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Corporation of President of Church of Jesus Christ of Latter-Day Saints v. RJ

United States District Court, D. Utah, Central Division

November 16, 2016

RJ, MM, BN, and LK, individuals, Defendants.

          Brooke C. Wells Judge


          Robert J. Shelby, Judge

         This case relates to lawsuits presently pending before the Navajo Nation District Court. In those cases, Defendants RJ, MM, BN, and LK (Doe Defendants) allege that they suffered abuse years ago after Plaintiffs, the Corporation of the President of the Church of Jesus Christ of Latter-Day Saints and LDS Family Services, placed them off-reservation with LDS families as part of the Indian Student Placement Program (ISPP). In their Amended Complaint, Plaintiffs here seek a declaration that the Navajo Nation District Court lacks jurisdiction to adjudicate the underlying cases, and request an injunction prohibiting Doe Defendants from proceeding with their cases in Tribal Court. Plaintiffs argue that the Tribal Court clearly lacks jurisdiction over Doe Defendants' claims, and that this court should so find now, without requiring Plaintiffs to exhaust their Tribal Court remedies by presenting their jurisdictional arguments to the Tribal Court in the first instance.

         Two motions are before the court: (1) Plaintiffs' Motion for Preliminary Injunction and (2) Defendants' Motion to Dismiss. For the reasons detailed below, the court grants Doe Defendants' Motion to Dismiss, concluding that Plaintiffs must exhaust their Tribal Court remedies before seeking relief from this court. Because the court grants the Motion to Dismiss, it denies as moot Plaintiffs' Motion for Preliminary Injunction.


         Doe Defendants filed three separate actions in the Navajo Nation District Court, District of Window Rock, Arizona. In the cases before the Tribal Court, Doe Defendants allege injuries resulting from their placement with LDS families while participating in the ISPP between 1965 and 1983.[2] The ISPP “continued for over forty years, ending in approximately 1990, with tens of thousands of Navajo Nation children having participated.”[3] As part of the program, Doe Defendants and their families agreed that Doe Defendants, who were children at the time, would be placed during the school year in homes of LDS Church members outside of the reservation to attend public school. Doe Defendants allegedly suffered sexual abuse while living with these families.[4]

         Doe Defendants do not claim that any of the sexual abuse at issue occurred on the reservation or on property owned by the Navajo Tribe.[5] The parties disagree about whether any related or relevant conduct occurred on the reservation. For example, Doe Defendants allege in their underlying complaints that the following occurred on the Navajo Reservation:

• “The decision to remove [Doe Defendants] from their families was made by case workers and/or employees and/or agents of [the Church Entities] while on the Navajo Nation.”[6]
• “On two occasions, once at a church and once at his home, ‘RJ disclosed the abuse to . . . an employee of LDS Social Services.'”[7]
• “The failure to warn [Doe Defendants] and their families, the failure to disclose or report sexual abuse to [Doe Defendants'] parents, police, or to child protective services occurred within the Navajo Nation.”[8]

         In contrast, Plaintiffs allege in their Amended Complaint in this case that:

[d]ecisions regarding the placement of participating tribal members from the part of the reservation where Doe Defendants lived were made by LDS Social Services employees operating from their offices in Cedar City and Salt Lake City, with input from the ecclesiastical leaders of the host families where the tribal members were placed.[9]

         At this stage of the case, the court is required to accept Plaintiffs' allegations as true. The court therefore accepts for purposes of deciding Doe Defendants' Motion to Dismiss that none of the alleged abuse occurred on the reservation, and that none of the placement decisions were made on the reservation.

         Doe Defendants assert eight causes of action in their Tribal Court cases: (1) childhood sexual abuse, (2) assault and battery, (3) negligence, (4) negligent supervision/failure to warn, (5) intentional infliction of emotional distress, (6) equitable relief, (7) common law nuisance and request for injunctive relief, and (8) violations of Navajo Common Law.[10]

         Plaintiffs responded to Doe Defendants' Tribal Court complaints by filing this federal court action. Plaintiffs seek a declaration that the Navajo Nation District Court lacks jurisdiction to consider Doe Defendants' lawsuits. Plaintiffs also filed a Motion for Preliminary Injunction asking this court to enjoin Doe Defendants from proceeding with their cases in Tribal Court.[11]Doe Defendants have now filed a combined Objection to the Preliminary Injunction and Motion to Dismiss.[12]

         In their Motion to Dismiss, Doe Defendants argue: (1) that Plaintiffs have failed to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6) because Plaintiffs failed to first exhaust their remedies in Tribal Court;[13] (2) that Plaintiffs' claim should be dismissed under Federal Rule of Civil Procedure 12(b)(7) because they have failed to join indispensable parties;[14] and (3) that the so-called Brillhart rule allows the court to stay this case pending exhaustion of Tribal Court remedies.[15] Because the court concludes that Plaintiffs have failed to state a claim upon which relief can be granted under Rule 12(b)(6), [16] it does not reach the issue of joinder or the potential application of the Brillhart rule.


         I. Legal Standard

         Before addressing the substance of the arguments advanced by the parties, the court must first identify the controlling legal standards. That is not an easy task in this case. Different standards govern the court's analysis of two related sets of issues. The court below explains both the legal standards that apply when deciding whether Plaintiffs must exhaust their remedies in the Tribal Court before seeking relief from this court, and the legal standards that define the scope of the Tribal Court's adjudicative jurisdiction over non-members.

         A. Exhaustion Rule and Exceptions

         “The tribal exhaustion rule provides that, absent exceptional circumstances, federal courts typically ‘should abstain from hearing cases that challenge tribal court jurisdiction until tribal court remedies, including tribal appellate review, are exhausted.'”[17] The Supreme Court articulated the exhaustion rule in National Farmers Union Insurance Co. v. Crow Tribe of Indians, stating that “examination [of jurisdiction] should be conducted in the first instance in the Tribal Court itself.”[18] In that case, the Supreme Court recognized three interests advanced by requiring a litigant to exhaust their Tribal Court remedies: “(1) furthering congressional policy of supporting tribal self-government; (2) promoting the orderly administration of justice by allowing a full record to be developed in the tribal court; and (3) obtaining the benefit of tribal expertise if further review becomes necessary.”[19] The Tenth Circuit has taken a “strict view of the tribal exhaustion rule, ” holding that “federal courts should abstain when a suit sufficiently implicates Indian sovereignty or other important interests.”[20]

         The Supreme Court, however, has recognized four exceptions to the exhaustion rule including: “(1) where an assertion of tribal jurisdiction is motivated by a desire to harass or is conducted in bad faith; (2) where the action is patently violative of express jurisdictional prohibitions; (3) where exhaustion would be futile because of the lack of an adequate opportunity to challenge the court's jurisdiction[; and] . . . . (4) where it is clear that the tribal court lacks jurisdiction and that judicial proceedings would serve no purpose other than delay.”[21] The party invoking one of these exceptions must make a “substantial showing of eligibility.”[22] Courts apply the exceptions narrowly, typically in situations “where the federal court has exclusive jurisdiction.”[23]

         Plaintiffs here invoke the fourth exception to the exhaustion rule. Plaintiffs claim that the Tribal Court clearly lacks jurisdiction, so requiring them to exhaust their remedies before the Tribal Court would serve no purpose other than delay.[24] In order for this exception to apply, it must be clear to the court based on the record before it that the Tribal Court lacks jurisdiction. The Tenth Circuit has further explained that this exception applies where it is “patently obvious” that the Tribal Court lacks jurisdiction; or where defendants in such an action cannot make a “colorable claim that [the Tribal Court] has jurisdiction.”[25] This requires the court to analyze the scope of tribal jurisdiction.

         B. Tribal Jurisdiction Under the Montana Rule

         Because Doe Defendants have identified no specific statute or treaty granting the Tribe jurisdiction over Plaintiffs' claims, the court must consider the inherent sovereign authority of the Tribe to assert adjudicative jurisdiction over non-members. “Indian tribes [are] ‘distinct, independent political communities', qualified to exercise many of the powers and prerogatives of self-government.”[26] Indeed, “Congress is committed to a policy of supporting tribal self-government and self-determination.”[27] But the “sovereignty that the Indian tribes retain is of a unique and limited character.”[28] And generally “[t]he inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe.”[29]

         Montana v. United States provides the starting point for analyzing the Tribal Court's jurisdiction over non-Indians.[30] In Montana, the Supreme Court considered the reach of a tribe's legislative jurisdiction-in contrast to its adjudicative jurisdiction. The Court considered whether the Crow Tribe had authority to “regulate hunting and fishing by non-Indians on lands within the Tribe's reservation owned in fee simple by non-Indians.”[31] The Court held that, while the “Crow Tribe retained power to limit or forbid hunting or fishing by nonmembers on land still owned by or held in trust for the tribe, ” it “lacked authority to regulate hunting and fishing by non-Indians on land within the Tribe's reservation owned in fee simple by non-Indians.”[32]

         The Court in Montana set forth the “general rule that, absent a different congressional direction, Indian tribes lack civil authority over the conduct of nonmembers on non-Indian land within the reservation.”[33] But the Court in Montana recognized two limited exceptions to this general rule:

To be sure, Indian tribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations, even on non-Indian lands. [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 dealings, contracts, leases, or other arrangements. [Second, 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 health or welfare of the tribe.[34]

         These exceptions are limited in nature and “cannot be construed in a manner that would ‘swallow the rule' or ‘severely shrink' it.”[35] The Court later clarified that under the first Montana exception there must be a nexus between the exercise of the tribe's regulatory authority-the imposition of a tax or regulation for instance-and the consensual relationship between the non-Indian and the tribe.[36] “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.'”[37]

         It appears that the Court further narrowed the Montana exceptions in its 2008 Plains Commerce Bank decision.[38] The Court there stated that the Montana exceptions permit tribes to regulate the activities of non-members “to the extent necessary ‘to protect tribal self-government [and] control internal relations.'”[39] The scope of this restriction, however, is currently unsettled. In Dolgencorp, Inc. v. Mississippi Bank of Choctaw Indians, the Fifth Circuit concluded that Plains Commerce Bank did not “require an additional showing that one specific relationship, in itself, ‘intrude[s] on the internal relationship of the tribe or threaten[s] self -rule.'”[40] Instead, the court concluded that it was appropriate to look to the general instead of the highly specific when determining if the activity of non-members had such an effect.[41]

         An equally divided Supreme Court recently affirmed this decision.[42] District courts, therefore, lack clear guidance about the implications of Plains Commerce Bank on the scope of the Montana exceptions. And these implications are potentially outcome determinative in many instances. If the specific consensual relationship between a tribal member and non-member can only be regulated if that relationship itself implicates tribal self-government and the internal relationship of the tribe, then the first Montana exception would seem to be severely limited.[43]

         In addition, it appears that a Tribal Court may exercise jurisdiction over a non-member only when the non-member has either implicitly or expressly consented to such jurisdiction.[44] It is not clear to the court whether this is a stand-alone requirement or whether this requirement is inherent in the Montana exceptions themselves. In either case, the party invoking tribal jurisdiction over the non-member has the burden of establishing jurisdiction under one of the exceptions to the Montana rule.[45]

         Although Montana addressed only a tribe's legislative jurisdiction, in Strate v. A-1 Contractors[46] the Supreme Court explained that “where tribes possess authority to regulate the activities of nonmembers, [c]ivil jurisdiction over [disputes arising out of] such activities presumptively lies with the tribal court.”[47] The Court also stated that “a tribe's adjudicative jurisdiction does not exceed its legislative jurisdiction.”[48] Whether a tribe's adjudicative authority is coextensive with its legislative authority remains unsettled.[49]

         “A tribe's regulation of nonmember conduct through tort law is analyzed under the Montana framework, ”[50] a proposition the parties here do not dispute. The Fifth and Eighth Circuits have clarified that “[i]n considering regulation through tort law, ‘courts applying Montana should not simply consider the abstract elements of the tribal claim at issue, but must focus on specific nonmember conduct alleged, taking a functional view of the regulatory effect of the claim on the nonmember.'”[51]

         II. Plaintiffs Fail to Make the Substantial Showing Necessary to Avoid the Exhaustion Rule

         Having set forth the governing legal standards, the court now turns to the specific issue presented in Doe Defendants' Motion to Dismiss: whether Plaintiffs have made a plausible claim that the undue delay exception to the exhaustion rule applies in this case. The issue is not whether the Navajo Nation District Court ultimately enjoys jurisdiction over Doe Defendants' Tribal Court claims, but instead whether Plaintiffs have met their substantial burden at this stage of the proceedings to show that it is “‘clear that the tribal court lacks jurisdiction, ' such that ‘the exhaustion requirement would serve no purpose other than delay.'”[52] Further, Plaintiffs request “a judgment declaring that the Tribal Court lacks subject matter jurisdiction over the Church Entities in the Tribal Court Actions”; and “an injunction prohibiting Defendants from proceeding with the Tribal Court Actions in Tribal Court.”[53] Because Plaintiffs request such broad relief, they must show that the Tribal Court clearly lacks jurisdiction over all Doe Defendants' claims.[54]

         Plaintiffs argue that the Tribal Court clearly lacks jurisdiction over Doe Defendants' actions for several reasons. First, Plaintiffs argue that the general Montana rule that tribal jurisdiction does not extend to non-members governs because Doe Defendants have not alleged that they were injured on Indian lands.[55] Second, Plaintiffs argue that the even under the Montana exceptions it is clear that the Tribal Court lacks jurisdiction because “both exceptions require actionable conduct on tribal lands.”[56] Finally, Plaintiffs contend, “the policies supporting the exhaustion rule are not served here.”[57] The court addresses each of these arguments in turn, finding none persuasive.

         A. Plaintiffs' Argument that the Montana Exceptions are ...

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