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Eaual Employment Opportunity Commission v. Peabody Western Coal Co.

United States Court of Appeals, Ninth Circuit

September 26, 2014

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant,
v.
PEABODY WESTERN COAL COMPANY; NAVAJO NATION, Rule 19 defendant, Defendants-Appellees,
v.
KEVIN K. WASHBURN, Esquire; SALLY JEWELL, in her official capacity as Secretary of the Interior, Third-Party-Defendants-Appellees

Argued and Submitted, San Francisco, California: May 12, 2014.

Page 963

Appeal from the United States District Court for the District of Arizona. D.C. No. 2:01-cv-01050-JWS. John W. Sedwick, District Judge, Presiding.

SUMMARY[*]

Title VII / Tribal Affairs

The panel affirmed the district court's summary judgment against the Equal Employment Opportunity Commission with respect to its claim that Title VII of the Civil Rights Act of 1964 prohibited the tribal hiring preference contained in Peabody Western Coal Co. leases with the Navajo Nation.

The panel held that the Navajo hiring preference in the leases was a political classification, rather than a classification based on national origin, and therefore did not violate Title VII. The panel concluded that the district court correctly granted summary judgment to defendants Peabody Western Coal Company and Navajo Nation, and third-party defendant Secretary of the Interior. The panel also held that the EEOC waived on appeal its record-keeping claim. Finally, the panel held that the district court acted within its discretion in denying the EEOC's eleventh-hour motion to supplement the record with a declaration and documents about Peabody's hiring practices in 1999.

P. David Lopez, General Counsel, Lorraine C. Davis, Acting Assistant General Counsel, and Susan Ruth Oxford (argued), Attorney, Equal Employment Opportunity Commission, Washington, D.C., for Plaintiff-Appellant.

John F. Lomax, Jr. (argued) and Kathryn Hackett King, Snell & Wilmer LLP, Phoenix, Arizona; Louis Denetsosie, Attorney General, and Paul Spruhan, Assistant Attorney General, Navajo Nation Department of Justice, Window Rock, Arizona; Lisa M. Enfield (argued), Paul E. Frye, and William Gregory Kelly, Frye Law Firm PC, Albuquerque, New Mexico, for Defendants-Appellees.

Robert Dreher, Acting Assistant Attorney General, Ethan G. Shenkman (argued), Deputy Assistant Attorney General, James C. Kilbourne, Section Chief, and Kristofor Swanson, United States Department of Justice, Washington, D.C., for Third-Party-Defendants-Appellees.

Before: Susan P. Graber, William A. Fletcher, and Richard A. Paez, Circuit Judges. Opinion by Judge W. Fletcher.

OPINION

Page 964

W. FLETCHER, Circuit Judge:

Peabody Western Coal Co. (" Peabody" ) mines coal at the Black Mesa Complex and Kayenta mines on the Hopi and Navajo reservations in northeastern Arizona under leases with the tribes. At issue in this appeal are two leases with the Navajo Nation (" the Nation" ) that permit Peabody to mine coal on Navajo reservation land. Each lease requires Peabody to give preference in employment to " Navajo Indians." Both leases received approval from the Department of the Interior (" Interior" ) under the Indian Mineral Leasing Act of 1938, 25 U.S.C. § § 396a, 396e (" IMLA" ). Since at least as early as the 1940s, Interior-approved mineral leases, including the two at issue here, have routinely included tribal hiring preference provisions.

This appeal is the latest stage in a long-running legal dispute about the tribal hiring preferences.[1] The Equal Employment

Page 965

Opportunity Commission (" EEOC" ) sued Peabody in the District of Arizona in 2001, alleging that Peabody's implementation of the tribal hiring preference constituted national origin discrimination in violation of Title VII of the Civil Rights Act of 1964. The EEOC also claimed that Peabody had violated Title VII's record-keeping requirements. See 42 U.S.C. § 2000e-8(c). Several years of litigation on procedural matters resulted in the joinder of the Nation under Federal Rule of Civil Procedure 19 and impleader of the Secretary and Assistant Secretary of the Interior (collectively, " the Secretary" ) under Federal Rule of Civil Procedure 14. The principal issue now before us is the EEOC's claim that Title VII prohibits the tribal hiring preference contained in the Peabody leases.

In the decision now on appeal, the district court granted summary judgment against the EEOC on the merits. It held that the Navajo hiring preference in the leases is a political classification, rather than a classification based on national origin, and therefore does not violate Title VII. We have jurisdiction over the EEOC's appeal pursuant to 28 U.S.C. § 1291. We agree with the district court that the tribal hiring preference is a political classification. We therefore affirm.

I. Background

Peabody's predecessor-in-interest entered into two leases with the Navajo Nation. The first, Lease No. 8580, signed in 1964, permits Peabody to mine coal on the Navajo reservation. The second, Lease No. 9910, signed in 1966, permits Peabody to mine on reservation land formerly held in trust for both the Navajo and Hopi tribes, now partitioned between the tribes.

In Lease No. 8580, Peabody " agrees to employ Navajo Indians when available in all positions for which, in the judgment of [Peabody], they are qualified, and to pay prevailing wages to such Navajo employees and to utilize services of Navajo contractors whenever feasible." The lease also provides that Peabody " shall make a special effort to work Navajo Indians into skilled, technical and other higher jobs in connection with [its] operations under this lease." Lease No. 9910 contains a similar provision, and also states that Peabody " may at its option extend the benefits of [the hiring preference] to Hopi Indians." Interior drafted the leases and required the inclusion of the Navajo hiring preferences. The leases were approved by Interior under the IMLA. Peabody IV, 610 F.3d at 1075.

In 1998, two members of the Hopi Tribe and one member of the Otoe Tribe filed discrimination charges with the EEOC. They alleged that they had applied to Peabody for positions for which they were qualified, and that they were not hired because they were not Navajo. After an investigation, the EEOC sued Peabody in federal district court in Arizona in 2001. The EEOC alleged that Peabody's implementation of the tribal hiring preference

Page 966

provisions constituted national origin discrimination forbidden by Title VII.

After the EEOC brought its Title VII claims, Peabody moved for summary judgment. The district court granted the motion on two grounds, holding that the suit presented a nonjusticiable political question and that the Nation was a necessary party for whom joinder was not feasible. Peabody I, 214 F.R.D. at 560-61. We reversed, holding that the suit did not present a political question and that Rule 19 joinder was feasible, provided that the EEOC sought no affirmative relief against the Nation. Peabody II, 400 F.3d at 778. The Supreme Court denied review. Peabody W. Coal Co. v. EEOC, 546 U.S. 1150, 126 S.Ct. 1164, 163 L.Ed.2d 1128 (2006) (mem.).

On remand, the EEOC amended its complaint to join the Nation under Rule 19. The district court again granted summary judgment against the EEOC. It held that the EEOC sought affirmative relief against the Nation, defeating Rule 19 joinder; that the Secretary was a necessary party for whom joinder was not feasible; and that the tribal hiring preference did not violate Title VII because it was authorized by the Navajo-Hopi Rehabilitation Act of 1950, 25 U.S.C. § § 631-638. Peabody III, 2006 WL 2816603.

On appeal, we reversed in part and vacated in part. We again held that joinder of the Nation was feasible. We held further that, although the EEOC could not join the Secretary as a defendant under Rule 19, Peabody or the Nation could implead the Secretary as a third-party defendant under Rule 14(a) on claims for injunctive or declaratory relief. We vacated the judgment on the Title VII claim in order to allow the district court to consider the Secretary's arguments. Peabody IV, 610 F.3d 1070. The Supreme Court again denied review. EEOC v. Peabody W. Coal Co., 132 S.Ct. 91, 181 L.Ed.2d 21 (2011) (mem.).

On remand, the EEOC filed a second amended complaint. Peabody impleaded the Secretary and counterclaimed against the EEOC for declaratory relief. The district court granted the EEOC's motion to dismiss Peabody's counterclaims.

The Secretary then moved for summary judgment on Peabody's third-party complaint on the ground that the tribal hiring preferences in the leases were permissible under Title VII. The Nation and Peabody also moved for summary judgment.

The day before argument on those motions, the EEOC moved to supplement the record with the declaration and supporting documents of a former EEOC investigator who had interviewed Peabody's hiring officials in 1999. The district court denied the motion as untimely, noting that the information that the EEOC sought to introduce had long been available, and that, in any event, the information was not relevant because it pertained to pre-1999 practices.

The district court upheld the tribal hiring preferences in the leases. After " an examination of the status of Indian tribes in general and their relationship to the federal government," and drawing on the principles the Supreme Court articulated in Morton v. Mancari, 417 U.S. 535, 94 S.Ct. 2474, 41 L.Ed.2d 290 (1974), the court held that the preference was a political classification rather than a national origin classification. The ...


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