Salt River Project Agricultura v. Reynold Lee ( 2012 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SALT RIVER PROJECT AGRICULTURAL 
IMPROVEMENT AND POWER DISTRICT,
a municipal corporation and
political subdivision of the State
of Arizona and HEADWATERS
RESOURCES, INC., a Utah
No. 10-17895
corporation,
Plaintiffs-Appellants, D.C. No.
v.  3:08-cv-08028-JAT
ORDER AND
REYNOLD R. LEE; CASEY
AMENDED
WATCHMAN; WOODY LEE; PETERSON
OPINION
YAZZIE; EVELYN MEADOWS; HERB
YAZZIE, Honorable; LOUISE G.
GRANT, Honorable; ELEANOR
SHIRLEY, Honorable; LEONARD
THINN; SARAH GONNIE,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Arizona
James A. Teilborg, District Judge, Presiding
Argued and Submitted
February 14, 2012—San Francisco, California
Filed March 15, 2012
Amended May 29, 2012
5877
5878 SALT RIVER PROJECT v. LEE
Before: A. Wallace Tashima and Barry G. Silverman,
Circuit Judges, and Marvin J. Garbis,
Senior District Judge.*
Opinion by Judge Silverman
*The Honorable Marvin J. Garbis, Senior District Judge for the U.S.
District Court for the District of Maryland, sitting by designation.
SALT RIVER PROJECT v. LEE 5879
COUNSEL
John J. Egbert (argued) and Paul G. Johnson of Jennings,
Strouss & Salmon, P.L.C., Phoenix, Arizona, for plaintiff-
5880 SALT RIVER PROJECT v. LEE
appellant Salt River Project Agricultural Improvement and
Power District.
Lisa M. Coulter, Snell & Wilmer, LLP, Phoenix, Arizona, for
plaintiff-appellant Headwater Resources, Inc.
Philip R. Higdon (argued), Rhonda L. Barnes, and Jessica J.
Berch, Perkins Coie LLP, Phoenix, Arizona, for defendants-
appellees Reynold R. Lee, Casey Watchman, Woody Lee,
Peterson Yazzie, Evelyn Meadows, Honorable Herb Yazzie,
Honorable Louise G. Grant, and Honorable Eleanor Shirley.
David R. Jordan, The Law Offices of David R. Jordan, PC,
Gallup, New Mexico, for defendants-appellees Leonard Thinn
and Sarah Gonnie.
ORDER
Appellants’ unopposed motion to amend opinion is
GRANTED. The opinion filed on March 15, 2012 and pub-
lished at 672 F.3d 1176 is amended as follows.
Page 3131 of the slip opinion begins: “Salt River Project
Agricultural Improvement and Power District co-owns, and
Headwater Resources, Inc. operates, a power plant called the
Navajo Generating Station on Navajo reservation land in
northern Arizona.” That sentence shall be deleted and
replaced with the following language:
“Salt River Project Agricultural Improvement and Power
District co-owns a power plant called the Navajo Generating
Station on Navajo reservation land in northern Arizona. Head-
water Resources, Inc. is a contractor employed by Salt River
Project at the power plant.”
With that amendment, the panel has voted to deny appel-
lees’ petition for rehearing.
SALT RIVER PROJECT v. LEE 5881
Judge Silverman has voted to deny appellees’ petition for
rehearing en banc, and Judges Tashima and Garbis so recom-
mend.
The full court has been advised of the petition for rehearing
en banc and no active judge has requested a vote on whether
to rehear the matter en banc. Fed. R. App. P. 35.
Appellees’ petition for rehearing and petition for rehearing
en banc are DENIED.
OPINION
SILVERMAN, Circuit Judge:
Two non-Indian entities brought this action to enjoin Nav-
ajo Nation tribal officials from applying tribal law to them in
tribal courts. They claim that both their contract with the tribe
and federal law deprive tribal officials of authority to regulate
them. This appeal presents the question whether the Navajo
Nation itself — which enjoys sovereign immunity and cannot
be sued — is a necessary (and if so, indispensable) party
under Federal Rule of Civil Procedure 19. We hold today that
the tribe is not a necessary party because the tribal officials
can be expected to adequately represent the tribe’s interests in
this action and because complete relief can be accorded
among the existing parties without the tribe. This lawsuit for
prospective injunctive relief may proceed against the officials
under a routine application of Ex parte Young, 209 U.S. 123(1908), and should not have been dismissed.
I. BACKGROUND
Salt River Project Agricultural Improvement and Power
District co-owns a power plant called the Navajo Generating
Station on Navajo reservation land in northern Arizona. Head-
5882 SALT RIVER PROJECT v. LEE
water Resources, Inc. is a contractor employed by Salt River
Project at the power plant. When they fired two Navajo
Nation employees who worked at the power plant, the
employees filed charges with the Office of Navajo Labor
Relations alleging that they were fired without just cause in
violation of the Navajo Preference in Employment Act, 15
Navajo Nation Code §§ 601 et seq. The Office of Navajo
Labor Relations issued right-to-sue notices to both former
employees, who then filed complaints with the Navajo Nation
Labor Commission. Salt River Project and Headwaters
defended the claims on, among other grounds, the theory that
the Navajo Nation lacked authority to regulate employment
matters at the power plant under (1) the terms of a 1969 lease
between the Navajo Nation and Salt River Project for the land
on which the power plant is located, which waived the tribe’s
right to regulate employment relations at the power plant,1 and
(2) a federal statutory right-of-way granted pursuant to 25
U.S.C. § 323, which extinguished all Indian uses of the cov-
ered lands.2 The Navajo Nation Supreme Court ultimately
rejected that defense, holding that the Navajo Preference in
Employment Act applied to Salt River Project and Headwa-
ters at the power plant, and remanded the case to the Navajo
Nation Labor Commission to allow the former employees’
claims to proceed on the merits. Thinn v. Navajo Generating
Station, No. SC-CV-25-06, 7 Am. Tribal Law 558, 560,
564-66 (Navajo 2007).
1
The relevant clause in the 1969 lease states:
The Tribe covenants that, other than as expressly set out in this
Lease, it will not directly or indirectly regulate or attempt to regu-
late the Lessees in the construction, maintenance or operation of
the Navajo Generation Station . . . .
2
The § 323 grant provides in relevant part:
All present existing Indian uses of any land described herein are
hereby extinguished and prohibited for the term of the § 323
Grant, and any renewals thereof . . . .
SALT RIVER PROJECT v. LEE 5883
Salt River Project and Headwaters then filed this action for
declaratory and injunctive relief against the Navajo officials
responsible for enforcing the Act — the Director of the Office
of Navajo Labor Relations, the members of the Navajo Nation
Labor Commission, and the justices of the Navajo Nation
Supreme Court. Their complaint alleged, inter alia, that the
Navajo officials “have proceeded, and are threatening to fur-
ther proceed, against [the plaintiffs] . . . in violation of federal
law” and that “all such actions . . . violate federal law.” The
complaint sought a declaratory judgment that those Navajo
officials lacked authority to regulate employment relations at
the Navajo Generating Station and an injunction staying the
former employees’ claims.
The Navajo officials moved to dismiss under Federal Rule
of Civil Procedure 12(b)(7) for failure to join a party required
by Rule 19: the Navajo Nation. The district court granted the
motion, concluding that the Navajo Nation was a necessary
party under Rule 19(a)(1)(A) because without the tribe, the
plaintiffs could not get complete relief from future attempts
by the Navajo Nation to enforce the Navajo Preference in
Employment Act. The district court also concluded that the
tribe was a necessary party under Rule 19(a)(1)(B)(i) because
proceeding without the Navajo Nation threatened to impair its
interests in the scope of the 1969 lease, its economic interests
in promoting full employment of Navajo Nation members,
and its general interests in governing the Navajo reservation.
Moreover, the district court concluded that the Navajo Nation,
which sovereign immunity prevented from being joined, was
an indispensable party under Rule 19(b). Accordingly, the dis-
trict court dismissed the action. Salt River Project and Head-
waters appeal that dismissal.
II. JURISDICTION AND STANDARD OF REVIEW
The district court had federal question jurisdiction under 28
U.S.C. § 1331. See Ariz. Pub. Serv. Co. v. Aspaas, 77 F.3d
5884 SALT RIVER PROJECT v. LEE
1128, 1132-33 (9th Cir. 1996). We have jurisdiction under 28
U.S.C. § 1291.
We review a Rule 19 dismissal for abuse of discretion and
underlying legal conclusions de novo. See Cachil Dehe Band
of Wintun Indians of the Colusa Indian Cmty. v. California,
547 F.3d 962, 969-70 (9th Cir. 2008).
III. DISCUSSION
As we have explained, Federal Rule of Civil Procedure 193
imposes a three-step inquiry:
3
Rule 19 states in relevant part:
(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject to service of
process and whose joinder will not deprive the court of
subject-matter jurisdiction must be joined as a party if:
(A) in that person’s absence, the court cannot accord com-
plete relief among existing parties; or
(B) that person claims an interest relating to the subject of
the action and is so situated that disposing of the action in
the person’s absence may:
(i) as a practical matter impair or impede the person’s
ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent
obligations because of the interest.
(2) Joinder by Court Order. If a person has not been joined
as required, the court must order that the person be made a
party. A person who refuses to join as a plaintiff may be
made either a defendant or, in a proper case, an involuntary
plaintiff.
...
(b) When Joinder Is Not Feasible. If a person who is required
to be joined if feasible cannot be joined, the court must determine
whether, in equity and good conscience, the action should pro-
SALT RIVER PROJECT v. LEE 5885
1. Is the absent party necessary (i.e., required to be
joined if feasible) under Rule 19(a)?
2. If so, is it feasible to order that the absent party
be joined?
3. If joinder is not feasible, can the case proceed
without the absent party, or is the absent party
indispensable such that the action must be dis-
missed?
See EEOC v. Peabody W. Coal Co., 400 F.3d 774, 779-80
(9th Cir. 2005).
A party may be necessary under Rule 19(a) in three differ-
ent ways. First, a person is necessary if, in his absence, the
court cannot accord complete relief among existing parties.
See Fed. R. Civ. P. 19(a)(1)(A). Second, a person is necessary
if he has an interest in the action and resolving the action in
his absence may as a practical matter impair or impede his
ceed among the existing parties or should be dismissed. The fac-
tors for the court to consider include:
(1) the extent to which a judgment rendered in the person’s
absence might prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or
avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person’s absence
would be adequate; and
(4) whether the plaintiff would have an adequate remedy if
the action were dismissed for nonjoinder.
...
Fed. R. Civ. P. 19.
5886 SALT RIVER PROJECT v. LEE
ability to protect that interest. See Fed. R. Civ. P.
19(a)(1)(B)(i). Third, a person is necessary if he has an inter-
est in the action and resolving the action in his absence may
leave an existing party subject to inconsistent obligations
because of that interest. See Fed. R. Civ. P. 19(a)(1)(B)(ii).
Here, the district court first concluded under Rule
19(a)(1)(A) that the Navajo Nation was a necessary party
because an injunction solely against the current Navajo offi-
cials would not prevent future or other Navajo officials from
taking the same allegedly unlawful actions.
[1] That conclusion is incorrect: An injunction against a
public officer in his official capacity — which is what the
plaintiffs seek here — remains in force against the officer’s
successors. See Hernandez v. O’Malley, 98 F.3d 293, 294 (7th
Cir. 1996) (noting that Rule 65(d) “makes an injunction effec-
tive against successors in office”); 11A Charles Alan Wright
et al., Federal Practice and Procedure § 2956 (2d ed. 1995)
(“A decree binding a public official generally is valid against
that official’s successors in office.”) (citing cases); cf. also
Fed. R. Civ. P. 25(d) (providing for automatic substitution of
public officer’s successor when officer ceases to hold office).
[2] Moreover, to the extent the district court concluded that
other Navajo officials (i.e., current officials not named as
defendants here) could somehow attempt to enforce the Nav-
ajo Preference in Employment Act against the plaintiffs not-
withstanding the plaintiffs’ requested injunction, that
possibility does not mean that complete relief is not possible
for the plaintiffs, who seek to enjoin only the named defen-
dants. If in the future the plaintiffs believe that other officials
are acting in violation of federal law, they may bring another
action against those officials.
[3] Accordingly, because the district court can accord the
complete relief sought by the plaintiffs in the Navajo Nation’s
SALT RIVER PROJECT v. LEE 5887
absence, it erred in holding that the tribe was a necessary
party under Rule 19(a)(1)(A).
[4] The district court also concluded under Rule
19(a)(1)(B)(i) that the Navajo Nation had three distinct inter-
ests in this action: (1) the scope of the tribe’s rights under the
1969 lease, (2) the job security of Navajo Nation members,
and (3) the tribe’s general interest in governing the Navajo
reservation. But that is not the end of the matter. The district
court failed to analyze whether proceeding without the Navajo
Nation would “impair or impede” the tribe’s ability to protect
those interests. See Fed. R. Civ. P. 19(a)(1)(B)(i). An absent
party with an interest in the action is not a necessary party
under Rule 19(a) “if the absent party is adequately repre-
sented in the suit.” Shermoen v. United States, 982 F.2d 1312,
1318 (9th Cir. 1992) (citation and internal quotation marks
omitted). As we said in Shermoen, “[i]f a legally protected
interest exists, the court must further determine whether that
interest will be impaired or impeded by the suit. Impairment
may be minimized if the absent party is adequately repre-
sented in the suit.” Id. (citation and internal quotation marks
omitted).
We consider three factors in determining whether an exist-
ing party adequately represents the interests of an absent
party: (1) “whether the interests of a present party to the suit
are such that it will undoubtedly make all of the absent party’s
arguments”; (2) “whether the party is capable of and willing
to make such arguments”; and (3) “whether the absent party
would offer any necessary element to the proceedings that the
present parties would neglect.” Id. (citation and internal quo-
tation marks omitted).
[5] Here, the Navajo official defendants can be expected to
adequately represent the Navajo Nation’s interests. First, the
officials’ interests are aligned with the tribe’s interests: The
officials are responsible for enforcing the Navajo Preference
in Employment Act, and there is no suggestion that the offi-
5888 SALT RIVER PROJECT v. LEE
cials’ attempt to enforce the statute here is antithetical to the
tribe’s interests. Second, there is no reason to believe the Nav-
ajo official defendants cannot or will not make any reasonable
argument that the tribe would make if it were a party. Third,
there is no indication that the tribe would offer any necessary
element to the action that the Navajo official defendants
would neglect. See Kansas v. United States, 249 F.3d 1213,
1227 (10th Cir. 2001) (“[M]ost importantly, the potential for
prejudice to the Miami Tribe is largely nonexistent due to the
presence in this suit of . . . the tribal officials . . . . These
Defendants’ interests, considered together, are substantially
similar, if not identical, to the Tribe’s interests in [the
action].”).
Indeed, the Navajo official defendants do not argue other-
wise. Instead, they argue only that the tribe automatically is
a necessary party to any action challenging a lease to which
the tribe is a signatory, citing Dawavendewa v. Salt River
Project, 276 F.3d 1150 (9th Cir. 2002). But Dawavendewa is
distinguishable because there — unlike here — the tribal offi-
cials were not parties to the action and thus could not repre-
sent the absent tribe’s interests, a fact we explicitly noted. See
id. at 1160 (“[N]or has [the plaintiff] named any tribal offi-
cials as parties to this litigation.”).
[6] Thus, because the officials adequately represent the
Navajo Nation’s interests here, the district court erred in hold-
ing that the tribe was a necessary party under Rule
19(a)(1)(B)(i).
[7] Finally, the Navajo official defendants argue that the
tribe is a necessary party under 19(a)(1)(B)(ii) because its
absence could subject the plaintiffs to inconsistent obliga-
tions. In particular, the defendants argue that the plaintiffs’
requested injunction would not bind the Navajo Nation, which
could later seek to enforce the Navajo Preference in Employ-
ment Act at the power plant. But the defendants fail to explain
how the tribe could enforce the Act without the aid of its offi-
SALT RIVER PROJECT v. LEE 5889
cers responsible for enforcing the Act, who would be bound
by the plaintiffs’ requested injunction. If other Navajo Nation
officials somehow attempted to enforce the Act against the
plaintiffs, the plaintiffs would be free to return to federal court
to seek an injunction against those officials. But at this stage,
the plaintiffs’ complaint seeks an injunction only against these
named officials. Accordingly, because there is no risk that the
plaintiffs could be subject to inconsistent obligations in the
Navajo Nation’s absence, the Navajo Nation is not a neces-
sary party under Rule 19(a)(1)(B)(ii).
*****
In sum, we hold that (1) the Navajo Nation is not a neces-
sary party under Rule 19(a)(1)(A) because the plaintiffs seek
relief only against the current Navajo officials; (2) the Navajo
Nation is not a necessary party under Rule 19(a)(1)(B)(i)
because the officials adequately represent the tribe’s interests;
and (3) the Navajo Nation is not a necessary party under Rule
19(a)(1)(B)(ii) because its absence will not risk subjecting the
plaintiffs to inconsistent obligations.
Indeed, a contrary holding would effectively gut the Ex
parte Young doctrine. That doctrine permits actions for pro-
spective non-monetary relief against state or tribal officials in
their official capacity to enjoin them from violating federal
law, without the presence of the immune State or tribe. See Ex
parte Young, 209 U.S. 123 (1908).
The district court recognized this, but reasoned that this
case was different from the traditional Ex parte Young case
because, the court said, the Navajo officials are allegedly vio-
lating a private lease, rather than merely a federal statute or
the federal Constitution. But the complaint specifically
alleged that the tribal officials were acting “beyond [their]
jurisdiction, without basis in law, and in violation of federal
law” — including the federal statutory right-of-way. More-
over, we have held that federal common law governs whether
5890 SALT RIVER PROJECT v. LEE
an Indian tribe’s lease with a non-Indian has waived the
tribe’s authority to regulate the non-Indian’s activities. See
Ariz. Pub. Serv. Co. v. Aspaas, 77 F.3d 1128, 1132-33 (9th
Cir. 1996). And it is well-settled that federal common law cir-
cumscribes a tribe’s inherent authority to regulate non-
members. See Montana v. United States, 450 U.S. 544,
563-66 (1981). Ex parte Young is not limited to claims that
officials are violating the federal Constitution or federal stat-
ute; it applies to federal common law as well. See South
Dakota v. Bourland, 949 F.2d 984, 989 (8th Cir. 1991), rev’d
on other grounds, 508 U.S. 679 (1993).
Thus, the Navajo Nation is not a necessary party under
Rule 19. The district court’s order dismissing the case is
reversed.
REVERSED and REMANDED.