United States District Court for the District of Columbia
April 13, 2004.
NAVAJO NATION, Plaintiff,
PEABODY HOLDING COMPANY, INC. et al., Defendants
The opinion of the court was delivered by: EMMET SULLIVAN, District Judge
OPINION & ORDER
Upon consideration of Defendants Peabody Holding Company, Inc. and
Southern California Edison's Renewed Motions to Dismiss or, in the
alternative, for Summary Judgment, the Responses and Replies thereto, it
is by the Court hereby
ORDERED that defendants' Motions to Dismiss or for Summary Judgment are
When considering a Motion to Dismiss, the Court construes the facts in
the complaint as true and construes all reasonable inferences in the
light most favorable to the plaintiff. See Swierkiewicz v. Sorema,
534 U.S. 506, 508 (2002). A Motion to Dismiss is granted and the
complaint dismissed only if no relief could be granted on those facts.
See Sparrow v. United Air Lines Inc., 216 F.3d 1111, 1114 (D.C. Cir.
2002) (stating that complaints "need not plead law or match facts to
every element of a legal theory") (quoting Krieger v. Fadely, 211 F.3d 134,
136 (D.C. Cir. 2000)).
Summary judgment is appropriate "if there is no genuine issue as to any
material fact and . . . the moving party is entitled to a judgment as a
matter of law." Waterhouse v. District of Columbia, 298 F.3d 989, 991
(D.C. Cir. 2002) (quoting Fed.R.Civ.P. 56). The moving party bears the
burden of showing that there is no genuine issue of material fact, and
the court views the evidence in the light most favorable to the
non-moving party. See Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
The issue in dispute is that of collateral estoppel; namely, whether
"the issue" here has already been determined by the Supreme Court in
Navajo Nation v. United States, "a different cause of action involving a
party to the prior litigation." Montana v. United States, 440 U.S. 147,
153-54 (1979); see Peabody's Mot. to Dismiss at 24-25. Defendants contend
that the Supreme Court's decision in Navajo Nation v. United States,
537 U.S. 488 (2003), effectively decided the underlying issues in the
instant case and thus requires the dismissal of plaintiff's suit.*fn1
Collateral estoppel precludes litigants "from contesting matters that they have had a full and fair opportunity to litigate."
Montana, 440 U.S. at 153. Plaintiffs argue that defendants have failed to
satisfy the three-prong test established by the D.C. Circuit, in which an
issue is precluded from subsequent litigation when: (1) the same issue
currently raised has been contested by the parties and submitted for
adjudication in a prior case; (2) the issue has been actually and
necessarily determined by a court of proper jurisdiction in the prior
case; and (3) "preclusion in the second case [does] not work a basic
unfairness to the party bound by the first determination." Yamaha Corp.
of America v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992).
The Court agrees. The question for which the Supreme Court granted
certiorari in Navajo Nation focused exclusively on whether the United
States government owed and breached a fiduciary duty to the Tribe such
that the allegedly inappropriate actions of government officials
permitted the Tribe to recovermonetary damages against the United States
despite the latter's sovereign immunity.*fn2 The issue before this Court
is whether a private company not the U.S. government violated RICO and committed
various common law torts when it hired a lobbyist to procure favorable
government action at the expense of the Tribe.*fn3 In other words,
although the underlying facts are the same as those presented before the
Supreme Court, the legal issue and concomitant question of liability are
Defendants nevertheless claim that, in deciding the merits of
plaintiff's case against the United States, the Supreme Court ruled
conclusively against plaintiffs on a number of issues common to the two
"parallel" suits. See Peabody's Mot. to Dismiss at 1; Peabody's Reply to
Pl's Opp'n at 13, 18. The Supreme Court's holding, however, stated only
that "the Tribe's claim for compensation from the Federal Government
fails, for it does not derive from any liability-imposing provision of
the [Indian Mineral Leasing Act ("IMLA")] or its implementing
regulations." United States v. Navajo Nation, 537 U.S. 488, 493 (2003).
Furthermore, the plain language of Navajo Nation reveals that the basis
for the Court's decision was the absence of any duty imposed on the
Secretary of Interior by statute. See, e.g., id. at 511 ("neither the IMLA nor any of its regulations establishes
anything more than a bare minimum royalty . . . there is no textual basis
for concluding that the Secretary's approval function includes a duty,
enforceable in an action for money damages, to ensure a higher rate of
return"); id. at 513 ("the Tribe's assertions are not grounded in a
specific statutory or regulatory provision that can fairly be interpreted
as mandating money damages. Nothing in . . . IMLA's basic provision, or
in the IMLA's implementing regulations, proscribed the ex parte
communications in this case") (emphasis added).
Defendants infer from the Supreme Court's language that plaintiff's
prospects of success on the merits are greatly reduced on remand. But in
deciding issue preclusion, where "it is the prior judgment that matters,
not the court's opinion explicating that judgment," defendants' strained
inferences are simply not enough to preclude plaintiff from litigating a
separate suit that, although arising from the same chain of events,
features different defendants and causes of action. Yamaha Corp., 961
F.2d at 254 (emphasis in original).
Another strong indication that the Supreme Court limited itself to
treatment of the precise issue before it is the opinion of the Federal
Circuit on remand. Navajo Nation v. United States, 347 F.3d 1327, 1328
(Fed. Cir. 2003). All three judges on the panel agreed that remand to the
Court of Federal Claims was appropriate to decide if, outside of the statutes under which the
Supreme Court had held the government was not liable, the Tribe could
prove that a separate "network" of statutes, treaties, and regulations
created a fiduciary duty that the government had breached. id. at 1332.
The majority of the panel constricted the Court of Federal Claims'
inquiry on remand, whereas Judge Neman, dissenting in part, agreed with
the Tribe that the Supreme Court had not completely foreclosed
consideration of the previously "explored" statutes; rather, "all sources
must be considered together." id. at 1332, 1335.
The Supreme Court has held that the statutes upon which the United
States' liability was predicated did not impose an enforceable duty on
the Secretary of Interior such that a breach of that duty gave rise to a
cause of action for monetary damages. See Navajo Nation, 537 U.S. at
493. The opinion of the Federal Circuit on remand clarifies that the
Supreme Court ruled only on liability under a specific statute, the
IMLA, and did not, as defendants contend, conclusively uphold the
validity of the Secretary's actions, and by implication, those of the
defendants. See Navajo Nation, 347 F.3d at 1332.
After a careful reading of the opinions of the Supreme Court and the
Federal Circuit, this Court concludes that the Supreme Court's opinion in
Navajo Nation was based squarely upon statutes controlling the United
States' relationship with and duty owed to Native American tribes and therefore has no preclusive effect on
plaintiff's civil RICO and intentional torts claims against private
defendants not party to the previous litigation.