Ninth Circuit Affirms Tribal Court Jurisdiction Over Claims Against Nonmember Former Employee

Author:Mr John Haney
Profession:Holland & Knight
 
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John H Haney is Associate in Holland & Knight's Los Angeles office

HIGHLIGHTS:

In a decision favorable to tribal sovereignty, the U.S. Court of Appeals for the Ninth Circuit affirmed that the tribal court of the Cedarville Rancheria of Northern Paiute Indians (the Tribe) had jurisdiction over claims brought by the Tribe against a nonmember former employee of the Tribe. The Ninth Circuit held that the tribal court had jurisdiction over the nonmember former employee pursuant to the Tribe's sovereign powers of exclusion, as well as under the framework for tribal civil regulatory jurisdiction over nonmembers as set forth in the 1981 case of Montana v. United States. In Knighton v. Cedarville Rancheria of Northern Paiute Indians, et al., No. 17-15515, 2019 WL 1145150 (9th Cir., March 13, 2019), the U.S. Court of Appeals for the Ninth Circuit issued a decision favorable to tribal sovereignty in affirming that the tribal court of the Cedarville Rancheria of Northern Paiute Indians (the Tribe) had jurisdiction over tort claims brought by the Tribe against a nonmember former employee of the Tribe.

The Ninth Circuit held that the tribal court had jurisdiction over the nonmember former employee pursuant to the Tribe's sovereign powers of exclusion. The Ninth Circuit also found the tribal court had jurisdiction, separate and apart from its exclusionary powers, under the framework for tribal civil regulatory jurisdiction over nonmembers as set forth in Montana v. United States, 450 U.S. 544 (1981).

Background and Procedural History

In Knighton, the Tribe brought a lawsuit in tribal court against a nonmember former employee, Duanna Knighton, and two entity defendants related to alleged acts by the former employee while she served as the tribal administrator. The claims arose from allegations that the former employee 1) improperly manipulated policies to provide the former employee's salary, fringe benefits and pensions, 2) improperly invested tribal funds leading to a loss of more than $1 million for the Tribe, 3) provided misinformation to the Tribe that led to the Tribe's purchase of real estate for substantially more than market value, and 4) attempted to enter into financial agreements without authorization or tribal sovereign immunity waivers. The claims were based on conduct regulated via the Tribe's personnel manual, which applied to the tribal administrator.

Knighton filed a motion to dismiss the lawsuit in tribal court, asserting that the...

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