Iowa Mutual Insurance v. LaPlante
1987 U.S. LEXIS 556, 480 US 9, 94 L. Ed. 2d 10 (1987)
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Rule of Law:
As a matter of comity, a federal court should not exercise its diversity jurisdiction over a case arising out of on-reservation conduct until the parties have exhausted their remedies in the tribal court system.
Facts:
- Edward LaPlante, a member of the Blackfeet Indian Tribe, was employed by the Wellman Ranch Company, which is owned by other tribal members and located on the Blackfeet Indian Reservation.
- Iowa Mutual Insurance Company provided insurance coverage for the Wellman Ranch.
- LaPlante was injured in a cattle truck accident that occurred within the boundaries of the reservation while he was working.
- After Iowa Mutual's claims adjuster failed to reach a settlement, LaPlante and his wife, also a tribal member, sued the Wellman Ranch for personal injuries and Iowa Mutual for bad-faith refusal to settle.
Procedural Posture:
- Edward and Verla LaPlante sued Iowa Mutual Insurance Co. and others in the Blackfeet Tribal Court.
- Iowa Mutual moved to dismiss the tribal court action for lack of subject-matter jurisdiction.
- The Tribal Court denied Iowa Mutual's motion, concluding it had jurisdiction over the dispute.
- Iowa Mutual then filed a new action against the LaPlantes in the U.S. District Court for the District of Montana, asserting diversity of citizenship as the basis for jurisdiction and seeking a declaratory judgment of non-coverage.
- The LaPlantes, as defendants in the federal action, moved to dismiss for lack of subject-matter jurisdiction.
- The District Court granted the motion to dismiss, holding that it must defer to the tribal court.
- Iowa Mutual, as appellant, appealed to the U.S. Court of Appeals for the Ninth Circuit, which affirmed the dismissal.
- The U.S. Supreme Court granted certiorari to review the Ninth Circuit's decision.
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Issue:
Does the principle of tribal court exhaustion, which requires a federal court to abstain from exercising jurisdiction until a tribal court can first determine its own jurisdiction, apply to cases where federal jurisdiction is based on diversity of citizenship?
Opinions:
Majority - Justice Marshall
Yes. The principle of tribal court exhaustion applies to diversity jurisdiction cases. The federal policy of supporting tribal self-government requires that federal courts stay their hand to give the tribal court a full opportunity to determine its own jurisdiction. Extending the exhaustion rule from National Farmers Union to diversity cases is necessary to prevent federal courts from being placed in direct competition with tribal courts, which would impair the latter's authority over reservation affairs. The general grant of diversity jurisdiction in 28 U.S.C. § 1332 contains no evidence of congressional intent to limit the jurisdiction of tribal courts. Civil jurisdiction over the activities of non-Indians on reservation lands presumptively lies in the tribal courts unless affirmatively limited by a specific treaty or federal statute. Exhaustion requires that tribal appellate courts have an opportunity to review lower tribal court determinations before a federal court intervenes.
Concurring-in-part-and-dissenting-in-part - Justice Stevens
No. The tribal exhaustion requirement should not apply in this context. While a federal court should not entertain a direct challenge to a tribal court's jurisdiction until tribal remedies are exhausted, it should not be required to abstain from deciding the merits of a separate, concurrent case properly before it. The pendency of an action in another court, including a tribal court, is not a sufficient reason for a federal court to decline its duty to adjudicate a controversy. The majority's holding improperly grants the judicial systems of Indian tribes a greater degree of deference than that afforded to the judicial systems of sovereign States, creating an anomalous rule where federal courts must abstain for tribal courts but not for state courts in similar circumstances.
Analysis:
This decision significantly broadened the tribal exhaustion doctrine by extending its application from federal question cases to diversity jurisdiction cases. It established a strong prudential rule of abstention rooted in comity and the federal policy of promoting tribal self-government. The ruling solidifies the role of tribal courts as the appropriate initial forum for disputes arising on reservations, even those involving non-members. This precedent requires lower federal courts to defer to tribal court proceedings, thereby strengthening tribal sovereignty and the authority of tribal judiciaries.
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