Parker Drilling Co. v. Metlakatla Indian Community

• Decision Date: 17 April 1978
• Docket Number: No. J75-6 Civil.,J75-6 Civil.
• Citation: 451 F. Supp. 1127
• Parties: PARKER DRILLING COMPANY, Plaintiff, v. METLAKATLA INDIAN COMMUNITY, Defendant and Third-Party Plaintiff, v. UNITED STATES of America, Third-Party Defendant.
• Court: U.S. District Court — District of Alaska

451 F. Supp. 1127

PARKER DRILLING COMPANY, Plaintiff, v. METLAKATLA INDIAN COMMUNITY, Defendant and Third-Party Plaintiff, v. UNITED STATES of America, Third-Party Defendant.

No. J75-6 Civil.

United States District Court, D. Alaska.

April 17, 1978.

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J. B. Bradley, of Robertson, Monagle, Eastaugh & Bradley, Juneau, Alaska, for plaintiff Parker Drilling Co.

Randall J. Weddle, of Faulkner, Banfield, Doogan & Holmes, Juneau, Alaska, Steven S. Anderson of Xiontz, Pirtle, Morisset, Ernstoff & Chestnut, Seattle, Wash., for defendant and third-party plaintiff.

Alexander O. Bryner, U. S. Atty. for Alaska, Anchorage, Alaska, for third-party defendant United States of America.

MEMORANDUM AND ORDER

VON DER HEYDT, Chief Judge.

This cause comes before the court on cross motions for summary judgment.¹ For the purpose of these motions certain facts apparently are undisputed. Plaintiff's airplane was to land at the Annette Island Airport to receive fuel from Annette Aviation. Upon attempting to land the aircraft hit a snow berm and was damaged. Plaintiff is an Oklahoma corporation and federal jurisdiction is predicated upon diversity of citizenship.

Plaintiff has asserted that the Annette Island Airport is owned by the Metlakatla Indian Community in its capacity as an Indian corporation organized pursuant to § 17 of the Indian Reorganization Act, 25 U.S.C. § 477.² Plaintiff further alleges that Annette Aviation is owned and operated by the § 17 Indian corporation.

Defendant contends that the Annette Island Airport is upon land held by the governing body of the Metlakatla Indian Community organized pursuant to § 16 of the Indian Reorganization Act, 25 U.S.C. § 476. Defendant further contends that Annette Aviation is owned and operated by the same § 16 government organization. The issue of whether the airport and Annette Aviation are owned by the § 16 governmental organization or § 17 Indian corporation is central to the present motions. Prior to considering the merits of the opposing claims, however, a brief overview of § 16 and § 17 of the Indian Reorganization Act is necessary. Much of the following discussion is adopted from Justice Rabinowitz's scholarly opinion in Atkinson v. Haldane, 569 P.2d 151 (Alaska 1977).³

Congress, in enacting the Indian Reorganization Act provided for the creation of two separate tribal entities. The entity created by § 16 of the Act, the governmental organization, was allowed the protection of sovereign immunity traditionally afforded Indian tribes. Atkinson, supra, at 174-75.

Recognizing that the protection of sovereign immunity would put the Indian tribe at a competitive disadvantage in obtaining credit and entering into business transactions Congress provided for the separate and distinct Indian corporation in § 17. This corporation has the ability to waive the protection of sovereign immunity. Atkinson, supra.

The Metlakatla Indian Community has formally adopted both a § 16 entity and a § 17 entity. The § 16 entity, The Metlakatla Indian Community Annette Islands Reserve, Alaska, was formed by a constitution and by-laws approved by the Assistant Secretary of the Interior on August 23, 1944, and adopted by the Metlakatlans on December 19, 1944. The § 17 entity, The Metlakatla Indian Community, was formed by a corporate charter approved and ratified respectively on the same dates. See generally Atkinson, supra, at 170-71.

It is thus apparent that if the Annette Island Airport and Annette Aviation were owned or operated by the § 16 governmental organization that this diversity action would be precluded by sovereign immunity. Atkinson v. Haldane, supra; Littell v. Nakai, 344 F.2d 486, 489 (9th Cir. 1965); Hot Oil Service, Inc. v. Hall, 366 F.2d 295, 297 (9th Cir. 1966). Plaintiff does not contest this conclusion.

If, on the other hand, Annette Island Airport and Annette Aviation are owned or operated by the § 17 corporate entity it is possible that sovereign immunity has been waived. Anticipating the possibility that the court might find that the activities involved the § 17 corporation defendant has made several alternative arguments.

Burden of Proof

Prior to addressing the substance of these motions one preliminary matter must be resolved. Plaintiff contends that in opposing defendant's motion it is to be given the benefit of all inferences and the evidence is to be viewed most favorably to it. Defendant asserts that the burden of proof on the jurisdictional issue rests with plaintiff and that all inferences should be drawn against plaintiff, citing, inter alia, 1 Moore's Federal Practice, ¶ 0.604.

Plaintiff concedes that it has the burden of proof at trial concerning the facts necessary to support diversity jurisdiction but maintains that in opposing a motion for summary judgment that it is to receive the benefit of all possible inferences. Plaintiff's position is basically correct.

A similar question recently was discussed by the Ninth Circuit in Data Disc, Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977); See also Sheridan v. Garrison, 415 F.2d 699, 709 (5th Cir. 1969). In Data Disc the court acknowledged that the party seeking to establish in personam jurisdiction has the burden of establishing the jurisdictional facts. In opposing a motion to dismiss based upon a lack of jurisdiction, however, when the motion is submitted on affidavits plus other discovery materials,⁴ a plaintiff need only make a prima facie showing of jurisdictional facts. It is only necessary for these materials to support a finding of personal jurisdiction. Data Disc, supra. A similar procedure seems appropriate for subject matter jurisdiction.

Of course, in considering plaintiff's motion, which requests a ruling that the Annette Island Airport and Annette Aviation were owned or operated by the § 17 Indian corporation, all inferences and conflicts in evidence will be resolved in defendant's favor.

Corporate or Governmental Activity—Annette Island Airport

Plaintiff's claims based upon ownership of the airport facility and its claims based upon ownership and operation of Annette Aviation are founded upon differing theories. In addition, its proof on the identity of the body involved in these two enterprises is slightly different. Hence, the court will consider them separately.

Defendant's primary line of attack is common to both the airport and Annette Aviation. It has steadfastly maintained that although formally approved, the corporate charter of the Metlakatla Indian Community has never been the vehicle through which the Metlakatlans have acted. Its contention is that the corporation is an empty shell which has never been "fleshed out." In support of this position it has presented various affidavits⁵ and refers to many exhibits. In opposition to this argument plaintiff has produced literally reams of resolutions, contracts, agreements, etc., which refer to the Metlakatlan body executing the document as a corporation organized pursuant to the Indian Reorganization Act or some variation with the same tenor.

While it would do little to aid the analysis of the issue to list individually the documents produced, one series of documents is particularly interesting. Pursuant to 25 U.S.C. § 470, the Secretary of the Interior is authorized to make certain loans to "Indian chartered corporations."⁶ In a series of transactions commencing on November 24, 1947, the Metlakatlans received various loans from that revolving fund. In all of those requests, as it was statutorily required to do, the Metlakatlans represented themselves to be acting in a corporate capacity. These loans were applied for apparently under the authority of Section 4 of the corporate charter which provides the corporation with the power "To borrow money from the Revolving Indian credit fund . . .."⁷

In the face of overwhelming evidence that it acted at least on some occasions in its corporate capacity and in support of its corporate bare shell theory defendant has pointed to many instances in which the documents reciting corporate activity were internally inconsistent. Defendant contends that it never fully understood the § 16/§ 17 distinction and that it intended to act as a § 16 governmental unit.

A review of the documents and other authorities indicates that such a confusion clearly was possible. Many of the documents submitted were internally inconsistent. When coupled with the fact that the Alaska Supreme Court in Atkinson v. Haldane, supra, in 1977 delivered the first judicial opinion thoroughly to explore the separate identity of the two units such confusion is not surprising. Indeed, the Supreme Court in Metlakatla Indian Community v. Egan, 369 U.S. 45, 49 n. 7, 82 S.Ct. 552, 556, 7 L.Ed.2d 562 (1962), noted that Metlakatla was a "chartered federal corporation under a constitution . . .." (Emphasis added) It then cited both § 16 and § 17. The constitution referred to presumably is the constitution of the § 16 governmental entity and has nothing to do with the § 17 Indian corporation.⁸

It is clear, however, that plaintiff has presented sufficient evidence to establish at this juncture that Metlakatla has acted in some instances in its corporate capacity. The series of transactions concerning the revolving fund alone have amply established that point by prima facie evidence.

With respect to the Annette Island Airport itself plaintiff points to several documents to indicate that the § 17 corporate entity controls the land. Prior to considering those documents a brief history of the Airport is necessary. In 1948 the airport was leased to the United States from the Metlakatla Indian Community (hereinafter lease agreement). Several amendments to the lease agreement were executed in the ensuing years and in 1974 the lease was terminated.

Plaintiff asserts that these documents demonstrate that the Airport was leased by the § 17 corporation and upon...