Marceau v. Blackfeet Housing Authority
| Decision Date | 21 July 2006 |
| Docket Number | No. 04-35210.,04-35210. |
| 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 Calfbossribs; Neva Running Calfbossribs; Neva Running 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 |
Thomas E. Towe, Towe, Ball, Enright, Mackey & Sommerfeld, PLLP, Billings, MT; Jeffrey A. Simkovic, Simkovic Law Firm, Billings, MT; Mary Ann Sutton, Attorney at Law, Missoula, MT, for the plaintiffs-appellants.
Stephen A. Doherty and Patrick L. Smith, Smith, Doherty & Belcourt, P.C., Great Falls, MT; Timothy J. Cavan, Assistant U.S. Attorney, Billings, MT, for the defendants-appellees.
John T. Harrison, Confederated Salish and Kootenai Tribes, Tribal Legal Department, Pablo, MT; Patterson V. Joe, Patterson V. Joe, P.C., Flagstaff, AZ, for the amici.
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: HARRY PREGERSON, SUSAN P. GRABER, and RONALD M. GOULD, Circuit Judges.
Opinion by Judge GRABER; Dissent by Judge PREGERSON.
The opinion filed on July 21, 2006, slip op. 8071, and appearing at 455 F.3d 974 (9th Cir.2006), is replaced in part and adopted in part by the amended opinion filed concurrently with this order. Further petitions for rehearing and petitions for rehearing en banc may be filed.
Plaintiffs are members of the Blackfeet Indian Tribe who bought or leased houses built under the auspices of the United States Department of Housing and Urban Development ("HUD"). The houses had wooden foundations. The wood had been pressure-treated with toxic chemicals. Plaintiffs allege that the use of wooden foundations caused their houses to deteriorate and that the chemicals in the wood have caused, and continue to cause, health problems for those who live in the houses. On behalf of a class of persons similarly situated, Plaintiffs sued HUD, the Secretary of HUD, the Blackfeet Tribal Housing Authority and its board members ("the Housing Authority") under several theories. The district court dismissed the entire complaint under Federal Rule of Civil Procedure 12(b)(6).
On rehearing, we hold: (1) the Housing Authority forfeited its claim to tribal exhaustion and, in any event, waived its tribal immunity; (2) the government did not undertake a trust responsibility toward Plaintiffs to construct houses or maintain or repair houses; and (3) Plaintiffs alleged sufficient facts to state claims against HUD under the Administrative Procedure Act ("APA"). We readopt our earlier opinion1 with respect to Plaintiff's breach of contract claims. Accordingly, we affirm the district court's dismissal of the case except as to Plaintiffs' claims against the Housing Authority and its board members and Plaintiffs' claims under the APA. As to those claims, we reverse and remand for further proceedings.
Because the district court dismissed the amended complaint for failure to state a claim, we construe the facts from Plaintiffs' amended complaint, which we must deem to be true, in the light most favorable to them. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). But we "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n. 2 (9th Cir. 1986).
The Blackfeet Tribe is a federally recognized Indian tribe. In January 1977, the Tribe established a separate entity, the Blackfeet Housing Authority. See 24 C.F.R. § 805.109(c) (1977) (). The Blackfeet Tribe adopted HUD's model enabling ordinance. Blackfeet Tribal Ordinance No. 7, art. II, §§ 1-2 (Jan. 4, 1977), reprinted in 24 C.F.R. § 805, subpt. A, app. I (1977). Thereafter, HUD granted the Blackfeet Housing Authority authorization and funding to build 153 houses.
Construction of those houses, and some additional ones, began after the Housing Authority came into being in 1977. Construction was completed by 1980.2 The houses — at least in retrospect — were not well constructed. They had wooden foundations, and the wood products used in the foundations were pressure-treated with toxic chemicals. The crux of Plaintiffs' complaint is that HUD directed the use of pressure-treated wooden foundations, over the objection of tribal members, and that the Housing Authority acceded to that directive.
In the ensuing years, the foundations became vulnerable to the accumulation of moisture, including both groundwater and septic flooding, and to structural instability. Some of the houses have become uninhabitable due to contamination from toxic mold and dried sewage residues. The residents of the houses have experienced health problems, including frequent nosebleeds, hoarseness, headaches, malaise, asthma, kidney failure, and cancer.
Plaintiffs bought or leased the houses, either directly or indirectly, from the Housing Authority. After it became clear that the houses were unsafe or uninhabitable, Plaintiffs asked the Housing Authority and HUD to repair the existing houses, provide them with new houses, or pay them enough money to repair the houses or acquire substitute housing. When they received no help from either entity, Plaintiffs filed this class action against the Housing Authority, HUD, and the Secretary of HUD. Plaintiffs seek declaratory and injunctive relief and damages for alleged violations of statutory, contractual, and fiduciary duties.
HUD filed a motion to dismiss for lack of subject matter jurisdiction and a motion to dismiss for failure to state a claim upon which relief can be granted. The Housing Authority and its board members filed a motion to dismiss because of tribal immunity. The district court granted those motions. In an earlier opinion, we affirmed the dismissal of HUD and its Secretary, but reversed with respect to the Housing Authority. Marceau v. Blackfeet Hous. Auth., 455 F.3d 974 (9th Cir.2006). The Housing Authority filed a petition for rehearing. The panel granted the petition and reheard the case. All parties, as well as amici curiae, participated in the rehearing. We now issue this revised opinion.
We review de novo each of the issues in this case. See Coyle v. P.T. Garuda Indon., 363 F.3d 979, 984 n. 7 (9th Cir.2004) (); Demontiney v. United States, 255 F.3d 801, 805 (9th Cir.2001) ().
Indian tribes generally enjoy immunity from suit. Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998) (). In our earlier opinion, we held that the Blackfeet Tribe waived tribal immunity through the enabling ordinance that established the Housing Authority.3 Marceau, 455 F.3d at 978-83. On rehearing, the Housing Authority urges us to dismiss the claims against it, or at least to abstain from considering those claims until tribal courts rule on the question whether the Housing Authority is immune from suit. For two reasons, we are not persuaded that we should do either.
We begin by recognizing that principles of comity generally require federal courts to dismiss, or abstain from deciding, cases in which a party asserts that an Indian tribal court possesses concurrent jurisdiction. Crawford v. Genuine Parts Co., 947 F.2d 1405, 1407 (9th Cir. 1991); see also Wellman v. Chevron U.S.A., Inc., 815 F.2d 577, 578 (9th Cir. 1987) (). Ordinarily, exhaustion of tribal remedies is mandatory. Burlington N. R.R. Co. v. Crow Tribal Council, 940 F.2d 1239, 1245 (9th Cir.1991).
But the Supreme Court has stated that the tribal exhaustion rule is "prudential" rather than "jurisdictional." Strate v. A-1 Contractors, 520 U.S. 438, 451, 117 S.Ct. 1404, 137 L.Ed.2d 661 (1997). Because it is a non-jurisdictional principle, the preference for tribal exhaustion may be forfeited. The Housing Authority forfeited the argument that the tribal court should decide the immunity issue by failing to raise it until the Housing Authority's petition for rehearing. Talk of the Town v. Dep't of Fin. & Bus. Servs., 353 F.3d 650, 650 (9th Cir.2003). That being so, we readopt our earlier opinion on this issue, Marceau, 455 F.3d at 978-83.
Moreover, in this case, the tribal court already has ruled on the question. In DeRoche v. Blackfeet Indian Housing Authority, 17 Indian L. Rptr. 6036 (Blackfeet Trib. Ct.App.1989), the Blackfeet Tribal Court of Appeals considered a breach of contract claim against the Housing Authority. That court adopted the Eighth Circuit's approach to interpreting a "sue and be sued" clause. Id. at 6042 (citing Namekagon Dev. Co. v. Bois Forte Reservation Hous. Auth., 517 F.2d 508, 510 (8th Cir.1975)). The Blackfeet Tribal Court of Appeals held that the original Housing Authority enabling ordinance "is an indisputable qualified waiver of immunity by the Blackfeet Tribe and housing authority for a breach of contract action" and that, by adopting...
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