Boller v. Key Bank: An Alarming Use of Brendale v. Yakima

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2 Copyright 1993 by National Clearinghouse for Legal Services, Inc. All rights reserved. 27 Clearinghouse Review 884 (December 1993) Boller v. Key Bank: An Alarming Use of Brendale v. Yakima By Andrew W. Baldwin Andrew W. Baldwin is currently a contract attorney with Wind River Legal Services, P.O. Box 247, Fort Washakie, WY 82514, (307) ; his private practice emphasizes federal Indian law. He was formerly in-house counsel and director of the Office of Tribal Attorney, Northern Arapaho Tribe, and director of Wind River Legal Services. Copyright 1993 Andrew W. Baldwin. I. Introduction Most legal services' clients living or working on Indian reservations rely upon the rights, privileges, and protections provided by tribal law and tribal courts. Of obvious importance are tribal protections regarding foreclosures, garnishments, attachments, and other forms of execution by judgment creditors. The Shoshone and Arapaho Tribes of Wyoming, for example, have special rules for executions of judgments including (1) exemptions that are more expansive than Wyoming law; (2) rules encouraging informal repayment agreements; and (3) rules that prevent executions within 60 days of the entry of judgment. /1/ Also unlike Wyoming law, tribal law prohibits self-help repossessions and declares void all contract provisions to the contrary. /2/ A recent Wyoming Supreme Court case, Boller v. Key Bank, however, radically expanded the scope of exclusive state court jurisdiction over foreclosures of Indian lands (and probably other forms of property execution) on the reservation. /3/ Of concern to advocates across the country is the court's unique approach to federal law governing the scope of tribal jurisdiction. In Boller, an enrolled member of the Shoshone Tribe of the Wind River Indian Reservation executed a mortgage on certain real property, owned by him in fee simple, to secure a note held by Key Bank, which is located outside of the reservation. /4/ The land Mr. Boller mortgaged was formerly held by the United States in trust for him. In 1978, a fee patent to the land was issued in Mr. Boller's name pursuant to the General Allotment Act of /5/ When Mr. Boller defaulted on his note, the bank sought to foreclose in state court pursuant to state law. Mr. Boller objected, arguing that the Shoshone and Arapaho Tribal Court had exclusive jurisdiction over the foreclosure. The Wyoming Supreme Court held that the state trial court had exclusive jurisdiction over the foreclosure and that state law applied. The court's opinion relied on (1) the General Allotment Act; (2) a characterization of the area of land involved as "open" under

3 Brendale v. Confederated Tribes and Bands of Yakima Indian Nation; /6/ (3) the impact of the U.S. Supreme Court's ruling on the interests of the Shoshone and Arapaho Tribes under Brendale; (4) actions of Mr. Boller that the court said waived tribal court jurisdiction; and (5) distinguishing aspects of the Wyoming Supreme Court's earlier jurisdictional ruling in Wyoming ex rel. Peterson v. District Court. /7/ A critical analysis of Boller reveals significant flaws in the rationale expressed in the majority opinion. /8/ Of particular concern is the court's interpretation and application of Brendale and its analysis of tribal interests. The Boller court's rationale regarding Brendale could affect the scope of tribal court jurisdiction in a wide range of cases, including those to which the General Allotment Act does not apply. II. "Open" versus "Closed" Areas of the Reservation In Brendale, a divided U.S. Supreme Court held that Yakima County could zone non- Indian lands in the "open" portion of the Yakima Reservation but that the county could not regulate non-indian land use in the "closed" portion of the reservation. /9/ In Boller, the Wyoming Supreme Court concluded that Mr. Boller's land was similar to the "open" area described in Brendale and, therefore, was subject to exclusive state jurisdiction for the following three reasons. /10/ A. Physical Character of the Land First, the Wyoming Supreme Court relied on the fact that Mr. Boller's land was "used primarily for livestock grazing and rural homesites." /11/ In another section of the opinion, the Boller court reinforced its reliance on the physical similarities between the "open" area in Brendale and the area where Mr. Boller's property was located on the Wind River Reservation, saying "the land is 'open,' i.e., it and surrounding land are being used primarily for grazing and rural homesites in which there is other fee patented land in the area." /12/ While it is certainly true that in Brendale the Supreme Court described the "open" land on the Yakima Reservation as "primarily rangeland, [and] agricultural land," the Court's distinction did not rest upon the physical characteristics of the land in question. "The closed area is so named because it has been closed to the general public.... Access to the open area, as its name suggests, is not likewise restricted to the general public." /13/ The Boller court's reliance on the physical character of an area to determine the scope of state court jurisdiction to foreclose on lands in that area is astounding. Under such an approach, the heavily wooded lands of the tribes in Wisconsin would be forever "closed" to state jurisdiction, while the arid lands of the southwestern pueblos would lose all semblance of tribal control because they are primarily "open." /14/

4 B. Landowner "Access" versus "Public Access" Second, the Boller court relied on the fact that "[a]ccess to appellant's land from U.S. Highway 287 (approximately one mile) is entirely over fee patented land, part of which is a housing tract subdivision." /15/ While it is true that the landowner in Brendale had access to his property, the U.S. Supreme Court did not rely on that fact in deciding the scope of the county's zoning authority in the "open" area. If the Court had relied on it, then the county could not have zoned specific parcels within the "open" area anytime the owners of those tracts developed access problems. Rather, the important factor in Brendale was that access to the lands was over public roads and thoroughfares, which helped make the area more open to the public. Obviously, when the Court said "public," it meant "non-indian public." If access to one's land determines the scope of a state court's jurisdiction to foreclose upon it, few reservation lands, if any, will be subject to tribal court jurisdiction. Further, jurisdiction for each foreclosure must be determined on a tract-by-tract basis, depending upon whether a landowner has access to the parcel. Exclusive jurisdiction over the same parcel of land could change if access problems develop or disappear from year to year. If future rulings extend the logic of Boller to permit states to condemn fee lands in "open" areas in order to create or preserve access to other lands (whether Indian or non-indian owned), an "access problem" may in fact never arise. In other words, inroads into tribal jurisdiction could proceed tract-by-tract until all areas of all reservations are forcibly "opened" to state jurisdiction, a result contrary to federal treaties, law, and policy. Again, the Boller court said that access to Mr. Boller's land is "approximately one mile" from the public highway and "is entirely over fee patented land." /16/ Access to Mr. Boller's lands depended not upon public thoroughfares but upon access across lands of other private owners "through an easement agreement." /17/ However, private easements do not provide "public" access. /18/ Under Wyoming law, a "public" road is one that the public generally, not merely a portion of the public, is privileged to use. /19/ The Wyoming Supreme Court has also cited with approval cases holding that the existence of a state ("public") highway through an Indian reservation does not affect the jurisdiction of the tribe in that area. /20/ Therefore, when the Boller court refers to the "public" nature of the area in Brendale, and speaks in terms of "access" to Mr. Boller's property, the court is actually saying that "private, non-indian access" helps make an area "open" to exclusive state jurisdiction. Because there is in fact no "public" access to Mr. Boller's lands, the court could not have correctly relied on the portion of Brendale that discusses public access to and through an "open" area. To the extent that the Boller court relies on the existence of "private, non- Indian access" to lands to determine the court's jurisdiction to foreclose on those lands, the court's logic is without precedent.

5 C. Sale of Adjacent Tracts to Non-Indians Finally, the Wyoming Supreme Court notes that "Appellant's sale of 40 acres of his fee patented land was to a non-indian." /21/ As noted earlier, the "closed" portion of the Yakima Reservation was not open to the general public, while the "open" area was generally accessible to the public. Sale of an adjacent parcel of one's land to another private person hardly renders it or the surrounding area "open" to the general public. The importance of this sale to the Wyoming Supreme Court appears rooted in the court's notion that private, non-indian access or land ownership can make an area "open" to exclusive state jurisdiction over Indian lands. Without additional factors, such as public access, Brendale does not even support this proposition with respect to non-indian lands. III. Impact on Tribal Interests The Wyoming Supreme Court also relies on portions of the Brendale decision regarding the protectable interests of a tribe in regulating land use on its reservation. Brendale held that a tribe's interest "does not entitle the tribe to complain or obtain relief against every use of fee land that has some adverse effect on the tribe. The impact must be demonstrably serious and must imperil the political integrity, the economic security, or the health and welfare of the tribe." /22/ The court in Boller correctly pointed out that the state court foreclosure did not involve any change of use of Mr. Boller's lands. While the Court recognized that "[t]here may be instances in which a change of ownership would have sufficient impact to entitle a tribe to relief, such impact is not indicated here." /23/ The court also pointed out that the Shoshone Tribe "has not here indicated any concern over the change in ownership." /24/ It is unfortunate that the Shoshone Tribe did not become involved in the case, either as a party or as amicus curie. The court speculates about the nature of the tribe's interest in the case, if any had been expressed, stating, "Of course, the tribe would probably refrain from asserting jurisdiction in this case in any event for fear of creating an obstacle to the granting of mortgage loans to tribal members by banks. If it made an appearance, it would likely be on the side of appellee [Key Bank]." /25/ The Boller Court's analysis of tribal interests is flawed for several reasons. A. The Tribe's Interest in Foreclosures of Reservation Indian Lands In Brendale, the Yakima Tribe argued that its treaty-based power to exclude non-indians from its reservation necessarily included the power to zone the use of non-indian land. The court rejected this argument on the ground that the General Allotment Act prevents a tribe from excluding non-indians from their own property. /26/ Mr. Boller's land was also

6 allotted under the General Allotment Act, but he is an enrolled member of the tribe. A tribe's legitimate interest in regulation and protection of its members is assumed to be much broader than it is with respect to non-indians. /27/ Unfortunately, the Boller decision does not address this important distinction from the facts in Brendale. In determining the tribe's interest in regulating foreclosures of Indian-owned lands on the reservation, the Wyoming Supreme Court should start with the tribes' public enactments. The Wind River Tribal Code provides that tribal courts "shall have jurisdiction over any real or personal property located on the reservation to determine the ownership thereof or rights therein," subject to any contrary federal law. /28/ If the tribe has any interest in the case, it certainly seems heightened by the ruling that state court has exclusive rather than concurrent jurisdiction over the foreclosure. The Tribal Law and Order Code also declares a policy of broad civil jurisdiction: It is hereby declared as a matter of tribal policy and legislative determination, that the public and tribal interests demand that the tribes provide all individuals living within the Wind River Indian Reservation with an effective means of redress for both civil and criminal conflicts against members, non-enrolled members, and other persons who through their residence, presence, business dealings, other acts or failures to act, or other significant minimum contacts with this reservation and/or its residents... incur civil obligations to persons or entities entitled to the tribes' protection. /29/ In addition, the Code provides that tribal jurisdiction "shall extend to the territory within the Wind River Indian Reservation." /30/ Finally, the Code declares personal civil jurisdiction over "[a]ny person who transacts, conducts, or performs any business or activity within the reservation, either in person or by an agent or representative." /31/ It seems worth noting that the Tribal Code does not establish "open" and "closed" areas of the Wind River Reservation; it does not distinguish between areas it does and does not regulate. The Code also does not limit its authority over foreclosures to land held in trust by the United States for tribal members. /32/ The court in Boller speculates that the tribe's interest in land ownership is less than its interest in regulating the use of the land itself. This may be true with respect to the tribe's interest in environmental protection or land use regulation. However, Boller relied heavily on the physical character of the land involved and the presence of non-indian-owned fee land to determine that Mr. Boller's land was "open" under Brendale. It is this very approach which makes land ownership a vital interest to the tribes. The loss of jurisdiction over mortgage foreclosures under Boller is a legitimate concern of the tribe because loss of that jurisdiction can lead to loss of jurisdiction over land use under a Brendale analysis.

7 Viewing the question of protectable governmental interests from another angle may be helpful. In other words, it is important to know what interest the state of Wyoming has in obtaining jurisdiction over foreclosures of Indian-owned fee lands on the reservation. However that interest is defined, the tribe has a similar, competing interest. Whatever the Wyoming Supreme Court may say about the scope of the tribes' jurisdiction as declared in the Tribal Code, it seems apparent that the tribes have a valid governmental interest in the scope of their civil jurisdiction over Indian lands located on the reservation. B. Federal Recognition of the Tribe's Interest In addition to the legislatively declared interest of the tribes, the United States has also recognized a tribe's interest in executions against property of tribal members located on their reservations. Federal law has specifically prevented on-reservation executions of judgments issued by state courts, even when the state court clearly had jurisdiction over the parties and subject matter of the dispute. The parties did not brief, and the Boller court did not address, this additional line of authority. Felix Cohen, author of a leading treatise on Indian law, concludes that when "execution to satisfy an off-reservation judgment against an Indian is sought, a state court and sheriff cannot seize Indian property within a self-governing reservation." /33/ He also notes that "[w]hen the parties are Indians, tribal courts have exclusive jurisdiction. When a non- Indian brings an action against an Indian and the action arises in Indian country, the rule of exclusive tribal jurisdiction also normally applies." /34/ State officials have no power to execute or otherwise enforce state court judgments on an Indian reservation, even when state court jurisdiction to adjudicate the rights of the parties is unquestioned. /35/ In Annis v. Dewey County Bank, an Indian sought to enjoin Dewey County Bank from enforcing its state court judgment against him on the reservation. The bank argued that the county sheriff could seize the plaintiff's livestock because all of the following occurred off of the reservation: (1) the plaintiff's signing of the security agreement; (2) the plaintiff's breach of the agreement; and (3) service of state court process. Furthermore, the tribal council had approved the specific security agreement used by the parties. Nonetheless, the court in Annis rejected the bank's argument because it "fails to recognize that the actual attachment by state officials must be made on the reservation and state officials have no jurisdiction on Indian reservations." /36/ Provision for the assumption of state civil jurisdiction over Indian country is made in 25 U.S.C. Sec. 1322(a) and (b). /37/ Only "strict compliance" with 25 U.S.C. Secs et seq. can allow state attachment processes to reach property of an Indian on the reservation. /38/ The Tenth Circuit has ruled that New Mexico state courts have no jurisdiction to garnish or otherwise attach wages due to a reservation Indian and in possession of his non-indian, on-reservation employer. /39/ In Joe v. Marcum, the circuit court decided that "to allow the present garnishment proceeding to stand would impinge upon tribal sovereignty." /40/

8 The same Navajo treaty examined and relied upon in Joe has been described by the Wyoming Supreme Court as "virtually identical" to the Shoshone treaty. /41/ The court in Joe noted that the Navajo Tribal Code provided its own methods of postjudgment enforcement. /42/ Similarly, the Shoshone and Arapaho Tribes have provided for postjudgment enforcement proceedings, including recognition of foreign judgments. Indeed, the Tribal Code provides a comprehensive system of debtor and creditor rights and obligations, including rules for prejudgment attachment, dishonored checks, executions and foreclosures on real and personal property, executions on unsecured property (including exemptions), garnishment, and replevin. /43/ C. Tribal Support for State Jurisdiction The Boller court states confidently, "Of course, the [Shoshone] tribe would probably refrain from asserting jurisdiction in this case in any event for fear of creating an obstacle to the granting of mortgage loans to tribal members by banks." /44/ The Tenth Circuit has rejected precisely the kind of second-guessing engaged in by the Boller court. In Bank of Oklahoma v. Muscogee (Creek) Nation, the bank argued "that commercial relations between Indian tribes and non-indian banks will be chilled if the district court's dismissal [in deference to tribal court proceedings] is affirmed." /45/ The court held that "this policy argument precisely misses the point of sovereign immunity, which is the power of self-determination. We decline the Bank's invitation to second-guess the wisdom of the [Creek] Nation's business decisions under the guise of judicial review." /46/ In addition, the Boller court's conclusion assumes that at least the following premises are true: Off-reservation banks are the sole or primary source of loans to tribal members. Offreservation lenders are not always the sole source of credit to tribal members. The Shoshone Tribe has long maintained both a loan guarantee and a direct lending program for tribal members. In addition, Bureau of Indian Affairs loan programs have been available to tribal members, including loans for the purchase of homes. /47/ Tribal law does not adequately protect the interests of lenders. As noted earlier, the Tribal Code provides for foreclosures of secured interests in real property on the reservation. /48/ Additionally, the Code permits recognition of foreign judgments, including judgments from state courts. /49/ Clearly, off-reservation creditors have specific rights and remedies under tribal law. Lenders would not loan funds to tribal members unless they could foreclose through state court proceedings or pursuant to state law. The concerns and decisions of lenders like Key Bank, the effects of those decisions on credit availability on the reservation, and the tribe's policies in that regard are speculative. As noted, the Tenth

9 Circuit declined "the Bank's invitation to second-guess the wisdom of [tribal]... business decisions under the guise of judicial review." /50/ If the Shoshone Tribe weighed the interests of the tribe and all of its members against the needs of some of its members for off-reservation credit, it would forgo the assertion of jurisdiction over foreclosures of fee lands on the reservation. One need only review the jurisdictional provisions of the Tribal Code to detect the danger in relying on this premise. IV. Conclusion The Wyoming Supreme Court has misread and misapplied the ruling in Brendale, invoking an approach that could eviscerate federal law regarding tribal sovereignty. Brendale did not rely on the physical character of the lands in question to determine whether they were "open" to state jurisdiction; Boller did. Brendale emphasized the existence of public thoroughfares in the open area; Boller accepted a private easement agreement as the equivalent of public access. Brendale permitted Yakima County to zone non-indian land use in the open area; Boller upheld exclusive state court jurisdiction to foreclose upon Indian land. Boller might be limited to situations involving off-reservation creditors and lands allotted under the General Allotment Act. However, the Court's analysis of open areas and tribal interests under Brendale would leave few Indian fee lands, if any, under tribal control. Land ownership patterns on a reservation can cost a tribe its jurisdiction to regulate non- Indian land use under Brendale. Under the Boller approach, tribes could also lose jurisdiction to regulate debtor and creditor rights of tribal members on Indian fee lands as well. In addition, if the logic used in Boller is extended to allow states to condemn Indianowned fee lands in "open" areas in order to create private, non-indian access to other lands, there will indeed be no limit to the amount of fee land owned by tribal members that a state court can ultimately control. Boller is a bold attempt to create broad state jurisdiction over Indian country and tribal members to the exclusion of tribal courts and tribal law. Advocates should be aware of this attempt and the potential danger it poses to the rights and remedies available to our clients. footnotes /1/ The Shoshone and Arapaho Law and Order Code [hereinafter S&A LOC], Rules of Civil Procedure, Rule 35(3), prohibits the seizure and sale of property of the judgment debtor if it would "create an immediate substantive hardship on the immediate family of the judgment debtor." Several specific categories and values of property that mirror

10 Wyoming's are presumed to create such a hardship. S&A LOC, Rules of Civil Procedure, Rule 35(1), encourages agreements; Wyoming has no comparable provision. /2/ S&A LOC Sec (1)(a). /3/ Boller v. Key Bank, 829 P.2d 260 (Wyo. 1992). /4/ The ruling in Boller applies only to lands held in fee status, as opposed to lands held in trust by the United States for the benefit of the Indian owner. Separate rules and issues apply to executions on trust property. /5/ General Allotment Act of 1887, 25 U.S.C. Secs , 339, , 348, 349, 354, 381. /6/ Brendale v. Confederated Tribes & Bands of Yakima Indian Nation, 492 U.S. 408 (1989). /7/ Wyoming ex rel. Peterson v. District Court, 617 P.2d 1056 (1980). /8/ A complete analysis of all points discussed or relied upon by the court in Boller is beyond the scope of this article. /9/ The Chief Justice and Justices Byron R. White, Antonin Scalia, and Anthony M. Kennedy joined the opinion with respect to the "open" area and Justices John Paul Stevens and Sandra Day O'Connor concurred in the result in a separate opinion. Justices Harry A. Blackmun, Walter J. Brennan, Jr., and Thurgood Marshall joined the opinion with respect to the "closed" area, and Justices Stevens and O'Connor concurred in the result in a separate opinion. /10/ Boller, 829 P.2d at 262. /11/ Id. /12/ Id. at /13/ Brendale, 492 U.S. at /14/ Under this approach, reforestation might become a leading strategy among tribes seeking to protect their authority to determine real property rights among their members and non-indians on their reservations. /15/ Boller, 829 P.2d at 262. /16/ Id.

11 /17/ Id. at The Boller court does not say that appellant was estopped from arguing his jurisdictional points because he earlier tried to obtain access to his lands pursuant to state condemnation law. /18/ See WYO. STAT. Secs et seq., regarding the establishment of private roads. /19/ McGuire v. McGuire, 608 P.2d 1278 (Wyo. 1980). /20/ Peterson, 617 P.2d at /21/ Boller, 829 P.2d at 262. The Boller court does not say that appellant was estopped from arguing his jurisdictional points because he earlier sold part of his lands to non- Indians. /22/ Brendale, 492 U.S. at 431 (cited in Boller at ). /23/ Boller, 829 P.2d at 263. /24/ Id. /25/ Id. /26/ Brendale, 492 U.S. at /27/ "When the parties are Indians, tribal courts have exclusive jurisdiction. When a non- Indian brings an action against an Indian and the action arises in Indian country, the rule of exclusive tribal jurisdiction also normally applies." FELIX COHEN, HANDBOOK OF FEDERAL INDIAN LAW 342 (citations omitted). /28/ S&A LOC Sec The phrase "subject to any contrary... federal laws" adds nothing to an analysis of the tribe's interest under the Brendale approach. Both the tribe and the state are subject to the supremacy of federal law. /29/ S&A LOC Sec , Jurisdiction-Tribal Policy (emphasis added). /30/ Id. Sec , Territorial Jurisdiction. /31/ Id. Sec , Personal Jurisdiction. /32/ Tribal courts have jurisdiction over foreclosures of mortgages on Indian trust lands, and the law of the tribe applies to such foreclosures, 25 U.S.C. Sec. 483a. See Northwest S.D. Prod. Credit Ass'n v. Smith, 784 F.2d 323, 326 (8th Cir. 1986). /33/ COHEN, supra note 27, at 359.

12 /34/ Id. at 342. /35/ Annis v. Dewey County Bank, 335 F. Supp. 133 (D.S.D. 1971). /36/ Id. at 136. /37/ Wyoming has not enacted legislation to assume such jurisdiction over the Shoshone and Arapaho Tribes; nor have the tribes consented to the same. /38/ Annis, 335 F. Supp. at 136. /39/ Joe v. Markham, 621 F.2d 358 (10th Cir. 1980). /40/ Id. at 361. /41/ Peterson, 617 P.2d at /42/ Joe, 621 F.2d at 361. /43/ See Title II, Rule 35, of the Rules of Civil Procedure, and Title XIV of the S&A LOC. /44/ Boller, 829 P.2d at 263. /45/ Bank of Okla. v. Muscogee (Creek) Nations, 972 F.2d 1166 (10th Cir. 1992). /46/ Id. at /47/ See 25 C.F.R. pts. 101, 103. /48/ S&A LOC Secs et seq. /49/ Id. Secs et seq. /50/ Bank of Okla., 972 F.2d at 1166.