FMC v. Shoshone-Bannock Tribes, SHOSHONE-BANNOCK

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: Before FARRIS, PREGERSON and BOOCHEVER; FARRIS
• Citation: 905 F.2d 1311
• Parties: 53 Empl. Prac. Dec. P 40,020, 59 USLW 2020 FMC, Plaintiff-Appellee, v.TRIBES, et al., acting By and Through its Tero Commission aka The Shoshone-Bannock Tribes Tribal Employment Rights Commission and its individual Commissioners, Arnold Appenay, Al Timsanico, Marvin Osborne and R. Willis Dixey; Shoshone Bannock Tribal Court; Honorable Charles H. Lonah; Honorable Robert Gonzales, Defendants-Appellants.
• Decision Date: 18 June 1990
• Docket Number: No. 89-35349,SHOSHONE-BANNOCK

Page 1311

905 F.2d 1311 53 Empl. Prac. Dec. P 40,020, 59 USLW 2020 FMC, Plaintiff-Appellee,
v.
SHOSHONE-BANNOCK TRIBES, et al., acting By and Through its
Tero Commission aka The Shoshone-Bannock Tribes Tribal
Employment Rights Commission and its individual
Commissioners, Arnold Appenay, Al Timsanico, Marvin Osborne
and R. Willis Dixey; Shoshone Bannock Tribal Court;
Honorable Charles H. Lonah; Honorable Robert Gonzales,
Defendants-Appellants. No. 89-35349. United States Court of Appeals,
Ninth Circuit. Argued and Submitted May 9, 1990.
Decided June 18, 1990.

Page 1312

Jeanette Wolfley, General Counsel, Shoshone-Bannock Tribes, Fort Hall, Idaho, for defendants-appellants.

Gary L. Cooper, Racine, Olson, Nye, Cooper & Budge, Pocatello, Idaho, for plaintiff-appellee.

Melody L. McCoy, Boulder, Colo., for amicus, Native American Rights Fund.

Appeal from the United States District Court for the District of Idaho.

Before FARRIS, PREGERSON and BOOCHEVER, Circuit Judges.

FARRIS, Circuit Judge:

This case presents the question of the extent of power Indian tribes have over non-Indians acting on fee land located within the confines of a reservation. The Shoshone-Bannock Tribes are attempting to enforce a Tribal Employment Rights Ordinance, which requires all employers working on the reservation to give mandatory preferences in hiring to Indians. FMC, a non-Indian business operating on fee land inside the Reservation, challenges the Tribes' power to enforce the ordinance. The district court held that the Tribes did not have jurisdiction over FMC, reversing the decision of the Tribal Appellate Court, which had upheld the Tribes' jurisdiction to enforce the regulation. We reverse the decision of the district court and affirm the decision of the Tribal Appellate Court.

I.

BACKGROUND

The Shoshone-Bannock Tribes are federally recognized tribes residing on the Fort Hall Reservation in southeastern Idaho. The reservation encompasses 870 square miles, of which 96 per cent is tribal land or is held in trust by the United States for the benefit of the Tribes or their members, and four per cent is fee land owned by individuals, including non-Indians. As on many reservations, unemployment is rampant among the Shoshone-Bannock and contributes to the concomitant problems of poverty, alcoholism, drug abuse, and economic dependency.

In order to combat the problem of unemployment, in 1980 the Tribal Business Council, the governing body of the Tribes, adopted a Tribal Employment Rights Ordinance, EMPT-80-54, July 22, 1980. The TERO required employers working on the Reservation to give preference in employment, contracting, and subcontracting to Indians. The Secretary of the Interior approved the Ordinance on October 14, 1980. The TERO applies to all employers within the Reservation, including those owned by non-Indians operating on fee land.

FMC is such an employer. This non-Indian owned company has a plant on fee land within the Reservation that manufactures elemental phosphorus. FMC is the largest employer on the Reservation, with 600 employees. FMC has other connections to the Reservation in addition to the location of its plant. The company currently gets all of the phosphate shale (one of the three primary raw materials required for production) from mining leases located within the Reservation. The phosphate shale constitutes approximately 90 percent of the minerals used at the facility. The shale leases are on lands owned by the Tribes or by individual Indians. FMC's leases are managed and operated by J.R. Simplot Company, whose operation of the mines is regulated by the TERO. The mining leases account for revenue to the Tribes and to individual members. All other materials used in production come from areas off-Reservation. The final product, elemental phosphate, is all shipped off-Reservation.

Upon notification of the passage of the TERO, FMC objected to the ordinance's application to its plant. After negotiations

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with the Tribes, FMC entered into an employment agreement based on the TERO in 1981 that resulted in a large increase in the number of Indian employees at FMC.

In late 1986, the Tribes became dissatisfied with FMC's compliance with the employment agreement. After attempts to negotiate an end to the alleged violations of the agreement failed, the Tribes filed civil charges in Tribal Court. FMC immediately challenged the Tribal Court's jurisdiction in federal district court and persuaded the district court to enjoin the Tribes from enforcing any orders against FMC until the Tribal Court had an opportunity to rule on the Tribes' jurisdiction over FMC. The Tribal Court then found that the Tribes had jurisdiction over FMC and held that the company had violated the TERO. The Tribal Appellate Court affirmed those rulings. When the parties could not reach agreement for compliance, the Tribal Appellate Court entered its own compliance plan, which required 75% of all new hires and 100% of all promotions to be awarded to qualified Indians, mandated that one-third of all internal training opportunities be awarded to local Indians, and levied an annual TERO fee of approximately $100,000 on FMC. FMC then returned to federal...