UNITED STATES EX REL. Fawn CAIN; Tanya Archer, Relator; Sandi Ovitt, Relator, Plaintiffs-Appellants, v. SALISH KOOTENAI COLLEGE, INC.; Salish Kootenai College Foundation; Robert Fouty; Jim Durglo; Rene Peirre; Ellen Swaney; Linden Plant; Tome Acevedo; Zane Kelly; Ernest Moran; Salish Kootenai College Board of Directors; Does, 1-10, Defendants-Appellees, Confederated Salish and Kootenai Tribes, Appellee-Intervenor.
No. 15-35001
United States Court of Appeals, Ninth Circuit
July 10, 2017
Argued and Submitted April 3, 2017 Seattle, Washington
862 F.3d 939
The district court found that there was “no evidence of actual or potential confusion” resulting from Defendants’ use of “The Write Choice,” and then concluded that Defendants had shown fair use. That fair use analysis was in error because “[t]he fair use defense only comes into play once the party alleging infringement has shown by a preponderance of the evidence that confusion is likely.” KP Permanent II, 408 F.3d at 608-09. The district court could not properly find here that there was no evidence of confusion, fail to conduct a Sleekcraft analysis, and still conclude that the Defendants qualified for the fair use defense. Thus, we remand for the district court to consider Marketquest‘s trademark infringement claim regarding Defendants’ use of “The Write Choice.”
CONCLUSION
We REVERSE and REMAND for proceedings consistent with this opinion.
Trent N. Baker (argued), Jason A. Williams, and David B. Cotner, Datsopoulos MacDonald & Lind P.C., Missoula, Montana, for Plaintiffs-Appellants.
Martin S. King (argued), Jori Quinlan, and Matthew J. Cuffe, Worden Thane P.C., Missoula, Montana, for Defendants-Appellees.
John Harrison (argued) and Rhonda R. Swaney, Tribal Legal Department, Pablo, Montana, for Appellee-Intervenor.
OPINION
KOZINSKI, Circuit Judge:
The False Claims Act (FCA),
FACTS
Plaintiffs are former employees of Salish Kootenai College, Inc. (the College). They brought a qui tam action against the College, the Salish Kootenai College Foundation (the Foundation), and eight of the College‘s board members, alleging that defendants violated the FCA and Montana law. Specifically, they claim that defen
After the United States declined to intervene pursuant to
The district court dismissed the complaint against the College and the Foundation with prejudice. The court held that the College was an arm of the Confederated Salish Kootenai Tribes (the Tribe)1 that shared the Tribe‘s sovereign immunity, and that neither the Tribe nor Congress waived the College‘s immunity. As for the Foundation, the district court dismissed the suit for failure to state a claim. The district court further determined that the board members were protected by sovereign immunity because they had been sued in their official capacities.
This appeal followed. Plaintiffs do not challenge the district court‘s dismissal of the claims against the Foundation or its finding that the board members were sued in their official capacities.2 Therefore, we limit our review to the portion of the district court‘s order pertaining to the College.3
DISCUSSION
To begin with, we disagree with the district court‘s framing of the central question. The central question in this case is whether the College is a “person” within the meaning of the FCA. The district court instead focused on whether the College enjoyed tribal immunity and, if so, whether that immunity was voluntarily waived.
To be sure, the two questions are linked. As we explain below, whether a particular entity is a “person” under the FCA is tied to whether that entity enjoys sovereign immunity. But the statutory interpretation question is logically antecedent to the question of sovereign immunity. Whether the College is an arm of the Tribe and therefore shares the Tribe‘s sovereign immunity is relevant only because our precedent tells us that sovereign entities are presumptively excluded from the term “person.” See infra p. 942.
This means we need not decide whether the College voluntarily waived its sovereign immunity.4 If the College is a sovereign entity to which Congress didn‘t intend the FCA to apply, the College cannot make the FCA apply to itself by voluntarily waiving its sovereign immunity; if the College is not a sovereign entity and therefore is a “person” under the FCA, it has no sovereign immunity to waive.
With this clarification, we now consider (1) whether the Tribe is a “person” under
I
In Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765, 787 (2000), the Supreme Court concluded that sovereign States were excluded from the term “person” under the FCA. In reaching this conclusion, the Court relied on its “longstanding interpretive presumption that ‘person’ does not include the sovereign.” Id. at 780 (citations omitted). Acknowledging that “[t]he presumption is . . . not a hard and fast rule of exclusion,” the Court nonetheless held that the presumption “may be disregarded only upon some affirmative showing of statutory intent to the contrary.” Id. at 781 (citations and internal quotation marks omitted). After examining the historical context and statutory scheme, the Court held that the FCA, “far from providing the requisite affirmative indications that the term ‘person’ included States for purposes of qui tam liability, indicate[s] quite the contrary.” Id. at 787.
The Court‘s reasoning in Stevens is equally applicable here. Although we no longer consider tribal sovereignty absolute, we continue to recognize Indian tribes as sovereign entities. See Nevada v. Hicks, 533 U.S. 353, 361 (2001) (“Though tribes are often referred to as sovereign entities, it was long ago that the Court departed from Chief Justice Marshall‘s view that the laws of [a State] can have no force within reservation boundaries.” (citation and internal quotation marks omitted)); see also Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998); Okla. Tax Comm‘n v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S. 505, 509 (1991). Thus, the Tribe, like other federally recognized Indian tribes, is presumptively excluded from the term “person.” See, e.g., Inyo County v. Paiute-Shoshone Indians, 538 U.S. 701, 711-12 (2003) (holding that a tribe was not a “person” who could bring a § 1983 action). Nothing in the FCA‘s text or legislative history overcomes this presumption. See Stevens, 529 U.S. at 783-86 (discussing features of the FCA‘s statutory scheme that suggest governmental entities are not subject to qui tam liability). Tribes may be “domestic dependent nations,” Cherokee Nation v. Georgia, 30 U.S. 1, 17 (1831), but “are sovereigns nonetheless,” and “something more than mere use of the word ‘person‘” is required to “demonstrate the federal intent to authorize unconsented private suit against them,” Stevens, 529 U.S. at 780 n.9.
Some features of the FCA that the Court discussed in Stevens were specific to States. For example, the Court relied on the fact that the FCA elsewhere explicitly defined “person” to include States for purposes of that section. Id. at 783-84 (citations and footnote reference omitted). The Court also found support for its conclusion in a parallel statutory scheme that explicitly left States out of its definition of “persons.” Id. at 786. These features merely provide reasons for affirming the presumption that the term “person” doesn‘t include States. They don‘t change the fact that the presumption applies equally to sovereign tribes. See United States v. Menominee Tribal Enters., 601 F. Supp. 2d 1061, 1067-68 (E.D. Wis. 2009).
That Indian tribes are entitled to the same interpretive presumption as States is further supported by the Court‘s holding in Cook County v. U.S. ex rel. Chandler, 538 U.S. 119, 123 (2003). The Court found that when the FCA was first enacted, municipalities like private corporations were presumed to be persons within the meaning of
Plaintiffs point to Donovan v. Coeur d‘Alene Tribal Farm, 751 F.2d 1113, 1115-16 (9th Cir. 1985), which held that federal statutes of general applicability are presumed to apply to Indian tribes unless one of three exceptions is satisfied. We have affirmed the continued validity of this presumption post-Stevens. See Consumer Fin. Prot. Bureau v. Great Plains Lending, LLC, 846 F.3d 1049, 1053-54 (9th Cir. 2017). However, our conclusion that the FCA was not intended to apply to Indian tribes “forecloses the argument that [the FCA] is of general applicability vis-a-vis the [t]ribe[s].” Miller v. Wright, 705 F.3d 919, 927 (9th Cir. 2013). Our decision turns on the meaning of the term “person.” If that term doesn‘t include Indian tribes, the FCA cannot be a statute of general applicability.
II
The question remains whether the College functions as an arm of the Tribe and therefore shares the Tribe‘s sovereign status. Contrary to the decision below, Smith v. Salish Kootenai College, 434 F.3d 1127 (9th Cir. 2006) (en banc), doesn‘t control this question. In Smith, we were considering whether the Tribal Court had jurisdiction over tort claims brought by a nontribal member against the College. Id. at 1128. Smith was not deciding whether the College is a sovereign entity. That the Smith court drew upon several cases discussing tribal sovereign immunity is insufficient to make Smith controlling precedent in this context. See id. at 1133 (“Whether an entity is a tribal entity de
Smith was also grounded in the record of that case. The status of the College, either for “purposes of civil tribal court jurisdiction,” Smith, 434 F.3d at 1135, or for purposes of the FCA, is a mixed question of law and fact. Even if we were considering the same question as the Smith court, a different factual record could lead to a different conclusion. No matter how extensive the record in Smith, the College cannot knock out plaintiffs’ suit by mere citation to Smith.
In any event, we have already adopted the proper standard for answering this question. Under White v. University of California, 765 F.3d 1010, 1025 (9th Cir. 2014), “whether an entity is entitled to sovereign immunity as an arm of the tribe” turns on several factors, “including: (1) the method of creation of the [entity]; (2) [its] purpose; (3) [its] structure, ownership, and management, including the amount of control the tribe has over the entit[y]; (4) the tribe‘s intent with respect to the sharing of its sovereign immunity; and (5) the financial relationship between the tribe and the entit[y].” (internal quotation marks omitted).
Plaintiffs argue that the White test is inapposite because White wasn‘t an FCA case. They argue we should instead apply the “arm of the state” analysis from Stoner v. Santa Clara County Office of Education, 502 F.3d 1116, 1122-23 (9th Cir. 2007). Stoner primarily turns on whether the State is directly or functionally liable for monetary judgments against the purported state agency. Id.; see also Belanger v. Madera Unified Sch. Dist., 963 F.2d 248, 251 (9th Cir. 1992) (“The most crucial question . . . is whether the named defendant has such independent status that a judgment against the defendant would not impact the state treasury.” (citations and internal quotation marks omitted)).
Our reasoning in Stoner undermines plaintiffs’ argument. In Stoner, we considered whether a California county office of education and a California school district were state agencies that were excluded from the term “person” within the meaning of the FCA. Id. at 1121. We held that “our Eleventh Amendment case law should guide [this] determination” because ”Stevens‘s analysis of the word ‘person’ in
It is of no moment that White wasn‘t an FCA case. White was about whether the Native American Graves Protection and Repatriation Act abrogated tribal sovereign immunity and whether that immunity extended to the tribe‘s repatriation committee. White, 765 F.3d at 1023-25. Similarly, the issue here is whether Congress intended the FCA to apply to tribal sovereigns and whether the Tribe‘s sovereign immunity extends to the College.
It may seem somewhat arbitrary to apply different tests for determining
Having concluded that White provides the appropriate test for determining whether the College is an arm of the Tribe, we remand so that the district court may apply the White factors. There‘s one last wrinkle: The district court denied plaintiffs additional jurisdictional discovery because it believed that Smith controlled the result and further discovery wouldn‘t make any difference. But information that is relevant under White remains to be discovered.5 On remand, the district court shall allow appropriate discovery before determining whether the College is an arm of the Tribe under White.
REVERSED AND REMANDED.
ALEX KOZINSKI
CIRCUIT JUDGE