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Court subjects non-Indian bank to tribal laws

A bank doing business on the Cheyenne River Sioux Reservation in South Dakota faces a nearly $900,000 tribal court judgment after losing a federal case on Tuesday.

Ronnie and Lila Long, a tribal couple with a cattle business, sued Plains Commerce Bank back in 1999. They said the bank violated their loan agreement for the operation, discriminated against them because they are Indian and treated them in bad faith.

A tribal jury agreed and awarded the Long Family Land and Cattle Company over $870,000 in damages. The Longs were also given the option to buy back land that the bank had seized. A tribal appeals court eventually affirmed the judgment.

But rather than pay the couple, the bank took the case to federal court and argued that the tribal court lacked jurisdiction to hear the dispute. Except in certain instances, non-Indian entities are not subject to tribal laws, a situation that makes it extremely difficult for tribes to exercise authority over activities that occur on the reservation.

In a 15-page ruling, U.S. District Judge Charles B. Kornmann said the Long's case met the test for tribal jurisdiction. Citing U.S. Supreme Court precedent, he said the bank willingly entered into a "consensual relationship" with the couple and their business.

"The instant case involves a non-members's direct contractual involvement with a Native American owned corporate entity and concerns land wholly located within the boundaries of the CRST reservation," Kornmann wrote.

The judge also noted that the bank willingly subjected itself to the jurisdiction of the Cheyenne River Sioux tribal court. He cited a recent 10th Circuit Court of Appeals case in which a nonmember initiated a lawsuit in tribal court.

"A nonmember who knowingly enters tribal courts for the purposes of filing suit against a tribal member has, by the act of filing his claims, entered into a 'consensual relationship' with the tribe," the 10th Circuit stated in Smith v. Salish Kootenai College, a decision that is considered precedent because the Supreme Court refused to review it last month.

But even when federal courts rule in favor of tribal jurisdiction, the burden falls heavily against tribes. The 10th Circuit case, involving a tribal college on the Flathead Reservation in Montana, was heard twice before the court agreed that the dispute could be resolved in tribal court.

In the Long's case, the Cheyenne River Sioux Tribe was heavily involved in the negotiations with the bank and the resulting loan to the family's cattle business. The Bureau of Indian Affairs also got involved because the Longs received the loan based on their status as Indians.

Tribal advocates said this fact pattern fits squarely within legal precedents that favor tribal jurisdiction. "Our tribal government works hard to ensure fairness in its court system, and this case sends a strong message upholding our tribal courts," said tribal attorney Thomas J. Van Norman, who worked on the case. "Ironically, the bank admitted it did a lot of business on the reservation, but it did not want to abide by the tribal court's rulings."

The Missouri-based Washington University School of Law's American Indian Law and Economic Development Program and a law firm from St. Louis helped the tribe defend its rights. "This case establishes an important precedent that tribes can use their own laws and their own legal systems to combat discrimination within their reservations," said associate professor Steven J. Gunn, the director of the law school program.

Get the 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 -