Dine Citizens Against Ruining v. Bureau of Indian Affairs

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DINE CITIZENS AGAINST RUINING No. 17-17320
OUR ENVIRONMENT; SAN JUAN
CITIZENS ALLIANCE; AMIGOS D.C. No.
BRAVOS; SIERRA CLUB; CENTER FOR 3:16-cv-08077-
BIOLOGICAL DIVERSITY, SPL
Plaintiffs-Appellants,
v. OPINION
BUREAU OF INDIAN AFFAIRS; UNITED
STATES DEPARTMENT OF INTERIOR;
UNITED STATES OFFICE OF SURFACE
MINING RECLAMATION AND
ENFORCEMENT; UNITED STATES
BUREAU OF LAND MANAGEMENT;
DAVID BERNHARDT, * in his official
capacity as Secretary of the U.S.
Department of Interior; UNITED
STATES FISH AND WILDLIFE SERVICE,
Defendants-Appellees,
ARIZONA PUBLIC SERVICE
COMPANY; NAVAJO TRANSITIONAL
ENERGY COMPANY LLC,
Intervenor-Defendants-Appellees.
*
David Bernhardt has been substituted for his predecessor, Sally
Jewell, under Fed. R. App. P. 43(c)(2).
2 DCAR V. BIA
Appeal from the United States District Court
for the District of Arizona
Steven Paul Logan, District Judge, Presiding
Argued and Submitted March 7, 2019
Phoenix, Arizona
Filed July 29, 2019
Before: Sandra S. Ikuta and Michelle T. Friedland, Circuit
Judges, and Frederic Block, ** District Judge.
Opinion by Judge Friedland
SUMMARY ***
Joinder / Tribal Sovereign Immunity
The panel affirmed the district court’s dismissal,
pursuant to Federal Rules of Civil Procedure 19 and
12(b)(7), of an action brought by a coalition of tribal,
regional, and national conservation organizations who sued
the United States Department of the Interior, its Secretary,
and several bureaus within the agency, challenging a variety
of agency actions that reauthorized coal mining activities on
land reserved to the Navajo Nation.
**
The Honorable Frederic Block, United States District Judge for
the Eastern District of New York, sitting by designation.
***
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
DCAR V. BIA 3
Plaintiffs alleged that the agency actions violated the
Endangered Species Act and the National Environmental
Policy Act. The Navajo Transitional Energy Company, a
corporation wholly owned by the Navajo Nation that owns
the Navajo Mine, intervened in the action for the limited
purpose of moving to dismiss under Rules 19 and 12(b)(7).
The Navajo Transitional Energy Company asserted that it
was a required party but that it could not be joined due to
tribal sovereign immunity, and that the lawsuit could not
proceed without it.
The panel held that the Navajo Transitional Energy
Company has a legally protected interest in the subject
matter of this suit that would be impaired in its absence. The
panel reasoned that if plaintiffs succeeded in their challenge
and the agency actions were vacated, the Navajo
Transitional Energy Company’s interest in the existing
lease, rights-of-way, and surface mining permits would be
impaired. Without the proper approvals, the Mine could not
operate, and the Navajo Nation would lose a key source of
revenue in which the Navajo Transitional Energy Company
had already substantially invested.
The panel next held that because no other party to the
litigation could adequately represent the Navajo Transitional
Energy Company’s interests, the district court did not err in
determining that the Company was a party that must be
joined if feasible under Rule 19(a). The panel held that the
Federal Defendants could not be counted on to adequately
represent the Company’s interests because although the
Federal Defendants had an interest in defending their
decisions, their overriding interest must be in complying
with environmental laws. This interest differed in a
meaningful sense from the Navajo Transitional Energy
Company’s and the Navajo Nation’s sovereign interest in
4 DCAR V. BIA
ensuring that the Mine and the Four Corners Power Plant,
which buys coals exclusively from the Mine, continued to
operate and provide profits to the Navajo Nation. The panel
further held that defendant, the Arizona Public Service
Company, did not share the Navajo Nation’s sovereign
interests in controlling its own resources and in the
continued operation of the Mine and Power Plant.
The panel held that due to tribal sovereign immunity, the
Navajo Transitional Energy Company could not feasibly be
joined as a party to this litigation. The panel held that the
district court correctly determined that the Navajo
Transitional Energy Company was an “arm” of the Navajo
Nation that enjoyed the Nation’s immunity from suit. The
panel noted that the Company is wholly owned by the
Navajo Nation and is organized pursuant to Navajo law. It
was created specifically so that the Navajo Nation could
purchase the Mine. Applying the Rule 19(b) factors, the
panel held that the district court did not err in concluding that
the litigation could not, in good conscience, continue in the
Navajo Transitional Energy Company’s absence.
The panel rejected plaintiffs’ and United States’ request
to apply the “public rights” exception to hold that this
litigation could continue in the National Transitional Energy
Company’s absence. The panel held that although plaintiffs
nominally sought only a renewed National Environmental
Policy Act and Endangered Species Act process, the
implication of their claims was that Federal Defendants
should not have approved the mining activities in their exact
form. The result plaintiffs sought, therefore, threatened the
National Transitional Energy Company’s legal entitlements,
and accordingly, the public rights exception did not apply.
DCAR V. BIA 5
COUNSEL
Shiloh Silvan Hernandez (argued) and Matt Kenna, Western
Environmental Law Center, Helena, Montana; Michael Saul,
Center for Biological Diversity, Denver, Colorado; John
Barth, Hygiene, Colorado; for Plaintiffs-Appellants.
Aukjen T. Ingraham (argued), Sara Kobak, Brien J.
Flanagan, and Sarah Roubidoux Lawson, Schwabe,
Williamson & Wyatt P.C., Portland, Oregon, for Intervenor-
Defendant-Appellee Navajo Transitional Energy Company,
LLC.
Stacey L. VanBelleghem (argued), Claudia M. O’Brien,
Roman Martinez, and Devin M. O’Connor, Latham &
Watkins LLP, Washington, D.C., for Intervenor-Defendant-
Appellee Arizona Public Service Company.
Rachel Heron (argued) and Andrew C. Mergen, Attorneys;
Eric Grant, Deputy Assistant Attorney General; Jeffrey H.
Wood, Acting Assistant Attorney General; United States
Department of Justice, Washington, D.C.; for Amicus
Curiae United States.
Ethel B. Branch, Attorney General; Paul Spruhan, Assistant
Attorney General; Navajo Nation Department of Justice,
Window Rock, Arizona; for Amicus Curiae Navajo Nation.
6 DCAR V. BIA
OPINION
FRIEDLAND, Circuit Judge:
A coalition of tribal, regional, and national conservation
organizations (“Plaintiffs”) sued the U.S. Department of the
Interior, its Secretary, and several bureaus within the agency,
challenging a variety of agency actions that reauthorized
coal mining activities on land reserved to the Navajo Nation.
Plaintiffs alleged that these actions violated the Endangered
Species Act (“ESA”), 16 U.S.C. § 1531 et seq., and the
National Environmental Policy Act (“NEPA”), 42 U.S.C.
§ 4321 et seq. The Navajo Transitional Energy Company
(“NTEC”), a corporation wholly owned by the Navajo
Nation that owns the mine in question, intervened in the
action for the limited purpose of moving to dismiss under
Federal Rules of Civil Procedure 19 and 12(b)(7). NTEC
argued that it was a required party but that it could not be
joined due to tribal sovereign immunity, and that the lawsuit
could not proceed without it. The district court agreed with
NTEC and dismissed the action. 1 We affirm.
1
At the parties’ joint request, we take judicial notice of the existence
of the following documents and their contents: (1) Record of Decision
for the Four Corners Power Plant and Navajo Mine Energy Project (July
14, 2015); (2) Final Environmental Impact Statement for the Four
Corners Power Plant and Navajo Mine Energy Project (May 1, 2015);
and (3) Environmental Assessment and Finding of No Significant Impact
for Navajo Mine Permit Transfer Application, Navajo Reservation, New
Mexico (Nov. 2013). See Ariz. Libertarian Party v. Reagan, 798 F.3d
723, 727 n.3 (9th Cir. 2015).
DCAR V. BIA 7
I.
A.
The Navajo Mine (“Mine”) is a 33,000-acre strip mine.
It produces coal from which the Four Corners Power Plant
(“Power Plant”) generates electricity. The Mine and Power
Plant are both on tribal land of the Navajo Nation within
New Mexico. The Mine operates pursuant to a surface
mining permit issued by the Department of the Interior’s
Office of Surface Mining Reclamation and Enforcement
(“OSMRE”) under the Surface Mining Control and
Reclamation Act of 1977, 30 U.S.C. § 1201 et seq.
Transmission lines that distribute electricity from the Power
Plant run west into Arizona through lands reserved to the
Navajo Nation and Hopi Tribe. The Mine, Power Plant, and
transmission lines were built in tandem and have operated
since the early 1960s.
The Navajo Nation is a federally recognized Indian tribe
with its seat of government in Arizona and territory spanning
areas of Arizona, Utah, and New Mexico. For many years,
the Navajo Nation granted a coal mining lease to BHP
Billiton Navajo Coal Company (“BHP Billiton”), a private
company that owned and operated the Mine. In 2013, the
Navajo Nation Council created the Navajo Transitional
Energy Company (again, “NTEC”) for the purpose of
purchasing the Mine from BHP Billiton.
The Power Plant is owned by several utility companies,
including Public Service Company of New Mexico, Tucson
Electric Company, Salt River Project, and Intervenor-
Defendant Arizona Public Service Company (“APS”). APS
operates the Power Plant on behalf of all co-owners subject
to a lease agreement, originally executed in 1960, with the
Navajo Nation. Under the agreement, the Mine sells coal
8 DCAR V. BIA
exclusively to the Power Plant, and the Power Plant buys its
coal exclusively from the Mine. The Navajo Nation also
authorizes easements for rights-of-way over Navajo lands
for the Power Plant, and both the Navajo Nation and Hopi
Tribe authorize easements for rights-of-way for power
transmission lines that cross tribal lands.
The Mine and the Power Plant are key sources of revenue
for the Navajo Nation. Under the federally approved leases
and permits that are at issue in this case, operations at the
Mine and the Power Plant are expected to generate between
40 and 60 million dollars per year in revenue for the Navajo
Nation.
B.
This lawsuit stems from changes and renewals to the
lease agreements, rights-of-way, and government-issued
permits under which the Mine and Power Plant operate.
In 2011, APS and the Navajo Nation amended the lease
governing Power Plant operations, including by extending
the term of the lease through 2041. BHP Billiton (which at
the time still owned the Mine) then sought a renewal of the
existing surface mining permit for the Mine and a new
surface mining permit that would allow operations to move
to an additional area within the Mine lease area. 2
The lease amendment and accompanying rights-of-way
could not go into effect, and the surface mining permits
could not be granted, without approvals from several
bureaus within the Department of the Interior. First,
2
When NTEC purchased the Mine from BHP Billiton, NTEC
became the applicant for these permits.
DCAR V. BIA 9
OSMRE needed to approve the surface mining permits.
Second, approval by the Bureau of Indian Affairs (“BIA”)
was required to effectuate the lease amendment. Third, BIA
had ultimate responsibility to grant the associated rights-of-
way for the Power Plant facilities and transmission lines that
the tribes had approved. Finally, approval of the Bureau of
Land Management (“BLM”) was required to ensure
adequate resource recovery and protection on the tribal
lands.
OSMRE took the lead on considering the approval
requests for the Mine. It cooperated with BIA and BLM, as
well as with two additional bureaus within the Department
of the Interior: the National Park Service and the Fish and
Wildlife Service (“Fish and Wildlife”). OSMRE also
coordinated with the U.S. Army Corps of Engineers, the U.S.
Environmental Protection Agency, the Navajo Nation, and
the Hopi Tribe on the review process.
OSMRE engaged in formal consultation with Fish and
Wildlife, as required by the ESA when a project “may affect
listed species or critical habitat.” 50 C.F.R. § 402.14(a). In
April 2015, Fish and Wildlife completed formal consultation
and issued a Biological Opinion concluding that the
proposed action would not jeopardize the continued
existence of any of the threatened and endangered species
evaluated. Relying on Fish and Wildlife’s assessments in
the Biological Opinion, OSMRE produced an
Environmental Impact Statement (“EIS”) in May 2015.
OSMRE and BIA issued a Record of Decision in July
2015, which included the approvals by OSMRE, BIA, and
BLM necessary for the continued operation and expansion
of the Mine. The Deputy Secretary of the Interior approved
the decisions of each of these bureaus within the Department
of the Interior.
10 DCAR V. BIA
Since obtaining the required permits and approvals, APS
and NTEC have made significant financial investments in
the Power Plant and Mine, including by implementing
conservation measures required by the Record of Decision.
NTEC also moved mining operations into the areas
designated in the new surface mining permit. 3 Additionally,
NTEC secured a new $115 million line of credit in July 2016
that paid off the original note with which NTEC had
purchased the Mine, and that provided additional capital.
This line of credit is secured by, among other things, the
Mine itself as an asset of NTEC.
C.
In April 2016, the plaintiff conservation organizations
sued BIA, OSMRE, BLM, Fish and Wildlife, and the
Department of the Interior, along with its Secretary
(collectively, “Federal Defendants”). Plaintiffs challenged
the opinions and approvals that authorized continued
operations at the Mine and the Power Plant. Specifically,
Plaintiffs alleged that Fish and Wildlife’s Biological
Opinion violated the requirements of the ESA, and that BIA,
OSMRE, and BLM violated the ESA by relying on the faulty
Biological Opinion in deciding to approve the activities at
issue. Plaintiffs also alleged that Federal Defendants
violated NEPA by crafting an unlawfully narrow statement
of purpose and need for the project in the EIS, failing to
consider reasonable alternatives, and failing to take the
requisite “hard look” at various impacts of the mining
3
Although the details of APS’s and NTEC’s investments and
mining activities that have taken place since issuance of the Record of
Decision are not before us, APS states in its brief that it and NTEC have
invested hundreds of millions of dollars in upgrades, improvements, and
conservation measures in reliance on the Record of Decision. Plaintiffs
have not disputed this assertion.
DCAR V. BIA 11
complex. See Marsh v. Or. Nat. Res. Council, 490 U.S. 360,
374 (1989) (“NEPA . . . require[s] that agencies take a ‘hard
look’ at the environmental effects of their planned action.”).
Plaintiffs sought: (1) declarations that Federal
Defendants violated NEPA and the ESA; (2) orders setting
aside Fish and Wildlife’s Biological Opinion and Federal
Defendants’ Record of Decision and EIS and remanding the
matter to the agencies for further analysis; (3) prospective
injunctive relief prohibiting Fish and Wildlife from
authorizing any adverse modification to critical habitat for,
or take of, two types of fish; and (4) prospective injunctive
relief prohibiting Federal Defendants from authorizing any
element of the mining operations pending compliance with
NEPA.
After Federal Defendants answered, APS filed a motion
to intervene, which the district court granted. NTEC also
sought to intervene in the action for the limited purpose of
filing a motion to dismiss under Federal Rules of Civil
Procedure 19 and 12(b)(7). The court granted NTEC’s
motion to intervene as a matter of right as owner of the Mine,
and NTEC then moved to dismiss. NTEC asserted that it
was a required party because of its economic interest in the
Mine, that it could not be joined due to tribal sovereign
immunity, and that the action could not proceed in its
absence. Even though dismissal would have left their
decisions intact, Federal Defendants opposed NTEC’s
motion to dismiss, arguing that the federal government was
the only party required to defend an action seeking to enforce
compliance with NEPA and the ESA.
The district court granted NTEC’s motion to dismiss.
The court concluded that NTEC had a legally protected
interest in the subject matter of this suit, because the “relief
Plaintiffs seek could directly affect the Navajo Nation
12 DCAR V. BIA
(acting through its corporation, Intervenor-Defendant
NTEC) by disrupting its ‘interests in [its] lease agreements
and the ability to obtain the bargained-for royalties and
jobs.’” The court held that Federal Defendants could not
adequately represent NTEC’s interest in the litigation,
because although the agencies had an interest in defending
their analyses and decisions, “NTEC’s interests in the
outcome of this case far exceed” those of the agencies. The
court observed that, although NTEC’s interests were
currently aligned with those of Federal Defendants, there
could be a “later divergence of interests” during the course
of the litigation. The court further concluded that NTEC
could not be joined due to the Navajo Nation’s sovereign
immunity, and that the litigation could not, “in equity and
good conscience,” continue in NTEC’s absence.
Plaintiffs timely appealed, arguing that NTEC did not
have a legally protected interest in Federal Defendants’
compliance with environmental laws; that even if NTEC did
have such an interest, Federal Defendants would adequately
represent that interest; and that even if NTEC were a
required party, the litigation could continue in its absence
under the “public rights exception” to traditional joinder
rules.
II.
We review a “district court’s decision to dismiss [an]
action for failure to join” a required party for abuse of
discretion, but we review its underlying legal conclusions de
novo. Paiute-Shoshone Indians of Bishop Cmty. of Bishop
Colony, Cal. v. City of Los Angeles, 637 F.3d 993, 997 (9th
DCAR V. BIA 13
Cir. 2011). 4 When reviewing an order dismissing a case
under Rule 12(b)(7) for failure to join a party, “we accept as
true the allegations in Plaintiff[s’] complaint and draw all
reasonable inferences in Plaintiff[s’] favor.” Id. at 996 n.1.
We review de novo the question whether a tribe feasibly can
be joined. E.E.O.C. v. Peabody W. Coal Co., 400 F.3d 774,
778 (9th Cir. 2005).
III.
A person or entity is a “required party” and “must be
joined” if feasible if either “in that [party]’s absence, the
court cannot accord complete relief among existing parties”;
or if “that [party] claims an interest relating to the subject of
the action and is so situated that disposing of the action in
the [party]’s absence may . . . as a practical matter impair or
impede the [party]’s ability to protect the interest” or “leave
an existing party subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations
because of the interest.” Fed. R. Civ. P. 19(a)(1). Under
Rule 19, if the party “who is required to be joined if feasible
cannot be joined, the court must determine whether, in
equity and good conscience, the action should proceed
among the existing parties or should be dismissed.” Fed. R.
Civ. P. 19(b). If it cannot proceed, a motion to dismiss under
Rule 12(b)(7) for failure to join a party is properly granted. 5
4
We need not decide here precisely which parts of the Rule 19
analysis are underlying legal conclusions entitled to de novo review and
which parts are entitled to abuse of discretion review, because even if we
reviewed every component of the Rule 19 analysis here de novo, we
would affirm the district court’s decision.
5
Before 2007, parties that are now called “required” under Rule 19
were referred to as “necessary,” and parties without whom the litigation
14 DCAR V. BIA
A.
NTEC argues that it is a required party that must be
joined if feasible because: (1) it has a legally protected
interest in the subject matter of this litigation, and
(2) proceeding with the lawsuit in NTEC’s absence would
impair that interest. See Fed. R. Civ. P. 19(a)(1)(B). We
agree.
1.
In determining whether NTEC claims a legally protected
interest in the subject matter of this suit, we must “carefully
. . . identify [NTEC’s] interest at stake.” Cachil Dehe Band
of Wintun Indians of the Colusa Indian Cmty. v. California,
547 F.3d 962, 973 (9th Cir. 2008) (“Colusa”). “The inquiry
under Rule 19(a) ‘is a practical one and fact specific,’” White
v. Univ. of Cal., 765 F.3d 1010, 1026 (9th Cir. 2014)
(quoting Makah Indian Tribe v. Verity, 910 F.2d 555, 558
(9th Cir. 1990)), and “few categorical rules inform[] this
inquiry,” Colusa, 547 F.3d at 970.
To satisfy Rule 19, an interest must be legally protected
and must be “more than a financial stake.” Makah, 910 F.2d
at 558. “[A]n interest that ‘arises from terms in bargained
contracts’ may be protected, but . . . such an interest [must]
be ‘substantial.’” Colusa, 547 F.3d at 970 (quoting Am.
Greyhound Racing, Inc. v. Hull, 305 F.3d 1015, 1023 (9th
Cir. 2002)). “[A]n absent party has no legally protected
could not, in good conscience, continue, were referred to as
“indispensable.” See Republic of Philippines v. Pimentel, 553 U.S. 851,
855–56 (2008). Rule 19 was revised in 2007, but the revisions were
intended to be only “stylistic,” and the Supreme Court has interpreted
them as such. Id. at 855.
DCAR V. BIA 15
interest at stake in a suit merely to enforce compliance with
administrative procedures.” Id. at 971.
“If a legally protected interest exists, the court must
further determine whether that interest will be impaired or
impeded by the suit.” Makah, 910 F.2d at 558. “As a
practical matter, an absent party’s ability to protect its
interest will not be impaired by its absence from the suit
where its interest will be adequately represented by existing
parties to the suit.” Alto v. Black, 738 F.3d 1111, 1127 (9th
Cir. 2013) (quoting Washington v. Daley, 173 F.3d 1158,
1167 (9th Cir. 1999)). Three factors are relevant to whether
an existing party may adequately represent an absent
required party’s interests:
whether the interests of a present party to the
suit are such that it will undoubtedly make all
of the absent party’s arguments; whether the
party is capable of and willing to make such
arguments; and whether the absent party
would offer any necessary element to the
proceedings that the present parties would
neglect.
Id. at 1127–28 (quotation marks omitted).
2.
Although an absent party has no legally protected
interest at stake in a suit seeking only to enforce compliance
with administrative procedures, our case law makes clear
that an absent party may have a legally protected interest at
stake in procedural claims where the effect of a plaintiff’s
successful suit would be to impair a right already granted.
Under that case law, NTEC has a legally protected interest
16 DCAR V. BIA
in the subject matter of this suit that would be impaired in its
absence.
In Northern Alaska Environmental Center v. Hodel,
803 F.2d 466 (9th Cir. 1986), we held that absent miners
with mining plans and access permits pending before (but
not yet approved by) the National Park Service (“NPS”) did
not have a legally protected interest in a suit brought by
environmental groups seeking to enjoin NPS from approving
such plans and permits until NPS complied with NEPA and
NPS regulations. Id. at 469. 6 We explained that “[t]he
subject matter of th[e] dispute concern[ed] NPS procedures
regarding mining plan approval,” and that although “all
miners [were] interested in how stringent the requirements
[would] be,” “miners with pending plans ha[d] no legal
entitlement to any given set of procedures.” Id. (quotation
marks omitted).
In Makah, we likewise held that absent tribes lacked a
legally protected interest in a suit brought by the Makah
Indian Tribe challenging the Secretary of Commerce’s ocean
fishing allotment “[t]o the extent that the Makah [sought
prospective injunctive] relief that would affect only the
future conduct of the administrative process.” 910 F.2d at
559 (emphasis added). We also held, however, that absent
tribes did have a legally protected interest “to the extent the
Makah [sought] a reallocation of [a particular prior year’s]
harvest or challenge[d] the Secretary’s [prior] inter-tribal
allocation decisions.” Id. We accordingly held that the suit
could proceed but that “the scope of the relief available to
the Makah on their procedural claims [was] narrow” and
6
We did not need to reach whether the miners had a legally
protected interest in already approved plans, because we held that any
claims related to those plans were moot. Hodel, 803 F.2d at 469 n.2.
DCAR V. BIA 17
limited to prospective relief relating to such future processes.
Id.Similarly, in Colusa, we held that absent tribes, whose
gaming compacts with California provided for the operation
of “gaming devices” but limited the number of state licenses
for such devices, had legally protected interests in the
licenses that they already held under the compacts. Still, we
held that such interests would not be impaired by a lawsuit
brought by another compact-holding tribe (Colusa) against
California “[t]o the extent that Colusa [sought] prospective
relief” relating to the issuance of future licenses, such as
Colusa’s request for higher priority in the draw for licenses.
547 F.3d at 974. We explained that “Rule 19 necessarily
confine[d] the relief that [could] be granted on Colusa’s
claims to remedies that [did] not invalidate the licenses that
[had] already been issued to the absent . . . Tribes.” Id.
at 977.
In Kescoli v. Babbitt, 101 F.3d 1304 (9th Cir. 1996), by
contrast, we affirmed dismissal of a lawsuit in which there
were legally protected interests at stake that we concluded
were threatened by the retroactive effect of the relief sought
in the litigation. Specifically, we held that the Navajo Nation
and Hopi Tribe both had a legally protected interest and were
necessary parties to a Navajo Nation member’s suit
challenging a settlement reached between those tribes and
the government that modified special conditions required by
a mining permit issued to a company that operated a mine
under lease agreements with the two tribes. Id. at 1310. We
reasoned that because the settlement dictated the conditions
under which mining operations could be conducted, the
litigation “could affect the amount of royalties received by
the Navajo Nation and the Hopi Tribe and employment
opportunities for their members.” Id. at 1309–10. We
18 DCAR V. BIA
explained that, unlike the prospective claim in Makah, the
plaintiff’s challenge to the settlement “could affect the
Navajo Nation’s and the Hopi Tribe’s interests in their lease
agreements and the ability to obtain the bargained-for
royalties and jobs.” Id. at 1310.
Applying these precedents, NTEC has a legally protected
interest in the subject matter of this action. Although
Plaintiffs’ challenge is to Federal Defendants’ NEPA and
ESA processes (rather than to anything that NTEC has
done), it does not relate only to the agencies’ future
administrative process, but instead may have retroactive
effects on approvals already granted for mining operations.
If Plaintiffs succeeded in their challenge and the agency
actions were vacated, NTEC’s interest in the existing lease,
rights-of-way, and surface mining permits would be
impaired. Without the proper approvals, the Mine could not
operate, and the Navajo Nation would lose a key source of
revenue in which NTEC has already substantially invested.
This case is therefore like Kescoli, where we concluded that
absent tribes were necessary because the litigation could
affect already-negotiated lease agreements and expected
jobs and revenue. And it is unlike either Makah or Colusa,
in which we could tailor the scope of relief available to being
prospective only, preventing any impairment to a legally
protected interest.
3.
The question whether any existing party adequately
represents NTEC’s interest in this litigation is closer, but we
conclude that none does.
In White v. University of California, we affirmed a
district court’s dismissal of a suit against the Department of
the Interior under the Native American Graves Protection
DCAR V. BIA 19
and Repatriation Act (“NAGPRA”) for failure to join absent
tribes that we concluded could not be adequately represented
by the existing defendant in the case. 765 F.3d. at 1015.
White involved a custody dispute over human remains
uncovered on land belonging to the University of California
that was aboriginally occupied by members of the
Kumeyaay Nation, which consists of several federally
recognized tribes. Id. The University determined that it was
required, under NAGPRA, to repatriate the remains to the
Kumeyaay Cultural Repatriation Committee, which had
requested repatriation. Id. at 1015–16. Several University
professors sued to enjoin repatriation, and the district court
dismissed the claim for failure to join the Repatriation
Committee, which could not be joined due to tribal
immunity. Id.
We affirmed, holding that absent Kumeyaay tribes and
the Repatriation Committee had an interest that would be
impaired if the suit proceeded in their absence. As we
explained, if the plaintiffs “succeed[ed] in their efforts to
enjoin transfer of the remains . . . then the claims of the
Tribes and the Repatriation Committee [to the human
remains] [would] be extinguished without the opportunity
for them to be heard.” Id. at 1027. We held that even though
the University had determined that NAGPRA obligated it to
repatriate the remains to the Kumeyaay, “the University
[could not] sufficiently represent the interests of the Tribes
or Repatriation Committee” in the litigation, because the
University’s and the absent tribes’ interests would “not
necessarily remain aligned.” Id. The University’s interest
and the absent tribes’ interest were of a different nature: the
University had “a broad obligation to serve the interests of
the people of California, rather than any particular subset,
such as the people of the Kumeyaay tribes.” Id. We
theorized that if, contrary to the University’s own
20 DCAR V. BIA
assessment of its obligations under NAGPRA, “a court were
to determine that the [] remains should not be transferred to
the Kumeyaay under NAGPRA, it [was] questionable
whether—perhaps even unlikely that—the University and
the Kumeyaay would pursue the same next course of action.”
Id. (emphasis added). We therefore upheld the district
court’s determination that the Kumeyaay tribes and
Repatriation Committee were necessary parties.
In Southwest Center for Biological Diversity v. Babbitt,
150 F.3d 1152 (9th Cir. 1998), by contrast, we held that the
government could adequately represent a tribe’s interest in
litigation brought by an environmental organization
challenging, under NEPA and the ESA, the Secretary of the
Interior’s plan to begin using a new water storage facility.
Id. at 1153. We recognized that the Salt River Pima-
Maricopa Indian Community (“Community”) had an interest
in the facility’s “becoming available for use as soon as
possible” to store water, and we concluded that this interest
would be impaired if an injunction issued in the case. Id.But, we reasoned, the government “share[d] a strong interest
in defeating [the] suit on the merits and ensuring that the
[facility was] available for use as soon as possible.” Id. at
1154. We held that this made the government an adequate
representative of the Community’s interest. Id. at 1154. We
also noted that although the government did not “share the
Community’s interest in protecting [the Community’s]
sovereignty,” there was no explanation of “how the
Community’s sovereignty would be implicated” in the suit.
Id. at 1154–55.
In Alto v. Black, we likewise held that the United States
could represent a tribe’s interest in a suit challenging a BIA
order upholding the tribe’s decision to disenroll certain
individuals as members of the tribe. 738 F.3d at 1128. As
DCAR V. BIA 21
we explained, the tribe’s own governing documents vested
BIA with ultimate authority over the tribe’s membership
decisions. Id. at 1115. We also relied on the government’s
shared interest in defending its own decision, which it had
already “vigorously defended,” and its obligation to protect
tribal interests as part of its general “trust responsibility” to
tribes. Id. at 1128 (citation omitted). The tribe had not
“presented any arguments that it would offer . . . which [the
government] ha[d] not or would not make.” Id.
The Tenth Circuit in Manygoats v. Kleppe, 558 F.2d 556(10th Cir. 1977), held, in contrast, that the government could
not adequately represent a tribe’s interests. In Manygoats,
the Navajo had granted Exxon Corporation the right to mine
uranium on tribal lands, and the Secretary of the Interior
approved the agreement after completing an EIS. Id. at 557.
Individual Navajo tribal members sought to enjoin
performance of the mining agreement between the tribe and
Exxon, claiming that the EIS was inadequate under NEPA.
Id. The Tenth Circuit held that the Secretary of the Interior
could not adequately represent the absent tribe because
“[t]he Secretary must act in accord with the obligations
imposed by NEPA,” and the environmental goals of that
statute were “not necessarily coincidental with the interest of
the Tribe in the benefits which the Exxon agreement
provides.” Id. at 558.
Applying the lessons from these cases, we agree with the
district court that Federal Defendants cannot be counted on
to adequately represent NTEC’s interests. Although Federal
Defendants have an interest in defending their decisions,
their overriding interest, as it was in Manygoats, must be in
complying with environmental laws such as NEPA and the
ESA. This interest differs in a meaningful sense from
NTEC’s and the Navajo Nation’s sovereign interest in
22 DCAR V. BIA
ensuring that the Mine and Power Plant continue to operate
and provide profits to the Navajo Nation. If the district court
were to hold that NEPA or the ESA required more analysis
that would delay mining activities, or that one of the federal
agencies’ analyses underlying the approval was flawed,
Federal Defendants’ interest might diverge from that of
NTEC. As we suggested in White, a holding that one or both
of these statutes required something other than what Federal
Defendants have interpreted them to require could similarly
change Federal Defendants’ planned actions, affecting the
lease, rights-of-way, and permits at stake.
This case is unlike Southwest, because while Federal
Defendants have an interest in defending their own analyses
that formed the basis of the approvals at issue, here they do
not share an interest in the outcome of the approvals—the
continued operation of the Mine and Power Plant. And no
party in Southwest had explained how the tribe’s
“sovereignty would be implicated,” 150 F.3d at 1154, as the
Navajo Nation has explained here. This case is also
distinguishable from Alto, where the tribe had specifically
granted BIA final decisionmaking authority over tribal
membership issues, making it more plausible that the
government would represent the tribe’s interest—or that the
government’s interest and the tribe’s interest had become
one and the same.
Plaintiffs resist the conclusion that no existing party can
adequately represent NTEC’s interest, arguing that APS, as
operator and part owner of the Power Plant, can do so even
if Federal Defendants cannot. In Southwest, we noted that
the presence of other cities that were financially invested in,
and dependent for their water supply upon, the facility
lessened the risk that the Community’s interest would be
impaired. Here, APS shares at least some of NTEC’s and
DCAR V. BIA 23
the Navajo Nation’s financial interest in the outcome of the
case. But APS does not share the Navajo Nation’s sovereign
interest in controlling its own resources, and in the continued
operation of the Mine and Power Plant and the financial
support that such operation provides. The Navajo Nation’s
interest is tied to its very ability to govern itself, sustain itself
financially, and make decisions about its own natural
resources. Because no other party to the litigation can
adequately represent these interests, the district court did not
err in determining that NTEC is a party that must be joined
if feasible under Rule 19(a).
B.
Rule 19 requires us next to ask whether NTEC can
feasibly be joined as a party to this litigation. Reviewing de
novo, see Peabody W. Coal Co., 400 F.3d at 778, we hold
that, due to tribal sovereign immunity, it cannot be.
“Tribal sovereign immunity protects Indian tribes from
suit absent express authorization by Congress or clear waiver
by the tribe. This immunity applies to the tribe’s commercial
as well as governmental activities.” Cook v. AVI Casino
Enters., Inc., 548 F.3d 718, 725 (9th Cir. 2008) (citation
omitted). “[T]he settled law of our circuit is that tribal
corporations acting as an arm of the tribe enjoy the same
sovereign immunity granted to a tribe itself.” Id.Here, it is undisputed that Congress has not abrogated
any relevant aspect of the Navajo Nation’s tribal immunity,
and that the Navajo Nation has not waived its immunity. The
question is thus whether NTEC shares that immunity.
In Allen v. Gold Country Casino, 464 F.3d 1044 (9th Cir.
2006), we had “little doubt that [a] Casino function[ed] as an
arm of the Tribe” that owned and operated it, and that the
24 DCAR V. BIA
casino therefore “enjoy[ed] the Tribe’s immunity from suit.”
Id. at 1047. In that case, the casino had been authorized by
tribal ordinance and an interstate gaming compact; the
casino served to promote the tribe’s self-sufficiency,
economic development, and employment opportunities; and
the economic advantages of the casino inured to the benefit
of the tribe such that “[i]mmunity of the Casino directly
protect[ed] the sovereign Tribe’s treasury.” Id. at 1046–47;
see also Cook, 548 F.3d at 726 (holding that a corporation
created by a tribe through tribal ordinance and
intergovernmental agreement that was wholly owned and
managed by the tribe, and from which the benefits flowed to
the tribe, enjoyed the tribe’s sovereign immunity).
Here, NTEC is wholly owned by the Navajo Nation and
is organized pursuant to Navajo law. It was created
specifically so that the Navajo Nation could purchase the
Mine. NTEC’s profits go entirely to the Navajo Nation, and
those profits support the Navajo Nation’s ability to govern
and financially sustain itself. The district court was therefore
correct that NTEC is an “arm” of the Navajo Nation that
enjoys the Nation’s immunity from suit and cannot be joined
to this action. 7
7
Plaintiffs argue that the court could order joinder of NTEC’s chief
executive officer pursuant to the Ex parte Young doctrine. That doctrine
“permits actions for prospective 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.” Salt
River Project Agric. Improvement & Power Dist. v. Lee, 672 F.3d 1176,
1181 (9th Cir. 2012) (citing Ex parte Young, 209 U.S. 123 (1908)); see
also Vann v. U.S. Dep’t of Interior, 701 F.3d 927 (D.C. Cir. 2012). But
both Salt River and Vann, on which Plaintiffs rely in making this
argument, involved claims against tribes as defendants, so it was possible
for a tribal official, rather than the tribe itself, to be named as defendant
DCAR V. BIA 25
C.
Because NTEC is a required party that cannot feasibly
be joined, we must next determine “whether, in equity and
good conscience, the action should proceed among the
existing parties or should be dismissed.” Fed. R. Civ. P.
19(b).
1.
To evaluate whether an action could fairly proceed
without a required party, we consider the following factors:
(1) the extent to which a judgment rendered
in the [party’s] absence might prejudice that
[party] 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
[party’s] absence would be adequate; and
pursuant to Ex parte Young. Plaintiffs’ claims here are that Federal
Defendants violated environmental laws—not that the Navajo Nation
itself did. The Ex parte Young doctrine therefore has no role to play here.
26 DCAR V. BIA
(4) whether the plaintiff would have an
adequate remedy if the action were dismissed
for nonjoinder.
Fed. R. Civ. P. 19(b). The Rule 19(b) factors “are
nonexclusive.” Republic of Philippines v. Pimentel,
553 U.S. 851, 862 (2008).
In general, “[i]f no alternative forum exists, [a court]
should be ‘extra cautious’ before dismissing an action.”
Kescoli, 101 F.3d at 1311 (quoting Makah, 910 F.2d at 560).
But “[i]f the necessary party is immune from suit, there may
be ‘very little need for balancing Rule 19(b) factors because
immunity itself may be viewed as the compelling factor.’”
Id. (quoting Confederated Tribes v. Lujan, 928 F.2d 1496,
1499 (9th Cir. 1991)); see also Am. Greyhound Racing, Inc.,
305 F.3d at 1025 (“[S]ome courts have held that sovereign
immunity forecloses in favor of tribes the entire balancing
process under Rule 19(b), but we have continued to follow
the four-factor process even with immune tribes.”). Indeed,
we have observed that there is a “wall of circuit authority”
in favor of dismissing actions in which a necessary party
cannot be joined due to tribal sovereign immunity—
“virtually all the cases to consider the question appear to
dismiss under Rule 19, regardless of whether [an alternate]
remedy is available, if the absent parties are Indian tribes
invested with sovereign immunity.” White, 765 F.3d
at 1028.
2.
Applying the Rule 19(b) factors, we hold that the district
court did not err in concluding that the litigation could not,
in good conscience, continue in NTEC’s absence.
DCAR V. BIA 27
Prejudice, the first factor in the Rule 19(b) analysis,
“largely duplicates the consideration that made a party
necessary under Rule 19(a),” Am. Greyhound Racing, Inc.,
305 F.3d at 1025, and clearly favors dismissal in this case.
The Navajo Nation and NTEC would be prejudiced if this
lawsuit were to proceed and Plaintiffs were to prevail—at
stake is an estimated 40 to 60 million dollars per year in
revenue for the Navajo Nation, as well as its ability to use its
natural resources how it chooses.
The second factor, the court’s ability to shape relief so as
to avoid prejudice, likewise favors dismissal. Although
relief could be shaped to avoid prejudice in the short term,
such as by remanding for further administrative review
without vacating the permits and approval decisions in the
meantime, the Navajo Nation inevitably would be prejudiced
if Plaintiffs ultimately succeeded and if, after further NEPA
and ESA processes, Federal Defendants were not able to
come to the same decisions without imposing new
restrictions or requirements on the Mine or Power Plant.
The third factor, on the other hand, weighs against
dismissal. A judgment rendered in NTEC’s absence would
be adequate and would not create conflicting obligations,
because it is Federal Defendants’ duty, not NTEC’s, to
comply with NEPA and the ESA.
The fourth factor depends on whether Plaintiffs would
have an alternate remedy if this suit is dismissed. Were this
suit dismissed, Plaintiffs would have no alternate forum in
which to sue Federal Defendants for their alleged procedural
violations under NEPA and the ESA. NTEC argues,
however, that Plaintiffs may be able to “raise environmental
claims in Navajo courts” under Navajo law.
28 DCAR V. BIA
We need not decide whether any alternate remedy is
available in the Navajo Nation courts for the environmental
concerns motivating Plaintiffs’ challenge to the mining
operations at issue here. Even assuming that no alternate
remedy exists, and that both the third and fourth factors
therefore weigh against dismissal, we would hold that
dismissal is proper. We have recognized that the lack of an
alternative remedy “is a common consequence of sovereign
immunity.” Id. Accordingly, “we have regularly held that
the tribal interest in immunity overcomes the lack of an
alternative remedy or forum for the plaintiffs.” Id. Mindful
of the “wall of circuit authority” in favor of dismissing an
action where a tribe is a necessary party, White, 765 F.3d
at 1028, we agree with the district court that this litigation
cannot, in good conscience, continue in NTEC’s absence.
3.
Finally, Plaintiffs and the United States urge us to apply
the “public rights” exception to hold that this litigation can
continue in NTEC’s absence. 8 The public rights exception
is a limited “exception to traditional joinder rules” under
which a party, although necessary, will not be deemed
“indispensable,” and the litigation may continue in the
absence of that party. Conner v. Burford, 848 F.2d 1441,
1459 (9th Cir. 1988). We hold that the exception does not
apply here.
The public rights exception is reserved for litigation that
“transcend[s] the private interests of the litigants and seek[s]
8
Federal Defendants did not file an answering brief; instead the
United States filed a brief as amicus curiae arguing that “federal agencies
and officers are normally the only necessary defendants in” federal suits
challenging agency action. Answering briefs defending the grounds of
the district court’s dismissal were filed by only NTEC and APS.
DCAR V. BIA 29
to vindicate a public right.” Kescoli, 101 F.3d at 1311. The
public rights exception may apply in a case that could
“adversely affect the absent parties’ interests,” but “the
litigation must not ‘destroy the legal entitlements of the
absent parties’” for the exception to apply. Id. (emphasis
added) (quoting Conner, 848 F.2d at 1459).
The doctrine derives from the Supreme Court’s decision
in National Licorice Co. v. N.L.R.B., 309 U.S. 350 (1940),
in which the Court allowed a suit to proceed in the absence
of necessary parties because it involved enforcement of
public rights. In National Licorice, a company was the
subject of a National Labor Relations Board (“NLRB”)
action challenging as violative of federal labor laws
contracts the company had procured from its employees. Id.at 351–56. The defendant company argued that those absent
employees were necessary and indispensable parties to the
NLRB action. Id. at 356. The Court held that the employees
did not need to be joined because the case was “narrowly
restricted to the protection and enforcement of public
rights”—specifically, the public’s interest in “the prevention
of unfair labor practices.” Id. at 363–64. Analogizing to
actions brought by the government under the Sherman
Antitrust Act or orders entered by the Federal Trade
Commission, id. at 365–66, the Court held that “the public
right was vindicated by restraining the unlawful actions of
the defendant.” Id. at 366. It also reasoned that the absent
employees’ legal entitlements would not be destroyed
because the employees “were left free to assert such legal
rights as they might have acquired under their contracts.” Id.We applied the public rights exception to allow suit to
proceed in Conner v. Burford, where the plaintiffs sued
BLM alleging that its sale of oil and gas leases in two
national forests violated NEPA and the ESA. 848 F.2d at30 DCAR V. BIA
1442–43. BLM had sold two different types of leases: for
one type, lessees were prohibited “from occupying or using
the surface of the leased land without further specific
approval from . . . BLM”; for the other, the government was
authorized to impose conditions on surface-disturbing
activities, but not to altogether preclude such activities. Id.
at 1444. During the ESA consultation process, Fish and
Wildlife and the U.S. Forest Service decided to analyze the
environmental effects of the lease sales only, and not those
of post-leasing activities. Id. at 1444. The district court
entered judgment in the plaintiffs’ favor, reasoning that
NEPA required a comprehensive EIS that evaluated not only
the sale of a lease but also “the cumulative effects of
successive, interdependent steps culminating in oil and gas
development and production.” Id. Several lessees attempted
to intervene, arguing that they were necessary and
indispensable parties. Id. at 1445.
Clarifying the district court’s order, we “enjoin[ed] the
federal defendants from permitting any surface-disturbing
activity to occur on any of the leases [of either type] until
they ha[d] fully complied with NEPA and [the] ESA.” Id. at
1461. We recognized that the contracts themselves,
however, “were not invalidated and further actions
construing rights under them [were] not precluded.” Id.at 1460–61. We thus held that the only thing foreclosed by
the district court’s judgment was the “lessees’ ability to get
‘specific performance’ [on their contracts] until the
government complie[d] with NEPA and the ESA,” which
was “insufficient to make the lessees indispensable to [the]
litigation.” Id. at 1461. The leaseholders still retained
“many of the fundamental attributes of their contracts,”
given that “significant economic value inheres in the
exclusive right to engage in oil and gas activities, should any
be allowed.” Id. Because “[t]he appellees’ litigation against
DCAR V. BIA 31
the government [did] not purport to adjudicate the rights of
current lessees,” but rather to “enforce the public right to
administrative compliance with the environmental
protection standards of NEPA and the ESA,” the public
rights exception applied. Id. at 1460.
In Kescoli, by contrast, we declined to apply the public
rights exception and thus affirmed dismissal of the suit. 101
F.3d at 1312. We reasoned that “if the action proceeded in
the absence of the Navajo Nation and the Hopi Tribe, the
rights of their members under the lease agreements could be
significantly affected.” Id. at 1311–12. “The litigation also
threaten[ed] the Navajo Nation’s and the Hopi Tribe’s
sovereignty by attempting to disrupt their ability to govern
themselves and to determine what is in their best interests
[by] balancing potential harm caused by the mining
operations against the benefits of the royalty payments.” Id.
at 1312. The litigation therefore was “not limited to ensuring
an agency’s future compliance with statutory procedures,”
and was “not one in which the risk of prejudice to the Navajo
Nation and the Hopi Tribe [was] nonexistent or minimal.”
Id.This case is more like Kescoli than Conner. Here, the
leases and rights-of-way are valid only with approval by
BIA. If the Record of Decision that granted such approval
were vacated, then those agreements would be invalid, and
NTEC would lose all associated legal rights. And, unlike in
Conner where surface-disturbing activity had apparently not
even been authorized or begun, the activities approved by
the Record of Decision here are already taking place. This
litigation therefore threatens to destroy NTEC’s existing
legal entitlements. See Am. Greyhound Racing, Inc.,
305 F.3d at 1026 (rejecting application of the public rights
exception, reasoning that the “litigation targeted the
32 DCAR V. BIA
extension or renegotiation of the compacts themselves,” and
did “not incidentally affect the gaming tribes in the course of
enforcing some public right,” but rather was “aimed at the
tribes and their gaming”); Kettle Range Conservation Grp.
v. U.S. Bureau of Land Mgmt., 150 F.3d 1083, 1087 (9th Cir.
1998) (distinguishing Conner and holding that where title to
land transferred in a challenged transaction had already
vested in private parties, an order declaring the land
exchange void would destroy the parties’ legal entitlements,
rendering the public rights exception inapplicable).
We acknowledge that Plaintiffs’ claims relate to public
rights insofar as they challenge only Federal Defendants’
NEPA and ESA processes. We also recognize that the
practical effect of this litigation on NTEC’s rights would
depend on what, exactly, the outcome of the litigation would
be if it proceeded. It is possible that, if the lawsuit continued,
the district court might grant judgment in favor of Federal
Defendants, or it might grant limited relief for Plaintiffs that
would not substantially impact NTEC’s rights.
We believe, however, that the question at this stage must
be whether the litigation threatens to destroy an absent
party’s legal entitlements. See Kescoli, 101 F.3d at 1311–12
(holding that the public rights exception was inapplicable in
part because “if the action proceeded in the absence of [two
tribes], the rights of their members under the lease
agreements could be significantly affected” (emphasis
added)); Shermoen v. United States, 982 F.2d 1312, 1319
(9th Cir. 1992) (“Because of the threat to the absent tribes’
legal entitlements, and indeed to their sovereignty, posed by
the present litigation, application of the public rights
exception . . . would be inappropriate.”). Here, although
Plaintiffs nominally seek only a renewed NEPA and ESA
process, the implication of their claims is that Federal
DCAR V. BIA 33
Defendants should not have approved the mining activities
in their exact form. The result Plaintiffs seek, therefore,
certainly threatens NTEC’s legal entitlements.
We also recognize, as the Tenth Circuit has pointed out,
that refusing to apply the public rights exception arguably
“produce[s] an anomalous result” in that “[n]o one, except
[a] Tribe, could seek review of an environmental impact
statement covering significant federal action relating to
leases or agreements for development of natural resources
on [that tribe’s] lands.” Manygoats, 558 F.2d at 559. Or, at
least, no one could obtain such review unless the tribe were
willing to waive its immunity and participate in the lawsuit.
This result, however, is for Congress to address, should it see
fit, as only Congress may abrogate tribal sovereign
immunity. See Michigan v. Bay Mills Indian Cmty.,
572 U.S. 782, 790 (2014). It is undisputed that Congress has
not done so here.
The public rights exception therefore does not apply.
III.
For the foregoing reasons, we AFFIRM.