Kodiak Oil & Gas (USA) Inc. v. Burr et al
Filing
68
ORDER by Chief Judge Daniel L. Hovland granting 29 Motion for Preliminary Injunction; denying 44 Motion to Dismiss; denying 52 Motion to Dismiss; granting 58 Motion for Preliminary Injunction. (RLB)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
Kodiak Oil & Gas (USA) Inc., now known )
as Whiting Resources Corporation and
)
HRC Operating, LLC,
)
)
Plaintiffs,
)
)
vs.
)
)
Jolene Burr, Ted Lone Fight, Georgianna )
Danks, Edward S. Danks, and Mary
)
Seaworth, in her capacity as Acting Chief )
Judge of the Fort Berthold District Court, )
)
Defendants.
)
)
)
Plaintiff,
)
)
vs.
)
)
Mary Seaworth, in Her Capacity as Acting )
Chief Judge of the Three Affiliated Tribes )
District Court of the Forth Berthold Indian )
Reservation, Yvette Falcon, in her capacity )
As Court Clerk/Consultant of the Three
)
Affiliated Tribes District Court of the Fort )
Berthold Indian Reservation, Jolene Burr, )
Ted Lone Fight, Georgianna Danks, and
)
Edward S. Danks,
)
)
Defendants.
)
ORDER GRANTING PLAINTIFFS’
MOTIONS FOR PRELIMINARY
INJUNCTION AND DENYING
DEFENDANTS’ MOTIONS TO
DISMISS
Case No. 4:14-cv-085
EOG Resources, Inc.,
Case No. 4:14-cv-087
Before the Court are three separate motions for preliminary injunctive relief filed by
Kodiak Oil & Gas (USA), Inc., now known as Whiting Resources Corporation, HRC Operating,
LLC, and EOG Resources, Inc. See Docket Nos. 29, 58, (Case No. 4:14-cv-085) and 26 (Case
No. 4:14-cv-087).1 The motions have been fully briefed by the parties and a hearing on the motions
was held on March 13, 2018, in Bismarck, North Dakota. See Docket No. 67. Also before the
Court are several motions to dismiss the complaints of Kodiak Oil, HRC Operating, and EOG
Resources (“Plaintiffs”). See Docket Nos. 44, 52 (Case No. 4:14-cv-085) and 31 (Case No. 4:14cv-087). For the reasons set forth below, the Plaintiffs’ motions for preliminary injunction (Docket
Nos. 29 & 58 (Case No. 4:14-cv-085) and 26 (Case No. 4:14-cv-087)) are granted and the motions
to dismiss the Plaintiffs’ complaints (Docket Nos. 44, 52 (Case No. 4:14-cv-085) and 31 (Case
No. 4:14-cv-087)) are denied.
I.
BACKGROUND
On July 29, 2014, Kodiak Oil & Gas (USA), Inc., now known as Whiting Resources
Corporation (“Kodiak Oil”), filed a complaint against Defendants Jolene Burr, Ted Lone Fight,
Georgianna Danks, Edward S. Danks, and Judge Diane Johnson, in her capacity as the Chief Judge
of the Fort Berthold District Court, seeking a declaration that the Fort Berthold Tribal Court
(“Tribal Court”) lacks jurisdiction over a suit filed by Defendants Jolene Burr, Ted Lone Fight, as
well as Georgianna Danks and Edward S. Danks2 in Tribal Court against Kodiak Oil and others.3
In the underlying Tribal Court action, the Tribal Court Plaintiffs seek to recover royalties pursuant
to an Oil & Gas Mining Lease for Kodiak and others’ improper flaring of natural gas associated
Unless otherwise specified, when referring to docket entries related to Kodiak Oil and/or HRC Operating’s claims
for declaratory and injunctive relief, such docket entries are found in Case No. 4:14-cv-085. Similarly, when
referring to docket entries related to EOG Resources’ claims, such docket entries are located in Case No. 4:14-cv087, unless otherwise specified.
1
2
In reference to the action filed in Tribal Court, the Court will refer to Jolene Burr, Ted Lone Fight, Georgianna
Danks, and Edward S. Danks collectively as “Tribal Court Plaintiffs.”
Kodiak Oil filed a “First Amended Complaint for Declaratory and Injunctive Relief” with this Court on February
2, 2015. See Docket No. 17.
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2
with oil wells. Specifically, the Tribal Court Plaintiffs allege they are enrolled members of the
Three Affiliated Tribe, owning mineral interests “within the exterior boundaries” of the Fort
Berthold Indian Reservation. See Docket No. 27-1 (Case No. 4:14-cv-087). In their second
amended complaint, the Tribal Court Plaintiffs allege they entered into a mineral lease – “OIL
AND GAS MINING LEASE – ALLOTTED INDIAN LANDS” – with Kodiak Oil and others,
and Kodiak and other oil and gas producers breached paragraph 3(f) of the mineral lease. See id.
On May 4, 2015, Magistrate Judge Charles S. Miller, Jr. ordered the federal court action brought
by Kodiak Oil stayed upon agreement of the parties, “pending further action by the tribal court.”
See Docket No. 25.
EOG Resources, Inc. (“EOG Resources”) also filed a complaint in this Court against Jolene
Burr, Ted Lone Fight, Georgianna Danks, Edward S. Danks, and Judge Diane Johnson, in her
capacity as the Chief Judge of the Fort Berthold District Court, as well as Yvette Falcon,4 in her
capacity as the Court Clerk/Consultant of the Three Affiliated Tribes District Court of the Fort
Berthold Indian Reservation, on August 29, 2014. See Docket No. 6 (Case No. 4:14-cv-087). As
a named defendant in the same tribal court action brought against Kodiak Oil, EOG Resources
similarly seeks a declaration the Tribal Court lacks jurisdiction over the suit filed by the Tribal
Court Plaintiffs in Tribal Court. On May 1, 2015, EOG Resources requested a stay of the federal
court action due to its pending motion to dismiss for lack of jurisdiction in the tribal court matter.
See Docket No. 18. Consequently, this Court ordered the federal action stayed “pending a ruling
4
In their complaints, both Kodiak Oil and EOG Resources named Diana Johnson, in her capacity as the Chief Judge
of the Fort Berthold District Court, as a defendant. See Docket Nos. 1 (Case No. 4:14-cv-085) and 1 (Case No. 4:14cv-087). In a “Notice of Special Appearance” filed by counsel for Defendant Johnson, counsel indicated Diana
Johnson is no longer the Chief Judge of the Fort Berthold District Court. The current Acting Chief Judge of the Fort
Berthold District Court is Mary Seaworth. Pursuant to Federal Rule of Civil Procedure 25(d) Mary Seaworth is
automatically substituted for Defendant Diana Johnson. See Docket Nos. 31 (Case No. 4:14-cv-085) and 29 (Case No.
4:14-cv-087).
3
from the Three Affiliated Tribes District Court and a possible appeal from the tribal court
decision.” See Docket No. 19.
While both federal court actions were stayed, the matter proceeded in the Tribal Court,
with Kodiak Oil and others filing motions to dismiss the tribal court action for lack of jurisdiction.
See Docket No. 17-3. A hearing on the motions to dismiss was held in Tribal Court on November
18, 2015. See Docket No. 29-1, p. 2. On May 12, 2016, the Tribal Court issued a “Memorandum
Opinion” in which the Tribal Court denied the motions to dismiss, concluding the Tribal Court has
jurisdiction over the “straight-forward contract action.” See Docket No. 27-2, p. 17 (Case No.
4:14-cv-087). Kodiak Oil and others then appealed the decision of the Fort Berthold District Court
to the MHA Nation Supreme Court. See Docket No. 27-3(Case No. 4:14-cr-087).
On appeal, the MHA Nation Supreme Court affirmed in part and reversed in part the order
of the Fort Berthold District Court. See Docket No. 27-3 (Case No. 4:14-cv-087). The MHA
Nation Supreme Court ultimately determined Kodiak Oil, EOG Resources, HRC Operating and
other defendants are subject to MHA Nation’s “legislative, executive and judicial jurisdiction”
because they operate businesses and conduct business activities within the Fort Berthold
Reservation. See Docket No. 27-3, p. 2 (Case No. 4:14-cv-087). The MHA Nation Supreme Court
first decided “Montana’s rule and exceptions do not apply here, where the challenged non-Indian
Petitioner’s activities were all taken on Indian allotments held in trust.” Id. at 5. Essentially, the
MHA Nation Supreme Court construed Montana v. United States, 450 U.S. 544 (1981) narrowly
to apply to lands within a reservation not owned by the Tribe or its members. Id. at 3-5. However,
the MHA Nation Supreme Court continued, and determined if Montana applies, the Tribal Court
has jurisdiction over the matter based upon the ‘consensual relationship’ exception to the Montana
rule, evinced “by the oil and gas leases executed by and between oil and gas companies and the
4
individual Indian allotees.” See Docket No. 27-3, p. 6. The MHA Nation Supreme Court also
concluded the federal regulatory scheme of oil and gas leases for allotted lands does not preclude
the Fort Berthold District Court from exercising its jurisdiction over the matter. Nonetheless, the
MHA National Supreme Court ultimately determined “judicial review is premature at this juncture
because [the Tribal Court Plaintiffs] have not exhausted their administrative remedies.” Id. at 20.
After the MHA Nation Supreme Court issued its order, the Tribal Court Plaintiffs filed a motion
for class certification. See Docket No. 29-10 (Case No. 4:14-cv-085).
Shortly after the MHA Nation Supreme Court issued its order finding the Fort Berthold
District Court has jurisdiction over the matter, Kodiak and EOG Resources filed motions for a
preliminary injunction with this Court. In their motions, Kodiak and EOG request the Court issue
a preliminary injunction preventing the Defendants from proceeding further with the underlying
Tribal Court action. Defendants Mary Seaworth, in her capacity as Acting Chief Judge of the Fort
Berthold District Court, and Yvette Falcon, in her capacity as Court Clerk/Consultant of the Three
Affiliated Tribes District Court of the Fort Berthold Indian Reservation (“Tribal Court
Defendants”), then filed motions to dismiss Kodiak Oil and EOG Resources’ complaints.5 See
Docket Nos. 44 (Case No. 4:14-cv-085) and 31 (Case No. 4:14-cv-087). In their motions to
dismiss, the Tribal Court Defendant contend the actions filed in this Court should be dismissed
because the Court lacks jurisdiction over them.
During the time period to brief the motions for preliminary injunction and motions to
dismiss, HRC Operating, LLC (“HRC Operating”) filed a motion to intervene in the matter
because of its status as a defendant in the Tribal Court action. See Docket No. 36 (Case No. 4:14-
A motion to dismiss HRC Operating’s complaint was also filed on February 22, 2018. See Docket No. 52 (Case No.
4:14-cr-085). However, on that date, HRC Operating had not yet filed a complaint. Nonetheless, the Court will treat
the motion to dismiss prematurely filed as seeking dismissal of HRC Operating’s complaint filed on February 26,
2018.
5
5
cv-085). On February 26, 2018, the Court granted HRC Operating’s motion to intervene. See
Docket No. 56. That same day, HRC Operating filed its complaint against Defendants Jolene Burr,
Ted Lone Fight, Georgianna Danks, Edward S. Danks, and Judge Mary Seaworth, in her capacity
as Acting Chief Judge of the Fort Berthold District Court, as well as a motion for preliminary
injunctive relief. See Docket Nos. 57 and 58. On February 27, 2018, the Court consolidated
Kodiak Oil & Gas (USA), Inc., et al. v. Burr, et al., Case No. 4:14-cv-085, with EOG Resources
Inc. v. Seaworth, et al., Case No. 4:14-cv-087. See Docket No. 60.
III.
LEGAL DISCUSSION
Before the Court may grant a preliminary injunction, the Court must be satisfied it has
jurisdiction over the matter. Consequently, the Court first addresses the jurisdictional concerns
raised by the Tribal Court Defendants in their motions to dismiss.
A.
FEDERAL COURT JURISDICTION
The substantive claims of the Plaintiffs rest upon the determination of whether the Tribal
Court has jurisdiction over the underlying tribal court action. It is well recognized that the question
of “[w]hether a tribal court has adjudicative authority over nonmembers is a federal question.”
Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 324 (2008).
Consequently, pursuant to 28 U.S.C. § 1331, this Court has original jurisdiction. See 28 U.S.C. §
1331. Nonetheless, in their motions to dismiss and responses to the motions for preliminary
injunction, the Tribal Court Defendants assert this Court lacks jurisdiction because: (1) Judge
Seaworth and Falcon are immune from suit and (2) the Plaintiffs failed to exhaust tribal remedies
before bringing this federal action.
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1.
SOVEREIGN IMMUNITY OF JUDGE SEAWORTH AND
FALCON
In the Eighth Circuit, sovereign immunity presents a jurisdictional question. Hagen v.
Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040, 4043 (8th Cir. 2000). It has been long been
recognized that Indian Tribes possess “common-law immunity from suit traditionally enjoyed by
sovereign powers.” Santa Clara Pueblo v. Martinez, 436 U.S. 49, 59 (1978). Indian tribes may
not be sued absent an express and unequivocal waiver of immunity by the tribe or “abrogation of
tribal immunity by Congress.” Baker Elec. Coop. v. Chaske, 58 F.3d 1466, 1471 (8th Cir. 1994).
A tribe’s sovereign immunity certainly extends to tribal officers or agencies. Hagen, 205
F.3d at 1043 (citing Dillon v. Yankton Sioux Tribe Housing Auth., 144 F.3d 581, 583 (8th Cir.
1998)). However, the United States Supreme Court has held tribal officers are not protected by
the tribe’s immunity from suits for declaratory or injunctive relief. Santa Clara Pueblo, 436 U.S.
at 59. Moreover, the Eighth Circuit has recognized a tribe’s sovereign immunity is subject to the
well-established exception expressed in Ex Parte Young, 209 U.S. 123 (1908) that “a suit
challenging the constitutionality of a state official’s action is not one against the State.” Baker
Elec. Coop., 28 F.3d at 1471. Consequently, tribal officers may be liable to suit when the
complaint alleges
the named officer defendants have acted outside the amount of authority that the
sovereign is capable of bestowing, an exception to the doctrine of sovereign
immunity is invoked. . . . If the sovereign did not have the power to make a law,
then the official by necessity acted outside the scope of his authority in enforcing it
....
N. States Power Co. v. Prairie Island Mdewakanton Sioux Indian Cmty, 991 F.2d 458, 460 (8th
Cir. 1993) (quoting Tenneco Oil Co. v. Sac & Fox Tribe of Indians, 725 F.2d 572, 574 (10th Cir.
1984)).
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Judge Seaworth and Falcon contend that as tribal court officers they are cloaked in
sovereign immunity as there has been no express and unequivocal waiver of immunity by the
Tribe. In fact, Judge Seaworth and Falcon assert the Plaintiffs filed suit against them, in their
official capacities, to evade the Tribe’s immunity since the Plaintiffs’ claims seek “relief from the
imposition of the tribal law including the resolution entitled, Regulation of Flaring of Gas,
Imposition of Tax, Payment of Royalties and Other Purposes.” See Docket No. 1-2 (Case No.
4:14-cv-085). In their complaints, Kodiak Oil, EOG Resources, and HRC Operating seek only
injunctive and declaratory relief against the Tribal Court Defendants. Pursuant to the holding of
Santa Clara Pueblo, 436 U.S. at 59, tribal officials are not protected by the tribe’s immunity in this
type of suit for declaratory and injunctive relief. Each of the Plaintiffs allege the Tribal Court
Defendants, in their official capacities, acted unlawfully by permitting the underlying Tribal Court
action to proceed. This Court’s exercise of jurisdiction over Judge Seaworth, in her capacity as
Acting Chief Judge of the Fort Berthold District Court, and Yvette Falcon, in her capacity as Court
Clerk/Consultant of the Three Affiliated Tribes District Court of the Fort Berthold Indian
Reservation, is warranted as they are not immune from suit. See Michigan v. Bay Mills Indian
Cmty., 134 S. Ct. 2024, 2035 (2014) (concluding “tribal immunity does not bar such a claim for
injunctive relief against individuals, including tribal officers, responsible for unlawful conduct”).
2.
FAILURE TO EXHAUST TRIBAL REMEDIES
The Tribal Court Defendants also contend this Court lacks jurisdiction over this matter
because Kodiak Oil, EOG Resources, and HRC Operating are required to exhaust tribal remedies
before filing a federal suit, citing National Farmers Union Ins. Cos. V. Crow Tribe of Indians, 471
U.S. 845 (1985) (“National Farmers”). At the hearing on the motions for preliminary injunction,
8
counsel for the Tribal Court Defendants specifically argued Kodiak Oil, EOG Resources, and HRC
Operating are required to bring a factual challenge to the Tribal Court’s jurisdiction and a factual
determination of jurisdiction, as opposed to a facial determination, is to be made by the Tribal
Court before tribal remedies are exhausted. The law in the Eighth Circuit requires no such factual
challenge to jurisdiction in order to effectively exhaust tribal remedies before filing a federal suit.
In Strate v. A-1 Contractors, the United States Supreme Court concluded National Farmers
cannot be read to require exhaustion of tribal remedies: “we do not extract from National Farmers
anything more than a prudential exhaustion rule . . . .” 520 U.S. 438, 450 (1997). Since the United
States Supreme Court’s decision in Strate, the Eighth Circuit has not required litigants to
adjudicate the full merits of a case in tribal court before a federal court can exercise jurisdiction.
Instead, “[a] federal court should stay its hand until after the Tribal Court has had a full opportunity
to determine its own jurisdiction,” but exhaustion of tribal remedies is not required, when it would
serve no purpose other than delay. Belcourt Pub. Sch. Dist. v. Herman, 786 F.3d 653, 656 n. 2
(8th Cir. 2015). See also Nevada v. Hicks, 533 U.S. 353, 369 (2001).
Here, the Tribal Court “had a full opportunity to determine its own jurisdiction.” See
Belcourt Pub. Sch. Dist., 786 F.3d at 656 n. 2. In Belcourt Pub. Sch. Dist., the Eighth Circuit noted
that non-members exhausted their tribal remedies upon the tribal appellate court determination of
jurisdiction. Id. Both the Fort Berthold District Court and the MHA Nation Supreme Court
determined they had jurisdiction over Kodiak Oil, EOG Resources, and HRC Operating. Upon
completion of the MHA Nation Supreme Court’s review, “all requisite tribal remedies were
exhausted” and the doors of the federal court were thus opened for Kodial Oil, EOG Resources,
and HRC Operating. See id. Based upon the foregoing, the Court is satisfied it has jurisdiction to
address whether the Tribal Court had adjudicative authority over the underlying claim for breach
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of a mineral lease entered into pursuant to 25 U.S.C. § 396. See Plains Commerce Bank v. Long
Family Land & Cattle Co., 554 U.S. 316, 324 (2008).6 The Court then turns to this inquiry.
B.
TRIBAL COURT JURISDICTION
In their complaints, Kodiak Oil, EOG Resources, and HRC Operating seek both declaratory
and injunctive relief preventing the Tribal Court from exercising jurisdiction over the underlying
Tribal Court action and preventing the Tribal Court Plaintiffs from proceeding with the underlying
Tribal Court action. See Docket Nos. 17, 57, (Case No. 4:14-cv-085) and 6 (Case No. 4:14-cv087).
Consequently, in their motions for preliminary injunctive relief, Kodiak Oil, EOG
Resources, and HRC Operating request a preliminary injunctive because the Tribal Court lacks
jurisdiction over them.
It is well-established that the movant has the burden of establishing the necessity of a
temporary restraining order or a preliminary injunction. Baker Elec. Coop., Inc. v. Chaske, 28
F.3d 1466, 1472 (8th Cir. 1994). “No single factor in itself is dispositive; in each case all of the
factors must be considered to determine whether on balance they weigh towards granting the
injunction.” Id. at 1472. Kodiak Oil, EOG Resources, and HRC Operating, by separate motion,
each seek a preliminary injunction pursuant to Rule 65(a) of the Federal Rules of Civil Procedure.
The primary purpose of a preliminary injunction is to preserve the status quo until a court can grant
full, effective relief upon a final hearing. Ferry-Morse Seed Co. v. Food Corn, Inc., 729 F.2d 589,
593 (8th Cir. 1984). A preliminary injunction is an extraordinary remedy, with the burden of
6
In their motions to dismiss, the Tribal Court Defendants also contend this matter must be dismissed because the
Three Affiliated Tribes is a necessary and indispensable party to the action, but cannot be joined. See Docket No. 45,
p. 19 (Case No. 4:14-cv-085). Whether a party is required to be joined pursuant to Rule 19 of the Federal Rules of
Civil Procedure does not present a threshold jurisdictional question. Consequently, at this juncture, the Court declines
to pass on the merits of whether the Three Affiliated Tribes should be joined as a party.
10
establishing the necessity of a preliminary injunction placed on the movant. Watkins Inc. v. Lewis,
346 F.3d 841, 844 (8th Cir. 2003); Baker Elec. Coop., Inc. v. Chaske, 28 F.3d 1466, 1472 (8th Cir.
1994); Modern Computer Sys., Inc. v. Modern Banking Sys., Inc., 871 F.2d 734, 737 (8th Cir.
1989). The court determines whether the movant has met its burden of proof by weighing the
factors set forth in Dataphase Systems, Inc., v. C L Systems, Inc., 640 F.2d 109, 114 (8th Cir.
1981). The Dataphase factors include "(1) the threat of irreparable harm to the movant; (2) the
state of balance between this harm and the injury that granting the injunction will inflict on other
parties litigant; (3) the probability that movant will succeed on the merits; and (4) the public
interest." Id. "No single factor in itself is dispositive; in each case all of the factors must be
considered to determine whether on balance they weigh towards granting the injunction." Baker
Elec. Coop., Inc., 28 F.3d at 1472 (quoting Calvin Klein Cosmetics Corp. v. Lenox Labs., Inc.,
815 F.2d 500, 503 (8th Cir. 1987)); see CDI Energy Servs., Inc. v. W. River Pumps, Inc., 567 F.3d
398, 401-03 (8th Cir. 2009).
1.
PROBABILITY OF SUCCESS ON THE MERITS
When evaluating a movant’s likelihood of success on the merits, the court should “flexibly
weigh the case’s particular circumstances to determine ‘whether the balance of equities so favors
the movant that justice requires the court to intervene to preserve the status quo until the merits
are determined.’” Calvin Klein Cosmetics Corp. v. Lenox Labs., Inc., 815 F.2d 500, 503 (8th Cir.
1987). At this stage, the Court need not decide whether the party seeking the preliminary
injunction will ultimately prevail. PCTV Gold, Inc. v. SpeedNet, LLC, 508 F.3d 1137, 1143 (8th
Cir. 2007). Although a temporary restraining order or a preliminary injunction cannot be issued if
the movant has no chance on the merits, “the Eighth Circuit has rejected a requirement as to a
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‘party seeking preliminary relief prove a greater than fifty per cent likelihood that he will prevail
on the merits.’” Id. The Eighth Circuit has also held that of the four factors to be considered by
the district court in considering preliminary injunctive relief, the likelihood of success on the merits
is “most significant.” S & M Constructors, Inc. v. Foley Co., 959 F.2d 97, 98 (8th Cir. 1992).
The Court must consider the substantive claims in determining whether the Plaintiffs have
a likelihood of success on the merits. All three plaintiffs assert claims of declaratory and injunctive
relief.
See Docket Nos. 17, 57, (Case No. 4:14-cv-085) and 6 (Case No. 4:14-cv-087).
Specifically, the Plaintiffs seek a judgment declaring that the Tribal Court lacks jurisdiction over
them and enjoining the Defendants from prosecuting the underlying action in Tribal Court. Id. A
likelihood of success on the merits of even one claim can be sufficient to satisfy the “likelihood of
success” Dataphase factor. See Nokota Horse Conservancy, Inc. v. Bernhardt, 666 F. Supp. 2d
1073, 1078-80 (D.N.D. 2009).
In their motions for preliminary injunction, the Plaintiffs contend they are able to
demonstrate a strong likelihood of success on the merits of their claims because: (1) the underlying
action gives rise to a federal question over which tribal courts lack jurisdiction, and, alternatively,
(2) the United States Supreme Court decision in Montana v. United States, 450 U.S. 544 (1981)
precludes the Tribal Court from exercising jurisdiction over the Plaintiffs. HRC Operating also
contends the Tribal Court lacks jurisdiction over the underlying action because the Defendants
failed to exhaust administrative remedies and failed to join the United States as a party to the Tribal
Court action. See Docket No. 59, pp. 9-11. In response to the motions for preliminary injunctive
relief, the Tribal Court Defendants contend this Court lacks jurisdiction over the case before it
because (1) the Plaintiffs failed to exhaust tribal court remedies, Judge Seaoworth and Yvette
Falcon are protected from suit by sovereign immunity, and (3) the Plaintiffs failed to join the Tribe
12
as a necessary and indispensable party to this suit. See Docket Nos. 48 (Case No. 4:14-cv-085)
and 33 (Case No. 4:14-cv-087) . In their response to the motion for preliminary injunction,
Defendants Jolene Burr, Ted Lone Fight, Georgianna Danks, and Edward S. Danks assert the
Tribal Court correctly determined its jurisdiction in the underlying action under the “consensual
relationship” exception to general Montana rule as tribal courts are not precluded from hearing
cases that present federal questions. See Docket No. 46 (Case No. 4:14-cv-085) and 30 (Case No.
4:14-cv-087). The Court finds the Plaintiffs have a strong likelihood of success on the merits of
theirs claims against the Defendants.
In their motions, the Plaintiffs contend they are able to demonstrate a strong likelihood of
success on the merits of their claims because: (1) the underlying action gives rise to a federal
question over which tribal courts lack jurisdiction, and, alternatively, (2) the United States
Supreme Court decision in Montana v. United States, 450 U.S. 544 (1981) precludes the Tribal
Court from exercising jurisdiction over the Plaintiffs. Specifically, the Plaintiffs contend that
pursuant to the United States Supreme Court decision of Nevada v. Hicks, 533 U.S. 353 (2001),
tribal courts may not exercise jurisdiction over the federal question presented in the underlying
action. Alternatively, the Plaintiffs contend none of the exceptions to the Montana general rule
apply to justify the Tribal Court’s exercise of jurisdiction over the oil and gas companies.
In response, the Defendants present several arguments vesting jurisdiction over this matter
with the Tribal Court. Specifically, the Tribal Court Defendants assert this Court lacks jurisdiction
over the matter and the Tribal Court has authority to adjudicate the issues raised in the underlying
action, namely the interpretation of an oil and gas lease premised on federal law. See Docket No.
33 (Case No. 4:14-cv-087). The Tribal Court Defendants also assert the Tribal Court may exercise
jurisdiction over a breach of contract action brought by a tribal member against a non-member
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when the breach occurred within the reservation. Defendants Jolene Burr, Ted Lone Fight,
Georgianna Danks, and Edward S. Danks contend the federal regulatory scheme applicable to the
oil and gas leases entered into by allottees and the Plaintiffs does not preclude the Tribal Court
from exercising jurisdiction over the interpretation of such leases. Moreover, the exceptions to the
Montana rule vest jurisdiction over the matter with the Tribal Court.
i.
The Precedent of United States Supreme Court
The Court first addresses the Plaintiffs’ contention that pursuant to the United States
Supreme Court decision of Nevada v. Hicks, 533 U.S. 353 (2001), tribal courts are precluded from
exercising jurisdiction over the federal question presented in the underlying action. In Hicks, the
United States Supreme Court addressed a tribal court’s jurisdiction over a state officer enforcing
state law on a reservation. 533 U.S. 353 (2001). In Hicks, a Nevada state game warden obtained
a search warrant from state court for Hick’s property after the warden became suspicious of Hicks
killing a California bighorn sheep, a gross misdemeanor, off the reservation. Id. at 356. The state
search warrant he obtained required the approval of the tribal court before the game warden could
execute the warrant. A search warrant was then obtained from the tribal court. The game warden,
accompanied by a tribal police officer, searched Hicks’ property, but did not locate the head of
any California bighorn sheep. One year later, the warden again obtained a state search warrant for
Hicks’ property; however, the warrant did not require permission from the tribal court to execute.
Nonetheless, the game warden obtained a tribal court search warrant and searched Hicks’ property,
but was again unsuccessful.
Hicks then bought suit against the tribal court judge, tribal officers, the state wardens, in
their individual and official capacities, and the State of Nevada in tribal court for trespass to land
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and chattels, abuse of process, and violation of civil rights, each remediable under 42 U.S.C. §
1983. Id. at 356-57. During the tribal court proceedings, Hicks’ claims against all defendants but
the state officials in their individual capacities were either voluntarily dismissed or dismissed by
the Court. The state officials and Nevada then filed an action in federal district court, seeking
declaratory judgment that the tribal court lacked jurisdiction. The district court granted summary
judgment in favor of Hicks and concluded the state officials must exhaust any claims of qualified
immunity in the tribal court. The Ninth Circuit Court of Appeals affirmed, concluding the fact
that Hicks’ property was located on “tribe-owned land within the reservation is sufficient to
support tribal jurisdiction over civil claims against nonmembers arising from their activities on
that land.” Id. at 357. The United States Supreme Court granted certiorari and reversed the
decision of the Ninth Circuit, concluding the tribal court lacked jurisdiction.
In determining the tribal court lacked jurisdiction, the Supreme Court in Hicks began its
analysis by addressing whether the tribe can regulate a state officer executing a state search warrant
on the reservation. To answer this inquiry, the Supreme Court looked to the previous decision of
Montana v. United States, 450 U.S. 544 (1981), and its progeny. It is well-established, “absent
express authorization by federal statute or treaty, tribal jurisdiction over the conduct of
nonmembers exists only in limited circumstances.” Strate, 520 U.S. at 445. In the “pathmarking
case” of Montana v. United States, the United States Supreme Court discussed both the tribes’
historical loss of many of its attributes of sovereignty, as a consequence of their incorporation into
the United States, and the tribes’ retention of inherent authority:
The areas in which such implicit divestiture of sovereignty has been held to have
occurred are those involving relations between an Indian tribe and nonmembers of
the tribe . . .
These limitations rest on the fact that the dependent status of Indian tribes within
our territorial jurisdiction is necessarily inconsistent with their freedom
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independently to determine their external relations. But the powers of selfgovernment . . . are of a different type. They involve only the relations among
members of a tribe. Thus, they are not such powers as would necessarily be lost by
virtue of a tribe’s dependent status.
450 U.S. at 563-65. Upon this premise, the Supreme Court in Montana concluded the exercise of
tribal authority beyond the control of internal relations or protection of tribal self-government,
“cannot survive without express congressional delegation.” Id. at 565 (emphasis added). The
Supreme Court then articulated the now well-accepted rule that “inherent sovereign powers of an
Indian tribe do not extend to the activities of nonmembers of the tribe.” Id. However, the Supreme
Court added that in certain circumstances, even when Congress has not expressly authorized such
regulation, Indian tribes retain inherent sovereign authority over non-members: (1) to 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” and (2) “to exercise civil authority over the conduct of non-Indians on fee lands
within its reservation when that conduct threatens or has some direct effect on the political
integrity, the economic security, or the health or welfare of the tribe.” Id. at 565-66.
Against this backdrop, the Supreme Court in Hicks first recognized the ‘consensual
relationship’ Montana exception did not apply to a warden executing a state search warrant within
the reservation, and continued to determine whether “regulatory jurisdiction over state officers in
the present context is ‘necessary to protect tribal self-government or to control internal relations’
and if not, whether such regulatory jurisdiction has been congressionally conferred.” 533 U.S.
353, 360. The Court ultimately concluded the state of Nevada’s interest in regulating poaching
outside the reservation does not impair the tribe’s self-government or impede its control of internal
relations. Consequently, pursuant to Montana, the tribe’s retained inherent sovereign authority
16
does not extend to regulate a state warden’s execution of a state search warrant within the
reservation. Id. at 364.
Concluding that neither Montana exception applied, the Supreme Court in Hicks then
considered whether there had been a delegation of tribal authority by Congress over the state
warden executing a state search warrant on the reservation pursuant to 28 U.S.C. § 1983. Id. at
366-68. Hicks contended tribal courts are courts of general jurisdiction with authority to entertain
a federal action brought pursuant to 28 U.S.C. § 1983. Id. at 366. Unlike state courts, where
jurisdiction is general, a tribal court’s jurisdiction “over nonmembers is at most only as broad as
its legislative jurisdiction.” Id. at 367. While it is true some federal statutes expressly grant tribal
courts jurisdiction over issues arising under federal law, no federal law extends tribal courts’
jurisdiction to encompass Section 1983 actions. Thus, in Hicks, there was no delegation by
Congress of tribal authority to adjudicate in 42 U.S.C. § 1983 actions.
This conclusion by the Supreme Court in Hicks was buttressed by the “anomalies” that
would be created under the federal removal statute, 28 U.S.C. § 1441, if tribal courts were viewed
as courts of general jurisdiction with adjudicative authority over federal questions. Section 1441
permits a parties to remove a matter from state court to federal court if the case involves a federal
question. However, if civil rights actions under Section 1983 could be heard in tribal court,
“defendants would inexplicably lack the right available to state-court § 1983 defendants to seek a
federal forum.” Id. at 368.
Kodiak Oil, EOG Resources, and HRC Operating assert that this Court should hold an
action for breach of a mineral lease entered into pursuant to the Indian Mineral Leasing Act, 25
U.S.C. § 396, also presents a federal question and, since tribal courts are not court of general
jurisdiction pursuant to Hicks, the tribal courts lacks jurisdiction over such action. The Court
17
agrees with the Plaintiffs that Hicks clearly establishes that tribal courts are not courts of general
jurisdiction.
However, this conclusion, standing alone, does not preclude a tribal court’s
adjudicative authority over a federal question. Instead, as the United States Supreme Court
articulated in Montana and its progeny, “a tribe’s adjudicative jurisdiction does not exceed its
legislative jurisdiction.” Strate, 520 U.S. at 453. This statement by the United States Supreme
Court encompasses the notion that a tribal court’s jurisdiction cannot be general in the same way
state courts are courts of general jurisdiction. Thus, although Hicks instructs that tribal courts are
not courts of general jurisdiction, it is the task of this Court to determine the scope of the Tribal
Court’s jurisdiction over a breach of mineral lease entered into pursuant to 25 U.S.C. § 396. To
do so, the Court turns to the “pathmarking” case of Montana.
In Montana, the United States Supreme Court articulated the general rule that “the inherent
sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe,”
absent express congressional delegation. Montana, 450 U.S. at 565. The Supreme Court in
Montana then outlined two exceptions to this general rule when tribal jurisdiction may extend to
nonmembers:
1)
“A tribe may regulation, 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[,]” and
2)
“A tribe may also retain inherent power to exercise civil authority over the conduct
of non-Indians on fee lands within its reservation when that conduct threatens or has some
direct effect on the political integrity, the economic security, or the health or welfare of the
tribe.”
18
Id. at 565-66. These exceptions are “limited ones” and are not to be construed in a manner that
“swallows the rule.” Plains Commerce Bank, 554 U.S. at 330 (quoting Atkinson Trading Co. v.
Shirley, 532 U.S. 645, 647 (2001).
The United States Supreme Court further explained the
mechanics of applying Montana’s principles in relation to tribal authority arising under federal
statutes or treaties in Strate: “As the Court made plain in Montana, the general rule and exceptions
there announced govern only in the absence of a delegation of tribal authority by treaty or statute.”
520 U.S. at 449. Absent the applicability of one of the Montana exceptions or a delegation of
tribal authority in federal law, Montana’s general rule applies and precludes the Tribal Court’s
jurisdiction from extending to the activities of Kodiak Oil, EOG Resources, or HRC Operating as
non-members.
ii.
Tribal Court Jurisdiction Under the First Montana Exception
The first exception articulated in Montana extends tribal jurisdiction to regulate, through
taxation, licensing, or other means, the “activities of nonmembers who enter consensual
relationships with the tribe of its members, through commercial dealing, contracts, leases, or other
arrangements.” Montana, 450 U.S. at 565. By its terms, this exception does not grant tribes
unlimited regulatory or adjudicative authority over non-members, but instead permits the
regulation of activities. Plains Commerce Bank, 554 U.S. at 330. In Montana, the United States
Supreme Court referenced four cases in explaining this exception. See Montana 450 U.S. at 56566. Each of those cases cited in Montana “involved the regulation of non-Indian activities on the
reservation that has a discernible effect on the tribe or its members.” Plains Commerce Bank, 554
U.S. at 330 (discussing those cases cited by the Montana Court in support of the first exception to
the general rule). As the United States Supreme Court explained in Plains Commerce Bank, the
rationale for the Montana exceptions was to ensure tribal regulation of certain activities that “may
19
intrude on the internal relations of the tribe or threaten tribal self-rule.” Id. at 335. In fact, in
Plains Commerce Bank, the United States Supreme Court determined a tribal court lacked
jurisdiction over a discrimination claim that arose from a sale of land because regulation of such a
sale was not an “activity” that implicated the tribe’s sovereign interests. Id. at 335-36. The
plaintiffs’ discrimination claim arose out of a land sale of non-Indian fee land within the
reservation to a non-member. Under these circumstances, the United States Supreme Court
reasoned the non-Indian fee land was no longer tribal trust land and “had been removed from the
tribe’s immediate control.” Id. at 336.
It is clear under the United States Supreme Court’s analysis in Plains Commerce Bank, the
first Montana exception is triggered when a non-member has a consensual relationship with the
tribe or its members and such activities arising from the consensual relationship implicate the
tribe’s sovereign interests. Following the rationale of Montana and Plains Commerce Bank, this
Court concludes that the tribe’s regulation of the mineral lease allegedly breached by Kodiak Oil,
EOG Resources, and HRC Operating does not implicate the tribe’s sovereign interests and,
therefore, even presuming consensual relationships between members of the tribe and the Plaintiffs
exist, the first Montana exception is not triggered.
In the underlying tribal court action, Jolene Burr, Ted Lone Fight, Georgianna Danks and
Edward S. Danks seek “royalties for past, present and future flared gas pursuant to the Oil and Gas
Mining lease paragraph 3(f).” See Docket No. 27-1 (Case No. 4:14-cv-087). Paragraph 3(f) of
the form leases provides, in relevant part:
In consideration of the foregoing, the lessee hereby agrees:
(f) Diligence, prevention or waste – To exercise reasonable diligence in drilling and
operating wells for oil and gas on the lands covered hereby, while such products
can be secured in paying quantities; to carry on all operations hereunder in a good
20
and workmanlike manner in accordance with the approved methods and practice,
having due regard for the prevention of waste of oil or gas developed on the land,
...
Provided, That the lessee shall not be held responsible for delays or casualties
occasioned by causes beyond the lessee’s control.
See id. As articulated by counsel for Jolene Burr, Ted Lone Fight, Georgianna Danks and Edward
S. Danks, the heart of their tribal court complaint is that companies are unnecessarily and
wastefully flaring natural gas instead or capturing, converting, and marketing the natural gas. The
mineral leases, entitled “Oil and Gas Mining Lease – Allotted Indian Lands,” at issue in the
underlying tribal court action are form leases published by the United States Department of Interior
and subject to regulations of the Secretary of the Interior. See Docket No. 27-4. Pursuant to 25
U.S.C. § 396, the Secretary of the Interior is authorized to “perform any and all acts and make such
rules and regulations as may be necessary” to facilitate mineral leasing by allottees. 25 U.S.C. 396
also conditions the leasing of minerals by allottees as they “may be deemed advisable by the
Secretary of the Interior.” Id. In fact, the form lease requires the signature of a representative of
the Bureau of Indian Affairs (“BIA”). See Docket No. 27-4, p. 4 (Case No. 4:14-cv-087).
Pursuant to the authority granted under the Mineral Leasing Act of 1938 and the Indian
Mineral Development Act of 1982, the Department of the Interior promulgated an extensive and
comprehensive scheme, including regulations, Onshore Oil and Gas Orders, and NTLs governing
all aspects of oil and gas operations on federal Indian lands. See 25 U.S.C. §§ 396a - 396g; 25
C.F.R. Parts 211, 212, 214; 43 C.F.R. Part 3160, §§ 3161.4, 3161.2. At the time the underlying
lawsuit was filed with the Tribal Court, this scheme included the following flaring standards set
forth in NTL-4A:
Gas Production (both gas well gas and oil well gas) subject to royalty shall include
that which is produced and sold on a lease basis or for the benefit of a lease under
the terms of an approved communitization or unitization agreement. No royalty
obligation shall accrue on any produced gas which (1) is used on the same lease,
21
same communitized tract, or same unitized participating area for beneficial
purposes, (2) is vented or flared with the Supervisor’s prior authorization or
approval during drilling, completing, or producing operations, (3) is vented or
flared pursuant to the rules, regulations, or orders of the appropriate State regulatory
agency when said rules, regulations, or orders have been ratified or accepted by the
Supervisor, or (4) the Supervisor determines to have been otherwise unavoidably
lost . . . Where produced gas (both gas well gas and oil well gas) is (1) vented or
flared during drilling, completing, or producing operations without the prior
authorization, approval, ratification, or acceptance of the Supervisor or (2)
otherwise avoidably lost, as determined by the Supervisor, the compensation due
the United States or the Indian lessor will be computed on the basis of the full value
of the gas so wasted, or the allocated portion thereof, attributable to the lease.
See Docket No. 1-3 (Case No. 4:14-cv-085).
As of January 17, 2017, NTL-4A was replaced by federal regulations of flaring, which are
applicable to the leases at issue. See 43 C.F.R. § 3179.1. Under those regulations, a royalty “is
due on all avoidably lost oil or gas” and not due on any oil or gas “unavoidably lost.” 43 C.F.R. §
3179.5. These federal regulations also govern flaring on federal Indian lands, including when loss
of oil or gas is avoidable or unavoidable, 43 C.F.R. § 3179.4, when flaring is permitted, 43 C.F.R.
§§ 3179.7 through 3179.9, and specific reporting requirements for operators, 43 C.F.R. § 3179.9.
Moreover, if a determination is made that royalties are due on flared gas, royalties are paid by
companies to the Office of Natural Resources Revenue (“ONRR”). 30 C.F.R. § 1218.100. ONRR
then deposits royalties into the U.S. Treasury and provides the BIA with distribution reports
covering the interests of Indian allottees. 30 C.F.R. §§ 1219.103 and 1219.104. Based on these
reports, the Office of the Special Trustee for American Indians (“OST”) pays Indian mineral
owners in accordance with their percentage of mineral ownership. If royalties are incorrect or
otherwise lacking, ONRR investigates, penalizes, fines, and recovers any outstanding payments.
See 30 C.F.R. Parts 1241 and 1243.7
7
In its order, the MHA Nation Supreme Court also acknowledged the extensive federal regulatory scheme over flaring
of natural gas. Specifically, in its order, the MHA Nation Supreme Court stated:
22
The extensive federal regulatory scheme applicable to the flaring of natural gas on Indian
lands demonstrates the regulation of such flaring and enforcement of regulations lies with the
federal government, through its various agencies, and is outside the control of tribes. Notably, as
to allotted Indian lands, tribes as sovereignties have no role in the approval of mineral leases, the
determination of whether royalties are due for flaring under those leases, or the collection or
payment of any royalties due to individual allottees. Consequently, the determination of whether
the Plaintiffs breached the mineral leases by failing to pay royalties for flared natural gas is entirely
controlled by federal laws and regulations, with the federal government, through its agencies,
determining if royalties are due, recovering any royalties that may be due, and distributing any
royalties to individual allottees. With such federal government regulation and enforcement,
although the alleged flaring unquestionably occurs on allotted lands within the Fort Berthold
Reservation, the activity which the Tribal Court Plaintiffs seek a determination does not implicate
tribal governance or internal relations. See Plains Commerce Bank, 554 U.S. at 335. Unlike those
cases cited in Montana in support of the ‘consensual relationship’ exception, the issue of flaring
regulation here is subject entirely to regulation and enforcement by the federal government, not
the tribal government.
1.
2.
3.
4.
With respect to “individually allotted trust lands, mineral leases are governed by regulations found in 25
C.F.R. § 212.” See Docket No. 29-9, p. 6 (Case No. 7:14-cv-085).
“[T]he BLM’s regulations for oil and gas development on Indian land are extensive. Indeed, the very issue
presented here ‒ the relationship between the flaring of natural gas from and royalty obligations under
development leases ‒ is specifically addressed in the federal regulatory scheme.” See Docket No. 29-9, p.
16(Case No. 7:14-cv-085).
“Respondents’ complaint alleged the Petitioners breached mineral leases executed by the parties under the
IMLA [Indian Mineral Leasing Act]. 25 U.S.C. § 396. As indicate[d] above, the IMLA establishes a
consistent system of leasing procedures that apply to mineral leases in Indian lands. For oil and gas leases
negotiated and executed under the IMLA, the Bureau of Indian Affairs Mineral Development Leasing
Regulations apply.” See Docket No. 29-9, p.18 (Case No. 7:14-cv-085).
“[A]ll of the claims made by the Respondents fall within the regulatory authority of the U.S. Department of
Interior, Bureau of Land Management.” See Docket No. 29-9, p. 19 (Case No. 7:14-cv-085).
23
The Court recognizes that while commercial activities on a reservation may certainly affect
a tribe’s self-governance and even intrude on the internal relations of the tribe, the specific activity
from which the Tribal Court Plaintiffs seek relief in their breach of contract action is wholly
regulated, determined, and enforced by the federal government. This characteristic of flaring
clearly distinguishes it from other commercial activities that occur on a reservation which are
subject to regulation by the tribe. There is no immediate control of flaring by the tribe and whether
the mineral lease was breached is, without question, a determination left to the federal
government.8
The Court recognizes the flaring of natural gas occurs on allotted lands within the
reservation, but the status of the land as allotted does not prevent the Court from concluding the
regulation of flaring occurring on such land does not implicate the tribe’s sovereign. The
ownership status of the land on which flaring occurs is not dispositive to the issue of whether the
activities implicate the tribe’s sovereign interests. See Plains Commerce Bank, 554 U.S. at 33536. In fact, in Hicks, the United States Supreme Court concluded Montana applies to both Indian
and non-Indian land. 533 U.S. at 360. Montana’s general rule restricts tribal authority over “nonmembers activities taking place on the reservation,” but the general rule’s restriction “is
particularly strong when on land owned in fee simple by non-Indians.” See Plains Commerce
Bank, 554 U.S. at 327 (emphasis added). The Court concludes the determination of whether
royalties are to be paid for the flaring of natural gas pursuant to a mineral lease entered into by an
allottee and an oil and gas company pursuant to 25 U.S.C. § 396 is not the type of consensual
8
The Court notes the complaint brought in Tribal Court is a breach of contract action. See Docket No. 27-1 (Case
No. 4:14-cv-087). The Tribal Court Plaintiffs did not bring a cause of action to enforce the Tribal Resolution,
Regulation of Flaring of Gas, Imposition of Tax, Payment of Royalties and Other Purposes, referred to in the parties’
briefing. Because this action is limited to a breach of contract claim, upon which resolution of the claims hinges on
the federal government’s determination of a breach (i.e. whether flaring was avoidable or unavoidable), the Court does
not pass on the question of whether the Tribe’s adjudicative authority extends to claims brought pursuant to the Tribal
Resolution.
24
relationship under Montana’s first exception over which a tribe may exercise adjudicative
authority.
iii.
Tribal Jurisdiction Under the Second Montana Exception
The Court next considers whether Montana’s second exception brings this action within
the Tribal Court’s adjudicative authority. Pursuant to Montana, a tribe retains inherent power to
exercise authority over the conduct of non-members “when the conduct threatens or has some
direct effect on the political integrity, the economic security, or the health or welfare of the tribe.”
450 U.S. at 566. In their motions for preliminary injunctive relief, Kodiak Oil, EOG Resources,
and HRC Operating contend this second exception does not apply to this matter. However, the
Plaintiffs’ explanation for why the second exception does not apply is cursory, presumably because
the MHA Nation Supreme Court concluded the Tribal Court had jurisdiction pursuant to the first
‘consensual relationship’ exception to the Montana general rule. In their response to the motions
for preliminary injunction, Jolene Burr, Ted Lone Fight, Georgianna Danks and Edward S. Danks
assert the second Montana exception applies here to permit the Tribal Court to exercise
jurisdiction. Specifically, they contend the flaring of natural gas by Kodiak Oil, EOG Resources,
and HRC Operating in breach of the mineral lease “implies environmental degradation” and,
therefore, “threatens the health and welfare of the Tribe.” See Docket No. 30, p. 18 (Case No.
4:14-cv-087).
The United States Supreme Court’s decisions in Strate and Hicks dictate a narrow
interpretation of the second Montana exception. See Hicks, 533 U.S. at 359-61; Strate, 520 U.S.
457-58. Both Hicks and Strate also caution that the second exception cannot be interpreted to
severely shrink Montana’s general rule. For example, in considering whether tribal courts may
entertain claims against non-members arising out of accidents on state highways within a
25
reservation, the Strate Court acknowledged careless driving on a public highway running through
a reservation certainly jeopardizes the safety of the tribal members, but concluded the second
exception cannot be interpreted so broadly to bring such claims within the adjudicative authority
of the tribal court. Strate, 520 U.S. at 457-58. In Strate, the Supreme Court cautioned that, read
in isolation, the second exception “can be misperceived.” Id. at 459. Instead, much like the first
exception, the second Montana exception must be read in the context of those cases cited to support
the exception. See id. at 458-59 (discussing cases cited by Montana Court in support of second
exception). Ultimately, in Strate, the Supreme Court concluded the second exception did not apply
because “[n]either regulatory nor adjudicatory authority over the state highway accident at issues
is needed to preserve ‘the right of reservation Indians to make their own laws and be ruled by
them.’” Id. at 459 (quoting Williams v. Lee, 358 U.S. 217, 220 (1959)).
This Court recognizes the flaring of natural gas may jeopardize the health of tribal
members. However, the Court nevertheless does not interpret the second Montana exception to
apply to a claim to recover royalties for flaring arising from a mineral lease entered into pursuant
to 25 U.S.C. § 396. Here, adjudicative authority over the determination of whether an oil and gas
company is to pay royalties for flaring natural gas in this context does not support tribes’ right to
make their own laws and be governed by them. As discussed previously, the extensive federal
regulatory scheme applicable to the flaring of natural gas on Indian lands demonstrates the
regulation of such flaring and enforcement of regulations solely lies with the federal government,
through its various agencies, and outside the control of tribes. Specifically, the determination of
whether the Plaintiffs breached the mineral leases by failing to pay royalties for flared natural gas
is controlled by federal laws and regulations, with the federal government, through its agencies,
determining whether royalties are due, recovering any royalties that may be due, and distributing
26
any royalties to individual allottees. Under such circumstances, when a federal agency has the
sole discretion to decide the pivotal issue of a matter, neither tribal regulatory nor adjudicative
authority over such is needed to preserve “the right of reservation Indians to make their own laws
and be ruled by them.” Williams, 358 U.S. at 220. Consequently, considering the United States
Supreme Court’s narrow interpretation of the second Montana exception, the Court cannot say this
matter falls within the second exception. See Hicks, 533 U.S. at 359-61; Strate, 520 U.S. 457-58.
Therefore, the Montana rule, and not its exceptions, applies here.
iv.
Congressional Delegation
In Montana, the United States Supreme Court articulated the general rule that “the inherent
sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe,”
absent express congressional delegation. Montana, 450 U.S. at 565. Given the Court’s conclusion
the Montana general rule, and not its exceptions, applies here, the Court must consider whether
there has been a congressional direction enlarging tribal court jurisdiction to include actions
brought for breach of a contract entered into pursuant to 25 U.S.C. § 396.9 Some federal statutes
explicitly declare tribal court jurisdiction over certain federal law issues. See e.g., 25 U.S.C. §
1911(a) (declaring tribal court authority to adjudicate child custody disputes under the Indian Child
Welfare Act of 1978); 12 U.S.C. § 1715z-13(g)(5) (declaring tribal court authority over mortgage
foreclosure actions brought by the Secretary of Housing and Urban Development against
homeowners on reservations). It is clear to this Court that no provision in federal law provides for
9
In Hicks, Justice Scalia noted the Court must consider tribal court jurisdiction over Section 1983 claims since the
Court had already determined the Montana exceptions do not extend tribal court jurisdiction to state wardens executing
a search warrant of an off-reservation crime. 533 U.S. at 366 n. 7. Such a determination “is based upon Strate’s
holding that tribal court jurisdiction does not exceed tribal regulatory jurisdiction; and because that holding contained
a significant qualifier: ‘absent congressional direction enlarging tribal-court jurisdiction.’” Id. (citing Strate, 520 U.S.
at 453).
27
tribal court jurisdiction over a claim for breach of a mineral lease entered into pursuant to 25 U.S.C.
§ 396, or a determination of whether royalties are to be paid for the flaring of natural gas on Indian
lands. With no express congressional delegation of jurisdiction to the tribal court, this Court
concludes the tribal court lacks jurisdiction over the claims brought in Tribal Court by Jolene Burr,
Ted Lone Fight, Georgianna Danks and Edward S. Danks.
v.
Joinder of the United States and Exhaustion of Administrative
Remedies
HRC Operating also contends the Tribal Court lacks jurisdiction over the underlying action
because the Defendants failed to exhaust administrative remedies and failed to join the United
States as a party to the tribal action. See Docket No. 59, pp. 9-11. Since the Court has found a
strong likelihood of success on at least one of the Plaintiff’s claims no further analysis is required
at this stage. See Nokota Horse Conservancy, 666 F. Supp. 2d at 1078-80 (finding sufficient
likelihood of success on the merits of one claim, without a need to undertake extensive review of
other claims). However, the Court notes the question of whether the Tribal Court Plaintiffs were
required to exhaust administrative remedies before filing the underlying action presents a distinct,
although perhaps parallel, legal question from whether the Tribal Court has jurisdiction over the
underlying action. Regardless of whether the Tribal Court Plaintiffs are required to exhaust
administrative remedies before filing suit in either tribal court or federal court, in this instance, the
Tribal Court has already exercised its jurisdiction. Thus, the scope of the Court’s inquiry is limited
to the question of whether the Tribal Court had adjudicative authority to exercise such jurisdiction.
In addition, because the Court has already concluded at this stage that the Tribal Court
lacks jurisdiction over the underlying action, the Court need not address whether the Tribal Court
Plaintiffs failed to join the United States in the Tribal Court action.
28
Based upon the Court’s review of the complaint, the Tribal Court documents, and the
relevant case law, the Court finds Kodiak Oil, EOG Resources, and HRC Operating have a strong
likelihood of success on at least one of their claims against the Defendants. Consequently, the
Court finds Kodiak Oil, EOG Resources, and HRC Operating have demonstrated the “success on
the merits” factor weighs in favor of the issuance of a preliminary injunction.
2.
IRREPARABLE HARM
Kodiak Oil, EOG Resources, and HRC Operating must establish there is a threat of
irreparable harm if injunctive relief is not granted, and that such harm is not compensable by an
award of money damages. Doe v. LaDue, 514 F. Supp. 2d 1131, 1135 (D. Minn. 2007). “The
‘mere possibility’ that harm may occur before a trial on the merits is not enough.” MKB Mgmt.
Corp. v. Burdick, 954 F. Supp. 2d 900, 912 (D.N.D. 2013). The party that seeks a preliminary
injunction must show that a significant risk of harm exists. Id. The absence of such a showing is
sufficient grounds to deny injunctive relief. Id.
The Plaintiffs argue they will suffer irreparable harm if forced to litigate in Tribal Court,
which this Court has determined lacks jurisdiction. The Eighth Circuit Court of Appeals has
explained that a district court can presume irreparable harm if the movant has a likelihood of
success on the merits. Calvin Klein Cosmetics Corp., 815 F.2d at 505 (citing Black Hills Jewelry
Mfg. Co. v. Gold Rush, Inc., 633 F.2d 746, 753 (8th Cir. 1980)). Other courts have concluded a
movant would suffer irreparable harm if forced to litigate in a tribal court that likely does not have
jurisdiction. See Crowe & Dunleavy, P.C. v. Stidham, 640 F.3d 1140, 1157-58 (10th Cir. 2011)
(finding the movant had demonstrated irreparable harm because the tribal court likely lacked
jurisdiction and there would be no realistic way to recoup fees expended in tribal court).
Consequently, the Plaintiffs would suffer irreparable harm if forced to expend time, effort, and
29
money in a forum that lacks jurisdiction. The Court finds this Dataphase factor weighs in favor
of granting a preliminary injunction.
3.
BALANCE OF HARMS
As outlined above, Kodiak Oil, EOG Resources, and HRC Operative have demonstrated
the threat of irreparable harm. The balance of harm factor requires consideration of the balance
between the harm to the movant and the injury the injunction’s issuance would inflict on other
interested parties. See Pottgen v. Mo. State High Sch. Activities Ass’n, 40 F.3d 926, 929 (8th Cir.
1994). While the irreparable harm factor focuses on the harm or potential harm to the plaintiff,
the balance of harm factor analysis examines the harm to all parties to the dispute and other
interested parties, including the public. See Dataphase, 640 F.2d at 114; Glenwood Bridge, Inc.
v. City of Minneapolis, 940 F.2d 367, 372 (8th Cir. 1991).
If the Court does not issue a preliminary injunction preventing the Tribal Court Plaintiffs
from proceeding in Tribal Court, Kodiak Oil, EOG Resources, and HRC Operating must then
continue to defend against the underlying action in a court which lacks jurisdiction over the matter.
However, if the Court issues a preliminary injunction, the Tribal Court Plaintiffs may no longer
proceed with their Tribal Court action and must pursue their claims in a different forum. However,
they are not left without a remedy. Although the Tribal Court venue would be foreclosed, nothing
prevents them from bringing their claims in federal district court pursuant to 28 U.S.C. § 1331.
Therefore, the Court finds this Dataphase factor weighs in favor of granting a preliminary
injunction.
30
4.
PUBLIC INTEREST
Avoiding duplicative legal proceedings in multiple venues is in the public interest.
However, the Court is also mindful that it is in the public interest to preserve tribal court
adjudicative authority over issues affecting a tribe’s internal relations and protecting tribal selfgovernance. Therefore, the Court finds this factor is neutral. Nonetheless, after a careful review
of the entire record and the Dataphase factors, the Court finds the Plaintiffs have met their burden
under Rule 65(b) of establishing the necessity of a preliminary injunction order.
IV.
CONCLUSION
After a careful review of the entire record, and a careful consideration of all of the
Dataphase factors, the Court finds the Dataphase factors, when viewed in their totality, clearly
weigh in favor of the issuance of a preliminary injunction. The Plaintiffs have met their burden of
establishing the necessity of a preliminary injunction.
The Court GRANTS Kodiak Oil, EOG Resources, and HRC Operating’s motions for
preliminary injunction (Docket Nos. 29, 58 (Case No. 4:14-cv-085) and 26 (Case No. 4:14-cv087)), and ORDERS Defendants Jolene Burr, Ted Lone Fight, Georgianna Danks and Edward S.
Danks enjoined from further prosecuting the underlying action in Tribal Court and Defendants
Judge Mary Seaworth, in her capacity as Acting Chief Judge of the Fort Berthold District Court,
and Yvette Falcon, in her capacity as the Court Clerk/Consultant of the Three Affiliated Tribes
District Court of the Fort Berthold Indian Reservation, enjoined from exercising jurisdiction over
the underlying Tribal Court action until a final determination of the Plaintiffs’ claims in federal
31
court. Further, the Court DENIES the Tribal Court Defendants’ motions to dismiss (Docket Nos.
44, 52 (Case No. 4:14-cv-085) and 31 (Case No. 4:14-cv-087)).
IT IS SO ORDERED.
Dated this 22nd day of March, 2018.
/s/ Daniel L. Hovland
Daniel L. Hovland, District Judge
United States District Court
32
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