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Runyon v. Association of Village Council Presidents (01/30/2004) sp-5776
Runyon v. Association of Village Council Presidents (01/30/2004) sp-5776
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
TOM RUNYON and LAURA )
RUNYON, as parents and next ) Supreme Court No. S-10772
friend of B.R., a minor child, )
) Superior Court No.
Appellants, ) 4BE-01-00210 CI
)
v. ) O P I N I O N
)
ASSOCIATION OF VILLAGE ) [No. 5776 - January 30, 2004]
COUNCIL PRESIDENTS and )
MARY KILBUCK, )
)
Appellees. )
________________________________)
)
EVAN NICK and STELLA )
WASSILIE, as parents and next )
friend of J.N., a minor child, ) Supreme Court No. S-
10838
)
Appellants, ) Superior Court No.
) 4BE-02-00061 CI
v. )
)
ASSOCIATION OF VILLAGE )
COUNCIL PRESIDENTS, )
)
Appellee. )
________________________________)
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District, Bethel,
Dale O. Curda, Judge.
Appearances: David Henderson, Law Offices of
David Henderson, Bethel, and Charles E. Cole,
Law Offices of Charles E. Cole, Fairbanks,
for Appellants. Patrick J. McKay, Law
Offices of Patrick J. McKay, Anchorage, for
Appellees. Robert K. Stewart, Jr., Davis
Wright Tremaine LLP, Anchorage, and Geoffrey
D. Strommer, Hobbs, Straus, Dean & Walker,
LLP, Portland, Oregon, for Amicus Curiae
Bristol Bay Area Health Corporation. Heather
Kendall Miller, Native American Rights Fund,
Anchorage, and Lloyd Miller, Sonosky,
Chambers, Sachse, Miller & Munson, Anchorage,
for Amicus Curiae Alaska Inter-Tribal
Council. William S. Cummings, Ashburn &
Mason, Anchorage, for Amicus Curiae Alaska
Academy of Trial Lawyers. Donald Craig
Mitchell, Anchorage, for Amicus Curiae
Legislative Council of the Alaska
Legislature.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
FABE, Justice.
I. INTRODUCTION
The Association of Village Council Presidents (AVCP or
the Association) is a nonprofit Alaska corporation consisting of
fifty-six Alaska Native villages in the Bethel area, each a
federally recognized tribe. It provides a variety of social
services, including a Head Start program. The parents of two
students in the program brought tort actions against AVCP after
their children suffered injuries in separate incidents allegedly
stemming from the inadequate training and supervision of Head
Start teachers. The superior court dismissed the cases,
concluding that AVCP is protected by its member tribes sovereign
immunity. In this consolidated appeal, the parents argue that
AVCP is not entitled to assert the sovereign rights of its member
tribes. Because we conclude that the villages are not the real
parties in interest in these actions and that AVCP is not
protected by their sovereign immunity, we reverse the superior
court.
II. FACTS AND PROCEEDINGS
A. Factual History
This case originated as a pair of suits alleging
negligence in the management of the Head Start program run by
AVCP. The Association is a nonprofit corporation serving the
fifty-six Native villages of the Yukon-Kuskokwim Delta. It was
incorporated in 1969 as a closed Corporation representing the
Eskimo, Indian, and Aleut people of the area. Its board of
directors is comprised of one representative from each member
village. Each representative has a single, equal vote in the
Association. According to an affidavit executed by AVCP
associate counsel Scott Sidell:
AVCP operates a wide range of traditionally
governmental programs designed to benefit the
member tribes, almost exclusively with state
and federal funding. These programs include
a variety of governmental social service
programs including General Assistance and
Temporary Assistance for Needy Families
(TANF), juvenile programs, vocational
rehabilitation, elder programs, and tribal
development and technical assistance. AVCP
also coordinates regional village law
enforcement through the Village Public Safety
Officer Program. AVCP contracts many other
programs and services with the United States
Government under the Indian Self-
Determination and Educational Assistance Act,
25 U.S.C. 450 et seq. All AVCP services are
designed [to] promote the welfare of our
member tribal governments and preserve and
protect the Yupik culture of all tribal
members.
Moreover, AVCP contracts with the United States Department of
Health and Human Services, under the American Indian Native
Alaskan Program, for Head Start program funds.
The facts of the tort suits are not at issue here, so
there is no need to go into great detail. Minors B.R. and J.N.
were Head Start students. B.R., the child of Tom and Laura
Runyon, was allegedly molested at school by another student.
J.N., the child of Evan Nick and Stella Wassilie, had her middle
finger cut off in [a] door at the building used by Head Start.
We refer to the parents collectively as the Runyons. In each
case, the plaintiffs alleged that AVCP was negligent in failing
to train Head Start teachers properly and in allowing the
incidents to occur.
B. Procedural History
Both minors parents sued AVCP; B.R.s parents also sued
the teacher responsible for their child at the time of the
incidents. Their complaints alleged that AVCPs actions
amount[ed] to willful and wanton misconduct, intentional
infliction of harm and emotional distress, gross negligence, and
extreme carelessness evidencing a reckless indifference toward
and disregard for the value of human life and the safety of the
public, and asked for punitive damages.
AVCP filed motions to dismiss in both actions, claiming
that it was protected by the sovereign immunity of the fifty-six
sovereign tribes that incorporated it. The superior court
granted the motions to dismiss in both cases on the basis of
sovereign immunity. Both sets of parents appealed to this court
and the cases were consolidated on appeal.
III. STANDARD OF REVIEW
The only issue in this appeal, whether AVCP is
protected by tribal sovereign immunity, is a question of law. We
review questions of law de novo, adopting the rule that is most
persuasive in light of precedent, reason, and policy.1
IV. DISCUSSION
The essential legal question presented by this case is
whether AVCP may be sued by private parties, or whether the
sovereign immunity of its member tribes extends to bar such
suits. Indian tribes are distinct, independent political
communities, retaining their original natural rights.2 In other
words, they are sovereigns. Although Alaska no longer contains
Indian country, its Native villages retain those fundamental
attributes of sovereignty . . . which have not been divested by
Congress or by necessary implication of the tribes dependent
status.3 [T]ribes have long been recognized as possessing the
common-law immunity from suit traditionally enjoyed by sovereign
powers.4 Each of AVCPs member tribes is therefore protected by
tribal sovereign immunity.
A subdivision of tribal government or a corporation
attached to a tribe may be so closely allied with and dependent
upon the tribe5 that it is effectively an arm of the tribe.6 It
is then actually a part of the tribe per se, and, thus, clothed
with tribal immunity.7 Tribal status similarly may extend to an
institution that is the arm of multiple tribes, such as a joint
agency formed by several tribal governments.8 Whether the entity
is formed by one tribe or several, it takes on tribal sovereign
immunity only if the tribe or tribes, the sources of sovereign
authority and privilege, are the real parties in interest.9
A corporation, agency, or other organization is an arm
of a tribe for sovereign immunity purposes if its connection to
the tribe or tribes is so close that allowing suit against the
entity will damage the tribal interests that immunity protects.
Indian tribes enjoy immunity because they are sovereigns
predating the Constitution, and because immunity is thought
necessary to promote the federal policies of tribal self
determination, economic development, and cultural autonomy.10
Protecting the tribal treasury is a crucial aspect of both of
these grounds for immunity. [P]reventing judgments from
depleting state treasuries is a key reason for the states
sovereign immunity under the Eleventh Amendment to the federal
constitution.11 Tribal sovereign immunity, drawing on the same
antecedents,12 is also motivated in significant part by the need
to ensure that tribal assets are used as the tribe wishes,
without threat from litigation.13 Furthermore, protecting tribal
assets has long been held crucial to the advancement of the
federal policies advanced by immunity.14
The entitys financial relationship with the tribe is
therefore of paramount importance if a judgment against it will
not reach the tribes assets or if it lacks the power to bind or
obligate the funds of the [tribe], it is unlikely that the tribe
is the real party in interest.15 If, on the other hand, the tribe
would be legally responsible for the entitys obligations, it may
be an arm of the tribe. In such a case other factors, relating
to how much control the tribe exerts or whether the entitys work
is commercial or governmental, may assist in the determination.16
This case does not require us to refine these other
factors because the most important factor, the financial
relationship between AVCP and the villages, gives a clear answer.
Under Alaska law, the fifty-six villages of AVCP, the members of
a nonprofit corporation, are not . . . liable . . . on [the
corporations] obligations.17 Any judgment against AVCP will be
paid out of the Associations coffers alone. Even if they fall
short, the villages assets will be safe from execution. This
legal insulation makes clear that AVCP is not an arm of the
villages. The villages therefore are not the real parties in
interest to this lawsuit. And AVCP is not entitled to the
protection of the villages tribal sovereign immunity.18
We note that we foresaw this arrangement over twenty-
five years ago in our decision in Atkinson v. Haldane.19 There we
suggested in dicta that a tribe might, for commercial purposes,
wish to form a corporation exposed to suit in order to cultivate
trust with business partners.20 Although that discussion
considered tribal corporations formed under the Indian
Reorganization Act,21 its insight is relevant here. The tribes
use of the corporate form protects their assets from being called
upon to answer the corporations debt. But this protection means
that they are not the real party in interest. Though this case
does not call upon us to decide what financial structure would
endow an association like AVCP with the tribes immunity, any
arrangement forgoing a liability shield and exposing the tribal
treasury would go a long way toward making the tribes the real
parties in interest. The villages of the Yukon-Kuskokwim Delta
have chosen to protect themselves from liability. By severing
their treasuries from the corporation, they have also cut off
their sovereign immunity before it reaches AVCP.
V. CONCLUSION
Because the Association of Village Council Presidents
is not protected by tribal sovereign immunity these two lawsuits
should have been allowed to continue. We therefore REVERSE the
superior courts dismissal of these two cases and REMAND them to
that court for proceedings consistent with this opinion.
_______________________________
1 Bennett v. Bennett, 6 P.3d 724, 726 (Alaska 2000).
2 Worcester v. Georgia, 31 U.S. 515, 559 (1832); see also
United States v. Kagama, 118 U.S. 375, 381-82 (1886).
3 John v. Baker, 982 P.2d 738, 751 (Alaska 1999)
(citation omitted). We decline the invitations of the Runyons
and amicus Legislative Council to revisit John v. Baker. Stare
decisis compels us to give precedential value to our prior
holdings. Joseph v. State, 26 P.3d 459, 468 (Alaska 2001).
4 Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978);
see also United States v. United States Fid. & Guar. Co., 309
U.S. 506 (1940); Atkinson v. Haldane, 569 P.2d 151, 157-63
(Alaska 1977).
5 Ransom v. St. Regis Mohawk Educ. & Cmty. Fund, Inc.,
658 N.E.2d 989, 993 (N.Y. 1995).
6 Id. at 992 (quotation marks omitted).
7 Dixon v. Picopa Contr. Co., 772 P.2d 1104, 1108 (Ariz.
1989) (citing White Mountain Apache Indian Tribe v. Shelley, 480
P.2d 654, 657 (Ariz. 1971)); see also Altheimer & Gray v. Sioux
Mfg. Corp., 983 F.2d 803, 812 (7th Cir. 1993); Weeks Const., Inc.
v. Oglala Sioux Housing Auth., 797 F.2d 668, 670-71 (8th Cir.
1986).
8 See Pink v. Modoc Indian Health Project, Inc., 157 F.3d
1185 (9th Cir. 1998) (holding that multi-tribe agency is Indian
tribe within meaning of 42 U.S.C. 2000e(b)); Dille v. Council of
Energy Res. Tribes, 801 F.2d 373 (10th Cir. 1986) (same).
9 Ransom, 658 N.E.2d at 993.
10 Am. Indian Agric. Credit Consortium, Inc. v. Standing
Rock Sioux Tribe, 780 F.2d 1374, 1378 (8th Cir. 1985).
11 Harter v. Vernon, 101 F.3d 334, 337 (4th Cir. 1996)
(citing Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30
(1994)).
12 Although the Eleventh Amendment immunity is based on
the constitutional text while tribal sovereign immunity is a
judicial doctrine, they share a background of traditional ideas
about the power and privileges of the sovereign. [Tribes] have
been placed by the United States, substantially, on the plane
occupied by the states under the eleventh amendment to the
constitution. Thebo v. Choctaw Tribe of Indians, 66 F. 372, 376
(8th Cir. 1895). Tribal immunity is a form of the common-law
immunity from suit traditionally enjoyed by sovereign powers.
Santa Clara Pueblo, 436 U.S. at 58. Similarly, cases
interpreting the Eleventh Amendment to protect states from suit
by private citizens are grounded in traditional understandings of
sovereignty. See, e.g., In re State of New York, 256 U.S. 490,
497 (1921) (That a state may not be sued without its consent is a
fundamental rule of jurisprudence . . . .); Hans v. Louisiana,
134 U.S. 1, 12-19 (1890) (basing state sovereign immunity in an
interpretation of the Eleventh Amendment grounded on the old
law); see also William A. Fletcher, A Historical Interpretation
of the Eleventh Amendment: A Narrow Construction of An
Affirmative Grant of Jurisdiction Rather Than A Prohibition
Against Jurisdiction, 35 Stan. L. Rev. 1033, 1071 (1983) ([The
Eleventh Amendment] . . . affirmed . . . the traditional
principle of sovereign immunity . . . .).
13 See Native Village of Stevens v. Alaska Mgmt. &
Planning, 757 P.2d 32, 41 n.24 (Alaska 1988); Atkinson, 569 P.2d
at 160.
14 See Thebo, 66 F. at 376 (tribe would soon be
impoverished if it was subject to the jurisdiction of the
courts); Adams v. Murphy, 165 F. 304, 308 (8th Cir. 1908) (Upon
considerations of public policy . . . Indian tribes are exempt
from civil suit. . . . If any other course were adopted, the
tribes would soon be overwhelmed with civil litigation and
judgments.).
15 See Ransom, 658 N.E.2d at 992 (quoting Altheimer &
Gray, 983 F.2d at 809); see also White Mountain Apache Tribe v.
Smith Plumbing Co., Inc., 856 F.2d 1301, 1305 (9th Cir. 1988)
(holding that sovereign immunity does not bar action against
tribes surety because judgment against surety will not run
against tribe); Dixon, 772 P.2d at 1109-10 (holding that
liability insurance insulat[ing] the [tribe] from [the entitys]
debts is relevant to the question of whether an Indian commercial
entity is an arm of a tribe).
16 See Gavle v. Little Six, Inc. 555 N.W.2d 284, 294
(Minn. 1996); Ransom, 658 N.E.2d at 992 (citing Vetter, Doing
Business with Indians and the Three Ses: Secretarial Approval,
Sovereign Immunity and Subject Matter Jurisdiction, 36 Ariz. L.
Rev. 169, 176 (1994)); Dixon, 772 P.2d at 1110-11.
17 AS 10.20.051(b).
18 Because we hold that AVCP is not immune, we do not need
to address the Runyons arguments that the organization waived
immunity either by purchasing liability insurance or through the
wording of its corporate charter, or AVCPs arguments concerning
whether its agents and employees may be sued.
19 569 P.2d 151, 170-75 (Alaska 1977).
20 Id. at 174-75.
21 25 U.S.C. 477 (2003).
