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Knighton v. Cedarville Rancheria of Northern Paiute Indians

United States Court of Appeals, Ninth Circuit

March 13, 2019

Duanna Knighton, Plaintiff-Appellant,
v.
Cedarville Rancheria of Northern Paiute Indians; Cedarville Rancheria Tribal Court; Patricia R. Lenzi, in her capacity as Chief Judge of the Cedarville Rancheria Tribal Court, Defendants-Appellees.

          Argued and Submitted November 16, 2018 San Francisco, California

          Appeal from the United States District Court for the Eastern District of California D.C. No. 2:16-cv-02438-WHO William Horsley Orrick, District Judge, Presiding

          Patrick L. Deedon (argued), Maire & Deedon, Redding, California, for Plaintiff-Appellant.

          Jack Duran, Jr., Esq. (argued), Duran Law Office, Roseville, California, for Defendants-Appellees.

          Before: A. Wallace Tashima and Milan D. Smith, Jr., Circuit Judges, and Lawrence L. Piersol, [*] District Judge.

         SUMMARY [**]

         Tribal Jurisdiction

         The panel affirmed the district court's dismissal of an action challenging a tribal court's subject matter jurisdiction over tort claims brought by the tribe against a nonmember employee.

         The tort claims arose from conduct committed by the nonmember on tribal lands during the scope of her employment. The panel held that a tribe's regulatory power over nonmembers on tribal land derives both from the tribe's inherent sovereign power to exclude nonmembers from tribal land and from the tribe's inherent sovereign power to protect self-government and control internal relations.

         The panel held that the tribe had authority to regulate the nonmember employee's conduct at issue pursuant to its exclusionary power. Alternatively, the tribe had regulatory authority under both Montana exceptions, which allow a tribe (1) to regulate the activities of nonmembers who enter consensual relationships with the tribe or its members and (2) to exercise civil authority over the conduct of nonmembers on fee lands within its reservation when that conduct threatens or directly affects the political integrity, the economic security, or the health or welfare of the tribe. Given the existence of regulatory authority, the sovereign interests at stake, and the congressional interest in promoting self-government, the tribal court had jurisdiction over the tribe's tort claims.

          OPINION

          PIERSOL, JUDGE

         This case concerns the sources and scope of an Indian tribe's jurisdiction over tort claims brought by the tribe against a nonmember employed by the tribe. The tort claims arose from conduct committed by the nonmember on tribal lands during the scope of her employment. The question presented is whether the tribal court has jurisdiction to adjudicate tribal claims against its nonmember employee, where the tribe's personnel policies and procedures manual regulated the nonmember's conduct at issue and provided that the tribal council would address violations by the nonmember during the course of her employment, and the tribal court and tribal judicial code were established and enacted after the nonmember left her employment with the tribe.

         We previously held that a tribe's inherent sovereign power to exclude nonmembers from tribal land is an independent source of regulatory power over nonmember conduct on tribal land. See Water Wheel Camp Recreational Area, Inc. v. LaRance, 642 F.3d 802, 814 (9th Cir. 2011) (per curiam) (stating that where the nonmember activity occurred on tribal land, and when there are no competing state interests at play, "the tribe's status as landowner is enough to support regulatory jurisdiction without considering Montana [v. United States, 450 U.S. 544 (1981)]"). Today we also observe that a tribe's regulatory power over nonmembers on tribal land does not solely derive from an Indian tribe's exclusionary power, but also derives separately from its inherent sovereign power to protect self-government and control internal relations. See Montana, 450 U.S. at 564 (stating that Indian tribes retain their inherent sovereign power to protect tribal self-government and to control internal relations); see also Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 144-45 (1982) (holding that the tribe's authority to tax nonmember mining and drilling on tribal land derived from its inherent power to govern and pay for the costs of self-government and stating that such regulations were also within the tribe's inherent power to condition the continued presence of nonmembers on tribal land).

         Accordingly, we now hold that under the circumstances presented here, the tribe has authority to regulate the nonmember employee's conduct at issue pursuant to its inherent power to exclude nonmembers from tribal lands. We also hold, in the alternative, that the tribe has regulatory authority over the nonmember employee's conduct under both Montana exceptions. Given the existence of regulatory authority, the sovereign interests at stake, and the congressional interest in promoting tribal self-government, we conclude that the tribal court has jurisdiction over the tribe's claims in this case.

          FACTUAL AND PROCEDURAL BACKGROUND I. Factual Background

         A. The Cedarville Rancheria Tribe

         The Cedarville Rancheria of Northern Paiute Indians ("the Tribe") is a federally recognized Indian tribe that has approximately twelve voting members and operates a 17-acre Rancheria in Cedarville, California ("the Rancheria"). The Rancheria is held in trust for the Tribe by the United States government. During the latter part of events at issue in this case, the Tribe's administrative offices were relocated from the Rancheria to land held in fee[1] by the Tribe in Alturas, California.

         The Tribe's governing body is the Community Council, which is composed of all qualified voters of the Rancheria who are 18 years of age or older. Every three years, the Community Council elects three of its members to serve on the Executive Committee-the Tribal Chairperson, Vice Chairperson, and Secretary. The Executive Committee enforces the Community Council's ordinances and other enactments and represents the Tribe in negotiations with tribal, federal, state, and local governments.

         B. Knighton's Employment with the Tribe

         Duanna Knighton ("Knighton") was employed by the Tribe from July 1996 until she resigned in March 2013. Knighton is not a member of the Tribe and had never resided on or owned land within the Rancheria. At the time of her resignation, Knighton's position was that of Tribal Administrator. As Tribal Administrator, she oversaw the day-to-day management of the Rancheria, its personnel, and many aspects of its finances.

         During Knighton's employment, the Tribe regulated its employees pursuant to the Cedarville Rancheria Personnel Policies and Procedures Manual ("the Personnel Manual"). The Personnel Manual regulated employee conduct including, but not limited to: misfeasance and malfeasance in the performance of duty, incompetency in the performance of job duties, theft, carelessness or negligence with the monies or property of the Rancheria, inducement of an employee to act in violation of Rancheria regulations, and violation of personnel rules. Disciplinary actions for an employee's breach of rules and standards of conduct in the course of employment specified in the Personnel Manual included a verbal warning, written reprimand, suspension without pay, demotion, and involuntary termination.

         The Personnel Manual provided that where the Tribal Administrator was the subject of disciplinary action, the Community Council directly oversaw the disciplinary process.

         C. Knighton's Employment with RISE

         From 2009 until at least 2016, in addition to her position as Tribal Administrator, Knighton was also serving as an employee or officer of Resources for Student Education ("RISE"), a California nonprofit, that provides education services and programs to Indian children. RISE is not a tribally created or licensed business entity, and it receives the majority of its funding from state and federal grants and private donations.

         D. The Tribe's Purchase of RISE Property

         In mid-2009, Knighton, acting in her capacity as Tribal Administrator, negotiated the Tribe's purchase from RISE of a building in Alturas, California, where the Tribe's administrative offices are now located. During this time, Knighton was also an employee or agent of RISE.

         Knighton initially recommended that the Tribe purchase the building for $350, 000, allegedly representing that such a price was below market value even though she had not received a professional appraisal of the property. The Tribe later discovered that the $350, 000 purchase price recommended by Knighton was $200, 000 above market value. Knighton also represented to the Tribe that it could pay off its building loan within five years after the purchase and that RISE would pay rent to the Tribe for its occupancy until the note on the building was paid off.

         The Tribe asserts that at no time during the purchase negotiations did Knighton disclose she had a conflict of interest representing both RISE and the Tribe in the sale, that RISE was close to insolvency, or that she had an agreement with RISE to split the proceeds of the building sale. The parties settled on a purchase price of $300, ...


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