Schwabe Defends Tribal Sovereignty
The trial team of Brien Flanagan, Aukjen Ingraham and Sarah Lawson successfully stood up to outside parties attempting to interfere in the Navajo Nation’s economic activity. Federal Judge Steven Logan granted the Navajo Transitional Energy Company’s motion to dismiss, throwing out the outside parties’ entire lawsuit.
Schwabe represents the Navajo Transitional Energy Company (NTEC), a Navajo corporation. The Navajo Nation formed NTEC to buy and operate the Navajo Mine, a Navajo resource that had long been controlled by non-Navajo companies. Taking control of ownership, now NTEC would operate the Mine for the Navajo people with the revenue returning to the Navajo Nation. NTEC is also charged with reinvesting profits into developing alternative energy sources to serve the Nation in years to come.
In an effort to shut down the Mine and the nearby Four Corners Power Plant (FCPP), certain outside groups filed a lawsuit seeking to invalidate NTEC’s mining permits and authorizations, alleging that several federal agencies violated the Endangered Species Act (ESA), National Environmental Protection Act (NEPA) and Administrative Procedures Act (APA).
The groups filing the lawsuit did not file any claims against NTEC or the Navajo Nation.
NTEC filed a limited motion to intervene for the purpose of seeking dismissal under Federal Rules of Civil Procedure
(FRCP) 12 and 19. The court agreed that NTEC was a necessary party for the litigation. The court reasoned that NTEC’s rights in the Mine were at stake and a decision in this case could adversely impact those rights. The court further determined that based on its formation by the Navajo Nation and under Navajo law, NTEC was an arm of the Navajo Nation, imbued with sovereign immunity. The court then held that because NTEC was an indispensable party with sovereign immunity, the entire action must be dismissed.
Judge Logan’s decision solidifies the precedent that native corporations are imbued with sovereign immunity unless they expressly disavow that immunity or Congress abrogates that immunity. Outside parties cannot circumvent sovereign immunity by failing to name a tribal entity as a party when tribal interests are at stake. It is key that a tribal nation be able to make its own economic decisions without outside interference. As the court notes, if operations of the Navajo Mine were hindered, NTEC could default on its loan, which would ultimately cost the Navajo Nation millions of dollars. Those dollars would be taken from, in part, the Navajo Nation’s operating costs and could interrupt key government services including police and fire operations. While the decision to uphold sovereign immunity seems obvious, tribal sovereign immunity continues to be challenged.
This decision is incredibly important to those who live and work on the Navajo Nation. In support of NTEC’s motion, Navajo employees of the FCPP discussed what their work means to them. “Unemployment on the Navajo Nation hovers at 50%,” said Harry Scott. “Even with a good salary at the mine, my wife and I barely make ends meet. My wife works as a school teacher. We not only support ourselves, but 10 to 12 other people in our family with our wages,” he continued. Scott is one of many Navajo employed at FCPP who is proud that the Navajo finally are getting the benefit of natural resources on their own land. He understands that the taxes paid by the Mine to the Navajo Nation go to support basic services. “If those taxes are not paid, those basic services will be cut and the already suffering Navajo will have even fewer basic services. Closing the mine and power plant would be an economic disaster for the region.” This week, that disaster was prevented.
- Brien FlanaganIndustry Group Leader
- Aukjen IngrahamShareholder
- Sarah Roubidoux LawsonOf Counsel