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Auto Owners Insurance Co. v. Azure

December 22, 2009


The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court


Before the Court is a motion to dismiss filed by Defendants Ken Davis and Jeremy Laducer on November 13, 2009. See Docket No. 19. The Plaintiff filed a response in opposition to the motion on November 25, 2009. See Docket No. 21. The Defendants filed a reply brief on December 3, 2009. See Docket No. 24. For the reasons set forth below, the Court grants the motion to dismiss.


Defendants Ken Davis and Travis Azure lived next door to each other on the Turtle Mountain Reservation. Each is an enrolled member of the Turtle Mountain Band of Chippewa, along with Defendant Jeremy Laducer, who is Davis's son-in-law. In early 2008, a dispute arose between Davis and Azure regarding a sewage clean-out pipe. The pipe originated at Azure's house and was routed outside between the two houses, coming to an end near Davis's yard. After the pipe began leaking sewage onto Davis's yard, Davis and Laducer allegedly trespassed onto Azure's land and intentionally blocked the pipe by pouring concrete into the sewer clean out. The blockage caused sewage to back up into Azure's basement, resulting in damage to his property.

After these events transpired, Azure filed a civil action against Davis and Laducer in Turtle Mountain Tribal Court which remains pending. On November 21, 2008, the plaintiff, Auto Owners Insurance Company, filed a complaint in federal court seeking a declaratory judgment regarding the rights of the parties. Auto Owners issued a homeowner's insurance policy to Davis which was in effect at the time of the dispute. The complaint alleges that the insurance policy does not require Auto Owners to indemnify Davis for any damages claimed by Azure because the policy does not cover intentional acts. Davis and Laducer filed the present motion on November 13, 2009, asserting that Auto Owners failed to exhaust Turtle Mountain Tribal Court remedies before seeking relief in federal court.


Davis and Laducer seek dismissal based on the Court's discretion under the Declaratory Judgment Act and the principles embodied in the tribal exhaustion doctrine. The motion is predicated upon Rule 12(b) of the Federal Rules of Civil Procedure.


The Plaintiff seeks relief under the Declaratory Judgment Act codified at 28 U.S.C. § 2201. Under the Act, district courts may determine the rights and legal relations of interested parties. 28 U.S.C. § 2201(a). The Act "is an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant." Roark v. South Iron R-1 Sch. Dist., 573 F.3d 556, 561-62 (8th Cir. 2009) (citing Pub. Serv. Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 241 (1952)). As stated by the United States Supreme Court, "By the Declaratory Judgment Act, Congress sought to place a remedial arrow in the district court's quiver; it created an opportunity, rather than a duty, to grant a new form of relief to qualifying litigants." Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995). Ultimately, whether a district court grants relief in a particular case "will depend upon a circumspect sense of its fitness informed by the teachings and experience concerning the functions and extent of federal judicial power." Id. at 287.

In this case, any inclination on the Court's behalf to exercise its discretion under the Declaratory Judgment Act yields to the applicability of the tribal exhaustion doctrine. Malaterre v. Amerind Risk Mgmt, 373 F. Supp. 2d 980, 982 (D. N. D. 2005) (citing Gaming World Int'l, Ltd. v. White Earth Band of Chippewa, 317 F.3d 840, 849 (8th Cir. 2003)). In Gaming World, the Eighth Circuit Court of Appeals held that the tribal exhaustion issue "is a threshold one because it determines the appropriate forum." Gaming World, 317 F.3d at 849. Therefore, the Court will analyze the applicability of the tribal exhaustion doctrine.


Under the tribal exhaustion doctrine, principles of comity require a federal court to stay an action until the parties exhaust the available remedies in tribal court. "[W]hen a colorable claim of tribal court jurisdiction has been asserted, a federal court may (and ordinarily should) give the tribal court precedence and afford it a full and fair opportunity to determine the extent of its own jurisdiction over a particular claim or set of claims." Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck Hous. Auth., 207 F.3d 21, 31 (1st Cir. 2000). The doctrine "is based on a policy of supporting tribal self-government and self-determination." Id. (citing Nat'l Farmers Union Ins. Co. v. Crow Tribe of Indians, 471 U.S. 845, 856 (1985)). While the doctrine is prudential, rather than jurisdictional, "[e]xhaustion is mandatory . . . when a case fits within the policy." Id.

Auto Owners contends this case does not fit within the parameters of the tribal exhaustion doctrine because the tribe does not maintain jurisdiction over non-members. As a general rule, in civil cases, "'[T]he inherent sovereign powers of an Indian tribe' -- those powers a tribe enjoys apart from express provision by treaty or statute - 'do not extend to the activities of nonmembers of the tribe.'" Strate v. A-1 Contractors, 520 U.S. 438, 445-46 (1997) (quoting Montana v. United States, 450 U.S. 544, 565 (1981)). However, the Supreme Court in Montana provided two exceptions to this general rule:

Indian tribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations, even on non-Indian fee lands. A tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements. A tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when ...

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