Grand Canyon Skywalk Dev. v. 'Sa' Nyu Wa Inc., No. 12-15634 (9th Cir. 2013)
Annotate this CaseThis dispute involved a revenue-sharing agreement between GCSD and SNW to build the Skywalk over the Grand Canyon on remote tribal land. GCSD filed suit against SNW seeking declaratory judgment that the Hualapai Tribe lacked the authority to condemn its intangible property rights and injunctive relief. After multiple hearings, the district court denied GCSD's temporary restraining order to enjoin SNW based on the principles of comity and ordered GCSD to exhaust tribal court remedies prior to review in federal court. The court affirmed and held that where, as here, a tribal court has asserted jurisdiction and was entertaining a suit, the tribal court must have acted in bad faith for exhaustion to be excused. The facts of this case did not support a finding of bad faith on the part of the tribal court. The submitted evidence supported the district court's finding that the tribal court operated independently from the tribal council and the evidence presented did not meet the narrow futility exception. The tribal court did not plainly lack jurisdiction because Montana v. United States's main rule was unlikely to apply to the facts of this case. Furthermore, the district court correctly relied on Water Wheel Camp Recreation Area, Inc. v. LaRance, which provided for tribal jurisdiction without even reaching the application of Montana. Even if the tribal consensual relationship with SNW or the financial implications of the agreement likely placed it squarely within one of Montana's exceptions and allowed for tribal jurisdiction.
Court Description: Tribal Court Jurisdiction. Affirming the district court’s judgment in an action concerning a dispute over a revenue-sharing contract between a Nevada corporation and a tribally chartered corporation of the Hualapai Indian Tribe for the building and operation of the Grand Canyon Skywalk, the panel held that the Nevada corporation must exhaust tribal court remedies before proceeding in federal court on its claims challenging the Tribe’s authority to condemn its intangible property rights in the contract. The panel concluded that the bad faith and futility exceptions to the exhaustion requirement did not apply. It held that where a tribal court has asserted jurisdiction and is entertaining a suit, the tribal court must have acted in bad faith for exhaustion to be excused; bad faith by a litigant instituting the tribal court action will not suffice. The panel held that the submitted evidence did not establish that the tribal court operated in bad faith or was controlled by the tribal council in its decision making. The panel also affirmed the district court’s conclusion that the evidence did not meet the narrow futility exception, which applies where exhaustion would be futile because of the lack of adequate opportunity to challenge the tribal court’s jurisdiction. The panel held inapplicable the exhaustion exception for cases in which the tribal court plainly lacks jurisdiction. The panel stated that the main rule of Montana v. United States, 450 U.S. 544 (1981), that generally Indian tribes lack civil authority over the conduct of nonmembers on non-Indian land within a reservation, was unlikely to apply to the facts of this case. The panel held that the district court correctly relied upon Water Wheel Camp Recreation Area, Inc. v. LaRance, 642 F.3d 802 (9th Cir. 2011), which recognizes that a tribe’s inherent authority over tribal land may provide for regulatory authority over non-Indians on that land without the need to consider Montana. Moreover, even if the tribal court were to apply Montana’s main rule, the Nevada corporation’s consensual relationship with the tribal corporation, or the financial implications of their agreement, likely would place the case squarely within one of Montana’s exceptions and allow for tribal jurisdiction.
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