AT&T Corp. v. Oglala Sioux Tribe Utility Commission et al

Filing 30

ORDER granting in part and denying in part 18 Motion to Dismiss for Lack of Jurisdiction and Staying Case. Signed by U.S. District Judge Lawrence L. Piersol on 9/25/15. (MWT)

FILED
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION

SEP 2 5 2015

~~

*****************************************************************************
*
CIV 14-4150
AT&T CORP.,
*
*
Plaintiff,
*
* MEMORANDUM OPINION AND
ORDER GRANTING IN PART
vs.
*
AND DENYING IN PART
*
DEFENDANTS'
OGLALA SIOUX TRIBE UTILITY
*
MOTION TO DISMISS
COMMISSION; JOE RED CLOUD;
*
AND STAYING CASE
IVAN BETTELYOUN;
*
DAVID ''Terry" MILLS; and
*
ARLENE CATCHES THE ENEMY, in
*
their official capacities as Commissioners;
OGLALA SIOUX TRIBAL COURT; and
MARY WYNNE, in her official capacity as
Chief Judge of the Oglala Sioux
TnbalCourt,
Defendants.

*
*
*
*
*
*
*
*

******************************************************************************
Pending before the Court is PlaintiffAT&T Corp.' s (AT&T) action for declaratory judgment
against Defendants Oglala Sioux Tnbe Utility Commission (OS TUC), OS TUC' s commissioners, and
Chief Judge of the Oglala Sioux Tnbal Court, Mary Wynne (Collectively, "Defendants" or the
''Tnbe"). Defendants have moved to dismiss for a lack of subject matter jurisdiction. Subsequent to
the Defendants moving to dismiss for lack ofsubject matter jurisdiction, the Plaintiffmoved to amend
the Complaint. The Amended Complaint added Count 1 which is again requesting the declaratory and
injunctive reliefbut this time with respect to the Final Utility Order entered by the Oglala Sioux Tnbe
Utility Commission. The Amended Complaint also adds additional facts providing more detail than
was alleged in the initial Complaint. Defendants have not separately responded to the Amended
Complaint but the Defendants' initial Motion to Dismiss for lack of subject matter jurisdiction applies
to both Count 1 and Count 2 of the Amended Complaint in that both Counts request declaratory and
injunctive relief against the Defendants. Defendants have not filed a separate motion to dismiss
regarding the new count, which is Count 1 in the Amended Complaint but Defendants did object to

'

the new count in the Amended Complaint in Defendants' Opposition to Plaintiff's Motion to Amend
Complaint. So that this matter may move ahead to ultimate resolution, the Court is ruling on both
Count 1 and 2 ofthe First Amended Complaint. For the following reasons, the Motion will be granted
in part and denied in part. In addition, the federal action will be stayed pending AT&T exhausting its
available tnbal remedies.

BACKGROUND
AT&T is a telecommunications provider incorporated in New York with its principal place
ofbusiness in New Jersey. AT&T is not a member of the Oglala Sioux Tnbe. In its capacity as a
telecommunications service, AT&T acts as a long distance carrier, also referred to as an

t

l
l

r

l
•
i

I

!

l

I

I

interexchange carrier (IXC).

The OS TUC was formally established in 2013 as a subdivision of the Oglala Sioux Tnbe. The
OSTUC is responsible for the exercise oftnbal regulatory authority over all utility systems on the
Pine Ridge Indian Reservation. Defendants Joe Red Cloud, Ivan Bettelyoun, David ''Terry'' Mills,
and Arlene Catches The Enemy are commissioners of the OSTUC and are named as defendants in
their official capacities. Defendant Mary Wynne is the Chief Judge of the Oglala Sioux Tnbal Court
and is also named as a defendant in her official capacity.

As an IXC, AT&T delivers long distance calls from one local area to another. When a long
distance customer places an interstate call, the customer's long distance carrier generally transports
the call to the local telephone company, referred to as a local exchange carrier (LEC). The LEC then
carries the call the remaining distance to the called party. The LEC then bills the interstate "access
charges" to the IXC for completing the call on the LEC's network. In order for these access charges
to be valid, a federal tariff must be filed by the LEC with the Federal Communications Commission
(FCC).

Relevant to this dispute is an Oglala Sioux Reservation LEC, Native American Telecom-Pine
Ridge (NAT-PR), which has been providing telephone and broadband services on the Pine Ridge

2

I
!

reservation since 2009. Doc. 1-1 at 4. As a result of NAT -PR' s services on the Reservation, it has
billed AT&T access charges under NAT-PR's federal tariff with the FCC. AT&T has refused to pay
the charges and filed an informal complaint with the FCC on August 21, 2014. In its informal
complaint, AT&T alleges that NAT-PR's access charges are "inconsistent with federal law, that
NAT-PR has not provided services consistent with its own federal tariff: and that NAT[-PR]'s
charges are unjust and unreasonable in violation of federal law." First Amended Complaint at 5. The
FCC action is currently pending.

On September9, 2014, theOSTUC adopted an Order U-1-2014 1, creating "new requirements

governing the operation ofUtilityproviders on the Pine Ridge reservation." See Doc. 1-1 at 2. These
new requirements included: a registration requirement for all utilities; an annual reporting requirement
and payment of utility fee; a process for handling consumer complaints; guidance for imposing taxes,
fees, and surcharges on consumers; and initiation and termination ofservice requirements. All utilities,
which includes AT&T, ''must comply with [the] applicable requirements, ... , or be subject to
penalties by [the OSTUC] consistent with the Tnbe Utilities Code." Id.

On September 24, 2014, the OSTUC, on its own motion, issued a Final Order (the "Order")

that "addresses [] an issue of importance to the administration and application of rules and orders in
a non-discriminatory manner on the Pine Ridge reservation." Id. at 1. The Order was the result of an
August 20, 2014 inquiry by the OS TUC into the question of"whether any carrier serving Pine Ridge
reservation has been subject to unreasonable discrimination." Id. While the Order purports to apply
to utilities such as AT&T generally, it centers on the dispute between AT&T and NAT-PR. In the
Order, the OSTUC found that NAT-PR established lawful tariffs governing IXC traffic and that the
tariffs are consistent with FCC regulations. Ultimately, the OSTUC found that "[i]t is unlawful for
these carriers to unilaterally withhold payment for services provided byNAT-PR while continuing
to enjoy the benefits of such services." Id. at 7. The Order concluded by detailing the process through
which services such as AT&T may bring future challenges to the OSTUC.

1

The Court has not been provided a copy of this September 9, 2014 Order.

3

On October 23, 2014, the OSTUC issued a "notice of liability" purporting to impose a fine

on utility providers that had not registered with the OSTUC in the amount of$1,000 per day. Doc.
29-2 at 1. This notice named ten utilities, including AT&T. First Amended Complaint at 3. Thereafter,
on December 19, 2014, the OSTUC filed a complaint against AT&T and eight other defendants in
tnbal court. See Doc. 29-3 at 1. In its complaint, the OSTUC asked the tribal court for an "Order
enforcing the Notice of Liability and the fines imposed on the Defendant utility providers." Id.

DISCUSSION
"A federal court must have jurisdiction over a matter before it grants [] relief" Sprint
Communications Co. v. Wynne, No. 4:15-CV-04051-KES, 2015 WL 4644983, at *2 (D.S.D. Aug.

4, 2015) (citing Bruce H Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412, 1422 (8th Cir. 1996)).
"'Whether a trib[ e] [] has adjudicative authority over nonmembers is a federal question."' 1d. (quoting
Plains Commerce Bankv. Long Family Land & Cattle Co., 554 U.S. 316, 324 (2008)). Therefore,

this Court has jurisdiction over AT&T' s claim for declaratory judgment.

Declaratory judgment provides "means by which rights and obligations may be adjudicated
in cases involving an actual controversy that has not reached the stage at which either party may seek
a coercive remedy and in cases in which a party who could sue for coercive relief has not yet done
so."§ 2751 Purpose ofDeclaratory Judgments, lOB Fed. Prac. & Proc. Civ. § 2751 (3d ed.). See 28
U.S.C. § 2201. In order to comport with Article III, Section 2 of the Constitution, the Declaratory
Judgment Act may be invoked only in "a case of actual controversy." 28 U.S.C. § 2201. See County
of Mille Lacs v. Benjamin, 361 F.3d 460, 463 (8th Cir. 2004) (quoting Carson v. Pierce, 719 F.2d

931, 933 (8th Cir. 1983)) ("'The controversy requirement of the Declaratory Judgment Act is
synonymous with that of Article III of the Constitution."'). What constitutes a case of actual
controversy for purposes of a declaratory judgment is a question of degree: whether the controversy
"is of sufficient immediacy and reality to permit ... "granting the remedy. Purpose of Declaratory
Judgments, supra, at § 2751. Therefore, whether facts before a court present an actual controversy
must be assessed on a case-by-case basis. Id.

4

In the present case, the OSTUC issued an Order on September 24, 2014 purporting to hold
services such as AT&T to the requirements the Tribe Utilities Code. See Doc. 1-1 at 2. According
to the Order, doing business on the Reservation means that "all of these carriers, regardless of
whether they have their own facilities on the Pine Ridge reservation or use the facilities of another
carrier, are subject to the jurisdiction and authority of the Oglala Sioux Tnbe and this Commission."

Id. Based on the tnbal regulations, the Tnbe has imposed fines on AT&T and attempts to exercise
regulatory authority over it. AT&T has neither remitted the fines nor complied with the tnbal
regulations. Instead, AT&T insists that the Tnbe and the OSTUC have no jurisdiction, generally, to
regulate AT&T' s conduct. The Court finds these facts support a sufficiently concrete case or
controversy. "[T]o satisfy the actual controversy requirement ofthe Declaratory Judgment Act, there
must exist 'substantial controversy between the parties having adverse legal interests, of sufficient
immediacy and reality to warrant issuance of a declaratory judgment."' Gopher Oil Co. v. Bunker,
84 F.3d 1047, 1050 (8th Cir. 1996) (quoting Caldwell v. Gurley Refining Co., 755 F.2d 645, 649
(8th Cir. 1985)). Here, as noted previously, the Tribe and the OSTUC purport to have jurisdiction
over AT&T to hold it to tribal regulations. As part of those regulations, AT&T is to register as a
utility and pay various fees, which have been assessed against AT&T and not paid. Currently pending
is an action in tnbal court related to that nonpayment. The parties' rights are therefore sufficiently
adverse and concrete to support declaratory action. The Court will therefore tum to whether AT&T
is entitled to declaratory judgment against the Tribe.

I. DOES 47 U.S.C. § 207 PRECLUDE THIS COURT'S JURISDICTION?
In its motion to dismiss, the Tnbe argues that this Court lacks jurisdiction to grant AT&T's
request for declaratory judgment by operation of 47 U.S.C. § 207 of the Federal Communications
Act (FCA). That section reads in whole,
Any person claiming to be damaged by any common carrier subject to the provisions
of this chapter may either make complaint to the Commission as hereinafter provided
for, or may bring suit for the recovery ofthe damages for which such common carrier
may be liable under the provisions of this chapter, in any district court of the United
States of competent jurisdiction; but such person shall not have the right to pursue
both such remedies.

5

47 U.S.C. § 207. Based on a plain reading of the statute, the Tribe argues that AT&T's complaint
before the FCC forecloses on maintaining a separate action before this Court. Insofar as Defendants'
motion centers on AT&T' s dispute with NAT -PR and its federal tariff: Defendants are correct. See
Sprint Communications Co., L.P. v. Native American Telecom, LLC, No. CIV. 10--4110-KES, 2010
WL 4973319, at *4 (D.S.D. Dec. 1, 2010) ("Congress has expressed a preference for a federal forum
both by preempting all non-federal substantive law claims regarding interstate tariffs and by limiting
the forum where such a claim can be brought to a federal forum") (emphasis added); AT&T Corp.
v. Coeur d'Alene Tribe, 295 F.3d 899, 905 (9th Cir. 2002) ("By its express language, § 207
establishes concurrent jurisdiction in the FCC and federal district courts only, leaving no room for
adjudication in any other forum- be it state, tnbal, or otherwise."). Thus, when a complainant such
as AT&T seeks to challenge interstate tariffs imposed by a common carrier, the complainant may file
an action with either the FCC or United States District Court, but not both. The Court agrees that
any dispute with NAT-PR is already before the FCC and this Court's jurisdiction to that extent is,
therefore, precluded.

AT&T asserts, however, that 47 U.S.C. § 207 is inapplicable because the OSTUC is not a
common carrier and emphasizes that the OSTUC is not a party to the FCC action. '"[C]ommon
carriers 12 are entities that must provide [transmission] service[ s] to the public without discrimination
and are heavily regulated by the FCC." Johnson v. American Towers, LLC, 781 F.3d 693, 702 (4th
Cir. 2015)(quotingPinneyv. Nokia, Inc., 402 F.3d 430, 450 (4th Cir. 2005)) (first alteration added).
The Court agrees that OSTUC is not a common carrier and an action such as this is, thus, not barred
by operation of 47 U.S.C. § 207. The facts presented are distinguishable from Native American
Telecom. There, the court held that 4 7 U.S. C. § 207 precluded the Crow Creek Sioux Tnbal Court's
jurisdiction over an action by Sprint Communications against Native American Telecom (NAT). In
its action, Sprint sought a preliminary injunction against NAT's imposition of two access service
2

47 U.S.C. § 153 defines "common carrier" as,
any person engaged as a common carrier for hire, in interstate or foreign communication by wire
or radio or interstate or foreign radio transmission of energy, except where reference is made to
common carriers not subject to this chapter; but a person engaged in radio broadcasting shall not,
insofar as such person is so engaged, be deemed a common carrier.
47 U.S.C. § 153(11)

6

tariffs. The Native American Telecom court found that NAT was "a tribally owned limited liability
company organized under the laws of South Dakota" and "provide[d] telecommunications service
on the Crow Creek Reservation subject to the tribe's laws." Native American Telecom, 2010 WL
4973319, at *1. See American Towers, 781 F.3d at 702 (finding that the lessor-owners of wireless
service towers are not "common carriers" but that the lessee-service providers are). Here, nothing
in the record suggests, and the parties do not argue, that the OS TUC provides telecommunications
services. Therefore, 47 U.S.C. § 207 does not apply to the facts presented and does not bar this
Court's jurisdiction to grant AT&T's requested relief in Count One ofthe First Amended Complaint.
Therefore, the Tnbe's motion to dismiss as to Count One of the First Amended Complaint is denied.
Alternatively, the Tnbe asserts that the doctrines of claim preclusion and issue preclusion
foreclose this Court's jurisdiction. 3 The Court disagrees. "Claim preclusion, or res judicata, 'bars
relitigation of the same claim between parties or their privies where a final judgment has been
rendered upon the merits by a court of competent jurisdiction."' Plough By and Through Plough v.

West Des Moines Community School Dist., 70 F.3d 512, 517 (8th Cir. 1995) (quoting Smith v.
Updegraff, 744 F.2d 1354, 1362 (8th Cir. 1984)) (emphasis added). See Allen v. McCurry, 449 U.S.
90, 94 (1980) (''Under res judicata, a final judgment on the merits of an action precludes the parties
or their privies from relitigating issues that were or could have been raised in that action.") (emphasis
added). The parties do not dispute that the FCC action is pending. Thus, res judicata and collateral
estoppel do not apply since there is no final decision from the FCC that would preclude the claim or
issues from being before the Court.

As to the dispute with NAT-PR, AT&T argues in its briefthat that dispute is not the subject
of this declaratory judgment action. Throughout AT &T's First Amended Complaint, however, are

3

Res judicata, while sometimes discussed as encompassing both claim preclusion and issue preclusion, is distinct
from the latter. Krull v. Jones, 46 F. Supp. 2d 997, 1000 (D.S.D 1999). Issue preclusion, often referred to as
collateral estoppel, forecloses a party from relitigating discrete issues previously decided by a tribunal as opposed to
a claim in its entirety. See id. (quoting Plough By and Through Plough v. West Des Moines Community School
Dist., 70 F.3d 512, 515 (8th Cir. 1995)). See Allen v. McCurry, 449 U.S. 90, 94 (1980) ("Under collateral estoppel,
once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude litigation of
the issue in a suit on a different cause of action involving a party to the first case.").

7

I
l

allegations as to NAT -PR' s status as a "traffic pumping" 4 network and that its access charges are
inconsistent with federal law. Related to those allegations, Count Two of AT&T's First Amended
Complaint seeks a declaration from this Court that the OSTUC is without jurisdiction to enforce the
September 24 Order. Specifically, AT&T requests that, insofar as the Order pertains to the AT&T
and NAT -PR dispute, the OS TUC is without jurisdiction to enforce it. Granting AT&T' s declaratory
reliefon this point, however, would be tantamount to invalidating NAT-PR's access charges. AT&T
asks this Court to invalidate the Tribe's jurisdiction over the NAT-PR dispute, claiming that the tariffs
imposed upon it by NAT-PR are invalid. As discussed, however, AT&T has already selected its
forum for the dispute with NAT-PR: the FCC. As such, by operation of 47 U.S.C. § 207, this Court
is without jurisdiction to enter the requested relief insofar as this action implicates NAT-PR and its
access charges and the Tribe's motion to dismiss will be granted as to Count Two of the First
Amended Complaint.

While the arguments ofthe parties have been addressed in the foregoing discussion, the matter
is not dispensed with. There remain issues to be addressed pertaining to the Tnbe's regulatory
authority over nonmember activity on reservation land.

II. DOES THE TRIBE HAVE INHERENT AUTHORITY OVER
TELECOMMUNICATIONS SERVICES ON THE RESERVATION?
Notions of tribal sovereignty and self-government counsel in favor of allowing the Tribe to
first determine its own jurisdiction on the present matter. While the parties do not raise the question
ofthe applicability oftribal exhaustion doctrine, the Court finds it to be a necessary consideration and
thus raises it sua sponte. Similar to the facts of Wynne, the Tribe ''points to no federal statute or
treaty specifically authorizing tnbal jurisdiction in this case so any tnbal jurisdiction 'must arise from
[the Oglala Sioux Tribe's] retained or inherent sovereignty.'" Wynne, 2015 WL 4644983, at *2
(quoting Belcourt Pub. Sch. Dist. v. Davis, 786 F .3d 653, 657 (8th Cir. 2015)) (alteration in original).

4

"Traffic pumping" is a business arrangement "whereby businesses [such as NAT-PR] generate high volumes of
calls by providing conference calling and similar services to others at little or no charge and [the business] pays the
[customers] kickbacks from the high levels of tariffs collected." Tekstar Communications, Inc. v. Sprint
Communications Co., L.P., Civil No. 08-1130 (JNE/RLE), 2009 WL 2155930, at * 1 (D. Minn. July 15, 2009).

f

i

t

8

I

f

I
l
i

The Tribe's retained or inherent sovereignty, however, does not grant it any type of automatic
jurisdiction over nonmembers. Instead, in order to have jurisdiction over nonmember activity on
reservation land, one of two exceptions must be satisfied: one, a tribe has jurisdiction over a
nonmember that enters a consensual relationship with a tribe or its members; or two, a nonmember's
activity "directly affects the tnbe's political integrity, economic security, health, or welfare." Strate

v. A-1 Contractors, 520 U.S. 438, 446 (1997) (summarizing the test for tribal jurisdiction over
nonmember activity first explained in Montana v. US., 450 U.S. 544 (1981)).

The record makes clear that AT&T has no physical presence on the Tnbe's reservation land.
AT&T's First Amended Complaint specifically alleges that AT&T is not a tribal member, is not
located on the Reservation, maintains no equipment on the reservation, and has no physical presence.
First Amended Complaint at 3. But under Montana, physical location is merely relevant, not
dispositive. See Wynne, 2015 WL 4644983, at *3 (citing Attorney's Process & Investigation Servs.

Inc. v. Sac & Fox Tribe of Miss. in Iowa, 609 F.3d 927, 937 (8th Cir. 2010)). Certainly a
telecommunications company can enter a consensual relationship with a tnbe or a tribal member or
engage in an activity on reservation land without being physically present there. After all, the focal
point of Montana analysis is the location of the nonmember's activity or conduct, not the location
of the nonmember him or herself Id. The Eighth Circuit recently held as much. In DISH Network

Service, LLC v. Laducer, 725 F.3d 877, 884 (8th Cir. 2013), the Eighth Circuit observed that while
an alleged tort of abuse of process may have taken place off reservation land, the harm of the tort
would still be felt on the reservation since the tort was related to a contract DISH had with a person
residing on the reservation. Because ofthe relationship with the reservation, the Eighth Circuit found
that tribal jurisdiction was not plainly lacking and the tribal court itself should be allowed to decide
the question of its jurisdiction for itself in the first instance. Id.

In the present case, no tort is being alleged by AT&T, but, as was found in Wynne, "the
regulations proposed by the OSTUC are aimed at protecting consumers on [the Reservation]."

Wynne, 2015 WL 4644983, at *4. Moreover, in its First Amended Complaint, AT&T alleges that it
''provides service to any customers located on the Reservation through Service Agreements or other

9

contracts that are governed by federal and/or State law, not tnbal law." First Amended Complaint
at 9. Thus, just as in DISH Network, AT&T's contact with the reservation is directly related to
contracts with Reservation residents. That the contracts are governed by something other than tnbal
law is not dispositive. In addition, while the Order complained of by AT&T is specifically directed
at it, the underlying regulations relied upon by the OS TUC in issuing the Order would be applicable
to any service similar to AT&T. See id. at 3 ("[OSTUC] named ten utility providers in the notice
including AT&T."). Furthermore, the regulations the OSTU C is attempting to enforce directly relate
to activity that AT&T has undertaken on the Reservation land. Thus, the Montana test does have
more bearing on the facts presented here than in DISH Network since, unlike in DISH Network, the
activity of AT&T itself, and not just the alleged harm of an off-reservation tort, is taking place on
reservation land. As the Wynne court recently stated, accepting the argument that physical presence
on reservation land is dispositive ''would exempt from tribal jurisdiction any business that had no
physical presence on a reservation regardless of the degree of contact and involvement it had with
tnbal members or the impact on the tnbe's welfare." Wynne, 2015 WL 4644983, at *3. A holding
dependent upon physical presence would also ignore the challenges that have come about concerning
electronic communications and electronic transactions.

Physical location aside, AT&T itself alleges that it "provides intrastate and interstate longdistance services to less than five customers located on the Reservation." First Amended Complaint
at 8. While the number of customers served by AT&T on the Reservation is low, that alone is not
sufficient to hold that the Montana test is not met. The Eighth Circuit has found that a single
customer is sufficient to grant a tnbe jurisdiction. See DISH Network, 725 F.3d at 885. In addition,
the Supreme Court's reasoning in Plains Commerce Bank v. Long Family Land & Cattle Co., 554
U.S. 316, 337-38 (2008), suggests that the degree of tnbal regulation relative to the degree of
connection the nonmember has with the Reservation is a further factor that a court may consider in
assessing a tribal court's jurisdiction under Montana. "Ifsome proportional degree oftribal regulation
is appropriate based on a nonmember's connection to the reservation, then the propriety ofthe tnbal
regulations in this case is a question of proportion and not a question ofjurisdiction." Wynne, 2015
WL 4644983, at *4. Thus, the Court finds that AT&T's connection to Oglala Sioux Tribal land is

10

sufficient for the tnbe to at least be allowed to decide the extent ofits jurisdiction in the first instance.

Finding that the Tribe has jurisdiction over matters concerning telecommunications on its own
land, it must next be determined if AT&T may nonetheless seek relief in this Court. While tnbal
jurisdiction over nonmembers is limited, it has been recognized by the Supreme Court that ''the
Federal Government[] [has a] longstandingpolicyof encouraging tribal self-government." lowaMut.

Ins. Co. v. LaPlante, 480 U.S. 9, 14 (1987). Given this policy, tnbal exhaustion doctrine has been
developed to require parties to first challenge tnbaljurisdiction in tnbal court before turning to United
States District Court. See Nevada v. Hicks, 533 U.S. 553, 555-56 (2001) (''We believe that
examination should be conducted in the first instance in the Tnbal Court itself Our cases have often
recognized that Congress is committed to a policy of supporting tnbal self-government and selfdetermination. That policy favors a rule that will provide the forum whose jurisdiction is being
challenged the first opportunity to evaluate the factual and legal bases for the challenge.").

Exhaustion oftnbal remedies thus developed as "a prudential exhaustion rule, in deference
to the capacity of tribal courts 'to explain to the parties the precise basis for accepting jurisdiction."'

Strate, 520 U.S. at 450 (quoting Nat'/ Farmers Union Ins. Cos. v. Crow Tribe ofIndians, 471 U.S.
845, 857 (1985)). The Supreme Court, however, has developed four exceptions to tribal exhaustion
doctrine: (1) where ''tribal jurisdiction is motivated by a desire to harass or is conducted in bad faith;"
(2) where the case "is patently violative of express jurisdictional prohibitions;"5 and (3) ''where
exhaustion would be futile because of the lack of an adequate opportunity to challenge the court's
jurisdiction." Nat'! Farmers, 471 U.S. at 856 n. 21. The fourth exception was recognized in Strate,
where the Supreme Court held that when "it is plain that [tnbal jurisdiction does not exist], the
otherwise applicable exhaustion requirement must give way, for it would serve no purpose other than
delay." Strate, 520 U.S. at 459 n. 14 (internal citation omitted). Under Strate, exhaustion is not
required when tribal jurisdiction would be "frivolous or obviously invalid under clearly established
law." DISH Network, 725 F.3d at 883.

5

This exhaustion exception is discussed more thoroughly in Part III., infra.

11

Since the Court raises the issue of tnbal exhaustion sua sponte, the record relevant to the
issue is limited. Nevertheless, AT&T's First Amended Complaint and arguments in its brief make
clear that it requests this Court to rule that the OS TUC has no jurisdiction over it generally. Given
the above discussion and unresolved factual questions, however, the Court declines to rule that the
Tnbe is plainly lacking jurisdiction over AT&T sufficient to excuse it from the requirement of tnbal
exhaustion in all events. AT&T's contact with the Tribe on reservation land, while limited, is
sufficient to grant the Tnbe the opportunity to first determine its own jurisdiction and the Court finds
that AT&T must first exhaust its tribal remedies before proceeding in federal court. See Burlington
Northern R. Co. v. Crow Tribal Council, 940 F.2d 1239, 1245 (9th Cir. 1991) (''The requirement of
exhaustion oftnbal remedies is not discretionary; it is mandatory. The district court had no discretion
to relieve [Plaintift] from exhausting tnbal remedies prior to proceeding in federal court."); Nat 'l
Farmers, 4 71 U.S. at 857 (finding that "exhaustion is required before such a claim may be entertained
by a federal court."). That AT&T is contesting the jurisdiction of a tribal administrative agency as
opposed to tnbal court is of no consequence and exhaustion is still a required prerequisite to this
Court's jurisdiction. Reservation Telephone Cooperative v. Three Affiliated Tribes of the Fort
Berthold Reservation, 76 F.3d 181, 186 (8th Cir. 1996) (''We hold that Duncan Energy [Company
v. Three Affiliated Tribes of the Fort Berthold Reservation, 27 F.3d 1294 (8th Cir. 1994), rehearing
en bane denied,] controls this action and requires the [Plaintiffs] to exhaust the administrative and
adjudicative remedies outlined in the Tnbal Tax Code before presenting their preemption arguments
to a federal court.") (emphasis added); Burlington Northern, 940 F.2d at 1246 ("[Plaintift] must
exhaust [] tnbal remedies, both administrative and judicial, before federal court adjudication of the
[]claims may proceed.") (emphasis added).

III. IS TRIBAL JURISDICTION PREEMPTED BY FEDERAL LAW?
AT&T argues in its brief and claims in its First Amended Complaint that federal law preempts
tribal governance over the issues presented. Specifically, AT&T asserts that "[t]he Federal
Communications Act gives the FCC exclusive jurisdiction over the provision of interstate services,
including wireline long distance services." First Amended Complaint at 4 (citation omitted). The
argument targets the second Nat 'l Farmers exhaustion exception and AT&T seems to suggest that
12

any tribal regulation of telecommunications is preempted by existing federal law, thus precluding
tnbal jurisdiction in any way. See AT&T' s brief in opposition at 5 ("AT&T' s federal claim here is not
limited to Defendants' attempt to exercise jurisdiction over charges imposed by NAT-PR under its
federal tariff, but extends to Defendants' attempt to exercise jurisdiction over AT&T in any way.")
(emphasis added). The role tnbes may serve in telecommunications regulation, however, is not as
certain as the requested relief suggests.

"At the tum of this century, the FCC acknowledged that Native American tribes have a role
in ensuring that 'all Americans, in all regions of the United States, have the opportunity to access
telecommunications and information services' and that 'certain communities, particularly Indian
reservations and Tribal lands, remain underserved[.]"' Wynne, 2015 WL 4644983, at *5 (quoting In
the Matter of Statement ofPolicy on Establishing a Government-to-Government Relationship with
Indian Tribes, 16 FCC Red 4078 at * 1 (FCC 2000). Since then the FCC has reaffirmed the roles of

tnbes in telecommunications. Inin the Matter of Western Wireless Corporation, 16 FCC Red 18145
(FCC 2001 ), the FCC determined that an agreement between a wireless service, Western Wireless,
and the Oglala Sioux Tribe satisfied the first prong of the Montana test and allowed the tribe, as
opposed to the South Dakota Public Utilities Commission (SD PUC), to exercise jurisdiction over
Western Wireless. Thus, while broad regulatory authority over communications law and policy has
been entrusted to the FCC by Congress, the FCC has demonstrated a desire to allow tnbes to regulate
telecommunications insofar as it affects reservation land. As the FCC itself stated,
[A]s an independent agency of the federal government, the Commission recognizes
its own general trust relationship with, and responsibility to. (sic) federally-recognized
Indian Tnbes. The Commission also recognizes the rights of Indian Tribal
governments to set their own communications priorities and goals for the welfare of
their membership.
In the Matter ofStatement ofPolicy on Establishing a Government-to-Government Relationship with
Indian Tribes, 16 FCC Red 4078 at *2 (FCC 2000).

While 47 U.S.C. § 207 might appear to foreclose on tribal jurisdiction in this case, as
discussed above, the OSTUC is not a common carrier. While a South Dakota District Court has
13

found ''that Congress preempted tribal jurisdiction over claims brought under [4 7 U.S. C. § 207] by
limiting jurisdiction over those claims to the FCC or federal courts and leaving 'no room for
adjudication in any other forum ... ,"' Wynne, 2015 WL 4644983, at *6 (quoting Native American

Telecom, 2010 WL 4973319, at *5), AT&T itself disclaims 47 U.S.C. § 207's applicability here.
Outside of the FCC's broad regulatory authority, however, which does not foreclose tribal
jurisdiction, no other jurisdictional prolnbition is pointed to by AT&T. "Instead, [AT&T] makes a
general jurisdictional argument of the type the Eighth Circuit has distinguished from other express
jurisdictional prohibitions." Id. at *7 (citing Reservation Telephone Cooperative, 76 F.3d at 185
(finding that the express jurisdictional prohibition exception in Nat 'l Farmers "refers to specific
prohibitions on designated tnbal remedies or to prohibitions on a tnbal forum's assertion of
jurisdiction over a dispute" and not general prohibitions on tribal jurisdiction over broad matters)).
The Court finds controlling the Eighth Circuit holding in Reservation Telephone Cooperative, 76
F.3d 181 (8th Cir. 1995). While there certainly exists telecommunications issues over which tnbes
lack jurisdiction, e.g., 47 U.S.C. § 207, no similar federal telecommunications law that this Court is
aware of equally proscnbes tnbal jurisdiction generally as AT&T suggests. Thus, finding that the
Tnbe should be allowed to determine its own jurisdiction in the first instance, the Court finds that
AT&T must first exhaust its tribal remedies before maintaining or proceeding on the federal action.

IV. SHOULD THE FEDERAL ACTION BE DISMISSED OR STAYED?

Once it is decided that a tribe should be deferred to under tnbal exhaustion doctrine, federal
courts "should either dismiss th[ e] case without prejudice for failure to exhaust tnbal remedies, or
should stay any proceedings until those remedies are exhausted." Duncan Energy Co. v. Three

Affiliated Tribes of Ft. Berthold Reservation, 27 F.3d 1294, 1301 (8th Cir. 1994). Neither the
Supreme Court nor the Eighth Circuit has established a test for district courts to apply when deciding
whether to dismiss or stay a federal action in deference to tnbes. See Nat 'l Farmers, 471 U.S. at 857
(leaving dismissal or stay up to the trial court). While the Tribe has moved for a dismissal of the
federal action, the Court finds that a stay would better promote judicial efficiency. Ifreview ofa tnbal
decision becomes necessary, a stay ofthe federal proceedings, as opposed to a dismissai would allow
for a more expedient review of that tribal decision. SeelowaMut., 480 U.S. at 19 (noting that a tnbal
14

court's "determination of jurisdiction is ultimately subject to review" in federal court).

CONCLUSION
While Plaintiffs action for declaratory judgment against Defendants may properly be
maintained in federal court, Plaintiffneed first exhaust its tribal remedies. Congress and the FCC have
expressed a desire to promote tribal self-government. Against that longstanding policy, as well as
Supreme Court and Eighth Circuit precedent, the Court finds that telecommunications regulation has
become an important component for tnbal self-government. Therefore, Defendants should be allowed
to determine their jurisdiction over telecommunications regulation in the first instance. Upon
exhausting available tnbal remedies on this jurisdictional issue, Plaintiffs action may, if necessary,
then continue in federal court with a lifting of the stay by Motion to the Court. Accordingly,
IT IS ORDERED:
1.

That Count One of the First Amended Complaint is not dismissed and no
ruling is made at this time on that request for declaratory and injunctive relief

2.

That Defendants' Motion to Dismiss what is now Count Two of the First
Amended Complaint, that having been the original Complaint, is granted.

3.

That this federal action is stayed until further Order of the Court.

4.

That the parties shall advise the Court each three months from the date of this
Order of the status of the proceedings in the Oglala Sioux Tnbal Court.

-if t::~
Datedthis ~day of September, 2015.
BY THE COURT:

wrence L. Piersol
nited States District Judge
ATTEST:

15