Materials in Competing State/Tribal Court Actions in North Dakota Oil Transport Contract Controversies

In the most recent Bench & Bar (Minnesota State Bar Journal) article “Boomtown: Risks and Rewards in the Peace Garden State,” Kristin Rowell writes about her experiences in litigating contract claims in both Fort Berthold Tribal Court and North Dakota’s Montrail County District Court where the courts reach opposition conclusions on the same legal question. An excerpt:

In October 2012, I commenced litigation on behalf of my client against four defendants companies.  Two of the companies were organized under the laws of the state of Minnesota, one of the companies was organized under the laws of Nevada, and the other company was organized under the laws of Florida.  All of these out-of-state residents were conducting business with my client on the Fort Berthold Indian Reservation in New Town, North Dakota, as a part of the booming oil industry.  (Another fascinating aspect of North Dakota’s judicial landscape is that there are several independent tribal courts separate from the state and federal court systems.  An in-depth look at North Dakota tribal courts will have to be saved for another article.)  My client is a member of the federally recognized Mandan, Hidatsa, and Arikara Native American Nations, also known collectively as the “MHA Nation” or the “Three Affiliated Tribes.”  For a variety of reasons, my client chose to commence its case in Fort Berthold District (Tribal) Court.

In response to the complaint, the four defendants moved to dismiss my client’s case for “lack of nonmember tribal court jurisdiction.”  We opposed the motion and explained to the tribal court judge that it could and should retain jurisdiction under Montana v. United States, 450 U.S. 544 (1981), the Supreme Court case that gave tribal courts the authority to regulate the activities of nonmembers on reservation land owned in fee by non-Indians.  Under Montana, tribal courts can regulate the activities of nonmembers (and in turn, assert jurisdiction over nonmembers in tribal court) where: (1) the nonmembers “enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements,” or (2) the nonmembers’ “conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.”¹⁵  If the circumstances of a case fit either exception, then the tribal court has jurisdiction over the dispute.¹⁶

We argued that the court had jurisdiction over the key non-Indian defendant because we met both Montana exceptions with respect to that defendant.  The focus of our analysis was that the defendant contracted with my client so the first Montana exception was easily met.  Defendants argued that because my client is a company and not a human, it could not be a “member” of the tribe for jurisdictional purposes.  We argued that my client, a limited liability partnership, was owned by an Indian, which meant that it was a “member” of the tribe for jurisdictional purposes.

The Fort Berthold Tribal Court agreed with us.  The court’s decision turned on the novel and narrow legal issue of whether a limited liability partnership was more akin to a limited liability company or a corporation for jurisdictional purposes.  We argued that the United States Supreme Court has held that the citizenship of a limited partnership for purposes of diversity jurisdiction is determined according to the citizenship of its limited and general partners, citing Carden v. Arkoma Associates, 494 U.S. 185, 195-96 (1990).  Several courts have held that this holds true for limited liability partnerships too.¹⁷  Defendants argued that the limited liability partnership was more analogous to a corporation, should be treated as a separate legal “person,” and cited cases in which the courts held that a corporate person could not be a “member” of an Indian tribe.

We have been proceeding in the tribal court ever since and we will eventually have a trial.  But there is a conundrum.  While the other side’s motion to dismiss was under advisement in tribal court, the contracting party defendant in the tribal court action started an action against my client in North Dakota state court related to alleged oil spills at the exact property they are fighting about in tribal court.  My client moved to dismiss or transfer the state court case, and the same issues were argued to the state court judge that had just been decided in tribal court.  The short story is that the state court judge disagreed with the tribal court judge and retained jurisdiction over the second case.  In other words, we now have two cases pending in two courts involving the same two parties and the same contract.  Suffice it to say that we are working hard to resolve both.

The materials in the Montrail County matter (Dakota Petroleum Transport Solutions LLC v. TJMD LLP are here:

DOCS-#424808-v1-PDF_notice_of_motion_&_motion_to_dismiss_or_transfer

DOCS-#424809-v1-PDF_Mem_Supp_Motion_Transfer_Venue_and_Dismiss

DOCS-#424810-v1-pdf_KBR_Affidavit_motion_to_dismiss_or_transfer

DOCS-#424811-v1-PDF_proposed_order_motion_to_dismiss_or_transfer

DOCS-#430259-v1-pdf_Dak_Pet_response_brief_to_motion_to_dismiss

DOCS-#430260-v1-PDF_exs_to_Dak_Pet_response_brief

DOCS-#430276-v1-PDF_authorities_cited_DP_response_motion_to_dismiss

DOCS-#431865-v1-PDF_Reply_Mem_Supp_Motion_to_Dismiss_or_Transfer

DOCS-#431866-v1-PDF_Supp_Aff_KBR_motion_to_dismiss_or_transfer

DOCS-#449184-v1-Order_denying_motion_to_dismiss_transfer_(mountrail)

Materials in the parallel tribal court litigation TJMD LLP v. Dakota Petroleum Transport Solutions LLC are included as exhibits to these pleadings. We will post those materials in a separate post.