Sprint Communications Company L.P. et al v. Wynne et al
Filing
36
ORDER granting 33 Motion for Leave to supplement the record; denying 12 Motion for Preliminary Injunction, and order staying case. Signed by U.S. District Judge Karen E. Schreier on 8/4/2015. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
SPRINT COMMUNICATIONS COMPANY
L.P., and
SPRINT COMMUNICATIONS, INC.,
f/k/a Sprint Nextel Corporation,
4:15-CV-04051-KES
Plaintiffs,
vs.
MARY WYNNE, in her Official Capacity
as Chief Judge of the Oglala Sioux
Tribal Court;
OGLALA SIOUX TRIBE UTILITIES
COMMISSION,
JOE RED CLOUD, in his Official
Capacity as Commissioner of the Oglala
Sioux Tribe Utilities Commission;
IVAN BETTELYOUN, in his Official
Capacity as Commissioner of the Oglala
Sioux Tribe Utilities Commission;
DAVID TERRY MILLS, in his Official
Capacity as Commissioner of the Oglala
Sioux Tribe Utilities Commission; and
ARLENE CATCHES THE ENEMY, in her
Official Capacity as Commissioner of
the Oglala Sioux Tribe Utilities
Commission;
ORDER DENYING MOTION FOR
PRELIMINARY INJUNCTION AND
STAYING CASE
Defendants.
Pending is a motion for preliminary injunction filed by Sprint
Communications Company, L.P., and Sprint Communications, Inc.
(collectively, Sprint). Defendants oppose the motion. For the following reasons,
the motion for preliminary injunction is denied and this action is stayed
pending exhaustion of tribal remedies.
BACKGROUND
Sprint Communications, Inc. (Sprint Inc.) is the parent company of
Sprint Communications Company (Sprint Communications). Sprint Inc. is a
Kansas corporation and does not directly provide any telecommunications
services. Sprint Communications is a Delaware limited partnership with its
offices located in Kansas. Sprint Communications is an interexchange carrier
(IXC) and is authorized by the Federal Communications Commission (FCC) to
provide interstate telecommunications services.
The Oglala Sioux Tribal Utilities Commission (OSTUC) was formally
established in 2013 as a subdivision of the Oglala Sioux Tribe. The OSTUC is
responsible for the exercise of tribal 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 only. Defendant Mary Wynne is the Chief Judge of the Oglala Sioux
Tribal Court and is also named as a defendant in her official capacity only.
As an IXC, Sprint Communications delivers long-distance calls from one
local area to another. When an individual makes a long-distance telephone call,
the call originates with the local exchange carrier (LEC) serving the individual
making the call and is transported by the IXC selected by the calling individual
to the LEC serving the individual receiving the call. The IXC either owns the
2
facilities over which the call travels between originating and terminating LECs
or it enters into arrangements with other IXCs to route the calls over their
facilities. IXCs pay “originating” and “terminating” access charges to the LECs
that serve individuals who initiate and receive long-distance calls, respectively.
In 2014, the OSTUC initiated seven rulemaking proceedings involving
utility providers on Pine Ridge and adopted 12 orders. In one of those orders,
U-1-2014, the OSTUC created: a registration requirement for all utilities; an
annual reporting requirement and payment of a utility fee; a process for
handling consumer complaints; guidance for imposing taxes, fees, and
surcharges on consumers; and initiation and termination of service
requirements. See Docket 16-6 (final order dated September 9, 2014). Later,
the OSTUC imposed a fine of $1,000 per day for each day a utility failed to
register in compliance with requirements set forth by the OSTUC. Docket 16-7.
Sprint did not participate in the development or implementation of U-12014. Sprint Communications has not registered with or obtained a business
license from the OSTUC. Several telecommunications companies, including
Sprint Communications, have refused to comply with the requirements
imposed by the OSTUC. As a result of that noncompliance, the OSTUC filed a
complaint against those carriers, including Sprint,1 in the Oglala Sioux Tribal
Court. Docket 16-13 (tribal court complaint).
In the tribal court complaint, Sprint Nextel Corporation is the named
defendant. Docket 16-13 at 2. Sprint Inc. was formerly known as Sprint Nextel
Corporation.
1
3
Subsequently, Sprint filed its complaint in this matter. Sprint argues
that the tribal regulatory process is a disguised effort to compel IXCs to pay
Native American Telecom-Pine Ridge (NAT-PR), a tribal LEC, for terminating
access charges associated with an access stimulation scheme2 run on Pine
Ridge. See Docket 1 at 2-5, 11-12. Sprint seeks a declaratory judgment that
neither Sprint Inc. nor Sprint Communications is subject to regulation by the
OSTUC, and an order permanently enjoining the OSTUC from proceeding
against Sprint. Id. at 18-19. Sprint requested a preliminary injunction.3 Docket
12. In support, Sprint asserts that it does not have to exhaust its tribal court
remedies because it is plain that the tribal court does not have jurisdiction over
either Sprint entity.
DISCUSSION
A federal court must have jurisdiction over a matter before it grants
preliminary relief. Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412,
1422 (8th Cir. 1996). “[W]hether a tribal court has adjudicative authority over
nonmembers is a federal question.” Plains Commerce Bank v. Long Family Land
Access stimulation, also known as traffic pumping, involves a
relationship between an LEC with a high terminating switched access charge
and a provider of high volume calling operations such as free conference
calling, chat lines, or adult entertainment calls. The LEC installs the necessary
equipment at or near its facility and terminates the calls there. The LEC bills
the IXC for the terminating switched access service associated with the calls.
The LEC and the high volume calling business then share the access revenue.
See In the Matter of Connect America Fund; A National Broadband Plan for Our
Future, 26 FCC Rcd. 17663, at ¶¶ 656-57 (2011).
2
Sprint also moves for leave to supplement the record to update an
affidavit regarding the services provided by Sprint Communications on Pine
Ridge. The motion to supplement the record (Docket 33) is granted.
3
4
& Cattle Co., 554 U.S. 316, 324 (2008) (citing Iowa Mut. Ins. Co. v. LaPlante,
480 U.S. 9, 15 (1987)); see also Nat’l Farmers Union Ins. Cos. v. Crow Tribe of
Indians, 471 U.S. 845, 852 (1985). Thus, this court has jurisdiction to decide
this matter.
Defendants point to no federal statute or treaty specifically authorizing
tribal jurisdiction in this case so any tribal jurisdiction “must arise from [the
Oglala Sioux Tribe’s] ‘retained or inherent sovereignty.’ ” Belcourt Pub. Sch. Dist.
v. Davis, 786 F.3d 653, 657 (8th Cir. 2015) (quoting Atkinson Trading Co. v.
Shirley, 532 U.S. 645, 649-50 (2001)). The “pathmarking case” on inherent
tribal jurisdiction over nonmembers is Montana v. United States, 450 U.S. 544
(1981). Nevada v. Hicks, 533 U.S. 353, 358 (2001). “Indian tribes lack civil
authority over the conduct of nonmembers on non-Indian land within a
reservation, subject to two exceptions: The first exception relates to
nonmembers who enter consensual relationships with the tribe or its members;
the second concerns activity that directly affects the tribe’s political integrity,
economic security, health, or welfare.” Strate v. A-1 Contractors, 520 U.S. 438,
446 (1997) (summarizing Montana’s rule). “ ‘The burden rests on the tribe’ to
establish that one of the Montana exceptions applies.” Belcourt Pub. Sch. Dist.,
786 F.3d at 658 (quoting Plains Commerce Bank, 554 U.S. at 330).
Despite the limits on tribal jurisdiction, the Supreme Court has
recognized “the Federal Government’s longstanding policy of encouraging tribal
self-government.” Iowa Mut., 480 U.S. at 14. “This policy reflects the fact that
Indian tribes retain ‘attributes of sovereignty over both their members and their
5
territory.’ ” Id. (quoting United States v. Mazurie, 419 U.S. 544, 557 (1975)).
Given the long-held policy considerations in promoting tribal sovereignty, the
doctrine of tribal exhaustion requires parties to challenge tribal jurisdiction in
tribal court before seeking relief in a federal court. Hicks, 533 U.S. at 369; Nat’l
Farmers, 471 U.S. at 855-56 (“[T]he existence and extent of a tribal court’s
jurisdiction will require a careful examination of tribal sovereignty, the extent
to which that sovereignty has been altered, divested, or diminished, as well as
a detailed study of relevant statutes, Executive Branch policy as embodied in
treaties and elsewhere, and administrative or judicial decisions. We believe that
examination should be conducted in the first instance in the Tribal Court itself.
Our cases have often recognized that Congress is committed to a policy of
supporting tribal self-government and self-determination. 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.”); Iowa
Mut., 480 U.S. at 16 (“Promotion of tribal self-government and selfdetermination require[] that the Tribal Court have ‘the first opportunity to
evaluate the factual and legal bases for the challenge’ to its jurisdiction.”).
The exhaustion requirement is “a prudential exhaustion rule, in
deference to the capacity of tribal courts ‘to explain to the parties the precise
basis for accepting [or rejecting] jurisdiction.’ ” Strate, 520 U.S. at 450 (quoting
Nat’l Farmers, 471 U.S. at 857). In National Farmers, the Supreme Court
recognized three exceptions to the tribal exhaustion doctrine: (1) where “tribal
jurisdiction is motivated by a desire to harass or is conducted in bad faith;”
6
(2) where the case “is patently violative of express jurisdictional prohibitions;”
and (3) “where exhaustion would be futile because of the lack of an adequate
opportunity to challenge the court’s jurisdiction.” Nat’l Farmers, 471 U.S. at
856 n.21. The Supreme Court has also recognized that when “it is plain that
[tribal 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). Exhaustion is only
excused under Strate’s exception when the exercise of tribal jurisdiction “is
frivolous or obviously invalid under clearly established law.” DISH Network
Serv., L.L.C. v. Laducer, 725 F.3d 877, 883 (8th Cir. 2013).
In this case, the central question is whether any Sprint entity is subject
to Oglala Sioux Tribal regulatory and adjudicative authority under Montana
and its progeny. Sprint argues that tribal exhaustion on that question is not
required because it is plain that tribal jurisdiction does not exist. According to
Sprint, the Oglala Sioux Tribe plainly lacks jurisdiction because Sprint has no
activities on Pine Ridge and because Congress has determined that
telecommunication regulation is exclusively a federal function.
I.
Activities on Reservation
Sprint contends that “Sprint Communications4 has no facilities,
employees or activity on [Pine Ridge]. It delivers all of the long-distance traffic
Sprint also contends that Sprint Inc. is clearly not on Pine Ridge
because it is only a holding company and is not certificated by the FCC or the
South Dakota Public Utilities Commission (SDPUC) to provide
telecommunications services and for that reason tribal jurisdiction over Sprint
Inc. plainly does not exist. See Docket 13 at 18. Because the court is deferring
4
7
destined for parties on [Pine Ridge] to SDN, Great Plains, or Mt. Rushmore, or
to Inteloquent to deliver to NAT-PR. Any traffic leaving the reservation goes first
to Golden West, then to SDN in Sioux Falls before reaching Sprint
Communications’ network.” Docket 13 at 17. According to Sprint, Sprint
Communications only has three customers on Pine Ridge, although it is
unclear whether any of the three customers is a tribal member. Id. at 18.
Defendants respond that the small number of customers is sufficient to
establish that Sprint Communications conducts business on Pine Ridge and
that physical presence is not necessary. Docket 21 at 12-14.
Defendants do not point to any Sprint Communications facilities,
equipment, or employees located on Pine Ridge. But physical location, while
relevant, is not dispositive because the focal point under Montana is the
location of the nonmember’s activities or conduct.5 See Attorney’s Process &
Investigation Servs., Inc. v. Sac & Fox Tribe of Miss. in Iowa, 609 F.3d 927, 937
(8th Cir. 2010). A company—particularly a company providing
to the Oglala Sioux Tribal Court to determine the extent of its jurisdiction, the
court leaves resolution of tribal jurisdiction over Sprint Inc. in the first instance
to the Tribal Court as well.
This is consistent with Hornell Brewing Co. v. Rosebud Sioux Tribal
Court, 133 F.3d 1087 (8th Cir. 1998), cited by Sprint. In Hornell, the Eighth
Circuit explained, “The operative phrase is ‘on their reservations.’ Neither
Montana nor its progeny purports to allow Indian tribes to exercise civil
jurisdiction over the activities or conduct of non-Indians occurring outside their
reservations.” Id. at 1091 (first emphasis added). At times, the question of
where activity or conduct took place may be clear. But when a nonmember
begins an activity outside the reservation, the effects of which are directed on
to the reservation, it is not clear that such an activity occurred wholly outside
the reservation. The precise location of Sprint Communications’ activity or
conduct should be evaluated by the tribal court when it applies Montana in the
first instance.
5
8
telecommunications services—can enter a consensual relationship with tribal
members or a tribe itself or engage in activities or conduct on the reservation
without physically entering a reservation. And while Sprint Communications
may not own the wires that physically enter Pine Ridge, Sprint
Communications provides services using those wires to customers located on
Pine Ridge and then bills those customers. Sprint’s position 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 tribal members
or the impact on the tribe’s welfare. That position is inconsistent with the
increasingly electronic nature of modern commerce and the overarching federal
policy to encourage tribal self-government and self-sufficiency. See F.T.C. v.
Payday Financial, LLC, 935 F. Supp. 2d 926, 939 (D.S.D. 2013) (noting “the
realities of our modern world that a defendant, through the internet or phone,
can conduct business on the reservation and can affect the Tribe and tribal
members without physically entering the reservation”).
Attorney’s Process also instructs courts to take a functional view of the
practical regulatory effect on the nonmember in light of the conduct at issue.
See Attorney’s Process, 609 F.3d at 938. The regulations proposed by the
OSTUC are generally aimed at conduct of telecommunications providers that
affects tribal members on the reservation. In DISH Network, the Eighth Circuit
noted that even if the alleged abuse of process occurred off the reservation, the
harm arguably occurred on the reservation because the alleged victims were
located there and the tort arose out of a contract to provide satellite television
9
on the reservation. See DISH Network, 725 F.3d at 884. Although this case
does not involve a tort, the regulations proposed by the OSTUC are aimed at
protecting consumers on Pine Ridge. Furthermore, the commercial activity that
the OSTUC seeks to regulate also forms the basis for Sprint Communications’
contact with the reservation and tribal members. In that manner, this case is
unlike Hornell or the conversion claim in Attorney’s Process because the alleged
torts in those cases had no connection to the reservation. See DISH Network,
725 F.3d at 885. Thus, the fact that Sprint Communications has no physical
presence on Pine Ridge does not plainly show that Sprint is not subject to
tribal jurisdiction under federal law.
Sprint’s second argument relates to the small number of customers it
has on Pine Ridge. Neither side has argued for or provided a bright line rule
requiring a certain number or percentage of customers to be tribal members. In
DISH Network, tribal jurisdiction was appropriate based on the nonmember
satellite television provider’s contract with a single tribal member. See id. at
879. The Supreme Court’s reasoning in Plains Commerce Bank also indicates
that the degree of regulation relative to the degree of connection to the
reservation may be considered as part of the determination of tribal
jurisdiction. See Plains Commerce Bank, 554 U.S. at 337-38 (discussing a
bank’s commercial relationships with tribal members as a reason the bank
would not be surprised by some degree of tribal regulation, but that “when it
comes to tribal regulatory authority, it is not ‘in for a penny, in for a Pound’ ”).
If some proportional degree of tribal regulation is appropriate based on a
10
nonmember’s connection to the reservation, then the propriety of the tribal
regulations in this case is a question of proportion and not a question of
jurisdiction. Although the number of Sprint Communications customers on
Pine Ridge is small, it is not plain that the OSTUC is completely unable to
regulate Sprint Communications on that basis alone.
The fact that Sprint Communications is exiting the residential wireline
service sector does not alter that outcome. Sprint Communications has not yet
exited the residential wireline long-distance market and is currently still
providing that service on Pine Ridge. See Docket 34 at 2 (stating that Sprint
Communications customers will need to find a new carrier by September 19,
2015). Also, Sprint Communications would still serve the two business entities.
See id. Although those entities are incorporated under South Dakota law, the
parties do not address whether those businesses are also licensed to do
business on Pine Ridge or how the court should evaluate the impact of Sprint
Communications’ service to those businesses. Questions of tribal membership
should be determined by a tribal court. See Heldt v. Payday Financial LLC, 12
F. Supp. 3d 1170, 1184 (D.S.D. 2014) (citing Santa Clara Pueblo v. Martinez,
436 U.S. 49, 72 n.32 (1978) (“A tribe’s right to define its own membership for
tribal purposes has long been recognized as central to its existence as an
independent political community.”)) Given that unresolved factual and legal
question, the court is unable to determine that the Oglala Sioux Tribal Court
would plainly be without jurisdiction.
11
When discussing the challenges inherent in determining tribal civil
jurisdiction over nonmembers, the Eighth Circuit has observed:
The controlling principles are broad and abstract and must be
carefully applied to the myriad of factual scenarios they govern.
Determining the contours of tribal civil jurisdiction and the
boundaries of tribal sovereignty requires consideration of the
historical scope of tribal sovereignty and the evolving place of the
tribes within the American constitutional order, careful study of
precedent, and ultimately a ‘proper balancing’ of the conflicting
interests of the tribes and nonmembers.
Attorney’s Process, 609 F.3d at 934. The location of Sprint Communications’
activities and conduct and the contact between Sprint Communications and
tribal members do not conclusively reveal a lack of tribal jurisdiction. Thus, it
does not plainly appear that tribal jurisdiction in this matter is frivolous or
obviously invalid. As a matter of comity, the tribal court should have the first
opportunity to balance the interests involved and determine its jurisdiction.
II.
Federal Preemption
Sprint argues that “Congress has determined that regulation of interstate
telecommunications [is] exclusively federal.” Docket 13 at 21-22. Sprint then
cites several authorities regarding the FCC’s broad power. According to Sprint,
because the Oglala Sioux Tribe’s role in telecommunications regulation has
been preempted, it is plain that the Tribe has no jurisdiction in this matter.
The role tribes play in regulating telecommunications is not as clear as
Sprint suggests. At the turn 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
12
reservations and Tribal lands, remain underserved[.]” In the Matter of Statement
of Policy on Establishing a Government-to-Government Relationship with Indian
Tribes, 16 FCC Rcd 4078 at *1 (FCC 2000). The FCC has further recognized
that Indian tribes are sovereign and that it would “endeavor to work with
Indian Tribes on a government-to-government basis consistent with the
principles of Tribal self-government to ensure . . . that Indian Tribes have
adequate access to communications services.” Statement of Policy, 16 FCC Rcd
4078 at *2. Thus, the FCC has expressed a need to include Indian tribes as an
active partner in telecommunications regulation.
Accordingly, the FCC has found that tribes can possess the authority to
regulate telecommunications services on tribal land. See In the Matter of
Western Wireless Corporation, 16 FCC Rcd 18145 (FCC 2001). In Western
Wireless, a carrier sought to deploy a wireless service to members of the Oglala
Sioux Tribe on Pine Ridge. Id. at ¶ 6. The SDPUC and the Oglala Sioux Tribe
both claimed jurisdiction over Western Wireless and sought a determination
from the FCC on which regulatory entity had authority over Western Wireless.
The FCC noted that the “case presents the issue of the extent of tribal authority
over a non-tribally owned carrier that intends to serve both tribal members and
others on the reservation.” Id. at ¶ 13.
The FCC found that the regulatory question presented was not an
instance where federal policy preempted state regulation Id. at ¶ 12. After
discussing Montana, the FCC concluded that the agreement between Western
Wireless and the Oglala Sioux Tribe in which Western Wireless consented to
13
tribal jurisdiction satisfied the first Montana exception. Id. at ¶¶ 14-15.
Ultimately, the FCC found that both the state and the Tribe had regulatory
authority over certain aspects of Western Wireless’s services. Id. at ¶ 23 (“We
conclude, therefore, that under principles of federal Indian law, the Tribe has
jurisdiction over aspects of Western Wireless’ service to tribal members living
within the Reservation boundaries, but the State commission has authority
over the carrier’s provision of service to non-tribal members.”). Thus, the fact
that the FCC has broad jurisdiction over interstate telecommunications does
not prevent tribes from exercising some jurisdiction over certain
telecommunication services, subject to Montana’s limitations. It is therefore not
plain that the Tribe’s jurisdiction would be frivolous or obviously invalid.
It is unclear whether Sprint also intends to argue that tribal jurisdiction
violates an express jurisdictional prohibition. The Eighth Circuit has
interpreted the “express jurisdictional prohibition” exception to the exhaustion
doctrine narrowly, reserving it for instances where “the very tribal remedies
which the plaintiffs would have had to exhaust before challenging tribal
authority in federal court were preempted by express statutory provisions.”
Reservation Tel. Co-op. v. Three Affiliated Tribes of Fort Berthold Reservation, 76
F.3d 181, 185-86 (8th Cir. 1996) (emphasis in original). “ ‘A substantial
showing must be made by the party seeking to invoke [the express
jurisdictional prohibition] exception to the tribal exhaustion rule.’ ” Plains
Commerce Bank v. Long Family Land & Cattle Co., 910 F. Supp. 2d 1188, 1197
14
(D.S.D. 2012) (quoting Kerr-McGee Corp. v. Farley, 115 F.3d 1498, 1502 (10th
Cir. 1997)).
The Eighth Circuit has applied that exception when federal legislation
placed exclusive jurisdiction for a claim brought under that statute in a federal
forum. See Blue Legs v. United States Bureau of Indian Affairs, 867 F.2d 1094,
1097-98 (8th Cir. 1989) (holding that exhaustion of tribal remedies was not
required because Congress placed exclusive jurisdiction for claims under the
Resource Conservation and Recovery Act in federal court). In the
telecommunications field, this court found that Congress preempted tribal
jurisdiction over claims brought under a federal statute by limiting jurisdiction
over those claims to the FCC or federal courts and leaving “ ‘no room for
adjudication in any other forum—be it state, tribal, or otherwise.’ ” Sprint
Commc’ns Co., L.P. v. Native American Telecom, LLC, No. CIV. 10-4110-KES,
2010 WL 4973319, at *5 (D.S.D. Dec. 1, 2010) (quoting AT & T Corp. v. Coeur
d’Alene Tribe, 295 F.3d 899, 905 (9th Cir. 2002) (emphasis in original)). The
Eighth Circuit has also found tribal jurisdiction preempted where Congress
expressly prohibited any state or tribal ordinance that was an obstacle to the
accomplishment of the federal legislation at issue. See N. States Power Co. v.
Prairie Island Mdewakanton Sioux Indian Cmty., 991 F.2d 458, 460-62 (8th Cir.
1993) (discussing the Hazardous Materials Transportation Act).
Unlike those cases, in this case Sprint does not show that the OSTUC is
pursuing a remedy in tribal court that Congress has expressly prohibited or
limited to another forum. Nor does Sprint point to any provision of federal law
15
that excludes all state or tribal regulations. Instead, Sprint makes a general
jurisdictional argument of the type the Eighth Circuit has distinguished from
other express jurisdictional prohibitions. See Reservation Tel. Co-op., 76 F.3d at
185 (noting that a broad interpretation of express jurisdictional prohibitions
“would render the exhaustion requirement virtually meaningless, allowing a
tribal court to assert jurisdiction over an action only after a federal court had
effectively determined the merits of the case”). As discussed above, tribes
possess some regulatory powers in the telecommunications field, even if those
powers are not as broad as the powers vested in the FCC and are limited by
Montana. In the absence of expressly prohibited remedies or a specific
statement by Congress that it intends to exclude tribes from all
telecommunications regulation, tribal jurisdiction in this case is not patently
violative of an express jurisdictional prohibition.
Sprint suggests that the comprehensive nature of FCC authority
implicitly displaces tribal authority by occupying the field of
telecommunications regulation. In Bruce H. Lien, the Eighth Circuit addressed
whether the Indian Gaming Regulatory Act (IGRA) preempted tribal civil
jurisdiction over a gaming dispute. Although the Eighth Circuit acknowledged
that IGRA was sufficiently comprehensive to preempt state law, it did not
conclude that IGRA also “divest[ed] tribal courts of jurisdiction regarding
reservation affairs.” Bruce H. Lien, 93 F.3d at 1421. Further, the Eighth Circuit
emphasized that under the exhaustion doctrine tribal courts should act first to
determine whether IGRA preempted tribal jurisdictions, stating:
16
It is true that under certain circumstances, preemptive federal
statutes may serve to relieve a party from exhausting tribal court
remedies, or may serve to curtail the tribe’s power to assert
jurisdiction. These notions notwithstanding, it bears repeating that
under the exhaustion doctrine, the tribal courts themselves are
given the first opportunity to address their jurisdiction and explain
the basis (or lack thereof) to the parties.
Id. (internal citations and quotations omitted). If the court accepted Sprint’s
argument that federal law occupies the field of telecommunications regulation
and completely displaces tribal regulations, that finding would imply that
federal law displaces state regulations as well. And the FCC itself has stated
that tribes (and states) have a role to play in telecommunications regulation
and that the existence of tribal regulations is not incompatible with federal law
and regulations.
Sprint also asserts that some of the specific tribal regulations conflict
with FCC regulations or usurp FCC authority. See Docket 13 at 12-14
(discussing related cases T-2-2014 and T-3-2014 that set tribal rules on when
an IXC may refuse to pay an invoice and provision of lifeline services); id. at 2425 (same). But even if the OSTUC implemented individual regulations that
cannot be upheld because they exceed the scope of OSTUC’s authority, that
would not wholly divest the tribe of jurisdiction. The tribal court can consider
whether specific regulations are proper exercises of tribal regulatory
jurisdiction.
Despite the prominence of the FCC in telecommunications regulation,
the OSTUC’s assertion of jurisdiction is based on tribal regulations and not on
a federal statute that provides for exclusive jurisdiction in a federal forum.
17
Thus, this case does not involve an express jurisdictional prohibition. Tribes,
like states, are not prohibited from regulating telecommunications. Although
questions remain about the regulations at issue in this case, it is not plain that
tribal jurisdiction is frivolous or obviously invalid. Under the exhaustion
doctrine, the tribal court is entitled to define the limits of its jurisdiction.
III.
Stay
When a federal court defers to a tribal court under the tribal exhaustion
doctrine, “[t]he district court should either dismiss th[e] case without prejudice
for failure to exhaust tribal 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). The parties do not
address what action the court should take to implement its decision to defer to
the tribal court. The Supreme Court and Eighth Circuit have not set forth a
specific test or rule for district courts to follow in deciding whether to dismiss
without prejudice or stay an action after finding that exhaustion is required.
See Iowa Mut., 480 U.S. at 19 n.14 (remanding for consideration of whether a
stay or dismissal is appropriate); Nat’l Farmers, 471 U.S. at 857 (leaving
dismissal or stay up to the trial court); Bruce H. Lien, 93 F.3d at 1422 (“[I]t
appears that the orderly administration of justice requires the District Court to
stay its proceedings pending a determination by the Tribal Court of that court’s
jurisdiction[.]”); Duncan, 27 F.3d at 1301. Neither party has requested
dismissal of this action. After Sprint exhausts its tribal remedies, the tribal
court’s jurisdictional determination would be subject to review in this court.
18
See Iowa Mut., 480 U.S. at 19 (noting that a tribal court’s “determination of
jurisdiction is ultimately subject to review” in federal court). A stay promotes
the orderly administration of justice because it would allow for efficient review
of the tribal court’s decision, if necessary. This action is stayed pending
exhaustion of tribal remedies on the question of tribal court jurisdiction over
Sprint Inc. and Sprint Communications.
CONCLUSION
As the FCC has recognized, tribes have a role to play in the regulation of
telecommunications services. This court respects the tribal court’s prerogative
to settle questions of its jurisdiction and to explain the basis for its acceptance
or rejection thereof. Sprint has not demonstrated that tribal jurisdiction in this
matter violates an express jurisdictional prohibition or that tribal jurisdiction
plainly does not exist and will only serve to delay these proceedings. Because
exhaustion of tribal remedies is required as a matter of comity, the court
denies Sprint’s motion for a preliminary injunction. In doing so, the court does
not hold that tribal jurisdiction over Sprint is ultimately proper under Montana,
only that the tribal court should be given the first opportunity to resolve that
question. Under these facts, it is proper to stay this action pending Sprint’s
exhaustion of its tribal remedies. Accordingly, it is
ORDERED that Sprint’s motion to supplement the record (Docket 33) is
granted.
IT IS FURTHER ORDERED that Sprint’s motion for a preliminary
injunction (Docket 12) is denied.
19
IT IS FURTHER ORDERED that this action is stayed until further order
of the court. The parties will keep the court advised of proceedings in the
Oglala Sioux Tribal Court.
Dated August 4, 2015.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE
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