Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 1 of 13 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA TINA MARIE SOMERLOTT, ) ) PLAINTIFF, ) ) V. ) ) ) CHEROKEE NATION DISTRIBUTORS, ) INC., AN OKLAHOMA CORPORATION, ) AND CND, L.L.C., AN OKLAHOMA ) LIMITED LIABILITY COMPANY, ) ) DEFENDANTS. ) PLAINTIFF S RESPONSE AND MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS MOTION TO DISMISS AMENDED COMPLAINT ON JURISDICTIONAL GROUNDS This action comes before the Court as an unfortunate by-product of efforts to further the prosperity of Indian Tribes in America. In this action for wrongful termination, Defendant CNDI n/k/a CND, L.L.C. (herein referred to in the singular as CND ) claims that it should be able to discriminate on the basis of gender and age because it is is an economic arm of the Cherokee Tribe. It is unclear how such discrimination intertwines with the Tribe s need for prosperity, or why it would wish to continue to do so in this time of enlightenment among all nations. Nevertheless, because CND does not meet the definition of an arm of the Tribe as required for immunity, its Motion to Dismiss should be denied.
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 2 of 13 ARGUMENT It is well-settled that not every Tribal endeavor is treated equally under the laws of the United States. The good reasoning behind this disparate treatment is that a business is defined not just by its stated nature, but also by what it does and how it carries itself. As the Tribes grow in economic prosperity and business diversification, their involvement in businesses far beyond Tribal borders also grows. It is just such a business that forms the basis of this action. Governing Statutes Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against employees based upon race, sex, national origin or religion. 42 U.S.C. 2000 et seq. It excludes from its definition of employer, the United States, or a corporation wholly owned by the government of the United States, or an Indian tribe. 42 U.S.C. 2000e(b). In contrast to the express mention of U.S. corporations, Tribal corporations are not named. Nevertheless, jurisprudence has stretched the definition to include corporations that are owned by the Tribe. Similarly, the Age Discrimination in Employment Act (ADEA) prohibits employers from discriminating against employees age forty and older. 29 U.S.C. 621 et seq. The ADEA excludes from its definition of employer, the 2
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 3 of 13 United States, or a corporation wholly owned by the Government of the United States. 29 U.S.C. 630(b). It does not mention Indian tribes as an entity to be excluded from its definition of employer. Even so, the ADEA has been held inapplicable to the Tribes. Facts Applicable To CND s Status As An Arm Of The Indian Tribe For Purposes Of Exemption From Title VII & ADEA 1. The Indian tribe, Cherokee Nation, wholly owns Cherokee Nation Businesses, LLC. [McLemore Affid. June 19, 2009 3; McLemore Affid. June 16, 2008, 2; Defs Supp. Resp. Supp. Interrog. Nos. 6A, 8, 15] 2. In turn, Cherokee Nation Businesses, LLC, wholly owns CND, L.L.C. which was renamed from Cherokee Nation Distributors, Inc. Ibid. 3. Cherokee Nation Distributors, Inc. was incorporated under the laws of the state of Oklahoma. Ibid. 4. Cherokee Nation Businesses, LLC is an Oklahoma limited liability company organized under the laws of the state of Oklahoma. Ibid. 5. Ms. Somerlott was a chiropractic technician who worked for Cherokee Nation Distributors, Inc. and was assigned to the chiropractic clinic at Reynolds Army Hospital located in Fort Sill, Oklahoma. [Amended Complaint] There is no 3
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 4 of 13 evidence that either the clinic or the hospital where she worked was operated for the sole or primary benefit of any Indian tribe or its members. 6. As a chiropractic technician employed by Cherokee Nation Distributors, Inc., none of Ms. Somerlott s duties were conducted on the Indian Reservation. 7. Ms. Somerlott s direct supervisor was Dr. Aguilar. [Amended Complaint] To Ms. Somerlott s knowledge, Dr. Aguilar was not a member of the Cherokee Nation Indian tribe prior to, or at the time of, her termination. 8. There is no evidence that the Indian Tribe set any of the terms and conditions of Ms. Somerlott s employment with respect to hours and days worked or conditions of her work. Indeed, it was Dr. Aguilar who did so. 9. It was Dr. Aguilar about whom Ms. Somerlott complained to the Chief of Physical Therapy, reporting that she had heard Dr. Aguilar having sexual intercourse on the grounds of the chiropractic clinic located on the military base as alleged in the Amended Complaint. 10. It was Dr. Aguilar who took the steps necessary to terminate Plaintiff s employment in January 2007, as alleged in the Amended Complaint. 11. At the time of her termination, Ms. Somerlott was older than forty years of age and it was Dr. Aguilar who attempted to replace Ms. Somerlott with a woman 4
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 5 of 13 younger than forty years of age, as alleged in the Amended Complaint. 12. Neither Ms. Somerlott, nor the EEOC while investigating this Charge, were ever informed that CND was an Indian tribe, nor that it was in any way affiliated with an Indian tribe. Amended Complaint, Exhibit 4. 13. The Amended Complaint does not name the Indian tribe, Cherokee Nation, as a defendant. 6. The Indian tribe, Cherokee Nation, does not provide funds directly to Cherokee Nation Distributors. Defs Resp. Supp. Interrog. No. 14. 7. Approval of the contract between Cherokee Nation Distributors and the Army to staff the chiropractic facility at Fort Sill where Ms. Somerlott was assigned and worked, was not made directly by the Indian tribe, Cherokee Nation. Defs Resp. Supp. Interrog. No. 4. Issue Presented In its Motion to Dismiss, CND states that it has not waived sovereign immunity for purposes of the instant litigation. However, it never had sovereign immunity to begin with, for the business endeavor at issue. The issue to be decided is whether activities of CND were purely intramural activities or government functions entitled to sovereignty. 5
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 6 of 13 Analysis The Indian Tribe s relationship to CND is so attenuated that CND cannot be entitled to the Tribe s exemption from the strictures of Title VII and the ADEA. CND claims that it is a corporate employer engaged in commercial activities, that it is owned by another corporation that is owned by the Tribe, and it is entitled to the exemption as though it were the Indian tribe itself. Although there is no reported case directly on point, a review of the cases cited by Defendants highlights how far from the norm CND asks this Court to venture, to further extend the already-tenuous reach between Tribal businesses and Tribal immunity. Ms. Somerlott respectfully asks the Court to refrain from further extending that reach. In EEOC v. Cherokee Nation, 871 F.2d 937 (10th Cir. 1989), the Tenth Circuit held that the ADEA was not applicable to tribes. However, it did not establish any guidelines for determining whether a corporation such as CND could be designated as an Indian tribe, by virtue of its having been owned by another corporation that was owned by an Indian tribe. It also begs a related question of whether the acts complained of here sexual intercourse in the workplace, retaliatory discharge for reporting it, and being replaced by someone younger than forty years of age 6
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 7 of 13 impacts, impinges, or infringes on tribal sovereignty, or deals with purely intramural affairs best left for resolution by the tribe. It is important to note that the Tenth Circuit appeared to limit EEOC v. Cherokee Nation by noting that its holding was that a statute of general applicability would not be applicable to Indian tribes if that application would be in derogation of Indians treaty rights. See, The Osage Tribal Council v. U.S. Dep t of Labor, 187 F.3d 1174, 1183 (10th Cir. 1999), cert. denied, 530 U.S. 1229 (2000). A review of Cherokee reveals its emphasis on the tribe s treaty-protected right of self-government under the Treaty of New Echota. 871 F.2d 937, 938 (10th Cir. 1989). In contrast, the case at bar does not deal with a treaty-protected right to selfgovernance. The corporation employing Ms. Somerlott was not a tribe or an arm of a tribe, and this was not an intramural issue, best left to a tribe to resolve. In Myrick v. Devil s Lake Sioux Mfg. Corp., 718 F.Supp.753, 755 n. 1 (D.N.D. 1989) the court distinguished Cherokee because the plaintiffs were non-tribal reservation employees. Indeed, Myrick held that the age and race discrimination claims under Title VII and the ADEA could proceed because the tribe owned only 51% of the corporation organized under laws of the State of North Dakota and so was not entitled to an exemption, noting that a tribe or an arm of the tribe was not a party. Id. 7
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 8 of 13 Compellingly, in Cano v. Cocopah Casino, 2007 U.S.Dist. LEXIS 54377 (D.Ariz. 2007), the court applied the ADEA to a casino where the plaintiff worked, that was wholly owned by an Indian tribe, and was the formal employer of all casino staff. The Cano court found the ADEA applied because the casino employed both tribal and non-tribal employees, and because while profits were no doubt important to the tribe, the actual operation did not touch on the exclusive rights to self-government in purely intramural matters that the casino was functioning simply as a business entity that happened to be run by a tribe or its members. Cano at * 9 - *10. Thus, even if CND has granted the Tribe authority to appoint Board members, and even if its financial records and liabilities are monitored by the Tribe, there is insufficient showing that CND is an arm of the tribe, without some nexus with Tribal-protected rights and self government. Desire for a thriving economy is not sufficient nexus with Tribal self-governance to give rise to Tribal status for every business interest of the Tribe particularly where that thriving economy comes at the expense of the civil rights of non-tribal citizens, and the non-tribal small businesses that must compete with them. In arriving at its decision, Cano cites to, and distinguishes, EEOC v. Karuk Tribe Housing Authority, 260 F.3d 1071, 1080-1081 (9th Cir. 2001), where the court 8
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 9 of 13 found an ADEA Indian tribe exemption applied because the defendant was not simply a business entity that happened to be run by a tribe or its members, but instead was an entirely intramural matter between the tribal government and a member of the tribe. A purely intramural matter is simply not involved here. A review of the relevant case law where a tribe or arm of a tribe is given exemption has as a common element intramural disputes or matters affecting a tribe s self-governance. They involve activities we normally envision as governmental functions. This is not the case here, which distinguishes the cases cited by Defendants. For instance, housing authorities may be exempt because of the nature of the activity. See Duke v. Absentee Shawnee Tribe of Oklahoma Housing Authority, 199 F.3d 1123 (10th Cir. 1999); see also EEOC v. Karuk Tribe Housing Authority, 260 F.3d 1071, 1078-1079 (9th Cir. 2001) (housing authority operated entirely by tribe, on tribal land, and tribe employed, found to be intramural). In EEOC v. Karuk Tribe Housing Authority, 260 F.3d 1071, 1078-1079 (9th Cir. 2001) the court held a statute of general applicability generally does not apply to a tribe where it (1) interferes with self-government because it is a purely intramural affair; or (2) effectively abrogates treaty rights. In Karuk, the housing authority functioned as an arm of the tribal government and was in a governmental role where 9
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 10 of 13 99% of housing units were occupied by Indian families and 83% of employees were Indians. Similarly, in Giedosh v. Little Wound School Board, Inc., 995 F.Supp. 1052 (D.S.D. 1997), the court found the Title VII exemption applied where the school board was Tribally chartered and provided education only to Indian children on the Reservation. The case at bar does not relate to activities that are normally considered governmental functions. Ms. Somerlott provided chiropractic services at a clinic at an Army base hospital, and those services were provided to military personnel, not Indians. Moreover, Ms. Somerlott herself is not an Indian, or working on a reservation. CND s cases are distinguishable and highlight the difference the case at bar presents. In EEOC v. Fond du Lac Heavy Equip. and Constr., 986 F.2d 246 (8th Cir. 1993), the court held that the ADEA did not apply, but emphasized the narrow facts giving rise to that conclusion - including the fact that the plaintiff was a member of the tribe, the company was on the reservation, the tribe wholly owned and chartered the defendant, and that it was strictly an internal matter that should be left to the tribe s self-government. Id. at 249, 251. See also Thomas v. Choctaw Mgmt/Services Enterp., 313 F.3d 910 (5th Cir. 2002) (holding enterprise was a 10
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 11 of 13 direct enterprise of the tribe and that they were legally inseparable). In Pink v. Modoc Indian Health Project, 157 F.3d 1185 (9th Cir. 1998), the health service organization was owned by a Tribe and provided health services only to Tribe members, the plaintiff being Indian, making the endeavor an arm of the Tribe for sovereign immunity purposes, and not merely a business. See also NLRB v. Chapa De Indian Health Program, Inc., 316 F.3d 995, 997 (9th Cir. 2003) (none of board of directors were tribe members and nearly half of patients were not Indians). Lastly, since there is no reported case directly on point where the issue was whether the Indian tribe exemption extends to a corporation that was owned by a corporation that was itself owned by a tribe, it is helpful to review analogous case law. CND characterizes its relationship as one of a subsidiary to its parent, and that its parent was wholly owned by the tribe. January 2009 Resp. Supp. Interrog. Nos. 9, 10, 19. In Frank v. US West, Inc., 3 F.3d 1357, 1362 (10th Cir. 1993), the Court held there is a strong presumption that a parent company is not the employer of its subsidiary s employees. If Ms. Somerlott could not sue Cherokee Nation Businesses, or the Cherokee Tribe itself, as the parents of her subsidiary-employer, then neither can the Tribe bestow exemption status to its subsidiary. See also Lee v. Mobile County 11
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 12 of 13 Commission, 954 F.Supp 1540, 1545-1546 (D.Ga. 1995), aff d 103 F.3d 148 (11th Cir. 1996)) (finding county commission was not employer because did not control means and manner of plaintiff s most important employment decisions such as hiring, firing, training). Similarly, in Bristol v. Bd. Of County Commissioners, 312 F.3d 1213, 1219 (10th Cir. 2002) the Court used the joint-employer test to find the Board had no control over employees; see also Lambertson v. Utah Dep t of Corrections, 79 F.3d 1024, 1028 (10th Cir. 1996) (DOC was not the employer because it did not control means and manner of workers performance, and was not single employer along with school district. Conclusion The matters at issue here do not involve purely intramural affairs, nor do they interfere with the Tribe s self-government rights. Moreover, the Tribe was never Ms. Somerlott s employer because it was too far removed from her direct employer. The Courts have never stretched sovereign immunity or Tribal status to a corporation owned by a corporation owned by the Tribe, and this Court should not allow such a reach. Neither the Tribes, nor those who work for or contract with them, are in any way helped by allowing attenuated exemptions of protection from Federal discrimination which CND promised to abide by as an 8a corporation. 12
Case 5:08-cv-00429-D Document 64 Filed 10/16/2009 Page 13 of 13 Accordingly, the Motion to Dismiss should be DENIED. DATED this 16 th day of October, 2009. /s Chandra L. Holmes Ray CHANDRA L. HOLMES RAY, OBA # 14254 JOHN P. ZELBST, OBA # 9991 DAVID BUTLER, OBA # 16912 Zelbst, Holmes & Butler P.O. Box 365 Lawton, OK 73502-0365 Tel: (580) 248-4844 Fax: (580) 248-6916 e-mail: Chandra@zelbst.com e-mail: zelbst@zelbst.com Attorneys for Plaintiff CERTIFICATE OF SERVICE I hereby certify that on this 16 th day of October, 2009, I electronically transmitted the attached document to the Clerk of Court using the ECF System for filing. Based on the records currently on file, the Clerk of Court will transmit a Notice of Electronic Filing to the following ECF registrants: Graydon Dean Luthey, Jr. dluthey@hallestill.com Attorneys for Cherokee Nation Distributors, Inc. and CND, L.L.C. s/chandra L. Holmes Ray 13