Chase Alone v. Brunsch

2019 S.D. 41

• Court: South Dakota Supreme Court
• Decided: July 10, 2019
• Docket: #28688-a-JMK
• Status: Published

Opinion

#28688-a-JMK 2019 S.D. 41

IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA

****

JENNIFER CHASE ALONE, as the Personal Representative of ELFREDA ANN TAKES WAR BONNETT, Deceased, Plaintiff,

v.

C. BRUNSCH, INC., a South Dakota Corporation, doing business as Defendant, Third-Party Lakota Plains Propane, Inc., Plaintiff, and Appellant,

and

WESTERN COOPERATIVE COMPANY, INC., Defendant and Third-Party a Nebraska corporation, Plaintiff,

Oglala Sioux Lakota Housing Authority, Richard Hill, Derek Janis, Wes Cottier, William White, Ben Plenty Arrows, Renaldo Two Bulls, Brandon Wes, Derek Slim, Robin T. (last name unknown), and Third-Party Defendants and John and Jane Doe 1-100, Appellees.

APPEAL FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT OGLALA LAKOTA COUNTY, SOUTH DAKOTA

THE HONORABLE JEFFREY R. CONNOLLY Judge

ARGUED ON MARCH 27, 2019 OPINION FILED 07/10/19 ROBERT J. GALBRAITH JOHN K. NOONEY of Nooney & Solay, LLP Rapid City, South Dakota Attorneys for defendant, third- party plaintiff, and appellant.

EVAN THOMPSON of Browning, Kaleczyc, Berry & Hoven, P.C. Helena, Montana

MARK F. MARSHALL of Bangs, McCullen, Butler, Foye & Simmons, LLP Rapid City, South Dakota Attorneys for appellees. #28688

KERN, Justice

[¶1.] Third-party defendants, who are enrolled tribal members and a tribal

housing authority, moved to dismiss a complaint filed against them for tortious

conduct occurring exclusively on the Pine Ridge Indian Reservation. After a limited

evidentiary hearing, the circuit court concluded it lacked jurisdiction and granted

the motion pursuant to SDCL 15-6-12(b)(1). Third-party plaintiff appeals. We

affirm.

Facts and Procedural History

[¶2.] On October 6, 2016, a duplex in Pine Ridge exploded after propane

entered a joint crawl space between Units 157 and 158 through an uncapped gas

line. A spark from the water heater pilot flame in Unit 158 most likely caused the

catastrophic explosion, which demolished the duplex and killed four people,

including Elfreda Ann Takes War Bonnett. Jennifer Chase Alone, her mother and

the personal representative of her Estate, filed an action in state court against the

building’s propane suppliers, Lakota Propane and Western Cooperative Company,

Inc. (Western Co-op), on May 31, 2017. She alleged negligence, strict liability, and

breach of warranty.

[¶3.] In the early stages of the litigation, the Oglala Sioux Housing

Authority (Housing Authority) was not a party to the lawsuit. At some point,

however, Lakota Propane discovered that the Housing Authority had, in 2013,

employed individuals to remove debris from Unit 157 after a fire damaged it. As

part of the Housing Authority’s cleanup work, they shut off Lakota Propane’s gas

services and removed a propane water heater.

-1- #28688

[¶4.] Until the spring of 2016, the Unit remained vacant while the Housing

Authority replaced several propane appliances in Unit 157 with electrical

appliances. When installing the appliances, the employees of the Housing

Authority allegedly did not check the gas lines from the previously removed propane

appliances to ensure that they were capped. On March 18, 2016, Lakota Propane

sold propane to the Housing Authority for the duplex. Gas from the uncapped lines

eventually filled the crawl space beneath the units which led to the tragic explosion

on October 6, 2016.

[¶5.] Lakota Propane requested and received information from the Housing

Authority regarding the nature of the work done on the units and the names of the

employees involved with maintaining it. Lakota Propane and Western Co-op then

filed a third-party complaint against the Housing Authority and several tribal

members in their individual capacities,1 alleging they caused the explosion by

failing to cap one or more propane lines that had previously supplied gas to the

propane appliances. Eventually, the court granted Western Co-op’s motion for

summary judgment, dismissing it from the case after concluding it owed Takes War

Bonnett no duty because it did not supply the propane that caused the explosion.

[¶6.] On September 12, 2017, Lakota Propane served the Housing Authority

with its first set of interrogatories and requests for production of documents. In the

interrogatories, it asked the Housing Authority to provide general information

regarding the renovations but did not include questions aimed at determining

1. The third-party complaint named Richard Hill, Derek Janis, Wes Cottier, William White, Ben Plenty Arrows, Renaldo Two Bulls, Brandon Wes, Derek Slim, and Rob Tuttle.

-2- #28688

subject matter jurisdiction, such as the tribal enrollment status of the individuals or

the Housing Authority’s relationship with the Tribe. Lakota Propane did not seek

discovery from any of the individually named defendants.

[¶7.] The Housing Authority refused to answer the discovery requests,

asserting the defense of sovereign immunity in response to every inquiry. For the

same reason, it moved for a protective order when Lakota Propane served it with a

notice of deposition. The Housing Authority and Richard Hill, one of the

defendants, moved to dismiss the third-party complaint pursuant to SDCL 15-6-

12(b)(1) for lack of subject matter jurisdiction. In support of its motion, the Housing

Authority attached an affidavit from Doyle Pipe On Head, an employee of the

Housing Authority, attesting that all named defendants were either tribal members

or a tribal entity and the tort occurred on the Reservation.

[¶8.] On January 4, 2018, the Housing Authority served a notice of hearing

on Lakota Propane regarding its motion to dismiss but did not disclose its plan to

present evidence at the hearing beyond the pleadings. In the two weeks between

the Housing Authority’s notice and the scheduled hearing, Lakota Propane filed an

affidavit in accordance with SDCL 15-6-56(f), requesting that the court convert the

motion to dismiss into a summary judgment motion. It argued written discovery

and a deposition pursuant to SDCL 15-6-30(b)(6) were necessary to resolve factual

disputes on the issues of subject matter jurisdiction and sovereign immunity prior

to ruling on the Housing Authority’s motion to dismiss.

[¶9.] At the January 18, 2018 hearing, the Housing Authority voiced its

intention to call Pipe On Head to the stand and offer exhibits based on his

-3- #28688

testimony. Lakota Propane responded by objecting to any questions touching on

topics that had not yet been subject to discovery. The court overruled the objection

but permitted a brief recess to allow Lakota Propane an opportunity to examine the

documents not received through discovery. Thereafter, Pipe On Head was called to

the stand and testified that he was “100% sure” all individually named defendants

were enrolled members of the Tribe. He also testified that the tort occurred

exclusively on tribal trust land. To support his statements, the Housing Authority

submitted several exhibits establishing that each defendant named in the third-

party complaint was either an enrolled member of the Tribe or a tribal entity. After

taking the matter under advisement, the circuit court issued a memorandum

opinion dismissing Lakota Propane’s third-party complaint against the Housing

Authority for lack of subject matter jurisdiction.

[¶10.] Lakota Propane appeals, alleging the circuit court erred in dismissing

the third-party complaint.

Analysis and Decision

[¶11.] Motions to dismiss for lack of subject matter jurisdiction fall into one of

two categories: (1) facial attacks on allegations of subject matter jurisdiction within

the complaint; or (2) disputes regarding the facts upon which subject matter

jurisdiction rests. See Hutterville Hutterian Brethren, Inc. v. Waldner, 2010 S.D. 86,

¶ 20, 791 N.W.2d 169, 174–75. “Jurisdictional issues, whether they involve

questions of law or fact, are for the court to decide.” Godfrey v. Pulitzer Pub. Co.,

161 F.3d 1137, 1140 (8th Cir. 1998).

-4- #28688

[¶12.] Both parties agree that in this case, the motion to dismiss constituted

a factual attack on subject matter jurisdiction. When presented with a factual

attack, the circuit court does not assume the allegations in the complaint are

accurate. See Hutterville, 2010 S.D. 86, ¶ 20, 791 N.W.2d at 175. “Because at issue

in a factual 12(b)(1) motion is the [circuit] court’s jurisdiction—its very power to

hear the case—there is substantial authority that the [circuit] court is free to weigh

the evidence and satisfy itself as to the existence of its power to hear the case.”

Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990). To resolve the question,

the court may hold hearings, consider live testimony, or review affidavits and

documents. See id.; Wright & A. Miller, Federal Practice & Procedure § 1350 at

243–49 (3d ed. 2004). On appeal, we review challenges to subject matter

jurisdiction de novo. See City of Sioux Falls v. Missouri Basin Mun. Power Agency,

2004 S.D. 14, ¶ 9, 675 N.W.2d 739, 742. However, a circuit court’s findings of fact

“cannot be disturbed unless they are clearly erroneous.” Ainsworth v. Erck,

388 N.W.2d 886, 888 (S.D. 1986).

[¶13.] We are empowered to hear only those cases constitutionally or

statutorily authorized. See Red Fox v. Hettich, 494 N.W.2d 638, 643 (S.D. 1993).

Our Constitution declares that “Indian lands shall remain under the absolute

jurisdiction and control of the Congress of the United States[.]” S.D. Const. art.

XXII; see also Risse v. Meeks, 1998 S.D. 112, ¶ 11, 585 N.W.2d 875, 877.

[¶14.] In the civil adjudicatory context, absent preemption by federal law,

state court subject matter jurisdiction turns on “whether the state action [would

infringe] on the right of reservation Indians to make their own laws and be ruled by

-5- #28688

them.” See Williams v. Lee, 358 U.S. 217, 220, 79 S. Ct. 269, 271, 3 L. Ed. 2d 251

(1959). We have consistently upheld this principle, which is commonly referred to

as the infringement test. See, e.g., Risse, 1998 S.D. 112, ¶ 27, 585 N.W.2d at 879

(Konenkamp, J., concurring); Sage v. Sicangu Oyate Ho, Inc., 473 N.W.2d 480, 481–

82 (S.D. 1991); Harris v. Young, 473 N.W.2d 141, 144, (S.D. 1991); Wells v. Wells,

451 N.W.2d 402, 405 (S.D. 1990).

[¶15.] To determine jurisdiction in accordance with the infringement test, we

assess the interests of the tribal and federal governments “on the one hand, and

those of the State, on the other.” See Washington v. Confederated Tribes of Colville

Indian Reservation, 447 U.S. 134, 156, 100 S. Ct. 2069, 2083, 65 L. Ed. 2d 10 (1980).

Under this standard, whether all defendants named in this action are member

Indians or tribal entities and whether the tort occurred within the confines of

Indian country are highly relevant in determining whether the exercise of

jurisdiction will infringe on tribal self-government. See, e.g., Williams, 358 U.S. at

220, 79 S. Ct. at 271.

[¶16.] At the motions hearing, the Housing Authority submitted certificates

of Indian blood issued by the Oglala Sioux Tribe’s Department of Enrollment

establishing that each individual defendant was a tribal member. To demonstrate

the Housing Authority’s status as a tribal entity, it provided its charter, which

declares its powers and duties as an entity of the Oglala Sioux Tribe. Although the

Housing Authority is a tribal governmental body rather than an individual, it falls

within the definition of a tribal member for purposes of jurisdiction due to its status

as a tribal entity. See generally Weeks Const., Inc. v. Oglala Sioux Hous. Auth., 797

-6- #28688

F.2d 668, 670–71 (8th Cir. 1986) (noting that the Housing Authority is “an arm of

tribal government . . . .”); cf. United States v. Big Crow, 327 F.3d 685, 686 (8th Cir.

2003) (“The Oglala Sioux Lakota Housing Authority is an Indian tribal

organization . . . .”).

[¶17.] To determine whether the tort occurred within the confines of the Pine

Ridge Indian Reservation, we rely upon the Congressional definition of Indian

country, which states, in part, that Indian country is “all land within the limits of

any Indian reservation under the jurisdiction of the United States[.]” See 18 U.S.C.

§ 1151(a). As evidence that the tort occurred in Indian country as defined in

§ 1151(a), the Housing Authority introduced into evidence funding documentation

showing it receives federal financial aid for providing housing on an Indian

reservation. It also submitted land title status reports and several aerial

photographs of the street in Pine Ridge where the explosion occurred.

[¶18.] From our review of the record and the controlling precedent, the court

correctly determined it did not have subject matter jurisdiction over the third-party

complaint. Lakota Propane has not identified any federal law that would provide

our courts with jurisdiction over its claims. Further, if the State asserted

jurisdiction over the complaint, it would infringe upon tribal self-governance.

Lakota Propane’s claims are asserted against member Indians and a tribal entity

and arise from tortious conduct occurring entirely within the Pine Ridge Indian

Reservation. See Williams, 358 U.S. at 218, 79 S. Ct. 269 (requiring a non-Indian

plaintiff to file his claim against member Indians in tribal court under infringement

principles).

-7- #28688

[¶19.] Nevertheless, Lakota Propane argues it was subjected to trial by

ambush because the court allowed the Housing Authority to present evidence at the

hearing without first permitting Lakota Propane to obtain full discovery. In Lakota

Propane’s view, when courts consider evidence outside the pleadings, even when

they are doing so to assess jurisdiction under a SDCL 15-6-12(b)(1) motion, the

rules of discovery should be broadened. Lakota Propane urged the circuit court to

convert its motion to dismiss into a motion for summary judgment. By applying the

summary judgment standard, Lakota Propane asserts “all parties [would] be given

reasonable opportunity to present all material made pertinent to such a motion by

§ 15-6-56.” See SDCL 15-6-12(b). Therefore, Lakota Propane requests that we

remand the case back to the circuit court for additional discovery on claims related

to both subject matter jurisdiction and sovereign immunity.

[¶20.] Lakota Propane is correct that, as a general rule, when conducting its

review, a circuit court should give each party an equal opportunity to request

discovery on the facts giving rise to a jurisdictional question. However, in some

cases the court’s threshold inquiry into its jurisdiction may be so narrow and

involve such uncontroverted facts as to make discovery unnecessary. Indeed, “a

party is not entitled to jurisdictional discovery if the record shows that the

requested discovery is not likely to produce the facts needed to withstand a Rule

12(b)(1) motion.” See Freeman v. United States, 556 F.3d 326, 342 (5th Cir. 2009).

See generally, e.g., Lopes v. Jetsetdc, LLC, 4 F. Supp. 3d 238, 242 (D.D.C. 2014);

Sizova v. Nat’l Inst. of Standards & Tech, 282 F.3d 1320, 1326 (10th Cir. 2002)

(“Although a district court has discretion in the manner by which it resolves an

-8- #28688

issue of subject matter jurisdiction under Rule 12(b)(1), . . . a refusal to grant

discovery constitutes an abuse of discretion if the denial results in prejudice to a

litigant.”).

[¶21.] Regardless, the discovery issue was not, strictly speaking, presented to

the circuit court as a separate and distinct issue. Lakota Propane did not seek an

order compelling discovery or otherwise invoke the procedure for litigating

discovery disputes set out in SDCL 15-6-37(a)(2). Instead, the general plea for

discovery was used as a subsidiary argument to Lakota Propane’s claim that the

Housing Authority’s motion to dismiss was premature or should be converted to a

summary judgment motion after additional discovery. See SDCL 15-6-56(f).

[¶22.] However, SDCL 15-6-56(f) does not apply here because a motion under

SDCL 15-6-12(b)(1) cannot be analyzed under the merits-based summary judgment

provisions of SDCL 15-6-56. In reaching this conclusion, we find persuasive the

reasoning of a number of federal appellate courts holding that summary judgment

procedures are inappropriate when determining questions of jurisdiction. Summary

judgment involves finding undisputed facts and resolving cases on the merits as a

matter of law. As the Fifth Circuit so aptly noted in Kirkham v. Société Air France,

429 F.3d 288, 291 (D.C. Cir. 2005), this is a task that cannot be accomplished if the

court lacks jurisdiction to hear the dispute.2

2. Gaspard v. Amerada Hess Corp., 13 F.3d 165, 168 (5th Cir. 1994) (“We have previously expressed doubt as to the propriety of summary judgment as a tool for disposing of a case on jurisdictional grounds when the district court does not actually purport to address the merits of the parties’ dispute.”); Rogers v. Stratton Indus., Inc., 798 F.2d 913, 917 (6th Cir. 1986) (“Normally, Rule 12(b)(6) judgments are dismissals on the merits and Rule 12(b)(1) dismissals (continued . . .) -9- #28688

[¶23.] In this case, Lakota Propane has not presented any indication that it

can uncover evidence that would establish subject matter jurisdiction in state court.

Instead, its basis for requesting remand for additional discovery is grounded solely

on the issue of whether the Housing Authority or the individually named

defendants were entitled to sovereign immunity. However, subject matter

jurisdiction and sovereign immunity, though often construed as a single concept, are

quite different.

[¶24.] “Subject matter jurisdiction is the power of a court to act[.]” Cable v.

Union Cty. Bd. of Cty. Comm’rs, 2009 S.D. 59, ¶ 20, 769 N.W.2d 817, 825. “[I]n the

absence of subject matter jurisdiction there can be no preclusive findings or

conclusions on the merits . . . .” Calvello v. Yankton Sioux Tribe, 1998 S.D. 107, ¶

16, n.5, 584 N.W.2d 108, 114 n.5. In contrast, sovereign immunity, although

“jurisdictional in nature[,]” see FDCI v. Meyer, 510 U.S. 471, 475, 114 S. Ct. 996, 127

L. Ed. 2d 308 (1994), is a defense that can be nullified by consent, waiver, or, with

respect to the Indian tribes, abrogation. See Michigan v. Bay Mills Indian Comty.,

572 U.S. 782, 782, 134 S. Ct. 2024, 2027, 188 L. Ed. 2d 1071 (2014). When the court

discovered it lacked subject matter jurisdiction, it correctly concluded that it must

end its inquiry and dismiss the case based on the motion to dismiss made pursuant

________________________ (. . . continued) are not . . . . [I]f a court does not have jurisdiction, ipso facto, it cannot address the merits of a case.”); Capitol Leasing Co. v. FDIC, 999 F.2d 188, 191 (7th Cir. 1993) (“Whereas a grant of summary judgment is a decision on the merits, . . . a court must dismiss the case without ever reaching the merits if it concludes that it has no jurisdiction.”); O’Donnell v. Wien Air Alaska, Inc., 551 F.2d 1141, 1144–45 n.4 (9th Cir. 1977) (“It is . . . error to rule on a summary judgment motion or any other matter going to the merits where a court determines that it lacks jurisdiction over the subject matter.”)

-10- #28688

to SDCL 15-6-12(b)(1). Therefore, it did not err by restricting Lakota Propane’s

right to conduct additional discovery. We affirm.

[¶25.] GILBERTSON, Chief Justice, JENSEN and SALTER, Justices, and

SEVERSON, Retired Justice, concur.

-11-