FILED LIJMM1 TRIBAl. COURT LUMMI NATiON AUG oo1 B 3 4 4 5 IN THE COURT OF APPEALS FOR THE LUMMI NATION MYTRIBETV, LLC A Washington State Limited ) NO. 01 CVAP 3040 Liability Co; LYN DENNIS, an Individual, ) OPINION 11 Appellant, ) ) 1 vs. ) ) 13 GAARD SWANSON, an Individual and his is 1 Martial community with ERIN SWANSON, Respondent. ) ) Before Bun, Chief Justice, Pouley and Steckel, Associate Justices. BURl, C.J. This appeal concerns tribal court jurisdiction over a dispute between 0 1 two members of a limited liability corporation. ) The trial court concluded it did not have subject matter jurisdiction over an internal disagreement within MyTribe TV, LLC. [T]he claim arose out of an LLC Operating agreement formed and filed in the state of Washington. The consensual relationship between the parties was based on a state agreement not an agreement regulated by the tribe. The formation and operation of the LLC has little or no effect on tribal self- 4 government nor does it fall under the necessity of controlling internal relations. Page 1 OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
Findings of Fact and Conclusions of Law at 1, MyTribe T J v. Swanson, No. 01 CVCT 0 (May, 01). We reverse the trial court s decision. Any challenge to tribal court jurisdiction 4 raises two questions. First, does the Code of Laws empower the court to hear the subject mailer of the suit and exercise personal jurisdiction over the parties? Second, does federal law restrict what the Lummi Code authorizes? We conclude that the Lummi Code authorizes the court to exercise personal and subject matter jurisdiction over this lawsuit and that federal law does not forbid it. Because the internal disagreement in MyTribe TV involves a Lummi Tribal member, a LLC registered to do business on the Reservation, and proceeds from Lummi contracts, courts 1 have jurisdiction to adjudicate these claims. 13 I. Facts Since Respondent Gaard Swanson seeks dismissal for lack of jurisdiction, the 1 Court presumes the allegations in Appellants complaint are true and draws all reasonable inferences in their favor. North County Community Alliance, Inc. v. Salazar, 53 F.3d 3, 41-4 (gth Cir. 00) ( court must accept all allegations of material fact as true and construe them in the light most favorable to nonmoving party). Any 0 statement of fact the Court makes in this decision is provisional, solely for determining 1 jurisdiction. In June 00, Appellant Lyn Dennis and Respondent Gaard Swanson executed 4 an operating agreement to create MyTribe TV, a Washington limited liability corporation. The Company s purpose was to record Native American events and broadcast them on Page OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
the Internet. According to Ms. Dennis declaration, the LLC is a majority-owned Lummi corporation, licensed to do business on the Reservation. Furthermore, Mr. Swanson visited the Reservation numerous times to discuss MyTribe TV s business plans. Ms. 4 Dennis recalls signing the LLC Agreement while on the Lummi Reservation. The parties intended that Mr. Swanson would manage the LLC s finances and. Ms. Dennis would secure recording and broadcast contracts in Indian Country. According to Ms. Dennis, from 00 through 011, the LLC conducted business exclusively in Indian Country, with a large majority of the contracts negotiated and executed on the Lummi Reservation. She identifies at least three contracts signed with Lummi entities or performed on the Reservation: (1) the Lummi Indian Business Council 1 for video equipment and leasing a channel on MyTribe TV; () the 13 School; and (3) the Department of Interior Indian Energy Economic Development, for a video on pipefitters training, filmed on the Reservation. In addition, MyTribe TV had 1 significant contracts with other tribes and tribal entities in the United States and British Columbia. On September, 0, Mr. Swanson emailed Ms. Dennis, requesting to dissolve the LLC. A dispute arose when Ms. Dennis identified expenses that she believes were 0 either unauthorized or unrelated to the business. These expenses include travel to 1 cities where MyTribe TV did not do business and large payments to Mr. Swanson and another LLC employee. Ms. Dennis claims that Mr. Swanson has misappropriated LLC 4 funds for his own benefit. Page 3 OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
On Court, alleging corporate January breach 4, 01, Ms. Dennis filed her complaint in Tribal of fiduciary duties, tortuous misconduct, tortuous interference, fraud, quantum meruit, misappropriation and conversion. On March 0, 01, 4 Mr. Swanson filed a motion to dismiss for lack of jurisdiction, and on May, 01, the trial court appeals. II. granted Standard the motion, dismissing the lawsuit with prejudice. Ms. Dennis now Of Review We review the trial court s dismissal order de 4, 51 (gth Cir. 01) ( review de novo plaintiffs first amended complaint for lack of whether subject nova Harris v. Rand, F.3d the district court properly dismissed mailer jurisdiction ). To survive a 1 motion to dismiss, the non-moving party must allege facts sufficient to make a colorable 13 claim of jurisdiction. Philip Morris USA, Inc. v. King Mountain Tobacco Co., Inc., 5 F.3d 3, 35 1 nonmember ( Cir. 00) ( Tribal Court Philip Morris s federal and Internet and beyond the reservation ). Ill. The Lummi The first Code Provides question is whether Both state does claims for not have colorable jurisdiction over trademark infringement on the Personal and Subject Matter Jurisdiction the Lummi Code grants the trial court personal 0 jurisdiction over the parties and subject matter jurisdiction over the dispute. We hold 1 that it does. /I 4 / / Page 4 OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
A. Personal Jurisdiction Under Lummi Code (LC) 1.0.030, Mr. Swanson s physical presence on the 3 reservation, in addition to MyTribe TV s registration to do business there, constitutes 4 consent to personal jurisdiction. Entrance, actions, or activities by any person on the Lummi Reservation or lands within Tribal Court jurisdiction as defined in Section 1.0.0 of this Code shall be deemed equivalent to and construed to be an acceptance of the jurisdiction of the Tribal Court and consent to such jurisdiction over his person concerning any legal action pursuant to this Code... (LC 1.0.030) (emphasis added). As noted above, evidence exists that Mr. Swanson visited the Reservation more than once to discuss MyTribe TV operations, including contracts or business with the or Tribal entities. 1 Furthermore, Mr. Swanson s LLC agreement with Ms. Dennis, a Lummi member, 13 and MyTribe TV s commercial operations on the Reservation are minimum contacts, sufficient to create personal jurisdiction. Any person, whether or not a member of the or a resident of 1 the Lummi Reservation, who in person or through an agent does any of the acts in this section, thereby submits himself or, and if through an agent, his personal representative, to the jurisdiction of the court of the Lummi Reservation as to any cause of action arising from the duty of the following acts: (a) Transaction or attempted transaction of any business within the 0 Reservation. 1 (b) The commission of a tortious act within the Reservation. (LC 3.01.00). In her complaint and submissions to the trial court, Ms. Dennis makes a 4 colorable claim that Mr. Swanson individually, and MyTribe TV, transacted business on Page 5 OPINION 1 Kwina Road Beilingham, WA facsimile: (30) 31-34
the Reservation. In addition, by allegedly diverting revenues from Lummi contracts for his personal use, Mr. Swanson also committed a tortious act within the Reservation. 3 Finally, Mr. Swanson knew or should have known that his business activities on 4 the Reservation would subject him to personal jurisdiction in the Nation s courts. To conduct business, MyTribe TV obtained a license from the. Under LC 4.03.040(b), before engaging in any business on the Reservation, all persons shall have in their possession a certificate of registration duly issued by the Lummi Indian Business Council and all persons shall display at all times a valid and current certification. Lummi Tribal Court has jurisdiction for violations of this licensing ordinance. (LC 4.05.0). 1 MyTribe TV, LLC and its members, Lyn Dennis and Gaard Swanson, chose to 13 conduct business on the Reservation and obtained a business license to do so. 1 Accordingly, the Nation s courts have personal jurisdiction over MyTribe TV and its members, related to this business activity. B. Subiect Mailer Jurisdiction The Lummi Code grants the Tribal Court broad power to hear civil and criminal claims. Under LC 1.01.0, it is the duty of all courts established under this Code to 0 review, interpret, and enforce the laws of the. The two types of civil 1 claims at issue here contract and torts Lummi law. fall within the grant of jurisdiction to enforce When jurisdiction is vested in the Court, all the means necessary to carry 4 it into effect are also given, and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by the code, any Page OPINION 1 Kwina Road Bellingham, WA facsimile: (30)31-34
3 suitable process or mode of proceeding may be adopted which may be most conformable to the spirit of Tribal Law. (LC 1.0.040). If all parties to this lawsuit were tribal members, there would be no question regarding subject mailer jurisdiction. Lummi Tribal Court routinely hears cases involving contract disputes and personal injuries. The complicating factor, as discussed a below, is that federal law restricts tribal court jurisdiction over non-members. IV. Federal Law Does Not Forbid Exercising Jurisdiction Over Mr. Swanson. The second question is whether federal common law bars the Lummi Court from exercising personal and subject matter jurisdiction over Mr. Swanson. We hold it does not. 1 13 A. Strict Limits Exist On Jurisdiction Over Non-Members Federal courts enforce strict limits on tribal courts jurisdiction over non-members. As the United States Supreme Court stated in its latest opinion on the issue, For nearly two centuries now, we have recognized Indian tribes as distinct, independent political communities, qualified to exercise many of the 1 powers and prerogatives of self-government. We have frequently noted, however, that the sovereignty that the Indian tribes retain is of a unique and limited character. It centers on the land held by the tribe and on tribal members within the reservation. As part of their residual sovereignty, tribes retain power to legislate and to tax activities on the reservation, including certain activities by 0 nonmembers, to determine tribal membership, and to regulate domestic relations among members. They may also exclude outsiders from entering 1 tribal land. But tribes do not, as a general matter, possess authority over non-indians who come within their borders: [1]he inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe. Montana v. United States, 450 U.S. 544, 55, 1 S.Ct. 145, L.Ed.d 43 (1). As we explained in Oliphant v. Suguamish Tribe, 435 U.S. 1, S.Ct. 11, 55 L.Ed.d 0 4 (), the tribes have, by virtue of their incorporation into the American republic, lost the right of Page OPINION Lummi Court or Appeals 1 Kwina Road Bellingham, WA facsimile: (30)31-34
3 governing... person[s] within their limits except themselves. at 0, S.Ct. 11 (emphasis deleted; internal quotation marks omitted). Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S. 31, 3-3, S.Ct. 0, 1 L.Ed.d 45 (00) (citations and quotations omitted). it The Supreme Cou recognizes o exceptions to the lack of jurisdiction over non-members. We have recognized two exceptions to this principle, circumstances in which tribes may exercise civil jurisdiction over non-indians on their reservations, even on non-indian fee lands. Montana, 450 U.S., at 55, 1 S.Ct. 145. First, [a] tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements. Ibid. Second, a tribe may 11 exercise civil authority over the conduct of non-indians on fee lands within the reservation when that conduct threatens or has some direct effect on 1 the political integrity, the economic security, or the health or welfare *330 of the tribe. ki., at 5, 1 S.Ct. 145. These rules have become known 13 as the Montana exceptions, after the case that elaborated them. By their terms, the exceptions concern regulation of the activities of nonmembers or the conduct of non-indians on fee land. 1 Plains Commerce, 554 U.S. at 3-330. II jurisdiction exists over Mr. Swanson, it must be under one of these two exceptions. As a general rule, tribes do not have jurisdiction, either legislative or adjudicative, over nonmembers, and tribal courts are not courts of general jurisdiction. 0 Inc., 5 F.3d 3, 3 (gth Cir. 00). Philip Morris USA, Inc. v. King Mountain Tobacco Co., 1 Amicus Curiae Business Counsel suggests that a third possibility exists, namely that the maintains inherent authority to exclude non- 4 members from the Reservation. (Amicus Brief at 5) (citing Water Wheel Camp Recreation Area v. LaRance, 4 F.3d 0(1h Cir. 011)). Because this case does not Page OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
involve the physical possession of trust land or Mr. Swanson s continued physical presence on the Reservation, the Court finds no reason to apply Water Wheel here. B. MyTribe TV s And Mr. Swanson s Consensual Relationships Confer Jurisdiction We find that MyTribe TV s and Mr. Swanson s commercial activities on the Lummi Reservation give the Nation s courts jurisdiction over this dispute. In other words, Ms. Dennis has made a colorable claim of jurisdiction under the first prong of the Montana test. We reach this conclusion for three reasons. First, Mr. Swanson chose to enter business with a Lummi Tribal member, for the 11 1 13 purpose of soliciting contracts with tribes and tribal entities. As noted above, MyTribe TV s operating agreement makes the parties intentions explicit, and Ms. Dennis owned 51% of the LLC to qualify as a Lummi-owned business. (LC 4.01.0(m)). Mr. Swanson s business plan relied on tribal connections to solicit business for MyTribe TV. Second, Mr. Swanson and MyTribe TV conducted business on the Reservation. 1 Not only did Mr. Swanson physically come to the Reservation for MyTribe TV, the LLC also contracted with tribal entities and were paid tribal funds for various video and internet productions here. And third, Mr. Swanson registered MyTribe TV with the 0 1 to do business on the Reservation. The LLC purchased a business license for the privilege of soliciting commercial contracts. Mr. Swanson s consistent, intentional commercial activity on the Lummi Reservation authorizes the Nation s courts to resolve disputes related to the LLC s 4 operations. As the Ninth Circuit recently held, Page OPINiON 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
For purposes of determining whether a consensual relationship exists under Montana s first exception, consent may be established expressly or by [the nonmember s] actions. Plains Commerce Bank, 554 u.s. at 33, S.Ct. 0. We are to consider the circumstances and whether under those circumstances the non-indian defendant should have reasonably anticipated that his interactions might trigger tribal authority. 4. at 33, 4 S.Ct. 0. Water Wheel Camp Recreational Area, Inc. v. LaRance, 4 F.3d 0, (gth Cir. 011). Mr. Swanson could reasonably conclude that obtaining a Lummi business license for his Lummi-owned business, doing business on the Reservation, would trigger tribal authority. It is odd that this Court s subject matter jurisdiction would rely on Mr. Swanson s actions or consent, but that is the hybrid nature of the federal rules governing tribal 1 courts. 13 The Supreme Court has referred to Montana s principles as pertaining to subject-matter, rather than merely personal, jurisdiction. The Court, however, has never defined Indian tribal subject matter jurisdiction with the same precision as we use that term when speaking of the subiect matter jurisdiction vested and circumscribed by Article Ill. In the federal 1 courts, subject-matter jurisdiction functions as a restriction on federal power, and contributes to the characterization of the federal sovereign. As a consequence, parties to a suit in federal court may not confer jurisdiction by stipulation, or other prior action or consent of the parties. In contrast to the strictures of federal court jurisdiction, tribal adjudicatory jurisdiction over non-members is ill-defined. In Strate, the Court observed 0 that in civil matters the existence and extent of a tribal court s jurisdiction will require a careful examination of tribal sovereignty, the extent to which 1 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. More recently, in Hicks, the Court identified this careful examination as a proper balancing of state and tribal interests. 4 Page OPINION Lummi Court of Appeais 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
Smith v. Salish Kootenai College, 434 F.3d 1, 113-113 (th Cir. 00) (quotations and citations omitted); Water Wheel, 4 F.3d at ( the nature and extent of an individual defendant s actions come into play ). 4 Ultimately, the court s jurisdiction relies on the quantity and intensity of Mr. Swanson s commercial relationship with the, its members and the Reservation. [l]n cases involving nonmembers, the inquiry focuses primarily on whether a nonmember is being haled into tribal court against his will. Philip Morris, 5 F.3d at 40. Because sufficient evidence exists that defendant targeted both the Lummi Nation and its members for business, the Nation s courts may exercise jurisdiction over the LLC s operations. 1 The Court s consensual relationship analysis under Montana resembles the Court s Due Process Clause analysis for purposes of personal 13 jurisdiction. The Due Process Clause protects an individual s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations, the constitutional touchstone being whether the defendant purposefully established minimum contacts in the forum State. Burger King Corp. v. 1 Rudzewic4 41 U.S. 4, 41-, 44, 5 S.Ct. 4, 5 L.Ed.d 5 (5) (quoting Int l Shoe Co. v. Washington, 3 U.S. 3, 31, 3, S.Ct. 4, 0 L.Ed. 5 (45)). Thus, the unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State; rather it must be actions by the defendant himself that create a substantial connection. Id. at 44, 1 5 S.Ct. 4 (quoting Hanson v. Denckla, 35 U.S. 5, 3, S.Ct. 0, L.Ed.d 3 (5), and McGee v. Int l Life Ins. Cc., 355 U.S. 0,, S.Ct., L.Ed.d (5)). In its due process analysis, 1 the Court has emphasized the need for predictability to the legal system so that the defendant can reasonably anticipate being haled into court. World-Wide Volkswagen Corp. v. Woodson, 444 U.S.,, 0 S.Ct. 55, L.Ed.d 40 (0). 4 Smith v. Salish Kootenai College, 434 F.3d at 113. Page 11 OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
3 C. A Sufficient Nexus Exists Between Mr. Swanson s Contacts And This Lawsuit We next find that a sufficient nexus exists between Mr. Swanson s commercial relationships with the Tribe and its members, and the allegations in Ms. Dennis lawsuit. This nexus must exist before the tribal courts may exercise jurisdiction. The mere fact that a nonmember has some consensual commercial contacts with a tribe does not mean that the tribe has jurisdiction over all suits involving that nonmember, or even over all such suits that arise within the reservation; the suit must also arise out of those consensual S contacts. In Atkinson, the Supreme Court clarified that [a] nonmember s consensual relationship in one area... does not trigger tribal civil authority in another-it is not in for a penny, in for a Pound. Atkinson, 53 U.S. at 5, 11 5.Ct. (citation omitted); see also Strate, 50 U.S. at 45, 1 S.Ct. 04 (holding Montana s first exception inapplicable despite 11 consensual commercial relationship with the tribe, because the claim was unrelated to that relationship). Montana s consensual relationship 1 exception requires that the tax or regulation imposed by the Indian tribe have a nexus to the consensual relationship itself. Atkinson, 53 U.S. at 13 5, 11 S.Ct.. Philip Morris, 5 F.3d at 41-4. 1 The trial court dismissed Ms. Dennis complaint on this ground, concluding that an internal dispute between Mr. Swanson and her did not arise out of the Lummi contacts. There must be sufficient nexus between the consensual relationship, and the exertion of tribal authority. The breach of contract is a state claim. 0 The Lummi business license allows the LLC to do business on the Reservation however the plaintiffs claims do not arise from a dispute over 1 that license. This complaint does not allege a breach of contract between the School and the LLC or the Business Council and the LLC. The claims for breach of contract and the common law and tort claims that follow arise out of the allege breach of the underlying My Tribe TV Operating Agreement. There is insufficient nexus 4 between the consensual contact and the activity giving rise to the lawsuit. (Findings and Conclusions at 11). Page 1 OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
We respectfully disagree with the trial court. Although the parties formed the LLC under Washington law, the LLC s operations occurred overwhelmingly in Indian Country. If Ms. Dennis claims concerned the LLC s formation, the trial court s 4 conclusion would be correct. Washington State has jurisdiction to decide whether or not the LLC was properly formed. Here, however, Ms. Dennis alleges that Mr. Swanson misappropriated LLC revenues for his personal benefit including revenues from Lummi contracts. It is the LLC s operations on the Reservation, not its formation, that is at issue. Because Ms. Dennis has offered evidence of Mr. Swanson diverting revenues from business on the Reservation, we hold that is a colorable showing of jurisdiction. A sufficient and compelling nexus exists for this Court to exercise jurisdiction over Ms. 1 Dennis claims. 13 CONCLUSION Under the first Montana exception, Lummi Tribal Courts may exercise jurisdiction.. over non-members who enter consensual relationships with the Tribe and its members. 1 We find that Plaintiff Lyn Dennis has made a sufficient showing that MyTribe TV and its minority owner, Gaard Swanson, had extensive commercial contracts on the Reservation with tribal members and entities. Because the trial court erred by finding 0 these facts insufficient to establish jurisdiction, we vacate the trial court s dismissal and 1 remand this matter for trial. Signed this - day of August, 01 4 Philip Bun Page 13 OPINiON 1 Kwina Road Beliingham, WA facsimile: (30) 31-34
We Concur: Justice Rand)! Steckel 4 4,, t-_.) 5 S Justice Mark Pouley 11 1 13 1 0 1 4 Page OPINION 1 Kwina Road Bellingham, WA facsimile: (30) 31-34
3 1 IWe Concur 4 Justice Randy Steckel 5 Justice Mark PoulWy 11 1 13 1 0 1 4 Page OPINION Luuizui Nation 1 lcwina Road Bellingham, WA lcnmi1. (30) 31-34