Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc.

PETITIONER: Kiowa Tribe of Oklahoma
RESPONDENT: Manufacturing Technologies, Inc.
LOCATION: The White House

DOCKET NO.: 96-1037
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: Supreme Court of Oklahoma

CITATION: 523 US 751 (1998)
ARGUED: Jan 12, 1998
DECIDED: May 26, 1998

ADVOCATES:
Edward C. DuMont - Argued the cause for the United States, as amicus curiae, by special leave of court, supporting the petitioner
John E. Patterson, Jr. - Argued the cause for the respondent
R. Brown Wallace - Argued the cause for the petitioner

Facts of the case

The U.S. holds in trust the Oklahoma land that the federally recognized Kiowa Tribe owns. In 1990, the then-Chairman of the Tribe's Business Committee signed a promissory note in the Tribe's name in order to purchase stock from Manufacturing Technologies, Inc. The note states that it was signed on tribal lands and provides that nothing in it subjects or limits the Tribe's sovereign rights. After the Tribe defaulted, Manufacturing Technologies sued the Tribe in state court, claiming that the note was executed and delivered beyond tribal lands. The Tribe moved to dismiss for lack of jurisdiction. Denying the motion, the trial court entered judgment for Manufacturing Technologies. In affirming, the Oklahoma Court of Civil Appeals held that Indian tribes are subject to suit in state court for breaches of contract involving off-reservation commercial conduct.

Question

May Indian tribes be sued in state courts for breaches of contract involving off-reservation commercial conduct?

Media for Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc.

Audio Transcription for Oral Argument - January 12, 1998 in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc.

William H. Rehnquist:

We'll hear argument now in Number 96-1037, the Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc.--

Mr. Wallace.

R. Brown Wallace:

Mr. Chief Justice, and may it please the Court:

Oklahoma State courts have entered a money judgment against the Kiowa Tribe of Oklahoma.

They have entered that judgment notwithstanding the fact that neither the tribe nor Congress have weighed the tribe's inherent immunity to suit, and despite the fact that in the very note sued upon, the parties agreed that nothing in that note would subject or limit the sovereign rights of the Kiowa Tribe.

This is one of a series of judgments that has been entered against the Kiowa Tribe that arises out of the same transaction, same series of transactions.

The enforcement of these judgments has resulted in a seizure of the tribal tax revenues, an enjoining of the tribe from enforcing tribal law on tribal land, a garnishment of the tribal bank accounts, even accounts containing federally appropriated funds, and generally a draining of the tribal treasury to the point of crippling the tribe's ability to maintain its governmental functions.

William H. Rehnquist:

Well, are those issues that you mentioned just now, are they necessarily involved in this case?

R. Brown Wallace:

They are involved in the case, in this case to the extent that they show the true impact of the judgment and some of the policy reasons why Congress has not elected to waive the sovereign immunity of tribes.

William H. Rehnquist:

It is quite possible, it seems to me, that a State court might have jurisdiction to enter a judgment but perhaps not have the jurisdiction to do some of the things which you describe as having happened in this case.

R. Brown Wallace:

I think you would have to look more deeply at what kind of judgment, and whether or not there was in fact a waiver.

Now, if we assume that there was no waiver, I would take the position that the judgment could be at best declaratory, and relating to the application of tribal... the application of State, regulatory, or taxation laws to the tribe when it's operating certainly without tribal country, and in some cases I think the State taxation laws should be respected by the tribe within Indian country.

Antonin Scalia:

Well, suppose there had been a waiver, would you think that these actions could then have been undertaken?

I mean, when the Federal Government waives its sovereign immunity I don't think that means that whoever gets the judgment can move in and cart off money from the Federal Treasury.

R. Brown Wallace:

Well, that's true, Your Honor, and it depends very much on how the waiver is structured.

Typically, when tribes engage in the activity of waiving their immunity they not only select a court that they're going to go into, designate the kind of causes of action that they will be subject to, but they also regulate the extent to which they expose their assets to court process.

Antonin Scalia:

But suppose they didn't.

I mean, I would be just as concerned about the effects that you're concerned about here in that situation where there was a waiver, without saying anything about what you can do to the tribe to enforce the liability.

R. Brown Wallace:

Well, in representing a tribe in that situation I would certainly take the position that until there is a waiver with respect to what assets can be subjected to the judgment, then the waiver is incomplete, that in order to have a complete and effective waiver so that a judgment can be entered and can be enforced, the waiver has got to have the court agreeing that it... excuse me, have the tribe agreeing that it will be subject to court process, and then the enforcement must also be specifically covered.

Anthony M. Kennedy:

So that if the tribe said, the tribe hereby waives sovereign immunity for liability on this note, that would be insufficient to waive immunity if a court ordered execution or attachment of a tribal bank account.

R. Brown Wallace:

I think it's in... yes.

I think it's insufficient because it fails to designate the property, the sovereign property to which the waiver attaches.

The... you know, the immunity of a sovereign has two basic concepts.

Number 1, the agreement of the sovereign to subject itself to court jurisdiction, in essence the agreement to create jurisdiction in a court, and then the second concept is the enforcement, the designation of exactly what remedial devices that the sovereign will be subject to.

Anthony M. Kennedy:

I just don't know if it's the tradition in our law to parse and separate sovereign immunity into those two components or not.

R. Brown Wallace:

State statutes that deal with State sovereign immunity very regularly say the State will agree to be sued for these causes of action, and then very regularly address the means of enforcement of those causes of action... or, excuse me, of any judgments under those causes of action.

Anthony M. Kennedy:

Usually by appropriation by the State legislature, or something.

R. Brown Wallace:

That is one of the devices that's used.

Oklahoma in fact does use that device.

I'm familiar with that.