Washington University School of Law’s American Indian Law and Economic Development Program and the St. Louis law firm of Sonnenschein, Nath & Rosenthal have garnered an important legal victory concerning the sovereignty of the Cheyenne River Sioux Tribe in South Dakota. Working with local attorneys in South Dakota, they helped the tribe defend a federal lawsuit challenging the authority of the tribe’s courts to hear a discrimination case brought by tribal members against a non-Indian bank doing business on the reservation.
In a fifteen-page opinion released this morning, Judge Charles B. Kornmann of the U.S. District Court for the District of South Dakota ruled that the tribe’s courts had jurisdiction over the case and affirmed a 2003 verdict by a tribal jury awarding $875,982.46 in damages, interest, and costs to the aggrieved tribal members.
“Discriminatory lending practices are common in Indian country, and it is critical that tribes have the power to deal with offenders,” says Steven J. Gunn, J.D., associate professor of law at Washington University and director of the school’s Indian law program. “This case establishes an important precedent that tribes can use their own laws and their own legal systems to combat discrimination within their reservations.”
Roger Heidenreich, a partner at Sonnenschein, who participated on the case and drafted complex sections of the tribe’s briefs concerning jurisdiction and commercial law, was pleased with the court’s decision: “The court saw the justice in the position we took. The court’s decision confirms that the courts of the Cheyenne River Sioux Tribe have the power to decide disputes arising out of commercial relationships with members of the tribe.”
The Discrimination Claim
The case, Plains Commerce Bank v. Long Family Land and Cattle Company, Inc., involved a claim brought by two tribal members, Ronnie and Lila Long, against Plains Commerce Bank, formerly known as the Bank of Hoven. The Longs alleged that the bank discriminated against them due to their status as American Indians. They cited discriminatory terms and conditions in the commercial loan the bank made to their cattle company, and alleged that the bank breached the loan agreement when it failed to lend the full amount promised.
In April of 1996 the bank sent the Longs a letter citing as the basis for its conduct “possible jurisdictional problems if the bank ever had to foreclose on the land when it is contracted or leased to an Indian owned entity on the reservation.” (Slip Opinion, page 3.) This would form a key part of the discrimination claim, since such factors are not considered in loans made to non-Indians.
The Longs argued that the bank’s failure to lend them the money they needed, when they needed it, contributed to the death of over 500 of their cows, yearlings, and horses during the severe Plains winter of 1996 and 1997. Unable to purchase hay, the Longs saw their cattle drift from protected draws and perish in the harsh winter storms. Further, unable purchase insurance, they suffered extraordinary financial losses when their livestock died.
Federal Court Rejects Bank’s Jurisdictional Challenge
To avoid paying the $875,982.46 jury verdict, the bank argued in federal court that the tribe’s courts had no jurisdiction to entertain the discrimination claim. The federal court disagreed.
“Indian tribes have long been recognized as semi-sovereign governments within the American political system,” Gunn says. “There are over 500 federally recognized Indian tribes in the continental United States and Alaska, and a great many of them have their own court systems. In a series of decisions issued over the last thirty years, the Supreme Court has largely limited the jurisdiction of tribal courts to disputes involving Indians, not outsiders.
“However, the Supreme Court has recognized some exceptions to this general rule. One such exception involves disputes arising out of contracts and commercial dealings between Indians and non-Indians. Tribal courts have authority to adjudicate disputes involving such consensual relationships.”
It was this exception that the federal court in South Dakota invoked to uphold the jurisdiction of the Sioux tribal courts over the Longs’ discrimination claim. By entering into a loan agreement with the Longs, the court said, the bank subjected itself to the jurisdiction of the tribal courts.
“While the Supreme Court has been reluctant to find tribal civil jurisdiction over defendants who are not members of the tribe, its decisions do not foreclose the possibility, particularly where the defendants enter consensual relationships with tribal members through commercial dealings, contracts, leases, or other arrangements.” (Slip Opinion, page 13.)
The federal court found that the Longs’ discrimination claim related “exclusively to the manner in which the bank treated the Longs in the various agreements” it made with them. (Slip Opinion, page 12.)
“Our tribal government works hard to ensure fairness in its court system, and this case sends a strong message upholding our tribal courts,” says Cheyenne River Sioux 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.”
Federal Court Finds that Tribal Law Prohibits Discrimination
The bank also argued that the Longs’ discrimination claim could not be heard in tribal court because, the bank contended, the discrimination claim arose under federal law. The bank based its argument, in large part, on the United States Supreme Court’s ruling in Nevada v. Hicks (2001) that tribal courts are not courts of general jurisdiction and therefore cannot entertain certain federal civil rights claims.
The tribe countered that the Longs’ discrimination claim was founded not on federal law, but on tribal common and customary law. Gunn and his students performed exhaustive legal and historical research into the customs of the tribe and found that those customs, which have the force of law, mandate fairness, respect for individual dignity, and equal treatment of all people regardless of race or tribal affiliation. This research informed the tribe’s position in the many briefs written and filed in the case by Washington University, Sonnenschein, and the tribe’s legal department.
The federal court agreed with the tribe’s position, ruling that while discrimination is the subject of federal law, including federal civil rights legislation, it is also actionable under the laws of the tribe. The federal court noted that:
“There is a basis for a discrimination claim that arises directly from Lakota [Sioux] tradition as embedded in Cheyenne River Sioux tradition and custom. Such a potential claim arises from the existence of Lakota customs and norms such as the traditional Lakota sense of justice, fair play and decency to others, and the Lakota custom of fairness and respect for individual dignity. Such notions of fair play are core ingredients in … definitions of discrimination.” (Slip Opinion, pages 14-15.)
Washington University’s Collaboration with the Cheyenne River Sioux Tribe
Washington University has a longstanding relationship with the Cheyenne River Sioux Tribe. Through its American Indian Law and Economic Development Program, directed by Professor Gunn, the School of Law sends law students to work and study on the reservation during the summer. Students help the tribe safeguard its rights and develop its legal institutions. Students participate in policy development, legislative advocacy, litigation, and transactional work. It was through this program that the school became involved in the case.
Washington University’s Collaboration with Sonnenschein
Sonnenschein’s involvement in the case was part of the firm’s broader collaboration with the Washington University School of Law. Working with law professors and students at Washington University, the firm’s attorneys have provided pro bono legal assistance in a wide variety of substantive areas, including American Indian law, domestic violence, and mediation of civil rights disputes.
“Sonnenschein has appreciated the opportunity to work with the faculty and students of the Washington University School of Law on such important and worthwhile projects,” says Heidenreich.