Bethel Native v. Dept. of the Interior

• Decision Date: 08 December 1998
• Docket Number: No. 98-3531,98-3531
• Citation: 208 F.3d 1171
• Parties: (9th Cir. 2000) BETHEL NATIVE CORP., an Alaska Native Village Corp.,Plaintiff, v. DEPARTMENT OF THE INTERIOR; BRUCE BABBITT, Secretary of the Interior; BUREAU OF INDIAN AFFAIRS; NILES CESAR, Regional Administrator of the Bureau of Indian Affairs; ADA DEER, Assistant Secretary of the Interior for Indian Affairs, Defendants, v. UNITED STATES OF AMERICA, Defendant-Third-Party-Plaintiff-Appellee, v. STATE OF ALASKA,Third-Party-Defendant-Appellant,and CITY OF BETHEL; SOUTHWEST FUELS,INC.; MICHAEL S. SHANTZ; BEN DALE, Third-Party-Defendants. Submission Deferred
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1171

208 F.3d 1171 (9th Cir. 2000)

BETHEL NATIVE CORP., an Alaska Native Village Corp.,Plaintiff, v. DEPARTMENT OF THE INTERIOR; BRUCE BABBITT, Secretary of the Interior; BUREAU OF INDIAN AFFAIRS; NILES CESAR, Regional Administrator of the Bureau of Indian Affairs; ADA DEER, Assistant Secretary of the Interior for Indian Affairs, Defendants, v. UNITED STATES OF AMERICA, Defendant-Third-Party-Plaintiff-Appellee, v. STATE OF ALASKA,Third-Party-Defendant-Appellant,and CITY OF BETHEL; SOUTHWEST FUELS,INC.; MICHAEL S. SHANTZ; BEN DALE, Third-Party-Defendants.

No. 98-3531

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Submission Deferred December 8, 1998

Resubmitted March 20, 2000¹

Filed April 6, 2000

COUNSEL: James E. Cantor, Assistant Attorney General, Department of Law, Anchorage, Alaska, for the third-party defendant appellant.

Kathleen Moriarty Mueller and Robert M. Loeb, United States Department of Justice, Washington, D.C., for the defendant-third-party plaintiff-appellee.

Appeal from the United States District Courtfor the District of Alaska; James K. Singleton, Jr., Chief District Judge, Presiding. D.C.No. CV-96-00461-JKS

Before: Thomas M. Reavley,² Susan P. Graber, and M. Margaret McKeown, Circuit Judges.

GRABER, Circuit Judge:

We are called upon to decide whether the Eleventh Amendment bars the United States from asserting a third-party claim for equitable apportionment of tort liability against a state, when the plaintiff filed an original action in federal court against the United States under the Federal Tort Claims Act (FTCA). We conclude that Eleventh Amendment immunity does not extend to third-party claims brought by the United States against a state in this circumstance.

FACTUAL AND PROCEDURAL BACKGROUND

In August 1992, the United States General Services Administration (GSA) and the Alaska State Agency for Surplus Property (ASASP) executed a GSA Standard Form 123, under which the United States donated 375,000 gallons of diesel fuel to the State of Alaska (State). ASASP, in turn, sold the fuel to the City of Bethel (City) for 10 cents per gallon. The City agreed to remove the fuel from its storage location, which was the Bethel Administrative Site operated by the United States Bureau of Indian Affairs.

From the end of August 1992 through April 1993, the City and its contractors periodically removed fuel from the Bethel Administrative Site. On or about April 15, 1993, it was discovered that a joint in the pipe connecting the fuel storage tank to the pump had cracked and that about 110,000 gallons of fuel had leaked onto the Bethel Administrative Site and onto surrounding property. The surrounding property included about 26 acres that Plaintiff, Bethel Native Corporation, owned.

On November 27, 1996, Plaintiff filed an FTCA action in federal district court against the United States, seeking $52.5 million in damages caused by the leaking fuel. The district court granted the United States leave to file a third-party complaint against the State, the City, and the City's contractors. The United States alleged that the contractors' negligence had caused the leak and, therefore, that the United States was not liable for Plaintiff's injury. The third-party complaint asserted three claims, only one of which is at issue on appeal: a claim for equitable apportionment of tort liability pursuant to Alaska Stat. S 09.17.080 (1996).³ The State moved to dismiss that claim on the basis of Eleventh Amendment immunity. The district court denied the State's motion and its later-filed motion for reconsideration. The State appealed.

STANDARD OF REVIEW

"Whether a state is immune from suit under the Eleventh Amendment is a question of law and is reviewed de novo." Micomonaco v. Washington, 45 F.3d 316, 319 (9th Cir. 1995).

ELEVENTH AMENDMENT IMMUNITY

A. General Principles Applicable to Actions against a State by the United States.

The Eleventh Amendment provides that "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U.S. Const. amend. XI. Under that amendment, generally, "an unconsenting State is immune from suits brought in federal courts by her own citizens[,] . . . by citizens of another State," Edelman v. Jordan, 415 U.S. 651, 663 (1974), by foreign countries, see Principality of Monaco v. Mississippi, 292 U.S. 313 (1934), and by Indian tribes or their members, see Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261 (1997).

Eleventh Amendment immunity does not, however, extend to actions brought by the United States in federal courts. The words of the amendment do not encompass actions commenced or prosecuted by the United States. The Supreme Court of the United States recently made this principle clear. In Alden v. Maine, 119 S. Ct. 2240, 2268 (1999), the Court held that state employees could not sue the State of Maine for overtime pay under the Fair Labor Standards Act. The Court reasoned that Congress, using the Necessary and Proper Clause or its enumerated powers, could not abrogate the State's immunity from suit by a private party. Id. at 2256. The Court also ruled that this immunity from suit by a private party applied in state, as well as in federal, court. Id. at 2266. At the end of its opinion, however, the Court explained that the State's Eleventh Amendment immunity would not bar an action by the United States for recovery of overtime pay owed to the state's employee. Id. at 2269.

The difference between a suit by the United States on behalf of the employees and suit by the employees implicates a rule that the National Government must itself deem the case of sufficient importance to take action against the State; and history, precedent, and the structure of the Constitution make clear that, under the plan of the Convention, the States have consented to suits of the first kind but not of the second.

Id.; see also United States v. California, 655 F.2d 914, 918 (9th Cir. 1980) ("The federal government . . . may sue a state in federal court under any valid cause of action, state or federal, even if the state attempts to limit the cause of action to suits in state courts only.")

The State concedes that the Eleventh Amendment does not generally bar actions by the United States against a state in federal court. Instead, the State contends that the circumstances of this case demand a departure from the general rule. The State's argument hinges on nuances of Alaska law, to which we now turn.

B. The Operation of Alaska Statute S 09.17.080 (1996).

Because Plaintiff's underlying claim accrued before August 7, 1997, the former version of section 09.17.080 applies. The relevant version of that statute provided:

(a) In all actions involving fault of more than one party to the action, including third-party defendants and persons who have been released under AS 09.16.040, the court, unless otherwise agreed by all parties, shall instruct the jury to answer special interrogatories or, if there is no jury, shall make findings, indicating

(1) the amount of damages each claimant would be entitled to recover if contributory fault is disregarded; and

(2) the percentage of the total fault of all of the parties to each claim that is allocated to each claimant, defendant, third-party defendant, and person who has been released from liability under AS 09.16.040.

(b) In determining the percentages of fault, the trier of fact shall consider both the nature of the conduct of each party at fault, and the extent of the causal relation between the conduct and the damages claimed. The trier of fact may determine that two or more persons are to be treated as a single party if their conduct was a cause of the damages claimed and the separate act or omission of each person cannot be distinguished.

(c) The court shall determine the award of damages to each claimant in accordance with the findings, subject to a reduction under AS 09.16.040, and enter judgment against each party liable. The court also shall determine and state in the judgment each party's equitable share of the obligation to each claimant in accordance with the respective percentages of fault.

(d) The court shall enter judgment against each party liable on the basis of several liability in accordance with that party's percentage of fault.

The foregoing statute effected a two-fold change in Alaska law. First, it replaced the old system of "modified joint and several liability" with a system of "pure several liability"; and, second, it eliminated the right of contribution between joint tortfeasors. Robinson v. U-Haul Co., 785 F. Supp. 1378, 1380-81 & n.2, 1383 (D. Alaska 1992). Under the new system of tort liability, the finder of fact had to determine, initially, the "total fault of all of the parties to each claim." Alaska Stat. S 09.17.080(a)(2) (1996). The fault was then "allocated to each claimant, defendant, third-party defendant, and person who has been released from liability." Id. The fault attributable to a non-party is not considered in the statutorily required allocation. See Benner v. Wichman, 874 P.2d 949, 957-58 (Alaska 1994). Finally, the court entered "judgment against each party liable on the basis of several liability in accordance with that party's percentage of fault." Alaska Stat. S 09.17.080(d) (1996).

The Alaska Supreme Court has interpreted section 09.17.080 to allow a named defendant to bring a third party into an action by asserting a claim for equitable apportionment of fault. See Benner, 874 P.2d at 956-97 ("In the absence of contribution, we hold that equitable apportionment is available as a means of bringing other tortfeasors into the action.") That claim is distinct, however, from other kinds of third-party claims, such as contribution or indemnity. Those other kinds of claims vest in the defendant/third-party plainti...