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Appeals court upholds tribal verdict in bank loan case
Thursday, June 28, 2007
Filed Under: Law

A non-Indian bank in South Dakota must answer to a tribal court judgment of nearly $900,000 after losing a federal appeal on Tuesday.

In a long-running case, the Plains Commerce Bank asserted it was not subject to the laws of the Cheyenne River Sioux Tribe. A tribal jury convicted the bank of breach of contract, bad faith and discrimination against a tribal couple who operated a cattle ranch on the reservation.

The bank had been doing business with Ronnie and Lila Long for several years. At one point, the tribe and the Bureau of Indian Affairs helped negotiate a loan agreement for the couple.

But when the relationship soured, the bank said the tribal court system lacked jurisdiction to hear the dispute. Tribes, in general, lack authority over non-Indians except under certain conditions outlined in a U.S. Supreme Court in Montana v. U.S.

In a unanimous ruling, the 8th Circuit Court of Appeals said those conditions were met in the case. The bank established a consensual relationship with the Longs and the bank's conduct can be regulated by the tribal government, the three-judge panel said.

"Because the bank not only transacted with a corporation of conspicuous tribal character, but also formed concrete commercial relationships with the Indian owners of that corporation, we conclude that it engaged in the kind of consensual relationship contemplated by Montana," Judge Diana E. Murphy wrote for the majority.

Furthermore, the tribe has a sovereign interest in regulating how businesses interact with tribal members, the 8th Circuit said. Preventing discrimination and ensuring that tribal members are treated in a fair manner satisfies the Montana test, the court noted.

"By subjecting the bank to liability for violating tribal antidiscrimination law in the course of its business dealings with the Longs, the tribe was setting limits on how nonmembers may engage in commercial transactions with members inside the reservation," Murphy wrote.

The ruling was hailed by Thomas J. Van Norman, the attorney for the Cheyenne River Sioux Tribe. "This case sends out a message in support of the sovereignty of our tribal courts, which are open and fair to all who use them," he said. The tribal jury had awarded $875,982.46 in damages, interest, and costs to the Longs.

The decision builds on a related case that appears to be having positive effects on tribal jurisdiction disputes in Indian Country. In that case, the 9th Circuit allowed a wrongful death lawsuit to be heard in tribal court even though it wasn't brought by a member of the Confederated Salish and Kootenai Tribes of Montana.

The 9th Circuit is considered precedent because the U.S. Supreme Court refused to review it last June. It has since prompted a second look at another tribal court jurisdiction dispute involving Ford Motor Company and members of the Navajo Nation.

Despite the evolving law, tribal advocates have long complained it is hard to meet the Montana test. "In a series of decisions issued over the last thirty years, the Supreme Court has largely limited the jurisdiction of tribal courts to disputes involving Indians, not outsiders," noted Steven J. Gunn, an associate professor of law at Washington University in St. Louis, which provided legal assistance to the Cheyenne River Sioux Tribe in the Long case.

The decision in the Montana case states:
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. A tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.

In addition to limited civil authority, tribal courts also lack criminal jurisdiction over non-Indians. But tribes can prosecute members of other tribes as long as the punishment doesn't exceed the Indian Civil Rights Act.

Appeals Court Decision:
Plains Commerce Bank v. Long Family Land and Cattle Company (June 26, 2007)

Lower Court Decision:
Plains Commerce Bank v. Long Family Land and Cattle Company (July 18, 2006)

Related Decision:
Smith v. Salish Kootenai College (January 10, 2006)

Relevant Links:
Cheyenne River Sioux Tribe -
Plains Commerce Bank -
NARF-NCAI Tribal Supreme Court Project -

Related Stories:
Navajo jurisdiction dispute back in court (5/10)
9th Circuit vacates tribal jurisdiction ruling (2/2)
Court subjects non-Indian bank to tribal laws (7/20)
Appeals court upholds tribal jurisdiction after rehearing (01/11)
Judge rules in jurisdiction dispute over clinic (11/7)
Federal courts try to decide who is legally Indian (08/24)
Appeals court to rehear tribal jurisdiction case (06/08)
Judge denies tribal jurisdiction over Indian descendant (12/08)
Appeals court rules against tribal jurisdiction (08/09)
Tribal authority over all Indians still unsettled question (06/23)
Supreme Court affirms tribal powers over all Indians (04/20)
Supreme Court hears tribal powers case (01/22)
Supreme Court case on jurisdiction attracts attention (01/08)

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