Stathis v. Marty Indian Sch.

• Decision Date: 19 June 2019
• Docket Number: 28738
• Citation: 930 N.W.2d 653
• Parties: Timothy STATHIS, Plaintiff and Appellant, v. MARTY INDIAN SCHOOL, a South Dakota non-profit corporation; Elk Soldier also known as Gary Drapeau, Sr.; Glenn Drapeau; Galena Drapeau; Sara W. Zephier; Sarah R. Zephier; Stephanie Cournoyer; Julie Blackmoon-Wright; and John and/or Jane Does One (1) through Five (5), Defendants and Appellees.
• Court: South Dakota Supreme Court

930 N.W.2d 653

Timothy STATHIS, Plaintiff and Appellant,

v.MARTY INDIAN SCHOOL, a South Dakota non-profit corporation; Elk Soldier also known as Gary Drapeau, Sr.; Glenn Drapeau; Galena Drapeau; Sara W. Zephier; Sarah R. Zephier; Stephanie Cournoyer; Julie Blackmoon-Wright; and John and/or Jane Does One (1) through Five (5), Defendants and Appellees.

28738

Supreme Court of South Dakota.

ARGUED ON APRIL 30, 2019

OPINION FILED June 19, 2019

JAMES D. TAYLOR, Mitchell, South Dakota, Attorney for plaintiff and appellant.

REBECCA L. KIDDER of Fredericks, Peebles & Morgan, LLP, Rapid City, South Dakota, Attorneys for defendants and appellees.

GILBERTSON, Chief Justice

[¶1.] Timothy Stathis was employed as the high school principal at the Marty Indian School (MIS) in Marty, South Dakota. In late 2017, a series of incidents between Stathis and members of the MIS school board and community of Marty led to the termination of Stathis’s employment. Stathis sued MIS and other involved parties in state court for breach of contract, breach of settlement agreement, wrongful termination, libel, and slander and requested punitive damages. The circuit court dismissed Stathis’s complaint on the grounds of tribal sovereign immunity, immunity of tribal officials and employees, federal preemption, and infringement of tribal sovereignty. We affirm the circuit court’s dismissal solely on a lack of subject matter jurisdiction based on federal preemption.

Facts and Procedural History

[¶2.] On May 8, 2017, Stathis entered into an employment contract with MIS to continue to serve as its high school principal. MIS is located in the town of Marty, South Dakota on the Yankton Sioux Indian Reservation. The school was chartered by the Yankton Sioux Tribe, a federally recognized Indian Tribe. The school operates under a constitution that was approved by the Yankton Sioux Tribal Business and Claims Committee on November 6, 2013. The constitution designates MIS as "a legal entity of the Yankton Sioux Tribe, from whom Marty Indian School, Inc. has been delegated authority to operate and maintain the Marty Indian School." It also states that MIS was "created for the purpose of maintaining and continually upgrading the educational process for the students of the Marty Indian School."

[¶3.] Stathis’s contract with MIS stated that his term of employment would begin around August 1, 2017, and end around June 30, 2018. A provision of the contract entitled "SCHOOL LAW" provided that:

The [MIS] School Board is an entity of the Yankton Sioux Tribe, and is not bound by the laws of the State of South Dakota. The By-laws and Policies and Procedures Manual of the School Board shall be binding and controlling on the parties and shall control the conduct of the operation of the school. Any matter by [sic] controlled by the By-laws and Policies and Procedures will be controlled by the laws of the State of South Dakota. If any ambiguity or question as to whether the laws of the State of South Dakota or the By-laws and Policies and Procedures Manual of the School Board is controlling shall arise, the By-law and Policies and Procedures of the School board shall be binding and controlling. The exceptions to South Dakota School law includes, but is not limited to, the following matters, to wit:

Administrator or Supervisor Retirement, School Calendar, Continuing Contract and Tenure, and Conflict of Interest. Nothing herein shall be construed to constitute and [sic] acceptance by the School Board of the jurisdiction of South Dakota courts.

[¶4.] As part of his duties as principal, Stathis was required to administer school improvement grants issued by the Bureau of Indian Education. This involved granting monetary bonuses to faculty to incentivize improvement in both faculty and student performance. While employed at MIS, Stathis developed a set of criteria to assist in awarding these bonuses. These criteria and the awarding of bonuses became the subject of several disputes between Stathis, MIS faculty, the MIS school board, and members of the Marty community.

[¶5.] On November 15, 2017, opposition to Stathis’s handling of monetary bonuses reached a boiling point. On that date, Elk Soldier (also known as Gary Drapeau, Sr.), a member of MIS faculty, arranged a sit-in demonstration at the MIS library for students and other community members to protest Stathis’s actions. The exact nature of the participants' grievances with Stathis is somewhat unclear from the record. As the gathering grew in size, members of the MIS school board, including Appellees Julia Blackmoon-Wright, Sarah W. Zephier, and Stephanie Cournoyer, began to arrive to assess the situation. Blackmoon-Wright sat in the front row of the gathering and stated, "I am a School Board Member, I am here to listen to what you want to say." Sarah W. Zephier, the president of the school board, then took control of the gathering.

[¶6.] President Zephier encouraged attendees of the gathering to voice their specific complaints regarding Stathis. This led to what Stathis characterizes as "an impromptu open and public meeting about Stathis between students, the entire Marty Indian School Board, members of the public, and Appellees John and/or Jane Does One (1) through Five (5)." The impromptu meeting continued for approximately two hours, at which point it was announced over the school’s public address system that there would be an emergency executive session of the school board. The school board commenced a meeting in private, then called Stathis before the board to answer questions, and then excused Stathis from the meeting so the school board could meet in private.

[¶7.] Later that evening, Stathis received an email from the MIS superintendent stating that he had been suspended from his employment for ten days, beginning on November 16, 2017. Stathis later determined that he would not be paid during the term of his suspension. He filed a written grievance with the school board regarding his suspension without pay and the events of November 15-16, 2017. On November 29, 2017, after receipt of the grievance and several discussions, the school board reinstated Stathis and stated that he would be repaid his previously withheld wages. Stathis returned to work on November 30, 2017.

[¶8.] On December 1, 2017, another incident involving Elk Soldier and Stathis occurred. That morning, Elk Soldier called Yankton Sioux Tribal Police to report that there had been a physical fight in the MIS school office between Stathis and another MIS staff member. When tribal police arrived at the scene, Stathis informed them that no fight had actually occurred. Elk Soldier later claimed that he had wrongly believed a fight had occurred between Stathis and another staff member. Later that day, both Elk Soldier and another MIS staff member, Appellee Galena Drapeau, submitted letters of resignation to the MIS superintendent. President Zephier then convened a meeting of the school board to discuss Stathis’s employment. Stathis was not present. At the end of the meeting, the school board advised Stathis that his contract had been terminated.

[¶9.] Stathis claimed that the school board informed him that the remaining salary under his contract would be paid in full. On December 12, 2017, Stathis returned to the school and was given a check that school officials claimed to be the remaining amount owed to Stathis under his contract minus taxes and other withholdings. Shortly after receiving the check, however, Stathis was ordered by the MIS superintendent to surrender the check back to the school or a stop payment order would be entered. After Stathis was informed of this decision, a tribal police officer was called to the school and escorted Stathis from the MIS campus.

[¶10.] Stathis claims to have made repeated demands for the payment of the balance of his contract. On December 20, 2017, the school board met again and decided to pay Stathis $ 1,500 as a complete settlement of the balance owed on Stathis’s contract. The school board also opted to pay Stathis’s salary for the two weeks he was suspended. On January 12, 2018, Stathis received a $ 1,500 settlement check and a $ 2,916 check for his salary during the two-week suspension. Stathis elected to not accept the $ 1,500 check. He later filed two written grievances with the school board, but claimed that both were unanswered.

[¶11.] Stathis sued the Appellees in this action in circuit court for breach of contract, breach of settlement agreement, wrongful termination, libel, and slander, and requested punitive damages arising from the termination of his employment contract with MIS. Appellees Elk Soldier (a.k.a. Gary Drapeau, Sr.), Glenn Drapeau, and Galena Drapeau were employees of MIS at the time of Stathis’s employment. Appellees President Zephier, Sarah R. Zephier, Stephanie Cournoyer, and Julie Blackmoon-Wright were members of the MIS school board at the time of Stathis’s employment. Appellees John and/or Jane Does one through five remain unknown, but are presumed to be employees, school board members, or students at MIS who were involved at the public meeting regarding Stathis. All named Appellees (defendants) are members of the Yankton Sioux Tribe. [¶12.] Appellees moved to dismiss Stathis’s complaint under SDCL 15-6-12(b)(1) (lack of subject matter jurisdiction), SDCL 15-6-12(b)(2) (lack of personal jurisdiction), SDCL 15-6-12(b)(5) (failure to state a claim on which relief can be granted), and SDCL 15-6-12(b)(6) (failure to join a party). The Appellees claimed the circuit court did not have jurisdiction to hear Stathis’s claims on the basis of tribal sovereign immunity, immunity of tribal officials and employees, federal preemption, and infringement of tribal sovereignty. A hearing was held on the motion on July 9, 2018. The circuit court granted the motion on the basis of tribal sovereign immunity, immunity of tribal officials and employees, federal preemption, and infringement of tribal sovereignty. The...