Summary of a Recent
Judicial
Development in
Environmental Law
Failure to Join Required Party Results in Dismissal
of Claims
for Damages for Contamination
by Poultry Companies' Growers
L. Paul GoeringerNational AgLaw Center Research Associate
Summary of Decision
In Oklahoma v. Tyson Foods, Inc., --- F.R.D. ---, 2009 WL 2176337 (N.D. Okla. 2009), District Judge Gregory K. Frizzell held that the Cherokee Nation was an indispensable party to the action, and that joinder of the Cherokee Nation was not feasible based on its sovereign immunity as a domestic dependent sovereign. Because joinder was not feasible, the judge dismissed the claims of monetary damages against the poultry integrators, but did not dismiss the claims of injunctive relief by Oklahoma. Finally, Judge Frizzell found that Oklahoma lacked standing to prosecute claims of monetary damages in land and resources held by the Cherokee Nation.
Background
Plaintiff, the state of Oklahoma, filed an action asserting monetary damages and injunctive relief from the defendant Poultry Integrators' "storing and disposing of hundreds of thousands of tons of poultry waste on lands within the [Illinois River Watershed (IRW)]." Id. at *1. Defendant Poultry Integrators (PIs) filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 19. Id. The PIs claimed that the Cherokee Nation was a required party to the action, and the state of Oklahoma failed to join the tribe. Id.
After the PIs filed their motion to dismiss, Oklahoma filed a purported binding agreement between the state and the Cherokee Nation assigning all claims it had against the PIs to Oklahoma. Id. at *2. The document was signed on May 19, 2009, by Oklahoma's Attorney General and the Cherokee Nation's Attorney General, and it was deemed effective retroactively on June 13, 2005. Id. at *3.
Arguments
At the motion hearing, the PIs argued that "the Cherokee Nation possesses significant, legally protected interests in lands, waters, and other natural resources in the IRW that will be impaired or impeded by its absence." Id. at *1. In the alternative, the PIs sought judgment as a matter of law because Oklahoma lacked standing to assert injury claims over properties owned or held in trust by the Cherokee Nation. Id.
Oklahoma claimed that the agreement with the Cherokee Nation made the Rule 19 joinder issue moot. Id. at *3. All parties agreed that the Cherokee Nation could not be joined, if it was a required party, because it has sovereign immunity. Id. at *9.
Analysis and Holdings
First, Judge Frizzell turned to the purported agreement between the Cherokee Nation and Oklahoma. Id. at *2. The agreement purported to assign any claims the Cherokee Nation may have had in the Illinois River Watershed (IRW) for possible environmental damages caused by the PIs to the state of Oklahoma. Id. at *3. The judge found that the agreement did not meet the requirements under state and tribal law to be legally binding. Id.
Under Oklahoma law, Oklahoma Statutes Ann. title 74, § 1221 sets forth three requirements for an agreement to be binding on the state. Id. First,
[t]he State ha[d] not shown that the Governor designated the Attorney General to negotiate and enter the cooperative agreement on behalf of the State, that the Joint Committee on State-Tribal Relations ha[d] approved the Agreement, that approval by the Secretary of the Interior ha[d] been sought and obtained with respect to Cherokee lands held in trust, or that the Oklahoma Legislature ha[d] consented to the cooperative agreement to the extent the agreement "involv[es] the surface water and/or groundwater resources of this state.
Id.
Therefore, Oklahoma had not followed Oklahoma law requirements to enter into a cooperative agreement with an Indian Tribe. Id.
Next, Oklahoma had made no showing that the Attorney General of the Cherokee Nation had the authority to execute the binding agreement on behalf of the Cherokee Nation. Id. at *4. The tribal code revealed that on the Principal Chief and/or the Council of the Cherokee Nation has the authority to enter into cooperative agreements on environmental enforcement with state authorities. Id.
The judge then found that Oklahoma Statutes Ann. title 12, § 2017(D) "prohibits assignment of state law claims not arising out of contract." Id. Finally, § 1221 prohibited Oklahoma and the Tribe from giving retroactive effect in cooperative agreements. Id. Judge Frizzell found the purported agreement did not moot or resolve the joinder issue. Id.
Judge Frizzell then turned to the Rule 19 issue. Rule 19 requires a court to perform a three-step process to determine if "an action should be dismissed for failure to join a purportedly indispensable party." Id. at *1. According to the judge,
First, the court must determine whether the absent party is "required." . . . Second, if the absent party is required, the court must determine if joinder is "feasible." . . . Third, if joinder of the absent party is not feasible, the court must determine "whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed."
Id. at *1-2.
Turning to the first step, the judge determined whether the Tribe was a "required party" by claiming an interest that was related to subject of the action and was "so situated that disposing of the action in the Cherokee Nation's absence may impair or impede its ability to protect the interest or leave an existing party subject to a substantial risk of incurring double, multiple or otherwise inconsistent obligations." Id. at *4. Judge Frizzell found that the signed agreement operated as an admission of the Cherokee Nation's interest in the current action. Id. at *5. But if the agreement was insufficient as an admission, Judge Frizzell also gave five other reasons for finding that the Cherokee Nation had a claimed interest in the litigation. Id.
First, the Cherokee Nation's Environmental Quality Code gave the Tribe "an interest in protecting the Illinois River and in vindicating its claimed rights for any pollution of the watershed." Id. at *6. The tribal code made it illegal to pollute the land and water of the Cherokee Nation, and broadly defined the "waters and lands" of the Cherokee Nation. Id. at *5. Second, the tribal code gave the right to the Tribe to pursue civil damages for violations of the Tribe's Environmental Quality Code. Id. at *6. Third, as a domestic dependent sovereign nation, the Cherokee Nation could choose to tax and regulate the application of poultry waste in its jurisdiction, instead of seeking monetary damages. Id. Fourth, the judge noted water rights established by federal laws in the Illinois River claimed by the Cherokee Nation, and unaffected by Oklahoma's statehood. Id. The judge cited legal scholars who believed the tribes would have "reserved water rights" in Oklahoma's waters. Id. Examining federal laws, federal precedent and the works of legal scholars, the judge also found that the Cherokee Nation would have an arguable claim to owning "much of the surplus water within its historic boundaries." Id. at *7. Finally, the judge pointed to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which permits tribal claims for pollution cleanup of natural resources that belong to the tribe or held in trust for the tribe. Id. For these reasons, the judge concluded that the Cherokee Nation claimed an interest for the purposes of Rule 19. Id.
The judge then turned to the question of whether the Cherokee Nation's absence "as a practical matter impair[ed] or impede[ed] the Cherokee Nation's ability to protect its interest, or leave defendants subject to a substantial risk of incurring double, multiple or otherwise inconsistent obligations." Id. Looking at the impairment of or impediment to the ability to protect the Cherokee Nation's interest, the judge found that "[t]he State [sought] damages for pollution to the IRW as a whole; it [did] not attempt to differentiate, segregate and/or exclude damages to tribal lands and water rights." Id. at *8. Because Oklahoma made no attempt, the judge found that "[a] large portion of the damages awarded for injury to tribal lands and natural resources would not benefit the Nation, as the State has contracted to give private counsel up to half of all monetary recovery as a contingency fee." Id.
Oklahoma contended that the Cherokee Nation's interests were "so aligned with those of one or more parties that the absent person's interests [were], as a practical matter, protected." Id. (citing Davis v. United States, 343 F.3d 1282, 1291-92 (10th Cir. 2003)). Judge Frizzell found this argument to be unpersuasive because of Oklahoma's and the Cherokee Nation's "disparate views relating to jurisdiction and ownership of lands and natural resources in Northeastern Oklahoma . . . ." Id. Judge Frizzell also rejected arguments that the Cherokee Nation would be a co-trustee under CERCLA. Id. CERCLA prevents double recovery for damages, and Oklahoma had made no showing of the land and resources owned by the State and the Cherokee Nation in the IRW. Id. For these reasons, Oklahoma was likely to be unjustly enriched at the expense of the Cherokee Nation, and impair the Cherokee Nation's ability to protect its interests in the IRW. Id.
Considering at the PIs' risk of double, multiple or inconsistent obligations, the judge found that allowing claims of monetary damages to go forward would leave the PIs subject to the real risk of an additional lawsuit brought by the Cherokee Nation. Id. at *9. This reasoning was based on the purported agreement the Cherokee Nation tried to enter into with Oklahoma, and statements of the Cherokee Nation's Principle Chief regarding protection of the IRW. Id.
Finally, the judge discussed CERCLA. Although CERCLA generally prevents double recovery of damages, CERCLA does not prevent double recovery when the cause of action is under state law claims, and does not prevent new CERCLA litigation "when the parties in the second action are not the same as, or in privity with, the parties in the prior action." Id. For those reasons, the judge found that there was a substantial risk of the PIs "incurring double, multiple, or otherwise inconsistent obligations with respect to the claims for monetary damages." Id.
Judge Frizzell then determined whether the action should be dismissed or proceed without the Cherokee Nation, and turned to the factors in Rule 19(b). Id. The first factor required the judge to determine the prejudice to the Nation and/or the PIs if the action proceeded. Id. at *10. Because the Cherokee Nation had a strong interest in regulating the resources in its jurisdiction, the judge found that "[t]he Nation would likely suffer prejudice to its sovereign interests should a money judgment be rendered in its absence." Id. The judge also found that the PIs would be prejudiced due to the real possibility of the Cherokee Nation pressing its claims for damages in the IRW. Id. According to the judge, this factor weighed in favor of dismissal. Id. at *11.
Looking at the next factor, the judge found that Oklahoma had not suggested and the judge had not discovered "a way by which prejudice to the Cherokee Nation and/or defendants could be lessened or avoided by protective provisions in the judgment, shaping the relief, or other measures." Id. Issue and claim preclusion would not prevent the Cherokee Nation from pressing its own claims, and the PIs would be exposed to the risk of multiple and inconsistent judgments. Id. Considering the adequacy of the judgment rendered without the Cherokee Nation, the judge looked at the adequacy of the dispute resolution, and not the adequacy of the judgment from Oklahoma's viewpoint. Id. The judge found that because "the State's claims involve[d] allegations of harm to natural resources in which the Cherokee Nation claim[ed] an interest, a judgment for damages in this case would either impinge on the Cherokee Nation's sovereign and statutory rights or leave defendants exposed to subsequent suit by the Cherokee Nation, or both." Id. This factor also weighed in favor of dismissal of the damages claims. Id.
Upon examining whether Oklahoma had an adequate remedy if the damages claims were dismissed, the judge found Oklahoma would have an adequate remedy. Id. Oklahoma could proceed with its claims for injunctive relief, or could dismiss the monetary damages claim and refile with the Cherokee Nation. Id. This factor also favored the court's dismissal of the damages claims. Id.
Looking at the timing of the Rule 19 claim, Judge Frizzell found the PIs to be seeking dismissal to protect the Cherokee Nation and not the PIs' own interests. Id. at *12. Judge Frizzell also found that Oklahoma had "resisted for over two years the defendants' efforts to clarify what specific lands and resources the State claims to own and alleges were injured." Id. Weighing each of the factors, Judge Frizzell found that Oklahoma's monetary damage claims should not proceed without the Cherokee Nation. Id. The judge granted the PIs' motion to dismiss Oklahoma's claims for money damages. Id.
Judge Frizzell turned to the final issue raised by the PIs: whether Oklahoma had standing to prosecute claims of monetary damages on the Cherokee Nation's land and resources in the IRW. Id. The Judge found that Oklahoma "ha[d] no standing as a 'quasi-sovereign' to seek damages for injury to lands and natural resources in the IRW that fall within the Cherokee Nation's sovereign interests." Id. Finally, the judge rejected claims by Oklahoma that it had standing under the Arkansas River Basin Compact of 1970 (Compact). Id. at *13. The judge found that the Cherokee Nation had not been a party to the Compact and the Compact had not abrogated the treaty water rights the Cherokee Nation held. Id. The judge concluded that Oklahoma had no standing to prosecute claims of monetary damages to land and resources held by the Cherokee Nation in the IRW. Id.
The case was decided on July 22, 2009.