Garcia v. Akwesasne Housing Authority

• Decision Date: 26 April 2001
• Docket Number: Docket No. 00-9029,DEFENDANTS-APPELLEES,PLAINTIFF-APPELLANT
• Parties: (2nd Cir. 2001) HILDA GARCIA,, v. AKWESASNE HOUSING AUTHORITY AND JOHN RANSOM,August Term: 2000 Argued:
• Court: U.S. Court of Appeals — Second Circuit

Page 76

268 F.3d 76 (2nd Cir. 2001)

HILDA GARCIA, PLAINTIFF-APPELLANT, v. AKWESASNE HOUSING AUTHORITY AND JOHN RANSOM, DEFENDANTS-APPELLEES.

Docket No. 00-9029

August Term: 2000

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: April 26, 2001

Decided October 3, 2001

Appeal from a judgment entered by the United States District Court for the Northern District of New York (McAvoy, J.), dismissing claims against an agency of an Indian tribe and an agency official under the tribal exhaustion rule, and dismissing claims against the agency on the alternative ground of tribal sovereign immunity.

Affirmed in part, and in part vacated and remanded. [Copyrighted Material Omitted] Mark A. Schneider, Plattsburgh, Ny, for Plaintiff-Appellant.

Russell D. Barr, Stowe, Vt, for Defendants-Appellees.

Before: Jacobs, Parker, and Katzmann, Circuit Judges.

Dennis Jacobs, Circuit Judge.

This suit arises from a decision by the Akwesasne Housing Authority, ("AHA"), an agency of the St. Regis Mohawk Indian Tribe, to terminate the employment of Hilda Garcia, the agency's Executive Director. Garcia commenced suit in the United States District Court for the Northern District of New York (McAvoy, J.) against the AHA and John Ransom, the Chairman of the AHA's Board of Commissioners, alleging discrimination, breach of contract and tort claims under (variously) federal and state law. The district court dismissed the action under Rule 12(b)(1) of the Federal Rules of Civil Procedure on the grounds that (i) Garcia's claims against both the AHA and Ransom must first be litigated in the courts of the St. Regis Tribe under the tribal exhaustion rule, and (ii) the AHA, in any event, enjoys tribal sovereign immunity. On appeal, Garcia challenges both grounds of dismissal.

BACKGROUND

While the facts bearing upon the underlying merits will no doubt be disputed, the defendants do not contest--and we therefore accept as true--the procedural facts contained in the complaint that are relevant to the appeal. The AHA was created pursuant to a resolution of the St. Regis Tribal Council. It provides public housing on the Akwesasne Reservation using federal funds disbursed by the United States Department of Housing and Urban Development ("HUD"). At all relevant times, Ransom chaired the AHA's Board of Commissioners.

The AHA hired Garcia as its Executive Director in 1985. She is not a member of the St. Regis Mohawk Tribe. For reasons that are hotly disputed by the parties, the AHA terminated her in June 1995.

Garcia challenged her termination by filing a five-count pleading in the district court. The complaint charges both the AHA and Ransom with violations of federal and state laws. Garcia is seeking compensatory and punitive damages, attorney's fees and costs, and injunctive relief in the form of reinstatement.

Count one of the pleading alleges that Garcia was fired by reason of age in violation of the Age Discrimination in Employment Act, ("ADEA"), and was replaced by a "younger man who appears to be in his middle `40s.'" It is alleged (and undisputed for present purposes) that she received a "right to sue" letter from the Equal Employment Opportunity Commission ("EEOC") for the ADEA claim, and that she filed suit within the statutorily-mandated 90-day period following her receipt of the letter. See 29 U.S.C. § 626.

Count two alleges that the termination was effected without due process and as retaliation for (inter alia) her exercise of First Amendment rights in reporting to HUD that Ransom had engaged in self-dealing in violation of federal regulations. Garcia invokes 42 U.S.C. § 1983 (which prohibits deprivations of constitutional rights by persons acting "under color of state law") and Title I of the Indian Civil Rights Act ("ICRA"), 25 U.S.C. § 1301-03 (which provides inter alia that "[n]o Indian tribe" shall "make or enforce any law... abridging the freedom of speech... or the right of the people... to petition for a redress of grievances," or "deprive any person of liberty or property without due process of law").

Counts three and four allege principally that the AHA breached an implied contract under state law by terminating Garcia in violation of the AHA's formal, written policies.

Finally, count five alleges that Ransom intentionally interfered with Garcia's employment contract with the AHA, acting "outside the scope of his authority" and "for personal, retaliatory, and unlawful reasons."

Defendants moved to dismiss the complaint for lack of subject matter jurisdiction, on the grounds that (1) the claims could not be presented in federal court because Garcia had not presented them to a tribal court in accordance with the tribal exhaustion rule, and (2) the claims were barred in any event by the doctrine of tribal sovereign immunity.

The district court held that it "lack[ed] [subject matter] jurisdiction" over the causes of action against both the AHA and Ransom because Garcia had not yet exhausted the claims in a tribal court. See Garcia v. Akwesasne Hous. Auth., 105 F. Supp. 2d 12, 21 & n.8 (N.D.N.Y. 2000). The court also ruled that the claims against defendant AHA had to be dismissed on the alternative ground of tribal sovereign immunity. See id. at 15-17. Following the entry of final judgment dismissing the complaint, Garcia filed this appeal.

DISCUSSION

We consider tribal exhaustion first; sovereign immunity second.

I.

The doctrine of federal court abstention now known as the "tribal exhaustion rule" was announced in National Farmers Union Insurance Cos. v. Crow Tribe, 471 U.S. 845 (1985). In general terms, the doctrine requires that federal courts abstain from hearing certain claims relating to Indian tribes until the plaintiff has first exhausted those claims in a tribal court. The defendants in this case argue, and the district court agreed, that the tribal exhaustion rule mandates dismissal of Garcia's claims against both the AHA and Ransom. We review the scope of the tribal exhaustion rule de novo. Bowen v. Doyle, 230 F.3d 525, 530 (2d Cir. 2000).

A. Subject Matter Jurisdiction

As a threshold matter, the district court erred by treating abstention on this ground as a matter of subject matter jurisdiction. See Garcia, 105 F. Supp. 2d at 21. Exhaustion in appropriate circumstances "is required as a matter of comity, not as a jurisdictional prerequisite." Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 16 n.8 (1987). Garcia alleged federal question jurisdiction over her federal law claims, see 28 U.S.C. § 1331, and supplemental jurisdiction over her state-law claims, see id. § 1367(a). (Garcia's assertion of diversity jurisdiction is dubious.¹) Because the tribal exhaustion rule does not impair jurisdiction, and instead is "analogous to principles of abstention articulated in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976)," LaPlante, 480 U.S. at 16 n.8, the doctrine must be interpreted narrowly in light of the "virtually unflagging obligation of federal courts to exercise the jurisdiction given them." Colorado River, 424 U.S. at 817.

B. The Reach of the Doctrine

This Court and the Supreme Court have required abstention under the tribal exhaustion rule on just three occasions: LaPlante, 480 U.S. at 14-20; National Farmers, 471 U.S. at 853-56; and Basil Cook Enters. v. St. Regis Mohawk Tribe, 117 F.3d 61 (2d Cir. 1997). In each instance, the plaintiff was litigating a previously-filed, ongoing tribal court action, and was asking the federal court to interfere with those tribal proceedings. These cases are procedurally distinguishable from Garcia's case because Garcia's claims have not been in tribal court. We conclude that the reasoning of these cases and the policy considerations that underlie them militate in favor of the opposite result in this case: the comity and deference owed to a tribal court that is adjudicating an intra-tribal dispute under tribal law does not compel abstention by a federal court where a non-member asserts state and federal claims and nothing is pending in the tribal court.

In the seminal tribal exhaustion case, National Farmers, the federal court granted an injunction against enforcement of a default judgment entered in a tribal court, on the ground that the tribal court lacked subject matter jurisdiction over the defaulted claim. See National Farmers, 471 U.S. at 848-49. The Supreme Court held that even though tribal court jurisdiction presented a question of federal law, see National Farmers, 471 U.S. at 853; 28 U.S.C. § 1331, the federal court was required to stay its hand because the examination of the tribal court's jurisdiction "should be conducted in the first instance in the Tribal Court itself." Id. at 850-53, 856. The motion for an injunction could be entertained in federal court, but only after the federal court plaintiffs exhausted the jurisdictional argument in the tribal judicial system.

In LaPlante, the Supreme Court considered "whether a federal court may exercise diversity jurisdiction before the tribal court system has [had] an opportunity to determine its own jurisdiction." LaPlante, 480 U.S. at 11. The federal court plaintiff was an insurer that had been named as a defendant in an ongoing tribal court proceeding. In the tribal forum, the insurer lost a jurisdictional challenge. While awaiting tribal appellate review, the insurer commenced a federal diversity suit against all the other parties to the tribal court proceeding, and sought a declaration of "tribal law" on an issue that would have been dispositive of an affirmative defense raised in the tribal forum. Id. at 11-13 & n.3; see also id. at 22 n.* (Stevens, J., concurring in part and dissenting in part) (noting that the majority "seems to assume that the merits of this controversy are governed by `tribal law'").

The Court held that respect for tribal self-government required the federal judiciary "to give the tribal court a `full opportunity to determine its own...