CONSUMER FINANCIAL PROTECTION BUREAU, Pеtitioner-Appellee, v. GREAT PLAINS LENDING, LLC; Mobiloans, LLC; Plain Green, LLC, Respondents-Appellants.
No. 14-55900
United States Court of Appeals, Ninth Circuit.
January 20, 2017
846 F.3d 1049
Argued and Submitted June 6, 2016, Pasadena, California
Kristin Bateman (argued) and Lawrence DeMille-Wagman, Attorneys; John R.
Before: FERDINAND F. FERNANDEZ, JOHNNIE B. RAWLINSON, and CARLOS T. BEA, Circuit Judges.
OPINION
RAWLINSON, Circuit Judge:
Appellants Great Plains Lending, LLC, Mobiloans, LLC, and Plain Green, LLC (collectively, Tribal Lending Entities) appeal from the district court‘s decision compelling the Tribal Lending Entities to comply with civil investigative demands (investigative demands) issued by Appellee Consumer Financial Protection Bureau (Bureau). The Tribal Lending Entities maintain that they are not subject to the Bureau‘s jurisdiction because the entities were created and operated by several recognized tribes, and are thereby cloaked in tribal sovereign immunity. The Tribal Lending Entities assert that, because the Consumer Financial Protection Act of 2010 (the Aсt)1 defines the term “State” as including Native American tribes, the Tribal Lending Entities, as arms of sovereign tribes, are not required to comply with the investigative demands. We disagree with the argument made by the Tribal Lending Entities that the inclusion of tribes in the Act‘s definition of “State” impliedly excludes the Tribal Lending Entities from regulation under the Act, and therefore AFFIRM the decision of the district court enforcing the investigative demands.
I. BACKGROUND
This appeal stems from the creation of several Tribal Lending Entities as for-profit lending companies by the Chippewa Cree, Tunica Bilоxi, and Otoe Missouria Tribes (collectively, Tribes). The Tribes established regulatory frameworks for consumer lending by these Tribal Lending Entities.
In addition to regulation by the Tribes, the Tribal Lending Entities came to the attention of the Bureau, which initiated an investigation into the Tribal Lending Entities by serving investigative demands. The Bureau explained that:
The purpose of this investigation is to determine whether small-dollar online lenders or other unnamed persons have engaged or are engaging in unlawful acts or practices relating to the advertising, marketing, provision, or collection of small-dollar loan products, in violation of Section 1036 of the Dodd-Frank Wall Street Reform and Consumer Protection Act,
12 U.S.C. § 5536 , the Truth in Lending Act,15 U.S.C. § 1601 , the Electronic Funds Transfer Act,15 U.S.C. § 1693 , the Gramm-Leach-Bliley Act,15 U.S.C. §§ 6802-6809 , or any other Federal consumer financial law. The purpose of this investigation is also to determine whether Bureau action to obtain legal or equitable relief would be in the public interest.
The Tribes directed the Tribal Lending Entities not to respond to the investigative demands, and informed the Bureau that it lacked jurisdiction to investigate lending entities created and operated by the Tribеs. Rather, the Tribes offered to cooperate with the Bureau as co-regulators of consumer lending services.
Relying primarily on our ruling in Donovan v. Coeur d‘Alene Tribal Farm, 751 F.2d 1113, 1115 (9th Cir. 1985), the district court concluded that thе Act, as an act of general applicability, was enforceable against the Tribal Lending Entities. The district court rejected the Tribal Lending Entities’ reliance on the holding in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 780, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) that the statutory definition of the term “person” typically excludes “the sovereign.” The district court noted the unlikelihood that Stevens overruled subsequent Ninth Circuit authority restating the holding in Coeur d‘Alene. Instead, the district court found it persuasive that “[t]he Stevens and Coeur d‘Alene presumptions have existed side by side for decades” without so much as a suggestion of “an inescapable conflict between them.” The district court reasoned that the cases were indeed reconcilable because the Supreme Court had not definitively held that the holding in Stevens applied to actions brought by the federal government against “the sovereign.”
The district court was also not swayed by the Tribes’ argument that, because the Act treats the states and tribes as co-regulators, Congress did not intend to vest authority in the Bureau to regulate tribal entities in the absence of cooperation with tribal regulators. The district court emphasized that:
textually, the [Act] is not silent with respect to Indian tribes.... The exclusion of statutes that are not silent with respect to Indian tribes is intended to avoid undermining the expressed intent of Congress. Congress does not express such intent by merely mentioning Indian tribes as sovereign regulators, while remaining silent on whether the unrelated provision at issue is also intended to regulate Indian tribes.
Put simply, there is no provision of the [Act] that expressly or impliedly suggests that the defined terms “persons” and “States” are mutually exclusive. Accordingly, the provision creating the Bureau‘s authority to investigate “persons” is silent with respect to the tribes.
Finally, the district court referenced the lack of any convincing legislative history bearing on the issue.
Following the district court‘s denying the Tribal Lending Entities’ petition to set aside the Bureau‘s investigative demands, the Tribal Lending Entities filed a timely notice of appeal.
II. STANDARD OF REVIEW
We review de novo whether the Bureau plainly lacked jurisdiction to issue the investigative demands. See Nat‘l Labor Relations Bd. v. Chapa De Indian Health Program Inc., 316 F.3d 995, 997-98 (9th Cir. 2003).2
III. DISCUSSION
A. The Bureau‘s Jurisdiction to Investigatе the Tribal Lending Entities’ Activities
Consistent with their argument before the district court, the Tribal Lending Entities contend on appeal that the Act does not confer authority upon the Bureau to investigate tribal entities. The Tribal Lending Entities repeat their assertion that the Act limits the Bureau‘s authority to “persons,” which excludes sovereign entities. The Tribal Lending Entities add that Congress did not intend for the definition of “person” to encompass tribal entities because the Act explicitly includes tribes in the definition of “State” in
Before we address the merits of the Tribal Lеnding Entities’ arguments, a delineation of the Act‘s statutory framework is in order. Pursuant to the expressed statutory purpose of the Act:
The Bureau shall seek to implement and, where applicable, enforce Federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive.
Whenever the Bureau has reason to believe that any person may be in possession, custody, or control of any documentary material or tangible things, or may have any infоrmation, relevant to a violation, the Bureau may, before the institution of any proceedings under the Federal consumer financial law, issue in writing, and cause to be served upon such person, a civil investigative demand requiring such person to—(A) produce such documentary material for inspection and copying or reproduction in the form or medium requested by the Bureau; (B) submit such tangible things; (C) file written reports or answers to questions; (D) give oral testimony concerning documentary material, tangible things, or other information; or (E) furnish any сombination of such material, answers, or testimony.
The Act also addresses the role “States” may play in supporting the goals of the Act. The Act defines “State” to include “any State, territory, or possession of the United States” including “any federally recognized Indian tribe, as defined by the Secretary of the Interior ...,”
Because the Act by its terms applies broadly and without exception, it is properly characterized as a law of general applicability. See Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99, 80 S.Ct. 543, 553, 4 L.Ed.2d 584 (1960). We have consistently held that similar laws of general applicability govern tribal entities unless Congress has explicitly provided otherwise. Most notably, in Coeur d‘Alene, we considered whether the Occupational Safety and Health Act (OSHA) applied to tribal entities. See 751 F.2d at 1114-15. We observed that OSHA‘s definition of “employer” as an “organized group of persons engaged in a business affеcting commerce who has employees” encompassed a tribal farm operating as a commercial enterprise. Id. at 1115 n.1 (alteration omitted). We recognized that “Congress expressly excluded only the United States or any State or any political subdivision of a State from the broad definition of employer in the Act.” Id. (citation and internal quotation marks omitted). We explained that:
No one doubts that the Tribe has the inherent sovereign right to regulate the health and safety of workers in tribal enterprises. But neither is there any doubt that Congress has the power to modify or extinguish that right. Unlike the states, Indian tribes possess only a limited sovereignty that is subject to complete defeasance....
Id. at 1115 (citations omitted). We emphasized that “[m]any of our decisions have upheld the application of general federal laws to Indian tribes; not one has held that an otherwise applicable statute should be interpreted to exclude Indians....” Id. (citations omitted). As a result, we eschewed “the proposition that Indian tribes are subject only to those laws of the United States expressly made applicable to them....” Id. at 1116. At the same time, we recognized the following three exceptions to enforcement of generally applicable laws against tribes:
A federal statute of general applicability that is silent on the issue of applicability to Indian tribes will not apply to them if: (1) the law touches exclusive rights of self-governance in purely intramural matters; (2) the application of the law to the tribe would abrogate rights guaranteed by Indian treaties; or (3) there is proof by legislative history or some other means that Congress intended the law not to apply to Indians on their reservations.
Id. (citation, alterations, and internal quotation marks omitted). “In any of these three situations, Congress must expressly apply a statute to Indians before we will hold that it reaches them.” Id. (emphasis in the original).
We have consistently applied Coeur d‘Alene and its progeny to hold that generally applicable laws may be enforced against tribal enterprises. See Solis v. Matheson, 563 F.3d 425, 432 (9th Cir. 2009) (observing that “[o]ther cases have similarly affirmed the application of OSHA, the Employee Retirement Income Seсurity Act (ERISA), and the Americans with Disabilities Act (ADA) to tribal businesses“) (citations omitted). In keeping
Relying on Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000), the Tribal Lending Entities contend that our precedent departs from the United States Supreme Court‘s holding that the statutory term “person” generally excludes sovereign entities, such аs states and Native American tribes. In Stevens, the Supreme Court considered “whether a private individual may bring suit in federal court on behalf of the United States against a State (or state agency) under the False Claims Act.” Id. at 768 (citation omitted). The Supreme Court reasoned that, in considering application of the False Claims Act to “any person,” the Court was required to take into account its “longstanding interpretive presumption that ‘person’ does not include the sovereign.” Id. at 780 (citations omitted). The Supreme Court added that “[t]he presumption is particularly applicable where it is claimed that Congress has subjected the States to liability to which they had not been subject before.” Id. at 780-81 (citations and internal quotation marks omitted). However, “[t]he presumption is, of course, not a hard and fast rule of exclusion, but ... may be disregarded only upon some affirmative showing of statutory intent to the contrary.” Id. at 781 (citations and internal quotation marks omitted). The Supreme Court observed that, in “another section of the [False Claims Act] ... which enables the Attorney General to issue civil investigative demands,” the statute includes a provision “expressly defining ‘person’ for purposes of this section to include States ...” Id. at 783-84 (citations and footnote reference omitted). But, the False Claims Act also imposes punitive damages “which would be inconsistent with state qui tam liability in light of the presumption against imposition of punitive damages on governmental entities....” Id. at 784-85 (citation and footnote reference omitted); see also Will v. Michigan Department of State Police, 491 U.S. 58, 67-68, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989) (holding that a state is not a “person” under
At first blush, the Tribal Lending Entities’ reliance on Stevens, a decision predating our precedent focusing on the general applicability of the law in question, has surface appeal. However, the “equivalence” provision in the Consumer Financial Protection Act only provides definitional guidance for later references in the statute to the term “State.” This “equivalence” provision simply clarifies that the term “State” includes “any federally recognized Indian tribe, as defined by the Secretary of the Interior ...”
The Tribal Lending Entities do not argue that the second exception—covering situations in which the application of a statute would abrogate Indian treaty rights—applies in this case, so we do not address it here.
With respect to the third exception, the Tribal Lending Entities’ assertion that the Act‘s legislative history supports a finding of lack of jurisdiction is unpersuasive. In considering the Coeur d‘Alene exception concerning legislative history, we have explained that for the exception to apply, “there must be proоf that Congress intended the statute not to apply to Indians on their reservations.” Chapa De, 316 F.3d at 1000-01 (citation, alteration, and internal quotation marks omitted). We rejected the tribe‘s reliance on the legislative history of the National Labor Relations Act (NLRA) because that history failed to reflect that “Congress intended the NLRA not to apply to Indian tribes” or to the particular activities of the tribal entity at
Here, the Tribal Lending Entities maintain that Congress’ decision to include tribes within the definition of “State” and not the definition of “person” reflects an intent to exclude tribes from the Bureau‘s enforcement purview. See H.R. Rep. No. 111-370, 2009 WL 4724255. However, these attenuated references do not demonstrate that jurisdiction is “plainly lacking” or that “Congress intended the [Act] not to apply to Indian tribes, or to [the tribes‘] activities.” Chapa De, 316 F.3d at 1001-02. At best, the referenced report reflects only the addition of tribes to the definition of “State,” without any expressed intent to cloak the tribes with immunity from enforcement of the Act as a generally applicable congressional enactment. See H.R. Rep. No. 111-370, 2009 WL 4724255, at *36. In addition, the lack of immunity is particularly evident in this case because “Indian tribes do not ... enjoy sovereign immunity from suits brought by the federal government.” Karuk Tribe, 260 F.3d at 1075 (citation omitted).
The Tribal Lending Entities also failed to persuasively establish that Congress intended to exclude tribes from enforcement of the Act by virtue of the promotion of coopеration between the States and the federal government. The statutes relied upon by the Tribal Lending Entities do not reflect mutual exclusivity of the Bureau‘s investigative authority and the States’ potential co-regulator status. For example,
The Tribal Lending Entities also argue that limitations upon the Bureau‘s enforcement authority vis-à-vis the States under
Davis v. Pringle, 268 U.S. 315, 45 S.Ct. 549, 69 L.Ed. 974 (1925) does not compel a contrary conclusion. In that cаse, the Supreme Court rejected the United States’ priority claim under the Bankruptcy Act then in effect. See id. at 318-19. The Supreme Court stated that the United States was not entitled to priority for its bankruptcy claim because Congress could not have “intended to smuggle in a general preference by muffled words at the end” of a statutory provision. Id. at 318. The Supreme Court noted the “conspicuous mention of the United States ... at the beginning of the section and the grant of a limited priority[.]” Id. The Supreme Court also observed that “[e]lsewhere in cases of possible doubt when the Act means the United States it says the United States....” Id. The Supreme Court did not confront or address the exclusion by implication argument raised by the Tribal Lending Entities in this appeal. Rather, in Davis, the Supreme Court construed a statute that specifically mentioned the United States relative to the substantive provisions of the bankruptcy priority framework. See id. That circumstance is vastly different from relying on the Act‘s definitional provisions to cloak tribal corporate entities with sovereign immunity merely because tribes are mentioned in the Act‘s definition of “States.” In any event, the general statutory interpretation approach expounded in Davis does not in any way undermine our binding precedent that laws of general applicability may be enforced against the tribes unless Congress expressly provides otherwise. See Coeur d‘Alene, 751 F.2d at 1115-16.
Finally, relying on County of Yakima v. Confederated Tribes and Bands of Yakima Indian Nation, 502 U.S. 251, 269, 112 S.Ct. 683, 116 L.Ed.2d 687 (1992) and Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 767-68, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985), the Tribal Lending Entities assert that any ambiguity in the Act must be resolved in their favor. The Supreme Court has recognized that, when confronted with two plausible statutory constructions, “our choice between them must be dictated by a principle deeply rooted in this Court‘s Indian jurisprudence: Statutes are to be construed liberally in favor of the Indians, with ambiguous provisions interpreted to their benefit.” County of Yakima, 502 U.S. at 269 (citation and alteration omitted). Nevertheless, we have repudiated this presumption in the face of our governing precedent concluding that to apply the presumption to laws of general applicability “would be effectively to overrule, [Coeur d‘Alene], which, of course, this panel cannot do.” Chapa De, 316 F.3d at 999 (citation omitted).
At this stage of the proceedings, we conclude that the district court properly held that the Bureau does not plainly lack
IV. CONCLUSION
We have consistently held in our post-Stevens precedent that generally applicable laws apply to Native American tribes unless Congress expressly рrovides otherwise. In the Consumer Financial Protection Act, a generally applicable law, Congress did not expressly exclude tribes from the Bureau‘s enforcement authority. Although the Act defines “State” to include Native American tribes, with States occupying limited co-regulatory roles, this wording falls far short of demonstrating that the Bureau plainly lacks jurisdiction to issue the investigative demands challenged in this case, or that Congress intended to exclude Native American tribes from the Act‘s enforcement provisions. Neither have the Tribes offered any legislative history compelling a contrary conclusion regarding congressional intent. At this stage of the proceedings, we affirm the district court‘s order enforcing the investigative demands against the Tribal Lending Entities.
AFFIRMED.
JOHNNIE B. RAWLINSON
UNITED STATES CIRCUIT JUDGE