IN THE MATTER OF JAMES W. RANSOM, ET AL., APPELLANTS, v. ST. REGIS MOHAWK EDUCATION AND COMMUNITY FUND, INC., ET AL., RESPONDENTS.
86 N.Y.2d 553, 658 N.E.2d 989, 635 N.Y.S.2d 116 (1996).
October 24, 1995
3 No. 218 [1995 NY Int. 217]Decided October 24, 1995
This opinion is uncorrected and subject to revision before publication in the New York Reports.
George W. Harder, for appellants.
John A. Piasecki, for respondents.
Pamela S. Fahey for Oneida Indian Nation, amicus curiae.
TITONE, J.:
The District of Columbia Non-Profit Corporation Act and New York's Not-For-Profit Corporation Law both empower corporate entities to "sue and be sued." We are asked in this case to hold that reference to the District of Columbia Act in the charter of a tribal social service agency incorporated thereunder, along with that corporation's qualification to do business in New York, constitutes a waiver of tribal sovereign immunity. We hold that reference in the corporate charter to statutory authority to sue and be sued, standing alone, neither constitutes an express and unequivocal waiver of sovereign immunity nor subjects the tribal entity to the jurisdiction of New York's courts.
Petitioners James W. Ransom, Wesley
Laughing, Brian D. Cole and Sakakohe Pembleton are members of the St. Regis
Mohawk Tribe employed by respondent St. Regis Mohawk Education and Community
Fund. Respondent Fund is a non-profit corporation organized in 19821 pursuant
to the District of Columbia Non- Profit Corporation Act to provide educational,
health care, social and historical services to residents of the St. Regis
Mohawk Reservation. Respondents L. David Jacobs, Norman Tarbell and Lincoln
C. White are directors of the Fund, and are also the three elected Tribal
Chiefs of the St. Regis Mohawk Tribe. On October 16, 1990, respondent applied
for authorization to do business in the State of New York. The Fund's Articles
of Incorporation provide that "[t]he corporation may exercise all power
or authority granted to it under the District of Columbia Non-Profit Corporation
Act or otherwise, including, but not limited to, the power to accept donations
or money or property, and the power to own or lease property, real or personal."
The Non-Profit Corporation Act states that a corporation formed thereunder
"shall have power * * * [t]o sue and be sued, complain and defend, in its
corporate name * * *." None of the corporate certificates contain any express
language that the Tribe waives its sovereign immunity.
In 1990, petitioners were suspended or discharged
from their various administrative positions with the Fund. Respondent Fund
concedes that the grievance procedures outlined in the Tribe's employment
policy and procedures manual were not followed when petitioners sought
internal disciplinary review with the appropriate tribal authority. Petitioners
commenced this article 78 proceeding to challenge their dismissal from
employment, claiming they were denied due process when discharged in violation
of the Tribe's Personnel Policy and Procedure Manual and are entitled to
reinstatement and back pay. Respondents did not answer, but claimed in
responsive affidavits that, because the Fund was an agency of the Tribe,
it enjoyed tribal sovereign immunity from this suit. Supreme Court rejected
the sovereign immunity defense, granted the petition, and ordered petitioners'
reinstatement with back pay.
The Appellate Division reversed and remitted
to Supreme Court for a factual determination of whether petitioners were
employees of the Tribe or the Fund, and, if the latter, whether the Fund
enjoyed sovereign immunity. On remand, Supreme Court concluded that the
Fund had waived its sovereign immunity by virtue of its incorporation and
subsequent qualification to do business in New York. Thus, the court adhered
to its original determination that respondents improperly dismissed petitioners
from employment, and that petitioners were entitled to the requested relief.
The Appellate Division reversed and dismissed the petition. The court held
that the Fund was an arm of the Tribal government and possessed attributes
of tribal sovereignty that precluded suit against it absent a waiver of
immunity. The court then ruled that such a waiver must be unequivocally
expressed, and that the generalized incorporation of corporate powers did
not satisfy this waiver standard. We now affirm.
That Indian Tribes possess common law sovereign immunity
from suit akin to that enjoyed by other sovereigns is part of this nation's
longstanding tradition (Santa Clara Pueblo v Martinez, 436 US 49, 58; Matter
of Patterson v Seneca Nation, 245 NY 433). 2 Tribal sub-agencies
and corporate entities created by the Indian Nation to further governmental
objectives, such as providing housing, health and welfare services, may
also possess attributes of tribal sovereignty, and cannot be sued absent
a waiver of immunity (see, Weeks Constr., Inc. v Oglala Sioux Hous. Auth.,
797 F2d 668 [8th Cir. 1986]; Namekagon Dev. Co. v Bois Forte Res. Housing
Auth., 395 FSupp 23 [D Minn 1974], affd 517 F2d 508 [8th Cir. 1975]). Although
no set formula is dispositive, in determining whether a particular tribal
organization is an "arm" of the tribe entitled to share the tribe's immunity
from suit, courts generally consider such factors as whether: the entity
is organized under the tribe's laws or constitution rather than federal
law; the organization's purposes are similar to or serve those of the tribal
government; the organizations's governing body is comprised mainly of tribal
officials; the tribe has legal title or ownership of property used by the
organization; tribal officials exercise control over the administration
or accounting activities of the organization; and the tribe's governing
body has power to dismiss members of the organization's governing body
(see, William V. Vetter, Doing Business with Indians and the Three "S"es:
Secretarial Approval, Sovereign Immunity and Subject Matter Jurisdiction,
36 Ariz. L. Rev. 169, 176 [1994]).
More importantly, courts will consider whether the
corporate entity generates its own revenue, whether a suit against the
corporation will impact the Tribe's fiscal resources, and whether the sub-entity
has the "power to bind or obligate the funds of the tribe" (Altheimer &
Gray v Sioux Mfg. Corp., 983 F2d 803, 809 [7th Cir. 1993], cert denied
114 S Ct 621). The vulnerability of the Tribe's coffers in defending a
suit against the sub-entity indicates that the real party in interest is
the Tribe.
The conclusion that respondent Fund is a tribal
entity which enjoys sovereign immunity from suit is fully supported by
the record. The Fund was established to enhance the health, education and
welfare of tribe members, a function traditionally shouldered by tribal
government. Additionally, the Fund received its resources from the Tribe,
and the Tribe was designated by the Fund as the recipient of its funds
and services. Critically, under its by-laws, the Fund's governing body
may only be comprised of elected Chiefs of the Tribe. Thus, the Fund's
provision of social services on behalf of and under the direct fiscal and
administrative control of the Tribe render it an entity so closely allied
with and dependent upon the tribe that it is entitled to the protection
of tribal sovereign immunity.
The remaining and more difficult question
here is whether New York courts have jurisdiction over this action against
the Fund. Having sovereign status, the tribal entity is not subject to
the jurisdiction of the New York courts without its consent. [FN3] Thus,
the pivotal inquiry is whether the Fund has waived its sovereign immunity
and submitted to suit in our courts.
The sovereignty of an Indian Nation
may be waived by the Tribe itself or by an act of Congress (Oklahoma Tax
Comm'n v Citizen Band Potawatomi Indian Tribe, 498 US 505 [1991]), which
has "superior and plenary control" over Indians (Santa Clara Pueblo v Martinez,
436 US 48, 58 [1978], supra). Because preserving tribal resources and tribal
autonomy are matters of vital importance, the United States Supreme Court
has repeatedly stated that a waiver of tribal sovereign immunity "cannot
be implied but must be unequivocally expressed" (id., quoting United States
v King, 395 US 1, 4). [FN4] Importantly, to be valid, waivers of tribal
sovereign immunity "must be traceable to an official government action
(statute, ordinance, resolution) that expressly and unequivocally waives
immunity or empowers particular officers to waive immunity" (Vetter, Doing
Business with Indians and the Three "S"es: Secretarial Approval, Sovereign
Immunity and Subject Matter Jurisdiction, 36 Ariz L Rev 169, 193, supra).
Additionally, waivers of immunity "are to be strictly construed in favor
of the tribe" (Rupp v Omaha Indian Tribe, 45 F3d 1241, 1245, [8th Cir.
1995]). In fact, while the United States Supreme Court "has expressed its
protectiveness of tribal sovereign immunity by requiring that any waiver
be explicit, it has never required the invocation of 'magic words' stating
that the tribe hereby waives its sovereign immunity" (Rosebud Sioux Tribe
v Val- U Constr. Co. of South Dakota, Inc., 50 F3d 560, 563 [8th Cir. 1995],
cert denied, 64 USLW [10-2-95]).
Waivers of sovereign immunity have been
accomplished in corporate charters through a variety of formulations that
commonly include terms expressing the corporation's amenability to suit
and the tribe's intent that certain matters be resolved in a particular
judicial or arbitral forum (see, e.g., Namekagon Devel. Co. v Bois Forte
Res. Hous. Auth., 517 F2d 508 [8th Cir. 1975]). [FN5] For example, the
Seventh Circuit Court of Appeals determined that the requisite unequivocal
expression of a waiver was accomplished by the Sioux Indians in Altheimer
& Gray v Sioux Manufacturing Corp., 983 F2d 803, 812 [1993], supra).
In that case, the Sioux Tribe passed a Tribal Law and Order Code section
providing that sovereign immunity may be limited by a tribal entity's charter.
In turn, the charter of a tribal corporation engaged in the manufacturing
of military supplies stated that sovereign immunity "is hereby expressly
waived with respect to any written contract entered into by the Corporation."
Additionally, the terms of a Letter of Intent concerning a specific corporate
contract stated that the Tribe and its corporation agreed to "waive all
sovereign immunity in regards to all contractual disputes" and that all
parties "agree to submit to the venue and jurisdiction of the federal and
state courts located in the State of Illinois." Similarly, in Rosebud Sioux
Tribe v Val-U Constr. Co. of South Dakota (50 F3d 560, supra), the Eighth
Circuit Court of Appeals held that the inclusion of a "sue and be sued"
clause within a tribal corporation's charter, plus an arbitration clause
in a contract executed thereunder constituted an express waiver of sovereign
immunity and submission to an arbitral forum. Waiver has also been found
where the tribal entity affirmatively subjected itself to the jurisdiction
of the federal district court by initiating a lawsuit, and requesting that
the court consider the asserted counterclaims (Rupp v Omaha Indian Tribe,
45 F3d 1241, 1244 [8th Cir 1995], supra).
By contrast, in American Indian Agricultural
Credit Consortium v Standing Rock Sioux Tribe (780 F2d 1374 [1985]), the
Eighth Circuit concluded that a tribal resolution authorizing the securing
of a loan coupled with language in a promissory note referring to default
remedies, the right to charge interest "in addition to such other and further
rights and remedies provided by law", and a choice of District of Columbia
law, together failed to satisfy Santa Clara Pueblo's requirement of an
express and unequivocal waiver, notwithstanding the fact that a waiver
of immunity from suit could easily be implied from that collective language
(id., at 1377). According to the Eighth Circuit, the missing link
in Standing Rock was that the tribe "did not explicitly consent to submit
any dispute over repayment on the note to a particular forum, or to be
bound by its judgment" (id., at 1380-1381).
Petitioners here urge that the tribe expressed
its intent to waive its sovereign immunity by (1) including a provision
in the Fund's articles of incorporation which states that "[t]he corporation
may exercise all power or authority granted to it under the District of
Columbia Non-Profit Corporation Act or otherwise, including, but not limited
to, the power to accept donations or money or property, and the power to
own or lease property, real or personal," and (2) qualifying to do business
in New York as a foreign corporation. The District of Columbia Non-Profit
Corporation Act in turn lists as a general power of a corporation formed
thereunder the power to "sue and be sued" (D.C. Non-Profit Corp. Law
29-505). New York's Not-For Profit Corporation Law provides that a foreign
corporation authorized to do business in the state designates the Secretary
of State as its agent for service of process (McKinneys Consol Laws of
NY, Book 37, Not-For-Profit Corp Law 1304) and "shall have power in furtherance
of its corporate purposes to "sue and be sued in all courts and to participate
in actions and proceedings, whether judicial, administrative, arbitrative
or otherwise" (id. 202[a][2]). Petitioners claim that by incorporating
and subjecting the entity to the provisions of both the New York and the
District of Columbia Non-Profit Corporation law, the Fund is automatically
amenable to suit in our courts. This claim does not satisfy the high threshold
for a valid waiver of immunity.
Here, the Tribe has not explicitly consented
in the Fund's charter, or by any ordinance or resolution, to waive its
sovereign immunity, submit corporate disputes to the jurisdiction of our
courts or be bound by such judgment. Critically, as stated in the related
context of state waivers of Eleventh Amendment immunity from suit, the
"sue and be sued" language contained in state corporation statutes means
"only that the entity has the status and capacity to enter our courts,
and does not signify a waiver of sovereign immunity against suit" (Howard
v Liberty Memorial Hosp., 752 FSupp. 1074, 1077 [SD Ga 1990]; see also,
Tuveson v Florida Governor's Council on Indian Affairs, Inc., 734 F2d 730,
734 [11th Cir. 1984] [not-for-profit incorporation of state agency under
statutory scheme which permits corporation to sue and be sued is not a
sufficiently explicit waiver of the state's Eleventh Amendment sovereign
immunity]). Thus, the mere fact that a tribal corporation, by statute,
has designated an agent for service of process or is empowered to "sue
and be sued" does not automatically subject that corporate entity to any
court's jurisdiction where jurisdiction is otherwise lacking. In other
words, the general powers provisions of the corporation statutes are not
self- executing, and express invocation of the power to sue and be sued
and submission to a particular forum by official tribal action is required.
Under this line of reasoning,
reference in the Fund's corporate charter to the statutory power to sue
and be sued contained in the D.C. and New York Non-Profit Corporation Acts
did nothing more than recognize the Fund's status as an entity with the
capacity to enter our courts. However, quite unlike the expressions of
waiver in Rosebud (supra), Altheimer, (supra) and Namekagon (supra), the
St. Regis Mohawk Tribe never explicitly stated in its charter or otherwise
that it would invoke that power, waive its immunity and submit to the jurisdiction
of our courts to resolve corporate matters. Thus, the requirement of an
express and unequivocal waiver of tribal sovereign immunity remains unsatisfied
by mere incorporation by reference in the charter of the statutory power
to sue and be sued (cf. Altheimer & Gray v Sioux Manufacturing Corp.,
983 F2d 803, 812, supra).
Petitioners contend that even if the corporation was cloaked with the sovereign's veil of immunity from suit, the individual respondents Jacobs, Tarbell and White acted outside the scope of their authority by failing to afford petitioners the disciplinary process outlined in the Tribe's Personnel Policy and Procedure Manual and thus were stripped of any immunity they may have possessed. Because respondents' acts, at most, involve the erroneous exercise of their delegated duties, their acts are not ultra vires, and, as tribal official acting in their representative capacity and within the scope of their authority, they remain protected by the sovereign immunity enjoyed by the Fund (see, Hardin v White Mtn. Apache Tribe, 779 F2d 476, 479 [9th Cir.]; Snow v Quinault Indian Nation, 709 F2d 1319, 1321 [9th Cir. 1983], cert denied 467 US 1214). Accordingly, the order of the Appellate Division should be affirmed, with costs.
F O O T N O T E S
1. Respondent Fund was originally incorporated under the name "St. Regis Mohawk Tribal Council, Inc." Several months later, the corporation's name was changed to its present name.
2. We initially note that petitioners' argument that the doctrine of sovereign immunity is not applicable to the St. Regis Mohawk Tribal Council, nor to the derivative Fund because the former body is a creature of and governed by New York statute, is similar to the claim rejected by this Court in Matter of Patterson v Seneca Nation (245 NY 433). In Patterson, we stated that, notwithstanding the enactment of provisions by this State's Legislature to assist the Seneca Indians in administering the affairs of government (see, McKinney's Consol Laws of New York, Book 25, Indian Law, article 4), the relevant portions of the New York Indian Law did "not otherwise make applicable to Indians either the common law or statute law of the State," and did "not abrogate Indian customs or usages" (Patterson, supra at 445). Thus, the Court reached the "inescapable" conclusion "that the Seneca tribe remains a separate nation; that its powers of self- government are retained with the sanction of the State; that the ancient customs and usages of the nation, except in a few particulars, remain, unabolished, the law of the Indian land; that in its capacity of a sovereign nation the Seneca Nation is not subservient to the orders and directions of the courts of New York State * * *" (id.). So too, here, the enactment of Article 8 of the Indian Law, which speaks generally to the powers of tribal officials, the conduct of elections, the allotment of lands and the jurisdiction of the tribal council to determine disputes (see, McKinney's Consol Laws of NY, Book 25, Indian Law, article 8), does not divest the St. Regis Mohawk Tribe of its sovereign immunity, but rather advances the desired attribute of tribal self-governance.
3. Petitioners seek to predicate the jurisdiction of the New York courts on 25 USC 233 and New York's Indian Law 5, which similarly grant our courts jurisdiction in civil actions "between Indians or between one or more Indians and any other person or persons * * *." However, those provisions govern private disputes between individual Indians, not disputes between an Indian and a sovereign tribe (see, People v Anderson, 137 AD2d 259). Because the Fund is to be treated as the tribe itself, it is not "an Indian;" nor is it a "person," notwithstanding the fact that it has incorporated.
4. Although the United States Supreme Court has not directly addressed the point, at least one federal Circuit Court of Appeals has ruled that regardless of whether the waiver is externally imposed by Congress or by an act of the Tribe itself, there is no distinction in the requirement of an explicit and unequivocal waiver (see, American Indian Agricultural Credit Consortium v Standing Rock Sioux Tribe, 780 F2d 1374, 1377 [8th Cir. 1985]).
5. In Namekagon Develop. Co. v Bois Forte Res. Hous. Auth., (517 F2d 508 [8th Cir. 1975]), a waiver of sovereign immunity was effectuated by the Tribal Council's inclusion of a "sue and be sued" provision within a tribal ordinance creating the Housing Authority. The clause stated that "[t]he Council hereby gives its irrevocable consent to allowing the Authority to sue and be sued in its corporate name, upon any contract, claim or obligation arising out of its activities under this ordinance and hereby authorizes the Authority to agree by contract to waive any immunity from suit which it might otherwise have; but the Band shall not be liable for the debts or obligations of the Authority, except insofar as expressly authorized by this ordinance" (517 F2d, at 509 [emphasis added]). Notably, the subject matter jurisdiction of the federal courts over this action apparently was not contested on appeal.
* * * * * * * * * * * * * * * * *
Order affirmed, with costs. Opinion by Judge Titone. Chief Judge Kaye and Judges Simons, Bellacosa, Smith, Levine and Ciparick concur.
Decided October 24, 1995