Bales v. Chickasaw Nation Industries

• Decision Date: 19 March 2009
• Docket Number: Civ. No. 07-1024 JP/RLP.
• Citation: Bales v. Chickasaw Nation Industries, 606 F.Supp.2d 1299 (D. N.M. 2009)
• Parties: David BALES, Plaintiff, v. CHICKASAW NATION INDUSTRIES, Defendant.
• Court: U.S. District Court — District of New Mexico

Page 1299

606 F.Supp.2d 1299

David BALES, Plaintiff, v. CHICKASAW NATION INDUSTRIES, Defendant.

Civ. No. 07-1024 JP/RLP.

United States District Court, D. New Mexico.

March 19, 2009.

Jeffrey A. Dahl, Keleher & McLeod, P.A., Albuquerque, NM, for Plaintiff.

Daniel I.S.J. Rey-Bear, Jennifer J. Dumas, Nordhaus Law Firm LLP, Albuquerque, NM, for Defendant.

MEMORANDUM OPINION AND ORDER

JAMES A. PARKER, Senior District Judge.

On March 31, 2008, Defendant filed Defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction (Doc. No. 9) based on tribal sovereign immunity. On June 13, 2008, the Court informed the parties by letter that on March 19, 2008 the Tenth Circuit heard oral argument in Native American Distributing, et al. v. Seneca-Cayuga Tobacco Company, et al., 546 F.3d 1288 (10th Cir.2008)(hereinafter referred to as NAD), a case discussing tribal sovereign immunity with respect to an Oklahoma tribal corporation. The Court also gave the parties an opportunity to supplement their briefs to address the significance of the Tenth Circuit's decision in NAD.¹ The parties, in fact, filed supplemental briefs. See Doc. Nos. 24, 25, and 26. Having considered the briefs (including the supplemental briefs) and the relevant law, the Court concludes that the motion to dismiss should be granted and that this lawsuit should be dismissed for lack of subject matter jurisdiction.

A. Background

The Plaintiff, a non-Native American, brings this employment discrimination lawsuit against Defendant, a corporation wholly owned by the Chickasaw Nation of Oklahoma doing business in New Mexico. Plaintiff asserts claims under Title VII of the Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act (ADEA); and New Mexico common law. See Complaint for Damages From Race Discrimination, Age Discrimination, Sex, Discrimination, Breaches of an Implied Contract of Employment and Constructive Discharge (Doc. No. 1) at ¶ 1, filed Oct. 9, 2007; Plaintiffs Response to Defendant's Motion to Dismiss For Lack of Subject Matter Jurisdiction (Doc. No. 15) at 1, filed May 1, 2008.

Defendant was federally chartered as a Chickasaw Nation tribal corporation under 25 U.S.C. § 503, a provision of the Oklahoma Indian Welfare Act (OIWA) permitting Native American tribes or bands in the state of Oklahoma to request from the Secretary of the Interior a charter of incorporation. See Certificate of Good Standing and Compliance for Federally Chartered Tribal Corporation, Defendant's Ex. 1 (attached to Defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction).² Section 503 allows a charter of incorporation to convey to the tribal corporation the right "to enjoy any other rights or privileges secured to an organized Indian tribe under the Act of June 18, 1934 (48 Sta. 984)[25 U.S.C. § 461, et seq.]...." Native American tribes from other states can likewise petition the Secretary of Interior to issue a charter of incorporation under 25 U.S.C. § 477.

The purpose of the Defendant is to engage in activities "for which corporations maybe organized under the Oklahoma Indian Welfare Act; ... [t]o promote the economic development of the Chickasaw Nation; and ... [t]o enable the development of tribal resources for the benefit of the Chickasaw Nation." Art. II of the Charter of Incorporation, Defendant's Ex. 1. See also Art. V, ¶ 5.01 of the Charter of Incorporation ("This Corporation is wholly owned by the Chickasaw Nation for the benefit of the Chickasaw Nation and its citizens and this ownership shall be inalienable."), Defendant's Ex. 1. Article I, ¶ 1.03 of Defendant's Charter of Incorporation also states that

[t]his Corporation is a distinct legal entity pursuant to 25 U.S.C., Section 503 wholly owned by the Chickasaw Nation and its corporate activities, transactions, obligations, liabilities and property are not those of the Chickasaw Nation. Nothing in this charter shall be deemed to have waived or to permit the Corporation to waive the sovereign immunity from suit ....

Defendant's Ex. 1 (emphasis added). Article III, ¶ 3.02 of the Charter of Incorporation further addresses tribal sovereign immunity by stating that Defendant is empowered:

To sue in its corporate name and, notwithstanding the immunity possessed by the Corporation as a wholly owned corporation of the Chickasaw Nation, to permit by written resolution of the board of directors enforcement of leases, contracts, agreements and mortgage instruments to which the Corporation is a party, against the Corporation in tribal court, or any court of competent jurisdiction by agreement of the board of directors; provided, however, that this limited waiver of sovereign immunity does not authorize the levy of any judgment, lien, garnishment or attachment upon any property or income of the Corporation, the Chickasaw Nation, or any agency thereto, other than property or income of the Corporation specifically and in writing duly mortgaged, pledged or assigned as collateral for the debts or liabilities of the Corporation related to the lease, contract, agreement or mortgage instrument to be enforced. The authority provided herein is not intended to nor shall it be construed to waive the immunity of the Corporation, the Chickasaw Nation, or any agency thereof for any other purpose with respect to any claim or other matter not specifically mentioned herein, and is not intended to, nor shall it extend to the benefit of, any person other than the parties to such leases, contracts, agreements or mortgage instruments or their successors or assigns.

Defendant's Ex. 1 (emphasis added).

B. Discussion

Defendant argues that tribal sovereign immunity bars this lawsuit because Defendant, a § 503 corporation, is wholly owned by a federally recognized tribe. Defendant also argues that tribal sovereign immunity over the Title VII and ADEA claims has not been unequivocally waived by the Chickasaw Nation and Congress has not unequivocally abrogated tribal sovereign immunity with respect to those statutory claims. The party who seeks to invoke federal jurisdiction, in this case the Plaintiff, bears the burden of establishing that federal jurisdiction is proper. United States v. Bustillos, 31 F.3d 931, 933 (10th Cir.1994). Tribal sovereign immunity is a matter of subject matter jurisdiction which can be challenged in a Fed.R.Civ.P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998); St. Stephen's Indian High School, 264 F.3d at 1302. Tribal sovereign immunity can be waived only if a tribe unequivocally waives its tribal sovereign immunity or Congress unequivocally abrogates tribal sovereign immunity. St. Stephen's Indian High School, 264 F.3d at 1304 (quoting Fletcher v. United States, 116 F.3d 1315, 1324 (10th Cir.1997)). Furthermore, the courts construe statutes liberally in favor of Native Americans. Montana v. Blackfeet Tribe, 471 U.S. 759, 766, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985).

1. Does Defendant Enjoy Tribal Sovereign Immunity Due to its Status as a § 503 Corporation Wholly Owned by the Chickasaw Nation?

a. Application of Tribal Sovereign Immunity when a Non-Tribal Plaintiff Brings Suit against a Tribal Commercial Enterprise Operating in the Open Market Outside of Tribal Lands

Defendant contends that it enjoys tribal sovereign immunity because it is a § 503 corporation wholly owned by a tribe. Plaintiff argues, however, that tribal sovereign immunity does not bar lawsuits brought by non-tribal plaintiffs against tribal commercial enterprises operating in the open market outside of tribal lands. To support this argument, Plaintiff cites to Donovan v. Coeur d'Alene Tribal Farm, 751 F.2d 1113 (9th Cir.1985); Chickasaw Nation v. United States, 1998 WL 975690 (E.D.Okla.1998); Myrick v. Devil's Lake Sioux Manufacturing Corp., 718 F.Supp. 753 (D.N.D.1989); and Roberson v. Confederated Tribes, 103 L.R.R.M. 2749 (D.Or. 1980). Additionally, Plaintiff cites to New Mexico case law.

The issue in Coeur d'Alene was whether the Occupational Safety and Health Act, a statute of general applicability silent as to its application to tribes, applied to the Coeur d'Alene tribal farm, a commercial enterprise wholly owned by the Coeur d'Alene Tribe, which sold produce on the open market outside of tribal lands and employed non-Native Americans. To address that issue, the Ninth Circuit applied the principle in Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99, 80 S.Ct. 543, 4 L.Ed.2d 584 (1960) which states that "general Acts of Congress apply to Indians as well as to all others in the absence of a clear expression to the contrary...." Id. at 120, 80 S.Ct. 543. The Ninth Circuit in Coeur d'Alene went on to hold that when a statute of general applicability is silent with respect to tribes, that statute will not apply to tribes if "(1) the law touches `exclusive rights of self-governance in purely intramural matters'; (2) the application of the law to the tribe would `abrogate rights guaranteed by Indian treaties'; or (3) there is proof `by legislative history or some other means that Congress intended [the law] not to apply to Indians on their reservations....' In any of these three situations, Congress must expressly apply a statute to Indians before [a court] will hold that it reaches them." Coeur d'Alene, 751 F.2d at 1116 (quoting United States v. Farris, 624 F.2d 890, 893-94 (9th Cir. 1980)). In Chickasaw Nation, the district court likewise applied the Tuscarora/Coeur d'Alene test to determine if the Internal Revenue Code, another statute of general applicability, should apply to tribes.

The issue of whether a statute of general applicability should apply to a tribe or tribal entity is distinct from the issue in this case, i.e., whether a tribal entity enjoys sovereign immunity from suit. The United States Supreme Court in Kiowa Tribe of Oklahoma v....