24 June 2010
The 9th Circuit
Court of Appeals revived a messy Indian preference lawsuit
against Peabody Energy, the world's largest coal company, and
said the Navajo Nation can be joined in the case.
into agreements with the Navajo Nation to operate coal mines on
the reservation. The leases, which were approved by the Interior
Department, include a provision that states Navajos will be
given preference in employment.
Secretary of the Interior Stewart Udall, who served as Secretary
during the period the leases were drafted and approved, stated
in a declaration submitted to the district court that DOI
drafted the leases and required the inclusion of the Navajo
employment preferences," the court observed. "This statement is
began when Equal Employment Opportunity Commission, a federal
agency, sued Peabody for allegedly failing to hire Native
Americans who are not Navajo. After several rounds of
litigation, including a trip to the 9th Circuit in 2005 in which
the Navajo Nation was told to answer to the lawsuit, a judge
dismissed the case in 2006.
On appeal, the
9th Circuit reversed. The court again concluded that the Navajo
Nation cannot raise a sovereign immunity defense in a lawsuit
filed by the federal government.
"We held that
the Nationís sovereign immunity did not shield it from a suit
brought by EEOC and therefore did not bar its joiner," the court
said, referring to the 2005 decision in the litigation.
But on a new
issue, the court said the Interior Department cannot be joined
without its consent. Only the Justice Department can bring an
EEOC suit against a government agency, the 9th Circuit ruled.
"While there is
no evidence in the record of a formal referral to and refusal by
the Attorney General, we assume for purposes of our decision
that the Attorney General either has refused or will refuse to
file suit against the Secretary," the court wrote.
As a result, the
court said it would be unfair to hold Peabody responsible for a
provision in a lease that was requested by the government.
"Peabodyís only sin, if indeed it was a sin, was to comply with
an employment preference provision inserted in its lease at the
insistence of the Secretary," the 9th Circuit said.
So the 9th
Circuit said the EEOC cannot seek damages from Peabody for
violating federal employment laws. "It would be profoundly
unfair for a court to award damages against Peabody while
allowing Peabody no redress against the government," the court
At the same
time, the court said EEOC can continue to seek injunctive relief
against Peabody and the Navajo Nation in hopes of resolving the
dispute. That leaves open the possibility that Peabody and the
Navajo Nation will be forced to ignore a provision in a
federally approved lease.
In that event,
the court said Peabody and the Navajo Nation can bring a
third-party complaint against the Interior Department in order
to address Interior's role in the matter. Turtle Talk has posted
briefs from the case, EEOC v. Peabody.
9th Circuit Decision: EEOC v.
Peabody (June 23, 2010)