Hornell Brewing Co. v. Seth Big Crow , 133 F.3d 1087 ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 97-1242
___________
Hornell Brewing Co., doing business *
as Ferolito, Vultaggio and Sons, Inc.; *
Heileman Brewing Co., Inc.; John *
Ferolito, Individually; Don Vultaggio, *
Individually, *
*
Plaintiffs-Appellees, *
*
v. * Appeals from the United States
* District Court for the
The Rosebud Sioux Tribal Court; * District of South Dakota.
Hon. Stanley Whiting, Pro-Tem *
Tribunal Judge; *
*
Defendants, *
*
Seth H. Big Crow, Sr., as Administrator *
of the Estate of Tasunke Witko, a/k/a *
Crazy Horse and as a member of and *
representative of the class of heirs of *
said estate, *
*
Defendant-Appellant, *
------------------------------------------------ *
Rosebud Sioux Tribe, *
*
Amicus Curiae. *
___________
No. 97-1243
___________
Hornell Brewing Co., doing business *
as Ferolito, Vultaggio and Sons, Inc.; *
Heileman Brewing Co., Inc.; John *
Ferolito, Individually; Don Vultaggio, *
Individually, *
*
Plaintiffs-Appellees, *
*
v. *
*
The Rosebud Sioux Tribal Court; *
Hon. Stanley Whiting, Pro-Tem *
Tribunal Judge; *
*
Defendants-Appellants, *
*
Seth H. Big Crow, Sr., as Administrator *
of the Estate of Tasunke Witko, a/k/a *
Crazy Horse and as a member of and *
representative of the class of heirs of *
said estate, *
*
Defendant, *
------------------------------------------------ *
Rosebud Sioux Tribe, *
*
Amicus Curiae. *
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___________
No. 97-1244
___________
Hornell Brewing Co., doing business *
as Ferolito, Vultaggio and Sons, Inc.; *
Heileman Brewing Co., Inc.; John *
Ferolito, Individually; Don Vultaggio, *
Individually, *
*
Plaintiffs-Appellants, *
*
v. *
*
The Rosebud Sioux Tribal Court; *
Hon. Stanley Whiting, Pro-Tem *
Tribunal Judge; Seth H. Big Crow, Sr., *
as Administrator of the Estate of *
Tasunke Witko, a/k/a Crazy Horse and *
as a member of and representative of the *
class of heirs of said estate, *
*
Defendants-Appellees, *
*
------------------------------------------------ *
Rosebud Sioux Tribe, *
*
Amicus Curiae. *
___________
Submitted: November 17, 1997
Filed: January 14, 1998
___________
Before BOWMAN, LAY, and MURPHY, Circuit Judges.
___________
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LAY, Circuit Judge.
Tasunke Witko, also known as Crazy Horse, was a renown and beloved leader
of the Oglala Sioux. He died in 1877. The Lakota people revere Crazy Horse as a
spiritual and political leader. We take judicial notice of the fact that on January 15,
1982, the United States Postal Service issued a stamp honoring Crazy Horse, and there
is a national Crazy Horse Monument under construction in South Dakota.
Crazy Horse opposed the use of alcohol by his people. Seth H. Big Crow, Sr.,
a descendant of Crazy Horse, acting as administrator of Crazy Horse’s Estate
(“Estate”), brought suit in the Rosebud Sioux Tribal Court1 contesting the use of the
Crazy Horse name by Hornell Brewing Co., doing business as Ferolito, Vultaggio and
Sons, Inc., Heileman Brewing Co., Inc., and John Ferolito and Don Vultaggio
(“Breweries”). The Estate challenged the Breweries’ use of the Crazy Horse name in
the manufacture, sale, and distribution of an alcoholic beverage called “The Original
Crazy Horse Malt Liquor” (“Crazy Horse Malt Liquor”).2 The complaint asserted
defamation, violation of the Estate’s right of publicity, and negligent and intentional
infliction of emotional distress. The complaint also alleged violations of the Lanham
Act, see 15 U.S.C. §§ 1051-1128 (1994), and the Indian Arts and Crafts Act, see 25
U.S.C. §§ 305- 305e (1994). The Estate sought injunctive and declaratory relief, as
well as damages.
1
The Rosebud Sioux Reservation is located in South Dakota.
2
In 1992, Congress enacted a statute banning the use of the name Crazy Horse
on the label of any distilled spirit, wine, or malt beverage product. See Pub. L. No.
102-393 § 633, 106 Stat. 1729. In 1993, the United States District Court for the
Eastern District of New York concluded the statute violates the First Amendment of
the Constitution. See Hornell Brewing Co. v. Brady, 819 F. Supp. 1227, 1245-46
(E.D.N.Y. 1993).
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On October 25, 1994, the tribal judge, Honorable Stanley E. Whiting, Pro-Tem
Tribunal Judge of the Rosebud Sioux Tribal Court, dismissed the Estate’s action on the
grounds that the tribal court lacked personal jurisdiction over the Breweries, and it
lacked subject matter jurisdiction over the Estate’s claims. J.A. at 13-34. The Estate
appealed the dismissal of its complaint to the Rosebud Sioux Supreme Court.
On May 1, 1996, the Rosebud Sioux Supreme Court held the Breweries had
sufficient contacts with the Rosebud Sioux Reservation to uphold service of process,3
and the Estate had established “prima facie” subject-matter jurisdiction. Id. at 187-214.
The tribal supreme court also held that the tribal court improperly dismissed the Estate’s
Lanham Act claim.4 Id. at 216-17. The tribal supreme court held, however,
3
The Rosebud Sioux Supreme Court observed:
In the advertising label affixed to each bottle of the
“Original Crazy Horse Malt Liquor,” Defendants clearly
exalt and direct their activities to the forum. The label
ornately proclaims:
The Black Hills of Dakota, steeped in the
history of the American West, home of Proud
Indian Nations. A land where imagination
conjures up images of blue clad Pony Soldiers
and magnificent Native American Warriors, A
land still rutted with wagon tracks of intrepid
pioneers. A land where wailful winds whisper
of Sitting Bull, Crazy Horse and Custer. A
land of character, of bravery, of tradition. A
land that truly speaks of the spirit that is
America.
J.A. at 198.
4
The Estate alleged a cause of action under section 1125(a) of the Lanham Act,
which provides:
(1) Any person who, on or in connection with any goods or
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that the Estate did not have standing to sue under the Indian Arts and Crafts Act. Id.
services, or any container for goods, uses in commerce any word, term,
name, symbol, or device, or any combination thereof, or any false
designation of origin, false or misleading description of fact, or false or
misleading representation of fact, which—
(A) is likely to cause confusion, or to cause mistake,
or to deceive as to the affiliation, connection, or association
of such person with another person, or as to the origin,
sponsorship, or approval of his or her goods, services, or
commercial activities by another person, or
(B) in commercial advertising or promotion,
misrepresents the nature, characteristics, qualities, or
geographic origin of his or her or another person’s goods,
services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she
is or is likely to be damaged by such act.
15 U.S.C. § 1125(a).
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at 214-16. 5 The Rosebud Sioux Supreme Court then remanded the case to the tribal
court for a “prompt trial on the merits.”6 Id. at 217.
In July 1996, the Breweries filed suit in the United States District Court for the
District of South Dakota against the Estate, the Rosebud Sioux Tribal Court,7 and the
5
Section 305e(c)(1) of the Indian Arts and Crafts Act of 1990 expressly provides:
(c) Persons who may initiate civil actions
(1) A civil action under subsection (a) of this section may
be commenced--
(A) by the Attorney General of the United
States upon request of the Secretary of
the Interior on behalf of an Indian who
is a member of an Indian tribe or on
behalf of an Indian tribe or Indian arts
and crafts organization; or
(B) by an Indian tribe on behalf of itself, an
Indian who is a member of the tribe, or
on behalf of an Indian arts and crafts
organization.
25 U.S.C. § 305e(c)(1).
6
Thereafter, the Rosebud Sioux Tribe filed a motion in the tribal court for
permissive joinder as a co-plaintiff under the Rosebud Sioux Tribe Law and Order
Code, Rules of Civil Procedure, Rule 20(a). The Tribe asserted an independent right
of action under the Indian Arts and Crafts Act. The tribal court granted the Tribe's
motion to join as a co-plaintiff. See J.A. at 241.
7
The Rosebud Sioux Tribe was not joined as a party. It appears in the present
appeal as Amicus Curiae.
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tribal court judge, seeking declaratory and injunctive relief. The Breweries asserted the
tribal court had neither personal jurisdiction over the Breweries, nor subject-matter
jurisdiction over the Estate’s claims. The district court8 enjoined the Rosebud Sioux
Tribal Court from conducting any further proceedings on the merits of the case. J.A.
at 391 (Hornell Brewing Co. v. Rosebud Sioux Tribal Court, Civ. No. 96-3028 (D.S.D.
Dec. 3, 1996)). The district court disagreed with the rationale the Rosebud Sioux
Supreme Court had used to find subject matter jurisdiction over the Estate’s claims.
8
Honorable Charles B. Kornmann, United States District Judge for the District
of South Dakota.
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In its discussion of subject matter jurisdiction, the Rosebud Sioux Supreme Court
first held Montana v. United States, 450 U.S. 544 (1981), inapplicable to this case.9
J.A. at 209. The tribal supreme court said Montana dealt only with questions
9
Montana is the initial Supreme Court case addressing the civil authority tribes
may exercise over nonmembers carrying on activities within a reservation. See
Montana, 450 U.S. at 544. The Montana Court determined the authority of the Crow
Tribe to regulate hunting and fishing by non-Indians on lands within the Tribe’s
reservation owned in fee simple by non-Indians. The Court concluded the Tribe did not
have the authority to regulate nonmembers in these particular circumstances but did
state:
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 fee lands. 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.
Id. at 565-66 (citations omitted). This passage thus describes two exceptions to the
general rule that Indian tribes may not exercise civil authority over the conduct of
nonmembers on alienated, non-Indian land within a reservation.
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of statutory construction, is specifically limited to fee lands, and is properly limited to
questions of tribal regulatory and legislative authority and not to questions of tribal
adjudicatory authority. Id. at 207-10. The tribal supreme court also held that even if
Montana were applicable to this case, the Breweries’ conduct satisfied both of the
Montana exceptions. Id. at 210. The tribal supreme court stated the Breweries’ failure
to enter into a consensual relationship with the Estate for the use of the name and
reputation of Crazy Horse satisfies the first exception. Id. at 211. The tribal supreme
court further stated that the Breweries’ conduct satisfies the second exception, because
the Tribe’s health and welfare depend upon the Tribe’s ability to provide a forum for
resolution of the Breweries’ allegedly harmful conduct. Id. at 212.
The United States District Court for the District of South Dakota disagreed,
finding Montana directly applicable to this case, and stated that because neither
Montana exception was met in this case, the tribal courts lacked subject matter
jurisdiction over the Estate’s claims. J.A. at 387-88. The district court concluded,
however, the Breweries had not exhausted their remedies, “because the tribal court
should be given the first full opportunity to determine whether [the Estate] has
established the jurisdictional facts by a preponderance of the evidence, as distinguished
from merely establishing a prima facie case of jurisdiction.” Id. at 386.10 The district
court entered an order enjoining the tribal court from proceeding
10
In the original tribal court decision, the tribal court did not conduct an
evidentiary hearing but found The Estate had established a prima facie case of
jurisdiction. The Rosebud Sioux Supreme Court faulted the tribal court for not
separating the discussions of personal and subject matter jurisdiction. The supreme
court, although remanding the case for “prompt trial on the merits,” did state that upon
remand, “if there [were] any subsequent questions of credibility or fact,” the plaintiff
must establish the “jurisdictional facts” by a preponderance of evidence. J.A. at 187.
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on the merits. Id. at 391. It remanded the case to the tribal court for the limited purpose
of conducting an evidentiary hearing on the issues of personal and subject matter
jurisdiction. Thus, under the district court’s order, this case has been remanded to tribal
court for further proceedings as to both personal and subject matter jurisdiction, and the
tribal court is enjoined from proceeding on the merits of this case. Id. at 391-92.
The tribal court, tribal judge, and the Estate have now appealed the issuance of
the preliminary injunction, pursuant to 28 U.S.C. § 1292(a)(1). They argue the Rosebud
Sioux Tribal Court has inherent and exclusive jurisdiction over the personal property
rights vested in the Estate. The Breweries have cross-appealed, asserting the order
remanding the case for evidentiary hearings on jurisdiction should be vacated, and this
court should hold that the tribal court lacks subject matter jurisdiction. Although the
parties assert differing viewpoints as to whether the district court properly issued a
preliminary injunction, we need not review this holding since, as we discuss infra, we
find the tribal court lacks subject matter jurisdiction over the Estate’s claims against the
non-Indian Breweries.11
We begin our discussion of subject matter jurisdiction by noting that, “absent
express authorization by federal statute or treaty, tribal jurisdiction over the conduct of
nonmembers exists only in limited circumstances.” Strate v. A-1 Contractors, ___ U.S.
___, 117 S. Ct. 1404, 1409 (1997) (citing Oliphant v. Suquamish Indian Tribe,
11
Although the Tribe has now made a claim over the same subject matter in the
tribal court, it is not a party to this appeal. Nonetheless, the preliminary injunction
issued by the district court enjoined the tribal court from exercising subject matter
jurisdiction as to the claim made by the Tribe against all of the non-Indian defendants.
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435 U.S. 191 (1978) and Montana v. United States, 450 U.S. 544 (1981)).12 Indian
tribes do, however, “retain inherent sovereign power to exercise some forms of civil
jurisdiction over non-Indians on their reservations.” Montana, 450 U.S. at 565(emphasis added). The operative phrase is “on their reservations.” Neither Montana
nor its progeny purports to allow Indian tribes to exercise civil jurisdiction over the
activities or conduct of non-Indians occurring outside their reservations.
The activities at issue in this case are the Breweries’ manufacture, sale, and
distribution of Crazy Horse Malt Liquor. It is undisputed that the Breweries do not
conduct those activities on the Rosebud Sioux Reservation or within South Dakota.
Thus, because the conduct and activities at issue here did not occur on the Rosebud
Sioux Reservation, we do not believe Montana450 U.S. at 564 (quoting United States v. Wheeler, 435 U.S. 313,
326 (1978)). As Montana emphasizes, “exercise of tribal power beyond what is
necessary to protect tribal self-government or to control internal relations is inconsistent
with the dependent status of the tribes, and so cannot survive without express
Congressional delegation.” Id.12
There is no federal statute or treaty conferring subject matter jurisdiction over
the Estate’s claims to the tribal court.
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At the time of the tribal court proceedings, as well as at the time of the issuance
of the district court’s injunction, neither the parties nor the various tribunals directly
involved in this case had the benefit of the United States Supreme Court’s recent
decision in Strate v. A-1 Contractors. Once again, however, the facts of Strate, like
Montana, relate to use by non-Indians of fee lands within a reservation. Strate does,
however, harmonize Montana with other cases addressing tribal civil authority over
nonmembers. See Strate, 117 S. Ct. at 1409-14.
In Strate, Lyle Stockert, a non-Indian driver of a truck owned by A-1
Contractors, a non-Indian company, collided with the automobile of Gisela Fredericks,
a non-Indian widow of a deceased member of the Three Affiliated Tribes of the Fort
Berthold Indian Reservation. Id. at 1408. The collision occurred on a state highway
that crossed through reservation land. Fredericks filed a personal injury suit in tribal
court, and the tribal court concluded it had jurisdiction to adjudicate Fredericks’ claims.
Id.Shortly thereafter, Stockert and A-1 Contractors filed suit in federal district court,
seeking a declaratory judgment that, as a matter of federal law, the tribal court lacked
jurisdiction to adjudicate the claims. Id. The district court concluded the tribal court
had civil jurisdiction over Fredericks’ claims against Stockert and A-1 Contractors, and
on cross-motions for summary judgment, it dismissed the suit. Id. at 1409. A divided
panel of the Court of Appeals for the Eighth Circuit affirmed. Id. Following a rehearing
en banc, and in an eight-to-four decision, the Eighth Circuit Court of Appeals reversed
the district court’s judgment, concluding that under Montana, the tribal court lacked
subject matter jurisdiction over the dispute. Id.The United States Supreme Court affirmed the en banc decision. The Court
equated the state-held highway to non-Indian fee land and concluded the Montana rule
and its two exceptions governed the issue of jurisdiction. Id. at 1414. With respect to
Montana, the Court stated:
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Montana thus described a general rule that, absent a different
congressional direction, Indian tribes lack civil authority over the conduct
of nonmembers on non-Indian land within a reservation, subject to two
exceptions: The first exception relates to nonmembers who enter
consensual relationships with the tribe or its members; the second
concerns activity that directly affects the tribe’s political integrity,
economic security, health, or welfare.
Strate, 117 S. Ct. at 1409-10. The Court concluded neither Montana exception
conferred tribal court jurisdiction over Fredericks’ claims. Id. at 1415-16.
In finding that the claims arising from this particular automobile accident did not
fall within the reach of the tribal court’s adjudicatory power, the Court also discussed
the exhaustion requirement now well-established in the cases of National Farmers Union
Ins. Cos. v. Crow Tribe, 471 U.S. 845 (1985), and Iowa Mutual Ins. Co. v. LaPlante,
480 U.S. 9 (1987). Id. at 1410-13. In doing so, the Court made clear that the
exhaustion rule is based upon “prudential” policies and is not jurisdictional. Id. at 1413.
We need not further elaborate on the detailed analysis of the Strate case other than to
emphasize the Court’s admonition set forth in footnote 14 at page 1416, wherein the
Court observed:
When, as in this case, it is plain that no federal grant provides for tribal
governance of nonmembers’ conduct on land covered by Montana’s main
rule, it will be equally evident that tribal courts lack adjudicatory authority
over disputes arising from such conduct. As in criminal proceedings, state
or federal courts will be the only forums competent to adjudicate those
disputes. Therefore, when tribal-court jurisdiction over an action such as
this one is challenged in federal court, the otherwise applicable exhaustion
requirement, must give way, for it would serve no purpose other than
delay.
Strate, 117 S. Ct. at 1416 n.14 (citations omitted).
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Suffice it to say neither the tribal court nor the Estate claim that the first exception
of Montana, regarding nonmembers entering consensual relationships with a tribe or its
members, applies in this case. Thus, the primary issue the parties raise on appeal relates
to Montana’s second exception, namely that the activity engaged in by the nonmember
Breweries “directly affects the tribe’s political integrity, economic security, health, or
welfare.” Strate, 117 S. Ct. at 1410. As we have noted, however, we deem this issue
misleading.
It is a fundamental fact in the present case that the Breweries do not manufacture,
sell, or distribute Crazy Horse Malt Liquor on the Reservation. The tribal court asserts
that the Breweries do engage in the sale of other beverages, including some alcoholic
beverages, on the Reservation. We find, as did the district court, that this argument is
irrelevant. This is not the activity for which complaint is made. The only grounds upon
which the Rosebud Sioux Supreme Court asserted subject matter jurisdiction was that
the Breweries’ conduct affects the health and welfare of the Tribe in that the Tribe
should be able to provide a forum for resolution of harm suffered by its members on the
Reservation. The district court rejected this reasoning and stated:
If providing a forum for its members would be a sufficient reason to confer
subject matter jurisdiction upon the tribal courts when a tribal member is
a party to a lawsuit, it follows that the tribal courts would always have
civil subject matter jurisdiction over non-Indians. There would have been
no reason for the discussion in Montana regarding the broad general rule
of no civil jurisdiction over non-Indians and the two narrow exceptions to
that general rule. Therefore, this Court does not agree that the second
Montana exception provides tribal civil subject matter jurisdiction over the
brewing companies in this case, under the present record.
J.A. at 388. We agree with this conclusion.
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On appeal, the tribal court also asserts that although Crazy Horse Malt Liquor
was not sold on the Rosebud Sioux Reservation, it was advertised outside the
Reservation and on the Internet (available to tribal members on the Reservation), and
therefore, it had a direct effect upon tribal members. We find this contention specious.
Advertising outside the Reservation and on the Internet does not fall within the rubric
of directly affecting the health and welfare of the Tribe. The Internet is analogous to the
use of the airwaves for national broadcasts over which the Tribe can claim no
proprietary interest, and it cannot be said to constitute non-Indian use of Indian land.
Following the admonition of the Supreme Court in Strate, we think it plain that
the Breweries’ conduct outside the Rosebud Sioux Reservation does not fall within the
Tribe’s inherent sovereign authority. We deem it clear the tribal court lacks
adjudicatory authority over disputes arising from such conduct. We emphasize that our
decision in this case does not turn upon the merits of the claims asserted by the Estate.
The Estate and other interested parties may assert these claims in federal district court.
Our holding relates solely to the adjudicatory authority of the tribal court.
Under the circumstances, we see no need for further exhaustion. We therefore
vacate the order of remand for further exhaustion. In view of our holding that the tribal
court lacks adjudicatory authority, we also see no further need for the preliminary
injunction the district court issued. We are confident that all the parties will be
governed by the law of the case. We therefore order the preliminary injunction
dissolved.
For the foregoing reasons, the judgment of the district court is hereby vacated,
and the case is remanded to the district court with instructions that the district court
amend its judgment to hold that the Rosebud Sioux Tribal Court lacks adjudicatory
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authority over the dispute arising from the Breweries’ use of the Crazy Horse name in
the manufacturing, sale and distribution of Crazy Horse Malt Liquor outside the
Rosebud Sioux Reservation.
IT IS SO ORDERED.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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