Navajo Nation v. Intermountain Steel Buildings, Inc.

42 F. Supp. 2d 1222, 1999 U.S. Dist. LEXIS 4003, 1999 WL 179345
CourtDistrict Court, D. New Mexico
DecidedMarch 26, 1999
DocketCIV-98-767-JP LFG
StatusPublished
Cited by7 cases

This text of 42 F. Supp. 2d 1222 (Navajo Nation v. Intermountain Steel Buildings, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Navajo Nation v. Intermountain Steel Buildings, Inc., 42 F. Supp. 2d 1222, 1999 U.S. Dist. LEXIS 4003, 1999 WL 179345 (D.N.M. 1999).

Opinion

MEMORANDUM OPINION AND ORDER

PARKER, District Judge.

The issue addressed in this Memorandum Opinion and Order is whether this federal court should exercise jurisdiction or defer to the judicial system of the Navajo Nation under the tribal exhaustion rule and principles of comity. The parties raised this issue by filing on February 4, 1999, a “Joint Motion to Confirm Subject Matter Jurisdiction,” (Doc. No. 16). After thoroughly considering the applicable pleadings, facts, and law, I conclude that the Joint Motion should be denied, this federal court action should be dismissed, and the parties should first pursue their claims in the Navajo Nation’s courts.

I. BACKGROUND

On June 24, 1998, the three Plaintiffs, The Navajo Nation, a federally regulated Indian tribe with sovereign authority; Navajo Agricultural Products Industries (“NAPI”), a lawfully organized enterprise of the Navajo Nation; and Allianz Insurance Company (“Allianz”), a non-Indian foreign corporation; filed this action in federal court suing Intermountain Steel Buildings, Inc., (“Intermountain”) a non-Indian Idaho corporation. On November 12, 1998, Intermountain filed a third party complaint for indemnity against Jacobson Steel & Erectors, Inc.

Plaintiff Allianz had issued an insurance policy, paid for by the Navajo Nation, that insured against fire loss a building owned by the Navajo Nation and NAPI (“Navajo Plaintiffs”). The insured building was on Navajo land and within the boundary of the Navajo Nation. A fire destroyed the building in April 1996. Plaintiffs then filed this lawsuit alleging jurisdiction under 28 U.S.C. § 1332 and averring counts of negligence, breach of contract, negligence per se, breach of express and implied warranties, claim of third-party beneficiary, and unfair trade practices. No party to this lawsuit has filed suit in the Navajo Tribal Court regarding the subject of this action.

In their Complaint, Plaintiffs allege that the fire caused at least $790,085.56 in damages. Navajo Plaintiffs had filed a claim for their loss under the Allianz insurance policy which obligated Allianz to make payments to Navajo Plaintiffs. (Complaint, ¶ 15.) Once Allianz completes its policy payments, Allianz will become sub-rogated to the rights, claims, and causes of action of the Navajo Nation. Id. The Navajo Nation also alleges that it sustained an uninsured loss of $100,000.00, the amount of its deductible under the Allianz policy. (Complaint, ¶ 16.)

*1225 In a proposed Initial Pretrial Report submitted to this court, the parties 1 stipulated that the United States District for the District of New Mexico has subject matter jurisdiction over this lawsuit. Apparently, unease caused the parties to file their Joint Motion to Confirm Subject Matter Jurisdiction seeking confirmation that this court will retain jurisdiction. In the parties’ jointly signed memorandum brief accompanying the parties’ joint motion, Defendant contends that the primary issue is whether Navajo law and custom established a duty of the Defendant to provide a thermal barrier over insulation Defendant installed in the burned building. (Memo.Brief. p. 2, ¶ 6.) Defendant also asserts that Navajo law regarding insurance, breach of contract and negligence, will apply. (Memo.Brief. p. 4, ¶ 6.) Plaintiffs, however, dispute that expertise in Navajo law and custom will be needed to resolve this action. (Memo.Brief. p. 2, ¶ 7.) Nevertheless, the parties suggest that if Navajo law and custom do apply this federal court could certify questions to the Navajo Nation courts for interpretation. (Memo. Brief, p. 4, ¶ 5.) Navajo Plaintiffs also state that they have reserved their right to raise sovereign immunity as a defense to any counterclaims or cross-claims that may be filed against them. (Memo.Brief. p. 2, ¶ 8.)

II. DISCUSSION

The Tribal Exhaustion Rule

“Congress is committed to a policy of supporting tribal self-government and self-determination. National Fanners Union Ins. Co. v. Crow Tribe of Indians, 471 U.S. 845, 856, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985). The development of tribal courts plays an important role in furthering the goal of tribal self-government, See Iowa Mutual Ins. Co. v. La-Plante, 480 U.S. 9, 14-15, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987). “Tribal authority over the activities of non-Indians on reservation lands is an important part of tribal sovereignty,” and “[cjivil jurisdiction over such activities presumptively lies in the tribal courts unless affirmatively limited by a specific treaty provision or federal statute.” Iowa Mutual, 480 U.S. at 18, 107 S.Ct. 971.

Based on Congress’ commitment to a policy of promotion of tribal self-determination, the United States Supreme Court developed the “tribal exhaustion rule” in National Farmers, 471 U.S. at 856-57, 105 S.Ct. 2447. This rule “provides that ‘as a matter of comity, a federal court should not exercise jurisdiction over cases arising under its federal question or diversity jurisdiction, if those cases are also subject to tribal jurisdiction, until the parties have exhausted their tribal remedies.’ ” Texaco, Inc. v. Zah, 5 F.3d 1374, 1376 (10th Cir.1993) (quoting Tillett v. Lujan, 931 F.2d 636, 640 (10th Cir.1991)); see also National Farmers, 471 U.S. at 856-57, 105 S.Ct. 2447; Iowa Mutual, 480 U.S. at 15-16, 107 S.Ct. 971. In the Tenth Circuit, which promotes expansive application of the exhaustion rule, “tribal court remedies must be exhausted with respect *1226 to issues other than the scope of the tribal court’s jurisdiction.” Calumet Gaming Group-Kansas, Inc., v. Kickapoo Tribe of Kansas, 987 F.Supp. 1321, 1328 (D.Kan.1997) (emphasis added).

The Supreme Court created the tribal exhaustion rule, in part, out of the Court’s concern that in diversity and federal question cases, “unconditional access to the federal forum would place it in direct competition with the tribal courts, thereby impairing the latter’s authority over reservation affairs.” Iowa Mutual, 480 U.S. at 16, 107 S.Ct. 971. Federal court adjudication of tribal court jurisdiction also “infringes upon tribal lawmaking authority, because tribal courts are best qualified to interpret and apply tribal law.” Id.

There are three exceptions to application of the tribal exhaustion rule. First, the rule does not apply where an assertion of tribal court jurisdiction is motivated by harassment or conducted in bad faith. See National Farmers, 471 U.S. at 856 n. 21, 105 S.Ct. 2447. Second, the tribal court exhaustion rule is inapplicable when the tribal court action violates express jurisdictional prohibitions.

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Bluebook (online)
42 F. Supp. 2d 1222, 1999 U.S. Dist. LEXIS 4003, 1999 WL 179345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/navajo-nation-v-intermountain-steel-buildings-inc-nmd-1999.