                                                                              FILED
                           NOT FOR PUBLICATION                                APR 20 2012

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


RINCON MUSHROOM CORPORATION                      No. 10-56521
OF AMERICA, a California corporation,
                                                 D.C. No. 3:09-cv-02330-WQH-
              Plaintiff - Appellant,             POR

  v.
                                                 MEMORANDUM*
BO MAZZETTI; JOHN CURRIER;
VERNON WRIGHT; GILBERT
PARADA; STEPHANIE SPENCER;
CHARLIE KOLB; DICK
WATENPAUGH,

              Defendants - Appellees.


                   Appeal from the United States District Court
                     for the Southern District of California
                   William Q. Hayes, District Judge, Presiding

                       Argued and Submitted April 12, 2012
                              Pasadena, California




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: SILVERMAN and RAWLINSON, Circuit Judges, and TUNHEIM,
District Judge.**

      Appellant Rincon Mushroom Corporation of America (RMCA) challenges

the district court’s dismissal of RMCA’s Complaint for failure to exhaust tribal

remedies. RMCA argues that exhaustion is not required in this case because the

tribal court plainly lacks jurisdiction. We agree, and reverse the district court.

      In this case, exhaustion is not required because “it is ‘plain’ that tribal court

jurisdiction is lacking, so that the exhaustion requirement ‘would serve no purpose

other than delay.’” Elliott v. White Mountain Apache Tribal Court, 566 F.3d 842,

847 (9th Cir. 2009) (quoting Nevada v. Hicks, 533 U.S. 353, 369 (2001)). A tribal

court plainly lacks jurisdiction where the basis of jurisdiction is not “colorable” or

“plausible.” Id. at 848 (citation omitted).

      “As a general rule, . . . the tribe has no authority itself, by way of tribal

ordinance or actions in the tribal courts, to regulate the use of fee land.” Plains

Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 329 (2008)

(citation and internal quotation marks omitted). In this case, it is Montana’s

second exception to this general rule that is at issue. See Montana v. United States,

450 U.S. 544, 566 (1981). Under Montana’s second exception, “a tribe may


       **
             The Honorable John R. Tunheim, United States District Judge for the
District of Minnesota, sitting by designation.
                                           2
exercise ‘civil authority over the conduct of non-Indians on fee lands within the

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. . . .’” Plains

Commerce, 554 U.S. at 329-30 (quoting Montana, 450 U.S. at 566). In evaluating

whether this case plainly falls outside of the scope of Montana’s second exception,

we must keep in mind that “[t]hese exceptions are limited ones, and cannot be

construed in a manner that would swallow the rule, or severely shrink it . . .” Id. at

330 (citations and internal quotation marks omitted).

      The Tribe argues that the non-member fee land at issue could potentially

contaminate the Tribe’s water supply, or exacerbate a future fire that might damage

the Rincon Casino. However, these possibilities do not fall within Montana’s

second exception, which requires actual actions that have significantly impacted

the tribe. Compare id. at 341 (“The sale of formerly Indian-owned fee land to a

third party . . . cannot fairly be called ‘catastrophic’ for tribal self-government. . .

.”) (citation omitted); and Strate v. A-1 Contractors, 520 U.S. 438, 458-59 (1997)

(ruling that tribal court jurisdiction over tort suits is not “needed to preserve the

right of reservation Indians to make their own laws and be ruled by them”)

(citation and internal quotation marks omitted), with Elliott, 566 F.3d at 844, 849-




                                            3
50 (holding that the tribal court had colorable jurisdiction where a non-Indian

started a forest fire on reservation land).

      To hold that the potential threats of harm presented on this record1 give rise

to tribal jurisdiction under Montana’s second exception would allow the exception

to swallow the rule; any property within the Rincon Reservation faces similar

potential threats. See Plains Commerce, 554 U.S. at 330. Because the potential

threats did not create a plausible basis for tribal court jurisdiction, the district court

erred when it dismissed RMCA’s Complaint for failure to exhaust tribal remedies.

See Elliott, 566 F.3d at 848.2

      REVERSED and REMANDED.




      1
        At oral argument, counsel for the Tribe urged us to send this case to the
tribal court to afford the Tribe an opportunity to produce additional evidence in
support of tribal jurisdiction. However, the Tribe had the burden to show tribal
jurisdiction in the district court proceedings. See Plains Commerce, 554 U.S. at
330 (“The burden rests on the tribe to establish one of the exceptions to Montana’s
general rule that would allow an extension of tribal authority to regulate
nonmembers on non-Indian fee land. . . .”) (citation omitted).
      2
        Our ruling here renders moot the district court’s decision to dismiss the case
rather than staying it.
                                              4
