Penobscot Nation v. Fellencer

• Court: Court of Appeals for the First Circuit
• Decided: January 20, 1999
• Docket: 98-1326
• Status: Published

Opinion

USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit


No. 98-1326



                        PENOBSCOT NATION,



                            Appellant,



                                v.



                      CYNTHIA A. FELLENCER,



                            Appellee.


APPEALS FROM THE UNITED STATES DISTRICT COURT



                    FOR THE DISTRICT OF MAINE



           [Hon. Morton A. Brody, U. S. District Judge]


Before



                      Lipez, Circuit Judge

                                

           Coffin and Campbell, Senior Circuit Judges


Kaighn Smith, Jr., with whom Gregory W. Sample was on brief

for appellant.

     Michael A. Duddy for appellee.


January 19, 1999


LIPEZ, Circuit Judge.  This case requires us to revisit and

further define the allocation of sovereign powers between the

Penobscot Nation (the Nation) and the State of Maine.  The question

before us is whether the decision of the Penobscot Nation Tribal

Council to terminate the employment of a community health nurse

constitutes an "internal tribal matter" within the meaning of the

Maine Indian Claims Settlement Act of 1980, 25 U.S.C.  1721 -

1735.  The district court held that it does not.  We disagree. 

That employment termination decision is an "internal tribal matter"

and, as such, cannot be challenged in the courts of Maine pursuant

to the Maine Human Rights Act (MHRA), Me. Rev. Stat. Ann. tit. 5,

 4551 et seq.

                               I.

     The undisputed material facts are recounted thoroughly in the

district court's opinion.  See Penobscot Nation v. Fellencer, 999

F. Supp. 120 (D. Me. 1998).  We provide only a brief sketch to set

the stage.  Cynthia A. Fellencer was employed by the Penobscot

Nation as a Community Health Nurse/Diabetes Program Coordinator

(community nurse) from December 1992 until September 1994, when the

Penobscot Nation Tribal Council voted to terminate her employment.

Fellencer, who is a non-Indian, filed a charge of discrimination

with the Maine Human Rights Commission (MHRC) alleging that she had

been discharged due to her race and national origin.  The MHRC

dismissed her complaint for lack of jurisdiction, finding that

adjudication of the claim "would create a serious potential of

State interference with the internal affairs of the tribal

government, a result clearly not intended by the Maine Indian

Settlement Act."  MHRC Administrative Dismissal, Case No. E94-0730

(Jan. 30, 1995). 

     Fellencer subsequently filed suit in the Maine Superior Court

against the Penobscot Nation, claiming that the Nation had

terminated her employment (1) without due process and (2) "due to

her race and/or national origin in violation of the Maine Human

Rights Act."  She claims that subsequent to her termination the

community nurse position was posted with an express preference for

Indian applicants.  The Nation filed a motion to dismiss, which was

denied.  

     On October 20, 1997, the Nation filed the instant action in

the federal district court seeking a preliminary injunction to stay

the state court proceeding.  Cross motions for summary judgment

were filed.  On March 13, 1998, the district court denied the

Nation's request for a preliminary injunction and entered judgment

in favor of Fellencer, thereby permitting the state court case to

proceed.  The district court's denial of the preliminary injunction

can be reversed where there has been a "misapplication of the law

to particular facts" or an "application of the wrong legal

standard."  See Planned Parenthood League of Mass. v. Bellotti, 641

F.2d 1006, 1009 (1st Cir. 1981); see also Narragansett Indian Tribev. Narragansett Elec. Co., 89 F.3d 908, 912 (1st Cir. 1996)

(reversing district court's denial of preliminary injunction).  We

conclude that there was a misapplication of the law.      

                              II.

     The backdrop to the state and federal court proceedings is

some familiar history.  In the early 1970s, the Nation (in concert

with the Passamaquoddy Tribe and others) filed suit claiming nearly

two-thirds of Maine's land mass as their ancestral homelands.  SeePassamaquoddy Tribe v. Maine, 75 F.3d 784, 787 (1st Cir. 1996)

(citing Joint Tribal Council of the Passamaquoddy Tribe v. Morton,

528 F.2d 370 (1st Cir. 1975)).  After federal authorities

interceded, the parties negotiated a compromise which was approved

by Maine, the Penobscots, the other Indian parties, and Congress. 

The compromise is memorialized in two statutes: the Maine

Implementing Act, Me. Rev. Stat. Ann. tit. 30,  6201-14 (the

Implementing Act), and the Maine Indian Claims Settlement Act, 25

U.S.C.  1721-35 (the Settlement Act).  The settlement represented

a partial victory for the Nation and Maine: the Nation obtained

federal recognition as an Indian tribe and received almost one half

of $81.5 million appropriated under the Settlement Act (see 25

U.S.C.  1733) and, in exchange, the Nation's claims against Maine

were extinguished.  Further, while the Nation's right to self-

government was preserved to a limited extent, Maine was permitted

to extend its jurisdiction over the Nation to a greater degree than

most states exercise over other Indian tribes.  See  Akins v.

Penobscot Nation, 130 F.3d 482, 484-85 (1st Cir. 1997).

     As a result of the settlement, the relationship between the

Penobscot Nation and Maine is governed primarily by the

Implementing Act (state) and the Settlement Act (federal).  The

Implementing Act provides as follows:

     [T]he Passamaquoddy Tribe and the Penobscot Nation,

     within their respective Indian territories, shall have,

     exercise and enjoy all the rights, privileges, powers and

     immunities, including, but without limitation, the power

     to enact ordinances and collect taxes, and shall be

     subject to all the duties, obligations, liabilities and

     limitations of a municipality of and subject to the laws

     of the State, provided, however, that internal tribal

     matters, including membership in the respective tribe or

     nation, the right to reside within the respective Indian

     territories, tribal organization, tribal government,

     tribal elections and the use or disposition of settlement

     fund income shall not be subject to regulation by the

     State.



Me. Rev. Stat. Ann. tit. 30,  6206(1) (emphasis added).  We have

previously recognized that "[a]s to state law, the Penobscot Nation

and Maine expressly agreed that, with very limited exceptions, the

Nation is subject to the laws of Maine."  Akins, 130 F.3d at 484-

85.

     The Implementing Act was incorporated by reference into the

Settlement Act, 25 U.S.C.  1721-1735.  See 25 U.S.C. 

1721(b)(3).   In ratifying the Implementing Act, Congress sought to

balance Maine's interest in continuing to exercise jurisdiction

over the Nation's land and members (which it had done without

interference for almost two centuries), see Bottomly v.

Passamaquoddy Tribe, 599 F.2d 1061, 1064-65 (1st Cir. 1979), with

the Nation's "independent source of tribal authority, that is, the

inherent authority of a tribe to be self-governing."  S. Rep. No.

96-957, at 29 (1980) (citing Santa Clara Pueblo v. Martinez, 436

U.S. 49 (1978)).  Both the House and Senate sought to assuage the

Nation's fears that the settlement undermined its sovereignty:

     While the settlement represents a compromise in which

     state authority is extended over Indian territory to the

     extent provided in the Maine Implementing Act, ... the

     settlement provides that henceforth the tribes will be

     free from state interference in the exercise of their

     internal affairs.  Thus, rather than destroying the

     sovereignty of the tribes, by recognizing their power to

     control their internal affairs ... the settlement

     strengthens the sovereignty of the Maine Tribes.



S. Rep. No. 96-957, at 14; H.R. Rep. No. 96-1353, at 14-15,

reprinted in 1980 U.S.C.C.A.N. at 3790.

                              III.

     As the language of the Implementing Act and the federal

legislative history make clear, the critical phrase to analyze in

determining the scope of tribal sovereignty is "internal tribal

matters."  When the Nation acts on "internal tribal matters," its

actions are not subject to regulation by the state.  Me. Rev. Stat.

Ann. tit. 30,  6206(1).  Because the phrase "internal tribal

matters" was adopted by the federal Settlement Act, the meaning of

that phrase raises a question of federal law.  See Akins, 130 F.3d

at 485; see also Bottomly, 599 F.2d at 1066 ("until Congress acts,

the tribes retain their [] sovereign powers").

     Before we examine the language of the Implementing Act, we

must acknowledge some general principles that inform our analysis

of the statutory language.  First, Congress' authority to legislate

over Indian affairs is plenary and only Congress can abrogate or

limit an Indian tribe's sovereignty.  See U.S. CONST., art. I,  8,

cl. 3; Morton v. Mancari, 417 U.S. 535, 551-53 (1974) (discussing

the plenary power of Congress to deal with special problems of

Indians);  see also F. Cohen, Handbook of Federal Indian Law 231

(1982 ed.) ("Neither the passage of time nor apparent assimilation

of the Indians can be interpreted as diminishing or abandoning a

tribe's status as a self governing entity.").  Second, special

rules of statutory construction obligate us to construe "acts

diminishing the sovereign rights of Indian tribes ... strictly," 

Rhode Island v. Narragansett Indian Tribe, 19 F.3d 685, 702 (1st

Cir. 1994), "with ambiguous provisions interpreted to the

[Indians'] benefit,"  County of Oneida v. Oneida Indian Nation of

New York, 470 U.S. 226, 247 (1985).  These special canons of

construction are employed "in order to comport with the[]

traditional notions of sovereignty and with the federal policy of

encouraging tribal independence," White Mountain Apache Tribe v.

Bracker, 488 U.S. 136, 143-44 (1980), and are "rooted in the unique

trust relationship between the United States and the Indians," 

County of Oneida, 470 U.S. at 247.

     A.  The Language of the Statute

     The Implementing Act preserves the Nation's sovereignty with

respect to

     internal tribal matters, including membership in the

     respective tribe or nation, the right to reside within

     the respective Indian territories, tribal organization,

     tribal government, tribal elections and the use or

     disposition of settlement fund income ....



Me. Rev. Stat. Ann. tit. 30,  6206(1).  While the list of

exemplars following "internal tribal matters" informs the meaning

of that term, the list is not exclusive or exhaustive.  In fact, we

declared in Akins that the exemplars "provide limited guidance." 

Akins, 130 F.3d at 486.  We also recognized in Akins that the fact

"[t]hat a tribe attempts to govern a matter does not render it an

internal tribal matter."  Id.  

     B.  The Akins Precedent

     Akins was our first occasion for addressing the allocation of

sovereign powers between the Nation and the State of Maine pursuant

to the Implementing Act and the Settlement Act.  The Nation had

adopted a policy allowing only enrolled members of the tribe who

lived on the reservation to be eligible for timber permits to

harvest timber on tribal lands.  See Akins, 130 F.3d at 483. 

Akins, an enrolled tribal member who had moved off the reservation,

lost his timber permit as a result of the change in policy.  Id. at

483-84.  Akins sued in federal court, claiming that the Nation had

violated his rights to due process and equal protection, and that

the Nation had violated his right to be free from bills of

attainder.  Id. at 484.  We held that Akins' claims involved an

"internal tribal matter" and were subject to the exclusive

jurisdiction of the tribal courts.  Id. at 490.

      We identified five considerations in Akins that were

persuasive in characterizing the grant of timber rights as an

"internal tribal matter."  These considerations were: (1) the

disputed policy regulated only tribal members; (2) the policy

related to lands acquired by the Nation with federal funds received

for that purpose, and the lands were considered "Penobscot Indian

Territory"; (3) the policy affected the Nation's ability to

regulate its natural resources; (4) at least on its face, the

policy did not implicate or impair the interest of the State of

Maine; and (5) the recognition that the timber harvesting policy

involved an "internal tribal matter" was consistent with prior

legal understandings.  Akins, 130 F.3d at 486-87.   We did not

offer these considerations as an essential test for determining

which tribal actions constitute "internal tribal matters,"  see id.at 487 (noting that "generalizations in this subject [of tribal

authority] have become ... treacherous" and that "[w]e tread

cautiously and write narrowly"), and we do not offer them now for

that purpose.  Instead, we use the Akins considerations as one

source of guidance in resolving this case.  And, in the spirit of

Akins, we consider another pertinent factor, the nature of the

position involved in this case. 

     Evaluating all of these considerations, with particular

emphasis on the interest of the State of Maine, prior legalunderstandings, and the nature of Fellencer's position, we conclude

that the decision of the Nation to terminate Fellencer's employment

was an "internal tribal matter."

     C. The Akins Considerations

     1.  Within the Tribe     

     Although Fellencer, unlike Akins, is not a member of the

Nation, and hence the effect of the decision at issue is not

limited to tribal members, the decision to terminate Fellencer as

the community health nurse affects many tribal members but only one

non-tribal member (Fellencer).  This limited impact beyond the

Nation distinguishes this case from Penobscot Nation v. Stilphen,

461 A.2d 478 (Me. 1983), wherein the Maine Supreme Judicial Court

held that a "beano" game, a tribal enterprise designed to involve

many non-tribal members, did not become an "internal tribal matter"

simply because an Indian tribe administered it, or because an

Indian tribe funded government services with the beano game's

profits.  See id. at 486.  Holding that the public gambling events

were "related to tribal self-government only because of the use to

which its profits are put," the Stilphen Court held that the tribe

had "no inherent right to 'market an exemption from state

taxation'" to the public.  Id. (quoting Washington v. Confederated

Tribes of the Colville Indian Reservation, 447 U.S. 134, 156

(1980)).  The "beano" games in Stilphen were designed to "draw many

hundreds of players to the Penobscot reservation from all over

Maine and beyond."  Stilphen 461 A.2d at 480.  Here the employment

decision has its immediate effect on only one non-tribal member.

     2 & 3.  Land and Natural Resources

     The second and third considerations in Akins related to the

commercial use of tribal lands ("the very land that defines the

territory of the Nation," Akins, 130 F.3d at 487), and the "growth,

health, and reaping" of the tribe's natural resources.  Id. 

Although this case does not involve tribal land and natural

resources, it does involve the Nation's human resources and its

judgment that a different community health nurse will better serve

the health of tribal members.  See Montana v. United States, 450

U.S. 544, 566 (1981) (recognizing that Indian tribes may "retain

inherent power to exercise civil authority over the conduct of non-

Indians on fee lands within its reservation when that conduct

threatens or has some direct effect on the . . . health or welfare

of the tribe").     

     4. Interest of Maine

     As a generality, Maine has a strong interest in protecting all

employees against discrimination through its Human Rights Act.  SeeMe. Rev. Stat. Ann. tit. 5,  4552; see also Maine Human Rights

Comm'n v. Local 1361, United Paperworkers Int'l Union, 383 A.2d

369, 373 (Me. 1978)(stating that the MHRA "was meant to have very

broad coverage").  In this case, however, the State is not

attempting to apply its laws to the Nation's employment decision. 

To the contrary, the Maine Attorney General ruled long before this

case that "the employment decisions of the Penobscot Nation, when

acting in its capacity as a tribal governmental employer, are not

subject to regulation by the state[.]"  Maine Attorney General

Opinion No. 84-22 (July 25, 1984).  Thus, while the United States

intervened in this case to argue that an employment decision by the

Nation is an "internal tribal matter" and therefore not subject to

the MHRA, Maine did not intervene to argue to the contrary.  In

Akins we found this posture significant.  Even though Akins alleged

violations of Maine law, we noted that there was "not a dispute

between Maine and the Nation over the attempted enforcement of

Maine's laws."  Akins, 130 F.3d at 487 (emphasis added).  The

situation here is even more favorable to the Nation.  The state

disavows the very "state interest" that Fellencer seeks to invoke

in support of her private cause of action.

     5. Prior Legal Understandings

     Prior legal understandings strongly support the Nation's claim

of exemption from challenge in state court to its employment

termination decision.  In the employment discrimination context,

Congress exempted Indian tribes from Title VII's definition of

"employer" in the original passage of the Civil Rights Act of 1964. 

42 U.S.C.  2000e(b) ("[T]he term 'employer' means a person engaged

in an industry affecting commerce . . . . Such term does not

include . . . an Indian tribe").  The Supreme Court has

characterized this exemption as "Congress' recognition of the

longstanding federal policy of providing a unique legal status to

the Indians in matters of tribal employment," and it characterized

Congressional intent as a "policy of furthering Indian self-

government."  Morton v. Mancari, 417 U.S. 535, 548, 551 (1974)

(emphasis added).  

     General federal Indian civil rights law, outside the

employment discrimination context, further bolsters the conclusion

that Fellencer's claim involves an "internal tribal matter."  Even

though Indian tribes were exempted from Title VII coverage,

Congress subsequently enacted the Indian Civil Rights Act of 1968

(ICRA), 25 U.S.C.  1301-41, made applicable to the Penobscot

Nation through the Settlement Act, 25 U.S.C.  1725(h).  See Akins,

130 F.3d at 486.  Under the ICRA, "[n]o Indian tribe in exercising

powers of self-government shall . . . deny to any person within its

jurisdiction the equal protection of its laws or deprive any person

of liberty or property without due process of law."  25 U.S.C. 

1302(8).

     As fundamental as federal court jurisdiction has been to the

protection of the civil rights enumerated in section 1302(8), the

Supreme Court held in Santa Clara Pueblo v. Martinez, 436 U.S. 49,

65 (1978) that gender discrimination claims against tribes were

cognizable only in Indian tribunals.  In the Supreme Court's view,

Congress did not intend to abrogate Indian tribal sovereignty to

the extent that Indian tribes could be forced to defend against

such civil rights claims in an external (non-tribal) forum: "Tribal

courts have repeatedly been recognized as appropriate forums for

the exclusive adjudication of disputes affecting important personal

and property interests of both Indians and non-Indians."  Id.  The

Supreme Court explained that exclusive jurisdiction has been

reposed in the Indian tribunals because subjecting such claims to

federal court jurisdiction "plainly would be at odds with the

congressional goal of protecting tribal self-government."  Id. at

64.

     These prior legal understandings (both the Title VII exemption

and the ICRA's grant of exclusive jurisdiction to tribal courts)

are particularly important because they inform the intent of

Congress in the adoption of the Settlement Act.  We "have long

presumed that Congress acts against the background of prior law." 

Akins, 130 F.3d at 489 (citing Kolster v. INS, 101 F.3d 785, 787-88

(1st Cir. 1996)); see also Passamaquoddy Tribe, 75 F.3d at 789 ("To

[give effect to the legislative will] a court must take into

account the tacit assumptions that underlie a legislative

enactment, including not only general policies but also preexisting

statutory provisions.").  The statutory provisions in Title VII and

the ICRA reflect Congress' understanding prior to the adoption of

the Settlement Act that employment discrimination claims against

Indian tribes implicate "unique" considerations, see Morton v.

Mancari, 417 U.S. at 548, and that such claims should be heard in

Indian courts.  See Santa Clara Pueblo, 436 U.S. at 64-65.

     Indeed, the Senate Report on the Settlement Act explicitly

cited with approval to Santa Clara Pueblo, 463 U.S. 49 (1978).  See 

S. Rep. No. 96-957, at 29 (1980).  Although we have refused to read

into this reference an incorporation of "all prior Indian law"

because that "would be inconsistent with the unique nature of the

Maine settlement,"  Akins, 130 F.3d at 489, we also recognized that

Congress "explicitly made existing general federal Indian law

applicable to the Penobscot Nation in the Settlement Act."  Id. 

That body of law includes Congressional enactments excluding Indian

tribes from Title VII coverage and limiting civil rights claims

against the tribes to tribal forums.  See  Santa Clara Pueblo, 463

U.S. at 65-66.

     The Senate Report on the Settlement Act also noted that the

Act strengthened the Nation's sovereignty "by recognizing [the

Penobscot's] power to control their internal affairs and by

withdrawing the power which Maine previously claimed to interfere

in such matters[.]"  S. Rep. 96-957, at 14.  The Report predicates

the Nation's  right to be free from state interference on the

Nation's "inherent sovereignty" as recognized in Bottomly, 599 F.2d

1061, and State v. Dana, 404 A.2d 551 (Me. 1979).  Both Bottomlyand Dana drew on federal Indian common law in recognizing the

inherent sovereignty of the Penobscot and Passamaquoddy tribes. 

See Bottomly, 599 F.2d at 1066; Dana, 404 A.2d at 560-61.  The

Report states that "[i]n keeping with" the sovereignty recognized

in Bottomly and Dana, it was Congress' intent to guarantee that the

Nation "[would] be free from state interference in the exercise of

[its] internal affairs."  S. Rep. 96-957 at 14.  By characterizing

its recognition of the Nation's sovereignty as "in keeping with"

Bottomly and Dana, Congress signaled its intent that federal Indian

common law give meaning to the terms of the settlement.  The Senate

Report continues by listing important sovereignty rights retained

by the Nation, including "the establishment of tribal courts ...

with powers similar to those exercised by Indian courts in other

parts of the country."  Id. at 15.  These powers included hearing

employment discrimination claims filed against the tribes.

     In summary, these prior legal understandings provide strong

support for classifying a claim of national origin discrimination

based on the termination of Fellencer's employment as an "internal

tribal matter."     

     D. The Nature of the Position at Issue

     Apart from the statutory language, judicial precedent,

legislative history and federal Indian common law, the Nation's

employment of a community health nurse has particular "internal

tribal matter" implications because of the statutory origins of the

position.  The community nurse position from which Fellencer was

dismissed is funded by the Indian Self-Determination and Education

Assistance Act of 1975 (ISDA), 25 U.S.C.  450 et seq.  Congress

therein declared its policy to "respond to the strong expression of

the Indian people for self-determination by assuring maximum Indian

participation in the direction of . . . Federal services to Indian

communities."  25 U.S.C.  450a(a); see also S. Rep. No. 102-392,

at 7 (1992), reprinted in 1992 U.S.C.C.A.N. at 3949 (1992

amendments to Indian Health Care Improvement Act)("health care

provided by people of one's own culture is the most appropriate,

and results in better utilization of health care services"). 

Believing that the administration of such services by Indians was

"crucial to the realization of self-government," 25 U.S.C. 

450(a)(1), Congress included an employment preference for Indians

in the legislation.  25 U.S.C.  450e(b) (requiring that

"preferences and opportunities for training and employment . . .

shall be given to Indians").

     This employment preference for Indians distinguishes the

Nation's community nurse position from any position in a regular

municipal government.  Cf. Implementing Act, Me. Rev. Stat. Ann.

tit. 30,  6204 (subjecting Nation generally to same state

jurisdiction as state exercises over municipalities).  Clearly,

Maine municipalities cannot employ similar preferences.   The

uniqueness of the federal employment preference counsels against

the application of Maine law in this employment discrimination

context.  In light of the Supreme Court's description of such

preferences in Morton v. Mancari, 417 U.S. at 553 (1974), as

furthering "self-government," and in light of the other

considerations set forth herein, we hold that the decision of the

Nation to terminate the employment of a community health nurse was

an "internal tribal matter" within the meaning of the Settlement

Act, and hence the Nation cannot be subjected to state court

jurisdiction for the adjudication of an employment discrimination

claim pursuant to the Maine Human Rights Act.     

     The judgment of the district court is reversed; the case is

remanded for the entry of judgment in favor of the Nation and the

issuance of an injunction if it is deemed necessary.