Penobscot Nation v. Georgia-Pacific Corp. , 254 F.3d 317 ( 2001 )

United States Court of Appeals
For the First Circuit
No. 00-2265
PENOBSCOT NATION, ET AL.,
Appellants,
v.
GEORGIA-PACIFIC CORPORATION, ET AL.,
Appellees.
__________
STATE OF MAINE,
Defendant, Intervenor-Appellee,
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Boudin, Circuit Judge,
Stahl, Senior Circuit Judge
and Lynch, Circuit Judge.
Kaighn Smith, Jr. with whom Gregory W. Sample and Drummond
Woodsum & MacMahon were on brief for appellants.
Catherine R. Connors with whom Matthew D. Manahan and Pierce
Atwood were on brief for appellees.
William R. Stokes, Assistant Attorney General, with whom
Andrew Ketterer, Attorney General, and Paul Stern, Deputy
Attorney General, were on brief for defendant, intervenor-
appellee.
June 20, 2001
BOUDIN, Circuit Judge. The appellants in this case,
the Penobscot Nation and the Passamaquoddy Tribe ("the
Tribes"), occupy tribal lands in Maine. The corporate
appellees--Georgia-Pacific Corp., Great Northern Paper, Inc.,
and Champion International Corp. ("the companies")--operate pulp
and paper mills that discharge waste water in rivers near or
flowing through the Tribes' reservations. A dispute developed
between the Tribes and the State of Maine as to the regulation
of waste water discharge under the Clean Water Act, 33 U.S.C. §§
1342(b), 1377 (1994).
Concerned that the Tribes would seek to regulate their
activities, the companies requested that the Tribes turn over
broad categories of documents bearing on such (potential)
regulation, including efforts by the Tribes to secure authority
to regulate and pertinent agreements between the Tribes and
federal agencies. The companies' demand, made on May 10, 2000,
was based on Maine's Freedom of Access Act ("the Maine Access
Act"), Me. Rev. Stat. Ann. tit. 1 §§ 401-10 (West 1989 & Supp.
2000). Under Maine law, the Tribes are regulated in certain
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respects as municipalities, and municipalities are covered by
the Access Act.
The Tribes then brought the present lawsuit against the
companies in federal district court to obtain injunctive and
declaratory relief debarring the companies from obtaining the
documents they sought. The substance of the Tribes' position
was that a settlement between Maine and the Tribes, reflected in
both Maine law and a federal statute, precluded state regulation
of "internal tribal matters" and that applying the Maine Access
Act as sought by the companies would impermissibly regulate the
Tribes' internal affairs. This federal suit was filed on May
18, 2000.
On May 22, the day before they were served with the
federal complaint, the companies brought suit against the Tribes
in the Maine Superior Court. Invoking the Maine Access Act, Me.
Rev. Stat. tit. 1 § 409(1), the companies demanded that the
Tribes produce the documents previously sought. In this state-
court suit, the Tribes resisted the demand by asserting, inter
alia, that the internal affairs limitation in the settlement
meant that the Maine Access Act could not validly be applied to
require the Tribes to produce the documents. The same question
as to the breadth of the limitation was thus posed in both
courts.
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The federal district court acted first, ruling on July
18, 2000, that it lacked jurisdiction to entertain the Tribes'
suit for declaratory and injunctive relief against the
companies. Penobscot Nation v. Ga.-Pac. Corp., 106 F. Supp. 2d
81, 86 (D. Me. 2000) ("Penobscot I"). The court assumed that
the internal affairs limitation could comprise a federal-law
defense if the companies sued the Tribes under the Maine Access
Act; but it ruled that under the well-pleaded complaint rule,
the anticipatory assertion of such a defense in a suit by the
Tribes did not create a case "arising under" federal law for
purposes of the general federal-question jurisdiction statute,
28 U.S.C. § 1331, nor under the parallel language of section
1362, the special Indian jurisdiction statute.1 Id. at 83-84.
The court thereafter (on September 26, 2000) denied
reconsideration. Penobscot Nation v. Ga.-Pac. Corp., 116 F.
Supp. 2d 201, 205 (D. Me. 2000) ("Penobscot II").
Shortly before the denial of reconsideration, the Maine
Superior Court ruled on the merits of the companies' suit
1
Section 1332 provides that "[t]he district courts shall
have original jurisdiction of all civil actions arising under
the Constitution, laws, or treaties of the United States." 28
U.S.C. § 1332. Section 1362, entitled "Indian tribes," states
that "[t]he district courts shall have original jurisdiction of
all civil actions, brought by any Indian tribe or band with a
governing body duly recognized by the Secretary of the Interior,
wherein the matter in controversy arises under the Constitution,
laws, or treaties of the United States." Id. § 1362.
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against the Tribes to enforce the Maine Access Act. Great N.
Paper, Inc. v. Penobscot Indian Nation, No. CV-00-329, slip op.
at 9 (Me. Super. Ct. Sept. 19, 2000). The state court ruled
that the demand for documents did not contravene the internal
affairs limitation and ordered the Tribes to produce the
documents immediately, save for conventionally privileged
documents which needed only to be logged. The Tribes refused,
were held in contempt, and appealed to the Maine Supreme
Judicial Court. The Tribes also appealed to us from the
district court's dismissal of their federal suit.
On May 1, 2001, while the present appeal was pending
before us awaiting decision, the Supreme Judicial Court decided
the state appeal. Great N. Paper, Inc. v. Penobscot Nation, 770
A.2d 574, 592 (Me. 2001). It ruled that the internal affairs
limitation did protect the Tribes from having to produce
documents reflecting internal deliberations about the waste
water issue, but not from turning over under the Maine Access
Act any correspondence between the Tribes and federal agencies
on that issue. Id. The court vacated the lower court's
judgment and contempt ruling and remanded for production of the
narrower category of materials.
Because the district court dismissed for want of
federal jurisdiction based on rulings of law, our review is de
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novo. Mills v. Maine, 118 F.3d 37, 41 (1st Cir. 1997). To sum
up our conclusion at the outset, we think that whether the
Tribes' claims "arise under" federal law within the meaning of
either section 1331 or section 1362 is a difficult question; but
the answer is now irrelevant in this case because the Maine
Supreme Judicial Court has decided the merits of the underlying
dispute, and any further proceedings in the federal district
court are controlled by res judicata doctrine and would be
pointlessly duplicative.
Understanding the jurisdictional issue requires a short
excursion. The Tribes in this case occupy a status, and are
subject to a legal framework, that is atypical. The federal
Maine Indian Claims Settlement Act ("the Settlement Act"), 25
U.S.C. §§ 1721-35 (1994), and the Maine Implementing Act, Me.
Rev. Stat. Ann. tit. 30 §§ 6201-14 (West 1996 & Supp. 2000),
capped a settlement, reached in 1980, between the Tribes and the
State of Maine involving disputes as to whether the Tribes
should be recognized at all and as to their claimed ownership of
large tracts of land in Maine. In the settlement, the Tribes
gave up much of their land claims but got recognition, trust
funds, title to designated reservations, and certain regulatory
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powers within those lands. See 25 U.S.C. §§ 1723-25; Me. Rev.
Stat. Ann. tit. 30 §§ 6205-10.2
However, partly as a result of the Tribes' disputed
status, the State of Maine, as part of the settlement, obtained
legal authority over the Tribes exceeding the usual state
authority over native American tribes. The Tribes were for most
purposes "subject to all the laws of the State of Maine." 25
U.S.C. § 1721(b)(4); accord id. § 1725; Me. Rev. Stat. Ann. tit.
30 § 6204. The Tribes were also (with a few exceptions not
relevant here) made subject to suit in state courts. 25 U.S.C.
§ 1725(a); Me. Rev. Stat. Ann. tit. 30 § 6206(2). And a central
provision of the state statute codifying the settlement contains
both a general rule and a key qualification:
Except as otherwise provided in this
Act, the Passamaquoddy Tribe and the
Penobscot Nation, within their respective
Indian territories, shall have, exercise and
enjoy all the rights, privileges, powers and
immunities, . . . and shall be subject to
all the duties, obligations, liabilities and
limitations of a municipality of and subject
to the laws of the State, provided, however,
that internal tribal matters, including
membership in the respective tribe or
nation, the right to reside within the
respective Indian territories, tribal
organization, tribal government, tribal
elections and the use or disposition of
2The story is recounted in detail elsewhere. See Great N.
Paper, 770 A.2d at 581-85; H.R. Rep. No. 96-1353, at 11-20
(1980), reprinted in 1980 U.S.C.C.A.N. 3786, 3787-96.
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settlement fund income shall not be subject
to regulation by the State.
Me. Rev. Stat. Ann. tit. 30 § 6206(1).
In the federal Settlement Act, Congress did not
expressly include the provision just quoted; but the Settlement
Act did state, as "a purpose" of the statute, Congress' intent
"to ratify" the Maine Implementing Act "which defines" the
relationship between the State of Maine and the Tribes. 25
U.S.C. § 1721(b)(3). This court has assumed, albeit without
extensive discussion, that the internal affairs limitation on
state authority in the Maine Implementing Act is also an
overriding federal limitation on Maine authority over the
Tribes. Akins v. Penobscot Nation, 130 F.3d 482, 485 (1st Cir.
1997); see also 25 U.S.C. § 1735. The companies do not dispute
that premise in this case.
This background brings us to the jurisdictional issue
decided by the district court. The Tribes, in bringing their
federal suit, based their claim of jurisdiction on the premise
that their suit "arises under" federal law within the meaning of
sections 1331 and 1362. In the Tribes' view, the controlling
federal issue in the lawsuit is whether the internal affairs
limitation is violated by applying the Maine Access Act to
require the Tribes to produce the documents sought. The
district court assumed arguendo that the internal affairs
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limitation was a creature of federal as well as state law.
Penobscot I, 106 F. Supp. 2d at 83.
But, as the district court pointed out in its very able
decision, Penobscot I, 106 F. Supp. 2d at 82, it is not enough
to satisfy traditional "arising under" jurisdiction under
section 1331 that a case involve a federal issue. Although this
would certainly satisfy Article III, the Supreme Court has read
the identically-worded statutory grant more narrowly, Verlinden
B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 494-95 (1983), and
has, for some time, required that it be apparent from the face
of the plaintiff's complaint either that a cause of action arise
under federal law, Am. Well Works Co. v. Layne & Bowler Co., 241
U.S. 257, 259-60 (1916), or at least (in some cases) that a
traditional state-law cause of action (e.g., a tort or contract
claim) present an important federal issue.
This latter exception, often associated with Smith v.
Kansas City Title & Trust Co., 255 U.S. 180, 201-02 (1921),3
might include a case in which a state-law contract claim rests
on a federal regulatory requirement. E.g., Price v. Pierce, 823
F.2d 1114, 1120-21 (7th Cir. 1987), cert. denied, 485 U.S. 9603
Although the Supreme Court has cited Smith with approval,
its present scope remains in some doubt. See Merrell Dow Pharm.
Inc. v. Thompson, 478 U.S. 804, 808-10 & n.5, 813-15 & n.12
(1986); Franchise Tax Board v. Constr. Laborers Vacation Trust,
463 U.S. 1, 9 (1983).
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(1988). This circuit treats Smith as good law but as limited to
cases where an important federal issue is a central element in
the state claim. Almond v. Capital Props., Inc., 212 F.3d 20,
23-24 & nn.2-3 (1st Cir. 2000). The Tribes in this case do not
rely on Smith.
In all events, there remains an overriding requirement
that the federal claim or issue appear on the face of "a well
[i.e., properly] pleaded complaint," so that federal
jurisdiction is absent where the federal issue would arise only
as a defense to a state cause of action. Louisville & Nashville
R.R. Co. v. Mottley, 211 U.S. 149, 153-54 (1908). As a settled
corollary, the restriction cannot be avoided by having the
beneficiary of the defense assert the defense preemptively in a
claim for declaratory or injunctive relief.4 This is just what
the district court said that the Tribes were attempting to do.
Penobscot I, 106 F. Supp. 2d at 82-83; Penobscot II, 116 F.
Supp. 2d at 203-04.
The district court's treatment of the issue under
section 1331 is straightforward and, with one possible
4Franchise Tax Board, 463 U.S. at 16; Pub. Serv. Comm'n v.
Wycoff, 344 U.S. 237, 248 (1952); Skelly Oil Co. v. Phillips
Petroleum Co., 339 U.S. 667, 671-74 (1950); Playboy Enters.,
Inc. v. Pub. Serv. Comm'n, 906 F.2d 25, 29-31 (1st Cir.), cert.
denied sub nom. Rivera Cruz v. Playboy Enters., Inc., 498 U.S.
959 (1990).
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qualification as to nomenclature, arguably correct. The
qualification is that under Bell v. Hood, 327 U.S. 678, 685
(1946), and its progeny, the Supreme Court has often said that
a colorable claim of a federal cause of action will confer
subject matter jurisdiction even though the claim itself may
fail as a matter of law on further examination.5 On this view,
the Tribes' suit, if colorably federal, would be better viewed
as dismissed for failure to state a federal claim after
"jurisdiction" to decide that issue had been established. See
Romero v. Int'l Terminal Operating Co., 358 U.S. 354, 359
(1959).
But is this a case where there is a federal claim?
Certainly nothing in the Settlement Act explicitly creates a
federal right for the Tribes to sue to enforce what is at most
an implicitly-adopted federal limitation on state power that
could easily be asserted as a defense in a state proceeding.
The creation of private causes of action by implication from
federal statutes used to be a cottage industry in the Supreme
Court, e.g., J.I. Case Co. v. Borak, 377 U.S. 426, 433-34
(1964), but it is now less favored, see Karahalios v. Nat'l
5
See, e.g., Steel Co. v. Citizens for a Better Env't, 523
U.S. 83, 89 (1998); Jackson Transit Auth. v. Local Div'n 1285,
Amalgamated Transit Union, 457 U.S. 15, 21 n.6 (1982); Oneida
Indian Nation v. County of Oneida, 414 U.S. 661, 666-67 (1974).
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Fed'n of Fed. Employees, 489 U.S. 527, 536 (1989); Touche Ross
& Co. v. Redington, 442 U.S. 560, 576-78 (1979).
Especially in Indian cases, the Supreme Court has
sometimes found federal rights present--or at least arguably
present--out of a tradition of federal regulation in the area.
See White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 143-44
(1980); Oneida Indian Nation v. County of Oneida, 414 U.S. 661,
677 (1974); see also Felix S. Cohen, Handbook of Federal Indian
Law 270-79 (1982 ed.). At the same time, the Maine tribes are
not treated like most other tribes but are subject to extensive
state regulation agreed to by Congress. And both of the cases
mainly relied upon by the Tribes for section 1331 jurisdiction
in this case are distinguishable on their facts.6
A further complication exists. In this case the Tribes
say that even if section 1331 does not support jurisdiction,
section 1362 will do so. The "arising under" language in the
two statutes is parallel; and the purpose of section 1362 was
probably just to confer federal jurisdiction where it otherwise
would exist over Indian cases without regard to the amount-in-
6Nat'l Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845,
853 (1985) (non-Indian plaintiff's claim that federal law bars
Indian tribal court from enforcing a default judgment against it
arguably arises under federal law to extent sufficient to
establish jurisdiction); Oneida Indian Nation, 414 U.S. at 666-
67 (Indian claims of right to land in New York based on federal
treaties and statutes).
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controversy requirement that governed section 1331 at the time
(but has been since repealed). See Blatchford v. Native Vill. of
Noatak, 501 U.S. 775, 784 (1991). Yet, the Supreme Court has
not settled definitively the question whether section 1362
reaches any further, and if so, how far, beyond section 1331.
See Blatchford, 501 U.S. at 784-85; Moe v. Confederated Salish
& Kootenai Tribes, 425 U.S. 463, 472-75 (1976).
Because of such uncertainties, we are reluctant
(despite the urging of the district court that we clear up the
matter) to decide in advance of necessity whether a federal
claim can be conjured out of a lawsuit by the Tribes asserting
that the threatened actions violate the internal affairs
limitation contained in Maine law and purportedly ratified by a
federal statute.7 Perhaps there is not even a single answer to
this question--it could conceivably turn on the circumstances.
See Penobscot I, 106 F. Supp. 2d at 83 n.4. In all events, no
7
The Tribes refer extensively to this Court's recent
decision
in Penobscot Nation v. Fellencer, 164 F.3d 706, 713 (1st Cir.),
cert. denied, 527 U.S. 1022 (1999). We held there that the
Penobscot Nation's decision, as employer, to fire a non-Indian
community health nurse was an "internal tribal matter" and
enjoined a suit brought by the discharged employee in state
court alleging discrimination under the Maine Human Rights Act,
Me. Rev. Stat. Ann. tit. 5, § 4551 et seq. (West 1998). As the
district judge noted in this case, Penobscot II, 116 F. Supp. 2d
at 204 & n.5, the question of subject matter jurisdiction was
not raised by the parties or the court in that case, so our
decision did not resolve the jurisdictional issue.
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answer is needed in this case because, either way, the federal
court can grant the Tribes no relief beyond what the state's
highest court has decreed.
Where pending state- and federal-court suits involve
the same underlying dispute, res judicata principles usually
give the race to the first court to decide the merits. A
federal court is (in general) bound to give the same respect to
a Maine judgment that would be given to it by Maine courts. 28
U.S.C. § 1738 (1994); Migra v. Warren City Sch. Dist. Bd. of
Educ., 465 U.S. 75, 81 (1984). This is true regardless whether
the state-court decision involves federal or state law. Cruz v.
Melecio, 204 F.3d 14, 18 (1st Cir. 2000). Here, Maine courts
would be bound to give res judicata effect to the May 1 decision
of the Maine Supreme Judicial Court.
In Maine, as in most jurisdictions, the pertinent
branch of res judicata, collateral estoppel (now often called
issue preclusion), provides that issues actually litigated,
decided, and necessary to a final judgment are binding in future
litigation between the same parties. Morton v. Schneider, 612
A.2d 1285, 1286 (Me. 1992); see also Restatement (Second) of
Judgments § 27 (1982). None of the exceptions in Maine law even
arguably apply in this case. See Mut. Fire Ins. Co. v.
Richardson, 640 A.2d 205, 208-09 (Me. 1998). Thus, unless there
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is some overriding federal exception, the district court would
be bound to follow the Supreme Judicial Court's resolution of
the central issue, namely, how the internal affairs limitation
applies to the requested documents.
The Tribes do invoke a supposed federal exception to
res judicata for which several cases are cited. The gist of the
suggested exception is that matters involving "controversies
about state power over Indian tribes" are so sensitive and so
suffused with a federal interest that they deserve special
treatment. In substance, the Tribes are urging that res
judicata doctrine be ignored and that a federal court routinely
reexamine the merits even in the teeth of a prior state-court
determination. Most of the cases cited by the Tribes do not
even remotely support such an exception.
The only case warranting discussion is the Tenth
Circuit's decision in Kiowa Indian Tribe v. Hoover, 150 F.3d
1163 (10th Cir. 1998). There, a judgment creditor with a state-
court judgment against the Kiowa Tribe on promissory notes
obtained state-court authority to garnish tribal revenues, and
the Tribe brought an action in federal court under section 1983,
42 U.S.C. § 1983 (Supp. II 1996), to enjoin the garnishment.
Id. at 1168. The district court dismissed the action under the
Rooker-Feldman doctrine, something of a cousin to res judicata.
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See D.C. Court of Appeals v. Feldman, 460 U.S. 462, 476, 483-86
& n.16 (1983); Rooker v. Fid. Trust Co., 263 U.S. 413, 415-16
(1923). The appeals court reversed, holding that the state
judgment did not resolve the matter.
Whether Kiowa Tribe was rightly decided or not, it is
completely distinguishable. The Tenth Circuit viewed the
ongoing state garnishment proceeding, under attack in the
section 1983 action, as "separable from and collateral to" the
state-court final judgment against the Kiowa Tribe. 150 F.3d at
1171. Here, no such separation exists: the Tribes' theory is
that the internal affairs limitation affords complete protection
for all the documents sought; the final judgment of the Maine
Supreme Judicial Court decided precisely this issue but held
that some of the documents were protected and others were not,
see 770 A.2d at 590. Certainly, nothing in this state decision
is so implausible as to suggest the need for independent
federal reexamination.
On the premise of Akins, 130 F.3d at 485, this is
ultimately a federal issue, and if so, the Tribes may request
certiorari in the United States Supreme Court, as they are
apparently seeking to do. The Supreme Court is entitled to
review a state-court decision that decides a federal issue even
if the action is one that could not have been brought in a
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federal district court under statutory "arising under"
jurisdiction. 28 U.S.C. § 1257 (1994). If the Supreme Court
does take the case and decides it differently, then all the
relief that the Tribes seek would be furnished on remand in the
state system.
There is one loose end. In Steel Co. v. Citizens for
a Better Environment, 523 U.S. 83 (1998), a plurality of the
Supreme Court disapproved the (until then) common practice by
which lower federal courts sometimes bypass jurisdictional
questions and resolve the merits where the result would be the
same however the jurisdictional question were decided. Id. at
101-02. It is not clear how firmly the Steel Co. plurality rule
is endorsed by a majority of the Court, see, e.g., id. at 110-11(O'Connor, J., concurring, joined by Kennedy, J.); id. at 111-12(Breyer, J., concurring in part and concurring in the judgment),
or how far Steel Co. applies when the "jurisdictional" objection
is something less fundamental than a doubt as to Article III
jurisdiction. See United States v. Woods, 210 F.3d 70, 74 & n.2
(1st Cir. 2000); Parella v. Ret. Bd. of R.I. Employees' Ret.
Sys., 173 F.3d 46, 53-54 (1st Cir. 1999).
However these questions may be answered, Steel Co. is
no bar to our disposition. The Steel Co. limitation is
fundamentally an objection to deciding "the merits" where
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jurisdiction is lacking. See, e.g., 523 U.S. at 101. Here,
without reaching the merits, we simply conclude that the Maine
judgment, binding under 28 U.S.C. § 1738, would prevent the
district court from affording any different relief. Steel Co.'s
underlying concern is not implicated. This spares us the need
to explore further whether under Bell v. Hood, there is a
sufficiently colorable federal claim to confer subject matter
jurisdiction, an outcome that would also make Steel Co.
inapplicable.
Accordingly, regardless whether the district court had
jurisdiction or whether a federal cause of action is presented,
the intervening decision of the Maine Supreme Judicial Court
forecloses on res judicata grounds the broader relief sought by
the Tribes and makes the present federal suit superfluous. On
this ground, the judgement of the district court is affirmed.
Abstention requests, urged by the State of Maine as intervenor,
need not be considered.
It is so ordered.
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