Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_06-cv-02125/USCOURTS-azd-3_06-cv-02125-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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Defendant’s request for oral argument is denied because the parties have thoroughly

discussed the law and evidence and oral argument will not aid the Court’s decision. See

Mahon v. Credit Bur. of Placer County, Inc., 171 F.3d 1197, 1200 (9th Cir. 1999).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Equal Employment Opportunity

Commission, 

Plaintiff, 

vs.

Navajo Health Foundation–Sage

Memorial Hospital, Inc., 

Defendant.

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No. CV-06-2125-PCT-DGC

ORDER

Defendant has filed a motion to dismiss for lack of subject matter jurisdiction pursuant

to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Dkt. #25. Plaintiff has responded

and Defendant has replied. Dkt. ##27, 32. The Court will grant Defendant’s motion.1

I. Background.

Plaintiff Equal Employment Opportunity Commission filed a complaint against

Defendant Navajo Health Foundation-Sage Memorial Hospital, Inc. (“Sage Hospital”).

Plaintiff brought this action pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C.

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§ 2000e et seq. Plaintiff alleges that Defendant discriminated against several employees

based on their race and national origin. Plaintiff further alleges that Defendant retaliated

against the employees after they complained and filed EEOC charges. Plaintiff seeks to

correct these alleged unlawful employment actions and to secure appropriate relief for the

aggrieved parties. Dkt. #1.

II. Rule 12(b)(1) Standard.

A Rule 12(b)(1) motion to dismiss may assert a lack of subject matter jurisdiction.

Thornhill Publ’g Co. v. Gen. Tel. & Elecs., 594 F.2d 730, 733 (9th Cir. 1979). In resolving

such a motion, the Court is not limited to the allegations in the pleadings. The Court

“may consider the evidence presented with respect to the jurisdictional issue and rule on that

issue, resolving factual disputes if necessary.” Id. The parties’ memoranda in this case cite

factual materials that will be addressed below.

III. Analysis.

“Title VII prohibits employers from engaging in discriminatory practices. Congress,

however, exempted ‘Indian tribes’ from the scope of the definition of ‘employer’ as used in

Title VII.” Pink v. Modoc Indian Health Project, Inc., 157 F.3d 1185, 1188 (9th Cir. 1998)

(quoting 42 U.S.C. § 2000e(b)). The purpose of this “tribal exemption, like the purpose of

sovereign immunity itself, [is] to promote the ability of Indian tribes to control their own

enterprises.” Id. (citing Dille v. Council of Energy Res. Tribes, 801 F.2d 373, 375-76 (10th

Cir. 1986)); see 110 Cong. Rec. 13702 (1964) (statement of Sen. Mundt).

Defendant argues that it falls within the “Indian tribe” exemption from Title VII and

that the Court therefore lacks subject matter jurisdiction. Dkt. #25. In determining whether

Defendant is a “tribe” under Title VII, the Court “must keep in mind the . . . ‘settled principle

of statutory construction that statutes passed for the benefit of dependent Indian tribes are to

be liberally construed, with doubtful expressions being resolved in favor of the Indians.’”

Giedosh v. Little Wound Sch. Bd., Inc., 995 F. Supp. 1052, 1056 (D.S.D. 1997) (quoting

Three Affiliated Tribes of the Fort Berthold Reservation v. World Eng’g, P.C., 467 U.S. 138,

149 (1984)).

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The Court concludes that Sage Hospital, like the Modoc Indian Health Project in Pink,

serves as an arm of a sovereign Indian tribe and therefore falls within the scope of Title VII’s

“tribe” exemption. In Pink, a former employee of the Modoc Indian Health Project

(“Modoc”) brought suit against Modoc for alleged violations of Title VII. Modoc was a nonprofit corporation created by two federally recognized Indian tribes. Modoc was organized

to provide health services to tribal members pursuant to the Indian Self-Determination and

Education Assistance Act (“ISDEAA”), Pub. L. No. 93-638, 88 Stat. 2004 (1975) (codified

as amended at 25 U.S.C. § 450 et seq.). The district court dismissed the suit for lack of

subject matter jurisdiction. The Ninth Circuit affirmed, concluding that Modoc was a tribe

for purposes of Title VII because it was organized to control a collective tribal enterprise and

its board of directors consisted of two representatives from each tribe. Pink, 157 F.3d at

1188 (citing Dille, 801 F.2d at 375-76).

Sage Hospital, like Modoc, is controlled by a federally recognized Indian tribe, the

Navajo Nation. The Navajo Nation includes political subdivisions called “chapters.”

2 N.N.C. § 1; 26 N.N.C. §2(6). Under the Navajo Nation Code, chapters are considered to

be the Navajo Nation itself and therefore enjoy sovereign immunity. 1 N.N.C. §§ 552(E),

553(A). Sage Hospital was formed by eight Navajo chapters to serve the medical needs of

their members. The hospital’s board of directors includes one representative from each of

the eight chapters. The directors must be enrolled members of the Navajo Nation and voting

members of the chapters they represent. Dkt. #26 at 7-12.

Plaintiff does not dispute that Sage Hospital is wholly owned and controlled by

members of the Navajo Nation. See Dkt. #25-4 at 16; Dkt. #28-2 Ex. 9. Plaintiff instead

argues that this fact does not show that Sage Hospital is controlled by the Navajo Nation.

But Plaintiff presents no legal authority in support of this argument. See Dkt. #27 at 6.

Because the hospital has been formed by eight political subdivisions of the Navajo Nation,

and those eight chapters select and are represented by members of the hospital’s board of

directors, the Court finds that the Navajo Nation exercises sufficient control over the hospital

to render it a tribal entity for purposes of Title VII. See Pink, 157 F.3d at 1188; Hagen v.

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Plaintiff argues that the hospital is not controlled by the Navajo Nation because, prior

to 2006, two members of the ten-member board were selected by the other board members

and were not required to be enrolled members of the tribe. Dkt. #27 at 6-7. The Court does

not find this fact significant. Plaintiff presents no evidence that the two board members

selected in this manner were not Navajo. And even if they were not, the board still would

have been under the control of the 80% of board members selected by and representing the

eight Navajo Nation chapters that formed the hospital.

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Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040, 1042-43 (8th Cir. 2000) (college served as

an arm of the tribe where its board of trustees consisted of one enrolled member from each

of the tribe’s seven districts); see also Dille, 801 F.2d at 376 (“Because the council is entirely

comprised of the member tribes and the decisions of the council are made by the designated

representatives of those tribes, [the council] falls directly within the scope of the Indian tribe

exemption that Congress included in Title VII.”); compare Myrick v. Devils Lake Sioux Mfg.

Corp., 718 F. Supp. 753, 753-55 (D.N.D. 1989) (defendant corporation was not a tribal entity

where the tribe owned 51% of the defendant and a Delaware corporation owned the other

49%).2

Sage Hospital is a “tribal organization” within the meaning of the ISDEAA. The

statute defines the term “tribal organization” as the recognized governing body of an Indian

tribe or “any legally established organization of Indians which is controlled, sanctioned, or

chartered by such governing body[.]” 25 U.S.C. § 450b(l). Sage Hospital is a legally

established organization of Indians recognized by the Navajo Nation. Dkt. #25-4 at 3.

Indeed, the Navajo Nation Council has identified Sage Hospital as a “tribal organization” in

formal resolutions and has authorized the hospital to enter into contracts to provide health

services to tribe members pursuant to the ISDEAA. Id. at 1-5.

 Sage Hospital’s status as a “tribal organization” under the ISDEAA supports the

conclusion that the hospital serves as an arm of the Navajo Nation and therefore falls within

the scope of the Title VII “tribe” exemption. See id. at 1187-88. “Congress sought to

achieve essentially the same goal when it enacted the ISDEAA as when it excluded ‘tribes’

from the operation of Title VII. Both the ISDEAA and the Title VII ‘tribe’ exemption

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attempt to aid tribal entities in their efforts to conduct their own affairs and economic

activities with as much autonomy as possible.” Pink, 157 F.3d at 1188-89 (citing Dille, 801

F.2d at 374). 

Plaintiff makes precisely the opposite argument – that the ISDEAA and Title VII have

nothing to do with each other and that the hospital’s status as a tribal organization for

purposes of ISDEAA therefore says nothing about the applicability of the Title VII

exemption. In support, Plaintiff quotes language from Dawavendewa v. Salt River Project

Agric. Improvement & Power Dist., 154 F.3d 1117, 1123 (9th Cir. 1998), that appears to be

directly contrary to the language quoted above from Pink. The court in Dawavendewa stated

that “whatever Congress decided to do with respect to amending the [ISDEAA] in 1994 has

little if anything to do with what it intended when it drafted Title VII thirty years earlier.”

Id. at 1123. Pink stated that Congress sought to achieve “essentially the same goal when it

enacted the ISDEAA as when it excluded ‘tribes’ from the operation of Title VII.” Pink, 157

F.3d at 1188-89. For two reasons, the Court chooses to follow Pink’s interpretation of the

ISDEAA. First, the decision in Dawavendewa concerned the Indian preference exemption

found in 42 U.S.C. §2000e-2(i), a provision not at issue in this case. Pink, on the other hand,

concerned the “Indian tribe” exemption at issue here, as found in 42 U.S.C. § 2000e(b).

Second, other courts have reached the same conclusion as Pink with respect to the intent of

the ISDEAA and Title VII. See Dille, 801 F.2d at 374. 

Plaintiff’s reliance on NLRB v. Chapa De Indian Health Program, Inc., 316 F.3d 995

(9th Cir. 2003), is also misplaced. None of Chapa-De’s board of directors were tribal

members and nearly half of Chapa-De’s patients and employees were non-Indians. Id. at

997. Sage Hospital, by contrast, is controlled exclusively by tribal members, 99% of its

patients are Navajo Indians, and 75% of its employees are Native American. Dkt. #25-4 at 3.

This case is closer to Pink than Chapa De. See Smith v. Salish Kootenai Coll., 434 F.3d

1127, 1135 (9th Cir. 2006) (en banc) (concluding that college where board of directors was

selected by tribe, college was treated under tribal law as a tribal corporation, most students

were Native American, and the college favored Native Americans in hiring was closer to

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Pink than Chapa De); Dillon v. Yankton Sioux Tribe Housing Auth., 144 F.3d 581, 583 (8th

Cir. 1998) (holding that a housing authority established by a tribal council pursuant to its

powers of self-government was a “tribal agency” immune from Title VII suits); see also

EEOC v. Karuk Tribe Housing Auth., 260 F.3d 1071, 1080 (9th Cir. 2001) (finding the

ADEA inapplicable to Indian tribes and holding that a housing authority “function[ed] as an

arm of the tribal government and in a governmental role” where 99% of the housing units

were occupied by Indian families and 83% of the employees were Indians).

The Court finds Plaintiff’s other arguments unpersuasive. “[T]he fact that [Sage

Hospital] is incorporated as a nonprofit corporation under [Arizona] law does not affect its

status as an ‘Indian tribe.’” Giedosh, 995 F. Supp. at 1059; see Duke, 199 F.3d at 1125

(“[T]he mere organization of . . . an entity under state law does not preclude its

characterization as a tribal organization as well.”); Smith, 434 F.3d at 1134-35 (holding that

a college incorporated under state law was a “tribal entity or an arm of the tribe”). Similarly,

the fact that the hospital is located on reservation land owned by a private entity is not

relevant given the other facts in this case. See Pink, 157 F.3d at 1189 (“Modoc did not lose

its exemption simply because it performed the self-determination contract for health services

off the reservation.”); Dille, 801 F.2d at 374-76 (finding tribal consortium exempt under Title

VII even though the plaintiffs were employees in the group’s Denver office). Finally, the

fact that two of Defendant’s employees have made statements inconsistent with its present

position does not alter the facts addressed in this order or control the Court’s legal analysis.

IV. Conclusion.

As this Circuit recognized in Pink, “there are entities that are sufficiently identified

with the tribe that they may be considered to be ‘tribal.’” Id. (citing Pink, 157 F.3d at 1187-

88). Sage Hospital is such an entity, and therefore is entitled to the exemption found in 42

U.S.C. § 2000e(b). The Court will dismiss this action for lack of subject matter jurisdiction.

IT IS ORDERED:

1. Defendant Navajo Health Foundation–Sage Memorial Hospital, Inc.’s motion

to dismiss (Dkt. #25) is granted.

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2. The Clerk shall terminate this action. 

DATED this 6th day of September, 2007.

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