The Plains Commerce Bank sued the Longs and the Long Family Land & Cattle Company in federal court, seeking to have a judgment of the Cheyenne River Sioux Tribal Court of Appeals declared null and void. The tribal court judgment upheld a jury verdict in the Longs' favor on their previous claim against the Bank alleging that it had discriminated against the Longs as Indians and tribal members. The Long Company is a family farming and ranching business located on the Cheyenne River Sioux Indian Reservation. Under its articles of incorporation, at least 51% of the company’s outstanding shares must be Indian owned at all times, ensuring the company's eligibility for Bureau of Indian Affairs (BIA) loan guarantees. The Longs, who are both enrolled members of the Cheyenne River Sioux Tribe, own at least 51% of the company’s shares. The Bank had been lending to the Long Company for many years, and these loans were guaranteed by the BIA because of the Long Company's Indian-owned status. The Longs' underlying discrimination claim grew out of one of these loan transactions. After losing its case in tribal court, the Bank argued in federal court that the tribal court lacked jurisdiction over the Longs' discrimination claim. The district court granted summary judgment to the Longs.
The Eighth Circuit Court of Appeals affirmed, finding that the tribal court had jurisdiction over the discrimination claim under an exception to the general rule that tribal jurisdiction does not normally extend to the conduct of nonmembers unless Congress has expressly granted such authority. In the watershed case of Montana v. United States, the Supreme Court ruled that tribes may exercise jurisdiction over nonmembers if they have entered into certain kinds of consensual relationships with the tribe or its members, "through commercial dealing, contracts, leases, or other arrangements." The Eighth Circuit held that the Bank directly benefitted from the Long Company's status as an Indian owned business entity, which qualified the company for BIA- guaranteed loans and allowed the Bank to greatly reduce its lending risk. The Bank therefore formed a consensual relationship with tribal members by doing business with the Company, which subjected it to tribal jurisdiction. The Eighth Circuit further found that enforcing a tort judgment against the Bank was an appropriate means for the Tribal Court to enforce standards of conduct on nontribal members who voluntarily do business with tribal members on the reservation.
Indian tribal courts inherently lack jurisdiction to hear claims between members and nonmembers. In Montana v. U.S., 450 U.S. 544, 565 (1981), this Court identified two narrow exceptions. The first relates to regulation of nonmembers who enter into
consensual relationships with the tribe or its members. The second relates to civil authority concerning activity that directly affects the tribe’s political integrity, economic security, health, or welfare. This Court, however, has never upheld tribal court,
civil-adjudicatory jurisdiction over a nonmember defendant under the first Montana exception, and expressly left this question open in Nevada v. Hicks, 533 U.S. 353, 360 (2001).
The question presented is:
Whether Indian tribal courts have subject-matter jurisdiction to adjudicate civil tort claims as an “other means” of regulating the conduct of a nonmember bank owning fee-land on a reservation that entered into a private commercial agreement with a