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U.S. Court of Appeals, District of Columbia Circuit
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No. 99-1440
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234 F.3d 714, 234 F.3d 714, 2000.CDC.0042253
<http://www.versuslaw.com>, 166 L.R.R.M. (BNA) 2012, 166
L.R.R.M. (BNA) 2012
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December 19, 2000
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YUKON-KUSKOKWIM HEALTH CORPORATION, PETITIONER
V.
NATIONAL
LABOR RELATIONS BOARD, RESPONDENT
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James E. Glaze argued the cause for petitioner. With him on the briefs
were Lloyd Benton Miller, Donald J. Simon, Stephen H. Hutchings and
Douglas S. Burdin. Sharon I. Block, Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the brief were Leonard
R. Page, General Counsel, Linda Sher, Associate General Counsel, Aileen A.
Armstrong, Deputy Associate General Counsel, and Charles Donnelly,
Supervisory Attorney.
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Before: Ginsburg, Randolph and Tatel, Circuit Judges.
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The opinion of the court was delivered by: Ginsburg, Circuit
Judge
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Argued September 7, 2000
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On Petition for Review and Cross-Application for Enforcement of an
Order of the National Labor Relations Board
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Opinion for the Court filed by Circuit Judge Ginsburg.
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Separate statement dissenting in part filed by Circuit Judge
Randolph.
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The Yukon-Kuskokwim Health Corporation (Yukon), a non-profit
organization controlled by Alaska Native tribes, challenges the National
Labor Relations Board's assertion of jurisdiction over a hospital that
Yukon operates. The Board properly rejected the employer's claim to be
exempt pursuant to § 2(2) of the National Labor Relations Act (NLRA) on
the ground that it is an Indian tribe acting in a governmental capacity.
The Board failed, however, to consider the employer's argument that it is
entitled to exemption under § 2(2) because the Indian SelfDetermination
Act (ISDA) authorizes it to act as an arm of, and thus to share in the
exemption of, the United States. Accordingly, we remand this matter to the
Board for further proceedings.
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I. Background
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A group of Alaska Native tribes formed Yukon in 1969 to provide health
services, primarily to Alaska Natives, in Southwestern Alaska. Yukon is
controlled by a board of directors elected by the tribal councils of the
58 tribes in the region.
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In 1975 the Congress enacted the ISDA, 25 U.S.C. §§ 450 et seq., to
bring about "an orderly transition from the Federal domination of programs
for, and services to, Indians to effective and meaningful participation by
Indian people in the planning, conduct, and administration of those
programs and services." 25 U.S.C. § 450a(b). The federal government
recognized Yukon as an "Indian tribe" for purposes of the ISDA and,
pursuant to that statute, Yukon began to assume responsibility from the
Indian Health Service, an agency within the U.S. Department of Health and
Human Services, for the operation of clinics in native villages throughout
Southwestern Alaska.
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In 1991 Yukon took over a hospital previously operated by the IHS in
Bethel, Alaska, the largest town in the region. Most of the federal
employees at the hospital, including 40 nurses, remained on staff. In 1996
the Board received an election petition from a union seeking to represent
the nurses. Yukon opposed the petition on the basis of § 2(2) of the NLRA,
which excludes from the definition of "employer" "the United States or any
wholly owned Government corporation ... or any State or political
subdivision thereof." 29 U.S.C. § 152(2). Yukon argued that it qualified
for exemption under § 2(2) both as a political subdivision (because it is
an Indian tribe acting in a governmental capacity) and as an arm of the
United States (because it operates a federal hospital pursuant to the
ISDA).
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The Board overruled Yukon's objection on the ground that the Board had
never applied the exemption in § 2(2) to the activities of an Indian tribe
not conducted on an Indian reservation. The Board certified the union and
Yukon took a refusal to bargain charge so that it could get judicial
review of the Board's order under §§ 10(e) and (f) of the NLRA. 29 U.S. §§
160(e) and (f).
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II. Analysis
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Yukon advances two arguments for the proposition that its hospital is
not subject to the NLRA. First, Yukon argues that it qualifies under §
2(2) as a "State or political subdivision" because it is an Indian tribe
acting in a governmental capacity. Second, Yukon argues that it shares in
the exemption that § 2(2) grants to the federal government because the
ISDA authorizes it to operate a federal hospital pursuant to a
government-to-government compact with the United States.
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A. Governmental Capacity
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Yukon argues that the Board acted arbitrarily in limiting the
exemption afforded to Indian tribes under § 2(2) to activities conducted
on a reservation, rather than limiting the exemption to "governmental
activities" of Indian tribes, wherever conducted. In our review of the
Board's decision, we "must accept the Board's position unless it conflicts
with the 'unambiguously expressed intent' of the Congress or is
[otherwise] not 'a permissible construction of the statute.' " Hormel v.
NLRB, 962 F.2d 1061, 1065 (D.C. Cir. 1992) (quoting Chevron v. NRDC, 467
U.S. 837, 843 (1984)).
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In the past, the Board has interpreted the exemption under § 2(2) for
"any State or political subdivision thereof," to include "entities that
are either (1) created directly by the State, so as to constitute
departments or administrative arms of the government, or (2) administered
by individuals who are responsible to public officials or to the general
electorate." NLRB v. Natural Gas Utility District of Hawkins County,
Tennessee, 402 U.S. 600, 604-605 (1971). In Fort Apache Timber Co. v.
NLRB, 1976-77 NLRB Dec. (CCH) ¶ 17,475 (Oct. 19, 1976), the Board applied
this test to conclude that because "the Fort Apache Timber Company is an
entity administered by individuals directly responsible to the Tribal
Council ... [it is] exempt as a governmental entity recognized by the
United States, to whose employees the Act was never intended to apply."
Id. at 28,876 n.22.
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More recently, in Southern Indian Health Council v. NLRB, 1988-89 NLRB
Dec. (CCH) ¶ 15,052 (July 29, 1998), the Board applied the "direct
responsibility" test to a hospital located on a reservation and operated
by a consortium of seven tribes. The Board concluded that the hospital was
exempt from the NLRA pursuant to the "State or political subdivision"
exemption because "the directors of the Employer are directly appointed
by, and subject to removal by, the governing bodies of the member tribes."
Id. at 28,226.
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Later, in Sac & Fox Industries v. NLRB, 1992-93 NLRB Dec. (CCH) ¶
17,250 (Apr. 24, 1992), the Board modified its test for application of the
"State or political subdivision" exemption to Indian tribes. In that case
the tribe had secured a $30 million supply contract with the Department of
Defense, for which it had built or acquired four factories not on its
reservation. Many of the workers employed at the acquired factories
previously had been represented by a union, but the tribe argued that its
substitution as the employer made the operation exempt from the NLRA and,
hence, from the obligation to bargain with the union. The Board rejected
this claim, explaining that "[a]lthough the Board's decision in Fort
Apache [ ] contains statements to the contrary ... we read that decision
as limited to situations in which the tribal enterprise is located on the
reservation." Id. at 32,416.
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Yukon argues that the Board should read Sac & Fox as having denied
exemption to the off-reservation factories in material part because of
their commercial nature, not simply because of their location off the
reservation. The Board, however, has never drawn a distinction based upon
the nature of the Indian enterprise. The Board first said somewhat
tentatively in Sac & Fox that the "exemption in Section 2(2) for a
'political subdivision' of a 'State' does not clearly include an
off-reservation tribal enterprise." Id. Now, the Board has firmly
concluded that an Indian tribe does not qualify as a "State or political
subdivision" for purposes of § 2(2) when it conducts activities off its
reservation. We can hardly say that position is
unreasonable.
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An Indian tribe, like any other governmental unit, typically operates
in its governmental capacity only within its geographical jurisdiction.
There are, to be sure, exceptions to that general rule, as recognized, for
example, in the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. §
1605(a)(2). The distinction between commercial and governmental
activities, however, is often elusive, see Princz v. Federal Republic of
Germany, 26 F.3d 1166, 1172 (D.C. Cir. 1994) (noting that FSIA, rather
than attempting to define "commercial" and "governmental" activity, leaves
to courts the task of distinguishing between the two), and the Board has
long and reasonably preferred bright line rules in order to avoid disputes
over its jurisdiction. See, e.g., Siemons Mailing Service, 122 N.L.R.B.
81, 85 (1958) (setting dollar threshold for the "effect on commerce"
sufficient to support Board jurisdiction). Accordingly, we defer to the
Board's interpretation and reject Yukon's argument to the
contrary.
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B. The ISDA
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Yukon also argues that it is exempt from the NLRA pursuant to § 2(2)
because that provision exempts "the United States" and here Yukon "stepped
into the shoes of" and "acts exactly for, and as, the United States"
because it operates a federal hospital pursuant to a
government-togovernment compact authorized under the ISDA.*fn1
Additionally, Yukon argues that for the Board to assert jurisdiction over
it would undermine the purpose of the ISDA, namely, to increase tribal
self-governance.
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In the decision under review the Board mentioned but dismissed the
ISDA in a single sentence:
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We further reject the Employer's contention that it is exempt from
coverage because in light of the government-to-government Compact
delegating Federal functions to the tribes on Federal property reserved
and intended for that purpose, the Employer functions as an arm to [sic]
the United States, and is, thus, an 'integral part of the government of
the United States as a whole.' 328 NLRB No. 101 at 4.
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The Board then repeated its conclusion that it has limited tribes'
exemption under § 2(2) "to situations in which the tribal enterprise is
located on the reservation." Id. (emphasis in original). The Board appears
simply to have misunderstood the tribe's argument here, which is that its
exemption derives not from its own sovereignty as an entity akin to a
"State or political subdivision" but, rather, from the exemption granted
to "the United States." For the Board to limit to the confines of an
Indian reservation the exemption granted to the United States makes no
sense. Additionally, the Board wholly failed to address Yukon's argument
that asserting jurisdiction over the hospital would "directly contraven[e]
the ISDA's goal" of increasing tribal self-governance.
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As this court explained in New York Shipping v. Federal Maritime
Commission, 854 F.2d 1338, 1370 (1988):
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[A]n agency, faced with alternative methods of effectuating the
policies of the statute it administers, (1) must engage in a careful
analysis of the possible effects those alternative courses of action may
have on the functioning and policies of other statutory regimes, with
which a conflict is claimed; and (2) must explain why the action taken
minimizes, to the extent possible, its intrusion into policies that are
more properly the province of another agency or statutory
regime.
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The ISDA is undoubtedly intended to remove tribal programs from
federal oversight. See Oklahoma Tax Comm'n v. Citizen Band Potawatomi
Indian Tribe, 498 U.S. 505, 510 (1991) (noting that ISDA "reflect[s]
Congress'[s] desire to promote the goal of Indian self-government").
Indeed, in the amendments to the ISDA enacted while this case was on
review, the Congress renewed its commitment to Indian selfdetermination.
See Tribal Self-Governance Amendments of 2000, P.L. 106-260, 114 Stat. 711
§ 2(3) (Aug. 18, 2000).
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The Board's one-sentence rejection of Yukon's arguments from the ISDA
both relies upon what, in this context, is an irrelevant distinction and
ignores the Board's obligation to address and to minimize conflict with
another statutory regime with which a disparity is claimed. Although the
General Counsel of the Board, in her argument before this court, addressed
in somewhat greater detail the Board's possible reasons for rejecting
Yukon's arguments from the ISDA, " 'courts may not accept appellate
counsel's post hoc rationalizations for agency action.' " NLRB v.
Metropolitan Life. Ins., 380 U.S. 438, 444 (1965) (quoting Burlington
Truck Lines v. United States, 371 U.S. 156, 168 (1962)).
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The Board's inadequate attention to the ISDA requires that we remand
this matter to the agency for further consideration. See, e.g., Iowa v.
FCC, 218 F.3d 756 (D.C. Cir. 2000) (remanding for agency to address
potentially dispositive argument). On remand, the agency must determine
whether Yukon qualifies as "the United States" for purposes of § 2(2); in
reaching its conclusion, the Board will need to consider what allowance,
if any, the NLRA must make in order to accommodate federal Indian law, as
reflected in the ISDA. As we noted in New York Shipping, our review of
such a determination "remains a matter of checking the [Board] against the
terms of the [labor] laws. This is precisely the type of appellate
exercise governed by Chevron; our review must be correlatively
deferential." 854 F.2d at 1364. It is for the agency, therefore, to
consider the petitioner's argument in the first instance.
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III. Conclusion
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For the reason set out in Part II B above, we deny enforcement of the
order issued by the Board and remand this case to the agency for further
consideration of the petitioner's argument from the ISDA.
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So ordered.
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Randolph, Circuit Judge, dissenting in part: I agree with the court's
opinion except for part II.B., which remands the case to the Board for
"further consideration of the petitioner's argument from the" Indian
Self-Determination Act. Maj. op. at 8.
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No principle of administrative law compels an agency to respond to
gibberish. It is therefore understandable that the Board never responded
to an argument that the Indian SelfDetermination Act removed Yukon from
the Board's jurisdiction. Maj. op. at 6. The Board did not respond because
Yukon never made any coherent argument to this effect. And it barely
managed to make one in this court. About all Yukon did before the Board
and before us is slap the SelfDetermination Act down on the table in the
hope that someone will figure out why it should matter.
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Here are the few assertions Yukon presented to the Board regarding the
statute. The Self-Determination Act "authorizes and encourages tribal
governments to assume operation of federal Indian programs." Employer's
Brief on Review of Jurisdictional Determination at 5. Indeed it does.
"Through the Act, Congress intended to shift programs from the federal
government to tribal governments, thereby reducing federal domination of
Indian programs." Id. That appears correct. "Nothing in the federal
government's authorization requires that the tribes' ... activities
[conducted pursuant to the Self-Determination Act] occur 'on reservation.'
" Id. at 8. This is obvious; Yukon's hospital is not on a reservation. (No
one-the Board included-has required Yukon or any Indian tribe to conduct
such activities on reservations.) What then is Yukon's point? All of its
statements about the SelfDetermination Act are contained in the section of
its brief claiming an exemption as a state or federal government under §
2(2). The section's heading is entitled "THE HOSPITAL IS OPERATED BY
FEDERALLY RECOGNIZED SOVEREIGN TRIBES ENTITLED TO THE GOVERNMENTAL
EXEMPTION." Id. at 4. The "governmental exemption" is § 2(2) of the
National Labor Relations Act, 29 U.S.C. § 152(2), the provision granting
an exemption to the federal government and state and local governments.
The Board rejected this argument, correctly we all agree at least to the
extent Yukon wanted to be considered a state. So what was left of Yukon's
reliance on the Self-Determination Act in its case before the Board? There
are two possibilities-nothing or nothing comprehensible. In either event,
the Board had no duty to respond.
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My colleagues think that perhaps Yukon also wanted to be considered
the United States for the purpose of § 2(2). (The section provides in
relevant part that the term employer "shall not include the United States
or any wholly owned Government corporation." 29 U.S.C. § 152(2).) Yukon's
briefs in this court hint here and there that it might have had this in
mind, although the thrust of its presentation to this court and the Board
was the rather inconsistent assertion that it-Yukon-was a separate,
independent sovereign. See, e.g., Brief of Petitioner at 36
(characterizing relationship under Self-Determination Act as
"inter-governmental delegation, transferring responsibility from one
sovereign to another"); Employer's Brief on Review of Jurisdictional
Determination (No. 19-RC-13271) at 5 ("[a]ccess to the benefits of the Act
is only available to sovereigns"); id. ("by definition under the Act, only
sovereigns may compact as an exercise of their
sovereignty").
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At all events, the Board said enough on this subject, given the
incoherence of Yukon's position. The Board wrote: "Significantly, the
Employer was not brought into existence by a special legislative Act.
Rather, it is a regional nonprofit corporation formed ... under applicable
Alaska laws. Under these circumstances, we find that the Employer is not
exempt under Section 2(2) 'as an integral part of the government of the
United States as a whole.' " Decision and Order, Yukon Kuskokwim Health
Corp., 329 N.L.R.B. No. 101 at 4 (June 18, 1999). In other words, whatever
the Self-Determination Act means, or whatever Yukon thinks it means, Yukon
remains an independent Alaska corporation, not a part of the government of
the United States. If Yukon believes the Act provides otherwise, it has
yet to explain why.
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Opinion Footnotes |
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*fn1
Judge Randolph, in his dissent, states that his "colleagues think that
perhaps Yukon also wanted to be considered the United States for the
purpose of § 2(2)." Lest we be thought utterly mad, he acknowledges a
"hint here and there" in its briefs to this court that Yukon "might have
had this in mind," but says that this was not "the thrust of its
presentation," either before the Board or here. We think that it was a
thrust. The heading of Part IV of Yukon's brief to the Board asserted that
"The 58 Tribes are Exempt as an Integral Part of the United States
[Government]," and the ensuing five pages (28-33) were devoted to arguing
the point. Yukon renewed the argument before this court in the section of
its brief headed "Tribes operating pursuant to the [ISDA] are treated as
the equivalent of federal agencies under the
[NLRA]."
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