# Opposition Brief — Broad v. Sealaska Corp.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1780%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1997
- **Citation:** 519 U.S. 1092

## Text

No. 96-756 ft ss
SticeetiibLbitete

ig I a 2p j

io

RK

Suprene Court of the Ynited States

4- «
October Term, 1996

LAURIE ISAAC BROAD, for himself and all others who are
similarly situated,

Petitioners,
VS.

SEALASKA CORPORATION, SEALASKA ELDERS’
SETTLEMENT TRUST, et al.,

Respondents.

On Petition for Writ of Certiorari to the United States
Court of Appeals for the Ninth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

L. MERRILL LOWDEN
LESLIE LONGENBAUGH
Counsel of Record
E. BUDD SIMPSON
SIMPSON, TILLINGHAST, SORENSEN
& LORENSEN
Attorneys for Respondents
One Sealaska Plaza
Suite 300
Juneau, Alaska 99801
(907) 586-1400

70153 juz
(800) 3 APPEAL » (800) 5 APPEAL « (800) BRIEF 21 Aone
ervices, inc.

i
QUESTIONS PRESENTED FOR REVIEW

1. Did the United States District Court for the District of

Alaska have federal question jurisdiction pursuant to 28 U.S.C.
§§ 1331 and 1441(a)?

2. Does the preemption analysis applied by the United
States Court of Appeals for the Ninth Circuit with respect to the
preemption of Alaska Stat. § 10.06.305(b) by provisions of the
Alaska Native Claims Settlement Act, 43 U.S.C. § 1629e,
conflict with preemption analysis applied by other circuit courts?

3. Did the United States Court of Appeals for the Ninth
Circuit err by holding that the Alaska Native Claims Settlement
Act, 43 U.S.C. § 1629e, preempts Alaska Stat. § 10.06.305(b)?

il

LIST OF INTERESTED PARTIES*

Petitioners Respondents
Laurie Isaac Broad Sealaska Corporation |
Marsha Simonds Sealaska Elders’
Julie Wigg Settlement Trust ;
Larry Taylor, Jr. Patrick Anderson
Marc Simpson Charles Carlson
Rebecca Simpson Joseph Demmert, Jr.
Alora J. Winchester L. Embert Demmert**
Emily Gotardo Raymond Demmert
Barbara Crabtree Jim Edenso
Angie Doak Clarence Jackson, Sr.
Royann Churchill Marlene A. Johnson
Leonard Valezquez Albert Kookesh**
Arlene Bell Hanson Ethel Lund
Victor Carl Davis, Jr. Carlton Smith
Joyce Lewis*** Richard Stitt, Sr.
Clinton Lewis*** Ralph Strong
Alan Williams
Rosita Worl
Marjorie Young

Each of the respondents joins in this brief of opposition.

* Pursuant to United States Supreme Court Rule 29.6, the petitioners
state that Sealaska Corporation has no parent company and has no nonwholly-
owned subsidiary.

** These names, which appear in the list filed with the Petition, are
listed here with their correct spellings.

*** These names appear in the petitioners’ amended complaint and do
not appear in the list filed with the Petition.

ee ee ee ee ee ae, lente tay Ae ee ee

ee

lil

TABLE OF CONTENTS

Page
Questions Presented for Review ................... i
List of Interested Parties ... oo... wc ccc ccc ccc cc cece ii
EE Ra ee ee iii
NP a ee iV
Statement of Jurisdiction ..............cccccccccu. l
ES a Ae ]
ne bib cc ceemecccn l
A. Course of Proceedings and Disposition of the
I a a 3
B. Correction of Misstatements in the Petition. ... 4
Reasons for Denying the Writ ..................... 5
I. Removal of this Action to Federal Court Was
MEE Wiablin's GWUWe AoW dhe leda os sdeeeecens 5
“Il. The Ninth Circuit’s Decision Does Not Conflict
with Decisions of the Other Ciscuits on the Same
NN ro a G
Ill. The Ninth Circuit’s Holding Is in Accord with
the Decisions of this Court. The ANCSA
Settlement Trust Option Preempts Alaska Law.
BOS TS Yee EES ROEM STE 21
Martha Hirschfield, The Alaska Native Claims Settlement

Act: Tribal Sovereignty and the Corporate Form, 101

ai: Se GEE 435s Sk och edecevoeeeaveces 19

To Amend The Alaska Native Claims Settlement Act:
Hearings on S. 2065 Before the Subcomm. on Public
Lands, Reserved Water and Resource Conservation of
the Senate Comm. on Energy and Natural Resources,
99th Cong., 2nd Sess., 101 (1986) .............. 20

x

Contents
Page
APPENDIX

Appendix A — Relevant Statutes, Act of February 3,
1988, Pub. L. 100-241, §§ 2, 101 Stat. 1813, 43
U.S.C. §§ 1606(h)(1)(A), 1629b(a), 1629e, Alaska
Stat. §§ 10.06.305(b), 10.06.960(f) .............. la

Appendix b — Verified Notice of Removal Filed October
28, 1992 with Attached Summons aud Complaint .. 12a

Appendix C — Amended Complaint Filed October 30,
GEES sevesskpactedsteiiese decibel thas 22a

l

Respondents request that the Court deny the petition for
writ of certiorari seeking review of an opi ion of the United
States Court of Appeals for the Ninth Circuit. The court of
appeals opinion is reported at 85 F.3d 422 (9th Cir. 1996),
petition for cert. filed, 65 U.S.L.W. 3381 (U.S. November 8,
1996) (No. 96-756). (For the convenience of the Court, all
citations to the Ninth Circuit opinion will be to the opinion
attached in the Appendix to the petition, pages 1 through 29).

STATEMENT OF JURISDICTION

The jurisdiction of this Court to grant certiorari for review
of the decision of the Ninth Circuit Court of Appeals is conferred
by 28 U.S.C. § 1254(1). Original and removal jurisdiction of
the United States District Court for the District of Alaska is
discussed below in Point I of this Brief in Opposition.

STATUTES INVOLVED

The statutory provisions involved in this case are portions
of the Alaska Native Claims Settlement Act, found at 43 U.S.C.
§§ 1601-1629f, and the Alaska state corporations code, Alaska
Stat. § 10.06. The specific provisions involved are: 43 U.S.C.
§§ 1606(h)(1)(A), 1629b(a), 1629e; Pub. L. No. 100-241,
§ 2, 101 Stat. 1788 (1988); Alaska Stat. § 10.06.305(b); and
Alaska Stat. § 10.06.960(f). The texts of these statutes are
attached in Appendix A.

STATEMENT OF THE CASE

Sealaska Corporation (“Sealaska”) is the Alaska Native
regional corporation for Southeast Alaska, established in 1971
pursuant to the Alaska Native Claims Settlement Act
(“ANCSA”), 43 U.S.C. §§ 1601-1629e. Sealaska’s 16,000
shareholders are predominantly Alaska Natives of Tlingit, Haida,

2

and Tsimshian descent. Pursuant to ANCSA, shareholders
received 100 shares each of Sealaska stock.

In 1987,' Congress substantially amended ANCSA “to
enable the shareholders of each Native Corporation to structure
the further implementation of the settlement in light of their
particular circumstances and needs.” Pub. L. No. 100-241,
§ 2(5), 101 Stat. 1788 (1988); 43 U.S.C. § 1601 note (Supp.
1996) (Congressional Findings and Declaration of Policy for
ANCSA Amendments of 1987). One of the 1987 amendments
added 43 U.S.C. § 1629e, which permits any Native corporation
to convey assets into a “settlement trust” to be used “to promote
the health, education, and welfare of its beneficiaries and
preserve the heritage and culture of Natives.” 43 U.S.C.
§ 1629e(b)(1).

Elders occupy a special position of honor, respect, and great
affection in traditional Tlingit, Haida, and Tsimshian culture.
Sealaska had long sought means to assist and give special
recognition to its elder shareholders, and the settlement trust
option in 43 U.S.C. § 1629e finally made it possible for Sealaska
to do this. In 1991, Sealaska’s board of directors presented a
resolution to a vote of the shareholders to establish the Elders’
Settlement Trust (“Trust”). The Trust would be funded with
corporate assets, and would distribute a one-time financial
benefit of $20 per share to each shareholder upon reaching age
65. (Op. at 3-4.) The resolution passed with the affirmative
vote of 73.7 percent of all shares voting on the issue, or 50.7
percent of all outstanding shares. Starting on December 10,
1991, and continuing thereafter as shareholders have reached
age 65, the Trust has paid them $20 per share according to the
terms of the resolution. (Op. at 4.)

1. The amendments were referred to in Congress, and are referred to
herein, as the 1987 amendments; in fact, they were enacted on February 3,
1988.

napacs Santina © Cee dieas.

3

A. Course of Proceedings and Disposition of the Case Below.

In September 1992, the petitioners filed a purported class
action lawsuit in the Alaska Superior Court claiming that the
payments made by the Trust were illegal “constructive
dividends.” The petitioners asserted that the payments were
illegal distributions because they discriminated between
Sealaska shares of the same class. The complaint was cursory,
it cited no state statute and did not mention the Alaska
corporations code or common law. But the complaint did
describe Sealaska as a corporation organized under ANCSA and
the creator of the ‘Trust.

The respondents removed the case to the United States
District Court for the District of Alaska as presenting claims
arising under federal law for which the district court had original
jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1441(a) and (b).”
The petitioners never moved for remand back to the state court,
and did not otherwise indicate that they believed their claim
was predicated solely upon Alaska law.

No trial or other evidentiary hearing of the petitioners’ claim
ever took place. On cross-motions for summary judgment, the
district court entered several orders that, together, denied the
petitioner’s motion and granted the respondents summary
judgment on all issues. The Ninth Circuit Court of Appeals
affirmed, holding, inter alia, that ANCSA, 43 U.S.C. § 1629¢e,
explicitly preempts state law with respect to corporate
resolutions that establish settlement trusts and, with respect to
settlement trust distributions, implicitly preempts Alaska Stat.
§ 10.06.305(b), which requires corporations to give equal
treatment to all shares of the same class and prohibits
discriminatory distributions.

F A copy of the respondents’ verified notice of removal, together with
the summons and complaint, is attached as Appendix B.

4

B. Correction of Misstatements in the Petition.

Pursuant to United States Supreme Court Rule 15.2, the
respondents bring to the Court’s attention the following
misstatements of fact contained in the petition.

The petition states that “(t]he complaint alleged Sealaska
had breached its shareholder contract by paying dividends in
violation of Alaska corporations statutes and in violation of the
Alaska common law of corporations.” (Petition at 17.) The
petition also states that Sealaska “removed this case on the
reasoning that the federal statute had preempted the corporations
law of Alaska.” (/d.) Contrary to the petitioners’ representations,
the complaint did not even mention, much less cite, any provision
in the Alaska corporations code, nor did it refer to the Alaska
common law of corporations. (See Complaint, Appendix B.)
The petitioners’ representation that Sealaska removed the case
to the federal district court “on the reasoning” that Alaska’s
corporations law was preempted by ANCSA is likewise
incorrect. The respondents removed the case to the federal
district court because the complaint presented claims arising
under federal law, namely ANCSA, 43 U.S.C. § 1629e, for which
that court had federal question jurisdiction under 28 U.S.C.
§ 1331. (See Notice, Appendix B.)

Even the petitioners’ amended complaint, filed after
removal, did not mention the Alaska corporations code or Alaska
common law.’ A copy of the amended complaint is attached
hereto as Appendix C.

Moreover, in their petition for certiorari, the petitioners

3. The amended complaint did cite, erroneously, a portion of the Alaska
probate code, Alaska Stat. §§ 13.16.005-.300, with respect to registration of
the Trust. The statutes that address registration of trusts are found at Alaska
Stat. §§ 13.36.005-.025.

5

designate as the statutes “principally” implicated in this case
only ANCSA (43 U.S.C. §§ 1606(h)(1)(A), 1629e) and Alaska
Stat. § 10.06.960(f) (the state corporations code provision by
which the code expressly yields toANCSA on all matters related
to Native corporations to the extent that ANCSA is inconsistent
with the state law). The petitioners do not mention Alaska Stat.
§ 10.06.305(b), the state corporations code section that they
allege is violated by the Trust. (Petition at 3.)

REASONS FOR DENYING THE WRIT
L

REMOVAL OF THIS ACTION TO FEDERAL COURT
WAS PROPER.

The petitioners challenge jurisdiction of the federal courts
for the first time here. While jurisdiction may be considered at
any time, Louisville & N. R. v. Mottley,211 U.S. 149, 152 (1908),
the petitioners effectively seek to amend their complaint to raise
strictly state law claims, avoid federal jurisdiction, and gain an
Opportunity to obtain a result from the state courts on federal
‘law issues that the federal courts have refused to give. Yet the
petitioners concede that portions of ANCSA comprise “the
Statutes principally involved in this case.” (Petition at 3
(emphasis added).)

The petitioners’ reliance on Caterpillar Inc. v. Williams,
482 U.S. 386 (1987), and the “well-pleaded complaint” rule is
unavailing. First, a federal question is presented on the face of
the petitioners’ complaint, and the federal issue did not arise
solely in anticipation of a defense. The complaint showed no
exclusive reliance on state law. Second, even if the complaint
could be fairly construed to have alleged a state cause of action
under the Alaska corporations code, vindication of the state law

6

right depended completely upon resolution of an issue of federal
law, making the claim one “arising under” federal law. Third,
the preemptive force of the federal law at issue, 43 U.S.C.
§ 1629¢e, is so powerful that it displaces entirely any state cause
of action for discrimination against certain shareholders by the
Trust.

43 U.S.C. § 1331 grants the district courts original
jurisdiction over claims “arising under the Constitution, laws,
or treaties of the United States.” 43 U.S.C. § 1441(b) permits
removal on the basis of federal question jurisdiction without
regard to the citizenship of the parties. Az “*is Court observed
in Franchise Tax Bd. v. Construction Lave*: Vacation Trust
for Southern California, 463 U.S. 1, 8 (1985+

[T]he statutory phrase “arising under the
Constitution, laws, or treaties of the United
States” has resisted all attempts to frame a
Single, precise definition for determining
which cases fall within, and which cases fall
outside, the original jurisdiction of the
district courts. Especially when considered
in light of § 1441’s removal jurisdiction, the
phrase “arising under” masks a welter of
issues regarding the interrelation of federal
and state authority and the proper
management of the federal judicial system.

Justice Holmes defined “arising under” simply: “A suit
arises under the law that creates the cause of action.” American
Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260 ( 1916).
Justice Holmes’ test is a principle of inclusion rather than
exclusion. Franchise Tax Bd., 463 U.S. at 9. The “vast majority”
of cases that come within section 1331's grant of jurisdiction
are covered by Justice Holmes’ statement — that is, cases in

7

which federal law creates the cause of action. /d. at 8-9.
However, this Court has also noted that a case may arise under
federal law “where vindication of a right under state law
necessarily turned on some construction of federal law,” or where
a purportedly state claim “is ‘really’ one of federal law.” Jd. at
9, 13. See also Merrell Dow Pharmaceuticals Inc. v. Thompson,
478 U.S. 804, 808-09 (1986) (a claim arises under federal law
when vindication of a state law right depends upon resolution
of a substantial question of federal law); Smith v. Kansas City
Title & Trust Co., 255 U.S. 180, 199 (1921) (same holding, over
Justice Holmes’ dissent).

The actual holding in Franchise Tax Bd. (a federal court is
without jurisdiction to determine whether a state may collect
unpaid taxes by imposing a levy on an ERISA plan)
“demonstrates that this statement must be read with caution.”
Merrell Dow Pharmaceuticals, 478 U.S. at 809. Indeed, the
powerful “well-pleaded complaint” doctrine “severely limits the
number of cases in which state law ‘creates the cause of action’
that may be initiated in or removed to federal district court.”
Franchise Tax Bd., 463 U.S. at 9. This Court has repeatedly
stressed that “the party who brings a suit is master to decide
what law he will rely upon.” Jd. at 22 (quoting The Fair v.
Kohler Die & Specialty Co., 228 U.S. 22, 25 (1913)). See also
Caterpillar, 482 U.S. at 392; Merrell Dow Pharmaceuticals,
478 U.S. at 809 n.6.

Nevertheless, the petitioners’ complaint clearly disclosed
that the claim would stand or fall in accordance with resolution
of a substantial federal law question in dispute between the
parties. The petitioners actually confirm this point when they
State:

The statutes principally involved in this
case are parts of the Alaska Native Claims

8

Settlement Act [ANCSA]: ANCSA
§ 7(h)(1)(A) [43 U.S.C. § 1606(h)(1)(A)]
Settlement Stock of Regional Corporation;
and ANCSA § 39 [43 U.S.C. § 1629e] —
Settlement Trust Option.

(Petition at 3 (first emphasis added).)

Although the complaint stated its cause of action with a
paucity of words, it was obvious that the object of the action
was a settlement trust established by an Alaska Native
corporation as authorized by ANCSA. It was therefore obvious
that a construction of the federal law governing settlement trusts,
43 U.S.C. § 1629e, would be essential to resolution of the
petitioners’ claim that the Trust unlawfully discriminated against
certain Sealaska shareholders.

Even assuming, for the sake of argument, that the complaint
Stated a cause of action created by Alaska corporations law,
vindication of the state right “necessarily turned on” the
construction of 43 U.S.C. § 1629e. Franchise Tax Bd., 463 U.S.
at 9. Thus, a federal question was presented and jurisdiction
was conferred on the district court. Jd.

Moreover, “it is an independent corollary of the well-
pleaded complaint rule that a plaintiff may not defeat removal
by omitting to plead necessary federal questions in a complaint.”
Franchise Tax Bd., 463 U.S. at 22 (emphasis added) (citing
Avco Corp. v. Aero Lodge No. 735, Intern. Ass’n of Machinists
and Aerospace Workers, 376 F.2d 337, 339-40 (6th Cir. 1967),
aff'd, 390 U.S. 557, 559 (1968)).

Finally, this Court has on occasion “concluded that the
preemptive force of a statute is so ‘extraordinary’ that it ‘converts
an ordinary state common-law complaint into one stating a

9
federal claim for purposes of the well-pleaded complaint rule.’ ”
Caterpillar, 482 U.S. at 393 (quoting Metropolitan Life Ins.
Co. v. Taylor, 481 U.S. 58, 65 (1987)). See also Franchise Tax
Bd., 463 U.S. at 24; Oneida Indian Nation of New York State
v. Oneida County, 414 U.S. 661, 677 (1974) (state law
complaint that alleged a present right to possession of Indian
tribal lands necessarily “asserts a present right to possession
under federal law,” and is thus completely preempted and arises
under federal law); Avco Corp. v. Aero Lodge No. 735, Intern.
Ass’n of Machinists and Aerospace Workers, 390 U.S. 557,
559 (1968) (finding complete preemption of state law by the
Labor Management Relations Act so that when “[t]he heart of
the [state law] complaint [is] a ... clause in the collective
bargaining agreement,” the complaint arises under federal law).

The settlement trust option, 43 U.S.C. § 1629e, lies at “the
heart” of the petitioners’ complaint. As explained in part III-B
of this Brief in Opposition, the settlement trust statute so
forcefully preempts contrary state law as to entirely displace
any state cause of action challenging the creation, purposes,
and characteristics of the Trust.

The petitioners’ suit was properly removed to the federal
district court.

Il.

THE NINTH CIRCUIT’S DECISION DOES NOT
CONFLICT WITH DECISIONS OF THE OTHER
CIRCUITS ON THE SAME MATTER.

The petitioners attempt to persuade this Court to grant
certiorari based on a supposed split among the circuits that this
case could mend. On the contrary, as the petitioners’ case law
discloses, the circuit courts are not split on basic preemption

10

analysis. The petitioners have demonstrated only that the circuits
have disagreed over the application of preemption to some
specific statutes, such as the Medical Device Amendments to
the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 360(a),
that are unrelated to this case.‘

Circuit disharmony over the construction of an unrelated
statute does not amount to a conflict among the circuits on the
matter of concern in this case. Resolving a conflict over the
preemptive effect of other statutes will not resolve the
controversy here. No other court — state or federal — has
considered the preemptive effect of ANCSA’s settlement trust
provisions. Moreover, if the petitioners and dissenting Judge
Kleinfeld are correct that “there is no basis for a preemption
analysis” here, (Petition at 15), then the circuit conflict that the
petitioners write of is not relevant to consideration of this case.

The lower courts do not “need instruction on . . . when they
may resort to preemption analysis and when they may not,” or
“when they may rely upon broad statutory language . . . to find
a preemption,” (id. at 15), as the petitioners contend. Nor would
such instruction be helpful. Preemption analysis is an “exercise
of statutory construction,” beginning with the text of the statute
in question and turning upon congressional intent. New York State
Conference of Blue Cross & Blue Shield Plans v. Travelers Ins.
Co., 115 S. Ct. 1671, 1677 (1995). The specifics of the
relationship between the relevant statutory provisions within the
preemption framework is unique in each case. The nature of the
problem of discovering congressional intent has necessarily
resulted in judicial ad hoc balancing. While the significant
criteria may be articulated, as discussed below, it is difficult to
apply the rationale underlying a decision in one field to the

4. The Alaska Native Claims Settlement Act relates only to Alaska
Natives; therefore, of all the federal circuit courts, only the Ninth Circuit
could host a lawsuit arising under ANCSA.

1]

problem in another context. As Justice Black cautioned in Hines
v. Davidowitz, 312 U.S. 52, 67 (1941):

But none of these expressions provides an
infallible constitutional test or an exclusive
constitutional yardstick. In the final analysis,
there can be no one crystal clear distinctly
marked formula.

See also English v. General Electric Co., 496 U.S. 72, 79 n.5
(1990) (the categories of preemption are not “rigidly distinct”;
for example, field preemption may be viewed as a form of
conflict preemption).

Certiorari would be justified here only if the Ninth Circuit
had entered its decision in conflict with the rulings of this Court,
(United States Supreme Court Rule 10(c)), and it has not done
so.

Til.

THE NINTH CIRCUIT’S HOLDING IS IN ACCORD
WITH THE DECISIONS OF THIS COURT. THE ANCSA
SETTLEMENT TRUST OPTION PREEMPTS ALASKA
LAW.

A. The Ninth Circuit Applied Correct Preemption Criteria.

The United States Constitution and the laws of the United
States are the supreme law of the land. U.S. Const. art VI.
“Where a state [law] conflicts with or frustrates federal law, the
former must give way.” CSX Transp., Inc. v. Easterwood, 506
U.S. 658, 663 (1993). See also Wisconsin Public Intervenor v.
Mortier, 501 U.S. 597, 604 (1991) (laws that “interfere with,
or are contrary to the laws «f Congress, made in pursuance of

12

the constitution” are invalid). Federal preemption of state laws
“may be either express or implied, and is compelled whether
Congress’ command is explicitly stated in the statute’s language
or implicitly contained in its structure and purpose.” FMC Corp.
v. Holliday, 498 U.S. 52, 56-57 (1990) (quoting Shaw v. Delta
Air Lines, Inc., 463 U.S. 85, 95 (1983)) (quoting Fidelity
Federal Savings & Loan Ass'n v. De la Cuesta, 458 U.S. 141,
152-53 (1982)) (in turn quoting Jones v. Rath Packing Co.,
430 U.S. 519, 525 (1977)).

This Court recently summarized basic preemption analysis
in Barnett Bank of Marion County, N.A. v. Nelson, 116 S. Ct.
1103 (1996):

This question is basically one of
congressional intent. Did Congress, in
enacting the federal statute, intend to exercise
its constitutionally delegated authority to set
aside the laws of a state? If so, the Supremacy
Clause requires courts to follow federal, not
State, law. Sometimes courts, when facing the
preemption question, find language in the
federal statute that reveals an explicit
congressional intent to preempt state law.
More often, explicit preemption language
does not appear, or does not directly answer
the question. In that event, courts must
consider whether the federal statute’s
“structure and purpose,” or nonspecific
Statutory language, nonetheless reveal a
clear, but implicit, preemptive intent. A
federal statute, for example, may create a
scheme of federal regulation “so pervasive
as to make reasonable the inference that
Congress left no room for the states to

13

supplement it.” Alternatively, federal law
may be in “irreconcilable conflict” with state
law. Compliance with both statutes, for
example, may be a “physical impossibility”;
or, the state law may “stan{d] as an obstacle
to the accomplishment and execution of the
full purposes and objectives of Congress.”

Id. at 1108 (citations omitted).

The petitioners argue that whenever Congress includes an
express preemption clause in a statute, courts “ought to limit
themselves to the preemptive reach of that provision without
essaying any further analysis under the various theories of
implied preemption.” (Petition at 10 (quoting Greenwood Trust
Co. v. Commonwealth, 971 F.2d 818, 823 (ist Cir. 1992).)
However, this Court rejected the same argument in Freightliner
Corp. v. Myrick, 115 S. Ct. 1483 (1995), declining to adopt “a
categorical rule precluding the coexistence of express and
implied preemption” in a statute. /d. at 1487-88 (discussing
Cipollone v. Liggett Group Inc., 505 U.S. 504, 517 (1992)). A
statute’s express preemption clause “supports a reasonable
inference that Congress did not intend to preempt other matters,”
but does not “entirely [foreclose] any possibility of implied
preemption.” Freightliner, 115 S. Ct. at 1488.

The petitioners urge this Court to instruct the lower courts
that they must rest preemption on “the narrowest grounds
possible.” (Petition at 12). This Court has already instructed,
repeatedly, that “state law is displaced only to the extent that it
actually conflicts with federal law,” and that “a federal court
should not extend its invalidation of a statute further than
necessary to dispose of the case before it.” Dalton v. Little Rock
Family Planning Services, 116 S. Ct. 1063, 1064 (1996)
(quoting Pacific Gas and Electric Co. v. State Energy Resources

14

Conservation & Development Comm'n, 461 U.S. 190, 204
(1983), and Brockett v. Spokane Arcades, Inc., 472 U.S. 491,
502 (1985)).

The Ninth Circuit’s opinion honors the principles of
preemption analysis prescribed by this Court. The court found
that ANCSA “explicitly preempted state law with respect to
corporate resolutions that establish settlement trusts,”* but that

5. In setting out the procedures for considering amendments and
resolutions authorized by the 1987 Amendments, Congress provided:

(a) Coverage

Notwithstanding any provision of the articles of
incorporation and bylaws of a Native Corporation or
of the laws of the State, except those related to proxy
statements and solicitations that are not inconsistent
with this section —

(3) a resolution to establish a Settlement Trust;

shall be considered in accordance with the provisions
of this section.

43 U.S.C. § 1629b(a) (emphasis added).

The provision authorizing ANCSA corporations to establish settlement
trusts also states:

A Native Corporation may convey assets (including
stock or beneficial interests therein) to a Settlement
Trust in accordance with the laws of the State (except

(Cont'd)

15

the relevant inquiry is “whether a state law that prohibits the
actions taken by the trust is preempted by federal law.” (Op. at
5-6 (emphasis in original).) Nevertheless, the court found “that
ANCSA implicitly preempts state law [Alaska Stat.
§ 10.06.305(b)] in this respect.” (Id. at 6.)

The Ninth Circuit focused on the intent of Congress and
looked to “the provisions of the whole law, and to its object
and policy,” Gade v. National Solid Wastes Management Ass'n,
505 U.S. 88, 98 (1992) (quoting Pilot Life Ins. Co. v. Dedeaux,
481 U.S. 41,51 (1987)). (See Op. at 6-8.) The Court conducted
an “exercise in statutory construction,” New York State
Conference of Blue Cross, 115 S. Ct. at 1677, and consulted
the legislative history of the settlement trust option. (See Op.
at 9-11.) Relying on Wisconsin Public Intervenor v. Mortier,
501 U.S. 597, 605 (1991), the court determined that Alaska
Stat. § 10.06.305(b) is implicitly preempted because it stands
as an obstruction to the “accomplishment and execution of the
full purposes and objectives of Congress.” (Op. at 6-7 (quoting
Hines v. Davidowitz, 312 U.S. at 67-68).) This holding is
consistent with Barnett Bank, 116 S. Ct. at 1108, and Gade,
505 U.S. at 98 (reconfirming “at least” two types of implied
preemption, including conflict preemption where state law
“stands as an obstacle to the accomplishment and execution of
the full purposes and objectives of Congress”).

B. The Ninth Circuit’s Interpretation of ANCSA Is Correct;
the Trust Is a Valid Use of the Settlement Trust Option.

Contrary to the petitioners’ suggestion that the settlement

(Cont'd)
to the extent that such laws are inconsistent with this
section and section 1629b of this title).

43 U.S.C. § 1629e(a)(1)(A) (emphasis added).

16

trust option, and ANCSA as a whole, is silent regarding
preemption of Alaska Stat. § 10.06.305(b), (Petition at 10), the
congressional findings and statement of policy, the language of
the statute, and the legislative history of the 1987 amendments
all sustain the Ninth Circuit’s conclusion.

ANCSA and the ANCSA Amendments of 1987 were
enacted by Congress as “Indian legislation” . . . “pursuant to its
plenary authority under the constitution of the United States to
regulate Indian affairs.” Pub. L. No. 100-241, § 2(9), 101 Stat.
1788 (1988); 43 U.S.C. § 1601 note (Supp. 1996) (Congressional
Findings and Declaration of Policy for ANCSA Amendments
of 1987). See also Santa Clara Pueblo v. Martinez, 436 U.S.
49, 56 (1978). Thus, to the extent any state law conflicts with
ANCSA, it is preempted.

In enacting the 1987 Amendments, Congress found:

Natives have differing opinions as to whether
the Native Corporation, as originally
structured by the Alaska Native Claims
Settlement Act [this chapter], is well adapted
to the reality of life in Native villages and to
the continuation of traditional Native cultural
values[.]

Pub. L. No. 100-241, § 2(4).

The 1987 amendments intended “to ensure the continued
success of the settlement and to guarantee Natives continued
participation in decisions affecting their rights and property,”
and “to enable the shareholders of each Native Corporation to
structure the further implementation of the settlement in light
of their particular circumstances and needs.” Jd. § 2(5). Finally,
“by granting the shareholders . . . options to structure the further

17

implementation of the settlement,” Congress expressly declined
to state an opinion “on the manner in which such shareholders
choose to balance individual rights and communal rights.” Jd.

§ 2(7).

Thus, the codified settlement trust statute provided that “the
purpose of a Settlement Trust shall be to promote the health,
education, and welfare of its beneficiaries and preserve the
heritage and culture of Natives.” 43 U.S.C. § 1629e(b)(1).
Section 1629e specifically prohibits only trusts “that
discriminate in favor of a group of individuals comprised only
or principally of employees, officers or directors of the settlor
Native Corporation.” 43 U.S.C. § 1629e(b)(1)(C). ANCSA’s
“plain language . . . prohibits settlement trusts that discriminate
in favor of corporate insiders, but does not otherwise prohibit
trusts that discriminate in favor of other groups of shareholders.”
(Op. at 6.) Alaska Stat. § 10.06.305(b), prohibiting
discrimination among corporate shareholders, would surely
obstruct this broadly stated autonomy of each Native corporation
to identify its particular needs and frame a settlement trust to
address those needs. “Discrimination” in favor of identified
groups of shareholders whose needs were deemed greater is
exactly what was intended for the settlement trusts.

While the Ninth Circuit did not phrase its holding in terms
of “field preemption,”* the purpose clause of the settlement trust
provisions is indicative of complete federal occupation of the
field to delimit permissible goals of settlement trusts. Surely
Congress was aware of the potency in the authority to “promote
the health, education and general welfare” that it bestowed on
the settlement trusts. 43 U.S.C. § 1629e(b){1)(C) (emphasis

6. Perhaps the Ninth Circuit did not view it necessary to affix a label
since, as this Court has observed, the categories of preemption are not “rigidly
distinct,” and field preemption “may be understood as a species of conflict
preemption.” English, 496 U.S. at 79 n.5.

18

added). Indeed Congress explained: “Subsection (b)(1) [of 43
U.S.C. § 1629e] establishes certain characteristics of the
Settlement Trust. By doing so, Congress expressly intends to
preempt State law with regard to these elements of Settlement
Trusts.” House Explanatory Statement, 133 Cong. Rec. H.
11933 (Dec. 21, 1987), reprinted in 1987 U.S.C.C.A.N. 3299,
3308.’ An analogy is inescapable to the broad construction given
by this Court to the “general welfare” spending clause in our
own Constitution. U.S. Const. art. I, § 8, cl. 1.

Governmental decisions to spend money to
improve the general public welfare in one
way and not another are “not confided to the
courts. The discretion belongs to Congress,
unless the choice is clearly wrong, a display
of arbitrary power, not an exercise of
judgment.”

Mathews v. De Castro, 429 U.S. 181, 185 (1976) (quoting
Helvering v. Davis, 301 U.S. 619, 640 (1937)).

Contrary to the viewpoint of the dissent, (Op. at 24-25,
Kleinfeld, J., dissenting), the general welfare standard “is not a
toothless one.” DeCastro, 429 U.S. at 185 (quoting Mathews
v. Lucas, 427 U.S. 495, 510 (1976)). But the challenged Trust,
established in accordance with the procedure prescribed by
ANCSA, would be entitled to a presumption of validity: “So
long as [the shareholders’) judgments are rational, and not
invidious, the [shareholders’ and Trust’s) efforts to tackle the
problems of the poor and the needy are not subject to a [statutory]
straitjacket.” Id. at 185 (quoting Jefferson v. Hackney, 406 U.S.
535, 546 (1972)). The statute’s specific prohibition against

7. Congress also explained that “conventional trust oversight functions”
would remain within the jurisdiction of the state courts. Jd. at 3309.

19

benefitting corporate insiders and the requirement of approval
by a majority of all voting shareholders, 43 U.S.C.
§§ 1629b(d)(A), 1629e(b)(1)(C), provide further protections.

The legislative history of the 1987 amendments supports
this expansive interpretation of the purpose of the settlement
trusts, and demonstrates that the Trust conforms to ANCSA.
Congress enacted the 1987 Amendments to address problems
inherent in the 1971 act.* Pub. L. No. 100-241, § 2, 101 Stat.
1788 (1988). The most urgent problem was the original act’s
stock alienation section. See 43 U.S.C. § 1606. The act restricted
the alienation of ANCSA stock until 1991, when the stock would
have become freely alienable. As 1991 drew closer, many Native
leaders were apprehensive that ANCSA stock would be
relinquished in a corporate takeover and the land belonging to
the corporations would leave Native hands. See remarks of
Congressman Don Young in 133 Cong. Rec. H. 11933 (Dec.
21, 1987).

Native leaders told Congress of their desire to change
ANCSA to allow corporations more flexibility in implementing
the act. This goal took shape as several identifiable objectives.
One objective was to a’*ow corporations to transfer land from
the corporation to another entity in order to remove the land
from the business risks that jeopardize corporate assets. Another
was to create an entity dedicated to providing broad welfare
benefits to Natives without the obstacles inherent in paying
dividends to shareholders:

The legislation would allow differential
benefits from the corporations for Native

8. For a summary of the legislative evolution of the settlement trust
option provisions, see Martha Hirschfield, The Alaska Native Claims
Settlement Act: Tribal Sovereignty and the Corporate Form, 101 Yale L-J.
1331, 1343 (1992).

20

elders and other classes of Natives who
deserve more from the settlement than the
rest of us.

To Amend The Alaska Native Claims Settlement Act: Hearings
on S. 2065 Before the Subcomm. on Public Lands, Reserved
Water and Resource Conservation of the Senate Comm. on
Energy and Natural Resources, 99th Cong., 2nd Sess., 101
(1986) (statement of William C. (“Spud”) Williams, President,
Tanana Chiefs Conference, Inc.).

The petitioners argued below that Congress created the
settlement trust option for one exclusive purpose: land
protection. The legislative history, however, belies this
constricted view. Congress contemplated, and the Ninth Circuit
found, a broader role, including use of settlement trust assets
“to bolster the economic well-being of the beneficiaries.” House
Explanatory Statement, 133 Cong. Rec. H. 11933 (Dec. 21,
1987), reprinted in 1987 U.S.C.C.A.N. 3299, 3308. The
following excerpts from the official Senate report demonstrate
two goals for the settlement trusts:

The Settlement Trust section is intended
to enable Native Corporations to convey
assets to Settlement Trusts in which the assets
may be better managed for the benefit of the
Alaska Natives.

... Settlement Trusts are expected to
serve two principle functions. They are
intended to be permanent, Native-oriented
institutions which shall hold and manage, in
perpetuity, any historic or culturally
significant surface lands, sites, cemeteries,
traditional use areas, or monuments, for the
benefit of the beneficiary population. . . .

21

The other prime function relates to the
health, education and economic welfare of
its beneficiaries. Trusts may receive
conveyances of securities, cash, or other
assets which it must manage prudently, and
passively, in the interests of its beneficiaries,
and in conformance with the terms and
conditions set forth in the trust instrument
and this Act... . [T]he Trust assets may be
used to bolster the economic well-being of
the beneficiaries. .. .

Id. at 3307-08 (emphasis added).

This legislative history directly refutes the petitioners’
assertion that Congress’ sole purpose for the settlement trust
option was (6 protect Native land. Sealaska’s use of a settlement
trust to benefit elders conforms with the purpose of the 1987
amendments.®

9. The legislative history of 43 U.S.C. § 1606(g) also supports the
view that settlement trusts were not created solely to protect Native land:

In addition, in recognition of the unique environment
in which the Native Corporations operate, the
subparagraph authorizes such stock, if so provided by
the authorizing amendment to the articles of
incorporation, to carry certain transfer restrictions or
to be canceled upon the death of the original holder,
to be restricted in its issuance to Natives aged 65 or
older similarly identifiable groups of Natives, or to
State-Chartered Settlement Trusts established for the
benefit of Natives or descendants of Natives, including
identifiable groups thereof.

Senate Rep. No. 201, 100th Cong., 2d Sess. 24, reprinted in 1987
U.S.C.C.A.N. 3269, 3276-77 (emphasis added).

22

Congress declared that one purpose of the 1987
amendments was “to enable the shareholders of each Native
corporation to structure the further implementation of the
settlement in light of their particular circumstances and needs.”
Pub. L. No. 100-241, § 2(5), 101 Stat. 1788 (1988). With respect
to settlement trusts, Congress clearly intended to give ANCSA
corporations more flexibility in implementing the broad goals
of the 1971 act, including alternatives theretofore not generally
available to corporations:

While setting forth Settlement Trust
characteristics, Congress intentionally left
discretion in the Native Corporations to
formulate and state the terms and conditions
governing the Trust through the trust
instrument, consistent with the provisions of
this Act and State law. Specifically, the
settlor Native corporation shall have the
authority to set forth the terms and conditions
contained in the trust instrument, including
but not limited to . . . distributions . . .

133 Cong. Rec. H. 11933 (Dec. 21, 1987), reprinted in 1987
U.S.C.C.A.N. 3299, 3308-09 (emphasis added).

The petitioners’ interpretation would prevent ANCSA
corporations from taking advantage of the increased flexibility
available through a settlement trust, giving § 1629e a meaning
directly contrary to the purpose of the 1987 amendments.

23
CONCLUSION

The petitioners have not shown the “compelling reasons”
required by United States Supreme Court Rule 10 for a grant of
certiorari. Their petition for a writ of certiorari should be denied.

Respectfully submitted,

L. MERRILL LOWDEN
LESLIE LONGENBAUGH
Counsel of Record

E. BUDD SIMPSON
SIMPSON, TILLINGHAST, SORENSEN
& LORENSEN

Attorneys for Respondents
One Sealaska Plaza

Suite 300

Juneau, Alaska 99801
(907) 586-1400

la

APPENDIX A — RELEVANT STATUTES, ACT OF

FEBRUARY 3, 1988, PUB.L. 100-241, §§ 2, 101 STAT. 1813,

43 U.S.C. §§ 1606(h)(1)(A), 1629b(a), 1629%e, Alaska
Stat. §§ 10.06.305(b), 10.06.960(f)

Federal Statutes

Congressional Findings and Declaration of Policy for Alaska
Native Claims Settlement Act Amendments of 1987

Pub.L. 100-241, § 2, Feb. 3, 1988, 101 Stat. 1788, provided
that:

“The Congress finds and declares that —

“(1) the Alaska Native Claims
Settlement Act [this chapter] was enacted in
1971 to achieve a fair and just settlement of
all aboriginal land and hunting and fishing
claims by Natives and Native groups of
Alaska with maximum participation by
Natives in decisions affecting their rights and
property,

“(2) the settlement enables Natives to
participate in the subsequent expansion of
Alaska’s economy, encouraged efforts to
address serious health and welfare problems
in Native villages, and sparked a resurgence
of interest in the cultural heritage of the
Native peoples of Alaska;

“(3) despite these achievements and
Congress’s desire that the settlement be
accomplished rapidly without litigation and

2a
Appendix A

in conformity with the real economic and
social needs of natives, the complexity of the
land conveyance process and frequent and
costly litigation have delayed implementation
of the settlement and diminished its value;

“(4) Natives have differing opinions as
to whether the Native Corporation, as
originally structured by the Alaska Native
Claims Settlement Act [this chapter], is well
adapted to the reality of life in Native villages
and to the continuation of traditional Native
cultural values;

“(5) to ensure the continued success of
the settlement and to guarantee Natives
continued participation in decisions affecting
their rights and property, the Alaska Natives
Claims Settlement Act [this chapter], must
be amended to enable the shareholders of
each Native Corporation to structure the
further implementation of the settlement in
light of their particular circumstances and
needs;

“(6) among other things, the
shareholders of each Native Corporation
must be permitted to decide —

“(A) when restrictions on
alienation of stock issued as part of
the settlement should be terminated,
and

3a
Appendix A

“(B) whether Natives born after
December 18, 1971, should
participate in the settlement;

“(7) by granting the shareholders of each
Native Corporation options to structure the
further implementation of the settlement,
Congress is not expressing an opinion on the
manner in which such shareholders choose
to balance individual rights and communal
rights;

“(8) no provision of this Act [see Short
title of 1988 Amendment note under this
section] shal] —

“(A) unless specifically provided, —
constitute a repeal or modification,
implied or otherwise, of any provision
of the Alaska Native Claims
Settlement Act [this chapter]; or

“(B) confer on, or deny to, any
Native organization any degree of
sovereign governmental authority
over lands (including management, or
regulation of the taking, of fish and
wildlife) or persons in Alaska; and

“(9) the Alaska Native Claims
Settlement Act [this chapter] and this Act [see
Short Title of 1988 Amendment note under
this section] are Indian legislation enacted

4a
Appendix A

by Congress pursuant to its plenary authority
under the constitution of the United States
to regulate Indian affairs.”

43 U.S.C. § 1606. Regional Corporations
(h) Settlement Common Stock
(1) Rights and restrictions

(A) Except as otherwise expressly provided
in this chapter, Settlement Common Stock of
a Regional Corporation shall —

(i) carry a right to vote in elections for the
board of directors and on such other
questions as properly may be presented to
shareholders;

(ii) permit the holder to receive dividends
or other distributions from the corporation;
and

(iii) vest in the holder all rights of a
shareholder in a business corporation
organized under the laws of the State.

43 U.S.C. § 1629b. Procedures for considering amendments
and resolutions

(a) Coverage

Notwithstanding any provision of the articles of

5a

Appendix A

incorporation and bylaws of a Native Corporation or of the laws
of the State, except those related to proxy statements and
solicitations that are not inconsistent with this section —

(1) an amendment to the articles of
incorporation of a Native Corporation
authorized by subsections (g) and (h) of
section 1606 of this title, subsection (d)(1)(B)
of this section, or section 1629c of this title:

(2) a resolution authorized by section
1629(d)(2) of this title

(3) a resolution to establish a Settlement
Trust; or

(4) aresolution to convey all or substantially
all of the assets of a Native Corporation to a
Settlement Trust pursuant to section
1629e(a)(1) of this title;

shall be considered in accordance with the provisions of this
section.

43 U.S.C. § 1629e. Settlement Trust Option
(a) Conveyance of corporate assets.

(1)(A) A Native Corporation may convey
assets (including stock or beneficial interests
therein) to a Settlement Trust in accordance
with the laws of the State (except to the extent
that such laws are inconsistent with this
section and section 36 [43 USCS § 1629b)).

6a

Appendix A

(B) The approval of the shareholders of
the corporation in the form of a resolution
shall be required to convey all or substantially
all of the assets of the corporation to a
Settlement Trust. A conveyance in violation
of this clause shall be void ab initio and shall
not be given effect by any court.

(2) No subsurface estate in land shall be
conveyed to a Settlement Trust. A
conveyance of title to, or any other interest
in, subsurface estate in violation of this
subparagraph shall be void ab initio and shall
not be given effect by any court.

(3) Conveyances made pursuant to this
subsection —

(A) shall be subject to applicable laws
respecting fraudulent conveyance and
creditors rights; and

(B) shall give rise to dissenters rights to
the extent provided under the laws of the
State only if the rights of beneficiaries in the
Settlement Trust receiving a conveyance are
inalienable.

(4) The provisions of this subsection
shall not prohibit a Native Corporation from
engaging in any conveyance, reorganization,
or transaction not otherwise prohibited under
the laws of the State or the United States.

REEL ORS | LARNER IGE IEEE Ry erry

7a

Appendix A

(b) Authority and limitations of a Settlement Trust.

(1) The purpose of a Settlement Trust
shall be to promote the health, education, and
welfare of its beneficiaries and preserve the
heritage and culture of Natives. A Settlement
Trust shall not —

(A) operate as a business;

(B) alienate land or any interest in land
received from the settlor Native Corporation
(except if the recipient of the land is the
settlor corporation); or

(C) discriminate in favor of a group of
individuals composed only or principally of
employees, officers, or directors of the settlor
Native Corporation.

An alienation of land or an interest in land
in violation of this paragraph shall be void
ab initio and shall not be given effect by any
court.

(2) A Native Corporation that has
established a Settlement Trust shall have
exclusive authority to —

(A) appoint the trustees of the trust, and

(B) remove the trustees of the trust for
cause.

8a
Appendix A

Only a natural person shall be appointed
a trustee of a Settlement Trust. An
appointment or removal of a trustee in
violation of this paragraph shall be void ab
initio and shall not be given effect by any
court.

(3) A Native Corporation that has
establishe. a Settlement Trust may expand
the class of beneficiaries to include holders
of Settlement Common Stock issued after the
establishment of the trust without
compensation to the original beneficiaries.

(4) A Settlement Trust shall not be held
to violate any laws against perpetuities.

(c) Savings.

(1) The provisions of this Act [43 USCS
§§ 1601 et seq.) shall continue to apply to
any land or interest in land received from the
Federal Government pursuant to this Act [43
USCS §§ 1601 et seq.] and later conveyed to
a Settlement Trust as if the land or interest
in land were still held by the Native
Corporation that conveyed the land or interest
in land.

(2) No timber resources subject to
section 7(i) conveyed to a Settlement Trust
shall be sold, exchanged, or otherwise
conveyed except as necessary to —

————————————————————eEoEOE

SPD Noy,

eT ee ee pws RE TE ea settee He:

9a
Appendix A

(A) dispose of diseased or dying timber
or to prevent the spread of disease or insect
infestation;

(B) prevent or suppress fire; or

(C) ensure public safety. The revenue,
if any, from such timber harvests shall be
subject to section 7(i) as if such conveyance
had not occurred.

(3) The conveyance of assets (including
stock or beneficial interests) pursuant to
Subsection (a) shall not affect the
applicability or enforcement (including
specific performance) of a valid contract,
judgment, lien, or other obligation (including
an obligation arising under section 7(i)) to
which such assets, stock, or beneficial
interests were subject immediately prior to
such conveyance.

(4) A claim based upon paragraph (1),
(2), or (3) shall be enforceable against the
transferee Settlement Trust holding the land,
interest in land, or other assets (including
stock or beneficial interests) in question to
the same extent as such claim would have
been enforceable against the transferor
Native Corporation, and valid obligations
arising under section 7(i) as well as claims
with respect to a conveyance in violation of
a valid contract, judgment, lien, or other

10a
Appendix A

obligation shall also be enforceable against
the transferor corporation.

(5) Except as provided in paragraphs (1),
(2), (3), and (4), once a Native Corporation
has made, pursuant to subsection (a), a
conveyance to a Settlement Trust that does
not —

(A) render it —

(i) unable to satisfy claims based
upon paragraph (1), (2), or (3); or

(ii) insolvent; or

(B) occur when the Native Corporation
is insolvent; the assets so conveyed to the
Settlement Trust shall not be subject to
attachment, distraint, or sale on execution of
judgment or other process or order of any
court, except with respect to the lawful debts
or obligations of the Settlement Trust.

(6) No transferee Settlement Trust shall
make a distribution or conveyance of assets
(including cash, stock, or beneficial interests)
that would render it unable to satisfy a claim
made pursuant to paragraph (1), (2), or (3).
A distribution or conveyance made in
violation of this paragraph shall be void ab
initio and shall not be given effect by any
court.

lla

Appendix A

(7) Except where otherwise expressly
provided, no provision of this section shall
be construed to require shareholder approval
of an action where shareholder approval
would not be required under the laws of the
State.

Alaska Statutes
Alaska Stat. § 10.006.305(b)

(b) All shares of a class shall have the same voting,
conversion, and redemption rights and other rights, preferences,
privileges, and restrictions, unless the class is divided into series.
If a class is divided into series, all the shares of a series shall
have the same voting, conversion, and redemption rights and
other rights, preferences, privileges, and restrictions.

Alaska Stat. § 10.06.960(f)

Notwithstanding the other provisions of this chapter, a
corporation organized under the act is governed by the act to
the extent the act is inconsistent with this chapter, and the
corporation may take any action, including amendment of its
articles, authorized by the act, and the action is considered to
be approved and adopted if approved under the act. An
amendment approved under the act and delivered to the
commissioner under AS 10.06.512 shall be filed by the
commissioner under AS 10.06.910, and a certificate of
amendment shall be issued.

12a

APPENDIX B — VERIFIED NOTICE OF REMOVAL
FILED OCTOBER 28, 1992 WITH ATTACHED
SUMMONS AND COMPLAINT

E. Budd Simpson

BIRCH, HORTON, BITTNER & CHEROT
One Sealaska Plaza, Suite 301

Juneau, Alaska 99801

(907) 586-2890

Attorneys for Defendants

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

Case No. K92-006 CIV
LAURIE ISAAC BROAD,
For Himself and All Others Who Are Similarly Situated,
Plaintiffs,
vs.

SEALASKA CORPORATION, THE SEALASKA ELDERS’
SETTLEMENT TRUST, and Patrick Anderson, Charles Carlson,
Joseph Demmert, Jr., L. Embert Demmert, Raymond Demmert,
Jim Edenso, Clarence Jackson, Sr., Marlene A. Johnson, Albert
Kookesh, Ethel Lund, Carlton Smith, Richard Stitt, Sr., Ralph

Strong, Alan Williams, Rosita Worl, and Marjorie Young
(Corporate Directors),

Defendants.

13a

Appendix B
VERIFIED NOTICE OF REMOVAL

The Defendants respectfully submit this Verified Notice of
Removal pursuant to 28 U.S.C. §§ 1441(a) and (b) and 1331.
This case presents issues under federal law for which the district
courts of the United States have original jurisdiction.

I. BACKGROUND

1. On September 30, 1992, plaintiff filed a Complaint in
the Superior Court for the State of Alaska, First Judicial District
of Petersburg. The complaint was docketed by the Clerk of the
Superior Court, assigned Case No. 1PE-92-132CI, and is now
pending therein. A true and correct copy of the summons and
complaint is attached hereto as required by 28 U.S.C. § 1446(a).

2. The state court action arises under the Alaska Native
Claims Settlement Act (“ANCSA”), codified at 43 U.S.C.
$§ 1601-1629e (1992), and Alaska Rule of Civil Procedure 23.
Specifically, plaintiff alleges that the Sealaska Elders’ Settlement
Trust, established by Sealaska Corporation under 43 U.S.C.
§ 1629e, unfairly discriminates against those Sealaska
shareholders who have not received benefits under the Trust.
Complaint at { 7. Plaintiff seeks, inter alia, a declaration that
the Trust is discriminatory. Complaint at { B.

3. On or around October 2, 1992, the summons and
complaint were served on defendant Sealaska Corporation.
Accordingly, this notice is filed within 30 days of receipt by
defendant Sealaska Corporation of service.

4. No proceedings have been held in the state court action
except the pro forma issuance of a case number with the filing
of the complaint.

l4a

Appendix B

5. The Defendants seek removal of the state court action
to the United States District Court of Alaska.

Il. THE DISTRICT COURT HAS ORIGINAL
JURISDICTION OVER THE STATE COURT ACTION

6. The district court has original jurisdiction over this state
court action, and the action is removable pursuant to 28 U.S.C.
§§ 1441(a) and (b).

7. Original jurisdiction exists because the action arises
under the laws of the United States. See 28 U.S.C. § 1331.
Plaintiff’s claim for relief arises under federal law: 43 U.S.C.
§ 1629e(b).

CONCLUSION

WHEREFORE, the Defendants ask that the state court
action be removed from the Superior Court for the State of
Alaska, First Judicial District at Petersburg to the United States
District Court of Alaska.

DATED this 27 day of October, 1992.

BIRCH, HORTON, BITTNER & CHEROT
Attorneys for the Defendants

By: s/ E. Budd Simpson
E. Budd Simpson

1Sa
Appendix B

IN THE SUPERIOR COURT FOR THE STATE OF ALASKA
FIRST JUDICIAL DISTRICT AT PETERSBURG

Case No. 1PE-92-132CI
LAURIE ISAAC BROAD
For Himself and All Others Who Are Similarly Situated
Plaintiffs
vs.
SEALASKA CORPORATION, THE SEALASKA ELDER’S
SETTLEMENT TRUST, and Patrick Anderson, Charles Carlson,
Joseph Demmert, Jr., L. Embert Demmert, Raymond Demmert,
Jim Edenso, Clarence Jackson, Sr., Marlene A. Johnson, Albert
Kookesh, Ethel Lund, Carlton Smith, Richard Stitt, Sr., Ralph
Strong, Alan Williams, Rosita Worl, and Marjorie Young
(Corporate Directors)
Defendants
SUMMONS
To: SEALASKA CORPORATION
c/o Registered Agent
Birch, Horton, Bittner & Monroe
One Sealaska Plaza
Juneau, Alaska 99801

You are hereby summoned and required to serve upon:

16a
Appendix B

Fred W. Triem

Box 129

Petersburg, Alaska 99833
(907) 772-3911

an answer to the Complaint which is herewith served upon you;
and you must do so within twenty (20) days after the service of
this summons upon you, exclusive of the day of service. If you
fail to do so, judgment by default will be taken against you for
the relief demanded in the Complaint.

s/ Darlene A. Whitethorn
Darlene A. Whitethorn
Magistrate

Petersburg, Alaska

ATTACHMENT: Complaint for Class Action of 30 September
1992

17a

Appendix B

[Stamped]

Filed in Trial Courts

State of Alaska, First District
at Petersburg

SEP 30 1992
By s/ dw

IN THE SUPERIOR COURT FOR THE STATE OF ALASKA
FIRST JUDICIAL DISTRICT AT PETERSBURG

Case No. 1PE-92-132CI
LAURIE ISAAC BROAD
For Himself and All Others Who Are Similarly Situated
Plaintiffs
vs.

SEALASKA CORPORATION, SEALASKA ELDER’S
SETTLEMENT TRUST, and Patrick Anderson, Charles Carlson,
Joseph Demmert, Jr., L. Embert Demmert, Raymond Demmert,
Jim Edenso, Clarence Jackson, S:., Marlene A. Johnson, Albert
Kookesh, Ethel Lund, Carlton Smith, Richard Stitt, Sr., Ralph

Strong, Alan Williams, Rosita Worl, and Marjorie Young
Defendants

COMPLAINT FOR CLASS ACTION

Comes now into court Laurie Isaac Broad, for himself and

18a

Appendix B

for all other members of the class hereinafter described, who
are plaintiffs in the above-captioned cause, by and through his
attorney, Fred W. Triem, of Box 129, Petersburg, Alaska, and
proceeding according to Alaska Civil Rule 23, and for their cause
of action allege and aver as follows:

(1) Plaintiff is a resident of the State of Alaska and is
domiciled in Wrangell, Alaska.

(2) Defendants are Sealaska Corporation, the Sealaska
Elders’ Settlement Trust, and the Board of Directors of Sealaska.
Sealaska Corporation is an Alaska corporation organized under
Section 7 of the Alaska Native Claims Settlement Act [43 U.S.C.
§ 1606] as a Regional Corporation, having its principal office
in the City of Juneau, Alaska, within the First Judicial District,
for the purpose of securing and administering the benefits of
the Settlement Act for its shareholders.

(3) This action is brought by plaintiff as a class action, on
his own behalf and on the behalf of all others similarly situated,
under the provisions of Alaska Civil Rule 23 for injunctive and
declaratory relief, for restitution, for damages, and for relief
incident and subordinate thereto, including pre-judgment
interest, costs and attorneys’ fees.

(4) The Class so represented by the plaintiff in this action
and of which plaintiff is himself a member, consists of all
shareholders of Sealaska Corporation who have not been
enrolled as beneficiaries in the Elders’ Settlement Trust
[hereinafter “EST”] during the period from November 1991 to
present or who have not been paid the special dividend.

(5) The exact number of members of the Class, as identified

19a
Appendix B

and described hereinabove, is not known; but it is estimated
that there are approximately 14,000 members. The Class is so
numerous that joinder of individual members herein is
impracticable.

(6) There is a common question of fact and law in the action
that relates to and affects the rights of each member of the Class.

(7) The claims advanced and the relief sought are common
to the entire Class, namely, on or about November 1991 ,
Sealaska Corporation established the Sealaska Elders’
Settlement Trust [hereinafter: EST]. The EST confers a special
benefit upon certain privileged shareholders in the form of an
extra dividend of $20 per share paid for by the corporation. This
benefit is conferred upon only those shareholders who are of
the age of 65 years or older. Because the named plaintiff is not
yet of the age of 65 years, he can receive nothing from the EST
— even though he holds the same class of stock as other
shareholders who do receive this extraordinary benefit. The EST
unfairly discriminates against the named plaintiff and the Class
because it is supported and paid for by an expenditure of
corporate assets that would otherwise be available for pro rata
distribution to ail the shareholders of the corporation including
the plaintiffs. Therefore, the benefits of the EST are a
constructive dividend, the restricted and limited distribution of
which discriminates against those shareholders of the same class
of stock who do not receive this dividend.

(8) The claim of the plaintiff, who is a representative of
the Class herein, is typical of the claims of the Class, in that the
claims of all members of the Class, including the claim of the
plaintiff, depend on the showing of the acts of omissions of the
defendants giving rise to the right of the plaintiffs to the relief
sought herein.

20a

Appendix B

(9) The named plaintiff is the representative party for the
Class, and is able to, and will, fairly and adequately protect the
interests of the Class. The plaintiff’s attorney has sufficient
experience and knowledge to conduct this litigation on behalf
of the plaintiff and the putative Class.

(10) There is no conflict between the nominal plaintiff and
the other members of the Class with respect to this action or
with respect to the claims for relief herein set forth.

WHEREFORE the plaintiff prays, for himself and for all
other members of the Class, the following relief:

(A) That the court determine this action is properly
maintained as a Class action pursuant to Civil Rule 23; and

(B) That the court declare the benefits of the EST to be a
constructive dividend, the past and present distribution of which
discriminates against the members of the Class; and

(C) That the court enjoin the defendants from continuing
the Elders’ Settlement Trust; or

(D) That the court enjoin the defendants to enroll the
plaintiffs in the EST; and

(E) That the court enjoin the defendants from paying any
dividend and from making any distribution to any shareholder
who is not a member of the Class until all members of the Class
have been fully compensated for their claims herein; and

(F) That the court award restitution and damages to the
plaintiff and to the Class for their pro rata share of the corporate
assets that have been expended on the EST; and

2la

Appendix B

(G) That the court award pre-judgment interest to the
plaintiff and to The Class; and

(H) That the defendant be required to pay the plaintiff's
court costs and attorney’s fees that are incurred in this action,
and post-judgment interest: and

(1) That the court award such further and additional relief
as may seem to the court just and proper under the circumstances,
including costs and expenses.

Respectfully submitted this 30th day of September 1992 at
Petersburg, Alaska.

s/ Fred W. Triem
Fred W. Triem
Attorney for plaintiffs

22a

APPENDIX C — AMENDED COMPLAINT FILED
OCTOBER 30, 1992

IN THE SUPERIOR COURT FOR THE STATE OF
ALASKA, FIRST JUDICIAL DISTRICT AT
PETERSBURG

Case No. 1PE-92-132CI

LAURIE ISAAC BROAD, MARSHA SIMONDS, JULIE
WIGG, JOYCE LEWIS, CLINTON LEWIS, LARRY
TAYLOR, JR., MARC SIMPSON, REBECCA SIMPSON,
ALORA J. WINCHESTER, EMILY GOTARDO, BARBARA
CRABTREE, ANGIE DOAK, ROYANN CHURCHILL,
LEONARD VALEZQUEZ, ARLENE BELL HANSON and
VICTOR CARL DAVIS, JR.

For themselves and All Others Who Are Similarly Situated
Plaintiffs
vs.

SEALASKA CORPORATION, SEALASKA ELDER’S
SETTLEMENT TRUST, and Patrick Anderson, Charles
Carlson, Joseph Demmert, Jr., L. Embert Demmert, Raymond
Demmert, Jim Edenso, Clarence Jackson, Sr., Marlene A.
Johnson, Sr., Albert Kookesh, Ethel Lund, Carlton Smith,
Richard Stitt, Sr., Ralph Strong, Alan Williams, Rosita Worl,
and Marjorie Young (DIRECTORS)

Defendants

23a

Appendix C
AMENDED COMPLAINT FOR CLASS ACTION

Come now into court Laurie Isaac Broad and his co-
plaintiffs, for themselves and for all other members of the Class
hereinafter described, who are the plaintiffs in the above-
captioned cause, by and through their attorney, Fred W. Triem,
of Box 129, Petersburg, Alaska, proceeding according to Alaska
Civil Rule 23, and for their cause of action allege and aver as
follows:

(1) Plaintiffs are residents of the State of Alaska and are
domiciled in Petersburg or in Wrangell, Alaska.

(2) All of the plaintiffs named above are shareholders of
Sealaska Corporation.

(3) Defendants are Sealaska Corporation, the Sealaska
Elder’s Settlement Trust, and the individual members of the
Board of Directors of Sealaska Corporation (some of whom are
also trustees of the Sealaska Elders’ Settlement Trust).

(4) Sealaska Corporation is an Alaska corporation
Organized under Section 7 of the Alaska Native Claims
Settlement Act [43 U.S.C. §1606] as a Regional Corporation,
having its principal office in Juneau, Alaska, within the First
Judicial District, for the purpose of securing the administering
the benefits of the Settlement Act for its shareholders.

(5) The Sealaska Elders’ Settlement Trust is a trust
established by, funded by, and registered by Sealaska
Corporation on 10 December 1991 pursuant to AS 13.16.005-
.300 in Case No. 1JU-91-11TR in the Superior Court in Juneau,
Alaska.

24a

Appendix C

(6) This action is brought by the plaintiffs as a class action,
on their own behalf and on the behalf of all others similarly
situated, under the provisions of Alaska Civil Rule 23 for
injunctive and declaratory relief, for restitution, for damages,
and for relief incident and subordinate thereto, including pre-
judgment interest, costs, and attorneys’ fees.

(7) The Class so represented by the plaintiffs in this action
and of which plaintiffs are themselves members, consists of all
shareholders of Sealaska Corporation who have not been
enrolled as beneficiaries in the Elders’ Settlement Trust
(hereinafter “EST”] during the period from November 1991 to
present or who have not been paid the special dividend of $20
per share that has been and is being distributed only to those
shareholders who are the beneficiaries of the EST.

(8) The exact number of members of the Class, as identified
and described hereinabove, is not known; but it is estimated
that there are approximately 14,465 members in the Class. The
Class is so numerous that joinder of individual members herein
is impracticable.

(9) There is a common question of fact and law in the
action that relates to and affects the rights of each member of
the Class.

(10) The claims being made by the plaintiffs are typical of
the claims of the Class. (In fact, the claims of the plaintiffs are
identical with those of the Class).

(11) The representative parties, who are the nominal
plaintiffs herein, are adequate to represent the Class and do not
have any conflicts with the other members of the Class with

25a

Appendix C

respect to this action or with respect to the claims for relief
herein set forth. The named plaintiffs are the representative party
for the Class, and are about to, and will, fairly and adequately
protect the interests of the Class. The plaintiffs’ attorney has
sufficient experience and knowledge to conduct this litigation
on behalf of the plaintiffs and the putative Class.

(12) The claims advanced and the relief sought are common
to the entire Class, namely: on or about December 1991,
Sealaska Corporation established the Sealaska Elders’ Settlement
Trust [hereinafter: EST]. The EST confers a special benefit
upon certain privileged shareholders in the form of an extra
dividend or distribution of $20 per share paid for by the
corporation. This benefit is conferred upon only those
Shareholders who are of the age of 65 years or older. Because
the named plaintiffs are not yet of the age of 65 years, they can
receive nothing from the EST — even though they hold the
same class of stock as the other shareholders who do receive
this extraordinary distribution. The EST unfairly discriminates
against the named plaintiffs and against the Class because it is
supported and paid for by an expenditure of corporate assets
that would otherwise be available for pro rata distribution to
all the shareholders of the corporation including the plaintiffs
and the members of the Class. Therefore, the benefits of the
EST are a constructive dividend, the restricted and limited
distribution of which discriminates against those shareholders
of the same class of stock who do not receive this dividend.

WHEREFORE the plaintiffs pray, for themselves and for
all the other members of the Class, the following relief:

(A) That the court determine this action to be properly
maintained as a Class action pursuant to Civil Rule 23; and

26a
Appendix C

(B) That the court declare the benefits of the EST to be a
constructive dividend, the past and present distribution of which
discriminates against the members of the Class; and

(C) That the court enjoin the defendants from continuing
the Elders’ Settlement Trust; or

(D) That the court enjoin the defendants to enroll the
plaintiffs and the members of the Class in the EST; and

(E) That the court enjoin the defendants from paying any
dividend and from making any distribution to any shareholder
who is not a member of the Class until all members of the Class
have been fully compensated for their claims herein; and

(F) That the court award restitution and damages to the
plaintiff and to the Class for their pro rata share of the corporate
assets that have been expended on the EST; and

(G) That the court award pre-judgment interest to the
plaintiffs and to The Class; and

(H) That the defendant be required to pay the plaintiffs’
court costs and attorney’s fees that are incurred in this action,
and post-judgment interest; and

(I) That the court award such further and additional relief
as may seem to the court just and proper under the circumstances,
including costs and expenses.

Respectfully submitted this 30th day of October 1992 at
Petersburg, Alaska.

27a

Appendix C

s/ Fred W. Triem
Fred W. Triem
Attorney for plaintiffs

CERTIFICATE OF MAILING

I hereby certify that on the 30th day of October in 1992, I
mailed a true and correct copy of the foregoing pleading to

Leslie Longenbaugh, Esq., attorney for the defendants, Sealaska
Corporation, et. al.

s/ Fred W. Triem
Fred W. Triem

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1780%3A2. Public record. Not legal advice.