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IGNACIA S. MORENO Assistant Attorney General EDWARD J. PASSARELLI Assistant Section Chief Natural Resources Section KURT G. KASTORF KRISTOFOR R. SWANSON AMY S. TRYON Environment and Natural Resources Division U.S. Department of Justice P.O. Box 7611 Washington, DC 20044 Tel: (202) 305-0248 Fax: (202) 305-0506 [email protected] [email protected] [email protected] Attorneys for Third-Party Defendants
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,
Plaintiff, v. PEABODY WESTERN COAL COMPANY, Defendant, -and- NAVAJO NATION, Rule 19 Defendant.
Case 2:01-cv-01050-JWS THIRD-PARTY DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AS TO PEABODY WESTERN COAL COMPANY’S THIRD-PARTY COMPLAINT
Case 2:01-cv-01050-JWS Document 243 Filed 04/30/12 Page 1 of 38
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PEABODY WESTERN COAL COMPANY, Third-Party & Counterplaintiff, v. LARRY J. ECHO HAWK, et al., Third-Party Defendants, -and- P. DAVID LOPEZ, et al., Counterdefendants.
Third-Party Defendants hereby move for summary judgment as to Peabody
Western Coal Company’s third-party complaint pursuant Federal Rules of Civil
Procedure 12(h)(3), 14(a)(2), and 56. Support for this motion is found in the attached
memorandum and exhibits.
Respectfully submitted this 30th day of April, 2012,
IGNACIA S. MORENO Assistant Attorney General Environment & Natural Resources Division
s/ Kristofor R. Swanson_______
EDWARD J. PASSARELLI Assistant Section Chief Natural Resources Section KURT G. KASTORF KRISTOFOR R. SWANSON AMY S. TRYON U.S. Department of Justice P.O. Box 7611
Case 2:01-cv-01050-JWS Document 243 Filed 04/30/12 Page 2 of 38
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Washington, DC 20044 Tel: 202-305-0248 Fax: 202-305-0506 [email protected] [email protected] [email protected]
OF COUNSEL: STEPHEN SIMPSON BARBARA COEN U.S. Department of the Interior Office of the Solicitor Division of Indian Affairs Washington, DC 20240
CERTIFICATE OF SERVICE I hereby certify that on April 30, 2012, I electronically filed the foregoing document and its attachments using the Court’s CM/ECF system, which will send notice to all parties. s/ Kristofor R. Swanson______ KRISTOFOR R. SWANSON Trial Attorney
Case 2:01-cv-01050-JWS Document 243 Filed 04/30/12 Page 3 of 38
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IGNACIA S. MORENO Assistant Attorney General EDWARD J. PASSARELLI Assistant Section Chief Natural Resources Section KURT G. KASTORF KRISTOFOR R. SWANSON AMY S. TRYON Environment and Natural Resources Division U.S. Department of Justice P.O. Box 7611 Washington, DC 20044 Tel: (202) 305-0248 Fax: (202) 305-0506 [email protected] [email protected] [email protected] Attorneys for Third-Party Defendants
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. PEABODY WESTERN COAL COMPANY, Defendant, -and- NAVAJO NATION, Rule 19 Defendant.
Case No. 2:01-cv-01050-JWS MEMORANDUM IN SUPPORT OF THIRD-PARTY DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AS TO PEABODY WESTERN COAL COMPANY’S THIRD-PARTY COMPLAINT
Case 2:01-cv-01050-JWS Document 243 Filed 04/30/12 Page 4 of 38
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PEABODY WESTERN COAL COMPANY, Third-Party & Counterplaintiff, v. LARRY J. ECHO HAWK, et al., Third-Party Defendants, -and- P. DAVID LOPEZ, et al., Counterdefendants.
Case 2:01-cv-01050-JWS Document 243 Filed 04/30/12 Page 5 of 38
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TABLE OF CONTENTS
INTRODUCTION .............................................................................................................. 1
BACKGROUND ................................................................................................................ 2
STANDARDS OF REVIEW ............................................................................................. 4
ARGUMENT ..................................................................................................................... 5
I. Peabody’s Third-Party Complaint is Procedurally Defective ................................. 5
A. Interior is not an Appropriate Third-Party Defendant under Rule 14 ............... 5
B. The Court Lacks Jurisdiction Over Peabody’s Third-Party Claims .................. 7
1. The Court lacks jurisdiction over Peabody’s challenge to alleged agency action .......................................................................................... 8
2. Peabody has not identified a discrete agency action that the Secretary is required to take .................................................................................. 11
II. Peabody is not Liable to EEOC on the Underlying Title VII Claim .................... 12
A. Fundamental Precepts of Federal Indian Law ................................................. 13
1. Indian tribes are sovereign nations possessing unique political attributes under federal law .................................................................. 13
2. The United States holds a special relationship with tribes aimed, in part, at safeguarding autonomy and economic self-sufficiency ........... 14
3. The history of the United States’ relationship with the Navajo Nation embodies the unique status of Indian tribes in this country ................. 14
4. The Supreme Court has held that affording Indian tribes a special status under the law is non-discriminatory ........................................... 16
B. The Tribal Preferences are Based on Political Classifications, not National Origin Discrimination ...................................................................................... 18
C. EEOC is Incorrect that Mancari does not Apply here ..................................... 19
1. Mancari is not limited to preferences in favor of all Indians ............... 19
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2. EEOC’s 1988 Policy Statement does not address the question of whether these tribal preferences are beyond the scope of Title VII ..... 21
3. The Civil Rights Act did not impliedly overturn the United States longstanding practice of approving tribal employment preferences or limit the Navajo Nation’s inherent sovereign authority ....................... 23
a. Canons of interpretation disfavor implied repeal of statutes and of longstanding Executive practice ..................................................... 23
b. Congress intended to leave unfettered Interior’s programs to benefit Indian tribes ......................................................................... 24
c. The United States’ conduct following enactment of the 1964 Civil Rights Act demonstrates its uniform understanding that tribal preferences had survived the enactment of Title VII ...................... 27
4. Applying Mancari here would not conflict with the Ninth Circuit’s opinion in Dawavendewa I ................................................................... 28
CONCLUSION ................................................................................................................ 30
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INTRODUCTION
Since this country’s inception, the Indian nations have comprised distinct and
independent political communities. Today, the tribes continue to retain all aspects of
tribal sovereignty not specifically withdrawn by Congress. Pursuant to federal statutes
that further the United States’ political relationship with Indian tribes such as the Navajo
Nation, the Secretary of the Interior has, for more than 90 years, approved leases to
extract natural resources on tribal lands held in trust or otherwise set aside by the United
States for the benefit of tribes and their members. To ensure that the economic
development of a tribe’s resources inures to the tribe and its members, these Secretary-
approved leases, including leases pre-dating Title VII of the Civil Rights Act, often
contain provisions requiring the tribe’s lessees to give preference in hiring decisions to
enrolled members of that tribe. These tribe-specific employment preferences run not to
Indians in general, as members of a particular race or national origin, but only to
members of the particular federally-recognized tribe or tribes whose trust resources are
at issue and with whom the United States holds a political relationship.
The question presented by the Equal Employment Opportunity Commission’s
(“EECO”) underlying complaint in this lawsuit is whether an employer violates Title VII
of the Civil Rights Act by complying with such a Secretary-approved lease and tribal
law, both of which require the employer to provide a preference for a tribe’s own
members in employment on the tribe’s reservation. Defendant Peabody Western Coal
Company (“Peabody”) has now brought third-party claims against the Secretary of the
Interior and Assistant Secretary for Indian Affairs (collectively, “Secretary” or
“Interior”). Those third-party claims should be dismissed for two reasons. First,
Peabody’s third-party complaint contains a number of procedural defects. Peabody
presents claims that are improper for impleader and over which this Court lacks
jurisdiction. Second, even if the Secretary were properly before the Court, summary
judgment on the third-party claims should be granted in the Secretary’s favor as he
cannot be liable to Peabody because Peabody is not liable on the EEOC’s Title VII claim
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against the company. As a general matter, a private employer’s unilateral decision to
favor members of one tribe over members of another tribe may constitute national-origin
discrimination within the meaning of Title VII. Here, however, Peabody is not granting
a preference to members of the Navajo Nation (“Navajo” or “Nation”) based on their
national origin. Instead, the preference, which arises from Peabody’s obligation to
comply with the terms of a Secretary-approved lease and with the Nation’s own law, is
based on a political classification—one rooted in the longstanding sovereign-to-
sovereign relationship between the United States and the Navajo Nation. The preference
is thus beyond the scope of Title VII.
BACKGROUND
Defendant and Third-Party Plaintiff Peabody operates the Kayenta Mine on trust
land on the Navajo Nation’s Reservation under two mineral leases with the Nation. 3d-
Party Compl. ¶ 15 (ECF No. 195). Pursuant to the 1938 Indian Mineral Leasing Act
(“IMLA”), 25 U.S.C. § 396a, Interior approved those two leases in 1964 and 1966,
respectively. See 3d-Party Compl. ¶¶ 17, 21. IMLA authorizes leases “for terms not to
exceed ten years and as long thereafter as minerals are produced in paying quantities.”
25 U.S.C. § 396a; see 25 C.F.R. § 211.27(a). Though approving both, the Secretary of
the Interior is not a party to either lease. See, e.g., Navajo Nation v. United States, 46
Fed. Cl. 217, 234-36 (2000). Both leases contain a provision requiring Peabody to grant
an employment preference to the Navajo Nation’s tribal members. See 3d-Party Compl.
¶¶ 18, 22; Mining Lease No. 14-20-0603-8580 Between Sentry Royalty Company and
the Navajo Tribe (Feb. 1, 1964) (attached for the Court’s convenience as Ex. 1); Mining
Lease No. 14-20-0603-9910 Between Sentry Royalty Company and the Navajo Tribe
(June 6, 1966) (attached for the Court’s convenience as Ex. 2). In addition, since 1985, a
tribal ordinance has separately required all employers doing business within the Navajo
Nation’s territorial jurisdiction to give employment preference to the Nation’s members.
See Navajo Nation Code Ann. Tit. 15, § 604(A)(1). Since the original approvals, Interior
has approved amendments to the leases, but none of those amendments have affected the
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tribe-specific employment preferences. See 3d-Party Compl. ¶ 26. The Secretary most-
recently approved amendments to the leases on December 9, 2011. See Agreement
Relating to Coal Mining Lease No. 14-20-0603-8580 and Coal Mining Lease No. 14-20-
0603-9910 between Peabody Western Coal Company and The Navajo Nation (“Lease
Amendments”) (attached as Ex. 3).
EEOC began investigating Peabody’s employment practices at the Kayenta Mine
in 1998, see 3d-Party Compl. ¶ 35. In 2001, EEOC filed the underlying suit against
Peabody, alleging that hiring pursuant to the leases’ tribe-specific employment
preferences violated Title VII. 3d-Party Compl. ¶¶ 37, 39; EEOC Comp. (ECF No. 1).
The case has twice been appealed to the United States Court of Appeals for the Ninth
Circuit. Most recently, the Ninth Circuit held that Rule 19 did not require dismissal of
the EEOC complaint where the Secretary was a necessary party that could be joined to
the action by Peabody or the Navajo Nation as a Rule 14 third-party defendant. See
EEOC v. Peabody W. Coal Co. (“Peabody IV”), 610 F.3d 1070, 1081-83 (9th Cir.
2010). Peabody has now filed a third-party complaint against the Secretary, basing
jurisdiction on 28 U.S.C. §§ 1331, 1346(a)(2), 1367, 2201, and 2202, and the
Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701–706. See 3d-Party Compl. ¶¶
11–13. Peabody alleges that, “[t]o the extent the Court rules [on EEOC’s claims against
Peabody] that the tribe-specific employment preferences violate Title VII . . . , the
Secretary’s actions and failures to act are arbitrary, capricious, an abuse of discretion,
and in violation of the federal law” under the APA. 3d-Party Compl. ¶ 65. Additionally,
Peabody maintains that the “Secretary’s failures at any time over the last 45 years” to
clarify or resolve the alleged differing federal positions on tribe-specific employment
preferences “constitute ‘agency action unlawfully withheld or unreasonably delayed’
within the meaning of [the APA].” 3d-Party Compl. ¶ 67. Peabody seeks “a declaration
stating that the tribe-specific employment preferences in [the leases] are lawful for
reasons beyond the scope of Title VII, or if not, whether they are lawful,” 3d-Party
Compl. ¶ 54. Peabody also seeks “[a]n injunction restraining . . . the Secretary from
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taking actions inconsistent with the foregoing declarations . . . .” 3d-Party Compl.
Request for Relief ¶ D.
STANDARDS OF REVIEW
Although district courts may allow a third-party complaint under Rule 14 of the
Federal Rules of Civil Procedure, Rule 14 does not itself grant a court jurisdiction over
third-party claims. See United States v. One 1977 Mercedes Benz, 708 F.2d 444, 452
(9th Cir. 1983); 28 U.S.C. § 2072(b); Fed. R. Civ. P. 82 (“These rules do not extend or
limit the jurisdiction of the district courts . . . .”). “The impleader claim, as every claim
asserted in federal court, must be supported by federal subject matter jurisdiction.” 3-14
J. Moore, Moore’s Federal Practice-Civil § 14.03(4), at 14-13 (3d ed. 2011); see
Caterpillar Inc. v. Lewis, 519 U.S. 61, 67 n.1 (1996). Rule 14 acknowledges that point
of law by requiring a third-party defendant to “assert any defenses against the third-party
plaintiff’s claim under Rule 12.” Fed. R. Civ. P. 14(a)(2)(A).
Federal court jurisdiction is limited, present only where authorized by statute or
the Constitution. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994);
United States v. Van Cauwenberghe, 934 F.2d 1048, 1059 (9th Cir. 1991). Further,
waiver of the United States’ sovereign immunity from suit is a prerequisite to bringing
any claim against a federal agency: “It is axiomatic that the United States may not be
sued without its consent and that the existence of consent is a prerequisite for
jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212 (1983). The terms of such
consent “define and circumscribe [the court’s] jurisdiction.” Nesovic v. United States, 71
F.3d 776, 777 (9th Cir. 1995) (citing United States v. Dalm, 494 U.S. 596, 608 (1990)).
Further, Rule 14 allows a third-party defendant to assert against the underlying
plaintiff “any defense that the third-party plaintiff has to the plaintiff’s claim.” Fed. R.
Civ. P. 14(a)(2)(C). Summary judgment is appropriate where “the movant shows that
there is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a).
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ARGUMENT I. Peabody’s Third-Party Complaint is Procedurally Defective.
The Secretary cannot be liable to Peabody for any of the potential liability
presented by EEOC’s underlying claims against the company. The third-party complaint
is therefore outside the scope of impleader under Rule 14. Even if the third-party
complaint were properly before the Court, the claims themselves have no jurisdictional
basis.
A. Interior is not an Appropriate Third-Party Defendant under Rule 14.
Despite the Ninth Circuit’s ruling in Peabody IV, 610 F.3d at 1081–83, impleader
of the Secretary is not appropriate.1 Peabody IV did not foreclose this Court’s
consideration of whether impleader is proper. The Secretary was not a party to the
matter before the Ninth Circuit and thus had no opportunity to argue the question. The
Ninth Circuit appears to have reasoned that because Peabody could file a freestanding
complaint against the Secretary under the APA, it could also file a third-party complaint
and bring the Secretary into this action. See id. at 1085-87. But the court gave little
attention to whether the posited APA action would meet Rule 14(a)’s requirements.
Indeed, in briefing on the petition for a writ of certiorari from Peabody IV, EEOC,
Peabody, and the Navajo Nation all agreed that Rule 14(a) does not permit the Secretary
to be impleaded in the present circumstances.2 See Br. for Fed. Resp., Navajo Nation v.
EEOC, Nos. 10-1981 & 10-986 at 10–20 (S. Ct. Aug. 2011); Pet. for Writ of Cert.,
Peabody W. Coal Co. v. EEOC, No. 10-986 at 14–17 (S. Ct. Jan. 2011); Pet. for Writ of
1 Contrary to Rule 14, Peabody did not move for leave to file its third-party claims. See Fed. R. Civ. P. 14(a)(1) (“. . . the plaintiff must, by motion, obtain the court’s leave if it files the third-party complaint more than 14 days after serving its original answer.”). For the reasons stated herein, the granting of a motion for leave would have been inappropriate. 2 Before suggesting that the Secretary could be impleaded under Rule 14, the Ninth Circuit agreed with this Court’s prior conclusion that the Secretary is a required party under Rule 19(a)(1). See Peabody IV, 610 F.3d at 1081–83. The United States maintains that the Secretary is not a required party under Rule 19(a)(1). The applicability of Rule 19 is not a question directly presented by the Secretary’s present motion.
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Cert., Navajo Nation v. EEOC, No. 10-981 at 18–22 (S. Ct. Jan. 28, 2011).3
Instead, Rule 14 allows a party to bring in a third-party defendant only if the
third-party defendant “is or may be liable to [the original defendant] for all or part of the
[original plaintiff’s] claim against [the original defendant].” Fed. R. Civ. P. 14(a)(1); see
3-14 J. Moore, Moore’s Federal Practice-Civil § 14.03(1), at 14-10; id. § 14.04(3)(b), at
14-22. “‘The crucial characteristic of a Rule 14 claim is that defendant is attempting to
transfer to the third-party defendant the liability asserted against him by the original
plaintiff.’” Johnson v. Rank, 110 F.R.D. 99, 101 (N.D. Cal. 1986) (quoting Wright &
Miller, Federal Practice and Procedure-Civil § 1446, at 256–257)).
Impleader, therefore, can occur only in circumstances where, if the original
plaintiff were to succeed on the claim that is already in the action, the original defendant
will have a right to recover some or all of that liability from someone who is not yet a
party. See One 1977 Mercedes Benz, 708 F.2d at 452. The fact that EEOC presently
seeks only injunctive relief against Peabody does not change that conclusion. See 2d
Am. Compl. Prayer for Relief (ECF No. 170). Even where the plaintiff does not
explicitly seek money damages against the defendant, impleader of a third-party would
still be appropriate only if damages are a possible remedy and the third-party defendant
may be liable to the original defendant for some or all of that liability. See, e.g., Lehman
v. Revolution Portfolio L.L.C., 166 F.3d 389, 394 (1st Cir. 1999).
Rule 14 is not a proper mechanism for Peabody’s claims against the Secretary
because the Secretary is not “liable to” Peabody “for all or part of” EEOC’s Title VII
claim. There is no right to seek contribution for Title VII violations. See Nw. Airlines v.
Transp. Workers Union, 451 U.S. 77, 91–98 (1981); see also Peabody IV, 610 F.3d at
1084 (holding that Peabody could not seek money damages from the Secretary because
the United States has not waived sovereign immunity for such a claim). In fact, Peabody
does not even allege that it could recover contribution from the Secretary. Peabody’s
third-party complaint seeks declaratory and injunctive relief related to the Secretary’s
3 The cited portions of the briefs are attached, collectively, as Exhibit 4.
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lease approvals and alleged duty to resolve the apparent differences in Interior’s and
EEOC’s Title VII interpretations. See 3d-Party Compl. ¶¶ 65, 66. But, ignoring the
jurisdictional problems discussed below, those claims exist wholly independent of
EEOC’s underlying claim that Peabody has violated Title VII. Unlike a claim for
indemnification or contribution, they could be brought (again ignoring the jurisdictional
deficiencies) regardless of the outcome on EEOC’s Title VII action.
Peabody’s allegation that the Secretary’s lease approvals somehow “caused” the
company to potentially violate Title VII does not require a different result. See 3d-Party
Compl. ¶ 63. “The suggestion that a separate and independent claim can be made the
proper subject of a third party complaint because, but for the violation of duty alleged
[in the third-party complaint] the main claim would not have matured, has been rejected
. . . .” Se. Mortg. v. Mullins, 514 F.2d 747, 750 (5th Cir. 1975); see City of Peoria v.
Gen. Elec. Cablevision Corp., 690 F.2d 116, 120 (7th Cir. 1982). Though a ruling in
favor of EEOC on its underlying claims may cause Peabody’s subsequent lease
obligations to become a matter of dispute among Peabody, the Navajo Nation, and,
conceivably, the Secretary, Rule 14 is used to apportion liability on existing claims; it is
not a vehicle for a defendant to avoid contingent future claims.
B. The Court Lacks Jurisdiction Over Peabody’s Third-Party Claims.
Even if a Rule 14 third-party complaint against the Secretary were proper,
Peabody’s claims would have to be dismissed because the Court lacks jurisdiction.
“[E]very claim asserted in federal court[ ] must be supported by subject matter
jurisdiction.” 3-14 J. Moore, Moore’s Federal Practice § 14.03, at 14-13; see Caterpillar
Inc., 519 U.S. at 67 n.1. Further, “[i]t is axiomatic that the United States may not be sued
without its consent[,] . . . that the existence of consent is a prerequisite for jurisdiction,”
Mitchell, 463 U.S. at 212, and that any waiver must be clear and unequivocal and strictly
construed in favor of the sovereign. See United States v. Nordic Vill., Inc., 503 U.S. 30,
33–34 (1992). A statute of limitations “constitutes a condition on the waiver of
sovereign immunity.” United States v. Mottaz, 476 U.S. 834, 841 (1986) (internal
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quotation marks and citation omitted); see Marley v. United States, 567 F.3d 1030, 1034
(9th Cir. 2009). In such instances, “[t]he failure to sue [the United States] within the
period of limitations is not simply a waivable defense; it deprives the district court of
jurisdiction to entertain the action.” Sisseton-Wahpeton Sioux Tribe v. United States, 895
F.2d 588, 592 (9th Cir. 1990) (citations omitted).
Peabody brings claims against the Secretary under the APA, which authorizes
federal courts to “set aside agency action . . . found to be . . . arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law” (5 U.S.C. § 706(2)); and to
“compel agency action unlawfully withheld or unreasonably delayed” (5 U.S.C. §
706(1)). Peabody seeks review under both provisions. See 3d-Party Compl. ¶¶ 65, 67.
But Peabody has failed to identify an “agency action” that falls within the United States’
waiver of sovereign immunity for judicial review of agency action. Similarly, Peabody
has failed to identify a legally-required “agency action” compellable under the APA.
1. The Court lacks jurisdiction over Peabody’s challenge to alleged agency action.
Peabody’s third-party complaint invokes the APA to challenge two alleged
“agency actions”: (1) the Secretary’s “continuing sanction of [Peabody’s] conduct” with
respect to tribe-specific employment preferences, and (2) the Secretary’s approval of the
leases. 3d-Party Compl. ¶¶ 59, 60, 63, 64. But the Court lacks jurisdiction over those
claims.
First, the United States has not waived sovereign immunity for Peabody’s
challenge to the Secretary’s alleged “continuing sanction of [Peabody’s] conduct.”
Section 702 of the APA contains a waiver of sovereign immunity. See 5 U.S.C. § 702;
Gallo Cattle Co. v. U.S. Dep’t of Agric, 159 F.3d 1194, 1198–99 (9th Cir. 1998).4 But
4 None of the Title 28 provisions to which Peabody refers (3d-Party Compl. ¶ 11) constitutes a waiver of the United States’ sovereign immunity. See Dunn & Black, P.S. v. United States, 492 F.3d 1084, 1088 n.3 (9th Cir. 2007) (28 U.S.C. §§ 1331, 1367); Kester v. Campbell, 652 F.2d 13, 15 (9th Cir.1981) (28 U.S.C. § 1331); Richardson v. Morris, 409 U.S. 464, 465–66 (1973) (28 U.S.C. § 1346); Grondal v. United States, 682 F. Supp. 2d 1203, 1218 (E.D. Wash. 2010) (28 U.S.C. § 2201).
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where, as here, the APA also serves as the cause of action to challenge an agency
decision as arbitrary, capricious, or contrary to law (3d-Party Compl. ¶ 65), Section 704
of the APA works to limit Section 702’s waiver. See Gallo Cattle, 159 F.3d at 1198.
Section 704, as applicable, authorizes judicial review only of “final agency action for
which there is no other adequate remedy in a court . . . .” 5 U.S.C. § 704; see Gallo
Cattle, 159 F.3d at 1198.5 Peabody’s challenge to the Secretary’s alleged “continuing
sanction of [Peabody’s] conduct” is not a challenge to “final agency action” within the
scope of Section 704. Sections 702 and 704 require that the action complained of be an
“agency action,” as defined in the APA. Norton v. S. Utah Wilderness Alliance
(“SUWA”), 542 U.S. 55, 62 (2004). “Agency action” includes “the whole or a part of an
agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure
to act.” 5 U.S.C. § 551(13).6 Peabody’s unspecified allegation that the Secretary has
“caused, directed, and condoned” Peabody’s conduct does not fit within those categories
of actions. Peabody identifies no rule, order, or other Departmental action with respect
to Peabody’s continuing employment practices at the Kayenta Mine.
Second, a challenge to the “final agency actions” that Peabody does identify—the
Secretary’s 1964 and 1966 lease approvals—falls well outside the applicable statute of
limitations. The six-year statutory limitations period in 28 U.S.C. § 2401(a) applies to
claims brought under the APA. Hells Canyon Pres. Council v. U.S. Forest Serv., 593
F.3d 923, 930 (9th Cir. 2010). Once accrued, a “failure to sue the United States within
the period of limitations . . . deprives the district court of jurisdiction to entertain the
5 A Ninth Circuit panel has previously held that Section 704’s “final agency action” requirement does not further limit Section 702’s waiver in the context of Constitutional claims. See Presbyterian Church v. United States, 870 F.2d 518, 525 (9th Cir. 1989). That question and its relation to the Gallo Cattle opinion are currently before the Ninth Circuit en banc. See Veterans for Common Sense v. Shinseki, 663 F.3d 1033 (9th Cir. 2011) (granting rehearing en banc for opinion reported at 644 F.3d 845 (9th Cir. 2011)). Peabody’s third-party complaint does not include a Constitutional claim. 6 “Rule,” “order,” “license,” “sanction,” and “relief” are specifically defined in 5 U.S.C. § 551.
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action.” Sisseton-Wahpeton, 895 F.2d at 592.7 “The right to bring a civil suit challenging
an agency action accrues ‘upon the completion of the administrative proceedings.’”
Wind River Mining Corp. v. United States, 946 F.2d 710, 716 (9th Cir. 1991) (quoting
Crown Coat Front Co. v. United States, 386 U.S. 503, 511 (1967)). Here, the Secretary
approved the leases at issue in 1964 and 1966, respectively. Congress enacted the Civil
Rights Act, including Title VII, prior to either approval. See Title VII, Pub. L. No. 88-
352, 78 Stat. 241, 253–66 (1964). Thus, more than forty-five years have passed since
Peabody could have challenged the inclusion of tribe-specific employment preferences
in the leases. The Secretary’s December 9, 2011, amendment approvals do not serve as
a new accrual date. The amendments do not address the leases’ employment preference
provision, and the approvals therefore do not represent final agency actions that caused
Peabody to suffer the Title VII-based legal wrong alleged in the third-party complaint.
See Lujan v. Nat’l Defenders of Wildlife, 497 U.S. 871, 883 (1990) (“[T]he party seeking
review under § 702 must show that he has ‘suffer[ed] legal wrong’ because of the
challenged agency action, . . . .’” (emphasis added)).
Regardless, Peabody’s lease-based challenge fails because the company has not
been aggrieved or injured by approval of the tribe-specific employment preferences.
Article III of the Constitution requires that Peabody demonstrate it has suffered a
concrete injury in fact that has been caused by the lease approvals and that could be
redressed by court order. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61
(1992). And the APA grants a right of review only to those “person[s] suffering legal
wrong because of agency action, or adversely affected or aggrieved by agency action . . .
7 Other Ninth Circuit panels have found 28 U.S.C. § 2401(a) not to be a jurisdictional bar and therefore subject to equitable tolling. See, e.g. Cedars-Sinai Med. Ctr v. Shalala, 125 F.3d 765, 770 (9th Cir. 1997). Those decisions have likely been superseded by subsequent Supreme Court case law. See John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 132–39 (2008) (holding that a strikingly similar statutory provision is jurisdictional). In any case, this Court need not address either the intra-circuit split or the implications of John R. Sand because Peabody cannot demonstrate extraordinary circumstances that would justify tolling the limitations period.
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.” 5 U.S.C. § 702. Thus, to bring its third-party claims, Peabody must establish that it
was somehow adversely affected when the Secretary granted the request to approve the
leases—leases that Peabody itself had sought, signed, wishes to continue and, indeed,
has operated under for more than forty years. Peabody makes no such showing.8 See 3d-
Party Compl. ¶ 66. Even assuming Peabody could surpass the Article III threshold, its
APA claims also fail the prudential portions of the standing analysis. See Lujan v. Nat’l
Wildlife Fed’n, 497 U.S. 871, 883 (1990). Peabody’s interest in resource development
does not fall within the “zone of interests” that Congress sought to protect in Title VII.
See Thompson v. N. Am. Stainless, LP, 131 S. Ct. 863, 870 (2011) (stating that “the
purpose of Title VII is to protect employees from their employers’ unlawful actions”).
2. Peabody has not identified a discrete agency action that the Secretary is required to take.
Peabody’s third-party claim seeking to compel the Secretary to act also requires
dismissal. Section 706(1) of the APA authorizes courts to “compel agency action
unlawfully withheld or unreasonably delayed.” 5 U.S.C. § 706(1). Peabody alleges that: The Secretary’s failures at any time over the last 45 years — to provide clarity by rule or notice to [Peabody] on what the law is with respect to tribe-specific employment preferences in mining leases on tribal lands and to resolve its differences with the EEOC over that issue — constitute “agency action unlawfully withheld or unreasonably delayed” within the meaning of 5 U.S.C. § 706(1).
3d-Party Compl. ¶ 67.9 Peabody does not, however, seek a writ or mandatory injunction
compelling the Secretary to take any specific action. And, even if it had, such relief
would not be within the scope of that authorized by Section 706(1).
“[A] claim under § 706(1) can proceed only where a plaintiff asserts that an
agency failed to take a discrete agency action that it is required to take.” SUWA, 542
8 To the extent Peabody argues its injury is the potential violation of Title VII, overturning the Secretary’s lease approvals would not redress that speculative harm—the Peabody actions that EEOC alleges to have violated Title VII would still have occurred. 9 Peabody’s Section 706(1) claims, which accrued no later than EEOC’s 2001 complaint, are also subject to, and therefore barred by, the statute of limitations in 28 U.S.C. § 2401(a).
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U.S. at 64. “[U]nder § 706(1), an agency’s failure to act constitutes agency action
subject to judicial review only if the agency failed to perform a legally required, non-
discretionary duty.” Defenders of Wildlife v. Tuggle, 607 F. Supp. 2d 1095, 1099 (D.
Ariz. 2000). To satisfy that standard, a plaintiff must identify one of the discrete agency
actions in 5 U.S.C. § 551(13), see SUWA, 542 U.S. at 61–63, and demonstrate that the
action in question is one that is legally required, id. at 63. Even assuming Peabody’s
reference to a failure “to provide clarity by rule or notice” met the first of those
requirements, the company has not identified a legal duty to issue such a rule or notice.
Section 706(1)’s “limitation to required [as opposed to discretionary] agency action
rules out judicial direction of even discrete agency action that is not demanded by law.”
SUWA, 542 U.S. at 65. There is no required action here and, accordingly, Peabody’s
Section 706(1) claim should be dismissed. See Hells Canyon, 593 F.3d at 932; Cent.
Delta Water Agency v. U.S. Fish & Wildlife Serv., 653 F. Supp. 2d 1066, 1089 (E.D.
Cal. 2009).
II. Peabody is not Liable to EEOC on the Underlying Title VII Claim.
Even if Peabody’s third-party complaint were valid, judgment would still be due
in favor of Interior. The United States cannot be liable to Peabody because Peabody is
not liable to EEOC. The relevant question at issue in the EEOC’s underlying complaint
is not whether Peabody’s conduct falls within an exception to Title VII, but whether
Peabody’s conduct is covered by Title VII at all. It is not. Title VII prohibits an
employer from “fail[ing] or refus[ing] to hire. . . any individual. . . because of such
individual’s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a)(1)
(emphasis added). This provision does not prohibit failing or refusing to hire an
individual on some basis other than a protected characteristic. This distinction is relevant
here, because Peabody’s alleged refusal to hire non-Navajos was based not on national
origin, but on Peabody’s compliance with the Navajo Nation’s law and the terms of two
Interior-approved leases requiring Peabody to give preference to Navajos in employment
on the Navajo reservation. There is no evidence that Congress intended Title VII to
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abrogate the Navajo Nation’s sovereign right to control access to (and economic activity
on) its Reservation, or to repudiate Interior’s long-standing practice of approving leases
containing tribe-specific preferences. Because the tribal preference is premised on tribal
membership—a political classification—rather than a form of national origin
discrimination, Peabody’s conduct falls outside the scope of Title VII.
A. Fundamental Precepts of Federal Indian Law.
Federal Indian law should guide the Court’s analysis of Title VII and tribe-
specific employment preferences. Title VII exempts Indian tribes from its definition of
employer, and, hence, tribes themselves are not covered by Title VII. 42 U.S.C. §
2000e(b). As discussed in greater detail infra at 21–22, Title VII also exempts from its
coverage the preferential employment of Indians on or near Indian reservations. §2000e-
2(i). But other fundamental precepts of Indian law are applicable here.
1. Indian tribes are sovereign nations possessing unique political attributes under federal law.
The Supreme Court has long recognized that “Indian tribes are unique
aggregations possessing attributes of sovereignty over both their members and their
territory.” United States v. Wheeler, 435 U.S. 313, 323 (1978) (quotation omitted). Prior
to the arrival of Europeans in America, the Indian tribes were “self-governing political
communities,” Nat’l Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 851 (1985),
and, as such, possessed the full attributes of sovereignty. Wheeler, 435 U.S. at 322–323;
see Worcester v. Georgia, 31 U.S. 515, 557 (1832). These “political communities”
interacted extensively with the United States before the adoption of the Constitution.
See, e.g., Saikrishna Prakash, Against Tribal Fungibility, 89 Cornell L.Rev. 1069, 1080
(2004). Specifically, the Indian Commerce Clause, Art. I, § 8, cl. 3, grants Congress the
power to “regulate Commerce with . . . the Indian Tribes.” This provision, along with
the Constitution’s structure, gives Congress “plenary power over Indian affairs.” Alaska
v. Native Vill. of Venetie Tribal Gov’t, 522 U.S. 520, 531 n.6 (1998); see Morton v.
Mancari, 417 U.S. 535, 551–552 (1974). The Constitution also provides for treaties
with Indian tribes. See Art. II, § 3, cl. 2. Indian tribes thus have a unique legal status
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under federal law. Cherokee Nation v. Georgia, 30 U.S. 1, 16 (1831) (Marshall, CJ).
Today, Indian tribes retain inherent governmental authorities and exist as separate
governments. See Wheeler, 435 U.S. at 323; United States v. Kagama, 118 U.S. 375,
381–382 (1886).
2. The United States holds a special relationship with tribes aimed, in part, at safeguarding autonomy and economic self-sufficiency.
Modern federal Indian policy revolves around promoting tribes’ autonomy and
sovereignty. This policy dates to the Indian Reorganization Act (“IRA”), Pub. L. No. 73-
383, 48 Stat. 984 (1934) (codified as amended at 25 U.S.C. §§ 461–479). The IRA
promotes the “principles of tribal self-determination and self-governance.” Connecticut
ex rel. Blumenthal v. U.S. Dep’t of Interior, 228 F.3d 82, 85 (2d Cir. 2000) (quoting
Cnty. of Yakima v. Confed. Tribes & Bands of Yakima Indian Nation, 502 U.S. 251, 255
(1992)). The concept of tribal self-governance is inextricably intertwined with economic
self-sufficiency. The IRA sought to give Indian tribes “a chance to develop the initiative
destroyed by a century of oppression and paternalism.” Mescalero Apache v. Jones, 411
U.S. 145, 152 (1973) (quoting H.R. Rep. No. 73-1804 at 6 (1934)). The “overriding
purpose” of the IRA was to “establish machinery whereby Indian tribes would be able to
assume a greater degree of self-government, both politically and economically.”
Mancari, 417 U.S. at 542. These concepts remain the guiding principles of the federal
government’s relationship with tribes today.
3. The history of the United States’ relationship with the Navajo Nation embodies the unique status of Indian tribes in this country.
The Navajo Nation’s history illustrates the relationship between the United States
and Indian tribes. It demonstrates both the Nation’s status as a sovereign and the United
States’ special relationship with the Navajo, particularly those responsibilities served by
the employment preferences at issue in this case. The United States has long treated the
Navajo as a sovereign people, capable of self-governance. The modern political
relationship between the United States and the Navajo Nation began on June 1, 1868,
when General William T. Sherman and Navajo representatives signed a peace treaty. See
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15 Stat. 667. The treaty acknowledges certain lands as the Navajo Reservation and
recognized, among other authorities, the right to exclude others from this Reservation.
See 15 Stat. 667; Williams v. Lee, 358 U.S. 217, 221 (1959). Pursuant to the treaty, “the
internal affairs of the Indians remained exclusively within the jurisdiction of whatever
tribal government existed.” Id.; see McClanahan v. Ariz. State Tax Comm’n, 411 U.S.
164, 175 (1973).
Tribal sovereign authority, which carries with it the right to exclude non-
members, allows the Nation to regulate economic relationships on the Reservation
between itself and non-members. The Supreme Court has held that, in general, an Indian
tribe has the power to “regulate, through taxation, licensing, or other means, the
activities of nonmembers who enter consensual relationships with the tribe or its
members, through commercial dealing, contracts, leases, or other arrangements.”
Montana v. United States, 450 U.S. 554, 564–65 (1981); see also Merrion v. Jicarilla
Apache Tribe, 455 U.S. 130, 141 (1982) (tribe has “an inherent power necessary to
tribal self-government and territorial management.”); White Mountain Apache Tribe v.
Bracker, 448 U.S. 136, 149 (1980) (there is a “general federal policy of encouraging
tribes to . . . assume control over their ‘business and economic affairs’” (quoting
Mescalaro Apache, 411 U.S. at 151)). A tribe’s sovereignty over its internal affairs has
particular force where, as here, the lands at issue are held in trust for a tribe.
Congress is cognizant of the United States’ unique relationship with the Navajo
Nation, and has enacted legislation to improve the Nation’s circumstances. The past
century demonstrates how the Navajo Nation has begun to benefit from federal
encouragement of tribal self-government and economic self-determination. In the 1940s
and 1950s the Navajo Nation faced significant challenges. Navajos living on the
reservation at that time had few employment options and “live[d] in abject poverty.”
Department of the Interior, Report on the Navajo: Long-Range Program of Navajo
Rehabilitation 6-7 (1948) (“Report on the Navajo”) (attached as Ex. 5); see S. Rep. No
81-550, at 5 (1949) (Statement of William Warne, Assistant Secretary of the Interior).
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The Navajo Nation also suffered from widespread malnutrition, diseases such as
tuberculosis, and a high infant mortality rate. Report on the Navajo at 7. Public services
and education were severely deficient. Id. at 7. Most had no formal schooling and were
illiterate. Id. at 16–17. In addition, the Reservation lacked roads and other basic
infrastructure needed to utilize the Navajo Nation’s trust resources. Id. at 10-11.
The United States took action to remedy this situation in 1947, when Congress
allocated $2,000,000 for emergency relief of the Navajo Nation and directed Interior to
formulate “a long-range program dealing with the problems of the Navajo and Hopi
Indians.” Act of Dec. 19, 1947, Pub. L. No. 80-390, 61 Stat. 940. Interior recommended
an approach that relied, in part, on development of the Reservation’s natural resources,
in particular the “extensive coal deposit underl[ying] the Black Mesa area,” which had
been identified but not significantly developed. Report on the Navajo, at 22. Then, in
April 1950, Congress passed the Navajo-Hopi Rehabilitation Act (“NHRA”). See Pub.
L. No. 81-474, 64 Stat. 44, 44-47 (codified as amended at 25 U.S.C. §§ 631-640).
Consistent with Interior’s recommendations, the NHRA appropriated approximately $88
million for infrastructure improvement projects, including surveys and studies of the
Navajo Nation’s coal resources. Id. § 1, 64 Stat. at 44-45 (25 U.S.C. § 631). Congress
also granted the Navajo Nation the authority to enter into long-term leases of their land
for certain specified purposes “with the approval of the Secretary of the Interior.” Id. § 5,
64 Stat. at 46 (25 U.S.C. § 635). The United States has continued to support the Navajo
Nation’s exercise of its sovereign rights through the present day.
4. The Supreme Court has held that affording Indian tribes a special status under the law is non-discriminatory.
To broadly effectuate the United States’ special relationship with Indian tribes,
Congress has enacted countless statutes—and the Executive Branch has promulgated
numerous regulations—to benefit Indian tribes and to promote their welfare, self-
government, and economic self-determination. Although each of these laws recognize
Indian tribes’ special status under the law, distinct from that held by non-Indians, the
Supreme Court has consistently held that such policies are lawful.
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The seminal case addressing tribes’ special status is Morton v. Mancari, 417 U.S.
535 (1974). In Mancari, a group of non-Indian employees of the Bureau of Indian
Affairs (“BIA”) challenged the BIA’s hiring preference for Indian applicants,
contending that the hiring preference constituted unlawful discrimination on the basis of
race. The Supreme Court upheld the preference, holding that it did not constitute
invidious racial discrimination, was subject to rational basis review rather than strict
scrutiny, and was reasonably and rationally designed to further Indian self-government,
“a legitimate, nonracially based goal. This is the principal characteristic that generally is
absent from proscribed forms of racial discrimination.” Id. at 553–54. The Court
recognized that Indian tribes have a special status under the law and a unique
relationship with the federal government. Id. at 551 (quotation omitted). It therefore held
that “[a]s long as the special treatment [of Indians] can be tied rationally to the
fulfillment of Congress’ unique obligation toward the Indians,” such judgments will not
be disturbed. Id. at 555. Because the BIA employment preference rationally served the
“non-racial” goal of “further[ing] the cause of Indian self-government,” it did not violate
constitutional equal protection principles. Id. at 554.
Mancari is not an isolated case. The Court has repeatedly reaffirmed that “federal
regulation of Indian affairs is not based upon impermissible [racial] classifications.”
United States v. Antelope, 430 U.S. 641, 646 (1977). It is “governance of once-sovereign
political communities; it is not to be viewed as legislation of a ‘racial group consisting of
Indians.’” Id. (quoting Mancari, 417 U.S. at 553 n.24); see Washington v. Fishing Vessel
Ass’n, 443 U.S. 658, 673 n.20 (1979); Washington v. Confederated Bands and Tribes of
the Yakima Indian Nation, 439 U.S. 463, 500–501 (1979); Moe v. Confederated Salish
& Kootenai Tribes, 425 U.S. 463, 479–480 (1976); accord United States v. Lara, 541
U.S. 193, 204–05 (2004) (referencing inherent tribal sovereign authority).
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B. The Tribal Preferences are Based on Political Classifications, not National Origin Discrimination.
The tribe-specific employment preferences at issue in this case are political
preferences rationally connected to the fulfillment of the federal government’s general
trust relationship with the Navajo Nation, and therefore do not constitute invidious
discrimination. Like the BIA employment preference at issue in Mancari, the Navajo-
specific employment preference, approved by the Secretary, “is reasonably and directly
related to a legitimate, nonracially based goal,” and is therefore distinct “from proscribed
forms of racial discrimination.” Mancari, 417 U.S. at 554. Here, EEOC contends that the
Navajo-specific employment preference constitutes unlawful national origin
discrimination. However, a number of factors demonstrate the legitimate purposes of the
preference that are unrelated to national origin.
First, benefiting the Nation’s own members in employment on the Reservation is
important to the Nation’s sovereignty. Tribes have a sovereign interest in achieving and
maintaining economic self-sufficiency, and the federal government has an established
policy of encouraging tribal economic self-sufficiency. White Mountain Apache, 448
U.S. at 149; Mescalero Apache, 462 U.S. at 335.
Second, the employment preference furthers the general trust relationship
between the Nation and the United States because it involves tangible resources—lands
and minerals beneath those lands—held by the United States in trust as a legal matter for
the Navajo. Accordingly, encouraging the development of those resources in a way that
benefits the Nation and its members is in accord with the Nation’s equitable title to the
resources and with furthering the Nation’s economic development and self-sufficiency
through extraction of those resources. Congress enacted IMLA, in part, to help achieve
the IRA’s goal to revitalize Indian tribal governments; and to promote tribal economic
development by ensuring the greatest return on tribal minerals. Felix Cohen, Handbook
of Federal Indian Law § 17.03[2][a] (2005 ed.) (attached for the Court’s convenience as
Ex. 6); United States v. Navajo Nation, 537 U.S. 488, 511 n.16 (2003); Montana v.
Blackfeet Tribe, 471 U.S. 759 (1985). The Navajo-specific employment preference
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furthers those goals by promoting the Nation’s existence as a self-sustaining political
unit that can pursue its own economic development for its members who share in the
trust resource.
Third, the political aspects of the relationship between the United States and the
Navajo Nation are especially evident here because the Navajo Nation has both the
sovereign right to exclude third parties from land held in trust for the Nation and an
express treaty right to exclude non-members from its reservation—a right that includes
the lesser power to condition entry. Jicarilla Apache Tribe, 455 U.S. at 144. The
Nation’s power to exclude demonstrates that the Nation and its people are a self-
contained political entity, who negotiated with the United States to “ensure peace” and
who are free “to conduct their own affairs.” Donovan v. Navajo Forest Prods. Indus.,
692 F.2d 709, 712 (10th Cir. 1982). The employment preference furthers these treaty
purposes and the United States’ goal of encouraging Navajo self-government.
C. EEOC is Incorrect that Mancari does not Apply Here.
1. Mancari is not limited to preferences in favor of all Indians.
Although EEOC urges this Court to reject an application of Mancari to these
circumstances, the entirety of EEOC’s argument rests on the notion that Mancari
addresses a general Indian preference rather than a tribe-specific preference. See
EEOC’s Supp. Resp. to Navajo Mot. to Dismiss at 12–16 (ECF No. 225). But the
distinction is without merit. Indeed, the permissibility of a preference for a particular
tribe’s members in connection with the leasing of that tribe’s land follows a fortiori from
Mancari.
As discussed supra at 13–14, Indian law is premised on the notion that each
federally-recognized Indian tribe is a domestic dependent sovereign nation with which
the United States holds a political, government-to-government relationship. Mancari, in
turn, relies on this very premise for its reasoning. Specifically, the Court concluded that
the preference at issue was not a “racial preference” because it “is granted to Indians not
as a discrete racial group, but, rather, as members of quasi-sovereign tribal entities
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whose lives and activities are governed by the BIA in a unique fashion.” 417 U.S. at
553–554 (emphasis added). The Court approved the preference not because it was in
favor of all Indians, but in spite of that fact, holding that the preference was not a racial
preference in favor of Indians but a political preference in favor of each federally-
recognized tribe. It is the very fact that the Indian preference ran to members of tribes
that made it non-discriminatory. As the Court further explained, the structure of Title
VII itself “reveal[s] a clear congressional sentiment that an Indian preference in the
narrow context of tribal or reservation-related employment [does] not constitute racial
discrimination of the type otherwise proscribed.” Id. at 548 (emphasis added). Just as the
Indian employment preference in Mancari was not a “racial” preference, id. at 553, the
Navajo-specific employment preference in this case is not a “national origin” preference.
Rather, “it is an employment criterion reasonably designed to further the cause of Indian
self-government.” Id. at 554.
Numerous other passages from Mancari also demonstrate that the decision is
based on tribal membership, rather than ethnic status as an Indian. For example, the
Court describes the purpose of the preference was “to increase the participation of tribal
Indians in the BIA operations.” id.. at 543 (emphasis added). And it explains that by
doing so, the United States will “further the Government’s trust obligation towards the
Indian tribes.” Id. at 541–42 (emphasis added). The Court also explains that any
contrary argument “ignores both the history and purposes of the preference and the
unique legal relationship between the Federal Government and tribal Indians.” Id. at 550
(emphasis added). It highlights “the plenary power of Congress . . . to legislate on behalf
of federally recognized Indian tribes.” Id. at 551 (emphasis added).
The Supreme Court’s repeated references to federally-recognized Indian tribes
make clear that it is tribal membership, not status as an Indian, that is the touchstone of a
political classification. The BIA used a general Indian preference only because the BIA
serves members of all federally-recognized tribes. This case, by contrast, involves
utilization of a particular tribe’s natural resources on that particular tribe’s reservation
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and trust land. It is thus entirely sensible that the leases contain a Navajo preference,
rather than a preference for all tribal Indians, because the purpose of the trust and the
lease is to benefit the Navajo in particular. And it is entirely appropriate, then, that
members of the Navajo Nation, rather than members of all tribes, are the beneficiaries of
the employment preference under a lease to develop the Nation’s own resources.
As the Court explained in Mancari, “[l]iterally every piece of legislation” dealing
with the BIA singles out for special treatment a particular “constituency of tribal Indians
living on or near reservations.” 417 U.S. at 552 (emphasis added). If Mancari’s
reasoning did not extend to laws pertaining to particular tribes or groups of tribal
Indians, “an entire Title of the United States Code (25 U.S.C.) would be effectively
erased and the solemn commitment of the Government towards the Indians would be
jeopardized.” Id.
2. EEOC’s 1988 Policy Statement does not address the question of whether these tribal preferences are beyond the scope of Title VII.
EEOC is also incorrect in suggesting that its 1988 Policy Statement interpreting
Title VII is of critical importance to this case. See, e.g., EEOC’s Supp. Resp. to Navajo
Mot. to Dismiss at 3, 5–7. In fact, the 1988 Policy Statement does not address whether
an employer complying with the terms of a Secretary-approved lease for the utilization
of a tribe’s own trust land and resources is a political classification beyond the scope of
Title VII. Instead, the Statement “sets forth the Commission’s interpretation of the
meaning and scope of the Indian preference provision contained in Section 703(i) of
Title VII.” Equal Employment Opportunity Comm’n, No. 915.027, Policy Statement on
Indian Preference Under Title VII (May 16, 1988), available at
http://www.eeoc.gov/policy/docs/indian_preference.html. But, despite EEOC’s repeated
mischaracterization, the basis for the validity of the Navajo-specific employment
preference is not grounded in the Section 703(i) exception. That exception reads:
Nothing contained in this subchapter shall apply to any business or enterprise on or near an Indian reservation with respect to any publicly announced employment practice of such business or enterprise under which
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a preferential treatment is given to any individual because he is an Indian living on or near a reservation.
42 U.S.C. § 2000e-2(i).
Section 703(i) thus creates an exception to conduct that otherwise falls within the
prohibitions contained within 42 U.S.C. § 2000e-2(a)(1). But Peabody need not rely on
that exception, because its conduct is not prohibited under 42 U.S.C. § 2000e-2(a)(1).
Peabody is not engaged in national origin discrimination.10 The company is instead
complying with requirements imposed upon it by the terms of its Secretarial-improved
lease and the Navajo Nation’s own law—requirements that are based on political
classifications.
Notably, this distinction does not diminish the importance of § 703(i). Interior
does not take issue with EEOC’s interpretation of § 703(i) in its 1988 Policy Statement
that the exception permits businesses to unilaterally offer an employment preference to
all Indians but does not authorize those businesses to discriminate among members of
different tribes. A contrary interpretation would appear to permit an employer—with no
oversight or approval by the federal government or the tribe concerned—to unilaterally
discriminate against members of a particular tribe, which could not have been Congress’
intent in drafting § 703(i).11 Such a practice, not adopted in compliance with the terms of
10 A simple analogy demonstrates this point: Suppose that the United States charged Peabody with violating a statute making it illegal for a coal company to extract lignite coal on Indian reservations. Suppose, further, that Peabody responded that the Kayenta Mine is a thermal coal mine, not a lignite coal mine. The United States could not respond by asserting that the statute does not contain an exception for thermal coal. Peabody would have no need to invoke an exception, because its conduct would not be prohibited by the statute. So too here. If Peabody’s conduct is not prohibited under § 2000e-2(a)(1), there is no need to consider whether it might also be excepted under 703(i). 11 A more plausible reading of § 703(i), and one the Ninth Circuit adopted in Malabed v. N. Slope Borough, 335 F.3d 864 (9th Cir. 2003), is that § 703(i) is a savings clause designed to ensure that Title VII would not interfere with federal preference programs to benefit Indians. Id. at 871–72; see also infra at 24–26. Read in this light, EEOC’s 1988 Policy Statement is correct that in enacting § 703(i), Congress did not intend to allow businesses to unilaterally discriminate among Indians of different tribes.
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a Secretarial-approved lease or tribal law, would likely constitute national origin
discrimination, not a valid form of political classification.
3. The Civil Rights Act did not impliedly overturn the United States’ longstanding practice of approving tribal employment preferences or limit the Navajo Nation’s inherent sovereign authority.
Because Peabody’s decision to follow the terms of its lease is not a violation of
Title VII, the Court need not consider whether that decision also would have been
permissible under § 703(i). Section 703(i) would be relevant to this litigation only if its
inclusion in the Civil Rights Act demonstrated a clear Congressional intent to prohibit
the United States’ longstanding practice of approving tribal preferences in employment
or to abrogate the Navajo Nation’s authority to control its own land and resources. There
is no evidence that Congress intended either.
a. Canons of interpretation disfavor implied repeal of statutes and of longstanding Executive practice.
Canons of interpretation disfavor an interpretation of Title VII that bans Interior’s
longstanding practice of approving tribal preferences or abrogates the Navajo’s
sovereign right to control economic activity on its reservation.
First, repeals by implication are disfavored. Posadas v. Nat’l City Bank, 296 U.S.
497, 503 (1936). They are particularly disfavored where—as here—the practice at issue
is longstanding. “‘Long-continued practice, known to and acquiesced in by Congress,
would raise a presumption that the [action] had been [taken] in pursuance of its consent .
. .’” Dames & Moore v. Regan, 453 U.S. 654, 686 (1981) (citation omitted). The
mineral leases at issue in this case were approved under IMLA. Interior Secretaries have
approved hundreds of similar leases. Congress, however, has never taken steps to
disapprove of the Secretarial actions, which supports a conclusion that Congress
acquiesces in the approvals. See Bob Jones Univ. v. United States, 461 U.S. 574, 601
(1983); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 137 (1985).
Indeed, Congress has even amended IMLA, but not to overturn the tribal preferences
long included in Secretary-approved mineral leases. And, in enacting the related Indian
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Mineral Development Act of 1982, 25 U.S.C. §§ 2101–2108, the Senate Report
highlighted that “[t]ribal autonomy and self-determination” should include the right to
negotiate terms of contracts, in part because such contracts “can provide a variety of
opportunities that would benefit the long-term tribal socio-economic development such
as involvement in resource management, training of tribal members for management
positions, and participation in the decision-making process.” S. Rep. 97-472, at 4 (1982).
If Congress reenacts a statute without making material changes, courts presume that
Congress intends to incorporate agency implementation of the statute into the reenacted
statute. See Forest Grove Sch. Dist. v. T.A., 129 S. Ct. 2484, 2492 (2009) (citing
Lorillard v. Pons, 434 U.S. 575 (1978)); Saxbe v. Bustos, 419 U.S. 65, 74 (1974).
Second, courts have regularly applied a canon of construction disfavoring implied
limitations on tribal sovereignty. The Navajo Nation has inherent authority to regulate its
own economic activities and the activities of nonmembers who enter into consensual
relationships with the tribe. Montana, 450 U.S. at 564–65. And it holds both an inherent
and a treaty right to condition access to its Reservation by non-members. See supra at
14–16. Prior to the enactment of Title VII, the Navajo Nation plainly held the lesser-
included authority to give a preferential right to employment on reservations to tribal
members. Tribes “retain all aspects of tribal sovereignty not specifically withdrawn.”
Wheeler, 435 U.S. at 323. Limitations on tribal self-government and internal affairs
cannot be implied from a treaty or statute; they must be expressly stated. United States v.
Dion, 476 U.S. 734 (1986); Bryan v. Itasca Cty., Minn., 426 U.S. 373 (1976); Mancari,
417 U.S. at 555 (1974)); Donovan, 692 F.2d 709. Because Title VII contains no express
limitation on the Nation’s sovereignty, courts may not infer one.
b. Congress intended to leave unfettered Interior’s programs to benefit Indian tribes.
No evidence exists, either in the text of Title VII or the Civil Rights Act’s
legislative history, that Congress intended to limit tribal sovereignty or to alter Interior’s
practice of approving tribal preferences. In fact, legislative history and contemporaneous
assessment of the Civil Rights Act suggest the opposite: Congress thought that the Civil
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Rights Act would not affect Interior’s programs to benefit Indian tribes—a practice well-
known to Congress—and Section 703(i) was intended to protect, not to prohibit or
restrict, those same programs.
In the winter of 1963, the House Committee on the Judiciary asked the Attorney
General for a list of Federal programs that would be affected by Title VI of the Civil
Rights Act, which prohibits the use of federal funds for discriminatory purposes.
Nicholas Katzenbach, then the Deputy Attorney General, replied to the Committee with
a list of programs that would be affected, which omitted “Programs of assistance to
Indians.” 110 Cong. Rec. 13,380–81 (1964). He explained: “Indians have a special status
under the Constitution and treaties. Nothing in [T]itle VI is intended to change that
status or to preclude special assistance to the Indians.” Id. This language, closely echoed
by the Supreme Court eleven years later in Mancari, demonstrates an understanding,
contemporaneous with the passage of the Civil Rights Act, that Indians enjoyed a special
status under the law that the Civil Rights Act did nothing to displace.
At the time, tribal economic self-sufficiency programs were already in place.
Senator Karl Mundt was the sponsor of Section 703(i). Senator Mundt was from South
Dakota (where nine Sioux tribes are located) and spent much of his career working on
Indian issues, including providing Indians with education, skills training, job
opportunities, and other means of promoting economic self-sufficiency. Scott N.
Heidepriem, A Fair Chance for a Free People, 58, 61, 64 (Leader Printing Co. 1988)
(attached as Ex. 7). In the late 1940s and early 1950s, the Senator began to promote a
program in which the United States would transfer control of federal land located on or
near reservations to tribes to lease out to private industry. Id. at A5; 103 Cong. Rec.
1386 (1957). The United States would then offer industry tax incentives to re-locate to
the site, provided that they provided skills training and preferential hiring to local tribal
Indians. See H.R. 3942, 85th Cong. (1957). One of these initial projects was designed to
help a particular South Dakota Sioux reservation. It is in that context that Senator
Mundt explained that including Section 703(i) in the Civil Rights Act “will assure our
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American Indians of the continued right to protect and promote their own interests and
to benefit from Indian preference programs now in operation or later to be instituted.”
110 Cong. Rec. 13,702 (1964); Malabed, 335 F.3d at 871-72. EEOC dismisses Mundt’s
comment on the basis that it refers to Indian preference programs generally, and
suggests that there is no reason to read the remark as encompassing programs containing
tribal preferences. See EEOC’s Supp. Resp. to Navajo Mot. to Dismiss at 7-8. But
history suggests otherwise.
In conjunction with the program Senator Mundt championed, by 1956 the Bureau
of Indian Affairs had initiated a broader industrial development program designed to
attract established industries capable of employing Indians to locate on or near
reservations. Annual Report of the Secretary of the Interior 204 (1956) (attached as Ex.
8). The program began when BIA worked with the Navajo Nation to create on the
reservation a “Central Office for the promotion of industrial development on and near
Indian reservations.” The Navajo Yearbook 84–85 (Rep. No. VII 1958) (attached as Ex.
9). The first two projects under the program were a furniture plant near Gamerco, New
Mexico, and a Lear Electronics plant in Flagstaff, Arizona, each of which adopted a
tribe-specific preference. Id. at 85. These industrial development programs were
repeatedly couched as providing “on and near Indian reservation” employment, and
mirror a Mundt-sponsored amendment with identical language and promoted as
preserving “Indian preference programs now in operation or later to be instituted.” 110
Cong. Rec. 13,702 (debate of June 13, 1964).
Had Congress intended to preserve every aspect of those programs but the tribal
preference, it would have done so much more definitively. See Chisom v. Roemer, 501
U.S. 380, 396 (1991). To the contrary, however, Congress exempted tribes from the
definition of “employer” in Title VII, consistent with an intent to preserve, rather than
impliedly abrogate, Indian tribes’ sovereign authority. There is simply no basis for
reading Title VII as impliedly abrogating the Navajo Nation’s previously-held rights
when the only provision in Title VII directly addressing Indian tribes expressly excludes
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them from coverage under the title. Section 703(i) does not demonstrate a clear
Congressional intent to abolish tribal preferences.
c. The United States’ conduct following enactment of the 1964 Civil Rights Act demonstrates its uniform understanding that tribal preferences had survived the enactment of Title VII.
There is little question that the practice of adopting tribal hiring preferences
predated enactment of Title VII and continued unabated in the years following its
passage. Since the enactment of Title VII, Interior has approved hundreds or thousands
of business site leases that contain tribal hiring preferences. The Navajo Nation claims to
be the beneficiary of 326 such leases. See Navajo Nation Reply to EEOC Resp. to Mot.
to Dismiss at 5 (ECF No. 231). But Interior is not the only federal agency that has
voiced support for Navajo preferences since the enactment of Title VII. In fact, while
Mancari was making its way through the courts, at least three other agencies—including
EEOC—supported tribal preferences for Navajo Indians.
First, EEOC itself has approved a company’s adoption of a preference in favor of
Navajos. In 1972, EEOC, at the request of the Navajo and Interior, investigated the
employment practices of a company constructing a generating plant on the reservation.
See Hearing Before the U.S. Commission on Civil Rights at 920 (Oct. 22-24, 1973)
(opening statement of Charles W. Lacey) (attached as Ex. 10). EEOC held a series of
meetings which resulted in an agreement known as the “August 1, 1972, Navajo
Preferential Employment Program.” See id. And EEOC accepted the terms of a
conciliation agreement, which specifically provided that the Navajo-specific preference
in that Program did not violate Title VII of the Civil Rights Act. See id. at 921; id. at
934 (conciliation agreement).
Second, in 1973, the United States Department of Labor wrote a letter to the
Navajo Nation opining that the Navajo could, consistent with § 703(i), append bid
conditions to federally-assisted construction contracts requiring contractors to hire an
all-Navajo workforce. See Guidelines for Establishment of Navajo Manpower
Utilization Requirements in Construction Activity (Aug. 17, 1973) (attached as Ex.
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11).12 In fact, Labor noted that it would have no objection “to even stronger language”
than in the Navajo’s draft provision. Id. at 2.
Third, in 1975, the United States Commission on Civil Rights published its report
on the plight of the Navajo People. The Commission criticized Interior for not being a
strong enough supporter of tribal preferences. Specifically, it blamed BIA for “mak[ing]
no valid effort to monitor or enforce the [tribal] employment provisions” that included
Navajo preferences. See U.S. Commission on Civil Rights, The Navajo Nation: an
American Colony, 123 (Sept. 1975) (attached as Ex. 12). The Report noted that a further
“obstacle” is the “weak wording of what is known as the ‘Navajo preference clause’ in
the tribe’s contracts and leases,” id. at 45, and cited with approval tribal efforts to get
“stronger Navajo preference provisions” in “approximately 100 contracts and leases with
large employers.” Id. at 125.
All three of these events happened close in time to the Mancari decision. The
Supreme Court, in explaining why the 1972 amendments to Title VII did not impliedly
repeal Indian preferences, highlighted that “[t]hree months after Congress passed the
1972 amendments, it enacted two new Indian preference laws.” Mancari, 417 U.S. at
548. The Court explained that it “is improbable, to say the least, that the same Congress
which affirmatively approved and enacted these additional and similar Indian
preferences was, at the same time, condemning the BIA preference as racially
discriminatory. In the total absence of any manifestation of supportive intent, we are
loathe to imply this improbable result.” Id. at 548–49.
4. Applying Mancari here would not conflict with the Ninth Circuit’s opinion in Dawavendewa I.
EEOC highlights the fact that, in Dawavendewa I, the Ninth Circuit stated that
“discrimination on the basis of tribal affiliation can give rise to a ‘national origin’ claim
under Title VII.” See EEOC’s Supp. Resp. to Navajo Mot. to Dismiss at 5 (quoting
12 The letter, EEOC’s reproduction thereof, and the fax cover pages were submitted to the Ninth Circuit during the Peabody IV appeal. See Ex. A to Navajo Nation Opp’n to EEOC Mot. to Strike, EEOC v. Peabody W. Coal Co., No. 06-17261 (9th Cir. Nov. 9, 2007).
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Dawavendewa v. Salt River Project (“Dawavendewa I”), 154 F.3d 1117, 1120 (9th Cir.
1998)). In so ruling, the Ninth Circuit relied, in part, on the deference properly due to
EEOC’s 1988 Policy Statement, which interprets the scope of the exception contained
within Section 703(i) of Title VII. Dawavendewa I, 154 F.3d at 1121.
A ruling in favor of Peabody on the merits of EEOC’s underlying complaint,
however, does not require revisiting either EEOC’s 1988 Policy Statement or the Ninth
Circuit’s holding in Dawavendewa I. As a general matter, a private employer’s unilateral
decision (e.g., where that decision is not mandated by a Secretary-approved lease or
tribal ordinance) to favor members of one tribe over members of another tribe may well
constitute national-origin discrimination within the meaning of Title VII. But neither
Dawavendewa I nor the 1988 Policy Statement addresses a situation in which an
employer is complying with an Indian tribe’s law or ordinance that requires a preference
for a tribe’s own members in employment on the tribe’s reservation, or such a preference
under a Secretary-approved lease for the utilization of the tribe’s own land or resources
held in trust by the United States for the benefit of the tribe. Under these circumstances,
the relevant question is not whether the preference provision falls within § 703(i), but
whether it constitutes national origin discrimination subject to Title VII in the first place.
Dawavendewa I’s holding is limited to the proposition that “discrimination on the
basis of tribal affiliation can give rise to a ‘national origin’ claim under Title VII.” 154
F.3d at 1120 (emphasis added). It does not hold that discriminating based on tribal
affiliation is always national origin discrimination, nor does it address the facts and
circumstances present here. Notably, neither Interior nor the Navajo Nation was a party
to Dawavendewa I. Interior, as an agency of the United States, is not bound by the
previous litigation. And it has not, until now, presented an affirmative case for (1) the
validity of tribe-specific preferences under these particular circumstances; (2) its
decades-long practice of approving leases containing tribal preferences; or (3) the
importance of the United States respecting Indian tribes as political entities with the
sovereign right to control access to, and economic activity on, their reservations, and to
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utilize their trust resources.
For that reason, the Solicitor General, on behalf of the United States,13 has on
three occasions represented to the Supreme Court that neither Dawavendewa I nor the
previous appeals in this case addressed the question of whether it is permissible for an
employer to comply with the terms of a Secretary-approved mineral lease or an Indian
tribe’s law requiring a preference for the tribe’s own members in employment on the
tribe’s reservation. Most recently, in August 2011, the Solicitor General observed that,
although, “[a]s a general matter, a private employer’s unilateral decision to favor
members of one Tribe over members of another Tribe constitutes national origin
discrimination within the meaning of Title VII,” the analysis “may differ when an
employer is complying with an Indian Tribe’s law or ordinance that requires a
preference for the Tribe’s own members in employment on the Tribe’s reservation, such
as . . . under a Secretary-approved lease . . . of the Tribe’s own land . . . held in trust by
the United States.” Br. for Fed. Resp., Navajo Nation v. EEOC, Nos. 10-1981 & 10-986
at 27 (attached for the Court’s convenience as Ex. 13). The Solicitor General explained
that “[u]nder those circumstances, the issue . . . is whether the tribal preference should
then be regarded as a political classification rather than a classification based on national
origin – and thus beyond the scope of Title VII.” Id. That specific issue—upon which
the underlying complaint in this case lies—has never been resolved by a federal court. If
the Court reaches the merits of Peabody’s third-party complaint, it should resolve that
issue in favor of Peabody.
CONCLUSION
Peabody’s third-party complaint should be stricken or dismissed. If the Court
reaches the merits of the third-party complaint, it should enter summary judgment in
favor of the Secretary because Peabody faces no liability on EEOC’s underlying claims.
13 Cf. 28 U.S.C. § 518(a) (vesting in the Solicitor General the authority to represent the United States before the Supreme Court); see 28 U.S.C. § 519 & 42 U.S.C. § 2000e-4(b)(2) (“Attorney General shall conduct all litigation to which [EEOC] is a party in the Supreme Court”).
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Respectfully submitted this 30th day of April, 2012,
IGNACIA S. MORENO Assistant Attorney General Environment & Natural Resources Division
s/ Kristofor R. Swanson_______
EDWARD J. PASSARELLI Assistant Section Chief Natural Resources Section KURT G. KASTORF KRISTOFOR R. SWANSON AMY S. TRYON U.S. Department of Justice P.O. Box 7611 Washington, DC 20044 Tel: 202-305-0248 Fax: 202-305-0506 [email protected] [email protected] [email protected]
OF COUNSEL: STEPHEN SIMPSON BARBARA COEN U.S. Department of the Interior Office of the Solicitor Division of Indian Affairs Washington, DC 20240
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