Ninigret Development Corp. v. Narragansett Indian Wetuomuck Housing Authority

No. 99-1828 (207 F.3d 21) (1st Cir. March 22, 2000)

ELR Digest

The court holds that a tribal court,not a federal district court, should review a development corporation's claims against a tribal housing authority concerning a tribal housing project outside of the reservation. A federal district court held that the development corporation's claims were barred because the corporation failed to adhere to the development contract's forum selection clause, which required disputes to be heard by the tribal council in binding arbitration. The court first holds that the district court only had subject matter jurisdiction to determine the extent of the tribal court's jurisdiction. The joinder of a Native American tribe destroys diversity jurisdiction. However, the question whether a Native American tribe retains the power to compel a non-Native American to submit to the civil jurisdiction of a tribal court is a federal question. In this case, the authority made a colorable case for tribal jurisdiction over the corporation's claims, but the authority disputed such an assertion. Therefore, the district court has the power to answer the federal question of the tribal court's jurisdiction.

The court next holds that the forum selection clause in the development agreement waived the authority's tribal sovereign immunity regarding the corporation's claims. The forum selection clause is direct, clear, and plain committing all claims arising out of the development agreement to arbitration and providing that the agreement to arbitrate shall be enforceable under prevailing law. The court then holds that the tribal exhaustion doctrine applies to the corporation's claims. To trigger exhaustion in cases such as this one where the dispute arose out of activities conducted outside the reservation, the claim must impact directly upon tribal affairs. Here, the corporation's dealings with the authority bore directly on the use and disposition of tribal land and money. In addition, where the tribal exhaustion doctrine applies generally to a controversy, an argument that a contractual forum selection clause either dictates or precludes a tribal forum should be directed to the tribal court. The existence and extent of tribal court jurisdiction must be made with reference to federal law, not with reference to provisions that may be contained within the four corners of a contract. Thus, the district court erroneously looked at the contract and passed on the forum selection clause's enforceability in holding that the tribal exhaustion doctrine does not apply. Further, the corporation failed to prove that any of the exceptions to the tribal exhaustion doctrine applied in this case. Consequently, the remaining issues, including the validity of the contract's forum selection clause, must be aired before the tribal court.

The full text of this decision is available from ELR (9 pp., ELR Order No. L-195).

Counsel for Plaintiff
Joseph F. Dugan
Law Offices of Joseph F. Dugan
800 Clinton Pl., Woonsocket RI 02895
(401) 766-5800

Counsel for Defendant
John F. Killoy Jr.
Law Offices of H. Jefferson Melish
404 Main St., Wakefield RI 02879
(401) 783-6840

[30 ELR 20481]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]