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Date: 10-13-2013

Case Style: Charles Sheffer v. Buffalo Run Casino, PTE, Inc.

Case Number: 2013 OK 77

Judge: Gurich

Court: Oklahoma Supreme Court on appeal from the District Court, Ottawa County

Plaintiff's Attorney: Ed Hershewe, Joplin, Missouri, Attorney for Plaintiffs-Appellants

Trevor Hughes & J. Christopher Davis, Johnson & Jones P.C., Tulsa, Oklahoma, Attorneys for Plaintiffs-Appellants

Richard L. Yohn, Legal Aid Services of Oklahoma, Inc., McAlester, Oklahoma, Attorney for Plaintiffs-Appellants

Defendant's Attorney: Jon Brightmire & Stuart Campbell, Doerner, Saunders, Daniel & Anderson L.L.P., Tulsa, Oklahoma, Attorneys for Defendants-Appellees Peoria Tribe of Indians of Oklahoma

Description: ¶0 Charles Sheffer, Jennifer Sheffer, and their minor son, J.S., were injured when their 18-wheeler tractor trailer collided with a rental vehicle leased to William Garris and driven by David Billups, both employees of Carolina Forge Company, L.L.C. Plaintiffs sued Carolina Forge on theories of respondeat superior and negligent entrustment. They also sued the Buffalo Run Casino, the Peoria Tribe of Indians of Oklahoma, and PTE, Inc. for dram-shop liability. The trial court granted summary judgment in favor of Carolina Forge, finding as a matter of law Carolina Forge was not liable for its employees' actions under a theory of respondeat superior and did not negligently entrust the rental vehicle to its employees. The trial court also dismissed, sua sponte, the Buffalo Run Casino, PTE, Inc., and the Peoria Tribe of Indians of Oklahoma, determining that injunctions issued by the Honorable Lee R. West in the Western District of Oklahoma in Case No. 10-CV-00050-W and Case No. 10-CV-01339-W, prohibited suit for any tort claims against a tribe or a tribal entity. Plaintiffs appealed both orders, and we retained the appeals. In Sheffer v. Carolina Forge Co., 2013 OK 48, 306 P.3d 544, we reversed the trial court's grant of summary judgment to Carolina Forge and found issues of material fact precluded summary judgment on both the respondeat superior and negligent entrustment claims. In the present case, we find the Peoria Tribe is immune from suit in state court for compact-based tort claims because Oklahoma state courts are not courts of competent jurisdiction as the term is used in the model gaming compact. We also hold that because Congress has not expressly abrogated tribal immunity from private, state court dram-shop claims and because the Peoria Tribe and its entities did not expressly waive their sovereign immunity by applying for and receiving a liquor license from the State of Oklahoma, the tribe is immune from dram-shop liability in state court. The trial court's dismissal of the Peoria Tribe and its entities is affirmed.

¶1 This case involves an automobile accident between Plaintiffs and two employees of Carolina Forge Company, L.L.C, the Appellee in Sheffer v. Carolina Forge Co., 2013 OK 48, 306 P.3d 544. While the facts and procedural history of the case are set out in detail in that opinion, in short, Plaintiffs Charles Sheffer, Jennifer Sheffer, and their minor son, J.S., were injured when a rental vehicle leased to employees of Carolina Forge collided with Plaintiffs' 18-wheeler tractor trailer. The driver of the rental vehicle, David Billups, was killed and his passenger, William Garris, was injured.

¶ 2 Plaintiffs sued Carolina Forge in the District Court of Ottawa County on theories of respondeat superior and negligent entrustment. They also sued the Buffalo Run Casino, the Peoria Tribe of Indians of Oklahoma, and PTE, Inc. ("Peoria Tribe") for dram-shop liability. The trial judge granted summary judgment in favor of Carolina Forge on both the respondeat superior and negligent entrustment claims. The trial court also dismissed, sua sponte, the Peoria Tribe because injunctions issued by the Honorable Lee R. West in the Western District of Oklahoma in Case No. 10-CV-00050-W1 and Case No. 10-CV-01339-W,2 prohibited suit "for any tort claims against a tribe or a tribal entity."3 Plaintiffs appealed, and we retained both appeals. In Sheffer v. Carolina Forge Co., 2013 OK 48, 306 P.3d 544, we reversed the trial court's grant of summary judgment to Carolina Forge and found issues of material fact precluded summary judgment on both the respondeat superior and negligent entrustment claims. In this opinion, we consider only the Plaintiffs' claims against the Peoria Tribe.

Standard of Review

¶3 A determination of jurisdiction is a question of law. Seneca Tel. Co. v. Miami Tribe of Okla., 2011 OK 15, ¶ 3, 253 P.3d 53, 54. The standard of review for questions of law concerning the jurisdictional power of the trial court to act is de novo. Diliner v. Seneca-Cayuga Tribe of Okla., 2011 OK 61, ¶ 12, 258 P.3d 516, 519. De novo review involves a plenary, independent, and non-deferential examination of the trial court's rulings of law. In re Estate of Bell-Levine, 2012 OK 112, ¶ 5, 293 P.3d 964, 966.

Analysis

Model Gaming Compact

¶4 Under the Indian Gaming Regulatory Act, state governments may negotiate a gaming compact with tribal governments so that tribes may conduct Class III Gaming on tribal lands. Griffith v. Choctaw Casino of Pocola, 2009 OK 51, ¶ 11, 230 P.3d 488, 492. In 2004, Oklahoma voters approved Oklahoma State Question 712, which proposed the negotiated model gaming compact as an offer to federally recognized tribes in the State of Oklahoma to engage in Class III gaming on tribal lands under the terms and conditions of the proposed compact. Id. ¶ 13, 230 P.3d at 492. The model gaming compact is codified in the State-Tribal Gaming Act. 3A O.S. 2011 §§ 261-282.

¶5 Part 6 of the compact, which governs tort and prize claims by patrons of a casino, provides a limited waiver of tribal immunity and states in subsection C: "The tribe consents to suit against the enterprise in a court of competent jurisdiction with respect to a tort claim or prize claim if all requirements of paragraph 9 of subsection A or all requirements of paragraph 11 of subsection B of this Part have been met; provided that such consent shall be subject to the following additional conditional limitations."4 The compact does not define "court of competent jurisdiction"; however, it expressly provides in Part 9 that "[t]his Compact shall not alter tribal, federal or state civil adjudicatory or criminal jurisdiction."5

¶6 In early 2009, this Court asserted state court civil-adjudicatory jurisdiction over compact-based, Indian country tort lawsuits in Dye v. Choctaw Casino of Pocola, 2009 OK 52, 230 P.3d 507 (per curiam); Griffith v. Choctaw Casino of Pocola, 2009 OK 51, 230 P.3d 488 (per curiam); Cossey v. Cherokee Nation Enters., 2009 OK 6, 212 P.3d 447. In each of those cases, a divided Court held state courts were courts of competent jurisdiction as the term was used in the voter-approved model gaming compact.

¶7 In response to the decisions in Dye, Griffith, and Cossey, the Chickasaw and Choctaw Nations and the State of Oklahoma invoked the compact's dispute resolution clause and entered into a joint agreement to arbitrate.6 The parties agreed to submit to binding arbitral interpretation the issue of whether, "under the Choctaw Nation and State of Oklahoma Gaming Compact and the Chickasaw Nation and State of Oklahoma Gaming Compact, jurisdiction over all Compact based tort claim and/or prize claim lawsuits lies exclusively in Choctaw Nation or Chickasaw Nation forums."7

¶8 In August 2009, the arbitrator for the dispute found the term "court of competent jurisdiction" as used in Part 6(C) of the Nations' compacts could not properly be interpreted to include the courts of the State of Oklahoma.8 Subsequent to the arbitrator's decision, the Nations sought to certify and enforce the arbitration award in federal district court as allowed for under Part 12(3) of the compact, which gives the federal district court exclusive jurisdiction to review "any arbitration award under paragraph 2 of this Part."9 The Nations also sought permanent injunctive relief in the federal district court, prohibiting Oklahoma state courts from exercising jurisdiction over any and all compact-based tort or prize claim lawsuits against the Nations.10

¶9 The federal district court for the Western District of Oklahoma, in an order by the Honorable Lee R. West, agreed with the arbitrator and found Oklahoma state courts were not courts of competent jurisdiction as the term was used in the gaming compact, and any attempt by any Oklahoma state court to exercise jurisdiction over a compact-based tort or prize claim lawsuit against the Nations was a violation of the sovereign immunity of the tribes.11 The federal district court issued an order purportedly enjoining the State of Oklahoma, including the courts of this state, from asserting state civil-adjudicatory jurisdiction over compact-based tort or prize claim lawsuits against the Nations.12 Since the federal district court's decision in the Choctaw and Chickasaw Nations case, subsequent orders, involving other tribes who have submitted the same issue to arbitration, have been issued in Eastern Shawnee Tribe of Okla. v. Oklahoma, 10-CV-00459-W (W.D.Okla. July 1, 2010), Cherokee Nation v. Oklahoma, 10-CV-979-W (W.D.Okla. Nov. 22, 2010), Comanche Nation, Osage Nation, Delaware Nation, and Wichita and Affiliated Tribes v. Oklahoma, 10-CV-01339-W (W.D.Okla. Dec. 28, 2010), and Tonkawa Tribe of Okla. v. Oklahoma, 11-CV-782-W (W.D.Okla. Nov. 23, 2011). The orders issued in those cases also purportedly enjoin the courts of this state from exercising state civil-adjudicatory jurisdiction over compact-based tort or prize claim lawsuits involving such tribes.13

¶10 The trial judge in the case before us took judicial notice of the orders entered by the federal district court and dismissed the Peoria Tribe from the case, finding because "Plaintiffs' claim is a tort arising on Indian land, the injunction currently in place by Judge West is to be followed by all State entities, including the judicial branch, for any tort claims against a tribe or a tribal entity."14 The Peoria Tribe asks this Court to affirm its dismissal because the gaming compact between the Peoria Tribe and the State of Oklahoma is identical to the gaming compact at issue in the above-mentioned federal court proceedings. As such, the tribe maintains it may not be sued in state court for compact-based tort claims.

¶11 Although the gaming compact between the Peoria Tribe and the State of Oklahoma is identical to the gaming compacts at issue in the above-mentioned federal court proceedings,15 the Peoria Tribe has not invoked the compact's dispute resolution clause and has not entered into a joint agreement to arbitrate this issue with the State of Oklahoma. No injunction has been entered enjoining the courts of this state from exercising civil-adjudicatory jurisdiction over compact-based tort or prize claim lawsuits involving the Peoria Tribe.16

¶12 Regardless of whether the injunctions in the above-mentioned proceedings apply to the case before us or whether the federal district court has the power to enforce such injunctions,17 recent decisions from the federal courts of this state as well as the above-mentioned arbitration proceedings have caused us to reexamine our previous holdings in Dye, Griffith, and Cossey. After further consideration, we agree with the federal courts and the arbitrator that Oklahoma state courts are not courts of competent jurisdiction as the term is used in the model gaming compact with regard to compact-based tort or prize claims. The Executive Branch of the State of Oklahoma, specifically the Governor, has been and continues to be the party responsible for negotiating compacts with the sovereign nations of this state.18 Unless and until the State of Oklahoma renegotiates the model gaming compact to include courts of this state as courts of competent jurisdiction, the courts of this state shall refrain from exercising civil-adjudicatory jurisdiction over compact-based tort or prize claims involving tribes who have entered into the model gaming compact with the State of Oklahoma.19

¶13 Congress provided in IGRA a "framework for the regulation of gaming activities on Indian lands which provides that in the exercise of its sovereign rights, unless a tribe affirmatively elects to have State laws and State jurisdiction extend to tribal lands, the Congress will not unilaterally impose or allow State jurisdiction on Indian lands for the regulation of Indian gaming activities." Muhammad v. Comanche Nation Casino, No. 09-CIV-968-D, 2010 WL 4365568, at *9 (citing S. Rep. 100-446, at 5-6, reprinted in 1988 U.S.C.C.A.N. at 3075). Only "an affirmative extension of state civil-adjudicatory jurisdiction by a tribal-state gaming compact will be sufficient" to expand state court jurisdiction to tribal gaming activities. Id.

¶14 Part 6 of the model gaming compact provides a limited waiver of tribal immunity and a tribe consents to suit for tort or prize claims in a "court of competent jurisdiction."20 Although, the compact does not define "court of competent jurisdiction," Part 9 of the compact provides: "[t]his Compact shall not alter tribal, federal or state civil adjudicatory or criminal jurisdiction."21

¶15 In Muhammad, 2010 WL 4365568, at *1, the Plaintiff filed suit in the District Court of Comanche County to recover damages for personal injuries suffered in a slip-and-fall accident while at the Comanche Nation Casino. Plaintiff asserted that Oklahoma's gaming compact with the Comanche Nation allowed her to sue the tribe in Oklahoma state court. Id. Defendant removed the case to federal court and argued that Oklahoma courts lacked jurisdiction over Plaintiff's tort action because jurisdiction was exclusively in the tribal courts of the Comanche Nation under the compact. Id.

¶16 The Honorable Timothy D. DeGiusti of the Western District of Oklahoma found the gaming compact between Oklahoma and the Comanche Nation did not waive tribal sovereign immunity from suit in Oklahoma state courts. Id. at *11. The court noted the compact was governed by IGRA and "its strong policy of promoting tribal self-government." Id. at *10. The court found: "Nothing in the Compact permits an inference that the tribe intended 'a court of competent jurisdiction to include state courts.' Parts 5 and 6 of the Compact specifically provide for the application of tribal rules and regulations to tort claims by casino patrons against the tribal gaming enterprise, and those regulations limit actions to tribal court." Id.

¶17 In Harris v. Muscogee (Creek) Nation, No. 11-CV-654-GKF-FHM, 2012 WL 2279340, at *1 (N.D.Okla. June 18, 2012), the Plaintiff, a customer of River Spirit Casino, was injured in a slip-and-fall accident at the casino. She filed suit in the District Court of Tulsa County and sought to invoke Oklahoma's gaming compact with the Creek Nation. Id. The Creek Nation removed the suit to federal court and argued jurisdiction for Plaintiff's tort claim was exclusively in the tribal courts of the Creek Nation under the compact. Id.

¶18 The Honorable Gregory Frizzell of the Northern District of Oklahoma held that "nowhere in Part 6 or any other part of the Compact does the tribe consent to extension of state civil-adjudicatory jurisdiction. Rather, the compact provides, 'This Compact shall not alter tribal, federal or state civil adjudicatory or criminal jurisdiction.'" Id. at *4. The court found the compact between the Creek Nation and the State of Oklahoma did not waive the tribe's sovereign immunity against compact-based tort suits in Oklahoma state courts. Id. at *5.

¶19 On January 29, 2013, the Tenth Circuit issued an Order and Judgment in Santana v. Muscogee (Creek) Nation, ex rel. River Spirit Casino, 508 F.App'x 821 (10th Cir. 2013), cert. denied, 133 S.Ct. 2038 (2013). In that case, Mr. Santana, a self-professed gambling addict, invoked Oklahoma's gaming compact with the Creek Nation to sue the tribe in Oklahoma state court. Id. at *1. Mr. Santana claimed the Creek Nation induced him to gamble at its casino, resulting in the tribe's unjust enrichment. Id. The Creek Nation removed the suit to federal court and argued that its compact with the State of Oklahoma did not extend jurisdiction to Oklahoma state courts to hear civil tort claims against the tribe because state courts were not "courts of competent jurisdiction" under the compact. Id. The Honorable James H. Payne of the Northern District of Oklahoma dismissed the Creek Nation and found nothing in the compact waived tribal immunity from civil tort suits brought in state or federal court.22

¶20 A unanimous three-judge panel of the Tenth Circuit affirmed and found that "[a]though the compact does not define a 'court of competent jurisdiction,' it does expressly provide that '[t]his Compact shall not alter tribal, federal or state civil adjudicatory or criminal jurisdiction.'" Id. The Tenth Circuit held that "because there is no express grant of jurisdiction to hear compact-based tort suits against the Creek Nation in state court, the phrase 'court of competent jurisdiction' does not include Oklahoma's state courts." Id. at *2. In footnote 1, the Tenth Circuit recognized that this Court reached a different conclusion in Dye, 2009 OK 52, 230 P.3d 507, Griffith, 2009 OK 51, 230 P.3d 488, and Cossey, 2009 OK 6, 212 P.3d 447. Id. at *2 n.1.

¶21 Additionally, in Comanche Nation, the arbitrator specifically construed Part 9 of the compact:

[b]ecause nowhere in any of the Tribes' Class III gaming Compacts is there any material tribal sovereign immunity waiver except "in a court of competent jurisdiction," and because Part 9 preserved, adopted, and incorporated by reference the jurisdictional status quo ante, there is no express waiver anywhere in the Compact[s] of any of the Tribes' sovereign immunity from any relevant Indian country-arising Class III casino-related lawsuit in any Oklahoma state court.

Supplement to Record on Accelerated Appeal, Ex. 4 at 6 (emphasis added).

¶22 As the arbitrator pointed out and as the federal courts of this state have concluded, Part 9 of the gaming compact preserves the civil-adjudicatory jurisdiction status quo--that "states are generally presumed to lack jurisdiction in Indian Country." Santana, 508 F.App'x at 823 (citing California v. Cabazon Band of Mission Indians, 480 U.S. 202, 216 n.18 (1987)). Only an express grant of jurisdiction by Congress23 or adoption of Public Law 28024 will confer civil-adjudicatory jurisdiction to the State of Oklahoma. "It is undisputed that Oklahoma was not a state which was allowed to assert civil jurisdiction over Indian Tribes under Public Law 280." Cossey, 2009 OK 6, 212 P.3d 447 (Kauger, J., concurring in part/dissenting in part ¶ 26); Okla.Tax Comm'n v. Sac & Fox Nation, 508 U.S. 114, 125 (1993) ("Oklahoma did not assume jurisdiction pursuant to Pub.L. 280."). And IGRA did not expressly grant civil-adjudicatory jurisdiction to the State of Oklahoma,25 but rather, included a provision "which allowed tribes and states to negotiate an allocation of jurisdiction to the states."26

¶23 The intention of the parties to the negotiation of the model gaming compact is clear. The Governor of the State of Oklahoma did not negotiate an allocation of civil-adjudicatory jurisdiction to the courts of this state. In its order confirming the arbitrator's decision in Comanche Nation, the federal court pointed out that the Governor did not dispute any of the facts outlined by the Tribes in their Motion for Summary Judgment and did not assert any affirmative defenses or arguments precluding certification of the Arbitration Award. Supplement to Record on Accelerated Appeal, Ex. 4 at 6-7. The Governor instead stated in the response that "if Part 12 of the Tribes' Compacts, which authorizes the submission of disputes over the terms and conditions of the Compacts to arbitration, is valid, then the Arbitration Award should be deemed valid and certified." Id. (emphasis added).27

¶24 Additionally, as the separate writing in Dye pointed out, the Governor of Oklahoma and the State Treasurer, the lead negotiators for the 2004 model gaming compact, "attached as exhibits to their Amicus Curiae brief filed on March 9, 2009, in Cossey, copies of sworn affidavits which indicate they negotiated and signed the compact with the intent that the phrase 'a court of competent jurisdiction' was not a provision intended to extend the jurisdiction of State courts. Rather, it was intended to preserve preexisting Tribal court jurisdiction over claims arising in Indian country against Indian Tribes." Dye, 2009 OK 52, 230 P.3d 507 (Kauger, J., concurring in part/dissenting in part ¶ 2 & n.2) (internal citations omitted) (emphasis added).

¶25 Other provisions in the compact support the conclusion that tribal courts and tribally designated forums have exclusive civil-adjudicatory jurisdiction over all compact-based tort or prize claim lawsuits. As the Tenth Circuit pointed out in Santana:

Part 6(A) of the compact charges the tribe, not the state, with ensuring that patrons are afforded due process. See 3A Okla. Stat. Ann § 281, Part 6(A) ("The enterprise shall ensure that patrons of a facility are afforded due process in seeking and receiving just and reasonable compensation for a tort claim for personal injury or property damage."). Part 6(A)(4)-(10) establishes the procedure by which tort claims are filed with and processed by tribal officials. And Part 5(A) obligates the tribe to promulgate rules and regulations necessary to implement the compact.

Santana, 508 F.App'x at 823.

We hold the model gaming compact preserved the civil-adjudicatory jurisdictional status quo, and Oklahoma state courts are not courts of competent jurisdiction as the term is used in the model gaming compact "to adjudicate tort claims against Indian tribes for tribal activity on tribal land." Griffith, 2009 OK 51, 230 P.3d 488 (Reif, J., dissenting ¶ 4). To the extent Dye, Cossey, and Griffith conclude otherwise, they are overruled.

Dram-Shop Liability

¶26 The Plaintiffs in the present case argue that regardless of whether we construe the compact to include the courts of the State of Oklahoma as courts of competent jurisdiction, the gaming compact does not apply to their dram-shop claim so they can pursue the claim in state court, relying on Bittle v. Bahe, 2008 OK 10, 192 P.3d 810. In response, the tribe maintains the compact is applicable to the dram-shop claim but asks this Court to overrule Bittle. The tribe's argument is twofold--Congress has not expressly and unequivocally abrogated tribal sovereign immunity from private dram-shop actions and the tribe did not waive its sovereign immunity by applying for and receiving a state liquor license.

¶27 Bittle v. Bahe was decided in 2008. Shatona Bittle brought an action to recover damages for personal injuries suffered in a motor vehicle collision caused by the alleged negligence of Valentine Bahe. Id. ¶ 2, 192 P.3d at 813. Bittle alleged the defendants, Bahe and Val Tsosie, had been at the Thunderbird Entertainment Center, where employees of the casino served alcoholic beverages to Bahe, who was obviously intoxicated. Id. ¶ 3, 192 P.3d at 813. Bittle also alleged the Absentee Shawnee Tribe of Oklahoma, who owned the Thunderbird Entertainment Center, was liable under a theory of dram-shop liability. Id.

¶28 The trial court dismissed the tribe on sovereign immunity grounds, but this Court reversed and determined that Rice v. Rehner, 463 U.S. 713 (1983), in conjunction with 18 U.S.C. § 1161, abrogated any tribal immunity from suit in the area of alcoholic beverage laws. Bittle, 2008 OK 10, ¶ 37-38, 192 P.3d at 823. The Court also held the tribe waived its sovereign immunity when it applied for and received a mixed beverage license from the State of Oklahoma. Id. ¶ 53, 192 P.3d at 827.

¶29 In 2011, this Court issued opinions in Seneca Telephone Co. v. Miami Tribe of Oklahoma and Diliner v. Seneca-Cayuga Tribe of Oklahoma. In Seneca Telephone Co., 2011 OK 15, 253 P.3d 53, the Miami Tribe of Oklahoma, d/b/a White Loon Construction Company, performed excavation work for the Shawnee tribe. Id. ¶ 2, 53 P.3d at 54. During the excavation work, White Loon cut Seneca Telephone Company's underground telephone lines on four separate occasions damaging the underground telephone cables. Id. Seneca Telephone Company filed four separate small-claims suits against the Miami Tribe, alleging White Loon Construction was negligent in performing the work. Id. ¶ 6, 53 P.3d at 55. The Miami Tribe claimed sovereign immunity. Id. ¶ 2, 53 P.3d at 54.

¶30 This Court held the tribe did not waive its sovereign immunity and could not be sued for negligence in state court. The Court observed that the "harsh reality in the present case, [was] that Seneca did not have the opportunity to negotiate a waiver of the sovereign immunity with the negligent party, but was an innocent third party to the negligence of a tribal enterprise." Id. ¶ 8, 53 P.3d at 55. We acknowledged the result left Seneca Telephone Company without a remedy against the tribe for their damages even when the assertions of negligence by the tribal enterprise were correct. Id.

¶31 Although this Court expressed frustration with such a policy, we recognized Congress would have to pass legislation limiting the sovereign immunity of Indian tribes. Id. We reviewed the statute in question and found it "apparent that the United States Congress ha[d] not authorized suit against the Tribe in this matter." Id. ¶ 10, 53 P.3d at 56. We also explained "[w]aiver for a federally-recognized tribe to be sued must be unequivocal" and found the tribe had not unequivocally waived its sovereign immunity. Id. ¶ 5, 53 P.3d at 55. This Court held the tribe was immune from a negligence action in state court absent an express waiver by the tribe or express abrogation by Congress, and we warned businesses they must "condition the performance of a contract upon an express waiver of sovereign immunity" or "act at their own peril when dealing with [an Indian] tribe." Id. ¶ 6, 53 P.3d at 55.28

¶32 In Diliner we upheld the sovereign immunity of the Seneca-Cayuga Tribe in a lawsuit stemming from the alleged breach of an employment contract. Diliner, 2011 OK 61, 258 P.3d 516. The Seneca-Cayuga Business Committee passed Resolution #27-072607, which stated the Chief of the Tribe was authorized to sign a three-year employment agreement between the Seneca-Cayuga Tribe of Oklahoma and tribal employees. Id. ¶ 5, 258 P.3d at 517-18. The Business Committee of the Tribe, at its regular business meeting, passed a resolution in an attempt to ratify Resolution #27-072607. Id. ¶ 6, 258 P.3d at 518. Resolution #46-081407 recited that the Business Committee had approved Resolution #27-072607 on July 26, 2007, which was authorization for the Chief to sign a three-year employment agreement with tribal employees, and that the Business Committee felt the action authorized by Resolution #27-072607 was in the best interest of the Tribe and its government, and of the Tribal Corporations. Id. The Chief entered into employment contracts with tribal employees for terms of three years. Id. ¶ 4, 258 P.3d at 517. The employment contracts contained a provision for limited waiver of sovereign immunity. Id. The plaintiffs were terminated from employment prior to the end of the three-year term and filed suit in the district court of Ottawa County to recover their base salaries until the end of the term. Id. ¶ 7, 258 P.3d at 518. The tribe moved to dismiss on the grounds of tribal sovereign immunity. Id.

¶33 This Court found that neither of the resolutions expressly ratified the contracts entered into by the Chief: "Resolution #27-072607 only authorized the Chief to sign a contract with tribal employees for a three-year term, in their present positions of employment and at their present salaries; Resolution #46-081407 ratified only the resolution, not the contracts." Id. ¶ 20, 258 P.3d at 520. Because under the tribe's constitution and by-laws the business committee had to waive tribal immunity by resolution, we found that waiver of sovereign immunity was neither expressed nor consented to by the tribe because no resolution was passed by the committee expressly waiving immunity in the employment contracts. Id. We held the tribe was immune from suit on the employment contract and reiterated that "[f]ederal law requires that the waiver of sovereign immunity be express and unequivocal; it cannot be implied." Id. ¶ 19, 258 P.3d at 520 (emphasis added).29

¶34 In light of our holdings in Seneca Telephone Co. and Diliner, we reexamine the question of whether a tort claim allegedly arising from the negligent sale of alcohol to an intoxicated individual at a tribal casino subjects a tribe to state court jurisdiction. In Brigance v. Velvet Dove Restaurant, Inc., 1986 OK 41, ¶ 24, 725 P.2d 300, 306, the seminal case creating a duty for a commercial vendor of alcohol, this Court rejected the doctrine of tavern owner nonliability and held that "public policy is better served by holding that the common law principles of negligence are applicable where a commercial vendor for on the premises consumption is shown to have sold or furnished intoxicating beverages to a person who was noticeably intoxicated." (emphasis added). A commercial vendor for on the premises consumption is under a duty to "exercise reasonable care in selling or furnishing liquor to persons who by previous intoxication may lack full capacity of self-control to operate a motor vehicle and who may subsequently injure a third party." Id. ¶ 18, 725 P.2d at 305.

¶35 In Copeland v. Tela Corp., 1999 OK 81, 996 P.2d 931, we reiterated the holding in Brigance and cited the elements of a common law negligence action as the standard for determining liability in a dram-shop action: "'(1) the existence of a duty on the part of the defendant to protect plaintiff from injury; (2) a violation of that duty; and (3) injury proximately resulting therefrom.'"

¶36 In the case before us, the Plaintiffs allege the Peoria Tribe is liable for their injuries because prior to the accident, casino employees allegedly negligently served alcoholic beverages to patrons of the casino who were noticeably intoxicated. Plaintiffs argue the tribe is subject to this Court's dram-shop case law because the tribe is acting as a commercial vendor providing alcohol to patrons of its tribal casino. However, tribal sovereign "immunity applies to the tribe's commercial as well as governmental activities." Seneca Tel. Co., 2011 OK 15, ¶ 5, 253 P.3d at 55 (emphasis added).

¶37 It is well settled that states have the authority to require tribes that sell alcohol on tribal land to obtain a state liquor license to sell liquor for off-premises consumption. The United States Supreme Court discussed the regulation of alcohol on Indian land in Rice v. Rehner, 463 U.S. 713 (1983). Rice involved a federally licensed Indian trader who operated a general store on the Pala Reservation. Id. at 716. The Pala Tribe had adopted a tribal ordinance permitting the sale of liquor on the reservation under 18 U.S.C. § 1161, but the trader sought exemption from state liquor licensing requirements. Id. The question before the U.S. Supreme Court was very narrow--whether 18 U.S.C. § 1161 prohibited the State of California from requiring the trader "to obtain a state liquor license in order to sell liquor for off-premises consumption." Id. at 715. Because California sought regulatory authority over the issuance and administration of liquor licenses, Id. at 713, the Supreme Court analyzed the case under "the principles to be applied in determining whether state regulation of activities in Indian country is pre-empted" by federal law. Id. at 718 (emphasis added).

¶38 The Court explained "[t]he role of tribal sovereignty in pre-emption analysis varies in accordance with the particular 'notions of sovereignty that have developed from historical traditions of tribal independence.'" Id. at 719. The Court went on:

When we determine that tradition has recognized a sovereign immunity in favor of the Indians in some respect, then we usually are reluctant to infer that Congress has authorized the assertion of state authority in that respect "except where Congress has expressly provided that State laws shall apply. . . ." If, however, we do not find such a tradition, or if we determine that the balance of state, federal, and tribal interests so requires, our pre-emption analysis may accord less weight to the "backdrop" of tribal sovereignty.

Id. at 720 (internal citations omitted).

¶39 In determining the "backdrop" of tribal sovereignty, the Court examined the history of liquor regulation in Indian Country and concluded that "tradition simply has not recognized a sovereign immunity or inherent authority in favor of liquor regulation by Indians." Id. at 722. The Court noted that "[t]he colonists regulated Indian liquor trading before this Nation was formed," and that Congress had "imposed complete prohibition by 1832." Id. at 722. The Court went on to find there was a "historical tradition of concurrent state and federal jurisdiction over the use and distribution of alcoholic beverages in Indian country." Id. at 724. The Court concluded that "'[t]he legislative history of § 1161 indicates both that Congress intended to remove federal prohibition on the sale and use of alcohol imposed on Indians in 1832, and that Congress intended that state laws would apply of their own force to govern tribal liquor transactions as long as the tribe itself approved these transactions by enacting an ordinance." Id. at 726. The Rice Court held 18 U.S.C. § 1161 authorized California to require a federally licensed Indian trader operating a store on a reservation to obtain a state liquor license to sell alcohol for off-premises consumption. Id. at 715-16, 733-34.

¶40 Although the sale of alcohol was involved in Rice, its holding is limited to a regulatory jurisdictional analysis and is not dispositive of a private dram-shop action against an Indian tribe in state court.30 In Rice, the Pala Tribe was not a party to the case, the tribe's sovereign immunity was not at issue, and neither the State of California nor a private citizen of that state was attempting to assert state civil-adjudicatory jurisdiction over the tribe. In contrast, a dram-shop action against a tribe is a tort where a private party attempts to assert state court civil-adjudicatory jurisdiction over the tribe--governmental regulation of the seller of alcohol is not an element of a dram-shop action. In the present case, the Peoria Tribe is a party to the case, and its sovereign immunity is directly at issue. The state of Oklahoma is not involved in this case and is not attempting to assert any type of jurisdiction over the Peoria tribe.

¶41 After further consideration of this issue, we can find no articulable reason to treat a private dram-shop action against a tribe in state court any differently than a tort or contract claim against a tribe in state court because the sale of alcohol is involved. A "tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity. Waiver of sovereign immunity cannot be implied but must be unequivocally expressed." Diliner, 2011 OK 61, ¶ 12, 258 P.3d at 519; Seneca Tel. Co., 2011 OK 15, ¶ 5, 253 P.3d at 55.

¶42 Congress has not expressly abrogated tribal immunity in private dram-shop claims. Before 18 U.S.C. § 1161 was enacted, the sale and use of alcohol on Indian land was prohibited by the federal government. Rice, 463 U.S. at 726. Section 1161 was enacted "to eliminate federal prohibition because it was discriminatory and had a detrimental effect on Indians." Id. at 727. It was "intended to eliminate all of the sections in the statutes which discriminate against Indians" while at the same time not interfere with state laws and "provide opportunity for the tribes to have prohibition on the reservation if they wish to, if it is not covered by State law." Id.

Section 1161 provides:

The provisions of sections 1154, 1156, 3113, 3488, and 3669 of this title, shall not apply within any area that is not Indian country, nor to any act or transaction within any area of Indian country provided such act or transaction is in conformity both with the laws of the State in which such act or transaction occurs and with an ordinance duly adopted by the tribe having jurisdiction over such area of Indian country, certified by the Secretary of the Interior and published in the Federal Register.

18 U.S.C. § 1161.

¶43 Section 1161 does not demonstrate Congressional intent to subject Indian tribes to private dram-shop suits.31 Although it requires conformity with state law and tribal ordinance, § 1161 provides no mechanism for enforcement of state law, either by a state or a private party, if the tribe violates state law. Nowhere in the text of § 1161 is there any mention of tribal immunity from suit, much less an unequivocal abrogation of tribal immunity with respect to private lawsuits alleging an Indian tribe has violated state dram-shop laws. We find Congress has not expressly abrogated the Peoria Tribe's immunity in private dram-shop claims.

¶44 We also find the Peoria Tribe did not expressly waive its sovereign immunity when it applied for and received a state liquor license. In the present case, although the Peoria Tribe admits in its brief that it applied for and received a liquor license from the State of Oklahoma, the record is void of any evidence that the tribe expressly and unequivocally waived its immunity when it applied for and received a state liquor license. Neither the liquor license nor the application for the liquor license has been included in our record.

¶45 Assuming, as the parties do, that the license application in this case states the applicant will "not violate any of the laws of the United States, the State of Oklahoma, or applicable municipal ordinances,"32 there was no waiver of sovereign immunity by the Peoria Tribe when it applied for and received a state liquor license. Applying for and accepting a state liquor license "is nothing more than a promise to comply with state liquor laws, not a voluntary waiver of sovereign immunity for private party lawsuits." Bittle, 2008 OK 10, 192 P.3d 810 (Kauger, J., dissenting ¶ 36).33 A determination to the contrary amounts to an implied waiver of sovereign immunity, which we expressly rejected in Diliner, 2011 OK 61, ¶ 19, 258 P.3d at 520.

¶46 We hold the Peoria Tribe is immune from dram-shop liability in state court, and in doing so, align ourselves with all other courts addressing this issue34--most notably, the United States Court of Appeals for the Eleventh Circuit. In Furry v. Miccosukee Tribe of Indians of Florida, 685 F.3d 1224, 1226 (11th Cir. 2012), cert. denied, 133 S.Ct. 663 (2012), Mr. Furry, as personal representative of the estate of his daughter Tatiana Furry, complained that the Miccosukee Tribe violated 18 U.S.C. § 1161 and Florida's dram-shop law by knowingly serving excessive amounts of alcohol to his daughter. Id. After allegedly being served excessive amounts of alcohol, the daughter got in her car, drove off while intoxicated, and ended up in a fatal head-on collision with another vehicle on a highway just outside Miami, Florida. Id. at 1227. Mr. Furry filed suit in federal district court in Florida, and the Miccosukee Tribe moved to dismiss the complaint on the jurisdictional ground that it was immune from suit under the doctrine of tribal sovereign immunity. Id. The district court dismissed the tribe on sovereign immunity grounds. Id.

¶47 On appeal to the Eleventh Circuit, Mr. Furry claimed "18 U.S.C. 1161, read in concert with the Supreme Court's decision in [Rice v.] Rehner, establishe[d] that Congress has subjected the tribes to private tort actions." Id. at 1230. The Eleventh Circuit rejected this argument and found "[t]he Supreme Court has made clear that a suit against an Indian tribe is barred unless the tribe has clearly waived its immunity or Congress has expressly and unequivocally abrogated that immunity." Id. at 1226. The court found Rice v. Rehner was not dispositive because "the Supreme Court was speaking to a wholly different issue" in that case, and "[n]otably absent from Rehner . . . was an analysis of tribal immunity from suit." Id. at 1230-31. The court also held that "[w]hile § 1161 requires conformity with state law and tribal ordinance, it says nothing at all about the means of enforcement if the tribe violates state law." Id. at 1231.35

¶48 Mr. Furry also argued the Miccosukee Tribe waived its immunity from private tort actions by applying for and receiving a state liquor license. The Eleventh Circuit rejected this argument as well and found that "waiver may not be inferred or implied from a tribe's conduct," and "[a]t no point in the liquor license application or the accompanying affidavit did the Miccosukee Tribe waive its immunity or consent to be subject to suit of any kind, much less to a private dram shop action." Id. at 1235. The Eleventh Circuit concluded that the doctrine of tribal sovereign immunity "remains the law of the land until Congress or the Supreme Court tells us otherwise." 36

¶49 We agree. "While Congress and the United States Supreme Court have determined that a state may regulate and license alcoholic beverages on Indian land, neither has addressed the waiver of tribal sovereignty immunity from private dram-shop actions in state court."37

Additionally, the State of Oklahoma has not negotiated the allocation of civil-adjudicatory jurisdiction to the courts of this state through the model gaming compact and has not conditioned the granting of a liquor license to a tribal gaming enterprise on an express waiver of sovereign immunity. Until such actions are taken, the tribes and their gaming enterprise are entitled to assert sovereign immunity when sued in state court for dram-shop liability.38

* * *

See: http://www.oscn.net/applications/oscn/deliverdocument.asp?cite=2013+OK+77

Outcome: ¶50 We hold the Peoria Tribe is immune from compact-based tort or prize claims in state court because Oklahoma state courts are not courts of competent jurisdiction as the term is used in the model gaming compact. To the extent Dye, 2009 OK 52, 230 P.3d 507, Griffith, 2009 OK 51, 230 P.3d 488, and Cossey, 2009 OK 6, 212 P.3d 447 conclude otherwise, they are overruled. We also hold that because Congress has not expressly abrogated tribal immunity from private, state court dram-shop claims and because the record is void of any evidence that the Peoria Tribe expressly and unequivocally waived its immunity when it applied for and received a state liquor license, the tribe is immune from dram-shop liability in state court. Bittle v. Bahe, 2008 OK 10, 192 P.3d 810, is overruled. The trial court's dismissal of the Peoria Tribe and its entities is affirmed.

AFFIRMED

Plaintiff's Experts:

Defendant's Experts:

Comments: Editor's Note: This case was decided 09/24/2013



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