled members of the Blackfeet
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Tribe, to obtain the Secretary of the Interior’s approval for sale of trust land. 25
U.S.C. § 5134. Schildts failed to obtain this approval and the Contract made no
mention of the statutory requirement. (Doc. 4-1 at 4.) Kumar asserts that Schildts
should have been aware of this requirement, as their attorney throughout the sale
previously had been employed as counsel for the Blackfeet Nation. (Id.)
Kumar was unrepresented during the sale proceedings and only inquired
about Schildts’ compliance with the federal regulation several months later in
December 2021. (Id. at 4.) Neither Schildts, nor their counsel, responded to
Kumar’s letters. (Id.)
Schildts entered into two separate sale agreements on May 4, 2021 (“the
Sale Agreements”) with the Blackfeet Tribal Business Council (“the Council”) to
sell the Subject Property to the Council. (Id. at 5.) The Council authorized entry
into the Sale Agreements via Resolution No. 377-2022 for the first sale agreement
and Resolution No. 378-2022 for the second. (Id. at 5–6.) Resolution No. 377-2022
provided for a total purchase price of $7,705,600 and provides that the Council will
provide an earnest money deposit of $700,000, at a time not specified, to be held in
escrow pending closing. (Id.) Resolution No. 378-2022 authorized the Council to
enter into a sale agreement for a total purchase price of $2,246,800. (Id. at 6.) The
corresponding Sale Agreement includes the same terms, except that the amount of
the earnest money deposit is $200,000. (Id.)
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Kumar sent a second inquiry, this time through counsel, on May 27, 2021,
informing Schildts of his intention to file this action and once again requesting
evidence of Schildts’ compliance with applicable regulations. (Id. at 5.) Kumar’s
counsel simultaneously sent letters to the Bureau of Indian Affairs (“BIA”), Rocky
Mountain Regional Office, enclosing a copy of the Contract and requesting that the
BIA confirm that the transaction required the approval of the Secretary and, if so,
determine whether the Secretary approved the transaction. (Id.) Kumar failed to
receive a response to any of these letters. (Id.)
Schildts delivered a letter to Kumar on June 5, 2022, which purported to be a
notice of termination of the Contract and “immediate eviction” from the Subject
Property. Schildts and other individuals allegedly forcibly removed Kumar from
the Subject Property on that same day, including the portion of the Subject
Property in which Kumar resided. (Doc. 4-1 at 6.) The Contract provides that, “[i]n
case of Sellers’ failure to deliver title pursuant hereto, the amount of all payments
made by Purchaser shall be a lien upon said property in favor of Purchaser to
secure the return of said payments to Purchaser, except insofar as there shall exist a
claim against any title insurance.” (Contract for Deed ¶ 14.)
Kumar’s Complaint contains five counts. (Doc. 1.) He seeks declaratory
judgment that, absent approval by the Secretary, Schildts cannot perform their
obligation under the Contract to transfer title to the Subject Property to Kumar. (Id.
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at 10.) Kumar also seeks a declaration that he has a lien on the Subject Property in
the amount of all payments he has made to Schildts to secure the return of such
payments to him, plus interest and attorney’s fees, and that this lien shall attach to
the proceeds payable to Schildts pursuant to the Sale Agreements. (Id.) Kumar also
alleges breach of contract and unjust enrichment. Kumar asserts that these two
claims justify imposing a constructive trust on the earnest money the Council paid
to Schildts under the Sales Agreements. (Id. at 11–12.)
Kumar’s also seeks a preliminary injunction to prevent Schildts from taking
possession of any of the earnest money advanced by the Council pending
resolution of Plaintiff’s claim for imposition of a constructive trust on such funds.
(Doc. 1 at 12.) Finally, Kumar claims that Schildts’ actions violated 15 U.S.C. § 1
and § 3 of the Sherman Antitrust Act. (Id. at 13.)
LEGAL STANDARDS
Schildts move to dismiss for lack of subject-matter jurisdiction. Fed. R. Civ.
P. 12(b)(1). A party invoking the federal court’s jurisdiction has the burden of
proving the actual existence of subject matter jurisdiction. Thompson v. McCombe,
99 F.3d 352, 353 (9th Cir. 1996). In reviewing a facial attack, a court must take as
true the allegations in the plaintiff’s complaint. Wolfe v. Strankman, 392 F.3d 358,
362 (9th Cir. 2004).

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DISCUSSION
Schildts move to dismiss for failure to state a claim and lack of jurisdiction,
arguing that Kumar fails to plead a basis for federal jurisdiction through his
deficient antitrust claims. (Doc. 13.) District courts shall have original jurisdiction
of all civil actions arising under the Constitution, laws, or treaties of the United
States. 28 U.S.C. § 1331. Kumar originally pled federal question jurisdiction over
his Sherman Antitrust Act Claims. (Doc. 1 at 2 (“This Court has jurisdiction of this
matter under . . . 15 USC § 1 & 3).) Kumar conceded in his response to Schildts’
motion that he insufficiently pled the elements of his antitrust claims. (Doc. 16 at
13.)
Kumar argues for the first time in his response brief to Schildts’ motion that
his breach of contract claim and unjust enrichment claim involve questions of
federal law pursuant to 28 U.S.C. § 1353. (Doc. 16 at 4.) This statute provides that
district courts shall have original jurisdiction of any civil action involving the right
of any person, in whole or in part of Indian blood or descent, to any allotment of
land under any Act of Congress or treaty. 28 U.S.C. § 1353.
Kumar asserts that his claims invoke Section 1353 jurisdiction because they
involve the rights of Schildts, who are “of Indian blood or descent,” to the Subject
Property, which is an allotment of treaty land. (Doc. 16 at 5–6.) Schildts dispute
Kumar’s reading of Section 1353 and argue that, to bring a suit under Section
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1353, the plaintiff must be “in whole or in part of Indian blood or descent.” (Doc.
17 at 3.) Kumar does not assert that he is of Indian blood or descent within the
meaning of Section 1353.
The text of Section 1353, on its face, fails to address whether the party
bringing suit must be a person “of Indian blood or descent.” See 28 U.S.C. § 1353.
The legislative intent of Section 1353 supports Schildts’ position, however, that
Section 1353 jurisdiction only covers suits brought by people of Indian blood or
descent. Section 1353 presents a recodification of 25 U.S.C. § 345. Scholder v.
United States, 428 F.2d 1123, 1126 (9th Cir. 1970). The Ninth Circuit has
determined that much of the analysis of Section 345 applies with equal force to
Section 1353. See Jachetta v. United States, 653 F.3d 898, 906 (9th Cir. 2011)
(determining that courts “need not analyze [Section 1353] separately” from Section
345).
Section 345, also known as the General Allotment Act, “authorizes Indians
to commence and prosecute actions ‘in relation to their right’ to land under any
allotment act or under any grant made by Congress.” Arenas v. United States, 322
U.S. 419, 429 (1944). The suits contemplated by Section 345 were “designed to
protect or preserve an allotment once issued” to an Indian person. Scholder v.
United States, 428 F.2d 1123, 1126 (9th Cir. 1970). Section 345 and, subsequently,

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Section 1353, intends to protect the land interests of Indian persons and their
descendants. United States v. Pierce, 235 F.2d 885, 888 (9th Cir. 1956).
Case law further supports a construction of Section 1353 that limits its
jurisdiction to cases brought by persons of Indian blood or descent to determine
their right to an allotment. The U.S. Supreme Court in Mottaz confirmed that
“federal courts may have general subject-matter jurisdiction over claims to quiet
title to allotments brought by Indians.” United States v. Mottaz, 476 U.S. 834, 846
(1986) (emphasis added). The Ninth Circuit mirrored this language in K2 America,
a suit between two non-Indian Montana corporations regarding oil and gas leases
on allotment land. K2 Am. Corp. v. Roland Oil & Gas, LLC, 653 F.3d 1024, 1026
(9th Cir. 2011). K2 America held that Section 1353 did not “authorize suit by state
corporations such as K2,” because Section 1353 “concern[s] suits by persons who
are ‘in whole or in part of Indian blood or descent.’” Id. at 1033 (emphasis added)
(citing United States v. Preston, 352 F.2d 352, 355–56 (9th Cir. 1965)).
Kumar argues that K2 America proves factually distinguishable from his
claims because, in K2 America, “neither company was an Indian party,” whereas
here “Indians are party to this case” because Schildts are Blackfeet tribal members.
(Doc. 16 at 6.) Courts have been similarly dismissive, however, when it comes to
claims brought by non-Indian parties against Indian defendants. Preston involved a
claim by non-Indian plaintiffs against the United States and an individual
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defendant who was an enrolled tribal member of the Agua Caliente Band of
Mission Indians. Preston, 352 F.2d at 353. After losing a prior federal action
seeking allotment of reservation lands, Agua Caliente tribal members encouraged
plaintiffs to bring a new case. Id. Despite the plaintiffs’ alignment with tribal
interests and close coordination with the tribe, the Ninth Circuit determined that
Section 345 did not confer jurisdiction because it had “no relation whatever to the
action[] brought” by non-Indian plaintiffs. Id. at 355. Preston affirmed that Section
1353 jurisdiction only extends to cases “brought by persons who are in whole or in
part of Indian blood or descent who are entitled to an allotment of land.” Id.
The Eastern District of Washington in Grondal v. United States similarly
dismissed the cross-claims of non-Indian party Wapato Heritage against the federal
government and the Colville Tribes over a dispute regarding an allotment interest
Wapato Heritage inherited from a person of Indian blood or descent. 513 F. Supp.
3d 1262, 1283 (E.D. Wash. 2021). The court based its dismissal on the fact that
“Wapato Heritage is not a person ‘in whole or in part of Indian blood or descent.’”
Id. (citing Preston, 352 F.2d at 355–356). Grondal repeated Preston’s holding
“that § 365 confers no federal jurisdiction over suit by non-Indians.” Id.
Courts have dismissed claims for lack of jurisdiction under Section 1353
even where Indian corporations or non-governmental organizations initiated the
suit. In San Xavier Development Authority v. Charles, the Ninth Circuit held that
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the plaintiff could not invoke Section 1353 jurisdiction despite its status as a nonprofit corporation chartered by the federally recognized San Xavier tribe. 237 F.3d
1149, 1150–51, 1153 (9th Cir. 2001). The court in San Xavier confirmed that a
“non-Indian party to a contract does not have the right to employ statutory
remedies enacted to protect Indian tribes and their members.” Id. at 1153.
Kumar attempts to use Section 1353 not for its intended purpose, but rather
as a method of getting his common law claims into federal court. Congress
intended Section 1353 to protect the land rights of Indian persons. Pierce, 235 F.2d
at 888. Permitting non-Indian plaintiffs challenging Indian persons’ land rights to
avail themselves of Section 1353 jurisdiction would defy Congressional intent and
undermine the statute’s remedial goals. Section 1353 cannot provide a basis for
Kumar’s claims as a non-Indian. San Xavier, 237 F.3d at 1153.
Federal-question jurisdiction may extend to some claims by non-Indians
against Indian persons. Federal-question jurisdiction requires a real “controversy
respecting [a federal law’s] validity, construction, or effect.” Grable & Sons Metal
Prods. v. Darue Eng’g & Mfg., 545 U.S. 308, 315 (2005). Grable emphasized that
requiring an “actual dispute about federal law was ‘especially’ important in ‘suit[s]
involving rights to land acquired under a law of the United States.’” Id. at 322 n. 3
(quoting Shulthis v. McDougal, 225 U.S. 561, 569 (1912)). The U.S. Supreme
Court reasoned that without this requirement, every lawsuit to establish or contest
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title in the central and western United States would arise under federal law. Grable,
545 U.S. at 322 n. 3. The Ninth Circuit in K2 America similarly affirmed that
“[t]he mere fact that the Secretary of the Interior must approve oil and gas leases
does not raise a federal question.” 653 F.3d at 1032.
A district court found federal-question jurisdiction in a recent case brought
by a non-Indian property owner against the state of Washington and the
Swinomish Indian Tribal Community (“Swinomish Tribe”). Carney v. Washington
et al., 551 F. Supp. 3d 1042, 1046–47 (W.D. Wash. 2021). Carney concerned a
dispute over a strip of Swinomish reservation land surrounded by tidelands. Id. at
1046–47. These tidelands constitute tribal trust land. Id. at 1046.
The district court in Carney found federal-question jurisdiction because the
plaintiff’s claims “necessarily depend[ed] on the resolution of substantial federal
issues.” Id. at 1049. Determining the plaintiff’s property boundary required
pinpointing the location and scope of the tidelands. Id. at 1050. The tidelands at
issue in Carney implicated Swonomish Tribe’s unceded aboriginal rights protected
by treaty, an executive order, and federal common law. Id. at 1052. The district
court concluded that Swonomish Tribe’s “aboriginal right to the tidelands qualified
as ‘an important issue of federal law that sensibly belongs in a federal court.’” Id.
at 1051 (quoting Grable, 545 U.S. at 315).

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Carney’s substantial federal issues are not present here. Carney, 551 F.
Supp. 3d. at 1052. Kumar’s claims against Schildts include breach of contract,
unjust enrichment, and conspiracy in restraint of trade. (Doc. 1 at 9–15.) Kumar
also seeks a declaratory judgment that Schildts were required to obtain the
Secretary of the Interior’s signature. (Id. at 15.) As in K2 America, the “mere fact
that the Secretary of the Interior must approve” the sale of trust lands does not raise
a federal question. 653 F.3d at 1032. Kumar does not contest the boundaries or size
of tribal trust lands or otherwise challenge the “validity, construction, or effect” of
a treaty, executive order, or other federal law. Grable, 545 U.S. at 315. Ultimately,
none of Kumar’s claims raises a substantial federal question.
Tribal court remains available as an appropriate forum in which Kumar may
seek relief. K2 America, 653 F.3d at 1033. Kumar can seek review in federal court
once he has exhausted his tribal court remedies. Takeda Pharm. Am., Inc. v.
Connelly, No. CV 14-50-GF-BMM, 2015 WL 10985374, *2 (D. Mont. 2015)
(citing Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 20 (1987)).
ORDER
Accordingly, IT IS ORDERED that Defendants’ Motion to Dismiss (Doc.
12) is GRANTED. The Clerk of Court is directed to enter Judgement accordingly.
This case will be closed.

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Dated this 19th day of September, 2022.

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