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Cain v. Salish Kootenai College, Inc.

United States District Court, D. Montana, Missoula Division

May 17, 2018

FAWN CAIN, TANYA ARCHER, and SANDI OVITT, Plaintiffs,
v.
SALISH KOOTENAI COLLEGE, INC., et al., Defendants.

          MEMORANDUM AND ORDER

          Brian Morris United States District Court Judge

         BACKGROUND

         The Ninth Circuit issued its opinion in this matter on July 10, 2017. United States ex rel. Cain v. Salish Kootenai College, Inc., 862 F.3d 939 (9th Cir. 2017). The Ninth Circuit instructed this Court to determine on remand whether Defendant Salish Kootenai College, Inc. (the College) functions as an arm of the Confederated Salish and Kootenai Tribes (the Tribe) “and therefore shares the Tribe's sovereign status” for purpose of the False Claims Act, 31 U.S.C. §§ 3729-3733. Cain, 862 F.3d at 943.

         The Ninth Circuit directed this Court to determine the College's status by analyzing the relationship between the College and the Tribe using the factors described in White v. University of California, 765 F.3d 1010 (9th Cir. 2014). Id. at 945. The parties have conducted discovery on the relationship between the College and the Tribe. The College has filed a Renewed Motion to Dismiss. (Doc. 91). The College argues that Plaintiffs' claims should be dismissed because the College functions as an arm of the Tribe. The Tribe has filed an amicus curiae brief. The Tribe agrees with the College. Plaintiffs oppose the College's motion. Plaintiffs argue that the College is not an arm of the Tribe.

         The Court conducted a hearing on the College's Renewed Motion to Dismiss on February 15, 2018. (Doc. 107). The Court is prepared to rule.

         DISCUSSION

         Plaintiffs ground their federal claims against the College in the False Claims Act. The False Claim Act permits suits against “any person” who defrauds the government by “knowingly present[ing] . . . a false or fraudulent claim for payment or approval.” 31 U.S.C. § 3729(a)(1)(A). The False Claims Act excludes sovereign entities, including federally recognized tribes, from the term person. Cain, 862 F.3d at 941. Entities that function as an arm of a tribe are also excluded from the term person for purposes of the False Claims Act. Id.

         White instructs courts to employ a multi-factor analysis to determine whether an entity enjoys sovereign immunity as an arm of the tribe. White, 765 F.3d at 1025. The factors include: 1) the method of creation of the entity; 2) the purpose of the entity; 3) the structure, ownership and management of the entity, including the amount of control the tribe has over the entity; 4) the sovereign's intent with respect to the sharing of its sovereign immunity with the entity; and 5) the financial relationship between the sovereign and the entity. Id. Application of these factors to the undisputed facts establishes that the College functions as an arm of the Tribe.

         1. The Method of Creation of the College

         The College sits on tribal land on the Flathead Indian Reservation. See Smith v. Salish Kootenai College, 434 F.3d 1127, 1134 (9th Cir. 2006). The Tribal Council chartered and established the College on November 18, 1977, pursuant to its governmental authority under §16 of the Indian Reorganization Act, 25 U.S.C. § 476, and the Tribe's Constitution. (Doc. 92-3 at 2; Doc. 92-3 at 4). The College was incorporated under tribal law as a tribal non-profit corporation. (Doc. 92-3 at 4). The Tribal Council appointed the College's first Board of Directors. (Doc. 92-2 at 2-3; Doc. 92-3 at 2, 9). The College's bylaws state that each of the members of the College's Board of Directors must be enrolled members of the Tribe. (Doc. 92-10 at 7).

         The Tribe incorporated the College under Montana law on September, 12, 1978. (Doc. 92-4). The dual incorporation of the College under tribal law and state law does not disqualify the College from functioning as a tribal entity. See Smith, 434 F.3d at 1129, 1135; see also, Duke v. Absentee Shawnee Tribe of Oklahoma Housing Authority, 199 F.3d 1123, 1125 (10th Cir. 1999) (creation of entity “under state law does not preclude its characterization as a tribal organization”). The first White factor supports a finding that the College functions as an arm of the Tribe.

         2. The Purpose of the College

          The Tribe established the College pursuant to its intrinsically governmental obligation “to represent, develop, protect and advance the views, interests, resources, and education of its members.” (Doc. 92-3 at 2). The Tribe recognized that “there [was] a tremendous need for educational programs beyond high school” and that “many . . . tribal members and their families [were] not able to move to cities where there [were] colleges and vocational schools.” Id.

         The College serves at least three primary purposes. The College seeks to provide post-secondary education opportunities for Native Americans on the Flathead Indian Reservation. (Doc. 92-3 at 4-5). The College seeks to “upgrade the skills and competencies of [tribal] employees.” (Doc. 92-3 at 2; Doc. 92-7 at 9). The College also seeks to “assist with the ...


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