_____________

                           No. 92-3359
                          _____________

A-1 Contractors; Lyle Stockert, *
                                *
          Appellants,           *
                                *
     v.                         *
                                *
Honorable William Strate,       *   Appeal from the United States
Associate Tribal Judge of the   *   District Court for the
Tribal Court of the Three       *   District of North Dakota.
Affiliated Tribes of the Fort   *
Berthold Indian Reservation;    *
Three Affiliated Tribes of the *
Fort Berthold Indian            *
Reservation, The Tribal Court; *
Lyndon Benedict Fredericks;     *
Kenneth Lee Fredericks; Paul    *
Jonas Fredericks; Hans          *
Christian Fredericks; Jeb Pius *
Fredericks; Gisela Fredericks, *
                                *
          Appellees.            *


                          _____________

                     Submitted:   May 23, 1995

                         Filed: February 16, 1996
                           _____________

Before RICHARD S. ARNOLD, Chief Judge, FLOYD R. GIBSON, McMILLIAN,
FAGG, BOWMAN, WOLLMAN, MAGILL, BEAM, LOKEN, HANSEN, MORRIS SHEPPARD
ARNOLD, and MURPHY, Circuit Judges, en banc.
                           _____________


HANSEN, Circuit Judge.

     In this case, we are asked to decide whether an American
Indian Tribal Court has subject matter jurisdiction over a tort
case which arose out of an automobile accident which occurred
between two non-Indian parties on an Indian reservation. A divided
panel of this court previously concluded that the Indian tribe
retained the inherent sovereign power to allow the tribal court to
exercise subject matter jurisdiction over the dispute.       After
granting the suggestion of A-1 Contractors and Lyle Stockert to
rehear this case en banc, we vacated the panel opinion. We now
hold that the tribal court does not have subject matter
jurisdiction over the dispute.


                                I.


     On November 9, 1990, on a state highway on the Fort Berthold
Indian Reservation in west-central North Dakota, a gravel truck
owned by A-1 Contractors and driven by Lyle Stockert (an A-1
employee) and a small car driven by Gisela Fredericks collided.
Mrs. Fredericks suffered serious injuries and was hospitalized for
24 days. A-1 is a non-tribal company located in Dickinson, North
Dakota.   Stockert is not a member of the tribe and resides in
Dickinson, North Dakota. Mrs. Fredericks is not a member of the
tribe; however, she resides on the reservation, she was married to
a tribal member (now deceased), and her adult children are enrolled
members of the tribe.


     At the time of the accident, A-1 was working on the
reservation under a subcontract agreement with LCM Corporation, a
corporation wholly owned by the tribe. Under the subcontract, A-1
performed excavating, berming, and recompacting work in connection
with the construction of a tribal community building.          A-1
performed all of the work under the subcontract within the
boundaries of the reservation. The record is not clear whether
Stockert was engaged in work under the contract at the time of the
accident.1

     1
      There is no proof (as opposed to allegations) that we can
find in the record to support the district court's finding of
fact that A-1 was in performance of the contract at the time of
the accident. The district court made its fact-findings based on

                                2
     In May 1991, Mrs. Fredericks sued A-1, Stockert, and
Continental Western Insurance Company (A-1's insurer), in the
Tribal Court for the Three Affiliated Tribes2 of the Fort Berthold
Indian Reservation.   Mrs. Fredericks' adult children also filed
loss of consortium claims as part of the suit. Mrs. Fredericks and
her adult children sought damages in excess of $13 million for
personal injury, loss of consortium, and medical expenses.


     A-1, Stockert, and Continental Western made a special
appearance in tribal court and moved to dismiss the Frederickses'
suit, contending that the tribal court lacked personal and subject
matter jurisdiction. The tribal court denied the motion and found
that it had personal and subject matter jurisdiction over the suit
brought by Gisela Fredericks. Fredericks v. Continental Western
Ins. Co., No. 5-91-A04-150, slip op at 1.24(d) (Fort Berthold
Tribal Ct. Sept. 4, 1991). Specifically, the tribal court found
that it had personal jurisdiction over the parties based on Chapter
1, section 3 of the Tribal Code because Mrs. Fredericks is a
resident of the reservation and because A-1 had "entered and
transacted business within the territorial boundaries of the
Reservation." 

The tribal court also concluded
that it had subject matter jurisdiction over the action because its
inherent tribal sovereignty had not been limited by treaty or
federal statute. See 

Given the tribal court's
conclusion that it had jurisdiction over the claims of Gisela
Fredericks, the tribal court did not reach the question of its
jurisdiction over the consortium claims brought by her children,
who were tribal members.



the pleadings in this case, not upon the evidence.
     2
      The Three Affiliated Tribes -- Mandan, Hidatsa, and Arikara
-- are federally recognized Indian tribes which exercise their
sovereignty under a federally approved constitution adopted
pursuant to the Indian Reorganization Act of 1934, 25 U.S.C.
§§ 461-479.

                                3
     A-1, Stockert, and Continental Western appealed to the
Northern Plains Intertribal Court of Appeals.      The Intertribal
Court of Appeals affirmed the tribal court and remanded the case to
the tribal court for further proceedings.           Fredericks v.
Continental Western Ins. Co., Northern Plains Intertribal Ct. App.
(Jan. 8, 1992). The Intertribal Court of Appeals took a broad view
of the tribe's civil authority over the non-Indians involved in
this dispute:


     Like any sovereign, Three Affiliated Tribes has [sic] an
     interest in providing a forum for peacefully resolving
     disputes that arise in their geographic jurisdiction and
     protecting the rights of those who are injured within such
     jurisdiction.


Slip op. at 7. Continental Western was dismissed from the case
without prejudice pursuant to an agreement of the parties.


     Before proceedings resumed in the tribal trial court, A-1 and
Stockert filed this case in the United States District Court for
the District of North Dakota against Mrs. Fredericks and her
children (hereinafter "the Frederickses"), the Honorable William
Strate, Associate Tribal Judge for the Tribal Court of the Three
Affiliated Tribes of the Fort Berthold Indian Reservation, and the
tribal court itself.     A-1 and Stockert sought injunctive and
declaratory relief. They asked the district court to declare that
the tribal court had no jurisdiction over this matter, to enjoin
the Frederickses from proceeding against them in the tribal court,
and to enjoin the tribal judge and the tribal court (hereinafter
the "tribal defendants") from asserting jurisdiction over them.


     The tribal defendants initially raised the affirmative defense
of sovereign immunity, but subsequently consented to the suit for
the limited purpose of defending the federal law claims for
injunctive relief. Both sides filed motions for summary judgment
on the issue of tribal court jurisdiction.      The district court

                                4
denied the summary judgment motion of A-1 and Stockert, and it
granted the summary judgment motions of the Frederickses and the
tribal defendants. A-1 Contractors v. Strate, Civil No. A1-92-94
(D.N.D. Sept. 17, 1992). The district court decided that the only
factual dispute was whether Mrs. Fredericks resided on or off the
reservation, which was irrelevant to the issue of tribal court
jurisdiction. 

The district court then decided that
the tribal court had both personal and subject matter jurisdiction,
and concluded that Indian tribes have retained inherent sovereignty
to exercise jurisdiction over civil causes of action between non-
Indians that arise on the reservation unless specifically limited
by treaty or federal statute. 

The district court
found that there was no treaty or statute that limited the tribe's
jurisdiction in this case. 

A-1 and Stockert appealed
on the issue of subject matter jurisdiction over the claims of Mrs.
Fredericks.3


     A panel of this court affirmed the district court in a two-to-
one decision.   A-1 Contractors v. Strate, No. 92-3359, 

(8th Cir. Nov. 29, 1994). A-1 and Stockert requested review
of the panel's decision en banc. We granted their request, vacated
the panel opinion, and set this case for rehearing en banc.


                               II.


     We review de novo the district court's decision both granting
and denying summary judgment. Get Away Club, Inc. v. Coleman, 

, 666 (8th Cir. 1992). We agree with the district court
that this case presents no relevant factual disputes for our
review. The only question presented, whether the tribal court has
jurisdiction over this dispute, is a question of law.       FMC v.

     3
      The consortium claims of Mrs. Fredericks' adult children
are not a part of this appeal because neither the tribal courts
nor the federal district court addressed the tribal courts'
jurisdiction over those claims.

                                5
Shoshone-Bannock Tribes, 

, 1313-14 (9th Cir. 1990),
cert. denied, 

(1991).


     The specific question presented for our resolution is whether
the tribal court has civil jurisdiction over this dispute which
arose between two non-Indian parties on the Fort Berthold
Reservation. A-1 and Stockert argue that under Supreme Court case
law, the tribe does not have the inherent sovereign authority to
exercise civil jurisdiction over non-Indians unless the dispute
implicates an important tribal interest. See, e.g., Montana v.
United States, 

(1981); South Dakota v. Bourland, 

, 2320 (1993); Brendale v. Confederated Tribes and Bands
of the Yakima Indian Nation, 

, 426-27 (1989)
(plurality).    A-1 and Stockert argue that because this case
involves no such tribal interest, the district court erred in
holding that the tribal court had subject matter jurisdiction over
this dispute.      The Frederickses and the tribal defendants
(collectively "the appellees") argue that a different line of
Supreme Court authority governs this issue. The appellees argue
that language from this line of cases indicates that the district
court correctly concluded that tribal courts have inherent civil
jurisdictional authority over all disputes arising on the
reservation, regardless of whether the parties involved are tribal
members. See, e.g., Iowa Mutual Ins. Co. v. LaPlante, 

(1987); National Farmers Union Ins. Cos v. Crow Tribe of Indians,

(1985); Merrion v. Jicarilla Apache Tribe, 

, 137 (1982); Williams v. Lee, 

(1959).          The
appellees contend that the district court correctly found that the
tribe had full geographical/territorial jurisdiction over this
dispute. The issue presented for our review is largely unresolved
and has generated a great deal of interest and commentary. See,
e.g., Allison S. Dussias, Geographically-Based and Membership-Based
Views of Indian Tribal Sovereignty: The Supreme Court's Changing
Vision, 55 U. Pitt. L. Rev. 1 (1993) (detailing and criticizing the


                                6
Supreme   Court's   increasing    emphasis   on   membership-based
sovereignty).


     In our view, the standards articulated in Montana v. United
States, 

(1981), and subsequent cases applying those
standards, control the resolution of this dispute. In Montana, the
Supreme Court specifically addressed the reach of tribal civil
jurisdiction over non-Indian parties and found that:


     the Indian tribes retain their inherent power to
     determine tribal membership, to regulate domestic
     relations among members, and to prescribe rules of
     inheritance for members. But exercise of tribal power
     beyond what is necessary to protect tribal self-
     government   or   to  control   internal   relations   is
     inconsistent with the dependent status of the tribes, and
     so   cannot   survive   without  express    congressional
     delegation.


 

(citations omitted).    The Court then announced the
general principle that "the inherent sovereign powers of an Indian
tribe do not extend to the activities of nonmembers of the tribe."

     Indian tribes, however, do "retain inherent sovereign
authority to exercise some forms of civil jurisdiction over non-
Indians on their reservations."    

   This
jurisdiction arises: (1) when nonmembers "enter consensual
relationships with the tribe or its members, through commercial
dealing, contracts, leases, or other arrangements" or (2) when a
nonmember's "conduct threatens or has some direct effect on the

     4
      Stated another way: "A tribe's inherent sovereignty . . .
is divested to the extent it is inconsistent with the tribe's
dependent status, that is, to the extent it involves the tribe's
`external relations.'" 

(plurality)
(citing United States v. Wheeler, 

, 326 (1978)). The
tribe's external relations are generally those involving
nonmembers of the tribe. See 

integrity, the economic security, or the health or
welfare of the tribe." 

(citations omitted). These
two situations are the "two exceptions" to Montana's general rule
that an Indian tribe does not have inherent sovereign powers over
the activities of nonmembers. 

. In
our view, the tribal court in this case would not have subject
matter jurisdiction under Montana unless the appellees can
establish the existence of a tribal interest under either of the
two exceptions.


     The Supreme Court has reiterated or reaffirmed the Montana
analysis of civil tribal jurisdiction over non-Indians a number of
times. 

(reasserting the centrality of
the observation in Montana that "exercise of tribal power beyond
what is necessary to protect tribal self-government or to control
internal tribal relations is inconsistent with the dependent status
of the tribes, and so cannot survive without express congressional
delegation"); County of Yakima v. Confederated Tribes and Bands of
Yakima Indian Nation, 

, 267 (1992) (citing Montana in
referring to the "long line of cases exploring the very narrow
powers reserved to tribes over the conduct of non-Indians within
their reservations"); Duro v. Reina, 

, 687-88 (1990)
(criminal jurisdiction case reciting Montana's observation that
"the inherent sovereign powers of an Indian tribe do not extend to
the activities of nonmembers of the tribe" and that civil tribal
jurisdiction over non-Indians on the reservation typically involves
situations arising from property ownership within the reservation
or the "consensual relationships" outlined in Montana), overruled
by statute on other grounds, 25 U.S.C. § 1301(2) & (3); 

(plurality) (following Montana principles and
concluding there was no tribal interest which allowed the tribe to
exercise authority over nonmembers on fee lands within the
reservation).   Perhaps the Court's most emphatic reiteration of
these standards is its recent statement that "after Montana, tribal


                                8
sovereignty over nonmembers `cannot survive without express
congressional delegation.'" 

n.15.

     The appellees argue that instead of applying the Montana
analysis, we should resolve this case under the Supreme Court's
decisions in Iowa Mutual, National Farmers Union, Williams v. Lee,
and Merrion.    In our view, none of those cases supports the
appellees' contentions that the tribal court has the broad civil
subject matter jurisdiction the tribal courts and the district
court found in this case. In Iowa Mutual, the Court held only that
exhaustion of tribal remedies is required before a federal district
court can decide the issue of federal court 

; see also 

n.10 (the plurality
specifically observed that Iowa Mutual only established an
exhaustion rule and did not decide whether the tribe had
jurisdiction over the nonmembers involved).      In reaching its
conclusion on the exhaustion requirement, the Court offered the
following observation upon which the appellees rely heavily:


     Tribal authority over the activities of non-Indians on
     reservation lands is an important part of tribal
     sovereignty. See Montana v. United States, 

,
     565-66 (1981) [other citations omitted].           Civil
     jurisdiction over such activities presumptively lies in
     the tribal courts unless affirmatively limited by a
     specific treaty provision or federal statute.


Iowa 

.      The appellees argue that this
language indicates that Indian tribes retain unrestricted
territorial civil jurisdiction unless that jurisdiction has been
affirmatively limited by treaty or federal statute. The appellees
contend that like a state, the tribe retains full sovereignty over
all matters arising on the reservation unless and until that
jurisdiction is divested by federal law. The appellees further
argue that consistent with Iowa Mutual, the tribal court may
exercise subject matter jurisdiction in this case because it


                                9
happened on the reservation and there has been no affirmative
divestment of the tribe's authority.


     In our view, the appellees' reading of this isolated language
from Iowa Mutual is unnecessarily broad and conflicts with the
principles of Montana.    This language from Iowa Mutual can and
should be read more narrowly and in harmony with the principles set
forth in Montana, which the Court cites in making those
observations.    When the Court observes in Iowa Mutual that
"[t]ribal authority over the activities of non-Indians on
reservation lands is an important part of tribal 

, the Court cites Montana and thus is referring to the
types of activities, like consensual contractual relationships (the
first Montana exception), that give rise to tribal authority over
non-Indians under Montana. Likewise, when the Court goes on to say
"[c]ivil jurisdiction over such activities presumptively lies in
the tribal courts unless affirmatively limited by a specific treaty
provision or federal statute," 

the Court
again is referring to a tribe's civil jurisdiction over tribal-
based activities that exists under Montana.            We recently
interpreted the Iowa Mutual case in just such a fashion, stating:
"Civil jurisdiction over tribal-related activities on reservations
presumptively lies in the tribal courts unless affirmatively
limited by a specific treaty provision or by federal statute."
Duncan Energy v. Three Affiliated Tribes, 

, 1299 (8th
Cir. 1994) (emphasis added) (citing Iowa 

).
Hence, Iowa Mutual should not be read to expand the category of
activities which Montana described as giving rise to tribal
jurisdiction over non-Indians or nonmembers. Instead, we read it
within the parameters of Montana.


     National Farmers Union, like Iowa Mutual, was an exhaustion
case which did not decide whether tribes had jurisdiction over
nonmembers.   

n.10.    Nonetheless, the
appellees contend that we should read National Farmers Union as a

                                10
limitation on the reach of Montana because National Farmers Union
limited the reach of Oliphant v. Suquamish Indian Tribe, 

(1978), a criminal tribal jurisdiction case upon which Montana
relied. In Oliphant, the Court had concluded that tribal courts
have no criminal jurisdiction over non-Indians because the tribe
did not retain the inherent authority to exercise that type of

. The Court in National Farmers
Union stated that "the question whether a tribal court has the
power to exercise civil subject-matter jurisdiction over non-
Indians in a case of this kind is not automatically foreclosed, as
an extension of Oliphant would 

. The
appellees argue that in National Farmers Union the Court refused to
extend Oliphant's limitation of inherent sovereign authority to
civil cases.


     The appellees fail to recognize the fact that Montana
specifically extended the general principles underlying Oliphant to
civil jurisdiction. 

("Though Oliphant
only determined inherent tribal authority in criminal matters, the
principles on which it relied support the general proposition that
the inherent sovereign powers of an Indian tribe do not extend to
the activities of nonmembers of the tribe") (footnote omitted).
Montana did not extend the full Oliphant rationale to the civil
jurisdictional question -- which would have completely prohibited
civil jurisdiction over nonmembers. Instead, the Court found that
the tribe retained some civil jurisdiction over nonmembers, which
the Court went on to describe in the Montana 

. Thus, when National Farmers Union states that civil
tribal jurisdiction over nonmembers is not foreclosed by Oliphant,
that observation is perfectly consistent with Montana, which
provides for broader tribal jurisdiction over non-Indians than does
Oliphant. Under Montana, the tribe has the ability to exercise
civil jurisdiction over non-Indians when tribal interests (as
defined in the Montana exceptions) are involved.


                                11
     We also read the other cases the appellees rely upon within
the limits of Montana.    In Williams, the Court found that the
tribal courts had jurisdiction over a suit by a non-Indian store
owner on the reservation against two members of the tribe for
breach of contract based on a transaction that occurred on the

, 223. This factual situation fits
squarely under the "consensual agreement" test for jurisdiction in
Montana (the first Montana exception).         In fact, Montana
specifically cited Williams in creating the two exceptions that
allow for civil jurisdiction over 

.


     Similarly, the appellees read too much into language from
Merrion, where the Court stated in a footnote: "Because the Tribe
retains all inherent attributes of sovereignty that have not been
divested by the Federal Government, the proper inference from
silence . . . is that the sovereign power . . . remains 

n.14. The Court made the observation in isolation
in a case dealing with the tribe's authority to impose a severance
tax on non-Indians on the reservation.      The Court found this
taxation power was derived either from the tribe's inherent power
of self-government or the power to exclude, 

both of
which are consistent with the inherent powers the tribe retains
over nonmembers described in Montana. Both Merrion and Iowa Mutual
say essentially the same thing: the inherent attributes of
sovereignty that an Indian tribe retains, which under Montana are
very limited when dealing with non-Indians, remain intact unless
affirmatively limited by the federal government.


     The appellees argue that Montana and Brendale apply only to a
tribe's ability to exercise authority over non-Indians' activities
on non-Indian fee lands -- i.e., plots of land owned by non-Indians
in fee simple that happen to be located within the exterior
boundaries of the reservation. In our view, the appellees place an
artificial limitation on those cases. While Montana and Brendale
address questions of tribal authority over non-Indians on non-

                                12
Indian owned fee lands, neither case limits its discussion or
rationale to jurisdictional issues arising on fee lands. To the
contrary, the Montana Court found, without any qualification
whatsoever, that tribal power may not reach beyond what is
necessary to protect tribal self-government or to control internal
relations absent express congressional 

.   Montana also specifically addressed the "forms of civil
jurisdiction over non-Indians on their reservations" and provided
the two limited situations in which that jurisdiction may arise.

(emphasis added). Thus, Montana explicitly addressed
the authority of tribes to exercise civil jurisdiction on the
reservation, as well as on non-Indian fee lands.      The Brendale
plurality noted that Montana involved regulation of fee lands, but
it did not specifically limit the Montana rationale to fee land
disputes. See 

. Since Brendale, the
Supreme Court likewise has not seen fit to limit either Montana or
Brendale in the fashion the appellees have suggested. Instead, the
Court has discussed these cases and their observations about tribal
jurisdiction in broad and unqualified language. See 

; County of 

; 

.


     Moreover, a number of cases analyzing civil jurisdictional
issues in non-fee land disputes have relied upon or cited Montana.
See Stock West Corp. v. Taylor, 

, 918-19 (9th Cir.
1992)   (en   banc)  (quoting   Montana   test   in  non-fee   land
jurisdictional dispute); 

(citing Montana in
non-fee land case as "the leading case on tribal civil jurisdiction
over non-Indians"); see also Tamiami Partners Ltd. v. Miccosukee
Tribe of Indians of Florida, 

, 508 n.11 (11th Cir.
1993) (citing Montana in recognizing that tribal courts have power
to exercise civil jurisdiction in conflicts affecting the interests
of Indians on Indian lands). Thus, we conclude that any attempt to
limit the rationale of Montana and Brendale to fee land


                                13
jurisdictional issues is both uncompelling and unsupported by the
language of those two cases.


     The appellees next argue that we should read the Montana line
of cases as addressing tribal regulatory power over non-Indians and
the line of cases represented by Iowa Mutual as addressing tribal
adjudicatory power over non-Indians. They contend that Iowa Mutual
and related cases would control in this case, which is a dispute
about tribal adjudicatory power. The appellees assert that drawing
such a distinction would be the best way to resolve what they see
as the apparent contradiction between the language from those
differing lines of cases.


     Again, we must disagree. While the distinction the appellees
propose appears in some commentaries, see, e.g., Dussias, 55 U.
Pitt. L. Rev. at 43-78, the distinction does not appear explicitly,
or even implicitly, anywhere in the case law.      Montana and the
cases following Montana have dealt with questions of civil tribal
regulatory jurisdiction, but those cases have never suggested that
their reasoning is limited solely to regulatory matters. Quite the
contrary, as we have noted above, those cases have spoken about
civil jurisdiction in broad and unqualified terms without any
limitation of the discussion to particular aspects of civil
jurisdiction.    Likewise, Iowa Mutual and the other cases the
appellees rely on have never suggested such a distinction.       In
fact, in Iowa Mutual, the Court cites Montana without any
indication that Montana should be limited to regulatory
jurisdiction. Iowa 

.


     Moreover, any attempt to create or apply a distinction between
regulatory jurisdiction and adjudicatory jurisdiction in this case
would be illusory.     If the tribal court tried this suit, it
essentially would be acting in both an adjudicatory capacity and a
regulatory capacity. At oral argument, all of the parties agreed
that if the tribal court tried this case, it would have the power

                                14
to decide what substantive law applies. Essentially, the tribal
court would define the legal relationship and the respective duties
of the parties on reservation roads and highways.      Thus, while
adjudicating the dispute, the tribal court also would be regulating
the legal conduct of drivers on the roads and highways that
traverse the reservation. Accordingly, we see no basis in this
case for applying the regulatory-adjudicatory distinction the
appellees have proposed.


     Furthermore, even if we applied a regulatory-adjudicatory
distinction, it would not change our conclusion.     None of the
cases, including those that the appellees argue are "adjudicatory
jurisdiction" cases, have ever addressed the issue presented here
-- a tribal court's civil jurisdiction over an accident involving
non-Indian parties.   As we have demonstrated above, all of the
appellees' proposed "adjudicatory" cases are consistent with the
Montana case. Even if we were to treat Montana as a "regulatory"
authority case, we see no reason not to apply its principles to
this open question of inherent authority to exercise civil
adjudicatory jurisdiction over this dispute. Thus, we see no valid
basis for distinguishing or limiting Montana, as the appellees
suggest.


     Arguably, some of the language from Iowa Mutual, Williams, and
Merrion can be viewed in isolation to create tension with Montana.
A careful reading of the particular language of those cases,
however, indicates that they can and should be read together with
Montana to establish one comprehensive and integrated rule: a valid
tribal interest must be at issue before a tribal court may exercise
civil jurisdiction over a non-Indian or nonmember, but once the
tribal interest is established, a presumption arises that tribal
courts have jurisdiction over the non-Indian or nonmember unless
that jurisdiction is affirmatively limited by federal law. This
rule is supported by the above authority and by the leading
treatise on American Indian law, which specifically states: "Tribal

                                15
courts probably lack jurisdiction over civil cases involving only
non-Indians in most situations, since it would be difficult to
establish any direct impact on Indians or their property." Felix
S. Cohen's Handbook of Federal Indian Law, 342-43 (1982 ed.). This
well-accepted rule controls this case.


     Finally, the appellees urge us to follow a recent decision in
a case factually very similar to this case, where the Ninth Circuit
held that the tribal court had jurisdiction over the lawsuit. See
Hinshaw v. Mahler, 

(9th Cir. 1994).       In Hinshaw,
Christian Mahler died from injuries he received when a car driven
by Lynette Hinshaw collided with the motorcycle Mahler was riding
on a U.S. highway within the boundaries of the Flathead Indian
Reservation.    Both Mahler and Hinshaw were residents of the
reservation, but they were not members of the tribe. 

Mahler's mother (an enrolled member of the tribe) and Mahler's
father (a nonmember) brought wrongful death and survivorship
actions in the tribal court. Hinshaw challenged the tribal court's
personal and subject matter jurisdiction in federal district court.
The Ninth Circuit affirmed the district court's conclusion that the
tribal court had jurisdiction over those claims. 

To the extent that Hinshaw supports the appellees' arguments that
tribal courts have jurisdiction over a tort claim arising between
two non-Indians on a highway running through an Indian reservation,
we respectfully decline to follow it. Such a broad interpretation
of civil tribal jurisdiction is, we believe, inconsistent with
Montana.


     The authority is quite clear that the kind of sovereignty the
American Indian tribes retain is a limited sovereignty, and thus
the exercise of authority over nonmembers of the tribe "is
necessarily inconsistent with a tribe's dependent status."

(citing United States v. Wheeler, 

, 326 (1978)). Stated another way, "the inherent sovereign
powers do not extend to the activities of nonmembers of the tribe."

                                16


, quoted in Duro v. 

.
As such, we cannot endorse the appellees' concept of plenary tribal
territorial (or geographical) civil jurisdiction. Such a concept
presents an overly broad interpretation of the tribe's sovereignty
which is inconsistent with the tribe's dependent status and is
contrary to Montana.     Thus, for the tribe to exercise civil
jurisdiction over nonmembers, the Montana exceptions must be
satisfied because the "inherent attributes of sovereignty" do not
extend to nonmembers.


     While the tribe's inherent authority to assert civil
jurisdiction over a nonmember depends on the existence of a tribal
interest as defined in Montana, that does not mean geography plays
no role in the sovereignty and jurisdictional inquiry. "The Court
has repeatedly emphasized that there is a significant geographical
component to tribal sovereignty." White Mountain Apache Tribe v.
Bracker, 

, 151 (1980). In Montana, the Court accounted
for this geographical component of the jurisdictional analysis when
it stated that "Indian tribes retain inherent sovereign power to
exercise some forms of civil jurisdiction over non-Indians on their
reservations, even on non-Indian fee 

(emphasis added). Montana implicitly recognizes that without the
geographic connection to Indian country, the tribes would have no
plausible grounds for asserting jurisdiction over the non-Indian
parties. Thus, properly understood, the geographical component of
the jurisdictional analysis is important but not dispositive. See
generally 

(geographical component of
tribal sovereignty is important -- though not dispositive factor
for courts to weigh in determining whether a state's authority to
tax non-Indians for activities on reservation has been pre-empted).




                                17
                               III.


     Applying Montana to this case, there must be a tribal interest
at issue (as defined in the Montana exceptions) before the tribal
court can exercise jurisdiction over the non-Indian parties. We
conclude that no such tribal interest exists in this case. This
dispute arose between two non-Indians involved in an ordinary run-
of-the-mill automobile accident that occurred on a North Dakota
state highway traversing the reservation. Those facts, which stand
alone in this case, make this dispute distinctively non-tribal in
nature.


     The appellees argue that the "consensual relationship" test
(the first Montana exception) is satisfied because A-1 voluntarily
entered into a subcontract with the tribe and Lyle Stockert was an
A-1 employee who was allegedly on the reservation pursuant to that
subcontract when he was involved in the accident with Gisela
Fredericks. In our view, that reasoning is flawed. The dispute in
this case is a simple personal injury tort claim arising from an
automobile accident, not a dispute arising under the terms of, out
of, or within the ambit of the "consensual agreement," i.e., the
subcontract between the tribes and A-1. Gisela Fredericks was not
a party to the subcontract, and the tribes were strangers to the
accident.5


     The appellees also argue that the second Montana exception is
satisfied because the dispute arose on the reservation, and
therefore, the conduct in dispute here necessarily affects the
tribe's political integrity, economic security, or health or

     5
      A-1 and Stockert have noted that under the terms of the
subcontract involved in this case, all disputes arising out of
the subcontract would be determined under Utah law and would be
heard in the Utah courts. The appellees have not argued to the
contrary. However, we will not give this fact any controlling
weight because the subcontract is not part of this record.


                                18
welfare.    The appellees contend that the dispute affects the
tribe's political integrity because it deals with the tribe's
ability to function as a fully sovereign government. We disagree.
In our view, this case has nothing to do with the Indian tribe's
ability to govern its own affairs under tribal laws and customs.
It deals only with the conduct of non-Indians and the tribe's
asserted ability to exercise plenary judicial authority over a
decidedly non-tribal matter. The only governmental interest the
tribe alleges is the right to act as a full sovereign to exercise
full sovereign authority over events that happen within its
geographical boundaries.     As noted above, tribes are limited
sovereigns and do not possess full sovereign powers. Thus, this
desire to assert and protect excessively claimed sovereignty is not
a satisfactory tribal interest within the meaning of the second
Montana exception.


     The appellees also argue that even though Mrs. Fredericks is
a non-Indian and nonmember of the tribe, she is a long-time
resident of the reservation and hence is an imbedded member of the
community with a recognizable social and economic value to the
tribal community. Thus, they argue that it is critical to provide
her a tribal forum for her disputes. The simple fact that Mrs.
Fredericks is a resident of the reservation, however, does not
satisfy the second Montana exception. It is not essential to the
tribe's political integrity, economic security, or health or
welfare to provide her, a non-Indian and nonmember, with a judicial
forum for resolution of her disputes. A forum is available to Mrs.
Fredericks in the North Dakota state courts, and there is no
indication that she would be prevented from asserting her claims,
in full, in that forum.6


     6
      There has been some discussion of the effect of 28 U.S.C.
§ 1360 on jurisdiction of the North Dakota state courts. That
section, by its very terms, applies only to the state court's
jurisdiction over actions to which Indians are parties. See also
25 U.S.C. § 1322 (similar jurisdictional provision of Indian

                                19
     Likewise, the fact that Mrs. Fredericks wants to bring her
suit in the tribal courts does not control. Montana very clearly
states that the conduct giving rise to the case must threaten or
have a "direct effect on the political integrity, economic
security, or health or welfare of the tribe," not the nonmember,
before the tribe can assert civil jurisdiction over 

(emphasis added). Nor is it persuasive to us that
Mrs. Fredericks may be as close to being a member of the tribe as
she could be without actually being a member.      Montana is very
clear that tribal membership is of critical importance.        Mrs.
Fredericks is neither an Indian nor a member of the tribe. The
fact that Mrs. Fredericks has not been admitted to membership in
the tribe places her outside the reach of the tribe's inherent
authority, absent some separate showing of a direct effect on the
tribe. In this case, the appellees have completely failed to show
that the tribe's ability to govern or protect its own members would
be directly damaged if the tribe cannot assert jurisdiction over
this lawsuit.    Thus, the second exception to Montana does not
apply.


                               IV.


       Simply stated, this case is not about a consensual
relationship with a tribe or the tribe's ability to govern itself;
it is all about the tribe's claimed power to govern non-Indians and
nonmembers of the tribe just because they enter the tribe's
territory. By remaining within the principled approach of Montana,



Civil Rights Act). Because we have found that this case does not
involve any Indian parties, those sections simply do not apply to
this case. We note that even if applicable, those sections would
tend to indicate that the North Dakota state courts have
jurisdiction over this case. See Three Affiliated Tribes of the
Fort Berthold Reservation v. Wold Engineering, 

(1986) (North Dakota's attempt to disclaim unconditional state
court jurisdiction over civil claims arising in Indian country
held invalid).

                                20
the tribe retains the ability to govern itself because the tribal
court will have jurisdiction whenever a "tribal interest" in a
dispute is established. Under Iowa Mutual, where such a tribal
interest exists, the jurisdiction is broad and requires an
affirmative change in federal law to limit it in any way. Because
we have concluded that no tribal interest as defined in Montana
exists in this case, we conclude that the tribe does not retain the
inherent sovereign power to exercise subject matter jurisdiction
over this dispute through its tribal court.        Accordingly, we
reverse the judgment of the district court.


BEAM, Circuit Judge, with whom FLOYD R. GIBSON, McMILLIAN, and
MURPHY, Circuit Judges, join, concurring and dissenting.

     I concur in the court's "comprehensive and integrated" rule
that "a valid tribal interest must be at issue before a tribal
court may exercise civil jurisdiction over a non-Indian or
nonmember, but once the tribal interest is established, a
presumption arises that tribal courts have jurisdiction over the
non-Indian or nonmember unless that jurisdiction is affirmatively
limited by federal law." Supra at 15-16. I dissent, however, from
the court's application of the rule in this case and from the
implication that a tribal court has no jurisdiction in a civil case
unless the dispute involves an Indian or a member of the tribe.


     The concept of "tribal interest" as advanced by the court
appears to be a free-floating theory wholly detached from
geographic reality except in a most attenuated way. I dissent from
this ideation of tribal jurisdiction because it is contrary to
Brendale v. Confederated Tribes & Bands of the Yakima Indian
Nation, 

(1989); Iowa Mut. Ins. Co. v. LaPlante, 

(1987); National Farmers Union Ins. Co. v. Crow Tribe of
Indians, 

(1985) and other earlier cases, to say
nothing of Montana v. United States, 

(1981), the case
most heavily relied upon by the court.


                                21
     A legitimate judicial system arises as an attribute of
sovereignty. Indeed, "the existence and extent of a tribal court's
jurisdiction . . . require[s] a careful examination of tribal
sovereignty."     National Farmers 

.
Accordingly, any determination of tribal court jurisdiction
requires examination of the parts and pieces of tribal sovereignty
and how they fit within the jurisdictional equation.


     Historically, the connection of Indians to the land has shaped
the course of Indian law. In the landmark case of Worcester v.
Georgia, 31 U.S. (6 Pet.) 515, 557 (1832), Indian nations were
recognized as "distinct political communities, having territorial
boundaries, within which their authority is exclusive, and having
a right to all the lands within those boundaries, which is not only
acknowledged, but guaranteed by the United States." In Williams v.
Lee, 

(1959), the Court recognized the importance of
Indian land when it decided the question of jurisdiction over a
case brought in state court by a non-Indian merchant against Indian
customers.   Holding that the case should have been brought in
tribal court, the Court stated "[i]t is immaterial that respondent
is not an Indian. He was on the Reservation and the transaction
with an Indian took place there." 

     Even in more recent cases the Court has recognized the
significance of geography to tribal sovereignty.      In U.S. v.
Mazurie, 

, 557 (1975), the Court noted that its cases
had consistently recognized that the Indian tribes retain
"attributes of sovereignty over both their members and their
territory." (Emphasis added.) Merrion v. Jicarilla Apache Tribe,

(1982), explores a tribe's historic power to exclude
others from tribal lands.


     Brendale supports a rule which would allow a court to consider
Indian territory in determining the tribe's interest in a given
case. The plurality in Brendale suggests a case-by-case approach

                                22
to deciding whether Montana's second exception confers tribal
jurisdiction. The precise wording of the second exception, the
plurality writes, indicates that "a tribe's authority need not
extend to all conduct that `threatens or has some direct effect on
the political integrity, the economic security, or the health or
welfare of the tribe,' but instead depends on the circumstances."

.     Thus, Brendale suggests that the
meaning of Montana's second exception is not static but depends on
various factors.


     All of these cases further suggest that geography plays a
vital role in a tribe's political integrity, economic security,
health and welfare, and therefore must be strongly considered in
any application of Montana's second exception, whether or not
Indian or tribal members are parties to the dispute.


     Even Montana lends support to the geographic component of
tribal court jurisdiction. The Supreme Court stated:


     [t]o be sure, Indian Tribes retain inherent sovereign
     power to exercise some forms of civil jurisdiction over
     non-Indians on their reservations, even on non-Indian fee
     

(emphasis added). The Court in Montana cited its
earlier holding in United States v. Wheeler, 

(1978)
and noted that Indian Tribes are "`unique aggregations possessing
attributes of sovereignty over both their members and their

(emphasis added).


     In finding no jurisdiction here, the court describes tribal
membership as "critical" to the Court's holding in Montana. Supra
at 20. Such a characterization oversimplifies Montana, overstates
the role tribal membership plays in a determination of tribal court
jurisdiction and understates the role of territorial integrity.
Montana was the product of several factors, including the nature of

                                23
the regulation in question and the application of that regulation
to fee land. It fully recognized that non-Indians and nonmembers
of a tribe can affect the political integrity, economic security,
health and welfare of a tribe under the proper circumstances. The
Montana Court's     establishment   of  two   tribal   jurisdiction
"exceptions" and its refusal to wholly extend its holding in
Oliphant1 to civil jurisdiction demonstrates the Court's cognizance
of the influence of non-Indians and tribal real estate on tribal
self-government.


     One of the strongest interests that the tribe advances in this
case is its interest in providing a forum for this plaintiff. And,
the question of North Dakota state court jurisdiction is not as
clear-cut as the court suggests. In fact, such jurisdiction is
doubtful.


     Two important points are relevant to this issue.       First,
Public Law 280, 28 U.S.C. § 1360, does not, for reasons other than
those advanced by the court, have any bearing on this issue. In
footnote 6, supra at 19, the court explains that 28 U.S.C. § 1360
applies only to actions to which Indians are parties. The original
Public Law 280, however, applied to all "civil causes of action."
See Act of Aug. 15, 1953, Pub. L. 280, ch. 505, 67 Stat. 588
(codified as amended at 18 U.S.C. § 1162, 25 U.S.C. §§ 1321-1326,
28 U.S.C. § 1360); see also Felix S. Cohen, Handbook of Federal
Indian Law 362-63 (1982 ed.). Under the original Act, assumption
of jurisdiction was mandatory for some states and optional for
others, including North Dakota.      It was not until 1968, when
amendments to Public Law 280 were enacted, that state assumption of
jurisdiction was limited to actions to which Indians were parties,
subject to tribal consent. North Dakota had chosen to assume civil


     1
      In Oliphant, the Court held that tribal courts could not
validly assert criminal jurisdiction over non-Indians. Oliphant
v. Suquamish Indian Tribe, 

(1978).

                                24
jurisdiction before the amendments were adopted,2 but had
voluntarily conditioned its jurisdiction upon consent of the
tribes. N.D. Cent. Code § 27-19-01 (1991). The tribes of the Fort
Berthold reservation did not consent. Three Affiliated Tribes of
the Fort Berthold Reservation v. Wold Eng'g I, 

(1984).
Thus, North Dakota has no jurisdiction over the Fort Berthold
reservation under 28 U.S.C. § 1360.


     My second point is more relevant to the question of the
authority of a state court to assume jurisdiction over a cause of
action arising on an Indian reservation. Even absent jurisdiction
conferred by federal statute, state courts may exercise
jurisdiction over some civil causes of action arising on
reservation lands.    The scope of state court jurisdiction is
limited by the Williams v. Lee "infringement" test: "whether the
state action infringe[s] on the right of reservation Indians to
make their own laws and be ruled by 

. State
court jurisdiction cannot be disclaimed, at least where there is no
other forum in which to bring an action. Three Affiliated Tribes
of the Fort Berthold Reservation v. Wold Eng'g II, 

(1986).


     Thus, the question of whether a North Dakota state court can
provide a forum for Mrs. Fredericks depends upon whether state
jurisdiction in this instance would infringe upon the tribe's right
to self government. Commentators seem to agree that state courts
have subject matter jurisdiction over suits by non-Indians against
non-Indians, even when the claim arises in Indian Country, so long
as Indian interests are not affected. See, e.g., Cohen, 352 ("The
scope of preemption of state laws in Indian country generally does
not extend to matters having no direct effect on Indians, tribes,

     2
      As Felix Cohen explains, although the amendments altered
any prospective assumption of Public Law 280 jurisdiction, it
preserved all jurisdiction previously acquired under the Act.
Cohen, 363 n.126.

                                25
their property, or federal activities. In these situations state
courts have their normal jurisdiction over non-Indians and their
property, both in criminal and civil cases."); Sandra Hansen,
Survey of Civil Jurisdiction in Indian Country 1990, 16 Am. Indian
L. Rev. 319, 346 (1991).


     The Three Affiliated Tribes have, however, adopted a tribal
code which outlines civil court jurisdiction within the exterior
boundaries of the reservation and which, in the absence of federal
law to the contrary, imposes tribal law and custom, not North
Dakota statute or common law, as controlling precedent for torts
occurring within the reservation. See Tribal Code of the Three
Affiliated Tribes of the Fort Berthold Reservation Ch. 1, § 2
(1980); see also Cohen 334-35.


     Thus, in this case, state court jurisdiction would infringe
upon the tribe's right of self government including the right to
provide a forum, indeed the only forum, available to this resident
of the reservation.    The accident occurred on Indian land over
which the tribe asserts territorial sovereignty and involved a non-
Indian truck driver brought onto the reservation by a commercial
contract between the tribe and his employer.      Even though Mrs.
Fredericks was a non-Indian, she had long resided on the
reservation with a tribal member spouse (now deceased) and is the
mother of adult children who are enrolled members of the tribe.
Had either accident participant been an Indian, the situs of the
accident on the reservation would have clearly dictated tribal
court jurisdiction as established in Brendale, Iowa Mutual,
National Farmers Union and Montana.        The tribal court has
jurisdiction over Mrs. Fredericks' claim.      I dissent from the
court's ruling to the contrary.




                                26
FLOYD R. GIBSON, Circuit Judge, with whom McMILLIAN, BEAM, and
MURPHY, Circuit Judges, join, dissenting.

     I agree with Judge McMillian's and Judge Beam's dissents. I
write separately to express my dismay at this Court's unduly narrow
view of "limited sovereignty." The type of "limited sovereignty"
allotted by this Court to the tribe is, in fact, no real
sovereignty at all.


     Whether framed in terms of inherent tribal sovereignty under
Iowa Mutual Insurance Co. v. LaPlante, 

, 18 (1987), or
tribal interests under Montana v. United States, 

, 565-
66 (1981), the power to adjudicate everyday disputes occurring
within a nation's own territory is among the most basic and
indispensable manifestations of sovereign power. As Chief Justice
Marshall observed:

     No government ought to be so defective in its
     organization, as not to contain within itself, the means
     of securing the execution of its own laws against other
     dangers than those which occur every day.     Courts of
     justice are the means most usually employed; and it is
     reasonable to expect, that a government should repose on
     its own courts, rather than on others.

Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 387-88 (1821). This
case does not present an extraordinary occurrence. As the majority
opinion notes, this case involves "an ordinary run-of-the-mill
automobile accident."    Ante at 18.   The majority opinion today
denies the tribe the ability to adjudicate the type of basic
disputes that occur daily within Indian territory unless these
disputes involve tribal members.    Such a restriction interferes
with the tribe's ability to manage its affairs by compromising its
ability to deal with non-tribe members who happen to wreak havoc on
tribal land.


     I believe that the analysis and underlying rationale set forth
in Montana have no relevance outside the narrow context of a

                                27
tribe's ability to regulate fee lands owned by 

. As such, I would limit the rule of that case to
its facts and rely instead on the broad scope of inherent tribal
sovereignty outlined in cases such as Iowa 

.1


     Even if I were convinced that the reach of Montana is as broad
as the majority of this Court believes it to be, I believe that
this case implicates tribal interests and, as such, falls squarely
under either of the two Montana exceptions. I believe that this
case meets the "consensual relationship" test under the first
Montana exception because it arose as a direct result of A-1's
consensual commercial contacts with the tribe. 

.    Had A-1 not subcontracted with LCM Corporation, a
corporation wholly owned by the tribe, to perform construction work
on a tribal community building within the boundaries of the
reservation, the accident would never have occurred. The majority
claims that there is "no proof (as opposed to allegations) . . . to
support the district court's finding of fact that A-1 was in
performance of the contract at the time of the accident." Ante at
3, note 1. I, however, fail to see any other plausible explanation
as to why a gravel truck owned by A-1, a non-Indian-owned company,
was on tribal land at the time of the collision. Because I believe
that the accident clearly arose as the result of A-1's consensual
relationship with the tribe and its members, I believe that the


     1
          Tribal authority over the activities of non-Indians on
     reservation lands is an important part of tribal
sovereignty.   Civil jurisdiction over such activities
presumptively lies in    the tribal courts unless affirmatively
limited by a specific    treaty provision or federal statute.
Because the Tribe   retains all inherent attributes of
sovereignty that have not     been divested by the Federal
Government, the proper inference   from silence is that the
sovereign power remains intact.

Citations and quotation omitted.


                                28
tribe retains the inherent sovereign power to exercise civil
jurisdiction over A-1 under the first Montana exception.



     I also believe that the tribe retains the inherent power to
exercise civil authority over A-1 under the second Montana
exception because A-1's conduct on tribal land "threatens or has
some direct effect on the political integrity, the economic
security, or the health or welfare of the 

.
The majority dismisses the tribal interests at stake here as a
"desire to assert and protect excessively claimed sovereignty."
Ante at 19.    As previously observed, however, the ability of a
sovereign, even a limited sovereign, to adjudicate the everyday
affairs and accidents occurring within its borders and provide a
forum for its citizens is one of the most basic and indispensable
aspects of sovereignty.    Aside from the threat to the tribe's
political integrity, the majority opinion also unfairly discounts
the effect of A-1's conduct on the health and welfare of the tribe.
Ante at 18-20. While the immediate victim of the collision, Gisela
Fredericks, is not a member of the tribe, she is nonetheless a
longtime resident of the reservation whose husband and adult
children are enrolled tribal members. To claim that A-1's conduct
on tribal land had no effect on the health or welfare of the tribe
is simply unrealistic and not in accordance with the facts.


     For the aforementioned reasons, I would affirm the order of
the district court.


McMILLIAN, Circuit Judge, with whom FLOYD R. GIBSON, BEAM, and
MURPHY, Circuit Judges, join, dissenting.


     I join in Judge Beam’s opinion concurring in part and
dissenting in part, particularly the emphasis on the importance of
geography or territory in analyzing issues of tribal sovereignty.
I write separately to set forth the reasons why I would hold that

                                29
the federal district court, and the tribal courts, correctly
decided that the tribal court has subject matter jurisdiction over
this reservation-based tort action between non-tribal members.


     There are no disputed issues of fact relevant to the
jurisdiction issue.    None of the parties are tribal members.
Gisela Fredericks is a resident of the reservation; the truck
driver, Lyle Stockert, and his employer, A-1 Contractors, are not
residents, but A-1 was performing work on the reservation under a
subcontract agreement with LCM Corp., a corporation wholly owned by
the tribe, in connection with the construction of a tribal
community building.    Because the accident occurred within the
exterior boundaries of the reservation, on a state highway
right-of-way,1 the cause of action arose on the reservation. The
tribal code establishes personal and subject matter jurisdiction
and applies tribal law and custom.


     The legal issue presented, tribal court civil jurisdiction, is
a question of federal law subject to de novo review. See, e.g.,
FMC v. Shoshone-Bannock Tribes, 

, 1313-14 (9th Cir.
1990), cert. denied, 

(1991). The jurisdiction issue
is properly presented for determination on the merits.       Tribal
remedies have been exhausted, and we have the benefit of the tribal
trial and appellate courts’ opinions as well as that of the federal
district court.




     1
      Rights-of-way are part of "Indian country" as defined by
federal law. 18 U.S.C. § 1151 ("Indian country" includes "all
land within the limits of any reservation under the jurisdiction
of the United States government, notwithstanding the issuance of
any patent, and, including rights-of-way running through the
reservation"). "While [18 U.S.C.] § 1151 is concerned, on its
face, only with criminal jurisdiction, the [Supreme] Court has
recognized that it generally applies as well to questions of
civil jurisdiction." DeCoteau v. District County Court, 

, 427 n.2 (1975).

                                30
     I would hold the tribal court has civil jurisdiction because
of the presumption in favor of inherent tribal sovereignty, Montana
applies only to issues involving fee lands, Iowa Mutual establishes
more than a rule of exhaustion of tribal remedies, the Handbook of
Federal Indian Law does not definitively resolve the issue, and
state court jurisdiction does not preclude tribal court
jurisdiction. Finally, I would hold that even if Montana applies,
providing a forum for reservation-based tort actions, even where
the parties are non-Indian, falls within both Montana exceptions.



INHERENT TRIBAL SOVEREIGNTY


     The majority opinion would not extend inherent tribal
sovereignty over the activities of non-members, absent consent or
some direct effect on the tribe.     I remain convinced that the
opposite presumption applies, that is, that "[c]ivil jurisdiction
over such activities presumptively lies in the tribal courts unless
affirmatively limited by a specific treaty provision or federal
statute." Iowa Mutual Insurance Co. v. LaPlante, 

, 18
(1987) (Iowa Mutual). See Hinshaw v. Mahler, 

, 1180-81
(9th Cir.) (tribal court jurisdiction over action brought by tribal
member on behalf of non-tribal member child against non-tribal
member arising out of car accident on reservation), cert. denied,

(1994).


     Indian tribes possess "‘inherent powers of a limited
sovereignty which has never been extinguished.’" United States v.
Wheeler, 

, 322 (1978) (emphasis omitted), citing Felix
S. Cohen, Handbook of Federal Indian Law 122 (1942 ed.).       The
Supreme Court has repeatedly emphasized that "there is a
significant geographical component to tribal sovereignty." White
Mountain Apache Tribe v. Bracker, 

, 151 (1980)
(pre-emption of state authority over non-Indians acting on tribal
reservations).        See    generally   Allison    M.    Dussias,

                                31
Geographically-Based and Membership-Based Views of Indian Tribal
Sovereignty: The Supreme Court’s Changing Vision, 55 U. Pitt. L.
Rev. 1 (1993).      Thus, "Indian tribes retain ‘attributes of
sovereignty over both their members and their territory’ to the
extent that sovereignty has not been withdrawn by federal statute
or treaty." Iowa 

, citing United States v.
Mazurie, 

, 557 (1975) (emphasis added).        Inherent
tribal sovereignty "exists only at the sufferance of Congress and
is subject to complete defeasance. But until Congress acts, the
tribes retain their existing sovereign powers.      In sum, Indian
tribes still possess those aspects of sovereignty not withdrawn by
treaty or statute, or by implication as a necessary result of their
dependent status."    United States v. 

(emphasis added). Implicit divestiture of inherent sovereignty has
been found necessary only


     where the exercise of tribal sovereignty would be
     inconsistent with the overriding interests of the
     National Government, as when the tribes seek to engage in
     foreign relations, alienate their lands to non-Indians
     without federal consent, or prosecute non-Indians in
     tribal courts which do not accord the full protections of
     the Bill of Rights.


Washington v. Confederated Tribes of Colville Reservation, 

, 153-54 (1980) (footnote omitted).


     The federal policy favoring tribal self-government
     operates even in areas where state control has not been
     affirmatively pre-empted by federal statute. "[A]bsent
     governing Acts of Congress, the question has always been
     whether the state action infringed on the rights of
     reservation Indians to make their own laws and be ruled
     by them."


Iowa 

, citing Williams v. Lee, 

,
220 (1959). "Because the Tribe retains all inherent attributes of
sovereignty that have not been divested by the Federal Government,
the proper inference from silence . . . is that the sovereign power

                                32
. . . remains intact."   Merrion v. Jicarilla Apache Tribe, 

, 149 n.14 (1982).


     There is no ground for divestiture of inherent tribal
sovereignty in the present case. No specific treaty provision or
federal statute has been shown to affirmatively limit the power of
the tribal courts of the Three Affiliated Tribes over civil actions
that arise on the reservation, and the exercise of tribal civil
jurisdiction over a tort action arising on the reservation between
non-members does not implicate foreign relations, alienation of
land, or the criminal prosecution of non-Indians.


STATUS OF LANDS AT ISSUE


     First, Montana v. United States, 

(1981), Brendale
v. Confederated Tribes & Bands of the Yakima Indian Nation, 

(1989) (Brendale), and South Dakota v. Bourland, 113 S.
Ct. 2309 (1993) (Bourland), are not controlling.       Montana and
Brendale involved attempts by the tribes to regulate the activities
of non-members on fee land, that is, land owned by non-members
within the reservation; Bourland involved lands taken by the
federal government for the construction of a dam and reservoir.
The distinction between land conveyed in fee to non-Indians
pursuant to the Indian General Allotment Act of 1887, 24 Stat. 388,
which was intended to eliminate the reservations and assimilate the
Indian peoples, or, in Bourland, land taken by the federal
government, and land owned by the tribe or trust land held by the
federal government in trust for the tribe or individual members of
the tribe, is fundamental to the analysis in Montana, Brendale and
Bourland. The present case does not involve fee land or land taken
by the federal government for public use. For that reason, I would
apply Montana, and its exceptions, only to fee lands owned by
non-tribal members.




                                 33
     A close reading of Justice Stewart’s opinion for the Court in
Montana demonstrates the importance of geographical or territorial
status of the land at issue to tribal sovereignty analysis. The
Court’s analysis differentiated between fee lands and lands owned
by the tribe or held in trust for the tribe.        The competing
regulatory authorities were the tribe and the state, each of which
asserted the authority to regulate hunting and fishing by
non-members within the reservation. The Court framed the issue in
terms of "the sources and scope of the power of an Indian tribe to
regulate hunting and fishing by non-Indians on lands within its
reservation owned in fee simple by 

(emphasis added), 557. The Supreme Court held that the tribe could
prohibit non-members from hunting or fishing on land owned by the
tribe or trust land, 

and, if the tribe permitted
non-members to fish or hunt on such lands, could condition their
entry by charging a fee or establishing bag and creel limits. 

Court held inherent tribal sovereignty over the
reservation did not extend to tribal regulation of non-Indian
fishing and hunting on reservation land owned in fee by
non-members.   

-65.    The Court admitted that "Indian
tribes retain inherent sovereign power to exercise some forms of
civil jurisdiction over non-Indians on their reservations, even on
non-Indian fee lands." 

(emphasis added). The first
Montana exception recognizes tribal regulatory authority over
non-members who enter consensual relationships with the tribe or
its members.     

Montana exception expressly
recognizes a tribe’s "inherent power to exercise over the conduct
of non-Indians on fee lands within its reservation when that
conduct threatens or has some direct effect on the political
integrity, the economic security, or the health or welfare of the
tribe." 

If inherent tribal sovereignty can
include civil jurisdiction over non-Indians on fee lands within the
reservation, it should include civil jurisdiction over non-Indians
on tribal land or trust land within the reservation.       This is


                                34
because tribal civil jurisdiction is more restricted on fee land
than on tribal or trust land.


     Brendale also involved fee lands within the reservation; the
competing regulatory authorities were once again the tribe and the
state (or, more precisely, one county). The issue presented was
the scope of the second Montana exception, that is, "whether, and
to what extent, the tribe has a protectible interest in what
activities are taking place on fee land within the reservation and,
if it has such an interest, how it may be 

(emphasis added). The tribal zoning ordinance applied to all
lands located within the reservation, part of which was located in
Yakima County. The county zoning ordinance applied to all lands
located within the county, except for tribal trust lands. Most of
the reservation was tribal trust land, referred to as the "closed
area"; the rest was fee land located through out the reservation in
a checkerboard pattern but mostly in one part of the reservation,
referred to as the "open area."      The county had approved two
proposed developments, one in the open area and one in the closed
area, on fee lands owned by non-members of the tribe, that
conflicted with the tribal zoning ordinance. The tribe sued to
stop the proposed development and challenged the county’s zoning
authority over the reservation.


     The judgment of the Court was divided.       The Court, in an
opinion by Justice White, upheld application of the county zoning
ordinance to the fee land located within the open area, under both
the treaty language, 

and the Montana inherent tribal
sovereignty analysis. 

However, the Court, in an
opinion by Justice Stevens, upheld application of the tribal zoning
ordinance to the fee land located within the closed area. 

(differentiating between "essential character" of closed and
open areas and noting open area was at least half-owned by
non-members, had lost its character as an exclusive tribal
resource, and, as practical matter, had become integrated part of

                                35
county that is not economically or culturally delimited by
reservation boundaries).   Although the opinions reach different
decisions for different reasons, it is important to note that the
regulatory dispute involved the authority to control development of
fee lands and not land owned by the tribe or held in trust for the
tribe. Cf. United States ex rel. Morongo Band of Mission Indians
v. Rose, 

, 906 (9th Cir. 1994) (Montana exceptions are
"relevant only after the court concludes that there has been a
general divestiture of tribal authority over non-Indians by
alienation of the land"). Justice Blackmun would have upheld the
tribe’s exclusive authority to zone reservation land, including fee
lands, and thus concurred in part and dissented in part. 

     In Bourland the competing regulatory authorities were once
again the tribe and the state.      At issue were not fee lands,
however, but former trust and fee lands that had been taken by the
United States for construction of a dam and reservoir for flood
control. The taking authorization also "opened" the taken land for
recreational use, including hunting and fishing, by the public at
large. As in Montana, the tribe sought to regulate hunting and
fishing by non-members on the reservation, including the land taken
for the flood control project. The state filed suit to enjoin the
tribe from excluding non-Indians from hunting and fishing on the
taken lands within the reservation. The Court, in an opinion by
Justice Thomas, held that Congress, in enacting the flood control
legislation, had abrogated the tribe’s right under the relevant
treaty to exclude non-Indians from the taken 

. The Court also held that inherent tribal sovereignty did not
enable the tribe to regulate non-Indian hunting and fishing in the
taken area in the absence of any evidence in the relevant treaties
or statutes that Congress intended to allow the tribe to assert
such regulatory jurisdiction. 

The Court, however,
remanded the case for further consideration of whether the tribe
retained the inherent sovereignty to regulate non-Indian hunting

                                36
and fishing in the taken area under the two Montana exceptions.

Justice Blackmun dissented and would have held that
the tribe had the authority to regulate non-Indian hunting and
fishing in the taken area because the relevant statutes did not
affirmatively abrogate either the tribe’s treaty rights or inherent
tribal sovereignty. 

EXHAUSTION OF TRIBAL REMEDIES


     Next, National Farmers Union Insurance Cos. v. Crow Tribe, 

(1985) (National Farmers Union), and Iowa Mutual do not
establish only a rule of exhaustion requiring tribal courts to
determine their jurisdiction in the first instance. The rule of
exhaustion established in National Farmers Union is premised upon
the Court’s decision that tribal civil jurisdiction over
non-Indians is not automatically foreclosed by Oliphant v.
Suquamish Indian Tribe, 

(1978) (holding federal
legislation conferring jurisdiction on federal courts to try
non-Indians for offenses committed in Indian country had implicitly
pre-empted tribal criminal jurisdiction over non-Indians).
National Farmers Union recognized that an exhaustion requirement
would have been superfluous if there were no possibility of tribal
civil jurisdiction over 

(because if
Oliphant applied, federal courts would always be the only forums
for civil actions against non-Indians).     National Farmers Union
thus did not foreclose tribal court jurisdiction over a civil
dispute involving a non-Indian defendant.      

(school
district defendant). Iowa Mutual not only reaffirmed the rule of
exhaustion established in National Farmers Union but also expressly
stated that "[t]ribal authority over the activities of non-Indians
on reservation lands is an important part of tribal sovereignty"
and that "[c]ivil jurisdiction over such activities presumptively
lies in the tribal courts unless affirmatively limited by a
specific treaty provision or federal 

; see

n.5 (Blackmun, J., concurring in part

                                37
and dissenting in part). This is an affirmative recognition that
tribal court civil jurisdiction over reservation-based tort actions
against non-Indians is part of inherent tribal sovereignty.
Otherwise, there would be no point in requiring exhaustion of
tribal remedies to permit the tribal courts to evaluate the factual
and legal bases of any challenges to their jurisdiction because the
tribal courts would never have jurisdiction.


HANDBOOK OF FEDERAL INDIAN LAW


     The landmark treatise does not definitively resolve this
issue. As noted by the majority opinion, Felix S. Cohen’s Handbook
of Federal Indian Law 342-43 (1982 ed.) does state that "[t]ribal
courts probably lack jurisdiction over civil cases involving only
non-Indians in most situations, since it would be difficult to
establish any direct impact on Indians or their property."
However, another section of the Handbook supports tribal civil
jurisdiction over non-Indians:


     Indian tribes retain civil regulatory and judicial
     jurisdiction over non-Indians.  The extent of tribal
     civil jurisdiction over non-Indians, however, is not
     fully determined.

          Analysis of the actions of each of the three federal
     branches demonstrates that civil jurisdiction over
     non-Indians has not been withdrawn and that the exercise
     of such jurisdiction is consistent with the tribes’
     dependent status under federal law. . . . In the civil
     field [contrary to the rule in criminal matters],
     Congress has never enacted general legislation to supply
     a federal or state forum for disputes between Indians and
     non-Indians in Indian country.     Furthermore, although
     treaties between the federal government and Indian tribes
     sometimes required tribes to surrender non-Indian
     criminal offenders to state or federal authorities,
     Indian treaties did not contain provision for tribal
     relinquishment of civil jurisdiction over non-Indians.
     Congress’ failure to regulate civil jurisdiction in
     Indian country suggests both that there was no
     jurisdictional vacuum to fill and that Congress was less
     concerned with tribal civil, non-penal jurisdiction over

                                 38
     non-Indians than with tribal jurisdiction      over   the
     personal liberty of non-Indians.

          The executive branch of the federal government has
     long acted on the assumption that Indian tribes may
     subject non-Indians to civil jurisdiction. Although the
     Attorney General and the Solicitor of the Department of
     the Interior have opined since 1834 that Indian tribes
     lack criminal jurisdiction over non-Indians, several
     opinions have upheld tribal civil jurisdiction. The
     Attorney General sustained tribal civil jurisdiction in
     1855. A comprehensive 1934 Opinion of the Solicitor of
     the Department of the Interior concluded that "over all
     the lands of the reservation, whether owned by the tribe,
     by members thereof, or by outsiders, the tribe has the
     sovereign power of determining the conditions upon which
     persons shall be permitted to enter its domain, to reside
     therein, and to do business." . . .

          . . . .

          The breadth of [the tribes’] retained power over
     non-Indians in civil matters has not been finally
     resolved. . . .

          . . . .

          A tribe presumptively has an interest in activities
     on lands belonging to the tribe or its members, so tribal
     control over Indian trust land can be the basis for
     extensive tribal jurisdiction over non-Indians in civil
     matters.     Regardless    of  land   ownership,   tribal
     jurisdiction within reservations can also be based on
     transactions between non-Indians and Indians or tribes or
     on non-Indian activities that directly affect Indians or
     their property.

(footnotes omitted). Neither excerpt definitively
resolves the issue of tribal court jurisdiction over a civil suit
brought against a non-Indian arising from a tort occurring on the
reservation.


STATE COURT JURISDICTION


     The possibility of state court jurisdiction does not preclude
tribal court jurisdiction. See Hinshaw v. 

                                39
(concurrent state and tribal jurisdiction over certain civil
matters occurring on Flathead Reservation, including operation of
motor vehicles on public roads), citing Larivee v. Morigeau, 

, 

, 566-71 (1979) (same), cert. denied, 

(1980). However, tribal court jurisdiction may preclude
state court jurisdiction, particularly where the tribe has
established tribal courts and adopted a tribal code which provides
for personal jurisdiction over non-Indians, subject matter
jurisdiction over torts arising on the reservation, and application
of tribal law. This is particularly true if one views the issue in
terms of a state’s attempt to assert its civil authority over the
conduct of non-Indians on the reservation, which is usually denied,
see, e.g., Williams v. Lee, 

, as opposed to a tribe’s
attempt to assert its civil authority over the conduct of
non-Indians on the reservation, which is usually upheld.       See,
e.g., City of Timber Lake v. Cheyenne River Sioux Tribe, 

, 558 (8th Cir. 1993) (reserving inherent tribal soverignty
issue), cert. denied, 

(1994). For example, in the
landmark case of Williams v. Lee the Court held that the state
court did not have jurisdiction over an action brought by a
non-Indian who operated a general store on a reservation to recover
money for goods sold to Indians because "the exercise of state
jurisdiction [under the circumstances] would undermine the
authority of the tribal courts over Reservation affairs and hence
would infringe on the right of the Indians to govern 

; cf. Cowan v. Rosebud Sioux Tribe, 

, 1341 (D.S.D. 1975) (upholding tribal court jurisdiction over
tribe’s suit against non-Indian lessee of tribal land).


TRIBAL SELF-GOVERNMENT


     Finally, even assuming for purposes of analysis that Montana
is not limited to disputes involving fee lands, a "consensual
relationship" existed between A-1 and Stockert and the tribe by
virtue of the subcontract within the meaning of the first Montana

                                40
exception. In addition, the allegedly tortious conduct of A-1 and
Stockert occurred on a state highway right-of-way on the
reservation. This conduct by non-Indians within the reservation
threatened the tribe’s interest in the safe operation of motor
vehicles on the roads and highways on the reservation. See Hinshaw
v. 

; cf. Sage v. Lodge Grass School District
No. 27, 13 Indian L. Rep. 6035, 6039 (Crow Ct. App. 1986) (remand
following National Farmers Union; student hit by motorcycle on
school parking lot; tribe has legitimate interest in protecting
health and safety of school children attending school within
reservation). The tribe also has an interest in affording those
who have been injured on the reservation with a judicial forum.
This interest is admittedly abstract compared to the safe operation
of motor vehicles.     However, disregarding the jurisdiction of
tribal courts, which play a vital role in tribal self-government,
undermines their authority over reservation affairs and to that
extent imperils the political integrity of the tribe.


     For these reasons, I would affirm the order of the district
court holding the tribal court has subject matter jurisdiction over
this reservation-based tort action between non-tribal members.


     A true copy.


          Attest:


                    CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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