SALT RIVER PROJECT AGR. IMP. AND POWER v. Lee

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SALT RIVER PROJECT AGRICULTURAL 

IMPROVEMENT AND POWER DISTRICT,

a municipal corporation and

political subdivision of the State

of Arizona and HEADWATERS

RESOURCES, INC., a Utah

corporation,

No. 10-17895

Plaintiffs-Appellants,

v.  D.C. No.

3:08-cv-08028-JAT

REYNOLD R. LEE; CASEY

OPINION

WATCHMAN; WOODY LEE; PETERSON

YAZZIE; EVELYN MEADOWS; HERB

YAZZIE, Honorable; LOUISE G.

GRANT, Honorable; ELEANOR

SHIRLEY, Honorable; LEONARD

THINN; SARAH GONNIE,

Defendants-Appellees.



Appeal from the United States District Court

for the District of Arizona

James A. Teilborg, District Judge, Presiding

Argued and Submitted

February 14, 2012—San Francisco, California

Filed March 15, 2012

3127

3128 SALT RIVER PROJECT v. LEE

Before: A. Wallace Tashima and Barry G. Silverman,

Circuit Judges, and Marvin J. Garbis,

Senior District Judge.*

Opinion by Judge Silverman

*The Honorable Marvin J. Garbis, Senior District Judge for the U.S.

District Court for the District of Maryland, sitting by designation.

SALT RIVER PROJECT v. LEE 3129

COUNSEL

John J. Egbert (argued) and Paul G. Johnson of Jennings,

Strouss & Salmon, P.L.C., Phoenix, Arizona, for plaintiff-

3130 SALT RIVER PROJECT v. LEE

appellant Salt River Project Agricultural Improvement and

Power District.

Lisa M. Coulter, Snell & Wilmer, LLP, Phoenix, Arizona, for

plaintiff-appellant Headwater Resources, Inc.

Philip R. Higdon (argued), Rhonda L. Barnes, and Jessica J.

Berch, Perkins Coie LLP, Phoenix, Arizona, for defendants-

appellees Reynold R. Lee, Casey Watchman, Woody Lee,

Peterson Yazzie, Evelyn Meadows, Honorable Herb Yazzie,

Honorable Louise G. Grant, and Honorable Eleanor Shirley.

David R. Jordan, The Law Offices of David R. Jordan, PC,

Gallup, New Mexico, for defendants-appellees Leonard Thinn

and Sarah Gonnie.

OPINION

SILVERMAN, Circuit Judge:

Two non-Indian entities brought this action to enjoin Nav-

ajo Nation tribal officials from applying tribal law to them in

tribal courts. They claim that both their contract with the tribe

and federal law deprive tribal officials of authority to regulate

them. This appeal presents the question whether the Navajo

Nation itself — which enjoys sovereign immunity and cannot

be sued — is a necessary (and if so, indispensable) party

under Federal Rule of Civil Procedure 19. We hold today that

the tribe is not a necessary party because the tribal officials

can be expected to adequately represent the tribe’s interests in

this action and because complete relief can be accorded

among the existing parties without the tribe. This lawsuit for

prospective injunctive relief may proceed against the officials

under a routine application of Ex parte Young, 209 U.S. 123

(1908), and should not have been dismissed.

SALT RIVER PROJECT v. LEE 3131

I. BACKGROUND

Salt River Project Agricultural Improvement and Power

District co-owns, and Headwaters Resources, Inc. operates, a

power plant called the Navajo Generating Station on Navajo

reservation land in northern Arizona. When they fired two

Navajo Nation employees who worked at the power plant, the

employees filed charges with the Office of Navajo Labor

Relations alleging that they were fired without just cause in

violation of the Navajo Preference in Employment Act, 15

Navajo Nation Code §§ 601 et seq. The Office of Navajo

Labor Relations issued right-to-sue notices to both former

employees, who then filed complaints with the Navajo Nation

Labor Commission. Salt River Project and Headwaters

defended the claims on, among other grounds, the theory that

the Navajo Nation lacked authority to regulate employment

matters at the power plant under (1) the terms of a 1969 lease

between the Navajo Nation and Salt River Project for the land

on which the power plant is located, which waived the tribe’s

right to regulate employment relations at the power plant,1 and

(2) a federal statutory right-of-way granted pursuant to 25

U.S.C. § 323, which extinguished all Indian uses of the cov-

ered lands.2 The Navajo Nation Supreme Court ultimately

rejected that defense, holding that the Navajo Preference in

Employment Act applied to Salt River Project and Headwa-

ters at the power plant, and remanded the case to the Navajo

Nation Labor Commission to allow the former employees’

claims to proceed on the merits. Thinn v. Navajo Generating

1

The relevant clause in the 1969 lease states:

The Tribe covenants that, other than as expressly set out in this

Lease, it will not directly or indirectly regulate or attempt to regu-

late the Lessees in the construction, maintenance or operation of

the Navajo Generation Station . . . .

2

The § 323 grant provides in relevant part:

All present existing Indian uses of any land described herein are

hereby extinguished and prohibited for the term of the § 323

Grant, and any renewals thereof . . . .

3132 SALT RIVER PROJECT v. LEE

Station, No. SC-CV-25-06, 7 Am. Tribal Law 558, 560,

564-66 (Navajo 2007).

Salt River Project and Headwaters then filed this action for

declaratory and injunctive relief against the Navajo officials

responsible for enforcing the Act — the Director of the Office

of Navajo Labor Relations, the members of the Navajo Nation

Labor Commission, and the justices of the Navajo Nation

Supreme Court. Their complaint alleged, inter alia, that the

Navajo officials “have proceeded, and are threatening to fur-

ther proceed, against [the plaintiffs] . . . in violation of federal

law” and that “all such actions . . . violate federal law.” The

complaint sought a declaratory judgment that those Navajo

officials lacked authority to regulate employment relations at

the Navajo Generating Station and an injunction staying the

former employees’ claims.

The Navajo officials moved to dismiss under Federal Rule

of Civil Procedure 12(b)(7) for failure to join a party required

by Rule 19: the Navajo Nation. The district court granted the

motion, concluding that the Navajo Nation was a necessary

party under Rule 19(a)(1)(A) because without the tribe, the

plaintiffs could not get complete relief from future attempts

by the Navajo Nation to enforce the Navajo Preference in

Employment Act. The district court also concluded that the

tribe was a necessary party under Rule 19(a)(1)(B)(i) because

proceeding without the Navajo Nation threatened to impair its

interests in the scope of the 1969 lease, its economic interests

in promoting full employment of Navajo Nation members,

and its general interests in governing the Navajo reservation.

Moreover, the district court concluded that the Navajo Nation,

which sovereign immunity prevented from being joined, was

an indispensable party under Rule 19(b). Accordingly, the dis-

trict court dismissed the action. Salt River Project and Head-

waters appeal that dismissal.

II. JURISDICTION AND STANDARD OF REVIEW

The district court had federal question jurisdiction under 28

U.S.C. § 1331. See Ariz. Pub. Serv. Co. v. Aspaas, 77 F.3d

SALT RIVER PROJECT v. LEE 3133

1128, 1132-33 (9th Cir. 1996). We have jurisdiction under 28

U.S.C. § 1291.

We review a Rule 19 dismissal for abuse of discretion and

underlying legal conclusions de novo. See Cachil Dehe Band

of Wintun Indians of the Colusa Indian Cmty. v. California,

547 F.3d 962, 969-70 (9th Cir. 2008).

III. DISCUSSION

As we have explained, Federal Rule of Civil Procedure 193

imposes a three-step inquiry:

3

Rule 19 states in relevant part:

(a) Persons Required to Be Joined if Feasible.

(1) Required Party. A person who is subject to service of

process and whose joinder will not deprive the court of

subject-matter jurisdiction must be joined as a party if:

(A) in that person’s absence, the court cannot accord com-

plete relief among existing parties; or

(B) that person claims an interest relating to the subject of

the action and is so situated that disposing of the action in

the person’s absence may:

(i) as a practical matter impair or impede the person’s

ability to protect the interest; or

(ii) leave an existing party subject to a substantial risk

of incurring double, multiple, or otherwise inconsistent

obligations because of the interest.

(2) Joinder by Court Order. If a person has not been joined

as required, the court must order that the person be made a

party. A person who refuses to join as a plaintiff may be

made either a defendant or, in a proper case, an involuntary

plaintiff.

...

(b) When Joinder Is Not Feasible. If a person who is required

to be joined if feasible cannot be joined, the court must determine

whether, in equity and good conscience, the action should pro-

3134 SALT RIVER PROJECT v. LEE

1. Is the absent party necessary (i.e., required to be

joined if feasible) under Rule 19(a)?

2. If so, is it feasible to order that the absent party

be joined?

3. If joinder is not feasible, can the case proceed

without the absent party, or is the absent party

indispensable such that the action must be dis-

missed?

See EEOC v. Peabody W. Coal Co., 400 F.3d 774, 779-80

(9th Cir. 2005).

A party may be necessary under Rule 19(a) in three differ-

ent ways. First, a person is necessary if, in his absence, the

court cannot accord complete relief among existing parties.

See Fed. R. Civ. P. 19(a)(1)(A). Second, a person is necessary

if he has an interest in the action and resolving the action in

his absence may as a practical matter impair or impede his

ceed among the existing parties or should be dismissed. The fac-

tors for the court to consider include:

(1) the extent to which a judgment rendered in the person’s

absence might prejudice that person or the existing parties;

(2) the extent to which any prejudice could be lessened or

avoided by:

(A) protective provisions in the judgment;

(B) shaping the relief; or

(C) other measures;

(3) whether a judgment rendered in the person’s absence

would be adequate; and

(4) whether the plaintiff would have an adequate remedy if

the action were dismissed for nonjoinder.

...

Fed. R. Civ. P. 19.

SALT RIVER PROJECT v. LEE 3135

ability to protect that interest. See Fed. R. Civ. P.

19(a)(1)(B)(i). Third, a person is necessary if he has an inter-

est in the action and resolving the action in his absence may

leave an existing party subject to inconsistent obligations

because of that interest. See Fed. R. Civ. P. 19(a)(1)(B)(ii).

Here, the district court first concluded under Rule

19(a)(1)(A) that the Navajo Nation was a necessary party

because an injunction solely against the current Navajo offi-

cials would not prevent future or other Navajo officials from

taking the same allegedly unlawful actions.

[1] That conclusion is incorrect: An injunction against a

public officer in his official capacity — which is what the

plaintiffs seek here — remains in force against the officer’s

successors. See Hernandez v. O’Malley, 98 F.3d 293, 294 (7th

Cir. 1996) (noting that Rule 65(d) “makes an injunction effec-

tive against successors in office”); 11A Charles Alan Wright

et al., Federal Practice and Procedure § 2956 (2d ed. 1995)

(“A decree binding a public official generally is valid against

that official’s successors in office.”) (citing cases); cf. also

Fed. R. Civ. P. 25(d) (providing for automatic substitution of

public officer’s successor when officer ceases to hold office).

[2] Moreover, to the extent the district court concluded that

other Navajo officials (i.e., current officials not named as

defendants here) could somehow attempt to enforce the Nav-

ajo Preference in Employment Act against the plaintiffs not-

withstanding the plaintiffs’ requested injunction, that

possibility does not mean that complete relief is not possible

for the plaintiffs, who seek to enjoin only the named defen-

dants. If in the future the plaintiffs believe that other officials

are acting in violation of federal law, they may bring another

action against those officials.

[3] Accordingly, because the district court can accord the

complete relief sought by the plaintiffs in the Navajo Nation’s

3136 SALT RIVER PROJECT v. LEE

absence, it erred in holding that the tribe was a necessary

party under Rule 19(a)(1)(A).

[4] The district court also concluded under Rule

19(a)(1)(B)(i) that the Navajo Nation had three distinct inter-

ests in this action: (1) the scope of the tribe’s rights under the

1969 lease, (2) the job security of Navajo Nation members,

and (3) the tribe’s general interest in governing the Navajo

reservation. But that is not the end of the matter. The district

court failed to analyze whether proceeding without the Navajo

Nation would “impair or impede” the tribe’s ability to protect

those interests. See Fed. R. Civ. P. 19(a)(1)(B)(i). An absent

party with an interest in the action is not a necessary party

under Rule 19(a) “if the absent party is adequately repre-

sented in the suit.” Shermoen v. United States, 982 F.2d 1312,

1318 (9th Cir. 1992) (citation and internal quotation marks

omitted). As we said in Shermoen, “[i]f a legally protected

interest exists, the court must further determine whether that

interest will be impaired or impeded by the suit. Impairment

may be minimized if the absent party is adequately repre-

sented in the suit.” Id. (citation and internal quotation marks

omitted).

We consider three factors in determining whether an exist-

ing party adequately represents the interests of an absent

party: (1) “whether the interests of a present party to the suit

are such that it will undoubtedly make all of the absent party’s

arguments”; (2) “whether the party is capable of and willing

to make such arguments”; and (3) “whether the absent party

would offer any necessary element to the proceedings that the

present parties would neglect.” Id. (citation and internal quo-

tation marks omitted).

[5] Here, the Navajo official defendants can be expected to

adequately represent the Navajo Nation’s interests. First, the

officials’ interests are aligned with the tribe’s interests: The

officials are responsible for enforcing the Navajo Preference

in Employment Act, and there is no suggestion that the offi-

SALT RIVER PROJECT v. LEE 3137

cials’ attempt to enforce the statute here is antithetical to the

tribe’s interests. Second, there is no reason to believe the Nav-

ajo official defendants cannot or will not make any reasonable

argument that the tribe would make if it were a party. Third,

there is no indication that the tribe would offer any necessary

element to the action that the Navajo official defendants

would neglect. See Kansas v. United States, 249 F.3d 1213,

1227 (10th Cir. 2001) (“[M]ost importantly, the potential for

prejudice to the Miami Tribe is largely nonexistent due to the

presence in this suit of . . . the tribal officials . . . . These

Defendants’ interests, considered together, are substantially

similar, if not identical, to the Tribe’s interests in [the

action].”).

Indeed, the Navajo official defendants do not argue other-

wise. Instead, they argue only that the tribe automatically is

a necessary party to any action challenging a lease to which

the tribe is a signatory, citing Dawavendewa v. Salt River

Project, 276 F.3d 1150 (9th Cir. 2002). But Dawavendewa is

distinguishable because there — unlike here — the tribal offi-

cials were not parties to the action and thus could not repre-

sent the absent tribe’s interests, a fact we explicitly noted. See

id. at 1160 (“[N]or has [the plaintiff] named any tribal offi-

cials as parties to this litigation.”).

[6] Thus, because the officials adequately represent the

Navajo Nation’s interests here, the district court erred in hold-

ing that the tribe was a necessary party under Rule

19(a)(1)(B)(i).

[7] Finally, the Navajo official defendants argue that the

tribe is a necessary party under 19(a)(1)(B)(ii) because its

absence could subject the plaintiffs to inconsistent obliga-

tions. In particular, the defendants argue that the plaintiffs’

requested injunction would not bind the Navajo Nation, which

could later seek to enforce the Navajo Preference in Employ-

ment Act at the power plant. But the defendants fail to explain

how the tribe could enforce the Act without the aid of its offi-

3138 SALT RIVER PROJECT v. LEE

cers responsible for enforcing the Act, who would be bound

by the plaintiffs’ requested injunction. If other Navajo Nation

officials somehow attempted to enforce the Act against the

plaintiffs, the plaintiffs would be free to return to federal court

to seek an injunction against those officials. But at this stage,

the plaintiffs’ complaint seeks an injunction only against these

named officials. Accordingly, because there is no risk that the

plaintiffs could be subject to inconsistent obligations in the

Navajo Nation’s absence, the Navajo Nation is not a neces-

sary party under Rule 19(a)(1)(B)(ii).

*****

In sum, we hold that (1) the Navajo Nation is not a neces-

sary party under Rule 19(a)(1)(A) because the plaintiffs seek

relief only against the current Navajo officials; (2) the Navajo

Nation is not a necessary party under Rule 19(a)(1)(B)(i)

because the officials adequately represent the tribe’s interests;

and (3) the Navajo Nation is not a necessary party under Rule

19(a)(1)(B)(ii) because its absence will not risk subjecting the

plaintiffs to inconsistent obligations.

Indeed, a contrary holding would effectively gut the Ex

parte Young doctrine. That doctrine permits actions for pro-

spective non-monetary relief against state or tribal officials in

their official capacity to enjoin them from violating federal

law, without the presence of the immune State or tribe. See Ex

parte Young, 209 U.S. 123 (1908).

The district court recognized this, but reasoned that this

case was different from the traditional Ex parte Young case

because, the court said, the Navajo officials are allegedly vio-

lating a private lease, rather than merely a federal statute or

the federal Constitution. But the complaint specifically

alleged that the tribal officials were acting “beyond [their]

jurisdiction, without basis in law, and in violation of federal

law” — including the federal statutory right-of-way. More-

over, we have held that federal common law governs whether

SALT RIVER PROJECT v. LEE 3139

an Indian tribe’s lease with a non-Indian has waived the

tribe’s authority to regulate the non-Indian’s activities. See

Ariz. Pub. Serv. Co. v. Aspaas, 77 F.3d 1128, 1132-33 (9th

Cir. 1996). And it is well-settled that federal common law cir-

cumscribes a tribe’s inherent authority to regulate non-

members. See Montana v. United States, 450 U.S. 544,

563-66 (1981). Ex parte Young is not limited to claims that

officials are violating the federal Constitution or federal stat-

ute; it applies to federal common law as well. See South

Dakota v. Bourland, 949 F.2d 984, 989 (8th Cir. 1991), rev’d

on other grounds, 508 U.S. 679 (1993).

Thus, the Navajo Nation is not a necessary party under

Rule 19. The district court’s order dismissing the case is

reversed.

REVERSED and REMANDED.