Alltel Communications, LLC v. Oglala Sioux Tribe ( 2012 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 11-1520
___________
Alltel Communications, LLC, *
*
Plaintiff - Appellee, *
*
v. *
* Appeal from the United States
Eugene DeJordy, * District Court for the
* District of South Dakota.
Defendant, *
*
Oglala Sioux Tribe; Joseph Red Cloud, *
*
Interested Parties - Appellants, *
___________
Submitted: December 13, 2011
Filed: April 4, 2012 (Corrected 4/6/12)
___________
Before LOKEN, MURPHY, and SHEPHERD, Circuit Judges.
___________
LOKEN, Circuit Judge.
Alltel Communications (“Alltel”) sued a former senior vice president, attorney
Eugene DeJordy, in the Eastern District of Arkansas, alleging that DeJordy breached
the terms of a Separation Agreement by, inter alia, assisting the Oglala Sioux Tribe
in a tribal court lawsuit to enjoin Alltel from a proposed sale of assets that provide
telecommunications services on the Pine Ridge Indian Reservation. In the Arkansas
action, Alltel served District of South Dakota third-party subpoenas duces tecum on
the Tribe and Joseph Red Cloud, a tribal Administrator who represents the Tribe in
telecommunications matters. The subpoenas seek production of any documents that
might establish a connection between DeJordy and the Tribe’s lawsuit against Alltel.
Following a hearing, the district court denied the Tribe’s motion to quash based on
tribal immunity and ordered the subpoenaed non-parties to deliver requested
documents for in camera review. The Tribe and Red Cloud then filed this
interlocutory appeal under the collateral order doctrine and 28 U.S.C. § 1292(b).1 The
only issue is whether tribal immunity bars enforcement of the subpoenas, an issue we
review de novo. See Rupp v. Omaha Indian Tribe, 45 F.3d 1241, 1244 (8th Cir.
1995). We agree with the Tribe that a third-party subpoena in private civil litigation
is a “suit” for purposes of the Tribe’s common law sovereign immunity. As that
immunity has not been waived or abrogated, we reverse.
It is well-established that “Indian tribes possess the common-law immunity
from suit traditionally enjoyed by sovereign powers.” United States v. Red Lake Band
of Chippewa Indians, 827 F.2d 380, 382 (8th Cir. 1987). The doctrine “developed
almost by accident,” initially grounded in the perception that Congress wished to
protect dependent, quasi-sovereign Indian tribes from costly claims and interference,
and sustained by the failure of Congress to exercise its unquestioned power to
abrogate the immunity, in whole or in part. Kiowa Tribe of Okla. v. Mfg. Techs., Inc.
523 U.S. 751, 756-60 (1998), and cases cited. The doctrine applies broadly to a
tribe’s commercial activities and to activities outside its reservation. See Okla. Tax
Comm’n v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S. 505, 510-11
(1991); Santa Clara Pueblo v. Martinez, 436 U.S. 49, 59 (1978). “[T]ribal immunity
is a matter of federal law.” Kiowa Tribe, 523 U.S. at 756.
1
We clearly have appellate jurisdiction. See Puerto Rico Aqueduct & Sewer
Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147 (1993).
-2-
Common law sovereign immunity “is an amalgam of two quite different
concepts, one applicable to suits in the sovereign’s own courts and the other to suits
in the courts of another sovereign.” Nevada v. Hall, 440 U.S. 410, 414 (1979).
Immunity from “suit” limits both concepts. “The general rule is that a suit is against
the sovereign if the judgment sought would expend itself on the public treasury or
domain, or interfere with the public administration, or if the effect of the judgment
would be to restrain the Government from acting, or to compel it to act.” Dugan v.
Rank, 372 U.S. 609, 620 (1963) (quotations and citations omitted). A broad definition
was first articulated by Chief Justice John Marshall in Cohens v. Virginia, 6 Wheat.
(19 U.S.) 264, 407 (1821). Thus, the threshold question raised by the Tribe’s claim
of tribal immunity is whether a federal court subpoena served on a tribe in civil
litigation in which the tribe is not a party constitutes a “suit” triggering the protections
of tribal immunity. The question has received surprisingly little consideration in
reported judicial decisions.
We note initially that the question is not whether sovereign immunity, as
applied by the Supreme Court to Indian tribes as a matter of federal law, limits
discovery under the Federal Rules of Civil Procedure in cases in which the tribe is a
party. In those cases, the threshold immunity question has been answered -- by tribal
consent or waiver when the tribe is a plaintiff, or by a valid waiver or abrogation of
immunity when it is a defendant. “The Government as a litigant is, of course, subject
to the rules of discovery.” United States v. Procter & Gamble Co., 356 U.S. 677, 681
(1958). As the Court observed in Three Affiliated Tribes of the Fort Berthold
Reservation v. Wold Engineering, 476 U.S. 877, 891 (1986), tribal immunity “does
not extend to protection from the normal processes of the state court in which [the
tribe] has filed suit.”
The third-party subpoenas here at issue raise a very different issue. They
command a government unit to appear in federal court and obey whatever judicial
discovery commands may be forthcoming. The potential for severe interference with
-3-
government functions is apparent. As the Fourth Circuit explained in quashing third-
party subpoenas demanding testimony by federal agency officials that was clearly
relevant in an underlying civil litigation:
Even though the government is not a party to the underlying
action, the nature of the subpoena proceeding against a federal employee
to compel him to testify about information obtained in his official
capacity is inherently that of an action against the United States because
such a proceeding “interfere[s] with the public administration” and
compels the federal agency to act in a manner different from that in
which the agency would ordinarily choose to exercise its public function.
Boron Oil Co. v. Downie, 873 F.2d 67, 70-71 (4th Cir. 1989), quoting Dugan, 372
U.S. at 620. This interpretation of Dugan was followed by the Fourth Circuit in
COMSAT Corp. v. National Science Foundation, 190 F.3d 269, 277 (4th Cir. 1999),
and by the Second Circuit in United States Environmental Protection Agency v.
General Electric Co., 197 F.3d 592, 597-98 (2d Cir. 1999). The D.C. Circuit instead
adheres to the view “that sovereign immunity is not a defense to a third-party
subpoena” of a federal agency because of the sovereign immunity waiver found in 5
U.S.C. § 702. Linder v. Calero-Portocarrero, 251 F.3d 178, 181 (D.C. Cir. 2001). But
the result is not much different because the D.C. Circuit then enforces “special
privileges” to prevent disclosures “inimical to national security or [an agency’s]
internal deliberations.” Northrop Corp. v. McDonnell Douglas Corp., 751 F.2d 395,
398 n.2 (D.C. Cir. 1984); accord Exxon Shipping Co. v. U.S. Dept. of Interior, 34
F.3d 774, 779-80 (9th Cir. 1994).
While noting this important issue of sovereign immunity, the Supreme Court
has avoided deciding it by applying a narrower basis to protect federal officials from
unwarranted third-party discovery. See U.S. ex rel. Touhy v. Ragen, 340 U.S. 462,
467-68 (1951); Boske v. Comingore, 177 U.S. 459, 469-70 (1900). But the Court has
endorsed the purposes underlying sovereign immunity emphasized in Boron Oil:
-4-
[I]t is one thing to provide a method by which a citizen may be
compensated for a wrong done to him by the Government. It is a far
different matter to permit a court to exercise its compulsive powers to
restrain the Government from acting, or to compel it to act. There are
the strongest reasons of public policy for the rule that such relief cannot
be had against the sovereign.
Larson v. Domestic & Foreign Corp., 337 U.S. 682, 704 (1949).
Concluding that a third-party subpoena is a “suit” triggering the federal
government’s sovereign immunity is significant, but it does not give the Executive
Branch a “blank check” to ignore third-party subpoenas because the agency response
may be judicially reviewed under the Administrative Procedure Act, 5 U.S.C. § 702.
Here, the Tribe’s claim that tribal immunity confers the same grant of immunity from
third-party judicial process is far more unsettling because the Tribe is not subject to
the Administrative Procedure Act or to any comparable legislation containing a
limited procedural waiver. Therefore, if we adopt the Tribe’s position, tribal
immunity, a federal common-law doctrine, may well confer greater immunity than
that enjoyed by federal officers and agencies, or by the States, whose sovereign
immunity is protected by the Eleventh Amendment. See In re Missouri Dept. of
Natural Res., 105 F.3d 434, 436 (8th Cir. 1997).
On the other hand, permitting broad third-party discovery in civil litigation
threatens to contravene “federal policies of tribal self determination, economic
development, and cultural autonomy” that underlie the federal doctrine of tribal
immunity. Am. Indian Agric. Credit Consortium v. Standing Rock Sioux Tribe, 780
F.2d 1374, 1378 (8th Cir. 1985). Here, for example, the Tribe’s gathering and
production of the extensive documents Alltel requests would likely be followed by
depositions of all tribal officials identified in those documents. Information gleaned
from this discovery would likely reveal deliberations establishing telecommunications
policies for the Reservation, information Alltel could then use, not only in its
-5-
Arkansas lawsuit against tribal ally DeJordy, but also to persuade federal regulators
not to favor the Tribe’s efforts to obtain the telecommunications assets Alltel wishes
to sell elsewhere. The point is not whether such compelled disclosure is good or bad;
it is whether the end result is the functional equivalent of a “suit” against a tribal
government within the meaning of its common law sovereign immunity.
In the one civil case squarely addressing this issue, a district court in the Second
Circuit followed the reasoning of General Electric and held that tribal immunity
barred third-party subpoenas in private civil litigation not unlike the dispute between
Alltel and DeJordy in this case. Catskill Dev., LLC v. Park Place Entm’t Corp., 206
F.R.D. 78, 86-88 (S.D.N.Y. 2002). Similarly, in In re Mayes, 294 B.R. 145, 154
(B.A.P. 10th Cir. 2003), the court concluded that a bankruptcy debtor’s application
to avoid a tribe’s judicial lien, though commenced by motion rather than complaint,
was a “suit” triggering tribal immunity because successful lien avoidance “has the
effect of preventing or ‘restraining’ the tribe from enforcing its judicial lien.”
Alltel and the district court rely on our decision in Missouri DNR, where we
rejected a non-party state agency’s claim of immunity from discovery subpoenas.
“There is simply no authority,” we noted, “for the position that the Eleventh
Amendment shields government entities from discovery in federal court.” 105 F.3d
at 436. We conclude the reliance is misplaced. Missouri DNR is not controlling.
Although Eleventh Amendment precedents are instructive, tribal immunity “is not
congruent with that which the Federal Government, or the States, enjoy.” Wold
Eng’g, 476 U.S. at 890. Moreover, given the public policy underlying sovereign
immunity summarized in the above-quoted portion of the opinion in Larson, we are
unwilling to predict how the Supreme Court would decide a case in which disruptive
third-party subpoenas that would clearly be barred in a State’s own courts are served
on a state agency in private federal court civil litigation. Based upon the reasoning in
cases such as Boron Oil, the Court might well conclude that the Eleventh Amendment
-6-
applies, or it might apply a broader form of state sovereign immunity as a matter of
comity, which would likewise apply to claims of tribal immunity.
The Tribe counters with United States v. James, 980 F.2d 1314, 1319 (9th Cir.
1992), where the court held that tribal immunity bars a criminal defendant’s trial
subpoena “unless the immunity had been waived.” Accord Cash Advance & Preferred
Cash Loans v. State, 242 P.3d 1099, 1108 (Colo. 2010) (relying on James in
concluding that tribal immunity applies to a “state investigative subpoena enforcement
action”). James did not cite our prior decision in In re Long Visitor, 523 F.2d 443,
446 (8th Cir. 1975), where we concluded that “Indian retained sovereignty” does not
bar grand jury subpoenas because “the extension by Congress of federal jurisdiction
to crimes committed on Indian reservations inherently includes every aspect of federal
criminal procedure applicable to the prosecution of such crimes.” James has also been
criticized and distinguished in district court opinions involving federal Major Crimes
Act prosecutions in which tribes broadly construing James argued that tribal immunity
bars discovery of relevant evidence in the tribe’s possession. These courts concluded
that the Sixth Amendment rights of criminal defendants, and Congress’s grant of
federal jurisdiction to prosecute major crimes committed in Indian country, counsel
against such a broad interpretation of tribal immunity. See United States v. Juvenile
Male 1, 431 F. Supp. 2d 1012, 1016-19 (D. Ariz. 2006); United States v. Velarde, 40
F. Supp. 2d 1314, 1315-17 (D.N.M. 1999).
Our panel is of course bound to follow Long Visitor, not James. But in our
view, decisions in federal criminal cases are not controlling in this private civil action.
The broad issue is how a tribe’s sovereign immunity, an immunity created and
controlled by federal law, will be enforced in the courts of another sovereign, the
United States. As the Eleventh Amendment does not apply, that is largely a question
of comity, Nevada v. Hall, 440 U.S. at 416, so federal courts have discretion not to
apply the doctrine where it would conflict with more important federal interests, such
as the constitutional rights of criminal defendants. See Washington v. Confed. Tribes
-7-
of the Colville Indian Reservation, 447 U.S. 134, 153 (1980) (“This Court has
[divested tribal powers] in cases where the exercise of tribal sovereignty would be
inconsistent with the overriding interests of the National Government.”). By contrast,
when the question is whether the doctrine applies to non-party subpoenas served in
this private civil litigation, no competing federal interests are present other than the
general benefits of discovery.
Although the answer to this issue is far from clear, we conclude from the plain
language of the Supreme Court’s definition of a “suit” in Dugan, and from the Court’s
“well-established federal ‘policy of furthering Indian self-government,’” Santa Clara,
436 U.S. at 62, that a federal court’s third-party subpoena in private civil litigation is
a “suit” that is subject to Indian tribal immunity. It may be that federal courts
applying normal discovery principles could adequately protect Indian tribes from
abusive third-party discovery without invoking tribal immunity. See Casino Res.
Corp. v. Harrah’s Entm’t, Inc., 243 F.3d 435, 440 (8th Cir. 2001) (“the Nation (a non-
party) can be protected in the discovery process, e.g., Fed. R. Civ. P. 45”); United
States v. Menominee Tribal Enters., No. 07-C-316, 2008 WL 2273285, at *13 (E.D.
Wis. June 2, 2008); Ho-Chunk Nation v. J.C. Penney Co., Inc., No. 98 C 3924, 1999
WL 1068700, at *2-3 (N.D. Ill. Nov. 17, 1999). But the Supreme Court has
consistently applied the common law doctrine even when modern economic realities
“might suggest a need to abrogate tribal immunity, at least as an overarching rule,”
concluding that it would leave that decision to Congress. Kiowa Tribe, 523 U.S. at
758. Thus, even if denying Alltel the discovery it seeks in this case works some
inconvenience, or even injustice, “it is too late in the day, and certainly beyond the
competence of this court, to take issue with a doctrine so well-established.” Standing
Rock Sioux Tribe, 780 F.2d at 1379.
For the foregoing reasons, as Alltel has made no claim that any applicable tribal
immunity was waived or abrogated, that portion of the district court’s Order dated
-8-
February 17, 2011, denying the Tribe’s motion to quash on the basis of tribal
sovereign immunity is reversed.
______________________________
-9-