MACARTHUR v. SAN JUAN HEALTH SERVICES DISTRICT
PUBLISH
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
DR. STEVEN MACARTHUR; DR. NATHANIEL PENN; MICHELLE LYMAN; HELEN VALDEZ;
CANDACE LAWS; PAUL KEITH; DOROTHY KEITH; LINDACACAPARDO; SUE BURTON; AMY
TERLAAK; ALISON DICKSON; CANDACE HOLIDAY; NICOLE ROBERTS; DONNA SINGER;
FRED RIGGS, Plaintiffs ? Appellants, v. SAN JUAN COUNTY; SAN JUAN HEALTH
SERVICES DISTRICT; J. TYRON LEWIS, Commissioner; BILL REDD,
Commissioner; CRAIG HALLS; MARK MARYBOY, Commissioner, official capacity
only; REID M. WOOD; CLEAL BRADFORD; ROGER ATCITTY; JOHN LEWIS; JOHN
HOUSEKEEPER; KAREN ADAMS; PATSY SHUMWAY; DR. JAMES D. REDD; DR. L. VAL
JONES; DR. MANFRED R. NELSON; RICHARD BAILEY; SAN JUAN FOUNDATION;
MARILEE BAILEY; ORA LEE BLACK; GARY HOLLADAY; LORI WALLACE, also known
as Laurie Walker; No. 01-4001 FARMER'S/TRUCK INSURANCE; ST. PAUL'S
INSURANCE; CARLA GRIMSHAW; GLORIA YANITO; JULIE BRONSON; R. DENNIS
ICKES; LAURIE SCHAFER, Defendants ? Appellees,
Appeal from the United States District Court for the District of Utah
(D.C. No. 00-CV-584-K)
Susan Rose of Sandy, Utah, for the Plaintiffs-Appellants.
Carolyn Cox (Blaine J. Benard with her on the brief) of Holme Roberts &
Owen L.L.P., Salt Lake City, Utah, for Defendants-Appellees San Juan
Health Services District, Reid Wood, Roger Atcitty, John Lewis, John
Housekeeper, Karen Adams, Patsy Shumway, Gary Holliday, and Lauren
Schafer.
Jesse C. Trentadue of Suitter Axland, Salt Lake City, Utah, for
Defendants-Appellees San Juan County, J. Tyron Lewis, Mark Maryboy, Bill
Redd, Craig Halls, and Richard Bailey.
Kyle M. Finch of Miller, Stratvert & Torgerson, P.A., Farmington, New
Mexico, submitted a brief for Defendant-Appellee Farmer's/Truck
Insurance.
Robert R. Harrison and David W. Slagle, of Snow, Christensen &
Martineau, Salt Lake City, Utah, submitted a brief for
Defendants-Appellees Cleal Bradford, Dr. James Redd, Dr. L. Val Jones,
Dr. Manfred Nelson, Marilee Bailey, Ora Lee Black, Lori Wallace, Carla
Grimshaw, Gloria Yanito, and Julie Bronson.
R. Dennis Ickes, pro se.
Before EBEL, McKAY, and LUCERO, Circuit Judges.
LUCERO, Circuit Judge.
Key to our determination of this appeal is the question whether the
courts of the Navajo Nation may exercise jurisdiction over a case
brought by private individuals against a Utah county alleging violations
of Navajo law. Contrary to the district court's ruling, we conclude that
resolution of this question lies in Montana v. United States, 450 U.S.
544 (1981) (defining the scope of tribes' inherent sovereignty), rather
than in the doctrine of state sovereign immunity. I The parties bring to
us a procedural quagmire marked by a profound lack of clarity-at times
approaching confusion-in their litigation before the Navajo Nation
district court and their pleadings before the federal district court
below. That pattern continues here.
Rather than including a complete statement of relevant facts as required
by Fed. R. App. P. 28, appellants' opening brief incorporates facts as
stated in a Navajo Nation judicial record. Appellants fail to comply
with Fed. R. App. P. 30(a)(1)(B), which requires the filing of an
appendix to the briefs including "relevant portions of the pleadings."
This being an appeal from a Fed. R. Civ. P. 12(b)(6) dismissal for the
complaint's failure to state a claim upon which relief may be granted,
Rule 30(a)(1)(B) requires, at a minimum, inclusion in the appendix of
the complaint at issue. See 10th Cir. R. 30.1(A)(1) (stating that the
appendix to the briefs must be "sufficient for considering and deciding
the issues on appeal"). Were it not for appellees' submission of the
complaint, we would be inclined to affirm the district court's dismissal
on this basis alone. See 10th Cir. R. 30.1(A)(3) (stating that this
court is not obliged to "remedy any failure of counsel to provide an
adequate appendix"). As best as we can tell, the facts are as follows. A
Montezuma Creek Clinic is located within the boundaries of the Navajo
Nation and was, during relevant times, operated by the San Juan Health
Service District ("Health District")-a special service district
organized by San Juan County, Utah ("County")-under contract with the
federal Indian Health Service ("IHS") to provide health care to members
of the Navajo community. The clinic and land upon which it is located
was purchased by the State of Utah as part of the Utah Navajo Trust
Fund.
In April 1999, Fred Riggs, Donna Singer, and Alison Dickson, all of whom
were employed at the clinic, sued the Health District and County, among
others, in Navajo Nation district court for, among other things, alleged
violations of the Navajo Preference in Employment Act ("NPEA"), Nation
Code tit. 15, §§ 601-609. The NPEA, which was enacted by the Navajo
Nation, requires employers to "[g]ive preference in employment to
Navajos," id. § 604(A)(1), and to file with the Office of Navajo Labor
Relations a written affirmative-action plan, § 604(A)(2).
In pretrial proceedings, the Navajo court concluded that Riggs, Singer,
and Dickson demonstrated a substantial likelihood of success on the
merits of their NPEA claims and entered a preliminary injunction in
their favor. The Navajo court was troubled by what it perceived as a
sharp drop in visits to the clinic by diabetic patients. In the court's
view, "The reason these patients have not been coming in for life
critical medical care is due to San Juan Health Service District's
billing of IHS eligible patients, making them believe they must pay for
medical services before receiving medical attention." (1 Appellants'
App. at 77.) Under the preliminary injunction, the County and Health
District were required to reinstate Singer and Riggs to their prior
positions at the clinic; to give Dickson full-time employment status; to
compensate Singer, Riggs, and Dickson for their lost income; to expunge
Singer's and Riggs's personnel files; and to pay attorney's fees.
Moreover, the Navajo court prohibited the County and Health District
from: Eliminating Emergency Medical Technician services and coverage
within the territorial jurisdiction of the Navajo Nation in service to
the local Navajo and other Native American population for or on behalf
of the Montezuma Creek Clinic; and, Interfering with the laboratory
services to the Montezuma Creek Clinic; and, Interfering with the
pharmaceutical services provided to the Montezuma Creek Clinic, and
immediate payment of all current and past due billings; and, Interfering
with any form of patient care, by, among any other matter or things,
billing IHS patients; and Interfering or harassing Ms. Singer as the
manager of the Montezuma Creek Clinic . . . .
(1 id. at 85-86.)
In its order granting a preliminary injunction, the Navajo court found
that the defendants had engaged in a pattern of bad faith conduct toward
the court, had wasted judicial resources, had engaged in "repeated
misrepresentations of fact and law," had engaged in evidence spoliation,
had intimidated and tampered with witnesses, had obstructed testimony,
and had engaged in the sandbagging of evidence. (1 id. at 80.) In the
Navajo court's view, the defendants had made frivolous claims against
Navajo plaintiffs and subjected them "to a trial by tabloid." (1 id. at
81.) Seizing on these conclusions, Riggs, Singer, and Dickson modified
their complaint to add as defendants the clinic's insurer, Truck
Insurance Exchange ("Truck Insurance"), and its attorney, R. Dennis
Ickes. On May 3, 2000, the Navajo court took the extraordinary step of
holding that Truck Insurance and Ickes should be bound by the
preliminary injunction. The court also granted Riggs, Singer, and
Dickson leave to seek enforcement of the preliminary injunction in state
or federal court "pursuant to principles of comity and applicable law."
(1 id. at 106.) B
Riggs, Singer, Dickson, and twelve other individuals filed a complaint
in United States district court against (1) the County, Health District,
and a number of County and Health District officials ("County and Health
District defendants"); (2) Truck Insurance; and (3) Ickes. The complaint
listed various causes of action: discrimination and denial of equal
protection; denial of free speech and association; denial of due
process; antitrust and racketeering violations; fraud, conversion, and
theft; and invasion of privacy and defamation. Their complaint also
sought enforcement of the Navajo court preliminary injunction and "a
declaratory judgment that the Preliminary Injunction Order designed to
protect the welfare of the Navajo Nation was issued within the sound
jurisdiction of the Navajo Nation District Court and is authoritative
over the defendants and the political subdivision" (Health District's
Supplemental App. ("H.D. App.") at 46). The complaint asserted:
"Pursuant to Strate v. A-1 Contractor, 117 S.Ct. 1404, (1997) [the]
Navajo Nation District Court . . . has the right to protect the Navajo
Patients' health and welfare, contractual rights of the Navajo people,
and the civil rights of all those who are within the Navajo Nation
boundaries and seek [the] Court's assistance." (H.D. App. at 48.) Ruling
on a motion to dismiss, the district court held that County and Health
District defendants were entitled to sovereign immunity in the Navajo
court. Reasoned the district court: [T]ribal courts historically did not
possess and therefore have not retained sovereign powers over states.
Therefore, absent a state's express waiver of immunity, a state cannot
be sued in tribal court. . . . Consequently, political subdivisions of
the State of Utah, as defined by Utah law, are immune from suit in
tribal courts because the State of Utah has not waived the common law
immunity of its political subdivisions from suit in tribal courts.
(2 Appellants' App. at 185.) In a separate decision, the district court
dismissed plaintiffs' claim as against Truck Insurance and Ickes.
Applying Montana v. United States, the district court held that the
Navajo court lacked subject-matter jurisdiction over them.
Appellants seek review of the district court decisions. C
We review the district court's dismissal of appellants' claims under
Rule 12(b)(6) for failure to state a claim de novo. Sutton v. Utah State
Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999). At this
stage of the litigation, we accept all well-pleaded allegations in the
complaint as true and will sustain the district court's Rule 12(b)(6)
dismissal only if it is clear beyond doubt that no relief could be
granted under any set of facts that could be proved consistent with the
allegations. Id. Our role in this context "is not to weigh potential
evidence that the parties might present at trial, but to assess whether
the plaintiff's complaint alone is legally sufficient to state a claim
for which relief may be granted." Id. (quotation omitted). "Indeed it
may appear on the face of the pleadings that a recovery is very remote
and unlikely but that is not the test." Scheuer v. Rhodes, 416 U.S. 232,
236 (1974), overruled on other grounds by Harlow v. Fitzgerald, 457 U.S.
800 (1982). In deciding a Rule 12(b)(6) motion, a federal court
generally "should not look beyond the confines of the complaint itself."
Dean Witter Reynolds, Inc. v. Howsam, 261 F.3d 956, 960 (10th Cir.
2001), cert. granted, 122 S. Ct. 1171 (2002). There are two exceptions
to this rule. First, the district court may consider "mere argument"
contained in the parties' memoranda concerning a motion to dismiss. Ohio
v. Peterson, Lowry, Rall, Barber & Ross, 585 F.2d 454, 457 (10th Cir.
1978). Second, "[i]t is accepted practice, if a plaintiff does not
incorporate by reference or attach a document to its complaint, but the
document is referred to in the complaint and is central to the
plaintiff's claim, a defendant may submit an indisputably authentic copy
to the court to be considered on a motion to dismiss." Howsam, 261 F.3d
at 961 (quotation omitted).
As stated above, appellants' failure to submit a copy of their complaint
to this court on appeal is rendered less harmful by appellees'
submission of that crucial document. However, the district court docket
entries indicate that appellants filed attachments and an addendum to
their complaint on July 26, 2000. We are at a loss as to the contents of
these filings. Although it seems clear that the district court relied on
facts beyond those alleged in the body of the complaint, there is no way
to know from the record before us whether these factual allegations are
reflected in the attachments to the complaint. Because appellants do not
challenge the district court's decisions on grounds that the court
exceeded the proper scope of Rule 12(b)(6) review, we defer to the
district court's statements of factual allegations. II We first consider
whether the district court properly dismissed appellants' claims against
Truck Insurance and Ickes. A Long before the arrival of Europeans on
this continent, tribes were self-governing political communities. Nat'l
Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 851 (1985). As
such, the tribes possessed the full attributes of sovereignty, which
included "the inherent power to prescribe laws for their members and to
punish infractions of those laws." United States v. Wheeler, 435 U.S.
313, 323 (1978). Although "[t]heir incorporation within the territory of
the United States, and their acceptance of its protection necessarily
divested them of some aspects of the sovereignty which they had
previously exercised," id., this divestiture was not absolute. Today,
tribes retain sovereignty of a unique and limited character. It exists
only at the sufferance of Congress and is subject to complete
defeasance. But until Congress acts, the tribes retain their existing
sovereign powers. In sum, Indian tribes still possess those aspects of
sovereignty not withdrawn by treaty or statute, or by implication as a
necessary result of their dependent status.
Id.
As Felix Cohen observed in his seminal work on the subject of federal
Indian law, "[T]hose powers which are lawfully vested in an Indian tribe
are not, in general, delegated powers granted by express acts of
Congress, but rather inherent powers of a limited sovereignty which has
never been extinguished." Felix S. Cohen, Handbook of Federal Indian Law
122 (1941); see Wheeler, 435 U.S. at 322. Contrary to County defendants'
assertion on appeal (see County Appellees' Br. at 20), tribes are not
subordinate to the states, see Washington v. Confederated Tribes, 447
U.S. 134, 154 (1980), and certainly not to counties.
The leading case defining the scope of tribal inherent civil authority
is Montana v. United States. Montana articulates the general rule that
"exercise of tribal power beyond what is necessary to protect tribal
self-government or to control internal relations is inconsistent with
the dependent status of the tribes, and so cannot survive without
express congressional delegation." 450 U.S. at 564. Generally, "the
inherent sovereign powers of an Indian tribe do not extend to the
activities of nonmembers of the tribe." Id. at 565. But there may be
cases in which inherent civil authority will extend to the conduct of
non-Indians on reservations. First, "[a] tribe may regulate, through
taxation, licensing, or other means, the activities of nonmembers who
enter consensual relationships with the tribe or its members, through
commercial dealing, contracts, leases, or other arrangements." Id.
Second, "[a] tribe may also retain inherent power to exercise civil
authority over the conduct of non-Indians on fee lands within its
reservation when that conduct threatens or has some direct effect on the
political integrity, the economic security, or the health or welfare of
the tribe." Id. at 566. In a pair of subsequent cases, the Supreme Court
applied Montana to address the scope of inherent civil adjudicative
authority as well, holding that "[a]s to nonmembers . . . , a tribe's
adjudicative jurisdiction does not exceed its legislative jurisdiction."
Strate v. A-1 Contractors, 520 U.S. 438, 453 (1997); Nevada v. Hicks,
533 U.S. 353, 357-58 (2001). In Hicks, the Court acknowledged that this
"formulation leaves open the question whether a tribe's adjudicative
jurisdiction over nonmember defendants equals its legislative
jurisdiction." 533 U.S. at 358.
B In evaluating appellants' declaratory judgment claim against Truck
Insurance, the district court stated that in April 1999,
there was in effect a Comprehensive Hospital Liability Policy issued by
Truck, which, among other things, covered the Montezuma Creek Clinic,
which was operated by the San Juan Health Services District . . . .
Consequently, Truck retained Mr. Ickes to represent the District and
related defendants . . . in the Tribal Court action. Because, there were
coverage issues as to many of the claims brought by Plaintiffs in the
Tribal Court proceedings, however, Mr. Ickes was retained solely to
represent the interests of Truck's insureds. Mr. Ickes was not retained
to, and has not, represented Truck at any time pertinent to this action.
(2 Appellants' App. at 198.) In their opening brief, appellants neither
take issue with the district court's statement of these allegations nor
contend that Truck Insurance is a member of the Navajo Nation such that
Montana's presumption against tribal authority would not apply. Rather,
they contend that Truck Insurance falls within Montana's consensual
relationship exception. According to appellants, Truck's contract for
liability insurance was an inherent aspect attaching to each Navajo
patient's contract for services with the clinic. But for the Navajo
patients, Truck would not have had a contract with the defendants for
the clinic. Truck's contract was an inherent aspect of Attorney Ickes'
representation of the defendants. Attorney Ickes kept Truck informed.
(Appellants' Br. at 28.)
We reject appellants' argument. Under Montana's consensual relationship
exception, the relationship must be one between the nonmember and "the
tribe or its members." 450 U.S. at 564. Here, Truck Insurance's
contractual relationship was with the clinic, another nonmember. Thus,
the Navajo Nation's exertion of authority over Truck Insurance is too
attenuated to fall under Montana's consensual relationship exception.
See Atkinson Trading Co. v. Shirley, 532 U.S. 645, 656 (2001)
("Montana's consensual relationship exception requires that the tax or
regulation imposed by the Indian tribe have a nexus to the consensual
relationship itself."). We also reject appellants' contention that their
declaratory judgment claim against Ickes, who is not a member of the
Navajo Nation, was improperly dismissed. Appellants claim that the
Navajo Nation may regulate Ickes's activity because he entered into a
consensual relationship with the tribe-i.e., he became a member of the
Navajo Nation Bar Association. We agree that Ickes's membership in the
Navajo Nation Bar Association and his practice before the Navajo
district court constitute a consensual relationship with the Navajo
Nation. However, our Montana inquiry does not end with this
determination. As was the case with respect to Truck Insurance, the
requisite nexus between the consensual relationship and the exertion of
tribal authority is missing.
By enrolling as a member of the Navajo Nation Bar Association, Ickes
agreed to follow the American Bar Association's Model Rules of
Professional Conduct, which have been adopted by the Navajo Nation
Supreme Court. Rule 8.5(a) of the Model Rules provides, "A lawyer
admitted to practice in this jurisdiction is subject to the disciplinary
authority of this jurisdiction . . . ." In our judgment, the power to
discipline an attorney for alleged misconduct in court is distinct from
the power to join the attorney as a defendant with the clients he is
representing before that court. As the Supreme Court observed in
Atkinson, the rule is not "in for a penny, in for a Pound." 532 U.S. at
656 (quotation omitted). We are also unpersuaded that Montana's
self-government exception should apply with respect to Ickes. This
exception "grants Indian tribes nothing beyond what is necessary to
protect tribal self-government or to control internal relations." Id. at
658-59 (quotations omitted). Surely, the Navajo Nation's interest in
regulating attorney conduct is great. See Goldfarb v. Va. State Bar, 421
U.S. 773, 792 (1975). But it is a long leap, and one we are unwilling to
take, to suggest that the action taken by the Navajo court in this case
was necessary to protect Navajo self-government or control its internal
relations. If warranted, the Navajo Nation may protect its political
integrity through other means, such as "the imposition of disbarment,
suspension or reprimand of the offending attorney[]." Garcia v. Rodey,
Dickason, Sloan, Akin & Robb, 750 P.2d 118, 123 (N.M. 1988). C
Appellants contend that the Navajo court's actions respecting Ickes are
sanctioned by federal law, namely 25 U.S.C. § 1302. This argument is
utterly devoid of any merit. Section 1302 is an express divestiture of
tribal authority, providing, among other things, that no Indian tribe
may "deny to any person within its jurisdiction the equal protection of
its laws or deprive any person of liberty or property without due
process of law." 25 U.S.C. § 1302(7); see also Santa Clara Pueblo v.
Martinez, 436 U.S. 49, 57 (1978) (stating that in § 1302, "Congress
acted to . . . impos[e] certain restrictions upon tribal governments
similar, but not identical, to those contained in the Bill of Rights and
the Fourteenth Amendment"). D
In contrast to their claim seeking a declaratory judgment, appellants'
claim for enforcement of the Navajo court's preliminary injunction with
respect to Truck Insurance and Ickes raises important questions
concerning the proper role of federal courts. Although a tribal court
defendant may bring a federal cause of action for an injunction where
the basis of the claim is assertion of "a right to be protected against
an unlawful exercise of Tribal Court judicial power," Nat'l Farmers, 471
U.S. at 851, 852, this right to be free from tribal court interference
does not necessarily support a federal claim seeking enforcement of a
tribal decree. Although the sovereign powers of the Navajo Nation are
held "only at the sufferance of Congress," Wheeler, 435 U.S. at 323,
these powers are rooted in Navajo, not federal, law. "Indian tribes are
neither states, nor part of the federal government, nor subdivisions of
either. Rather, they are sovereign political entities possessed of
sovereign authority not derived from the United States, which they
predate." NLRB v. Pueblo of San Juan, 276 F.3d 1186, 1192 (10th Cir.
2002) (en banc) (footnote omitted). To the extent appellants' complaint
anticipates a defense arising under federal law, it runs up against the
well-pleaded complaint rule. See Louisville & Nashville R.R. Co. v.
Mottley, 211 U.S. 149, 152 (1908). Appellants nonetheless seek
enforcement of the Navajo court injunction under Full Faith and Credit
Clause of the Constitution or, in the alternative, comity principles.
Under the Full Faith and Credit Clause, Full Faith and Credit shall be
given in each State to the public Acts, Records, and judicial
Proceedings of every other State. And the Congress may by general Laws
prescribe the Manner in which such Acts, Records and Proceedings shall
be proved, and the Effect thereof.
U.S. Const. art. IV, § 1. Full faith and credit principles are also in
place as a matter of statute:
Such Acts, records, and judicial proceedings or copies thereof, so
authenticated, shall have the same full faith and credit in every court
within the United States and its Territories and Possessions as they
have by law or usage in the courts of such State, Territory or
Possession from which they are taken.
28 U.S.C. § 1738. According to appellants, tribes historically have been
viewed as territories of the United States. In fact, Supreme Court cases
point in opposing directions. Compare United States ex rel. Mackey v.
Coxe, 59 U.S. (18 How.) 100, 103 (1855) (holding that the Cherokee
Nation was a "territory" for purposes of a federal letters of
administration law), with New York ex rel. Kopel v. Bingham, 211 U.S.
468, 474-75 (1909) (citing, with approval, Ex Parte Morgan, 20 F. 298,
305 (W.D. Ark. 1883), which held that the Cherokee Nation was not a
"territory" within the meaning of the federal extradition statute). See
generally Wilson v. Marchington, 127 F.3d 805, 808-09 (9th Cir. 1997)
(discussing the issue at length and ultimately holding that neither the
Full Faith and Credit Clause nor 28 U.S.C. § 1738 is applicable to
tribal judgments). We need not address this issue because appellants
admit that they did not argue full faith and credit in the Federal
[district] Court, but upon further consideration of the full
pervasiveness of the United States in Tribal Court systems, and given
the need for preliminary injunctions in health and public safety
emergencies, the Plaintiffs now argue full faith and credit is
appropriate for exclusively tribal claims under the facts of this case.
(Appellants' Br. at 36 n.14.) As a general rule, this court will not
consider an issue on appeal that was not pressed below, Walker v. Mather
(In re Walker), 959 F.2d 894, 896 (10th Cir. 1992), and we choose not to
do so today. We thus proceed with the assumption that the Navajo Nation
injunction is enforceable in federal court as a matter of comity. We are
unwilling to enforce judgments of tribal courts acting beyond their
authority, especially where defendants have a federal right "to be
protected against an unlawful exercise of Tribal Court judicial power,"
Nat'l Farmers, 471 U.S. at 851; see Wilson, 127 F.3d at 810 (holding
that "federal courts must neither recognize nor enforce tribal judgments
if: (1) the tribal court did not have both personal and subject matter
jurisdiction; or (2) the defendant was not afforded due process of
law"). Therefore, given our earlier conclusion that the Navajo court
lacked subject-matter jurisdiction over Truck Insurance and Ickes, we
must affirm the district court's dismissal of appellants' enforcement
claim as against those parties. III We proceed to review the district
court's dismissal of appellants' claims against County and Health
District defendants. A
In its memorandum decision and order, the district court ruled that the
Navajo court suit against County and Health District defendants was
barred by the doctrine of sovereign immunity. The Navajo court's
exercise of jurisdiction over these defendants was, in the district
court's view, "nonsensical" and "ludicrous." (2 Appellants' App. at
190.) The district court based its decision on constitutional
sovereign-immunity principles, stressing that the Constitution never
would have been ratified had the states been stripped of their sovereign
authority "'except as expressly provided by the Constitution itself.'"
(2 id. at 185 (quoting Alden v. Maine, 527 U.S. 706, 727 (1999)).) As
exemplified by such decisions as Alden and Hans v. Louisiana, 134 U.S. 1
(1890), the federal doctrine of sovereign immunity holds that the
federal government may not, as a general matter, infringe the states'
immunity from private suit. Appellants contend that the district court's
analysis of their claims against County and Health District defendants
should have proceeded under Montana and subsequent cases defining tribal
inherent sovereignty. Had these principles been applied, say appellants,
dismissal would have been improper. B We begin our analysis with the
acknowledgment that federal sovereign immunity and Montana are distinct
legal doctrines. On a practical level, however, both Montana and
sovereign immunity may potentially divest the Navajo court of the power
to adjudicate the parties' suit.
The district court's reliance on federal sovereign immunity
misunderstands the doctrine as defined by the Supreme Court. See Nevada
v. Hicks, 533 U.S. 353, 373-74 (2001); Nevada v. Hall, 440 U.S. 410, 414
(1979) ("The doctrine of sovereign immunity is an amalgam of two quite
different concepts, one applicable to suits in the sovereign's own
courts and the other to suits in the courts of another sovereign.").
Nonetheless, at this point in the analysis it would be premature to
decide the sovereign immunity question because there remains a threshold
question of the tribe's jurisdiction under Montana. C The threshold
question in our review of the Navajo court judgment is whether the
Navajo Nation's decision to exercise adjudicative power over County and
Health District defendants passes muster under Montana. If, and only if,
appellants overcome the heavy presumption Montana establishes against
the existence of tribal jurisdiction will a federal court have occasion
to address the sovereign immunity issue at all.
Our judgment is guided by Nevada v. Hicks, 533 U.S. 353 (2001) decided
by the Supreme Court after the district court's dismissal in the present
case. The primary issue in Hicks was whether a tribal court possessed
"jurisdiction to adjudicate the alleged tortious conduct of state
wardens executing a search warrant for evidence of an off-reservation
crime." Id. at 357. The Court concluded that the tribal court did not
have jurisdiction, applying the two Montana principles of Indian law
that we have already discussed: first, that "'[a]s to nonmembers . . . a
tribe's adjudicative jurisdiction does not exceed its legislative
jurisdiction,'" id. at 357-58 (quoting Strate, 520 U.S. at 453); and
second, that "[w]here nonmembers are concerned, the 'exercise of tribal
power beyond what is necessary to protect tribal self-government or to
control internal relations is inconsistent with the dependent status of
the tribes, and so cannot survive without express congressional
delegation,'" id. at 359 (quoting Montana, 450 U.S. at 564 ) (emphasis
removed). Although the Court did not answer the question of whether a
tribe's adjudicative jurisdiction over nonmembers equals its regulatory
jurisdiction, the Court made clear that without regulatory jurisdiction
under Montana, a tribe is definitively without adjudicative
jurisdiction. Id. at 358.
Hicks expressly acknowledges that Montana and sovereign immunity are
distinct doctrines. Moreover, Hicks rejects the view that "immunity
defenses should be considered in reviewing tribal court jurisdiction,"
id. at 373 (quotation omitted), and provides two reasons for this
conclusion: The first is that it is not true. There is no authority
whatever for the proposition that absolute- and qualified-immunity
defenses pertain to the court's jurisdiction-much less to the tribe's
regulatory jurisdiction, which is what is at issue here. (If they did
pertain to the court's jurisdiction, they would presumably be
nonwaivable. Cf. Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261,
267 (1997)). And the second problem is, that without first determining
whether the tribe has regulatory jurisdiction, it is impossible to know
which "immunity defenses" the federal court is supposed to consider.
Id. at 373-74 (parallel citations omitted). Hicks thus stands for the
proposition that Montana analysis should proceed before considering
immunity defenses. In sum, we conclude that the district court should
have performed a Montana analysis before reaching the sovereign immunity
question. D
Although the district court did not conduct a proper analysis under
Montana, we are nonetheless free to affirm the district court's
dismissal on any grounds for which there is a record sufficient to
permit conclusions of law, provided the litigants have had a fair
opportunity to develop the record. See Seibert v. Oklahoma ex rel. Univ.
of Okla. Health Scis. Ctr., 867 F.2d 591, 597 (10th Cir. 1989). We
decline to do so, however, and instead vacate the court's dismissal of
appellants' claim against County and Health District defendants, and
remand the matter for further proceedings. In addition to the fact that
County and Health District defendants did not brief the Montana issues
on appeal, we have kept in mind the limited nature of our inquiry when
assessing Rule 12(b)(6) motions to dismiss for failure to state a claim
upon which relief may be granted. "The granting of a motion to dismiss
must be cautiously studied, not only to effectuate the spirit of the
liberal rules of pleading but also to protect the interests of justice."
Pelt v. Utah, 104 F.3d 1534, 1540 (10th Cir. 1996) (quotation omitted).
Appellants' position has been that the district court relied on the
wrong doctrine in dismissing its claims against County and Health
District defendants. We do not intend to suggest an outcome on remand.
However, as the Supreme Court has observed, "the existence and extent of
a tribal court's jurisdiction will require a careful examination of
tribal sovereignty, the extent to which that sovereignty has been
altered, divested, or diminished, as well as a detailed study of
relevant statutes, Executive Branch policy as embodied in treaties and
elsewhere, and administrative or judicial decisions." Nat'l Farmers, 471
U.S. at 855-56 (footnote omitted). IV The district court's dismissal of
appellants' claim against Ickes and Truck Insurance is AFFIRMED.
Dismissal of appellants' claim against County and Health District
defendants is VACATED, and the matter is REMANDED for further
proceedings consistent with this opinion. All outstanding motions are
DENIED.