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Bruguie v. Lac Du Flambeau Band of Lake Superior Chippewa Indians

United States District Court, W.D. Wisconsin

February 21, 2017

JEANINNE BRUGUIER, Plaintiff,
v.
LAC DU FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS and HENRY ST. GERMAINE, Defendants. JONI R. THEOBALD, Plaintiff,
v.
LAC DU FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS, L.D.F. BUSINESS DEVELOPMENT CORPORATION, and HENRY ST. GERMAINE, Defendants.

          OPINION & ORDER

          JAMES D. PETERSON, District Judge

         Plaintiffs Jeaninne Bruguier and Joni Theobald assert claims under Title VII and state law, alleging that defendants wrongfully terminated their employment and otherwise violated their rights because of plaintiffs' political activities.

         Defendants Lac du Flambeau Band of Lake Superior Chippewa Indians, L.D.F. Business Development Corporation, and Henry St. Germaine jointly move to dismiss these actions on several threshold issues. Dkt. 13. The court will dismiss all Title VII claims under Federal Rule of Civil Procedure 12(b)(6) for plaintiffs' failure to state a claim. Tribal sovereign immunity precludes their claims, and an Indian tribe is not an employer under Title VII. The court will decline to exercise supplemental jurisdiction over the state-law claims and dismiss both cases.

         ALLEGATIONS OF FACT

         To decide a Rule 12(b)(6) motion, the court may consider plaintiffs' complaints, documents referenced in the complaints, documents critical to the complaints, and information subject to judicial notice. Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). The court draws the following facts from plaintiffs' complaints, charges filed with the EEOC, right-to-sue letters, and publicly available charters of tribal corporations.

         Defendant Lac du Flambeau Band of Lake Superior Chippewa Indians (the Tribe) is a federally recognized Indian tribe. In the 1930s, the Tribe was reorganized and approved by the Secretary of the Interior pursuant to Section 16 of the Indian Reorganization Act of 1934 (the IRA), 25 U.S.C. § 5123 (originally 25 U.S.C. § 476). Defendant Henry St. Germaine is a former president of the Tribe's council. In 2012, the tribal council established defendant L.D.F. Business Development Corporation (L.D.F. Business Development) pursuant to Article VI, Section 1(o) of the Tribe's constitution. Under L.D.F. Business Development's charter, the Tribe is the “sole owner.” Dkt. 14-6, at 2.

         Plaintiffs are former employees of the Tribe. Plaintiff Bruguier was the Tribal Administrator. Theobald was the Director of Gikendaasowin [Knowledge] Education & Workforce Development. The Tribe terminated plaintiffs' employment in 2015.

         In July 2015, Theobald announced her candidacy for a seat on the tribal council. Plaintiffs allege that St. Germaine, then-president of the tribal council, arranged a phony internal audit to create a negative perception of Theobald and those associated with Theobald, including Bruguier. The internal auditors obtained confidential documents that pertained to plaintiffs and published those documents on a Facebook page that had over 900 members.

         Around the same time, St. Germaine and two other council members met and identified the two highest-paid female managers, Bruguier and Theobald, as candidates for termination. The Tribe later accused plaintiffs of misconduct and terminated their employment, without giving them an opportunity to defend against the accusations. The Tribe terminated male employees too, but the Tribe gave them an opportunity to speak before the tribal council before their termination.

         Plaintiffs filed separate charges with the EEOC, each alleging sex discrimination, race discrimination, and retaliation. They filed their charges only against the Tribe and not against the other defendants. Dkt. 14-1, at 3 and Dkt. 14-2, at 3. The EEOC dismissed both charges for lack of jurisdiction on June 3, 2016. Dkt. 14-3, at 1 and Dkt. 14-4, at 1. The same notices that informed plaintiffs of the dismissal informed them of their right to sue. Plaintiffs filed separate complaints with this court on September 1, 2016, and the court consolidated these two cases.

         ANALYSIS

         The parties debate whether defendants' motion should be treated as a motion to dismiss for lack of subject matter jurisdiction or for failure to state a claim. “Customarily, a federal court first resolves doubts about its jurisdiction over the subject matter.” Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 578 (1999). But as the Seventh Circuit has recently explained, a federal district court “has leeway to choose among threshold grounds for denying audience to a case on the merits.” Meyers v. Oneida Tribe of Indians of Wis., 836 F.3d 818, 821 (7th Cir. 2016). Here, the court will construe defendants' motion as a motion to dismiss for failure to state a claim because the issues discussed in this opinion are not jurisdictional.

         The standards governing a Rule 12(b)(6) motion are well established. A complaint must contain allegations that, when accepted as true, state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). If the allegations in a complaint “however true, could not raise a claim of entitlement to relief, ” the court should grant the motion. Virnich v. Vorwald, 664 F.3d 206, 212 (7th Cir. 2011) (quoting Twombly, 550 U.S. at 558).

         A. Title VII claims against the Tribe

         Both plaintiffs claim that the Tribe discriminated against them based on sex, race, and national origin and that the Tribe retaliated against them in violation of Title VII. But their claims fail for two reasons. First, the Tribe's sovereign immunity precludes their claims. Second, the Tribe is not an “employer” under Title VII. Each of these two reasons provides an independent basis for dismissal.

         1. Sovereign immunity

         As a matter of federal law, Indian tribes have sovereign authority traditionally enjoyed by sovereign powers. Michigan v. Bay Mills Indian Cmty., 134 S.Ct. 2024, 2030 (2014). Thus, Indian tribes are immune from suit in both state and federal courts unless Congress abrogates the tribe's sovereign immunity or the tribe waives its sovereign immunity. Wells Fargo Bank, Nat'l Ass'n v. Lake of the Torches Econ. Dev. Corp., 658 F.3d 684, 689 (7th Cir. 2011) (citing Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998)). In the Seventh Circuit, sovereign immunity is not a jurisdictional issue. Meyers, 836 F.3d at 820. The parties here agree that the Tribe is a federally recognized Indian tribe, and plaintiffs do not contend that Congress abrogated the Tribe's sovereign immunity. Thus, the remaining question is whether the Tribe waived its sovereign immunity.

         An Indian tribe's waiver of sovereign immunity must be “clear.” C & L Enter's, Inc. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418 (2001). It cannot be implied, Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978), and any ambiguity must be resolved in favor of immunity, Meyers, 836 F.3d at 827 (citing F.A.A. v. Cooper, 132 S.Ct. 1441, 1448 (2012)); Nanomantube v. Kickapoo Tribe in Kan., 631 F.3d 1150, 1153 (10th Cir. 2011). An Indian tribe can waive its sovereign immunity by, among other means, a tribal resolution or a contract. Stifel, Nicolaus & Co., Inc. v. Lac du Flambeau Band of Lake Superior Chippewa Indians, 807 F.3d 184, 202 (7th Cir. 2015).

         a. ...


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