Pelt v. Utah

• Decision Date: 03 September 2008
• Docket Number: No. 06-4046.,No. 06-4164.,06-4046.,06-4164.
• Citation: 539 F.3d 1271
• Parties: Jake C. PELT; Dan Benally; Jim Benally; Helen Cly; Fred Johnson, Plaintiffs-Counter-Defendants-Appellees, Wallace Saltclah; Harrison Johnson; Kenneth Maryboy; Corey N. Johnson; Leo Manheimer; Nancy A. Tsosie, Plaintiffs-Intervenors-Appellees, v. State of UTAH, Defendant-Counter-Claimant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

539 F.3d 1271

Jake C. PELT; Dan Benally; Jim Benally; Helen Cly; Fred Johnson, Plaintiffs-Counter-Defendants-Appellees Wallace Saltclah; Harrison Johnson; Kenneth Maryboy; Corey N. Johnson; Leo Manheimer; Nancy A. Tsosie, Plaintiffs-Intervenors-Appellees, v. State of UTAH, Defendant-Counter-Claimant-Appellant.

No. 06-4046.

No. 06-4164.

United States Court of Appeals, Tenth Circuit.

September 3, 2008.

Debra J. Moore, Assistant Utah Attorney General (Philip S. Lott and Reha Deal, Assistant Utah Attorneys General, and Mark L. Shurtleff, Utah Attorney General, with her on the briefs), Salt Lake City, UT, for Defendant-Appellant.

Brian M. Barnard, Utah Legal Clinic, Salt Lake City, UT, for Plaintiffs-Appellees.

Before LUCERO and MURPHY, Circuit Judges, and ROBINSON, District Judge.^*

ROBINSON, District Judge.

This appeal involves an oil and gas royalty fund that the State of Utah ("Utah") is required to administer for the benefit of members of the Navajo Nation living in San Juan County, Utah. In this class action, beneficiaries of the Navajo Trust Fund (the "Beneficiaries") seek a fiduciary accounting of trust fund activities from Utah. In proceedings below, Utah unsuccessfully argued that all or a portion of the Beneficiaries' claim was precluded by three prior cases to which the Beneficiaries were not parties. On appeal, Utah argues that Beneficiaries should be precluded because they were either "adequately" or "virtually" represented by parties in the three prior cases. After oral argument, the United States Supreme Court granted certiorari in Taylor v. Sturgell, ___ U.S. ___, 128 S.Ct. 977, 169 L.Ed.2d 800 (2008), to consider the theory of "virtual representation." This appeal was abated pending resolution of Taylor. The Supreme Court issued a decision in Taylor rejecting the theory of "virtual representation" and concluded that nonparty preclusion is inappropriate unless one of six established exceptions applies. The Court ordered supplemental briefing regarding the effect of Taylor on this appeal. Exercising jurisdiction under 28 U.S.C. § 1292(b), we AFFIRM.

I. JURISDICTION

The district court entered a partial summary judgment order on January 11, 2006. Utah filed a notice of interlocutory appeal from that order, asserting jurisdiction under 28 U.S.C. §§ 1291 and 1292(a), and Case No. 06-4046 was opened. Beneficiaries filed a motion to dismiss, challenging appellate jurisdiction over the uncertified interlocutory order. That issue was briefed and submitted to this merits panel.

In the meantime, Utah requested the district court to certify the January 11, 2006 order for interlocutory appeal. The district court granted the motion, and on April 27, 2006, amended its order to include the appropriate language for potential interlocutory appeal pursuant to 28 U.S.C. § 1292(b).² A petition seeking permission to appeal was then filed with this Court, Pelt v. Utah, Case No. 06-602, which was granted, and Case No. 06-4164 was opened on June 20, 2006. Utah filed a motion to consolidate the two appeals, but the clerk's panel denied the motion and the appeals were briefed separately on the merits.

The jurisdictional issue remains pending in Case No. 06-4046. In opposing Beneficiaries' motion to dismiss, Utah argued that the appeal in 06-4046 should be maintained because it provided a broader scope of review than the appeal in 06-4164. Specifically, Utah argued that this Court might be more inclined to exercise "supplemental" appellate jurisdiction over a prior 2001 district court order in 06-4064 because that appeal would not be dependent upon certification by the district court. Utah does not raise this supplemental jurisdiction argument in either appeal, however, and has acknowledged that the issues in these appeals are identical.³

The status of the appeals herein is that there is pending a timely discretionary appeal by Utah under section 1292(b) and an appeal under section 1291 requesting non-discretionary appeal of the same interlocutory order under section 1292(a)(1). In short, these identical appeals are before us both as one of right and one of petition. Because we granted Utah's petition for discretionary appeal under section 1292(b), we find it unnecessary to consider the simultaneous non-discretionary appeal under section 1292(a)(1) and dismiss Case No. 06-4046. See PPG Indus., Inc. v. Continental Oil Co., 478 F.2d 674, 676 n. 1 (5th Cir.1973).

II. PROCEDURAL AND FACTUAL BACKGROUND

In 1933, the federal government established the Navajo Trust Fund ("the Fund"), from which a percentage of royalties derived from exploitation of oil and gas deposits under the Navajo Reservation's Aneth Extension would be paid to Utah. Such funds were to be spent for the health, education and general welfare of the Indians residing in the Aneth extension, the ancestral home of Navajo Indians and other Native Americans. Congress later amended the beneficiary class to include all Navajo Indians living in San Juan County, Utah. See Pelt v. Utah, 104 F.3d 1534, 1538-39 (10th Cir.1996).

The present action is the fourth lawsuit brought by Fund beneficiaries against Utah challenging its administration of the Fund. Before the instant case was filed, three other cases also sought equitable accountings of Fund receipts and expenditures for time periods now at issue. These prior lawsuits are discussed below.

Sakezzie v. Utah State Indian Affairs Commission

The Sakezzie action was filed in April 1961, on behalf of the named plaintiffs and "as representatives of and members of the class of persons who are Navajo Indians residing within the Aneth Extension of the Navajo Indian Reservation in San Juan County, Utah." Although it was a class action, the Sakezzie case was not certified as such, nor was it subject to the current rules governing class actions under Federal Rule of Civil Procedure 23, as amended in 1966.

Plaintiffs requested an accounting of all Fund monies and alleged that no expenditures had been for their use and benefit. Plaintiffs did not seek monetary compensation in connection with the accounting. Utah provided answers to interrogatories containing a summary explanation of expenditures, with no supporting documentation. The case was tried to the court on June 12, 1961, at which time the district court issued an oral ruling where the judge stated:

[t]he matter of accounting has been rendered moot by pretrial discovery, I believe, and also by the evidence which indicates that the agencies of the Federal Government have been receiving and paying over to the State the funds in question, leaving the problem of accountability in the area of disbursements, rather than checking receipts.

The "pretrial discovery" refers to the interrogatory answers, but it is not clear what other "evidence" the district court was referring to. Nothing in the record indicates that Plaintiffs objected to the district court's finding that the accounting claim was mooted by the interrogatory answers.

The district court entered written Findings of Fact and Conclusions of Law, which stated that the court found that the Utah defendants "have not kept the plaintiffs and those represented by them reasonably informed concerning the amounts received in said [F]und and as to expenditures from said [F]und; but in the course of this proceeding have fully informed the plaintiffs of such receipts and expenditures." Sakezzie v. Utah Indian Affairs Comm'n, 198 F.Supp. 218, 222 (D.Utah 1961). ("Sakezzie I"). The court also concluded that the Fund is not a public fund. Id. at 224. Plaintiffs did not appeal from this order.

In July 1962, plaintiffs filed the first of two post-judgment petitions for relief, alleging that defendants were not complying with the district court's judgment and decree. Plaintiffs alleged that defendants refused to provide them with information relating to either the receipts or disbursements of the Fund. Plaintiffs sought an order requiring monthly accountings of both receipts and expenditures. Defendants again filed answers to interrogatories setting forth what they characterized as accounting information in the form of an Indian Affairs Commission Annual Report that contained accounting information from July 1, 1961 through June 30, 1962. On February 7, 1963, the district court entered a Memorandum of Decision, stating that while defendants had kept "full and proper accounts" of the funds received by them, they demonstrated

remarkable unconcern about keeping the beneficiaries of the fund informed of accretions to said fund, about disbursements and commitments therefrom and about plans with respect to future expenditures, have failed to do what was convenient and reasonably within their power to advise the beneficiaries concerning these and other matters and have often ignored without justification or excuse requests and inquiries by the Indians or their representative.

Sakezzie v. Utah Indian Affairs Comm'n, 215 F.Supp. 12, 18 (D.Utah 1963) ("Sakezzie II"). The court went on to state that it was clear that defendants had not discharged their duty in that respect and, after some admonishment, ordered defendants to make monthly accounting reports of receipts and expenditures as requested by plaintiffs. Id. at 18-19, 24.

In May 1964, plaintiffs filed a second post-judgment petition seeking relief from defendants' alleged failure to comply with the two previous orders. This third petition alleged, inter alia, continued refusal of Fund administrators to provide information regarding ongoing receipts and expenditures. The third petition did not seek an order requiring Defendants to produce yet another accounting, but instead requested compensation for funds that the court found to have been expended or invested for purposes inconsistent with its previous orders, and an order enjoining defendants from making any further use or expenditures of the funds. The record in Sakezzie reveals no further activity for more than a...