Salt River Project Agricultura v. Reynold Lee

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 29, 2012
• Docket: 10-17895
• Status: Published

Opinion

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

SALT RIVER PROJECT AGRICULTURAL  IMPROVEMENT AND POWER DISTRICT, a municipal corporation and political subdivision of the State of Arizona and HEADWATERS RESOURCES, INC., a Utah No. 10-17895 corporation, Plaintiffs-Appellants, D.C. No. v.  3:08-cv-08028-JAT ORDER AND REYNOLD R. LEE; CASEY AMENDED WATCHMAN; WOODY LEE; PETERSON OPINION YAZZIE; EVELYN MEADOWS; HERB YAZZIE, Honorable; LOUISE G. GRANT, Honorable; ELEANOR SHIRLEY, Honorable; LEONARD THINN; SARAH GONNIE, Defendants-Appellees.  Appeal from the United States District Court for the District of Arizona James A. Teilborg, District Judge, Presiding

Argued and Submitted February 14, 2012—San Francisco, California

Filed March 15, 2012 Amended May 29, 2012

5877 5878 SALT RIVER PROJECT v. LEE Before: A. Wallace Tashima and Barry G. Silverman, Circuit Judges, and Marvin J. Garbis, Senior District Judge.*

Opinion by Judge Silverman

*The Honorable Marvin J. Garbis, Senior District Judge for the U.S. District Court for the District of Maryland, sitting by designation. SALT RIVER PROJECT v. LEE 5879

COUNSEL

John J. Egbert (argued) and Paul G. Johnson of Jennings, Strouss & Salmon, P.L.C., Phoenix, Arizona, for plaintiff- 5880 SALT RIVER PROJECT v. LEE appellant Salt River Project Agricultural Improvement and Power District.

Lisa M. Coulter, Snell & Wilmer, LLP, Phoenix, Arizona, for plaintiff-appellant Headwater Resources, Inc.

Philip R. Higdon (argued), Rhonda L. Barnes, and Jessica J. Berch, Perkins Coie LLP, Phoenix, Arizona, for defendants- appellees Reynold R. Lee, Casey Watchman, Woody Lee, Peterson Yazzie, Evelyn Meadows, Honorable Herb Yazzie, Honorable Louise G. Grant, and Honorable Eleanor Shirley.

David R. Jordan, The Law Offices of David R. Jordan, PC, Gallup, New Mexico, for defendants-appellees Leonard Thinn and Sarah Gonnie.

ORDER

Appellants’ unopposed motion to amend opinion is GRANTED. The opinion filed on March 15, 2012 and pub- lished at 672 F.3d 1176 is amended as follows.

Page 3131 of the slip opinion begins: “Salt River Project Agricultural Improvement and Power District co-owns, and Headwater Resources, Inc. operates, a power plant called the Navajo Generating Station on Navajo reservation land in northern Arizona.” That sentence shall be deleted and replaced with the following language:

“Salt River Project Agricultural Improvement and Power District co-owns a power plant called the Navajo Generating Station on Navajo reservation land in northern Arizona. Head- water Resources, Inc. is a contractor employed by Salt River Project at the power plant.”

With that amendment, the panel has voted to deny appel- lees’ petition for rehearing. SALT RIVER PROJECT v. LEE 5881 Judge Silverman has voted to deny appellees’ petition for rehearing en banc, and Judges Tashima and Garbis so recom- mend.

The full court has been advised of the petition for rehearing en banc and no active judge has requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35.

Appellees’ petition for rehearing and petition for rehearing en banc are DENIED.

OPINION

SILVERMAN, Circuit Judge:

Two non-Indian entities brought this action to enjoin Nav- ajo Nation tribal officials from applying tribal law to them in tribal courts. They claim that both their contract with the tribe and federal law deprive tribal officials of authority to regulate them. This appeal presents the question whether the Navajo Nation itself — which enjoys sovereign immunity and cannot be sued — is a necessary (and if so, indispensable) party under Federal Rule of Civil Procedure 19. We hold today that the tribe is not a necessary party because the tribal officials can be expected to adequately represent the tribe’s interests in this action and because complete relief can be accorded among the existing parties without the tribe. This lawsuit for prospective injunctive relief may proceed against the officials under a routine application of Ex parte Young, 209 U.S. 123 (1908), and should not have been dismissed.

I. BACKGROUND

Salt River Project Agricultural Improvement and Power District co-owns a power plant called the Navajo Generating Station on Navajo reservation land in northern Arizona. Head- 5882 SALT RIVER PROJECT v. LEE water Resources, Inc. is a contractor employed by Salt River Project at the power plant. When they fired two Navajo Nation employees who worked at the power plant, the employees filed charges with the Office of Navajo Labor Relations alleging that they were fired without just cause in violation of the Navajo Preference in Employment Act, 15 Navajo Nation Code §§ 601 et seq. The Office of Navajo Labor Relations issued right-to-sue notices to both former employees, who then filed complaints with the Navajo Nation Labor Commission. Salt River Project and Headwaters defended the claims on, among other grounds, the theory that the Navajo Nation lacked authority to regulate employment matters at the power plant under (1) the terms of a 1969 lease between the Navajo Nation and Salt River Project for the land on which the power plant is located, which waived the tribe’s right to regulate employment relations at the power plant,1 and (2) a federal statutory right-of-way granted pursuant to 25 U.S.C. § 323, which extinguished all Indian uses of the cov- ered lands.2 The Navajo Nation Supreme Court ultimately rejected that defense, holding that the Navajo Preference in Employment Act applied to Salt River Project and Headwa- ters at the power plant, and remanded the case to the Navajo Nation Labor Commission to allow the former employees’ claims to proceed on the merits. Thinn v. Navajo Generating Station, No. SC-CV-25-06, 7 Am. Tribal Law 558, 560, 564-66 (Navajo 2007). 1 The relevant clause in the 1969 lease states: The Tribe covenants that, other than as expressly set out in this Lease, it will not directly or indirectly regulate or attempt to regu- late the Lessees in the construction, maintenance or operation of the Navajo Generation Station . . . . 2 The § 323 grant provides in relevant part: All present existing Indian uses of any land described herein are hereby extinguished and prohibited for the term of the § 323 Grant, and any renewals thereof . . . . SALT RIVER PROJECT v. LEE 5883 Salt River Project and Headwaters then filed this action for declaratory and injunctive relief against the Navajo officials responsible for enforcing the Act — the Director of the Office of Navajo Labor Relations, the members of the Navajo Nation Labor Commission, and the justices of the Navajo Nation Supreme Court. Their complaint alleged, inter alia, that the Navajo officials “have proceeded, and are threatening to fur- ther proceed, against [the plaintiffs] . . . in violation of federal law” and that “all such actions . . . violate federal law.” The complaint sought a declaratory judgment that those Navajo officials lacked authority to regulate employment relations at the Navajo Generating Station and an injunction staying the former employees’ claims.

The Navajo officials moved to dismiss under Federal Rule of Civil Procedure 12(b)(7) for failure to join a party required by Rule 19: the Navajo Nation. The district court granted the motion, concluding that the Navajo Nation was a necessary party under Rule 19(a)(1)(A) because without the tribe, the plaintiffs could not get complete relief from future attempts by the Navajo Nation to enforce the Navajo Preference in Employment Act. The district court also concluded that the tribe was a necessary party under Rule 19(a)(1)(B)(i) because proceeding without the Navajo Nation threatened to impair its interests in the scope of the 1969 lease, its economic interests in promoting full employment of Navajo Nation members, and its general interests in governing the Navajo reservation. Moreover, the district court concluded that the Navajo Nation, which sovereign immunity prevented from being joined, was an indispensable party under Rule 19(b). Accordingly, the dis- trict court dismissed the action. Salt River Project and Head- waters appeal that dismissal.

II. JURISDICTION AND STANDARD OF REVIEW

The district court had federal question jurisdiction under 28 U.S.C. § 1331. See Ariz. Pub. Serv. Co. v. Aspaas, 77 F.3d 5884 SALT RIVER PROJECT v. LEE 1128, 1132-33 (9th Cir. 1996). We have jurisdiction under 28 U.S.C. § 1291.

We review a Rule 19 dismissal for abuse of discretion and underlying legal conclusions de novo. See Cachil Dehe Band of Wintun Indians of the Colusa Indian Cmty. v. California, 547 F.3d 962, 969-70 (9th Cir. 2008).

III. DISCUSSION

As we have explained, Federal Rule of Civil Procedure 193 imposes a three-step inquiry: 3 Rule 19 states in relevant part: (a) Persons Required to Be Joined if Feasible. (1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if: (A) in that person’s absence, the court cannot accord com- plete relief among existing parties; or (B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person’s absence may: (i) as a practical matter impair or impede the person’s ability to protect the interest; or (ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest. (2) Joinder by Court Order. If a person has not been joined as required, the court must order that the person be made a party. A person who refuses to join as a plaintiff may be made either a defendant or, in a proper case, an involuntary plaintiff. ... (b) When Joinder Is Not Feasible. If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should pro- SALT RIVER PROJECT v. LEE 5885 1. Is the absent party necessary (i.e., required to be joined if feasible) under Rule 19(a)?

2. If so, is it feasible to order that the absent party be joined?

3. If joinder is not feasible, can the case proceed without the absent party, or is the absent party indispensable such that the action must be dis- missed?

See EEOC v. Peabody W. Coal Co., 400 F.3d 774, 779-80 (9th Cir. 2005).

A party may be necessary under Rule 19(a) in three differ- ent ways. First, a person is necessary if, in his absence, the court cannot accord complete relief among existing parties. See Fed. R. Civ. P. 19(a)(1)(A). Second, a person is necessary if he has an interest in the action and resolving the action in his absence may as a practical matter impair or impede his

ceed among the existing parties or should be dismissed. The fac- tors for the court to consider include: (1) the extent to which a judgment rendered in the person’s absence might prejudice that person or the existing parties; (2) the extent to which any prejudice could be lessened or avoided by: (A) protective provisions in the judgment; (B) shaping the relief; or (C) other measures; (3) whether a judgment rendered in the person’s absence would be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder. ... Fed. R. Civ. P. 19. 5886 SALT RIVER PROJECT v. LEE ability to protect that interest. See Fed. R. Civ. P. 19(a)(1)(B)(i). Third, a person is necessary if he has an inter- est in the action and resolving the action in his absence may leave an existing party subject to inconsistent obligations because of that interest. See Fed. R. Civ. P. 19(a)(1)(B)(ii).

Here, the district court first concluded under Rule 19(a)(1)(A) that the Navajo Nation was a necessary party because an injunction solely against the current Navajo offi- cials would not prevent future or other Navajo officials from taking the same allegedly unlawful actions.

[1] That conclusion is incorrect: An injunction against a public officer in his official capacity — which is what the plaintiffs seek here — remains in force against the officer’s successors. See Hernandez v. O’Malley, 98 F.3d 293, 294 (7th Cir. 1996) (noting that Rule 65(d) “makes an injunction effec- tive against successors in office”); 11A Charles Alan Wright et al., Federal Practice and Procedure § 2956 (2d ed. 1995) (“A decree binding a public official generally is valid against that official’s successors in office.”) (citing cases); cf. also Fed. R. Civ. P. 25(d) (providing for automatic substitution of public officer’s successor when officer ceases to hold office).

[2] Moreover, to the extent the district court concluded that other Navajo officials (i.e., current officials not named as defendants here) could somehow attempt to enforce the Nav- ajo Preference in Employment Act against the plaintiffs not- withstanding the plaintiffs’ requested injunction, that possibility does not mean that complete relief is not possible for the plaintiffs, who seek to enjoin only the named defen- dants. If in the future the plaintiffs believe that other officials are acting in violation of federal law, they may bring another action against those officials.

[3] Accordingly, because the district court can accord the complete relief sought by the plaintiffs in the Navajo Nation’s SALT RIVER PROJECT v. LEE 5887 absence, it erred in holding that the tribe was a necessary party under Rule 19(a)(1)(A).

[4] The district court also concluded under Rule 19(a)(1)(B)(i) that the Navajo Nation had three distinct inter- ests in this action: (1) the scope of the tribe’s rights under the 1969 lease, (2) the job security of Navajo Nation members, and (3) the tribe’s general interest in governing the Navajo reservation. But that is not the end of the matter. The district court failed to analyze whether proceeding without the Navajo Nation would “impair or impede” the tribe’s ability to protect those interests. See Fed. R. Civ. P. 19(a)(1)(B)(i). An absent party with an interest in the action is not a necessary party under Rule 19(a) “if the absent party is adequately repre- sented in the suit.” Shermoen v. United States, 982 F.2d 1312, 1318 (9th Cir. 1992) (citation and internal quotation marks omitted). As we said in Shermoen, “[i]f a legally protected interest exists, the court must further determine whether that interest will be impaired or impeded by the suit. Impairment may be minimized if the absent party is adequately repre- sented in the suit.” Id. (citation and internal quotation marks omitted).

We consider three factors in determining whether an exist- ing party adequately represents the interests of an absent party: (1) “whether the interests of a present party to the suit are such that it will undoubtedly make all of the absent party’s arguments”; (2) “whether the party is capable of and willing to make such arguments”; and (3) “whether the absent party would offer any necessary element to the proceedings that the present parties would neglect.” Id. (citation and internal quo- tation marks omitted).

[5] Here, the Navajo official defendants can be expected to adequately represent the Navajo Nation’s interests. First, the officials’ interests are aligned with the tribe’s interests: The officials are responsible for enforcing the Navajo Preference in Employment Act, and there is no suggestion that the offi- 5888 SALT RIVER PROJECT v. LEE cials’ attempt to enforce the statute here is antithetical to the tribe’s interests. Second, there is no reason to believe the Nav- ajo official defendants cannot or will not make any reasonable argument that the tribe would make if it were a party. Third, there is no indication that the tribe would offer any necessary element to the action that the Navajo official defendants would neglect. See Kansas v. United States, 249 F.3d 1213, 1227 (10th Cir. 2001) (“[M]ost importantly, the potential for prejudice to the Miami Tribe is largely nonexistent due to the presence in this suit of . . . the tribal officials . . . . These Defendants’ interests, considered together, are substantially similar, if not identical, to the Tribe’s interests in [the action].”).

Indeed, the Navajo official defendants do not argue other- wise. Instead, they argue only that the tribe automatically is a necessary party to any action challenging a lease to which the tribe is a signatory, citing Dawavendewa v. Salt River Project, 276 F.3d 1150 (9th Cir. 2002). But Dawavendewa is distinguishable because there — unlike here — the tribal offi- cials were not parties to the action and thus could not repre- sent the absent tribe’s interests, a fact we explicitly noted. See id. at 1160 (“[N]or has [the plaintiff] named any tribal offi- cials as parties to this litigation.”).

[6] Thus, because the officials adequately represent the Navajo Nation’s interests here, the district court erred in hold- ing that the tribe was a necessary party under Rule 19(a)(1)(B)(i).

[7] Finally, the Navajo official defendants argue that the tribe is a necessary party under 19(a)(1)(B)(ii) because its absence could subject the plaintiffs to inconsistent obliga- tions. In particular, the defendants argue that the plaintiffs’ requested injunction would not bind the Navajo Nation, which could later seek to enforce the Navajo Preference in Employ- ment Act at the power plant. But the defendants fail to explain how the tribe could enforce the Act without the aid of its offi- SALT RIVER PROJECT v. LEE 5889 cers responsible for enforcing the Act, who would be bound by the plaintiffs’ requested injunction. If other Navajo Nation officials somehow attempted to enforce the Act against the plaintiffs, the plaintiffs would be free to return to federal court to seek an injunction against those officials. But at this stage, the plaintiffs’ complaint seeks an injunction only against these named officials. Accordingly, because there is no risk that the plaintiffs could be subject to inconsistent obligations in the Navajo Nation’s absence, the Navajo Nation is not a neces- sary party under Rule 19(a)(1)(B)(ii).

*****

In sum, we hold that (1) the Navajo Nation is not a neces- sary party under Rule 19(a)(1)(A) because the plaintiffs seek relief only against the current Navajo officials; (2) the Navajo Nation is not a necessary party under Rule 19(a)(1)(B)(i) because the officials adequately represent the tribe’s interests; and (3) the Navajo Nation is not a necessary party under Rule 19(a)(1)(B)(ii) because its absence will not risk subjecting the plaintiffs to inconsistent obligations.

Indeed, a contrary holding would effectively gut the Ex parte Young doctrine. That doctrine permits actions for pro- spective non-monetary relief against state or tribal officials in their official capacity to enjoin them from violating federal law, without the presence of the immune State or tribe. See Ex parte Young, 209 U.S. 123 (1908).

The district court recognized this, but reasoned that this case was different from the traditional Ex parte Young case because, the court said, the Navajo officials are allegedly vio- lating a private lease, rather than merely a federal statute or the federal Constitution. But the complaint specifically alleged that the tribal officials were acting “beyond [their] jurisdiction, without basis in law, and in violation of federal law” — including the federal statutory right-of-way. More- over, we have held that federal common law governs whether 5890 SALT RIVER PROJECT v. LEE an Indian tribe’s lease with a non-Indian has waived the tribe’s authority to regulate the non-Indian’s activities. See Ariz. Pub. Serv. Co. v. Aspaas, 77 F.3d 1128, 1132-33 (9th Cir. 1996). And it is well-settled that federal common law cir- cumscribes a tribe’s inherent authority to regulate non- members. See Montana v. United States, 450 U.S. 544, 563-66 (1981). Ex parte Young is not limited to claims that officials are violating the federal Constitution or federal stat- ute; it applies to federal common law as well. See South Dakota v. Bourland, 949 F.2d 984, 989 (8th Cir. 1991), rev’d on other grounds, 508 U.S. 679 (1993).

Thus, the Navajo Nation is not a necessary party under Rule 19. The district court’s order dismissing the case is reversed.

REVERSED and REMANDED.