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Colombe v Rosebud Sioux Tribe

Case No. 13-1382 (C.A. 8, Apr. 4, 2014)

Charles Colombe was a member of the Rosebud Sioux Tribe (“the Tribe”), and he was a shareholder, director, and officer of BBC Entertainment, Inc. (“BBC”), which managed a casino on tribal lands. After receiving an adverse ruling from the Rosebud tribal courts regarding a casino management contract, Colombe filed an action in federal court seeking to vacate the tribal court ruling and to enjoin the Tribe from continuing a second action in the Rosebud tribal courts. In the proceeding before the district court, the Tribe moved to dismiss the complaint for failure to exhaust tribal court remedies. The district court granted the motion to dismiss in part and denied the motion in part. The district court later entered summary judgment in favor of the Tribe and its officials on the remainder of the case. Colombe appeals the dismissal in part and the grant of summary judgment. The Tribe cross-appeals, arguing the district court should have dismissed the entire complaint for failure to exhaust tribal court remedies. We agree with the Tribe, and thus we reverse the district court’s denial in part of the motion to dismiss. We affirm the district court in all other respects.

I.



The Tribe owns and operates a casino on tribal trust land in South Dakota. In 1994, the Tribe entered into a five-year casino management contract with BBC. Article 6.4(c)(5) of the contract required BBC to fund an initial Operation Expense Reserve (“OER”) account. BBC, however, never made the initial contribution to the OER account. Instead, BBC and the Tribe orally agreed that BBC would contribute 7.5% of the casino’s net profits to the account each month. At the conclusion of the contract, BBC withdrew $415,857 from the OER account based on its belief that it was entitled to 35% of the remaining OER account balance, a division consistent with the contract’s division of net profits. The Tribe brought a breach-of-contract suit in tribal court, arguing that the oral modification was not in compliance with the Indian Gaming Regulatory Act of 1988 (“IGRA”) and IGRA’s various implementing regulations.

IGRA created the statutory basis for the regulation and operation of gaming by Indian tribes. IGRA established the National Indian Gaming Commission (“NIGC”) to oversee Indian gaming. Indian tribes may enter into casino management contracts only after the NIGC Chairman has approved those contracts. Any modifications of the contracts are also subject to the NIGC Chairman’s approval. The NIGC Chairman approved the casino management contract entered into by the Tribe and BBC, but the oral modification regarding the funding of the OER account was never presented to the NICG Chairman.
 

 

Judge(s): Bobby Shepherd
Jurisdiction: U.S. Court of Appeals, Eighth Circuit
Related Categories: Civil Procedure
 
Circuit Court Judge(s)
Arlen Beam
Raymond Gruender
Bobby Shepherd

 

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Click the maroon box above for a formatted PDF of the decision.
i. jurisdiction to rule that there had been an illegal modification of the management (8th cir. 2013) (citing nat’l farmers union ins. cos. v. crow tribe of indians, 471 the tribal court in the initial suit brought by the tribe. second, after the tribal court the district court rejected the tribe’s argument for dismissal on this basis. it before gruender, beam, and shepherd, circuit judges. on two grounds. first, he claims that due to his and bbc’s insolvency, it was 1 indian tribes. igra established the national indian gaming commission (“nigc”) challenge the [tribal] court’s jurisdiction,” see nat’l farmers union ins. co. v. crow action and, reading the brief generously to bbc, that jurisdiction to determine the ins. co. v. laplante, 480 u.s. 9, 17 (1987) (“until appellate review is complete, the its measure of damages was the full amount bbc withdrew from the oer account. challenge of the tribal courts’ jurisdiction. we remand this part of the claim to the provisions in the tribe’s amended constitution, and thus the rosebud supreme court asathresholdissue,wemustconsider, as presented in the tribe’scross-appeal, court granted summary judgment to the tribe, holding that the nigc chairman’s no. 13-1512 rosebud sioux tribe; rosebud sioux tribal court; judge sherman marshall, in to exhaust available tribal court remedies to challenge tribal court jurisdiction to ii. ___________________________ court erred in granting summary judgment to the tribe because according to igra, agreement.” count 2 sought a permanent injunction against the tribe, the tribal filed: april 4, 2014 “[a]s a matter of comity, the examination of tribal sovereignty and jurisdiction the money in the oer account. the tribal court judge disagreed with the tribe and arguing the district court should have dismissed the entire complaint for failure to and clarifying the factual and legal issues that are under dispute and relevant for any entire complaint because of failure to exhaust. specifically, bbc failed to exhaust its and denied the motion in part. the district court later entered summary judgment in his official and individual capacities lacked authority to hear an appeal from the tribal court. the district court noted that court, and the tribal court judge sherman marshall from proceeding with the action . . . tribal courts have not had a full opportunity to evaluate the claim and federal colombe argues that he should be excused from the exhaustion requirements adjudicate the breach-of-contract claims. the tribe acknowledged bbc made a -8- tribal court denied the motion to dismiss, and colombe sought an interlocutory appeal tribal court seeking to pierce bbc’s corporate veil and recover the judgment from the tribal court conducted a hearing on damages, awarding final judgment the contracts are also subject to the nigc chairman’s approval. the nigc chairman regulations. rejected bbc’s jurisdictional argument. the rosebud supreme court reversed the decision of the tribal court, holding the basis of financial insolvency, and we decline to adopt such an exception now. to fund the oer account as required by the contract, bbc was not entitled to any of the rosebud tribal courts’ lack of jurisdiction through bbc’s arguments related to the court had jurisdiction to consider the contract modification claim. instead, in its ___________________________ rosebud sioux tribe; rosebud sioux tribal court; judge sherman marshall, in -5- supreme court] on notice as to the substance of the [jurisdictional] issue.” see colombe filed suit in federal court. count 1 of the complaint sought de novo review court could have determined, based on bbc’s contention in its reply brief, it did not the tribe owns and operates a casino on tribal trust land in south dakota. in action in federal court seeking to vacate the tribal court ruling and to enjoin the tribe further, however, that bbc had not exhausted any other issues pertaining to the tribal courts should not intervene.”)). thisargument,however,becausethequestionoftherosebudtribalcourts’jurisdiction the rosebud tribal courts lacked jurisdiction to consider the validity of the oral remedy for bbc’s breach of the management contract. the rosebud supreme court the tribe moved to dismiss the complaint, arguing, as relevant to this appeal, thetribecross-appeals,contendingthedistrictcourtshouldhavedismissedthe motion for rehearing and rehearing en banc raising the jurisdictional question. thus, the tribe argued to the tribal court that, because the oral modification was not district court’s denial in part of the motion to dismiss. we affirm the district court in exclusive authority to determine a contract’s compliance with igra does not to the exhaustion requirement “because of the lack of an adequate opportunity to -10- opportunities—in the tribal court, on direct appeal to the rosebud supreme court, or approved the casino management contract entered into by the tribe and bbc, but the to the rosebud supreme court, the motion for rehearing was brought by the tribe and after the district court granted the motion to dismiss in part, colombe filed determine damages. the tribe sought rehearing en banc of the rosebud supreme presented to the nigc chairman, the modification was void, and because bbc failed to the extent the district court found that he had not exhausted tribal court remedies which managed a casino on tribal lands. after receiving an adverse ruling from the exhaust tribal court remedies. the district court granted the motion to dismiss in part jurisdiction to find an illegal modification ofthe management contract. the court held administration of justice, providing federal courts with the benefit of tribal expertise, grounds. in their motion to dismiss, the tribe argued, inter alia, that bbc had failed in a motion for rehearing and rehearing en banc—to challenge the rosebud tribal wayne boyd was later dismissed from the suit. legality of the contract modification rests with the nigc rather than [the rosebud] ___________________________ united states court of appeals bbc’s owners—wayne boyd2 contract, bbc withdrew $415,857 from the oer account based on its belief that it article 6.4(c)(5) of the contract required bbc to fund an initial operation expense remedy for bbc’s breach of the management contract. bbc failed to file its own vacating the tribal court judgment . . . on the grounds that the tribal court had no wes colombe, personal representative of charles colombe, individually and as court’s decision to remand. the tribe argued that remand was unnecessary because v. cir. 1984); see duncan energy, 27 f.3d at 1300-01 (rejecting argument of futility of “any controversy litigated in the tribal court” and “an order from [the federal court] statutory argument that igra did not provide for a private cause of action, however to oversee indian gaming. indian tribes may enter into casino management contracts obvious that the rosebud supreme court was not going to consider his jurisdictional validity of an oral modification because igra had given the nigc exclusive exhaust tribal court remedies. we agree with the tribe, and thus we reverse the going to consider his argument that the rosebud tribal courts lacked jurisdiction. jurisdiction to make such determinations. the rosebud supreme court granted the rehearing en banc, but limited that rehearing to the “sole issue” of the appropriate charles colombe1 to the nigc-approved management contract was void.” (doc. 66 at 6.) the district 7.5% of the casino’s net profits to the account each month. at the conclusion of the before the district court, the tribe moved to dismiss the complaint for failure to tribal courts.” (doc. 33 at 16-17.) thus, the district court held the rosebud supreme on his request for a permanent injunction. in these motions, he argued for the first against bbc in the amount of $399,353.61, plus interest accrued from august 15, held that bbc had exhausted tribal court remedies as to the issue of the tribal court’s 1999 in the amount of $127,793.15. bbc did not appeal the judgment to the rosebud iii. that the oral agreement was void because it had not been approved by the nigc 2013. all references in this opinion to “colombe” pertain to charles colombe. favor of the tribe and its officials on the remainder of the case. colombe appeals the found that, “when the tribe appealed [tribal] judge jones’s first decision to the rosebud tribal courts regarding a casino management contract, colombe filed an u.s. 845, 856-57 (1985)). “exhaustion includes both an initial decision by the tribal ____________ for the district of south dakota - pierre colombe appeals, raising three arguments. first, he argues that the district economically impossible to exhaust tribal remedies. second, he argues that it became 1994, the tribe entered into a five-year casino management contract with bbc. the district court dismissed, on exhaustion grounds, colombe’s argument that time in federal court that the rosebud tribal courts had failed to comply with certain accordingly, we reverse the district court’s denial of the tribe’s motion to therefore, the rosebud supreme court had not addressed this issue when colombe the rosebud supreme court that bbc adequately raised the jurisdictional question to for the eighth circuit only after the nigc chairman has approved those contracts. any modifications of that colombe and bbc had failed to exhaust tribal court remedies. the district court dismissal in part and the grant of summary judgment. the tribe cross-appeals, all other respects. appeal that order. bbc argued the rosebud supreme court had no jurisdiction to determine the legal lllllllllllllllllllll plaintiff - appellant the nigc chairman’s approval and, according to the district court, “implicit[ly]” was entitled to 35% of the remaining oer account balance, a division consistent with chairman. the rosebud supreme court remanded the case to the tribal court to decision. court. bbc did not file an appeal or a cross-appeal challenging whether the tribal colombe may not be excused from his obligation to exhaust tribal court remedies on court’s exercise of jurisdiction over the breach-of-contract claim. sought an interlocutory appeal which the tribal court, in its discretion, denied. lllllllllllllllllllll defendants - appellants claim that the tribal courts lacked jurisdiction under igra to consider the validity of appellee’s brief to the rosebud supreme court, bbc stated, “bbc has not filed a an officer of bbc entertainment, inc., a dissolved minnesota corporation in response to the tribe’s action in tribal court to pierce the corporate veil. colombe we disagree with the district court’s “generous[]” reading of bbc’s briefs to was, at best, tangentially mentioned and certainly did not “fairly put [the rosebud the contract’s division of net profits. the tribe brought a breach-of-contract suit in jurisdictional evaluation.” dish network serv. l.l.c. v. laducer, 725 f.3d 877, 882 federal complaint should have been dismissed on that basis. the basis of futility. court’s order after remand from the rosebud supreme court because bbc failed to while the tribe’s suit seeking to pierce the corporate veil was proceeding, based on “mere[] alleg[ation] that tribal courts will be incompetent or biased”). courts’ jurisdiction, and they failed to do so. “[s]peculative futility is not enough to ____________ -6- colombe has failed to point us to any cases that excuse the exhaustion requirement on igra, such as its claim that igra does not create a private right of action. we reject -3- from continuing a second action in the rosebud tribal courts. in the proceeding oral modification regarding the funding of the oer account was never presented to cir. 1994). thus, “a federal court should stay its hand in order to give tribal forums to pierce the corporate veil. shepherd, circuit judge. ______________________________ submitted: october 23, 2013 representative of the estate of charles colombe. charles colombe died on june 9, raised it in federal court, meaning tribal court remedies had not been exhausted. he also argued that under an amendment to the rosebud sioux tribe constitution at 882. accordingly, we hold that bbc has failed to exhaust tribal remedies, and the ____________ claims, and therefore it would be futile to require exhaustion of those claims. co. v. three affiliated tribes of fort berthold reservation, 27 f.3d 1294, 1299 (8th -7- wes colombe, personal representative of charles colombe, individually and as appeal from united states district court district court with instructions to enter an order dismissing colombe’s complaint. we motions for reconsideration of the partial grant of the motion to dismiss and for a trial properly exhausted its tribal court remedies regarding whether the rosebud supreme brief that the tribe could have complained to the nigc and sought relief from that reservation tel. coop. v. three affiliated tribes of fort berthold reservation, 76 ____________ due to insolvency, bbc did not pay the judgment. the tribe then filed suit in rosebud supreme court. accordingly, the district court denied the motions to v. rosebud supreme court, bbc argued that igra did not create a private cause of did not address the issue of tribal jurisdiction in its order re-affirming its prior errors to tribal court’s exercise of jurisdiction. bbc stated, however, in their appellate the tribe contended bbc never made an explicit or implicit challenge to the tribal colombe and the tribe filed competing motions for summary judgment on the supreme court. procedure 43, wes colombe’s motion to substitute himself in his capacity as personal the initial opportunity to determine cases involving questions of tribal authority.” interlocutory appeal. rosebud supreme court decided the oral modification was void for failure to obtain tribe of indians, 471 u.s. 845, 856 n.21 (1985), colombe and bbc had several 2 -2- 16 (1987)). “allowing tribal courts to make an initial evaluation of jurisdictional he was a shareholder, director, and officer of bbc entertainment, inc. (“bbc”), “sole remaining issue” following the district court’s partial grant of the motion to no. 13-1382 found in favor of bbc. the tribe appealed to the rosebud sioux tribe supreme we do not have the benefit of the rosebud tribal courts’ expertise and clarification in affirm the district court’s orders in all other respects. court (“rosebud supreme court”). bbc did not file a cross-appeal or assign any igra created the statutory basis for the regulation and operation of gaming by was granted by the rosebud supreme court to address the narrow issue of the proper insolvency and futile because the rosebud supreme court made clear that it was not modification to the management contract. second, colombe argues that bbc trial court and the completion of appellate review.” id. at 882-83 (citing iowa mut. oer account. instead, bbc and the tribe orally agreed that bbc would contribute lllllllllllllllllllll plaintiff - appellee dismiss: “whether the tribal court had jurisdiction to hold that the oral modification on august 8, 2013, the court granted, pursuant to federal rule of civil the rosebud tribal courts have failed to comply with the rosebud sioux tribe an officer of bbc entertainment, inc., a dissolved minnesota corporation constitution. we affirm this dismissal. this argument was first raised by colombe ruled in favor of bbc, the tribe appealed that decision to the rosebud supreme reconsider and for trial on colombe’s request for a permanent injunction. have jurisdiction to decide whether the oral modification was void. instead, the a more clear argument as to jurisdiction in its responsive optional brief on rehearing agency. bbc asserted that 25 u.s.c. § 2713(3) “provides the procedure applicable was a member of the rosebud sioux tribe (“the tribe”), and his official and individual capacities encompass the authority to determine the legal validity of a contract. the rosebud tribal courts. first, the bbc never raised the jurisdictional challenge in to violations which replaces the jurisdiction of courts.” this issue had not been exhausted because it had not yet been considered by the nelson v. adams usa, inc., 529 u.s. 460, 469 (2000). third, while bbc did present f.3d 181, 184 (8th cir. 1996) (citing iowa mut. ins. co. v. laplante, 480 u.s. 9, 15- suit, claiming that the judgment was void because the tribal court had violated igra. reserve (“oer”) account. bbc, however, never made the initial contribution to the further, while the supreme court has recognized that futility may justify an exception consideration of the jurisdictional questions. see dish network serv., 725 f.3d at cross appeal, and assigns no error.” colombe maintains that bbc necessarily raised the oral modification to the management contract. -9- dismiss the complaint for failure to exhaust tribal court remedies pertaining to bbc’s the time judgment was entered against bbc, the tribal court had ceased to exist. the court was deprived of its constitutional power to act. finally, colombe argues that, tribal court, arguing that the oral modification was not in compliance with the indian lllllllllllllllllllll defendants - appellees to the rosebud supreme court. the tribal court denied the request for an as to some of his claims, exhaustion was impossible because of bbc’s financial -4- should be conducted in the first instance by the tribal court itself.” duncan energy and charles colombe. colombe moved to dismiss the ___________________________ justify federal jurisdiction.” white v. pueblo of san juan, 728 f.2d 1307, 1313 (10th gaming regulatory act of 1988 (“igra”) and igra’s various implementing whether the district court erred in denying the tribe’s motion to dismiss on exhaustion accordingly, the district court properly dismissed this claim. questions serves several important functions, such as assisting in the orderly the nicg chairman.


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