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Arrow Midstream Holdings, LLC v. 3 Bears Construction, LLC

Supreme Court of North Dakota

December 29, 2015

Arrow Midstream Holdings, LLC, Arrow Pipeline, LLC, Plaintiffs, Appellants, and Cross-Appellees
3 Bears Construction, LLC, Defendant, Appellee, and Cross-Appellee and Tesla Enterprises, LLC, Defendant, Appellee, and Cross-Appellant

Appeal from the District Court of Dunn County, Southwest Judicial District, the Honorable Zane Anderson, Judge.

Monte L. Rogneby (argued) and Diane M. Wehrman (on brief), and Caren W. Stanley (on brief), for plaintiffs, appellants, and cross-appellees.

John Fredericks (argued), and Thomas W. Fredericks (on brief), for defendant, appellee, and cross-appellee 3 Bears Construction, LLC.

Thomas M. Disselhorst, for defendant, appellee, and cross-appellant Tesla Enterprises.


VandeWalle, Chief Justice.

[¶ 1] Arrow Midstream Holdings, LLC and Arrow Pipeline, LLC (collectively "Arrow") appealed, and Tesla Enterprises, LLC ("Tesla") cross-appealed, from a judgment dismissing without prejudice for lack of jurisdiction its action against 3 Bears Construction, LLC ("3 Bears") and Tesla for breach of contract and a declaration that Tesla's pipeline construction lien is invalid. We reverse and remand, concluding the district court has jurisdiction over this lawsuit.


[¶ 2] In 2013, Arrow, a Delaware limited liability company, hired 3 Bears, a North Dakota limited liability company, to be the general contractor for the construction of a pipeline located on a right-of-way easement acquired by Arrow from the Bureau of Indian Affairs over Indian trust land on the Fort Berthold Indian Reservation. See 25 U.S.C. §§ 321 and 323. The easement was "for the purpose of installing oil, gas and water lines" and described the right-of-way as "11, 882.77 feet in length and 13.520 acres in area (34.206 acres during construction), more or less, ... and shall be buried a sufficient depth below the surface of the land so as not to interfere with cultivation." 3 Bears, which has its principal place of business in New Town, entered into a subcontract with Tesla, an Alaska limited liability company, to supply materials and labor for the construction. 3 Bears is owned by two members of the Three Affiliated Tribes ("Tribe") and is certified under the Tribal Employment Rights Ordinance ("TERO"). 3 Bears claims Arrow was a covered employer who was required to comply with TERO rules.

[¶ 3] After the pipeline was completed, a dispute arose between 3 Bears and Tesla concerning amounts Tesla claimed it was owed by 3 Bears for work Tesla performed. In mid-2014, Tesla sent Arrow a notice of right to file a pipeline lien under N.D.C.C. ch. 35-24. Tesla recorded the pipeline lien against Arrow in the Dunn County recorder's office in June 2014. In July 2014, Arrow commenced this action in state district court challenging the validity of the pipeline lien, seeking indemnification, and claiming 3 Bears breached the parties' contract. In August 2014, 3 Bears moved to dismiss for lack of subject matter jurisdiction. In November 2014, 3 Bears filed a complaint against Tesla and Arrow in Fort Berthold Tribal Court. 3 Bears sought a declaration that the pipeline lien was invalid, alleged Arrow had breached the master service contract, and requested an award of damages.

[¶ 4] In December 2014, the state district court agreed with 3 Bears' argument that it lacked subject matter jurisdiction over the lawsuit. The court concluded "exercising jurisdiction over this action under the circumstances presented here would infringe upon Tribal sovereignty." The court further concluded, "at the very least, Arrow and Tesla, as a matter of comity, should be required to exhaust their tribal court remedies before this Court exercises jurisdiction." The court dismissed the action "without prejudice to allow any of the parties to re-open the case without payment of another filing fee should it become necessary for purposes of enforcing the Tribal Court action or for any other reason."


[¶ 5] 3 Bears argues this Court lacks jurisdiction to hear the appeal because the district court dismissed the action without prejudice.

[¶ 6] "Before we consider the merits of an appeal, we must have jurisdiction." Choice Fin. Grp. v. Schellpfeffer, 2005 ND 90, ¶ 6, 696 N.W.2d 504. The situation here is similar to the circumstances in Winer v. Penny Enters., Inc., 2004 ND 21, ¶¶ 1, 4-5, 674 N.W.2d 9, in which the district court dismissed without prejudice for lack of subject matter jurisdiction an action brought by a non-Indian plaintiff against Indian defendants for damages resulting from a motor vehicle accident occurring on a state highway on an Indian reservation. Concluding this Court had jurisdiction over the appeal, we explained:

Ordinarily, an order dismissing a complaint without prejudice is not appealable because either side may commence another action after the dismissal. State v. Gwyther, 1999 ND 15, ¶ 10, 589 N.W.2d 575. However, a dismissal without prejudice may be final and appealable if it has the practical effect of terminating the litigation in the plaintiff's chosen forum. Rodenburg v. Fargo-Moorhead YMCA, 2001 ND 139, ¶ 12, 632 N.W.2d 407; Triple Quest, Inc. v. Cleveland Gear Co., 2001 ND 101, ¶ 8, 627 N.W.2d 379. In this case, the order and judgment effectively foreclose litigation of Winer's action in the courts of this state. Consequently, we conclude the dismissal is appealable.

Id. at ¶ 6.

[¶ 7] We likewise conclude in this case that the judgment dismissing the action without prejudice is appealable.


[¶ 8] Arrow argues the district court erred in concluding it lacked jurisdiction, and the Fort Berthold Tribal Court had exclusive jurisdiction, to decide the validity of the pipeline lien and the parties' contractual disputes.

[¶ 9] There is no dispute about the facts relevant to a determination of the jurisdictional issue in this case. "'When the jurisdictional facts are not in dispute, the question of subject-matter jurisdiction is a question of law, and we review the jurisdiction decision de novo.'" Gustafson v. Estate of Poitra, 2011 ND 150, ¶ 9, 800 ...

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