and Submitted May 17, 2019 Seattle, Washington
from the United States District Court for the District of
Idaho D.C. No. 4:14-cv-00489-BLW B. Lynn Winmill, Chief
District Judge, Presiding
Gregory G. Garre (argued), Elana Nightingale Dawson, and
Genevieve P. Hoffman, Latham & Watkins LLP, Washington,
D.C.; Ralph H. Palumbo, Yarmuth Wilsdon PLLC, Seattle,
Washington; Lee Radford, Parsons Behle & Latimer, Idaho
Falls, Idaho; Maureen L. Mitchell, Fox Rothschild LLP,
Seattle, Washington; for Plaintiff-Appellant/Cross-Appellee.
Douglas B. L. Endreson (argued) and Frank S. Holleman,
Sonosky Chambers Sachse Endreson & Perry LLP, Washington,
D.C.; William F. Bacon, Shoshone-Bannock Tribes, Fort Hall,
Idaho; Paul C. Echo Hawk, Echo Hawk Law Office, Pocatello,
Idaho; for Defendant-Appellee/Cross-Appellant.
Before: Michael Daly Hawkins and William A. Fletcher, Circuit
Judges, and David C. Bury, [*] District Judge.
panel affirmed the district court's judgment enforcing a
judgment of the Shoshone-Bannock Tribal Court of Appeals,
which ruled that FMC Corporation must pay an annual use
permit fee for storage of hazardous waste on fee lands within
the Shoshone-Bannock Fort Hall Reservation, as required under
a consent decree settling a prior suit brought against FMC by
the Environmental Protection Agency under the Resource
Conservation and Recovery Act.
panel held that the tribal court had regulatory and
adjudicatory jurisdiction over the Shoshone-Bannock
Tribes' suit against FMC under two "Montana
exceptions." Under the first exception, a tribe may
regulate the activities of nonmembers who enter into
consensual relationships with the tribe or its members. Under
the second Montana exception, a tribe retains
inherent power to exercise civil authority over the conduct
of non-Indians on fee lands within its reservation when that
conduct threatens or has some direct effect on the political
integrity, the economic security, or the health or welfare of
the tribe. The panel held that, under the first
Montana exception, the Tribes had regulatory
jurisdiction to impose the permit fees because FMC entered
into a consensual relationship when it signed a permit
agreement with the Tribes. The panel held that FMC's
conduct of storing hazardous waste on its fee lands within
the reservation fell within the second Montana
exception. The panel held that the district court erred in
refusing, as a matter of comity, to enforce the judgment of
the Tribal Court of Appeals under the second exception. The
panel held that, in addition to regulatory jurisdiction, the
Tribes had adjudicatory jurisdiction.
panel also held that the Tribal Court of Appeals did not deny
FMC due process through a lack of impartiality.
FLETCHER, CIRCUIT JUDGE:
over 50 years, FMC Corporation ("FMC") operated an
elemental phosphorus plant on fee land within the
Shoshone-Bannock Fort Hall Reservation
("Reservation") in Idaho. FMC's operations
produced approximately 22 million tons of hazardous waste
that is currently stored on the Reservation. The waste is
radioactive, carcinogenic, and poisonous.
1990, the U.S. Environmental Protection Agency
("EPA") declared FMC's plant and storage area,
together with an adjoining off-reservation plant owned by
J.R. Simplot, a Superfund Site under the Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"). In 1997, the EPA further charged FMC
with violating the Resource Conservation and Recovery Act
("RCRA"). A Consent Decree settling the RCRA suit
required FMC to obtain permits from the Shoshone-Bannock
Tribes ("the Tribes"). FMC and the Tribes
negotiated an agreement under which FMC agreed to pay $1.5
million per year for a tribal use permit allowing storage of
hazardous waste. FMC paid the annual use permit fee from 1998
to 2001 but refused to pay the fee in 2002 after ceasing
active plant operations. FMC has continued to store the
hazardous waste on the Reservation despite its failure to pay
the use permit fee.
Tribes sued FMC in Tribal Court, seeking inter alia
payment of the annual $1.5 million use permit fee for waste
storage. Under Montana v. United States, 450 U.S.
544 (1981), there are two potentially relevant bases for
tribal jurisdiction in this case-two of the three so-called
"Montana exceptions." First, "[a]
tribe may regulate, through taxation, licensing, or other
means, the activities of nonmembers who enter consensual
relationships with the tribe or its members, through
commercial dealing, contracts, leases, or other
arrangements." Id. at 565. Second, "[a]
tribe may also retain inherent power to exercise civil
authority over the conduct of non-Indians on fee lands within
its reservation when that conduct threatens or has some
direct effect on the political integrity, the economic
security, or the health or welfare of the tribe."
Id. at 566. After years of litigation, the Tribal
Court of Appeals held in 2014 that the Tribes have regulatory
and adjudicatory jurisdiction over FMC under both
Montana exceptions. The court held that FMC owed
$19.5 million in unpaid use permit fees for hazardous waste
storage from 2002 to 2014, and $1.5 million in annual fees
the decision of the Tribal Court of Appeals, FMC sued the
Tribes in federal district court. FMC argued that the Tribes
did not have jurisdiction under either of the
Montana exceptions; that the Tribal Court of Appeals
denied FMC due process because two judges on the Tribal Court
of Appeals were biased against FMC; and that the judgment by
the Tribal Court of Appeals was unenforceable. The Tribes
counterclaimed, seeking an order recognizing and enforcing
the judgment of the Tribal Court of Appeals. The district
court held that the Tribes had regulatory and adjudicatory
jurisdiction under both Montana exceptions, that the
Tribal Court of Appeals had not denied FMC due process, and
that the Tribal Court of Appeals' judgment was entitled
to comity, and was therefore enforceable, under the first but
not the second Montana exception.
appeals the district court's judgment in favor of the
Tribes. The Tribes cross-appeal the district court's
decision that the Tribal Court of Appeals' judgment is
not enforceable under the second Montana exception.
affirm the judgment of the district court. We hold that the
judgment of the Tribal Court of Appeals is enforceable under
both Montana exceptions.
Factual and Procedural Background
Shoshone-Bannock Tribes are a federally recognized Indian
tribe comprising the eastern and western bands of the
Northern Shoshone and the Bannock, or Northern Paiute, bands.
The Tribes are organized under the Indian Reorganization Act
of 1934, 25 U.S.C. §§ 5101 et seq., and are
governed by the Fort Hall Business Council, a legislative
body consisting of seven elected members. Shoshone-Bannock
Tribes, Tribal Government,
http://www2.sbtribes.com/government (last visited Sept. 19,
2019). The ancestral lands of the Tribes included land in
present-day Idaho, Oregon, Nevada, Utah, Wyoming, Montana,
and parts of Canada. See Shoshone-Bannock Tribes,
http://www2.sbtribes.com/about (last visited Sept. 19, 2019).
Pursuant to the Fort Bridger Treaty of 1868, 15 Stat. 673,
and related executive orders, the Tribes today have sovereign
authority over the Fort Hall Reservation. The Fort Hall
Reservation originally encompassed approximately 1.8 million
acres, or 2, 800 square miles. See id. The
Reservation now encompasses approximately 544, 000 acres, or
840 square miles, in what is now southeastern Idaho.
Ninety-seven percent of the Reservation is tribal land or
land held in trust by the United States for the benefit of
the Tribes and their members. Approximately three percent of
the Reservation is fee land owned by non-members.
FMC's Phosphorus Plant, Consent Decree, and Permit Fees
1949 to 2001, FMC Corporation and its predecessors owned and
operated an elemental phosphorus production plant occupying
1, 450 acres. Virtually all of the property is fee land on
the Fort Hall Reservation. FMC's plant was the largest
elemental phosphorus plant in the world. FMC Idaho, Plant
History, http://fmcidaho.com/plant-history (last visited
Sept. 19, 2019). For most of its operation, FMC obtained or
mined raw materials for its plant from tribal and allottee
lands on the Reservation. See, e.g.,
waste from the plant's 52 years of operation contaminates
FMC's land on the Reservation. Approximately 22 million
tons of hazardous waste are stored in waste storage ponds on
the site. Some storage ponds are capped. Some are not. Some
ponds are lined. Some are not. Phosphorus, arsenic, and other
hazardous materials contaminate an additional 1 million tons
of loose soil and groundwater throughout the site. Millions
of tons of slag containing radioactive materials contaminate
the site. Somewhere between twenty one and thirty railroad
tanker cars containing toxic phosphorous sludge are buried on
the property. There is no lining underneath the tanker cars
and no cap above them. As will be described in greater detail
below, the hazardous waste in the storage ponds, tanker cars,
soil, groundwater, and air at the site is radioactive,
carcinogenic, and poisonous.
1990, EPA declared the FMC plant, as well as an adjoining
off-reservation plant owned by a different company, J.R.
Simplot, as a National Priority List Superfund Site-the
"Eastern Michaud Flats" site-under CERCLA.
See 55 Fed. Reg. 35502, 35507. The National
Priorities List is a list of the nation's "worst
hazardous waste sites." EPA, Superfund Cleanup
visited Sept. 19, 2019).
1997, EPA charged FMC with violating RCRA. RCRA regulates the
disposal of solid and hazardous waste. To avoid litigation,
FMC began negotiations with the EPA over the terms of a
possible Consent Decree that would settle the RCRA suit.
Though not a formal party, the Tribes participated in the
negotiations. Among other measures, the proposed RCRA Consent
Decree required construction of a treatment facility and
additional waste storage ponds on FMC's fee land on the
Reservation. As a condition to obtaining the Consent Decree,
the EPA required FMC to obtain relevant permits from the
Tribes. See Consent Decree, Case No.
4:98-cv-00406-BLW (D. Idaho, July 13, 1998).
to the Tribes' Land Use Policy Ordinance
("LUPO" or "Ordinance") and associated
Guidelines, the relevant tribal permits included a building
permit for construction of the treatment facility and waste
storage ponds, and a use permit for storage of the hazardous
waste. FMC and the Tribes met in July 1997 to discuss the
permits. During negotiations, FMC consented to tribal
jurisdiction. See, e.g., Letter from the Land Use
Policy Commission to FMC (Aug. 6, 1997) (stating that
following the July meeting, "We understood that FMC
would recognize tribal jurisdiction within the exterior
boundaries of the Fort Hall Indian Reservation.");
Letter from J. Paul McGrath, Senior Vice President and
General Counsel and Secretary of FMC, to the Fort Hall
Business Council, Shoshone-Bannock Tribes (Oct. 30, 1997)
(stating "[i]n connection with the land use permit, we
did agree that we would consent to tribal jurisdiction in
that area"). FMC applied for the building and use
permits in August 1997.
negotiations were proceeding, the Tribes considered and then
adopted amended LUPO Guidelines for storage of hazardous
waste on the Reservation. The Tribes finalized the amended
Guidelines in April 1998. The amended Guidelines required an
annual use permit for storage of hazardous waste on the
Reservation, with an annual fee of $5.00 per ton. Money from
use permit fees was to be "deposited in the
Shoshone-Bannock Hazardous Waste Management Program
Fund," and to be used "to pay the reasonable and
necessary costs of administrating the Hazardous Waste
Management Program." Amendments to Chapter V: Fort Hall
Land Use Operative Policy Guidelines, § V-9-2(B) (1998).
Land Use Policy Commission ("LUPC" or
"Commission"), the Tribes' administrative and
enforcement body for the Ordinance, notified FMC of the
amended Guidelines. FMC estimated that the $5 per ton storage
fee would cost over $110 million per year. FMC sought to
negotiate a compromise with the Tribes. FMC Corp. v.
Tribes, No. 4:14-CV-489-BLW, 2017 WL 4322393, at *2 (D.
Idaho Sept. 28, 2017).
and June 1998, the Tribes and FMC negotiated an agreement
under which FMC agreed to a one-time fee of $1 million and an
annual use permit fee of $1.5 million to cover FMC's
storage of its hazardous waste on the Reservation.
See Letter from LUPC to FMC (May 19, 1998). The
parties agreed that FMC was required to obtain a use permit
and to pay the $1.5 million fee even if FMC capped and closed
the eleven hazardous waste ponds that were subject to the
RCRA Consent Decree (the "RCRA ponds"). See
id. (stating that FMC agreed to pay the annual use
permit fee "beginning on June 1, 1999, and for every
year thereafter"); Letter from J. Paul McGrath, Senior
Vice President and General Counsel and Secretary of FMC, to
LUPC (June 2, 1998) ("[I]t is our understanding that the
permit covers the plant and that the $1.5 million annual fee
would continue to be paid for the future even if the use of
ponds 17-19 was terminated in the next several years.");
Affidavit of Robert J. Fields, Division Manager of FMC (Oct.
20, 2000) (stating that he participated in the negotiations
with the Tribes and that the June 2, 1998 letter from FMC was
intended to confirm FMC's shared understanding that the
use permit covered the entire facility and that FMC's
agreement to pay $1.5 million per year would not end when
Ponds 17, 18 and 19 were closed pursuant to the Consent
Decree). FMC paid its first fee on June 1, 1998.
months later, FMC and the EPA agreed to a Consent Decree to
settle the RCRA suit. FMC Corp. v. Tribes, 2017 WL
4322393 at *3. Paragraph 8 of the Consent Decree memorialized
the Decree's requirement that FMC obtain permits from the
Tribes: "Where any portion of the Work requires a . . .
tribal permit or approval, [FMC] shall submit timely and
complete applications and take all other actions necessary to
obtain all such permits or approvals." See
Consent Decree, No. 4:98-CV-00406-BLW, ¶ 8 (D. Idaho
July 13, 1998).
to the Consent Decree, FMC agreed to pay a fine to the U.S.
government of $11.9 million, to install a range of upgrades
in its handling of waste, and to cap nine of the eleven RCRA
ponds covered by the Consent Decree. FMC Corp. v.
Tribes, 2017 WL 4322393 at *3. Between 1999 and 2005,
FMC capped and/or closed the RCRA ponds. Id. at *4.
In 2005, FMC certified that the last of the RCRA ponds had
been capped and/or closed.
Prior Federal Court Proceedings
1998 to 2001, FMC paid the Tribes the annual use permit fee
of $1.5 million pursuant to its 1998 agreement with the
Tribes. In December 2001, FMC stopped all active phosphorus
processing operations at the site. When the $1.5 million use
permit fee came due in 2002, FMC refused to pay it.
negotiations failed, the Tribes filed a motion in the RCRA
Consent Decree action in federal district court, seeking a
declaration that FMC was required by the Consent Decree to
obtain tribal permits for waste storage on the Reservation.
Id. The district court held that "(1) the
Tribes had jurisdiction over FMC under the first
Montana exception . . ., (2) FMC was required to
apply for Tribal permits based on FMC's agreement to
submit to tribal jurisdiction in ¶ 8 of the RCRA Consent
Decree, (3) the Tribes were intended third-party
beneficiaries of the Consent Decree and therefore had a right
to enforce its terms, and (4) FMC was required to exhaust
tribal remedies over any challenges to the Tribal permit
decisions." FMC Corp. v. Tribes, 2017 WL
4322393 at *4; see United States v. FMC, No.
CV-98-0406-E-BLW, 2006 WL 544505 (D. Idaho 2006).
appeal from the district court, we addressed only the third
of the district court's holdings. We held that the Tribes
were incidental rather than intended beneficiaries of the
Consent Decree and therefore had no right to judicial
enforcement of the Decree. United States v. FMC, 531
F.3d 813, 815 (9th Cir. 2008). We remanded to the district
court with instructions to dismiss the Tribes' suit.
Id. at 824. However, we noted that during the
pendency of the appeal to our court "FMC began the
process of applying for tribal permits, which is the main
relief that the Tribes have sought in this action."
Id. at 823. We explicitly noted and relied on a
representation by FMC. We wrote:
At oral argument, the Tribes expressed their concern that, if
we were to hold that the Tribes lack standing to enforce the
Consent Decree, FMC would withdraw its permit applications
and undo the progress made to date on the proper resolution
of this dispute. In response to questioning from the panel,
FMC's lawyer represented to the court that FMC
understands that it has the obligation to continue, and will
continue, with the current tribal proceedings to their
conclusion. We accept that statement from counsel as binding
Id. at 823-24.
2006, after entry of the district court's order but while
FMC's aforementioned appeal to our court was still
pending, FMC applied to the Tribes' Land Use Policy
Commission for a building permit for demolition activities
and a use permit for continued storage of the waste.
Following notice and a public hearing, the Commission granted
FMC's applications for the two permits. See
Findings of Fact and Decision on FMC Application for Building
Permit for Activities at the FMC Pocatello Plant (Land Use
Policy Commission, Apr. 25, 2006); Findings of Fact and
Decision on FMC Application for Special Use Permit for
Activities at the FMC Pocatello Plant (Land Use Policy
Commission, Apr. 25, 2006). The Commission concluded
that it had regulatory jurisdiction under both
Montana exceptions to require FMC to obtain the
permits. The Commission assessed a one-time building permit
fee at $3, 000 for demolition activities during that year.
The Commission also assessed FMC's use permit fee for
storage of hazardous waste at the previously agreed $1.5
million annual rate. The Commission provided, as an
alternative, that FMC could choose to pay the higher $5 per
ton fee based on the weight of the waste stored on FMC's
property on the Reservation, pursuant to the Tribes'
amended Guidelines. Id.
appealed the Commission's decision to the governing body
of the Tribes, the Fort Hall Business Council
("Council"). On July 21, 2006, the Council affirmed
the Commission's decision. Fort Hall Business Council
Decision Regarding FMC's Appeals of the April 25, 2006
Land Use Permit Decisions (July 21, 2006). On February 8,
2007, the Commission issued a "letter resolution"
setting the use permit fee at the agreed-upon $1.5 million.
FMC again appealed the Commission's decision to the
Council. On June 14, 2007, the Council affirmed the
appealed the Council's and the Commission's decisions
to the Tribal Court. (The Shoshone-Bannock tribal court
system consists of a trial court and an appellate court-the
"Tribal Court"and the "Tribal Court of
Appeals.") The Tribal Court held inter alia
that, pursuant to the Tribes' laws, the Tribes were
required to submit their Land Use Policy Guidelines and the
Hazardous Waste Management Act of 2001, upon which the tribal
use permit requirement was premised, to the Secretary of the
Interior for approval. FMC Corp. v. Shoshone-Bannock
Tribes' Fort Hall Business Council and Land Use Policy
Commission, Case Nos. C-06-0069, C-07-0017, C-07-0035
(Shoshone-Bannock Tribal Court, Civil Division, May 21,
2008). The Tribal Court found that the Guidelines and the Act
had not been approved by the Secretary of the Interior, and
therefore, were unenforceable as a matter of tribal law.
2008, the Tribes and FMC cross-appealed to the Tribal Court
of Appeals. The members of that court were Judges Fred
Gabourie, Mary Pearson, and Cathy Silak. None of them is a
member of the Shoshone-Bannock Tribes. Judge Gabourie is a
former California state court judge, former Chief Judge for
the Kootenai Tribe of Idaho, and a former prosecutor and city
attorney. Judge Pearson is a former Chief Judge for the
Spokane Tribe and the Coeur d'Alene Tribe. Judge Silak is
a former Justice of the Idaho Supreme Court.
Conference Remarks by Judges Gabourie and Pearson
the case was pending before the Tribal Court of Appeals,
Judges Gabourie and Pearson spoke at a conference entitled
"Tribal Courts: Jurisdiction and Best Practices"
convened by the University of Idaho College of Law on March
23, 2012. In the audience were law students, tribal court
practitioners, other lawyers, and members of the public. The
conference was videotaped. FMC's counsel attended the
Gabourie described the manner in which tribal appellate court
decisions come before federal courts, and he noted that very
few federal court judges have experience with tribes. He
stated that "every court has-should be impartial"
and "a good opinion comes [from] both sides, both
parties. Because both parties rely on a good opinion, strong
opinion." He stated that a tribal appellate court
decision should discuss the tribe's tradition and culture
so that judges in the federal system have some context when
they read the decision. He stated that an appellate judge has
a responsibility to remand the case for testimony from expert
witnesses if there is a weakness in the record. He discussed
limitations on tribes' sovereign powers under current
law, and how, in light of Supreme Court decisions like
Montana, "which has just been murderous to
Indian tribes," it is important for tribes to support
good appellate courts that can issue strong opinions in the
event issues are heard in a federal court. He discussed
Nevada v. Hicks, 533 U.S. 353 (2001), and Strate
v. A-1 Contractors, 520 U.S. 438 (1997), noting that the
tribal appellate court decisions had not been good, and that,
as a result, the U.S. Supreme Court did not have vital
information about the tribes' cultures and traditions.
Pearson discussed the importance of tribal attorneys creating
a record at the tribal trial court level. She stated tribal
attorneys should involve the tribe in the "big
cases." She noted that they had a big case at that
moment that they knew was "going to go up," so they
were saying prayers, reading cases, and "trying to do .
. . the history." She described Bugenig v. Hoopa
Valley Tribe, 266 F.3d 1201 (9th Cir. 2001), as a case
where the tribal lawyers had effectively laid out the history
for the tribal trial and appellate courts. She discussed the
importance of this responsibility-how "[you] just need
to make sure that you do the job right"-since non-Indian
federal judges were reviewing the decisions.
response to questions, Judge Gabourie discussed the value of
anthropologists and scientists testifying in tribal court
cases. He stated that the use of experts in Bugenig
was a model for tribes seeking to protect their sovereignty,
traditions, and cultures. Expanding on his earlier discussion
of experts, Judge Gabourie stated:
You know, there's one area, too, there are tribes that
have had mining and other operations going on, on the
reservation, you know, and then the mining company or
whatever, manufacturing company, disappears. They leave, you
know. They've . . . either dug everything they could, and
then the ground is disturbed, sometimes polluted beyond
repair. And you sit as . . . an appellate court justice, and
you're starting to read the cases that come down from the
tribal court. And you're saying to yourself, you know, we
know that . . . there's pollution, that the food that
they're eating is polluted, the water's polluted, but
nobody proved it. And while John Jones said that it is
polluted, you know, John Jones don't count. But the
tribal courts have got to realize that you need expert
witnesses. You need chemists and whatever to get out of
testifying. It may cost a little, but so the appellate court
is in a position of remanding that case back and say "do
You know, you made-and you're really being fair to both
sides. . . . That's why you need the expert witnesses to
cover those loose ends, you know, so when it finally goes to
the-whatever circuit it may go to, they can see that
there's been some experts testifying on behalf. Maybe
experts that testify on behalf of the mining company, but
experts nonetheless. Well, you can be damn sure that the
mining company's going to spend the money to protect
their interest, you know.
So the appellate courts have got to step in and in their own
way, make a good, balanced decision, a hundred-percenter for
both sides, but be sure to protect the tribe. And that's
my own opinion, that last sentence.
Pearson clarified, "We're not guaranteeing anybody
anything." Judge ...