Ninth Circuit Rules against Grand Canyon Skywalk Challenge to Hualapai Tribal Court Jurisdiction


From the court’s syllabus:

Affirming the district court’s judgment in an action concerning a dispute over a revenue-sharing contract between a Nevada corporation and a tribally chartered corporation of the Hualapai Indian Tribe for the building and operation of the Grand Canyon Skywalk, the panel held that the Nevada corporation must exhaust tribal court remedies before proceeding in federal court on its claims challenging the Tribe’s authority to condemn its intangible property rights in the contract.

The panel concluded that the bad faith and futility exceptions to the exhaustion requirement did not apply. It held that where a tribal court has asserted jurisdiction and is entertaining a suit, the tribal court must have acted in bad faith for exhaustion to be excused; bad faith by a litigant instituting the tribal court action will not suffice. The panel held that the submitted evidence did not establish that the tribal court operated in bad faith or was controlled by the tribal council in its decision making. The panel also affirmed the district court’s conclusion that the evidence did not meet the narrow futility exception, which applies where exhaustion would be futile because of the lack of adequate opportunity to challenge the tribal court’s jurisdiction.

The panel held inapplicable the exhaustion exception for cases in which the tribal court plainly lacks jurisdiction. The panel stated that the main rule of Montana v. United States, 450 U.S. 544 (1981), that generally Indian tribes lack civil authority over the conduct of nonmembers on non-Indian land within a reservation, was unlikely to apply to the facts of this case. The panel held that the district court correctly relied upon Water Wheel Camp Recreation Area, Inc. v. LaRance, 642 F.3d 802 (9th Cir. 2011), which recognizes that a tribe’s inherent authority over tribal land may provide for regulatory authority over non-Indians on that land without the need to consider Montana. Moreover, even if the tribal court were to apply Montana’s main rule, the Nevada corporation’s consensual relationship with the tribal corporation, or the financial implications of their agreement, likely would place the case squarely within one of Montana’s exceptions and allow for tribal jurisdiction.

Briefs are here.