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General Memorandum 16-019

General Memorandum 16-019
Federal Court Dismisses Case Seeking to Protect Intertribal Health Organization from State Agency Investigations

On February 23, 2016, Judge Tory Nunley in the Eastern District Court for California dismissed a case seeking to insulate an intertribal health organization from on-going investigations by two California labor and employment agencies. The suit, filed by United Indian Health Services (UIHS), asserted that the District Court should step in to prevent California's Department of Labor Standards Enforcement (DLSE) and the Department of Fair Employment & Housing (DFEH) from investigating the retaliation claims of two terminated employees' initiated under the agencies' state law-based processes.

UIHS claimed that the investigations, which carried threats of financial penalties and had sought information via subpoenas, were improper, as neither the DFEH nor the DLSE had authority over intertribal organizations like UIHS. UIHS also claimed that participation with the investigations carried a threat to its immunity from suit that stemmed from its status as an intertribal organization under the Indian Self-Determination and Education Assistance Act (ISDEAA) and as a tribally run business (i.e., an "arm" of its member tribes).

The Court did not reach the question of whether the state agencies had jurisdiction over UIHS, but said instead that UIHS' claim of a threat to its sovereign immunity was too remote as the agencies had not sued UIHS or otherwise attempted to enforce any penalties against the organization. The Court held that a mere investigation did not rise to the level of a "case or controversy" required to give plaintiffs in federal court "standing" to sue. Accordingly, the Court held that it did not have jurisdiction to hear the case. The Court stated that the fact UIHS would incur financial costs to participate in the investigation or respond to question was not an injury sufficient to give rise to standing.

The case highlights the tension of how far state agencies can go in pursuing their investigations, even if when the law generally points to the idea that the states cannot enforce penalties against tribes and tribal organizations like UIHS. See, Pink v. Modoc Indian Health Project, 157 F.3d 1185, 1187 & 1187 n.1 (9th Cir. 1998); Middletown Rancheria of Pomo Indians v. Workers' Compensation Appeals Bd., 60 Cal. App. 4th 384, 388 (Board did not have jurisdiction over a tribe for purposes of enforcing state law).

Please let us know if we may provide additional information regarding this decision or related concerns.

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Inquiries may be directed to:
Geoff Strommer (gstrommer@hobbsstraus.com)
Adam Bailey (abailey@hobbssstraus.com)

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