NLRB v. Fortune Bay Resort Casino

• Decision Date: 25 February 2010
• Docket Number: MISC. No. 08-0065 (JRT/JJG).
• Citation: 688 F. Supp.2d 858
• Parties: NATIONAL LABOR RELATIONS BOARD, Applicant, v. FORTUNE BAY RESORT CASINO, Respondent.
• Court: U.S. District Court — District of Minnesota

688 F.Supp.2d 858

NATIONAL LABOR RELATIONS BOARD, Applicant, v. FORTUNE BAY RESORT CASINO, Respondent.

MISC. No. 08-0065 (JRT/JJG).

United States District Court, D. Minnesota.

February 25, 2010.

Joseph H. Bornong, National Labor Relations Board, Minneapolis, MN, for applicant.

Henry M. Buffalo, Jr., Jessica Intermill, Joseph F. Halloran, Mark A. Anderson, William A. Szotkowski, Jacobson, Buffalo, Magnuson, Anderson & Hogan, Saint Paul, MN, for respondent.

MEMORANDUM OPINION AND ORDER ADOPTING THE REPORT AND RECOMMENDATION OF THE MAGISTRATE JUDGE

JOHN R. TUNHEIM, District Judge.

On December 9, 2008, applicant National Labor Relations Board (the "Board") filed an Application for an Order Requiring Obedience to Subpoena Duces Tecum. (Docket No. 1.) In a Report and Recommendation, United States Magistrate Judge Jeanne J. Graham recommended that the Court grant the Board's application. (Report & Recommendation at 19, Docket No. 14.) The case is before the Court on respondent Fortune Bay Resort Casino's ("Fortune Bay") objections to the Report and Recommendation. (Docket No. 15.) After reviewing de novo those portions of the Report and Recommendation to which Fortune Bay objected, 28 U.S.C. § 636(b)(1)(C); D. Minn. LR 72.2, the Court overrules the objections and adopts the Report and Recommendation for the reasons set forth below.

BACKGROUND

Fortune Bay is a wholly owned and managed governmental entity of the Bois Forte Band of Chippewa Indians (the "Band"), which is a federally recognized Indian tribe. (Response to Order to Show Cause at 18, Docket No. 7.) Fortune Bay operates a hotel, resort, and casino on the Band's Lake Vermillion Reservation pursuant to a tribal gaming ordinance and license issued by the Bois Forte Reservation Tribal Council. (Id. at 3.) Fortune Bay employs approximately 450 people, one-third of whom are Native Americans, and of the Native Americans employed, eighty-two percent are Band members. (Id. at 19.) Customers of the Fortune Bay Resort Casino include both members and nonmembers. (Board's Mem. in Supp. at 3, Docket No. 2.)

In 2007 the United Steelworkers Union (the "Union") began efforts to organize Fortune Bay's employees. (Id.) On or about August 4, 2008, Fortune Bay terminated employee Rorie Farr, a Band member, based on her alleged failure to show up for work as scheduled without giving notice as required under Fortune Bay's personnel policy. (Id.) The Board claims that Farr orally appealed her discharge to the Band's Tribal Chairman. On August 18, 2008, the Union filed an unfair labor practice charge with the Board alleging that Farr's termination was motivated by the Union's organizing activities, but the Union withdrew that charge on October 9, 2008. (Id. at 4 & n. 1; Response to Order to Show Cause at 4, Docket No. 7.) The Tribal Chairman later told Farr that she was rehired, but Fortune Bay's CEO withdrew the reinstatement offer. (Board's Mem. in Supp. at 4, Docket No. 2.)

On October 14, 2008, the Union filed another charge against Fortune Bay alleging that Fortune Bay violated subsections (1), (3), and (4) of section 8(a) the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158, by refusing to reinstate Farr in retaliation for participating in a previous case before the Board and in retaliation for engaging in union activities. (Id. at 1.) After the Union filed its charge, the Board, through its General Counsel, commenced an investigation in accordance with section 10(a) of the NLRA and section 102.15 of the Board's Rules to determine whether Fortune Bay had engaged in unfair labor practices. (Application ¶ 3, Docket No. 1); see also 29 U.S.C. §§ 153(a),(d), 159(c)(1), 160(a). On October 31, 2008, the Board served on Fortune Bay a subpoena duces tecum to appear before an agent of the Board and produce certain subpoenaed documents. (Id. ¶ 4.) The subpoena "seeks information relevant to Fortune Bay's effects on commerce, to establish federal jurisdiction, . . . to establish attributes of tribal sovereignty, and to establish whether the Board will consider Fortune Bay an `employer' within the meaning of the NLRA." (Board's Mem. in Supp. at 1-2, Docket No. 2.) Fortune Bay objected to the subpoena, and the Board applied to this Court for an order to enforce the subpoena pursuant to section 11(2) of the NLRA. (Application, Docket No. 1.)

After receiving a response from Fortune Bay to the Magistrate Judge's Order to Show Cause, as well as the Board's reply and Fortune Bay's surreply, the Magistrate Judge filed a Report and Recommendation recommending that the Court grant the Board's Application. The Magistrate Judge concluded in her Report and Recommendation that (1) the Court has jurisdiction over the subpoena enforcement proceeding; (2) the instant enforcement action was brought by the Board, as an administrative agency of the United States, and not by a private party; (3) the Court has personal jurisdiction over Fortune Bay and subject matter jurisdiction over the subpoena enforcement action; and (4) that the subpoena should be enforced. (Report & Recommendation, Docket No. 14.) Fortune Bay timely filed objections to the Report and Recommendation, arguing that (1) under established Indian-law canon and Eighth Circuit law, the Board did not have jurisdiction to issue the subpoena; and (2) the Band is immune from the underlying Board proceeding under the NLRA on sovereignty grounds because a private party—the Union—initiated that proceeding.

DISCUSSION

The primary issue before the Court is whether the Board had jurisdiction under the NLRA to issue the subpoena on Fortune Bay, a business enterprise wholly owned and managed by the Band on the Band's Lake Vermillion Reservation. For the reasons set forth below, the Court concludes that the Board had jurisdiction to issue the subpoena in an effort to establish the NLRA's coverage over Fortune Bay, and the Court may enforce that subpoena.

I. THE BOARD HAD JURISDICTION TO ISSUE THE SUBPOENA.

A. The Board's Investigative Role

The Board's subpoena seeks information relating to Fortune Bay's effects on interstate commerce, to federal jurisdiction, to attributes of tribal sovereignty, and to Fortune Bay's status as an "employer" within the meaning of the NLRA. (Board's Mem. in Supp. at 2, Docket No. 2.)

In considering whether to enforce the Board's subpoena, the Court is not concerned with the merits of the underlying claim, and does not consider Fortune Bay's potential defenses to the merits of the underlying proceeding. Cf. E.E.O.C. v. Tempel Steel Co., 814 F.2d 482, 484-86 (7th Cir.1987). Instead, the Court considers four factors: (1) whether the subpoena was issued pursuant to lawful authority; (2) whether the subpoena was issued for a lawful purpose; (3) whether the information requested in the subpoena is relevant to the lawful purpose; and (4) whether the subpoena was reasonable. See United States v. McDonnell Douglas Corp., 751 F.2d 220, 226 (8th Cir.1984) (citing Okla. Press Publ'g Co. v. Walling, 327 U.S. 186, 208-09, 66 S.Ct. 494, 90 L.Ed. 614 (1946)). In other words, as the Eighth Circuit held in E.E.O.C. v. Peat, Marwick, Mitchell & Co., "the showing of reasonable cause required to support an application for enforcement of a subpoena duces tecum is satisfied . . . by the court's determination that the investigation is authorized by Congress, is for a purpose Congress can order, and the documents sought are relevant to the inquiry." 775 F.2d 928, 930 (8th Cir.1985) (internal quotation marks omitted; second alteration in original).

In Peat, Marwick, Mitchell & Co., the Eighth Circuit affirmed a district court's order requiring an employer to produce documents subpoenaed by an administrative agency, the Equal Employment Opportunity Commission ("EEOC"), in relation to the EEOC's investigation of alleged violations of the Age Discrimination in Employment Act ("ADEA"). 775 F.2d at 931. The employer appealed the district court's order, arguing that the subpoena could not be enforced because the EEOC's investigation was not for a congressionally authorized, legitimate purpose; that is, the employer argued that the ADEA did not apply to the employer. Id. 929-30. The Eighth Circuit rejected the argument, stating:

Congress has established the EEOC as the administrative body empowered to investigate violations of the ADEA and has given the EEOC subpoena power in order to carry out its investigations. The authority to investigate violations includes the authority to investigate coverage under the statute. It can no longer be disputed that "a subpoena enforcement proceeding is not the proper forum in which to litigate the question of coverage under a particular federal statute." The initial determination of the coverage question is left to the administrative agency seeking enforcement of the subpoena. Often a coverage question cannot be resolved until the administrative agency has had an opportunity to examine the subpoenaed records.

Id. at 930 (emphasis added and citations omitted).

Here, the Board seeks subpoenaed documents to establish jurisdiction to bring unfair labor practice charges under the NLRA against Fortune Bay. In that sense, the Board's application is akin to jurisdictional discovery, as it seeks documentation pertaining to federal jurisdiction and tribal sovereignty. Under these circumstances, the Board's subpoena duces tecum is reasonable in scope and is brought for a legitimate purpose. See id. ("The EEOC's investigation of the employer is in an effort to determine whether the employer's retirement practices and policies discriminate against individuals classified as employees for purposes of the ADEA. Thus, EEOC's investigation is for a legitimate purpose authorized by Congress.").

Fortune Bay objects to the Magistrate Judge's conclusion that the Board issued the subpoena pursuant to lawful authority. Fortune Bay primarily argues that the Magistrate Judge failed to apply the appropriate standard...