Opinion ID: 714079
Heading Depth: 2
Heading Rank: 2

Heading: The Enforceability of the Navajo Ordinance

Text: 27 We turn to the merits of the issue of the enforceability of the ordinance. Initially, APS contends that the Navajo Nation may never exercise its sovereign power to regulate a non-Indian lessee. It relies upon the Supreme Court's recognition of the general proposition that the inherent powers of an Indian tribe do not extend to the activities of nonmembers of the tribe. Montana v. United States, 450 U.S. 544, 565, 101 S.Ct. 1245, 1258, 67 L.Ed.2d 493 (1980). Montana, however, was concerned with sovereign power over a non-Indian fee holder, not a lessee. See United States ex rel. Morongo, 34 F.3d at 906 (Montana ... only established that alienation of lands in fee to non-Indians presumptively divests [Indians] of authority.). Moreover, Montana recognized, even in the fee context, that there are exceptions where contractual relationships exist: 28 To be sure, Indian tribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations, even on non-Indian fee lands. A tribe may regulate ... the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements. 29 Id. 450 U.S. at 565, 101 S.Ct. at 1258 (emphasis added) (internal citations omitted). 30 We need not determine in this case the precise limits of the Navajo Nation's inherent power to regulate employment relations of a non-Indian employer and Indian employees. Assuming arguendo, such authority exists, the dispositive question in this case is whether the Navajo Nation has agreed to a valid waiver of such a right. In Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 102 S.Ct. 894, 71 L.Ed.2d 21 (1982), the Supreme Court discussed the differences and similarities among federal, state, local and Indian sovereigns. It held that all these sovereigns can waive sovereign power if they do so in sufficiently clear contractual terms: 31 Each of these governments has different attributes of sovereignty, which also derive from different sources. These differences, however, do not alter the principles for determining whether any of these governments has waived its sovereign power through contract, and we perceive no principled reason for holding that the different attributes of Indian sovereignty require different treatment in this regard. Without regard to its source, sovereign power, even when unexercised, is an enduring presence that governs all contracts subject to the sovereign jurisdiction, and will remain intact unless surrendered in unmistakable terms. 32 Id. at 148, 102 S.Ct. at 907. 33 We agree with the district court that the record evidences the requisite unmistakable waiver by the tribal officials concerned. The clear language contained in the Lease Documents, including the Non-regulation Covenant and the subsequent detailed provisions of the Letter Agreement on hiring preferences, demonstrated the parties' understanding that the Navajo Nation would not regulate APS's employment decisions beyond enforcement of the contractual commitments. Of particular significance to us is the parties' establishment of a special dispute resolution mechanism in order to resolve any disputes that might arise in connection with employment matters. See supra note 4. The record in this case reflects that the Navajo Nation refused to abide by the contractual mechanisms and resorted to passage and enforcement of the NPEA in order to bypass them. We thus refuse to disturb the district court's injunction. 34 The appellants further contend that the Navajo Tribal Council, which approved the operative documents here (and later enacted the NPEA), lacked authority to waive sovereign police power in lease agreements. This position is untenable. As the governing body of the Navajo Nation, the Navajo Tribal Council is similar in function to the Congress of the United States. United States v. Begay, 42 F.3d 486, 490 (9th Cir.1994), cert. denied, --- U.S. ----, 116 S.Ct. 93, 133 L.Ed.2d 49 (1995). The legitimacy of the Navajo Tribal Council, the freely elected governing body of the Navajos, is beyond question. Kerr-McGee Corp. v. Navajo Tribe, 471 U.S. 195, 201, 105 S.Ct. 1900, 1904, 85 L.Ed.2d 200 (1985). Thus, the Navajo Tribal Council had authority to effect a waiver of the Navajo Nation's power to subject a lessee to employment regulations. 35 AFFIRMED.