Marceau v. Blackfeet Housing Authority

• Decision Date: 21 July 2006
• Docket Number: No. 04-35210.,04-35210.
• Citation: 455 F.3d 974
• Parties: Martin MARCEAU; Candice Lamott; Julie Rattler; Joseph Rattler, Jr.; John G. Edwards; Mary J. Grant; Gray Grant; Deana Mountain Chief, on behalf of themselves and others similarly situated, Plaintiffs-Appellants, v. BLACKFEET HOUSING AUTHORITY, and its board members; Sandra Opinion Calfbossribs; Neva Running Wolf; Kelly Edwards; Ursula Spotted Bear; Melvin Martinez, Secretary; Department of Housing and Urban Development, United States of America, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

455 F.3d 974

Martin MARCEAU; Candice Lamott; Julie Rattler; Joseph Rattler, Jr.; John G. Edwards; Mary J. Grant; Gray Grant; Deana Mountain Chief, on behalf of themselves and others similarly situated, Plaintiffs-Appellants, v. BLACKFEET HOUSING AUTHORITY, and its board members; Sandra Opinion Calfbossribs; Neva Running Wolf; Kelly Edwards; Ursula Spotted Bear; Melvin Martinez, Secretary; Department of Housing and Urban Development, United States of America, Defendants-Appellees.

No. 04-35210.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 16, 2005.

Filed July 21, 2006.

COPYRIGHT MATERIAL OMITTED

Jeff Simkovic, (argued and briefed), Billings, MT, Thomas E. Towe, (briefed), Towe, Ball, Enright, Mackey & Sommerfeld, Billings, MT, and Mary Ann Sutton (argued and briefed), Missoula, MT, for the plaintiffs-appellants.

Timothy J. Cavan, Assistant United States Attorney, Department of HUD, Billings, MT, Stephen A. Doherty for Blackfeet Housing, Great Falls, MT, and Harold J. Rennett for Government, Washington, D.C., for the defendants-appellees.

Appeal from the United States District Court for the District of Montana, Sam E. Haddon, District Judge, Presiding. D.C. No. CV-02-00073-SEH.

Before: PREGERSON, GRABER, and GOULD, Circuit Judges.

PREGERSON, Circuit Judge:

Plaintiffs represent members of the Blackfeet Indian tribe who purchased or leased homes built under the auspices of the Department of Housing and Urban Development ("HUD") Mutual Help and Homeownership Program ("MHHO Program"). Plaintiffs' homes were built with wood foundations, using wood pressure-treated with arsenic and other toxic chemicals. Plaintiffs allege that this use of wood foundations caused their homes to deteriorate, and that the present condition of the homes has caused and continues to cause severe health problems for the homes' residents. They sued both HUD and the Blackfeet Tribal Housing Authority ("Housing Authority") and its board members alleging numerous statutory and contractual violations. We have jurisdiction under 28 U.S.C. § 1291, with the limitations discussed below. We reverse the district court's dismissal of the claims against the Housing Authority, and affirm dismissal of the claims against HUD.

I. Factual Background¹

Pursuant to the goals set out in the United States Housing Act of 1937, 42 U.S.C. §§ 1437-1440 (2005), HUD developed the MHHO Program. The MHHO Program was designed to meet the housing needs of low-income American Indian families. HUD entered into agreements called "Annual Contributions Contracts" with tribal housing authorities under which HUD agreed to provide a specified amount of money to fund projects undertaken by the housing authorities and preapproved by HUD. See 24 C.F.R. § 805.102 (1979); id. § 805.206. After securing funding from HUD, the Housing Authority, in turn would contract with eligible American Indian families. See id. § 805.406. The families were required to contribute land, labor, or materials to the building of their house, see id. § 805.408, and after occupying the house, each family was required to make monthly payments in an amount calibrated to their income, see id. § 805.416(a)(1)(ii). The homebuyers were made responsible for maintenance of the house. See id. § 805.418(a). Until 1988, when the program was formalized in the Indian Housing Act of 1988, 42 U.S.C. §§ 1437aa-1437ee (1988), repealed by Native American Housing Assistance and Self-Determination Act of 1996, Pub.L. No. 104-330, 110 Stat. 4016 (1996), HUD operated the MHHO Program under a series of regulations and its own "Indian Housing Handbook." See H.R.Rep. No. 100-604 (1988), reprinted in 1988 U.S.C.C.A.N. 791, 793.

In 1977, the Blackfeet Tribe established a separate entity, the Blackfeet Housing Authority, as required by HUD's regulations. See 24 C.F.R. § 805.109(c) (1979) (requiring, as a prerequisite to receiving MHHO funding, that tribes form a tribal housing authority). The Blackfeet Tribe adopted HUD's model enabling ordinance, reprinted in 24 C.F.R. § 805, subpt. A, app. I (1979).² In the enabling ordinance, the Blackfeet Housing Authority was charged with "[a]lleviating the acute shortage of decent, safe and sanitary dwellings for persons of low income" and "[r]emedying unsafe and [u]nsanitary housing conditions that are injurious to the public health, safety and morals." Blackfeet Tribal Ordinance No. 7, art. II, §§ 1-2 (Jan. 4, 1977). Thereafter, HUD granted the Housing Authority authorization and funding to build 153 homes.

Construction of the homes took place between 1979 and 1980. The homes, at least in retrospect, were not constructed well. The homes were built with wood foundations, and the wood products used to build the foundations were chemically treated with arsenic and other toxic chemicals. Plaintiffs allege, as the crux of their claim, that HUD required the use of wood foundations over the objection of tribal members, and that the Housing Authority acceded to that directive.

In the ensuing years, the foundations were, predictably, vulnerable to moisture accumulation and structural instability. Today, some of the houses are uninhabitable due to toxic mold and dried sewage residues. There has been a high incidence of cancer, asthma, kidney failure, respiratory problems, and other serious health problems among residents of the homes. Many residents have been advised to leave their houses for health reasons; some residents cannot leave because there are, quite simply, no affordable housing options in the area.

Plaintiffs represent those who purchased or leased these MHHO homes either directly or indirectly from the Housing Authority. They have made significant monthly payments and investments of their own time and/or resources, as required under the MHHO program. After it became clear that the houses were substandard and possibly hazardous, Plaintiffs sought assistance from the Housing Authority and from HUD in remedying the construction defects. When they received no assistance from either entity, Plaintiffs filed this class action complaint on August 2, 2002, in the District Court for the District of Montana seeking declaratory and injunctive relief and damages. They named, as Defendants, the Housing Authority, its board members, and Mel Martinez, then-secretary of the Department of Housing and Urban Development. Plaintiffs allege that HUD and the Blackfeet Housing Authority violated statutory, contractual, and fiduciary duties owed to them.

HUD Defendants filed a motion to dismiss for lack of subject matter jurisdiction and a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The Tribal Defendants filed a similar motion to dismiss based on tribal immunity. After hearings and further briefing, the district court granted both parties' motions to dismiss. Plaintiffs appealed.

II. Standard of Review

We review the question of subject matter jurisdiction de novo. See Coyle v. P.T. Garuda Indon., 363 F.3d 979, 984 n. 7 (9th Cir.2004). Questions of tribal and sovereign immunity are also reviewed de novo. See Orff v. United States, 358 F.3d 1137, 1142 (9th Cir.2004); Linneen v. Gila River Indian Cmty., 276 F.3d 489, 492 (9th Cir.2002). Dismissal for failure to state a claim is likewise reviewed de novo. See Decker v. Advantage Fund, Ltd., 362 F.3d 593, 595-96 (9th Cir.2004).

III. Analysis

A. Tribal Immunity for Board Members of the Blackfeet Housing Authority

An Indian tribe enjoys sovereign immunity from suit except where Congress authorizes the suit or the tribe waives its immunity. See Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998). Tribal immunity extends to both the corporate and governmental activities of the tribe. See id. at 754-55, 118 S.Ct. 1700. It extends to agencies and subdivisions of the tribe, and has generally been held to apply to housing authorities formed by tribes. See, e.g., Dillon v. Yankton Sioux Tribe Hous. Auth., 144 F.3d 581, 583 (8th Cir. 1998). Moreover, tribal immunity covers "tribal officials when acting in their official capacity and within their scope of authority." United States v. Oregon, 657 F.2d 1009, 1013 n. 8 (9th Cir.1981). Thus there is little doubt that the Blackfeet Tribe's sovereign immunity extends to the Blackfeet Housing Authority and to the members of the Blackfeet Housing Authority's board.

We turn next to the question of waiver. Congressional abrogation of tribal immunity "cannot be implied but must be unequivocally expressed." Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978) (citation omitted). Similarly, a tribe may voluntarily subject itself to suit by issuing a "clear" waiver. See C & L Enters., Inc. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418, 121 S.Ct. 1589, 149 L.Ed.2d 623 (2001).

Plaintiffs claim that a "sue and be sued" clause in the Enabling Ordinance that created the Blackfeet Housing Authority is a clear waiver of tribal immunity. The Enabling Ordinance states:

The Council hereby gives its irrevocable consent to allowing the Authority to sue and be sued in its corporate name, upon any contract, claim or obligation arising out of its activities under this ordinance and hereby authorizes the Authority to agree by contract to waive any immunity from suit which it might otherwise have; but the Tribe shall not be liable for the debts or obligations of the Authority.

Blackfeet Tribal Ordinance No. 7, art. V, § 2 (Jan. 4, 1977). For the reasons set forth below, we conclude that the "sue and be sued" clause of the Enabling Ordinance is a clear and unambiguous waiver of tribal immunity, and we reverse the district court's dismissal of the claims against the Housing Authority.

1. Caselaw

The federal courts have had frequent occasion to interpret this "sue and be sued" clause. The text was proposed in HUD's model enabling ordinance, and is...