Plains Commerce Bank v. Long Family Land & Cattle Co.

2008-06-25

Headline: Court limits tribal authority, blocking tribal-court power to regulate a non‑Indian bank’s sale of fee land on a reservation and undo portions of sales to non‑Indian buyers.

Holding: The Court held that the tribal court lacked authority to hear a discrimination claim about a non‑Indian bank’s sale of its fee land because Montana’s exceptions do not let tribes regulate such sales on non‑Indian fee parcels.

Real World Impact:

Limits tribal court authority over non‑Indian fee land sales.
Makes it harder for tribes to void portions of sales to non‑Indian buyers.
Allows banks to challenge tribal judgments that nullify sales for lack of jurisdiction.

Topics: tribal authority, reservation land sales, tribal courts, bank lending and land

Summary

Background

A non‑Indian bank owned and then sold fee land located inside a tribal reservation. An Indian couple who had leased the land and later defaulted on loans sued in tribal court, saying the bank had discriminated by offering better sale terms to non‑Indian buyers. The tribal jury awarded the couple money and gave them an option to buy part of the land, effectively canceling part of the prior sale to non‑Indians. The bank then sued in federal court, arguing the tribal court lacked authority to decide the discrimination claim.

Reasoning

The Court asked whether the tribe could hear a discrimination case about a non‑Indian’s sale of land it owned in fee simple. The Justices explained that tribes generally lack power to regulate non‑Indian fee land and that two narrow exceptions from Montana (one for consensual commercial relationships and one for conduct that threatens the tribe) do not allow a tribe to control or undo such sales. The Court also held the bank had the right to bring the challenge because the tribal judgment awarded money and an option to purchase, both of which harmed the bank and could be fixed by a federal ruling.

Real world impact

The ruling makes clear tribes cannot use tribal tort rules to annul or broadly regulate a non‑Indian’s sale of non‑Indian fee land on a reservation. Parties doing business on or near reservations should not assume tribal authority extends to sales of privately owned fee parcels. The Court reversed the federal appeals court and vacated the tribal court’s authority over the discrimination claim.

Dissents or concurrances

A separate opinion agreed the sale option was improper but disagreed about the money judgment; four Justices would have left the damages award intact.