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Plains Commerce Bank v. Long Family Land & Cattle Co. January 6, 2008

Posted by rezjudicata in 8th Circuit, Federal Circuits, SCOTUS.
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Below is a brief synopsis of the underlying facts and major issues decided by the Eighth Circuit in this case. The full 8th Circuit Opinion is here: Plains Commerce Bank v. Long.

Documents and analysis of the latest Indian law case to test the Supreme Court can be found at the SCOTUS page as they become available.

Facts

The Long’s company is located on the Cheyenne River Sioux Reservation in South Dakota. According to its articles of incorporation, Indians must own at least 51% of the company’s shares. By arranging the composition of its shareholders in this way, the company takes advantage of BIA loan guarantees. Over time, the company became heavily indebted to the bank, which is not located on the reservation. To partially settle the debt and to obtain operating capital, the Longs deeded mortgaged land to the bank. The Longs claimed to provide them with promised funds. As a result, the Longs lost many cattle in the ensuing winter and were unable to repurchase the land. The Bank subsequently sold the land to non-Indians on better terms than in the Long’s repurchase option. The Long’s sued the bank in tribal court under several causes of action, including a discrimination claim. The Bank initially conceded jurisdiction but later changed its mind. After a jury ruled in favor of the Longs, the Bank appealed to the Cheyenne River Sioux Tribal Court of Appeals, which upheld jurisdiction. Then, the Bank went to federal court seeking a declaration that the judgment was invalid because the tribal court did not have jurisdiction.

The 8th Circuit Opinion

The Eighth Circuit analyzed the jurisdictional issue under the (so-called) first Montana v. United States exception. This exception allows tribes to exercise jurisdiction over nonmembers if they have entered into a consensual relationship with the tribe or its members. Even if such a relationship exists, the exercise of authority must be by taxation, licensing, or “other means” that has some nexus to the relationship.

The Court said the Bank’s relationship with the Longs was “overwhelmingly tribal in character.” First, the Bank benefited from the company’s status as an Indian-owned business because of the BIA loan guarantees. Second, the Bank interacted extensively with the three tribal owners of the company. Third, the Bank sought the assistance of the Tribe-both to negotiate agreements and serve eviction papers on the Longs. Because the Long’s suit arose from their commercial relationship with the Bank, the Court held that tribal tort law was an appropriate means for regulating behavior. Therefore, the Court said that the Tribe had authority, and thus jurisdiction, over the Bank.

The Bank further argued, however, that the Long’s discrimination functionally was a federal claim. The Bank contended that tribal courts have no authority to adjudicate federal claims. The Eighth Circuit rejected this argument because the tribal Court of Appeals ruled that the discrimination claim fell under traditional tribal law rather than federal law. Therefore, the Court held that the Montana analysis was dispositive of the jurisdictional question.

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