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Sprint Communs. Co. L.P. v. Wynne

United States District Court, D. South Dakota, Southern Division

August 4, 2015

SPRINT COMMUNICATIONS COMPANY L.P., and SPRINT COMMUNICATIONS, INC., f/k/a Sprint Nextel Corporation, Plaintiffs,
v.
MARY WYNNE, in her Official Capacity as Chief Judge of the Oglala Sioux Tribal Court; OGLALA SIOUX TRIBE UTILITIES COMMISSION, JOE RED CLOUD, in his Official Capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission; IVAN BETTELYOUN, in his Official Capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission; DAVID TERRY MILLS, in his Official Capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission; and ARLENE CATCHES THE ENEMY, in her Official Capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission; Defendants

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          For Sprint Communications Company L.P., Sprint Communications, Inc., formerly known as Sprint Nextel Corporation, Plaintiffs: Philip R. Schenkenberg, Scott G. Knudson, LEAD ATTORNEYS, PRO HAC VICE, Briggs and Morgan, P.A., Minneapolis, MN; Terry L. Pechota, LEAD ATTORNEY, Rapid City, SD; Tommy Drake Tobin, LEAD ATTORNEY, Winner, SD.

         For Mary Wynne, in her official capacity as Chief Judge of the Oglala Sioux Tribal Court, Oglala Sioux Tribe Utilities Commission, Joe Red Cloud, in his official capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission, Ivan Bettelyoun, in his official capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission, David Terry Mills, in his official capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission, Arlene Catches the Enemy, in her official capacity as Commissioner of the Oglala Sioux Tribe Utilities Commission, Defendants: Jay C. Shultz, LEAD ATTORNEY, The Shultz Law Firm, Prof. LLC, Rapid City, SD.

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          ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION AND STAYING CASE

         KAREN E. SCHREIER, UNITED STATES DISTRICT JUDGE.

         Pending is a motion for preliminary injunction filed by Sprint Communications Company, L.P., and Sprint Communications, Inc. (collectively, Sprint). Defendants oppose the motion. For the following reasons, the motion for preliminary injunction is denied and this action is stayed pending exhaustion of tribal remedies.

         BACKGROUND

         Sprint Communications, Inc. (Sprint Inc.) is the parent company of Sprint Communications Company (Sprint Communications). Sprint Inc. is a Kansas corporation and does not directly provide any telecommunications services. Sprint Communications is a Delaware limited partnership with its offices located in Kansas. Sprint Communications is an interexchange carrier (IXC) and is authorized by the Federal Communications Commission (FCC) to provide interstate telecommunications services.

         The Oglala Sioux Tribal Utilities Commission (OSTUC) was formally established in 2013 as a subdivision of the Oglala Sioux Tribe. The OSTUC is responsible for the exercise of tribal regulatory authority over all utility systems on the Pine Ridge Indian Reservation. Defendants Joe Red Cloud, Ivan Bettelyoun, David Terry Mills, and Arlene Catches The Enemy are commissioners of the OSTUC and are named as defendants in their official capacities only. Defendant Mary Wynne is the Chief Judge of the Oglala Sioux Tribal Court and is also named as a defendant in her official capacity only.

         As an IXC, Sprint Communications delivers long-distance calls from one local area to another. When an individual makes a long-distance telephone call, the call originates with the local exchange carrier (LEC) serving the individual making the call and is transported by the IXC selected by the calling individual to the LEC serving the individual receiving the call. The IXC either owns the facilities over which the call travels between originating and terminating LECs or it enters

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into arrangements with other IXCs to route the calls over their facilities. IXCs pay " originating" and " terminating" access charges to the LECs that serve individuals who initiate and receive long-distance calls, respectively.

         In 2014, the OSTUC initiated seven rulemaking proceedings involving utility providers on Pine Ridge and adopted 12 orders. In one of those orders, U-1-2014, the OSTUC created: a registration requirement for all utilities; an annual reporting requirement and payment of a utility fee; a process for handling consumer complaints; guidance for imposing taxes, fees, and surcharges on consumers; and initiation and termination of service requirements. See Docket 16-6 (final order dated September 9, 2014). Later, the OSTUC imposed a fine of $1,000 per day for each day a utility failed to register in compliance with requirements set forth by the OSTUC. Docket 16-7.

         Sprint did not participate in the development or implementation of U-1-2014. Sprint Communications has not registered with or obtained a business license from the OSTUC. Several telecommunications companies, including Sprint Communications, have refused to comply with the requirements imposed by the OSTUC. As a result of that noncompliance, the OSTUC filed a complaint against those carriers, including Sprint,[1] in the Oglala Sioux Tribal Court. Docket 16-13 (tribal court complaint).

         Subsequently, Sprint filed its complaint in this matter. Sprint argues that the tribal regulatory process is a disguised effort to compel IXCs to pay Native American Telecom-Pine Ridge (NAT-PR), a tribal LEC, for terminating access charges associated with an access stimulation scheme[2] run on Pine Ridge. See Docket 1 at 2-5, 11-12. Sprint seeks a declaratory judgment that neither Sprint Inc. nor Sprint Communications is subject to regulation by the OSTUC, and an order permanently enjoining the OSTUC from proceeding against Sprint. Id. at 18-19. Sprint requested a preliminary injunction.[3] Docket 12. In support, Sprint asserts that it does not have to exhaust its tribal court remedies because it is plain that the tribal court does not have jurisdiction over either Sprint entity.

         DISCUSSION

         A federal court must have jurisdiction over a matter before it grants preliminary relief. Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412, 1422 (8th Cir. 1996). " [W]hether a tribal court has adjudicative authority over nonmembers is a federal question." Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 324, 128 S.Ct. 2709, 171 L.Ed.2d 457 (2008) (citing Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 15, 107 S.Ct. 971,

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94 L.Ed.2d 10 (1987)); see also Nat'l Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845, 852, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985). Thus, this court has jurisdiction to decide this matter.

         Defendants point to no federal statute or treaty specifically authorizing tribal jurisdiction in this case so any tribal jurisdiction " must arise from [the Oglala Sioux Tribe's] 'retained or inherent sovereignty.'" Belcourt Pub. Sch. Dist. v. Davis, 786 F.3d 653, 657 (8th Cir. 2015) (quoting Atkinson Trading Co. v. Shirley, 532 U.S. 645, 649-50, 121 S.Ct. 1825, 149 L.Ed.2d 889 (2001)). The " pathmarking case" on inherent tribal jurisdiction over nonmembers is Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981). Nevada v. Hicks, 533 U.S. 353, 358, 121 S.Ct. 2304, 150 L.Ed.2d 398 (2001). " Indian tribes lack civil authority over the conduct of nonmembers on non-Indian land within a reservation, subject to two exceptions: The first exception relates to nonmembers who enter consensual relationships with the tribe or its members; the second concerns activity that directly affects the tribe's political integrity, economic security, health, or welfare." Strate v. A-1 Contractors, 520 U.S. 438, 446, 117 S.Ct. 1404, 137 ...


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