Alaska Supreme Court grants significant legal protection to tribal consortium

Apr. 27—The Alaska Supreme Court on Friday extended tribal sovereign immunity to a tribal consortium, overruling a decision it made 20 years ago that refused to take a similar step.

In simple terms, the 45-page decision is a win for the Copper River Native Association, a tribally run Alaska nonprofit corporation that provides health care and other services for its members. It's a loss for Yvonne Ito, the plaintiff and former employee of the association who argued that she was wrongfully terminated and sued.

But the ruling could have broad implications.

It could lead to new protections for tribally formed entities across Alaska that are some of the biggest employers in the state, said Nathaniel Amdur-Clark, an attorney who represented the Copper River Native Association.

Warren W. Matthews was the lone dissenting voice on the five-justice panel.

Matthews argued that the ruling will diminish state sovereignty and the rights of thousands of employees at those tribal entities, as well as contractors doing business with tribal consortia.

Amdur-Clark said in an interview Friday that concerns such as Matthews' are greatly overstated. He said the decision means tribal health care organizations that operate clinics and hospitals across Alaska will be able to better focus on providing health care, rather than fending off frivolous legal attacks.

"The biggest, most important thing going on is that it provides a pretty significant measure of safety for making sure that these dollars are going where they're intended to be going," he said.

The Copper River Native Association, with headquarters in Glennallen, was formed by six tribal governments to provide services in a 23,000-square-mile region.

The member tribes authorized the association to receive health care funds from the federal government that would otherwise flow to the tribes, the Alaska Supreme Court said in the decision.

As such, the consortium is an extension of the tribe, it said.

The consortium is "entitled to sovereign immunity as an arm of its member tribes," the decision said.

It is "immune from suit," the decision said.

Amdur-Clark said the state Supreme Court brought Alaska in line with decisions across the U.S. courts that have held that Alaska Native tribes are sovereign governments, as are state and federal governments, that are immune to many lawsuits.

Amdur-Clark said employees will continue to have rights, while patients at tribally created clinics and hospitals will still be protected under the Federal Tort Claims Act.

"To the extent that an employee has rights under federal law, for example, they still have those," he said. "This makes it so they can't be suing in a private civil action for money damages."

"The universe of claims where there is not a clear, legal remedy because of sovereign immunity is very narrow," he said.

Several tribal consortiums filed court briefs in support of the Copper River Native Association, including the Tanana Chiefs Conference, the Alaska Native Tribal Health Consortium and the Southeast Alaska Regional Health Consortium.

They argued that funding for tribal services should be spent on services, not legal fees.

The federal government also filed a brief in the case, at the court's invitation. The federal government supported the Copper River Native Association.

The state of Alaska, at the court's invitation, filed a brief in the case.

The state's brief supported Ito and raised concerns about state sovereignty in areas such as tax collection, workers' compensation and anti-discrimination laws.

The court said it disagreed with the state's arguments.

The Alaska Department of Law did not immediately provide comment Friday afternoon. The attorney for Yvonne Ito, the plaintiff, did not return requests for comment.

Friday's decision overrules a 2004 decision by the Alaska Supreme Court, after concluding that departing from precedent would do more good than harm.

The 2004 decision found that tribal immunity did not extend to the Association of Village Council Presidents, a consortium of tribes in Southwest Alaska overseeing a variety of community development, education and social service programs.

Senior justices Warren W. Matthews and Dana Fabe participated in that decision but later left the court.

They both heard the new case as senior justices, after two Supreme Court justices recused themselves amid personal conflicts.

Fabe wrote the 2004 decision. It found that a tribal consortium's financial relationship with the tribe is the paramount factor to consider. Since a judgment against the Southwest Alaska tribal consortium would not hurt the tribe's assets, the consortium was "not an arm of the villages" and was not entitled to tribal sovereign immunity.

In Friday's decision, Fabe sided with the four-justice majority overruling that decision.

The decision Friday said "the legal landscape has evolved" in the last 20 years, following decisions by federal circuit courts and at the state level.

Several factors, and not just the "financial insulation" between tribes and tribal consortium, are now considered in evaluating whether a tribal consortium is entitled to "arm-of-the-tribe immunity," Friday's decision said.

The 2004 case had been undermined and deeply criticized by several courts, Amdur-Clark said.

The Copper River Native Association met the broader test, which includes factors such as the purpose of the consortium, and how it is owned and controlled, the decision said.

The decision means tribal sovereign immunity under state law can be extended to other consortium groups, such as the Association of Village Council Presidents, Amdur-Clark said.

The court's decision Friday said the factor involving the "purpose" of a tribal consortium "strongly favors immunity" in the case of the Copper River Native Association.

That's because the member tribes use the Copper River Native Association to deliver tribal health care services, "a core tribal governmental function necessarily connected to tribal self-governance and autonomy," the decision said.

The recent case was also heard before former Chief Justice Daniel Winfree, as well as justices Susan M. Carney and Jennifer S. Henderson.

Warren W. Matthews' 28-page dissent said the majority opinion is "plainly and disturbingly wrong" in concluding that overruling the 2004 case would do more good than harm.

He said the new decision will limit the state's ability to protect the public. It will also limit the rights of thousands of employees who work at tribally owned nonprofit consortiums that have become a significant part of Alaska's economy with more than $3 billion in revenue, he said.

"Today's decision immunizes these companies from the normal enforcement mechanisms built into Alaska's health, safety, employment, and civil rights statutes, and municipal ordinances of all sorts including tax, planning, zoning, and building codes," Matthews said. "These laws are of vital importance. Once there is immunity normal enforcement tools are no longer available."

Chief Justice Peter J. Maassen recused himself because a family member works for one of the law firms involved, said Meredith Montgomery, clerk of the Alaska Appellate Courts.

Also, Justice Dario Borghesan had previously worked on the case as an assistant attorney general before he joined the Alaska Supreme Court.

"The court felt that the issue was important enough that it should be heard by a five person panel," Montgomery said.