Pratt Manufacturing Co., Inc. v. & Joe Leaphorn & Navajo Supreme Court (updated)

To avoid confusion, note well who is plaintiff and who is defendant for this problem. The original case took place in tribal court (plaintiff Joe Leaphorn v. defendant Pratt Manufacturing). But the case we are dealing with is a subsequent lawsuit brought by plaintiff Pratt against defendants Joe Leaphorn and the Navajo Supreme Court). Lawyers representing the "plaintiff" in this problem work for Pratt Manufacturing and lawyers representing the "defendants" represent Joe Leaphorn and the Navajo Supreme Court.


Joe Leaphorn is a citizen of the Navajo Nation. He lives on the reservation on land owned by the Navajo Nation and works in a textile factory located within the borders of the Navajo Reservation that is located on land held in fee simple by a business corporation called Pratt Manufacturing Co. Inc. (Pratt). The corporation is not a tribal corporation but is incorporated under the laws of the state of New Mexico. Its majority shareholder is Colonel Henry Pratt who owns 57 percent of the shares. Pratt has entered an agreement with the Navajo Nation to hire at least 50 percent of its employees from the tribe unless not enough tribal members are interested in the jobs.

On May 1, 2001, Leaphorn was injured on the job while operating a large sewing machine. His right arm was severely injured and he is now unable to work. Because he is right handed he has had a hard time finding other work he can do. He no longer is earning a living and has been supported by his family and the Navajo Nation.

Leaphorn sued Pratt in the Navajo Tribal Court for damages, claiming that the machine he was using was poorly maintained and that Pratt was negligent and that its negligence proximately caused his injuries. Pratt defends by arguing that it pays workers compensation to the New Mexico Workers Compensation office and that under the New Mexico workers compensation statute it is immune from tort liability to employees for injuries that occur on the job. Under Navajo law, Leaphorn is entitled to bring the tort claim to recover damages above what he would receive in workers compensation if he can show that the employer was grossly negligent. The Navajo Trial Court rules in favor of Leaphorn, allowing a trial to proceed on the claim of gross negligence. Pratt appeals that ruling to the Navajo Supreme Court. That court affirms the ruling and remands the case to the trial court to allow Leaphorn to prove that Pratt was grossly negligent.

Pratt sues both Leaphorn and the Navajo Supreme Court in federal District Court in New Mexico, arguing that the Navajo courts do not have subject matter jurisdiction over the case under the rulings of Montana v. United States, 450 U.S. 544 (1981), Strate v. A-1 Contractors, 520 U.S. 438 (1997), and Atkinson Trading Co. v. Shirley, 532 U.S. 645 (2001). Leaphorn and the Navajo Supreme Court argue that those cases are distinguishable and that the Navajo courts do have jurisdiction to apply Navajo tort law to Pratt's negligent harm of a Navajo tribal member within reservation borders.

The District Court must decide two questions:


1. Does the Navajo Nation have legislative and adjudicative jurisdiction over the controversy because of the consensual relationship between the Navajo Nation and Pratt and/or because of the employment contract between Leaphorn and Pratt?

2. Does the Navajo Nation have legislative and adjudicative jurisdiction over the tort claim brought by Leaphorn against Pratt pursuant to the second Montana exception because defendant Pratt's conduct threatens or had a direct effect upon the political integrity, the economic security or the health or welfare of the tribe?


π = Pratt Manufacturing

∆ = Joe Leaphorn & Navajo Supreme Court