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UNITED NUCLEAR CORP. v. CLARK

January 31, 1984

United Nuclear Corporation Plaintiff
v.
William Clark, et al., Defendants



The opinion of the court was delivered by: GREENE

 In this action, United Nuclear Corporation (UNC) seeks a declaratory judgment that the Secretary of the Interior was in error when he required approval by the Navajo Tribe of a mining plan for uranium mines on Indian land. In 1971, with the approval of the Secretary under 25 U.S.C. § 392, UNC had secured leases from the Tribe for the exploration and mining of uranium on certain tribal lands. When UNC discovered mineable resources, it proposed a mining plan under 25 C.F.R. § 177.7 which the secretary refused to approve because the leases had since expired and had not been extended by the Navajo Tribe. This suit against the Secretary followed.

 On the government's motion to dismiss, the Court held that approval from the Tribe was necessary to an extension of leases, and that, since the Tribe had not given its consent, the action was subject to dismissal. Nevertheless, the Court denied the government's motion; it allowed UNC to join the Navajo Tribe in the lawsuit; and it stated that the action would be dismissed only if it subsequently turned out that the Tribe was protected by sovereign immunity and thus could not be forced to extend the leases. UNC thereafter brought in the Tribe and four of its officials, and these defendants have now moved to dismiss on grounds of sovereign immunity, lack of personal jurisdiction, and improper venue. Since the sovereign immunity defense is dispositive, only it needs to be discussed.

 I

 Many, if not most of UNC's contentions are directly foreclosed by the decision of the Supreme Court in Santa Clara Pueblo v. Martinez, 436 U.S. 49, 56 L. Ed. 2d 106, 98 S. Ct. 1670 (1978). That case was an action filed by a female member of the Santa Clara Pueblo Tribe seeking relief against the enforcement of a tribal ordinance denying membership in the tribe to children of female members who marry outside the tribe while extending membership to children of male members to marry outside the tribe. Notwithstanding the compelling nature of the claim and the Court of Appeals' conclusion that this classification was presumptively invidious and therefore sustainable only if justified by a compelling tribal interest, the Supreme Court reversed. Among the Court's holdings (or restatements of prior holdings) of substantial applicability to this case are the following: Indian tribes are distinct independent political communities, retaining their original natural rights in matters of local self-government; as separate sovereigns pre-existing the Constitution, tribes are unconstrained by those constitutional provisions framed specifically as limitations on federal or state authority, such as the Fifth Amendment and other provisions of the Bill of Rights; *fn1" Congress has plenary authority to limit, modify, or eliminate the powers of local self-government which the tribes otherwise possess; tribes possess the common-law immunity from suit traditionally enjoyed by sovereign powers; although Congress has power to authorize civil actions against tribal officers, a proper respect both for tribal sovereignty and the plenary authority of Congress in this area cautions that the federal courts tread lightly in the absence of clear indications of legislative intent; and, unless and until Congress makes clear its intention to authorize civil actions for violations of the Indian Civil Rights Act, *fn2" the courts are constrained to find that this statute does not impliedly authorize such actions against either a tribe or its officers.

 It is thus a basic principle that Indian tribes are immune from suit in the courts of the United States. Santa Clara Pueblo v. Martinez, supra; Puyallup Tribe, Inc. v. Department of Game, 433 U.S. 165, 172-73, 53 L. Ed. 2d 667, 97 S. Ct. 2616 (1977); United States v. Fidelity & Guarantee Co., 309 U.S. 506, 509, 60 S. Ct. 653, 84 L. Ed. 894 (1940). Any waiver of that immunity cannot be implied but must be unequivocally expressed. Santa Clara Pueblo v. Martinez, supra, 436 U.S. at 58; United States v. Testan, 424 U.S. 392, 399, 47 L. Ed. 2d 114, 96 S. Ct. 948 (1976); United States v. King, 395 U.S. 1, 4, 23 L. Ed. 2d 52, 89 S. Ct. 1501 (1969). It is likewise clear that an Indian tribe may not be sued indirectly by making the Tribal representatives the nominal defendants. Bottomly v. Passamaquoddy Tribe, 599 F.2d 1061, 1067 (1st Cir. 1979); State of Wisconsin v. Baker, 464 F. Supp. 1377, 1380 (W.D. Wisc. 1978).

 UNC does not seriously quarrel with these principles. Instead, it maintains that the sovereign immunity of Indian tribes does not extend to commercial activities, that sovereign immunity does not bar actions which seek redress for the deprivation of property without due process or just compensation, and that the Navajo tribal officials may be sued in the circumstances presented by this case under the Indian Civil Rights Act.

 II

 No court appears to have ever recognized a commercial activity exception to Indian sovereign immunity, and if the court were to accept UNC's argument it would therefore have to break new ground. It thus becomes necessary to examine the reasoning underlying UNC's position.

 At least with respect to foreign nations, the federal courts have by and large declined to recognize immunity with respect to suits involving the sovereign's non-public, non-political activities. See, e.g., Petrol Shipping Corp. v. Kingdom of Greece, 360 F.2d 103, 110 (2d Cir. 1966); Amkor Corp. v. Bank of Korea, 298 F. Supp. 143, 144 (S.D.N.Y. 1969). See also, Note, Sovereign Immunity of States Engaged in Commercial Activities, 65 Colum. L. Rev. 1086 (1965); Lauterpacht, The Problem of Jurisdictional Immunity of Foreign Sovereigns, 28 Brit. Y.B. Int'l L. 220 (1951). It may well be that, by analogy and by the logic of the precedents and authorities, a similar rule should apply to the Indian tribes. It is unnecessary to resolve that question, however, for although the Court is prepared to assume for purposes of the issues before it on the present motion that the principle of sovereign immunity is not a defense to an action against an Indian Tribe for purely commercial activities, it is still constrained to hold that UNC cannot prevail.

 The commercial activity exception to sovereign immunity is enshrined in the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(2), and it may be regarded for present purposes to be as broad as specified in that statute. The District Court for the Central District of California had occasion not long ago to consider that Act in relation to the price-fixing activities of the OPEC nations, and it concluded that the commercial exception did not apply to the lease of mineral rights on government-owned land. IAM v. OPEC, 477 F. Supp. 553 (C.D. Cal. 1979), aff'd, 649 F.2d 1354 (9th Cir. 1981). Said the court:

 
In determining whether the activities of the OPEC members are governmental or commercial in nature, the Court can and should examine the standards recognized under international law. The United Nations, with the concurrence of the United States, has repeatedly recognized the principle that a sovereign state has the sole power to control its natural resources. . . . The United States' enforcement of this principle deprives from its control, as a sovereign, of the development of its own lands and resources. See, e.g., U.S. Constitution, Art. 4, Sec. 3, Cl. 2.
 
The control over a nation's natural resources stems from the nature of sovereignty. By necessity and by traditional recognition, each nation is its own master in respect to its physical attributes. The [OPEC members '] control over their oil resources is an especially sovereign function because oil, their primary, if not sole, revenue-producing resource, is crucial to the welfare of their nations' people. . . . *fn3"

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