Eaglesun Systems Products, Inc. v. Association of Village Council Presidents
Filing
41
OPINION AND ORDER by Judge Claire V Eagan ; denying 36 Motion for Discovery; denying 22 Motion to Dismiss; denying 27 Motion to Strike (Re: 2 Complaint ) (RGG, Chambers)
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
EAGLESUN SYSTEMS PRODUCTS, INC.,
)
)
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)
)
)
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Plaintiff,
v.
ASSOCIATION OF VILLAGE
COUNCIL PRESIDENTS,
Defendant.
Case No. 13-CV-0438-CVE-PJC
OPINION AND ORDER
Now before the Court are the following motions: Defendant’s Motion to Dismiss (Dkt. # 22),
Plaintiff’s Motion to Strike (Dkt. # 27), and Plaintiff’s Motion for Jurisdictional Discovery (Dkt. #
36). Defendant Association of Village Council Presidents (AVCP) argues that it has sovereign
immunity from suit because all of its members are federally-recognized Indian tribes and AVCP was
created to provide governmental services for its members. Plaintiff Eaglesun Systems Products, Inc.
responds that AVCP is a non-profit corporation organized under state law, and it is not entitled to
sovereign immunity as an Indian tribe or as a tribal organization. Plaintiff also requests leave to
conduct jurisdictional discovery before the Court rules on defendant’s motion to dismiss.
I.
AVCP is an Alaskan native regional corporation organized under Alaska law, and it is a nonprofit corporation. Dkt. # 25-1, at 1. AVCP was incorporated following enaction of the Alaska
Native Claims Settlement Act, 43 U.S.C. § 1601 et seq. (ANCSA), because it was necessary for
Alaskan native villages or tribes to form a native regional corporation to receive certain benefits
under ANCSA. See Rice v. Cayetano, 528 U.S. 495, 535 n.11 (2000). Each member of AVCP is
a federally recognized Indian tribe. Like other corporations, AVCP has articles of incorporation,
a board of directors, and bylaws. See Dkt. # 22-6; Dkt. # 25-1, at 1. Myron P. Naneng, President
of AVCP, states that its “corporate mission is to serve member tribes by providing social service,
human development, and culturally-relevant programs that promote tribal self-determination and
self-governance and works to protect tribal culture and traditions.” Dkt. # 22-1, at 2. AVCP
receives state and federal grants to administer social service programs, and Naneng states that all
of AVCP’s services “are provided to promote the welfare and preserve and protect the Native
Alaskan culture of AVCP’s member tribes.” Id. at 2-3.
Eaglesun states that it is a software company specializing in providing software to Indian
tribes and affiliated entities for federally-funded social welfare programs. Dkt. # 2, at 2. In
particular, Eaglesun developed a software program known as the Tribal Assistance System (TAS),
and TAS is utilized by over fifty different Indian tribes and tribal social service providers. Id. at 3.
In 2000, Eaglesun and AVCP entered into a license agreement that allowed AVCP to use TAS for
its Tribal Temporary Assistance for Needy Families (TTANF) program. Id. Eaglesun installed the
software in Bethel, Alaska, and it also provided training to AVCP’s employees in Tulsa, Oklahoma.
Id. The license agreement provided that Eaglesun owned the TAS software and that AVCP agreed
to keep the software confidential from unauthorized users. Id. On May 15, 2003, Eaglesun obtained
a copyright from the United States Copyright Office for TAS, and Eaglesun states that it is listed as
the sole author of TAS. Id. Eaglesun claims that it included a notice of copyright on each copy of
TAS licensed to AVCP. Id.
In 2008, AVCP and Eaglesun executed a License Agreement and Services Agreement (the
Agreement) that was intended to replace the original license agreement. Id. In the Agreement,
Eaglesun granted AVCP a “nonexclusive, nontransferable, nonassignable license” to use TAS, and
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the license “is solely for [AVCP’s] own use for its internal data processing operations and solely on
the computer system currently used or purchased by [AVCP].” Dkt. # 2-1, at 1. AVCP agreed that
it would “not allow others to reverse engineer, disassemble, decompile, modify, or in any way
tamper with the Licensed Software.” Id. The Agreement also contains an arbitration provision:
Arbitration: Between the parities [sic] all disputes arising out of or relating to this
Agreement, or a material breach thereof, including disputes regarding arbitrability,
will be submitted to binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association . . . .
Id. at 4. The parties subsequently amended the Agreement to allow Eaglesun to bring suit against
AVCP:
[AVCP] further agrees that monetary damages would not be a sufficient remedy for
an ongoing violation of the Confidentiality Provisions, nor would arbitration be an
effective process for the prevention or relief thereof, and so [Eaglesun] shall be
entitled to seek specific performance and injunctive or other equitable relief from a
court of competent jurisdiction, and [AVCP] further agrees to waive any requirement
of the securing or posting of any bond in connection with such action. Such remedy
shall further not be deemed to be the exclusive remedy of [Eaglesun] but shall be in
addition to all other remedies available under the provisions of this Agreement or at
law or equity.
Id. at 8. The parties also agreed that the Agreement would be governed by Oklahoma law. Id.
Eaglesun alleges that AVCP hired Front Range Solutions USA, Inc. (Front Range) to write
software to replace TAS, but that AVCP granted Front Range improper access to TAS. Eaglesun
claims that Front Range’s product was virtually identical to TAS and that AVCP employees
immediately noticed the similarities between the two software programs. Dkt. # 2, at 6. Eaglesun
filed this case alleging claims of copyright infringement, breach of contract, and misappropriation
of trade secrets against AVCP, and Eaglesun seeks injunctive relief, monetary damages, punitive
damages, and attorney fees from AVCP.
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II.
Sovereign immunity is a limitation on the Court’s subject matter jurisdiction, and
defendant’s motion is considered a challenge to the Court’s subject matter jurisdiction. See Clymore
v. United States, 415 F.3d 1113, 1118 n.6 (10th Cir. 2005). When considering a motion to dismiss
under Rule 12(b)(1), the Court must determine whether the defendant is facially attacking the
complaint or challenging the jurisdictional facts alleged by the plaintiff. In Holt v. United States,
46 F.3d 1000 (10th Cir. 1995), the Tenth Circuit stated:
Generally, Rule 12(b)(1) motions to dismiss for lack of subject matter jurisdiction take two
forms. First, a facial attack on the complaint’s allegations as to subject matter jurisdiction
questions the sufficiency of the complaint. In reviewing a facial attack on the complaint, a
district court must accept the allegations in the complaint as true.
Second, a party may go beyond allegations contained in the complaint and challenge the
facts upon which subject matter jurisdiction depends. When reviewing a factual attack on
subject matter jurisdiction, a district court may not presume the truthfulness of the
complaint’s factual allegations. . . . In such instances, a court’s reference to evidence outside
the pleadings does not convert the motion to a Rule 56 motion.
Id. at 1002-03. AVCP relies on evidence outside the pleadings and the Court will construe its
motion as a factual attack on the jurisdictional facts alleged by plaintiff. When ruling on a factual
attack on subject matter jurisdiction, a court “has wide discretion to allow affidavits, other
documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts” without
converting the motion into a motion for summary judgment. Stuart v. Colorado Interstate Gas Co.,
271 F.3d 1221, 1225 (10th Cir. 2001) (quoting Holt, 46 F.3d at 1003); see also Davis ex rel. Davis
v. United States, 343 F.3d 1282, 1295-96 (10th Cir. 2003) (district court had authority to review
evidence outside the pleadings without converting defendant’s motion to dismiss for lack of subject
matter jurisdiction into a motion for summary judgment). To defeat the defendant’s Rule 12(b)(1)
motion, “plaintiff must present affidavits or other evidence sufficient to establish the court’s subject
4
matter jurisdiction by a preponderance of the evidence.” Southway v. Central Bank of Nigeria, 328
F.3d 1267, 1274 (10th Cir. 2003).
III.
AVCP argues that it is entitled to sovereign immunity based on the immunity of its members
or on AVCP’s alleged status as a subordinate economic entity of federally-recognized Indian tribes.
Eaglesun responds that AVCP is not a federally recognized Indian tribe but, instead, is a corporation
created under state law, and AVCP has waived sovereign immunity from suit under the Agreement.
A.
Eaglesun requests leave to conduct jurisdictional discovery before the Court rules on
AVCP’s motion to dismiss for lack of subject matter jurisdiction. Dkt. # 36. Eaglesun claims that
it should be permitted to conduct discovery on six issues raised by AVCP’s motion to dismiss and
reply:
•
AVCP’s alleged profit-making activity
•
AVCP’s contention that its decision to incorporate under Alaska law was
involuntary
•
AVCP’s claim that is operates as a governmental entity
•
Discovery concerning AVCP’s claim that it did not intend to waive sovereign
immunity when it entered the Agreement
•
Evidence concerning “how AVCP deals with sovereign immunity (or not) in
its other contracts”
•
Discovery to contest certain factual allegations contained in Naneng’s second
affidavit (Dkt. # 33-1)
Dkt. # 36, at 3-5. Eaglesun claims that it will be necessary to take the deposition of Naneng and
other employees of AVCP who engaged in contractual negotiations with Eaglesun, as well as other
5
persons with knowledge of AVCP’s alleged governmental activities, and Eaglesun intends to
conduct written discovery as well. Id. at 6.
“When a defendant moves to dismiss for lack of jurisdiction, either party should be allowed
discovery on the factual issues raised by the motion.” Sizova v. Nat’l Institute of Standards &
Technology, 282 F.3d 1320, 1326 (10th Cir. 2002). However, a district court has discretion in the
manner in which it resolves a motion to dismiss for lack of jurisdiction, and jurisdictional discovery
is not required if no party will be prejudiced by the refusal to allow discovery. Id. “Prejudice is
present where ‘pertinent facts bearing on the question of jurisdiction are controverted . . . or where
a more satisfactory showing of facts is necessary.” Id. The party seeking jurisdictional discovery
bears the burden to show that jurisdictional discovery is necessary. Breakthrough Management
Group, Inc. v. Chukchansi Gold Casino and Resort, 629 F.3d 1173, 1190 (10th Cir. 2010).
The Court has reviewed Eaglesun’s motion for jurisdictional discovery and AVCP’s motion
to dismiss, and finds that jurisdictional discovery is unnecessary. The discovery sought by Eaglesun
would be expensive and time-consuming for the parties, but there is a low probability that the
discovery would assist the Court in ruling on the jurisdictional issues. See Bell Helicopter Textron,
Inc. v. Heliquest Int’l, Ltd., 385 F.3d 1291, 1299 (10th Cir. 2004). For example, Eaglesun
challenges AVCP’s assertion that it was required to incorporate under state law to receive certain
federal benefits, but this fact has been recognized by the Supreme Court. Rice, 528 U.S. at 535 n.11.
It is also irrelevant whether Naneng subjectively believed that AVCP had sovereign immunity and
did not intend to waive it, because these are legal conclusions for the Court to make based on the
law and the parties’ Agreement. As to factual issues such as AVCP’s profit-making activities and
how it deals with sovereign immunity in other contracts, the Court does not find that these are
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“pertinent facts bearing on the question of jurisdiction,” and plaintiff will not be prejudiced if it is
not able to conduct jurisdictional discovery on these issues. Plaintiff’s motion for jurisdictional
discovery (Dkt. # 36) should be denied.
B.
Plaintiff asks the Court to strike any portion of Naneng’s first affidavit (Dkt. # 22-1)
concerning his subjective intentions when entering the Agreement or any amendment to the
Agreement, because this would constitute parol evidence that is inadmissible under Oklahoma law.
AVCP responds that the contractual language is ambiguous and Naneng’s statement explains or
clarify the ambiguous language.
Oklahoma courts follow the parol evidence rule and the Oklahoma Supreme Court has
clearly stated that the parol evidence rule is a matter of Oklahoma substantive law, rather than a rule
of evidence. First Nat’l Bank in Durant v. Honey Creek Entertainment Corp., 54 P.3d 100, 104
(Okla. 2002). “The parol evidence rule provides that unless fraud or mistake is involved precontract negotiations and oral discussions are merged into, and superseded by, the terms of the
executed written agreement.” Mercury Inv. Co. v. F.W. Woolworth Co., 706 P.2d 523, 529 (Okla.
1985). When the language of a contract is clear and unambiguous, evidence of one party’s
subjective intent when entering the contract is inadmissible. First Nat’l Bank & Trust Co. of
Norman, Oklahoma v. Security Nat’l Bank & Trust Co. of Norman, Oklahoma, 676 P.2d 837, 841
(Okla. 1984).
The Court has reviewed the disputed contractual language, particularly the “court of
competent jurisdiction” provision, and finds that the Agreement is not ambiguous as a matter of law.
Naneng’s subjective beliefs that AVCP possessed sovereign immunity and that it did not intend to
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waive sovereign immunity have no bearing on the Court’s ruling. The Court will determine as a
matter of law whether AVCP has sovereign immunity and, if it did, whether AVCP waived its
sovereign immunity, and Naneng’s subjective beliefs about AVCP’s sovereign immunity will have
no effect on the decision. However, the Court does not find that it would be helpful to strike select
portions of Naneng’s affidavit, because it is unclear from plaintiff’s motion precisely what
statements it seeks to strike. Plaintiff’s motion to strike should be denied, but the parties are advised
that Naneng’s statements concerning conclusions of law will not be considered.
C.
AVCP claims that it should be treated as a federally recognized Indian tribe, because it was
formed by Indian tribes for the purpose of carrying out governmental functions. “Indian tribes are
‘domestic dependent nations’ that exercise inherent sovereign authority over their members and
territories.” Oklahoma Tax Comm’n v. Citizen Band Potawatomi Indian Tribe of Oklahoma, 498
U.S. 505, 509 (1991).
Although Indian tribes no longer “‘possess[] the full attributes of
sovereignty,’ they remain a ‘separate people, with the power of regulating their internal and social
relations.’” Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55 (1978). One of the key attributes of
sovereignty that the tribes retain is immunity from suit. Northern Arapaho Tribe v. Harnsberger,
697 F.3d 1272, 1281 (10th Cir. 2012). Tribal immunity is similar to the immunity afforded to the
states under the Eleventh Amendment, but tribal immunity is a matter of federal common law that
is subject to congressional control and modification. Crowe & Dunlevy, P.C. v. Stidham, 640 F.3d
1140, 1154 (10th Cir. 2011). Although tribal immunity is not co-extensive with a state’s sovereign
immunity, the Supreme Court has clearly established that a federally recognized Indian tribe has
immunity from suit unless that immunity has been abrogated by Congress or the tribe has waived
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its immunity. Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 760
(1998).
AVCP argues that Alaskan native villages were organized into regional associations of
Native Alaskan tribes, and various federal laws treat the regional associations as a tribe for certain
purposes. Under the ANCSA, the state of Alaska was divided into twelve regions, and the regions
were intended to approximate the geographical areas covered by the existing operations of twelve
regional associations, including AVCP. 43 U.S.C. § 1606. There was a thirteenth region formed
for the benefit of non-resident Alaska natives. Id. The regional associations were required to form
regional corporations to receive certain benefits under ANCSA. Id. The corporations were
organized under Alaska law and AVCP has a certificate of incorporation issued by the Alaska
Department of Commerce and Economic Development. Dkt. # 25-1, at 1. Under ANCSA, title to
land was transferred to the regional corporations and only Native Alaskans could be shareholders
in the regional corporations. Cook Inlet Region, Inc. v. Rude, 690 F.3d 1127, 1129 (9th Cir. 2012).
The federal government does not have any supervisory role over lands given to a regional
corporation under ANCSA, and the lands are not considered “Indian County” under 18 U.S.C. §
1151. Alaska v. Native Village of Venetie Tribal Government, 522 U.S. 520 (1998). The clear
congressional intent in enacting ANCSA was to revoke any existing reservation status in Alaska and
to grant the regional corporations title to land to “make use of them as they wished for any purpose
. . . .” Hydro Resources, Inc. v. United States Environmental Protection Agency, 608 F.3d 1131,
1151 (10th Cir. 2010). A leading treatise on federal Indian law states that ANCSA represented an
“experimental model initially calculated to speed assimilation of Alaska Natives into corporate
America.” Cohen’s Handbook of Federal Indian Law § 4.07[3][b][ii][B] (2012); see also City of
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Angoon v. Hodel, 803 F.2d 10161026 (9th Cir. 1986) (one of the goals of ANCSA was “to create
viable, profitable Native Corporations . . . ). ANCSA has been described as a “legislative
compromise” between the federal government, the State of Alaska, and Alaskan Natives to
efficiently resolve the dispute over aboriginal title to land. Leisnoi, Inc. v. Stratman, 154 F.3d 1062,
1064 (9th Cir. 1998).
AVCP argues that the regional corporations formed pursuant to ANCSA are included within
the definition of an Indian tribe in numerous federal statutes. See 25 U.S.C. § 450b(e) (“‘Indian
tribe’ means any Indian tribe, band, nation, or other organized group or community, including any
Alaska Native village or regional or village corporation as defined in or established pursuant to
[ANSCA] . . .”); 25 U.S.C. § 1903(3) (“‘Indian’ means any person who is a member of an Indian
tribe, or who is an Alaskan Native and a member of a Regional Corporation . . .); 25 U.S.C. §
4001(2) (“The term ‘Indian tribe’ means any Indian tribe, band, nation, or other organized group or
community, including any Alaska Native village or regional or village corporation as defined in or
established pursuant to [ANCSA] . . .); 42 U.S.C. § 619(4)(B)(iv) (“The term ‘Indian tribe’ means,
with respect to the State of Alaska, only the . . . following Alaska Native regional nonprofit
corporations” including AVCP). Even though Alaska Native corporations or regional associations
are recognized as tribes for limited purposes, no court has ever found that these corporations or
associations possess sovereign immunity from suit, because they do not possess key attributes of an
independent and self-governing Indian tribe. Aleman v. Chugach Support Services, Inc., 485 F.3d
206, 213 (4th Cir. 2007) (“While the sovereign immunity of Indian tribes ‘is a necessary corollary
to Indian sovereignty and self-governance’ . . ., Alaska Native Corporations and their subsidiaries
are not comparable sovereign entities.”); see also Seldovia Native Ass’n, Inc. v. Lujan, 904 F.2d
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1335, 1350-51 (9th Cir. 1990) (Alaska Native Village corporations are not governing bodies and
they do “not meet one of the basic criteria of an Indian tribe”).
AVCP claims that Alaskan native tribal corporations are recognized as Indian tribes in
various federal laws and that it can assert the defense of sovereign immunity as if it were an Indian
tribe. The Bureau of Indian Affairs maintains a list of federally recognized tribes that “are
acknowledged to have the immunities and privileges available to other federally acknowledged
Indian Tribes by virtue of their government-to-government relationship with the United States . . .
.” Indian Entities Recognized and Eligible to Receive Services from the United States Bureau of
Indian Affairs, 75 Fed. Reg. 60810-01 (Oct. 1, 2010). As to Alaskan native entities, the individual
tribes or vilages are separately listed as Indian tribes, and AVCP is not identified as an Indian tribe.
Id. As stated in Cohen’s Handbook of Federal Indian Law, it is the native villages that retain the
power of self-government:
Although regional and village corporations are included as “tribes” under some
Indian legislation, many Natives are not shareholders in Native corporations, because
stock was initially limited to Natives alive on December 18, 1971. Tribal
governments, as opposed to regional and village corporations, are the only Native
entities that possess inherent powers of self-government and that can develop
autonomous membership rules. Internal self-government within a village by a stateauthorized municipal government is not an effective alternative when control of the
government becomes diluted by the growth of a non-Native constituency. The
Native regional and village corporations are chartered under state law to perform
proprietary, not governmental, functions.
Cohen’s Handbook of Federal Indian Law § 4.07[3][d][i] (2012). AVCP has cited no authority that
it is federally recognized Indian tribe that is entitled to sovereign as a matter of law. The Court will
consider AVCP’s other arguments concerning the sovereign immunity of tribal entities, but AVCP
is not an Indian tribe that possesses sovereign immunity in its own right.
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AVCP argues that it is an entity organized by federally recognized Indian tribes to perform
governmental functions, and it can rely on the sovereign immunity of its members. AVCP cites
Dille v. Council of Energy Resources Tribes, 801 F.2d 373 (10th Cir. 1986), for the proposition that
an organization or association formed by tribal entities for the purpose of performing governmental
functions is entitled to sovereign immunity. However, Dille is inapplicable to this case. In Dille,
the issue was whether the Council of Energy Resources Tribes (CERT) were excluded from the
definition of employer under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.
(Title VII). Id. at 374. CERT was a council whose membership was limited to representatives of
its tribal members, but it was not a corporation or entity organized under the law of any sovereign.
Id. The Tenth Circuit considered the specific statutory exemption under Title VII and found that
CERT fell within the statutory exemption for Indian tribes. The holding of Dille was limited to the
specific statutory exemption under Title VII, and the Tenth Circuit noted that an entity’s right to
assert sovereign immunity depends “upon the purpose of the regulation or statutory provision under
consideration.” Id. at 376. In this case, AVCP is a corporation formed under Alaska law and the
Court is not dealing with a specific statute or regulation as in Dille. AVCP has cited no authority
that any entity composed of tribal members that performs governmental or quasi-governmental
services automatically possesses sovereign immunity, and the mere fact that AVCP provides
services that could also be provided by a government does not give AVCP sovereign immunity from
suit.
AVCP argues that it can assert sovereign immunity in its capacity as a subordinate economic
entity of its member tribes, because AVCP shares in the sovereign immunity possessed by its
member tribes. Dkt. # 22, at 9. Defendant responds that the subordinate economic entity test applies
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only to entities organized under tribal law and, as a state law corporation, AVCP cannot rely on the
sovereign immunity of its member tribes. Dkt. # 25, at 15. Tribal sovereign immunity extends to
subdivisions of a tribe and “even bars suits arising from a tribe’s commercial activities.” Native
American Distributing v. Seneca-Cayuga Tobacco Co., 546 F.3d 1288, 1292 (10th Cir. 2008). To
determine whether a subordinate tribal entity shares in a tribe’s immunity, a district court must
consider six factors:
(1) the method of creation of the economic entities; (2) their purpose; (3) their structure,
ownership, and management, including the amount of control the tribe has over the entities;
(4) the tribe’s intent with respect to the sharing of sovereign immunity; . . . (5) the financial
relationship between the tribe and the entities; . . . [and] (6) the policies underlying tribal
sovereign immunity and its connection to tribal economic development, and whether those
policies are served by granting immunity to the economic entities.
Breakthrough Management Group, Inc. v. Chukachansi Gold Casino and Resort, 629 F.3d 1173,
1188 (10th Cir. 2010). However, this test is inapplicable when a tribe or tribes form an entity under
the law of a different sovereign, such as a state, and the entity in question must be organized under
tribal law to qualify as a subordinate economic entity. Somerlott v. Cherokee Nation Distributors,
Inc., 686 F.3d 1144, 1149 (10th Cir. 2012). The subordinate economic entity test is inapplicable to
entities organized under state law, because such entities are under the authority of the state under
which they are incorporated, not an Indian tribe. Id. at 1149-50.
AVCP argues that it did not voluntarily decide to form a corporation under Alaska law, but
that it was required to organize under Alaska law to receive benefits under ANCSA. However,
AVCP’s characterization of its decision to incorporate under state law is misleading. It is true that
Alaskan Natives and Native villages were required to incorporate to receive certain benefits, but this
does not mean the formation of the Native regional corporations was involuntary. ANCSA
represented a settlement between the federal government, the State of Alaska, and Alaskan Natives
13
concerning title to aboriginal land, and the Native villages agreed to form the regional corporations
as part of the settlement. See Leisnoi, Inc., 154 F.3d at 1064; Ariachak Native Community v.
United States Dep’t of the Interior, 584 F. Supp. 2d 1 (D.D.C. 2008). ANCSA contains the
following findings by the United States Congress:
(a) there is an immediate need for a fair and just settlement of all claims by Natives
and Native groups of Alaska, based on aboriginal land claims;
(b) the settlement should be accomplished rapidly, with certainty, in conformity with
the real economic and social needs of Natives, without litigation, with maximum
participation by Natives in decisions affecting their rights and property, without
establishing any permanent racially defined institutions, rights, privileges, or
obligations, without creating a reservation system or lengthy wardship or trusteeship,
and without adding to the categories of property and institutions enjoying special tax
privileges or to the legislation establishing special relationships between the United
States Government and the State of Alaska;
43 U.S.C. § 1601. AVCP has cited no authority that Alaskan Native Villages or their members
involuntarily formed regional corporations under ANCSA, and case law and the Congressional
findings show that all parties entered ANCSA to resolve disputed land claims fairly, efficiently, and
without litigation. There is no evidence that would suggest that AVCP involuntarily formed a
corporation under Alaska law, and AVCP is not entitled to claim sovereign immunity as a tribal
economic entity.
Even if the Court were to assume that AVCP had sovereign immunity, Eaglesun argues that
AVCP expressly waived its immunity from suit and sovereign immunity would not bar Eaglesun’s
claims. Eaglesun states that the original license agreement contains an arbitration provision, and
AVCP’s agreement to submit to arbitration constitutes an unequivocal waiver of sovereign
immunity. Tribal sovereign immunity can be abrogated by Congress or a tribe can waive its own
immunity from suit. Native American Distributing v. Seneca-Cayuga Tobacco, Co., 546 F.3d 1288,
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1293 (10th Cir. 2008). A waiver of sovereign immunity “cannot be implied but must be
unequivocally expressed.” Santa Clara Pueblo, 436 U.S. at 58. The arbitration provision in the
original license agreement states that:
Between the parities [sic] all disputes arising out of or relating to this Agreement, or
a material breach thereof, including disputes regarding arbitrability, will be
submitted to binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association . . . and judgment upon the award
rendered by the arbitrator may be entered in any Court having jurisdiction thereof.
Dkt. # 2-1, at 4. In C & L Enterprises, Inc. v. Citizen Band of Potawatomi Indian Tribe of
Oklahoma, 532 U.S. 411 (2001), the Supreme Court held that by agreeing to arbitration and
enforcement of any arbitration award in court an Indian tribe waives its sovereign immunity against
a lawsuit to enforce an arbitration award. However, the parties in this case have not participated in
arbitration pursuant to the original license agreement and this is not a case to enforce an arbitration
award. The Court finds that the arbitration provision does not constitute a waiver of sovereign
immunity for all purposes but, instead, it waives sovereign immunity only as to lawsuits to enforce
an arbitration award. See Swanda Bros., Inc. v. Chasco Constructors, Ltd., LLP, 2013 WL 4520203
(W.D. Okla. Aug. 26, 2013). The arbitration provision could allow either party to compel
arbitration, if it is still in force, but plaintiff has not shown that the arbitration provision could be
construed as a waiver of sovereign immunity as to any suit arising out of the Agreement.
Plaintiff argues that the parties subsequently amended the Agreement because they agreed
that arbitration would not be an effective remedy, and AVCP agreed that plaintiff could seek
equitable relief in a “court of competent jurisdiction.” The amendment states that:
Licensee further agrees that monetary damages would not be a sufficient remedy for
an ongoing violation of the Confidentiality Provisions, nor would arbitration be an
effective process for the prevention or relief thereof, and so ESP shall be entitled to
seek specific performance and injunctive or other equitable relief from a court of
15
competent jurisdiction, and the Licensee further agrees to waive any requirement of
the securing or posting of any bond in connection with such action. Such remedy
shall further not be deemed to be exclusive remedy of the ESP but shall be in
addition to all other remedies available under the provisions of this Agreement or at
law or equity.
Dkt. # 2-1, at 8. The amendment also provides that “[t]he Agreement, and the rights, obligations,
and duties of the parties arising from or relating in any way to the subject matter of this Agreement,
whether arising in contract or tort, shall be governed, construed, and enforced in accordance with
the laws of the State of Oklahoma without regard to choice of law principles.” Id. AVCP argues
that that the language “court of competent jurisdiction” is ambiguous and it does not clearly identify
the court in which it consents to suit. Dkt. # 33, at 9. In the context of a waiver of tribal sovereign
immunity, “court of competent jurisdiction” can be ambiguous if it is unclear whether a tribe is
waiving the right to be sued in tribal court or a state or federal court. See Santana v. Muscogee
(Creek) Nation, ex rel. River Spirit Casino, 508 Fed. Appx. 821 (10th Cir. Jan. 29, 2013). In this
case, AVCP is a corporation formed under state law and it has not argued or presented any evidence
that it maintains a court system. Thus, the phrase “court of competent jurisdiction” cannot refer to
a tribal court, and it must refer to a state or federal court. Construing the Agreement as a whole, the
parties also agreed to a choice of law provision selecting Oklahoma law and this supports a finding
that the parties intended for “court of competent jurisdiction” to mean a state or federal court in
Oklahoma. C & L Enterprises, 532 U.S. at 419 (considering the choice of law provision to
determine the meaning of “court having jurisdiction”). Plaintiff seeks equitable and injunctive relief
in this case and its claims fall within the remedy provision of the Agreement. Even if AVCP
possessed sovereign immunity, it consented to suit for claims concerning breach of the
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confidentiality provisions of the Agreement for equitable and injunctive relief, and this Court has
jurisdiction over plaintiff’s claims.
IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss (Dkt. # 22),
Plaintiff’s Motion to Strike (Dkt. # 27), and Plaintiff’s Motion for Jurisdictional Discovery (Dkt. #
36) are denied.
DATED this 20th day of March, 2014.
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