United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 7, 2000 Decided December 19, 2000
No. 99-1440
Yukon-Kuskokwim Health Corporation,
Petitioner
v.
National Labor Relations Board,
Respondent
On Petition for Review and Cross-Application for
Enforcement of an Order of the
National Labor Relations Board
James E. Glaze argued the cause for petitioner. With him
on the briefs were Lloyd Benton Miller, Donald J. Simon,
Stephen H. Hutchings and Douglas S. Burdin.
Sharon I. Block, Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the
brief were Leonard R. Page, General Counsel, Linda Sher,
Associate General Counsel, Aileen A. Armstrong, Deputy
Associate General Counsel, and Charles Donnelly, Superviso-
ry Attorney.
Before: Ginsburg, Randolph and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Ginsburg.
Separate statement dissenting in part filed by Circuit
Judge Randolph.
Ginsburg, Circuit Judge: The Yukon-Kuskokwim Health
Corporation (Yukon), a non-profit organization controlled by
Alaska Native tribes, challenges the National Labor Relations
Board's assertion of jurisdiction over a hospital that Yukon
operates. The Board properly rejected the employer's claim
to be exempt pursuant to s 2(2) of the National Labor
Relations Act (NLRA) on the ground that it is an Indian tribe
acting in a governmental capacity. The Board failed, howev-
er, to consider the employer's argument that it is entitled to
exemption under s 2(2) because the Indian Self-
Determination Act (ISDA) authorizes it to act as an arm of,
and thus to share in the exemption of, the United States.
Accordingly, we remand this matter to the Board for further
proceedings.
I. Background
A group of Alaska Native tribes formed Yukon in 1969 to
provide health services, primarily to Alaska Natives, in South-
western Alaska. Yukon is controlled by a board of directors
elected by the tribal councils of the 58 tribes in the region.
In 1975 the Congress enacted the ISDA, 25 U.S.C. ss 450
et seq., to bring about "an orderly transition from the Federal
domination of programs for, and services to, Indians to
effective and meaningful participation by Indian people in the
planning, conduct, and administration of those programs and
services." 25 U.S.C. s 450a(b). The federal government
recognized Yukon as an "Indian tribe" for purposes of the
ISDA and, pursuant to that statute, Yukon began to assume
responsibility from the Indian Health Service, an agency
within the U.S. Department of Health and Human Services,
for the operation of clinics in native villages throughout
Southwestern Alaska.
In 1991 Yukon took over a hospital previously operated by
the IHS in Bethel, Alaska, the largest town in the region.
Most of the federal employees at the hospital, including 40
nurses, remained on staff. In 1996 the Board received an
election petition from a union seeking to represent the nurs-
es. Yukon opposed the petition on the basis of s 2(2) of the
NLRA, which excludes from the definition of "employer" "the
United States or any wholly owned Government corporation
... or any State or political subdivision thereof." 29 U.S.C.
s 152(2). Yukon argued that it qualified for exemption under
s 2(2) both as a political subdivision (because it is an Indian
tribe acting in a governmental capacity) and as an arm of the
United States (because it operates a federal hospital pursuant
to the ISDA).
The Board overruled Yukon's objection on the ground that
the Board had never applied the exemption in s 2(2) to the
activities of an Indian tribe not conducted on an Indian
reservation. The Board certified the union and Yukon took a
refusal to bargain charge so that it could get judicial review
of the Board's order under ss 10(e) and (f) of the NLRA. 29
U.S. ss 160(e) and (f).
II. Analysis
Yukon advances two arguments for the proposition that its
hospital is not subject to the NLRA. First, Yukon argues
that it qualifies under s 2(2) as a "State or political subdivi-
sion" because it is an Indian tribe acting in a governmental
capacity. Second, Yukon argues that it shares in the exemp-
tion that s 2(2) grants to the federal government because the
ISDA authorizes it to operate a federal hospital pursuant to a
government-to-government compact with the United States.
A. Governmental Capacity
Yukon argues that the Board acted arbitrarily in limiting
the exemption afforded to Indian tribes under s 2(2) to
activities conducted on a reservation, rather than limiting the
exemption to "governmental activities" of Indian tribes, wher-
ever conducted. In our review of the Board's decision, we
"must accept the Board's position unless it conflicts with the
'unambiguously expressed intent' of the Congress or is [oth-
erwise] not 'a permissible construction of the statute.' " Hor-
mel v. NLRB, 962 F.2d 1061, 1065 (D.C. Cir. 1992) (quoting
Chevron v. NRDC, 467 U.S. 837, 843 (1984)).
In the past, the Board has interpreted the exemption under
s 2(2) for "any State or political subdivision thereof," to
include "entities that are either (1) created directly by the
State, so as to constitute departments or administrative arms
of the government, or (2) administered by individuals who are
responsible to public officials or to the general electorate."
NLRB v. Natural Gas Utility District of Hawkins County,
Tennessee, 402 U.S. 600, 604-605 (1971). In Fort Apache
Timber Co. v. NLRB, 1976-77 NLRB Dec. (CCH) p 17,475
(Oct. 19, 1976), the Board applied this test to conclude that
because "the Fort Apache Timber Company is an entity
administered by individuals directly responsible to the Tribal
Council ... [it is] exempt as a governmental entity recog-
nized by the United States, to whose employees the Act was
never intended to apply." Id. at 28,876 n.22.
More recently, in Southern Indian Health Council v.
NLRB, 1988-89 NLRB Dec. (CCH) p 15,052 (July 29, 1998),
the Board applied the "direct responsibility" test to a hospital
located on a reservation and operated by a consortium of
seven tribes. The Board concluded that the hospital was
exempt from the NLRA pursuant to the "State or political
subdivision" exemption because "the directors of the Employ-
er are directly appointed by, and subject to removal by, the
governing bodies of the member tribes." Id. at 28,226.
Later, in Sac & Fox Industries v. NLRB, 1992-93 NLRB
Dec. (CCH) p 17,250 (Apr. 24, 1992), the Board modified its
test for application of the "State or political subdivision"
exemption to Indian tribes. In that case the tribe had
secured a $30 million supply contract with the Department of
Defense, for which it had built or acquired four factories not
on its reservation. Many of the workers employed at the
acquired factories previously had been represented by a
union, but the tribe argued that its substitution as the em-
ployer made the operation exempt from the NLRA and,
hence, from the obligation to bargain with the union. The
Board rejected this claim, explaining that "[a]lthough the
Board's decision in Fort Apache [ ] contains statements to the
contrary ... we read that decision as limited to situations in
which the tribal enterprise is located on the reservation." Id.
at 32,416.
Yukon argues that the Board should read Sac & Fox as
having denied exemption to the off-reservation factories in
material part because of their commercial nature, not simply
because of their location off the reservation. The Board,
however, has never drawn a distinction based upon the nature
of the Indian enterprise. The Board first said somewhat
tentatively in Sac & Fox that the "exemption in Section 2(2)
for a 'political subdivision' of a 'State' does not clearly include
an off-reservation tribal enterprise." Id. Now, the Board
has firmly concluded that an Indian tribe does not qualify as a
"State or political subdivision" for purposes of s 2(2) when it
conducts activities off its reservation. We can hardly say that
position is unreasonable.
An Indian tribe, like any other governmental unit, typically
operates in its governmental capacity only within its geo-
graphical jurisdiction. There are, to be sure, exceptions to
that general rule, as recognized, for example, in the Foreign
Sovereign Immunities Act (FSIA), 28 U.S.C. s 1605(a)(2).
The distinction between commercial and governmental activi-
ties, however, is often elusive, see Princz v. Federal Republic
of Germany, 26 F.3d 1166, 1172 (D.C. Cir. 1994) (noting that
FSIA, rather than attempting to define "commercial" and
"governmental" activity, leaves to courts the task of distin-
guishing between the two), and the Board has long and
reasonably preferred bright line rules in order to avoid
disputes over its jurisdiction. See, e.g., Siemons Mailing
Service, 122 N.L.R.B. 81, 85 (1958) (setting dollar threshold
for the "effect on commerce" sufficient to support Board
jurisdiction). Accordingly, we defer to the Board's interpre-
tation and reject Yukon's argument to the contrary.
B. The ISDA
Yukon also argues that it is exempt from the NLRA
pursuant to s 2(2) because that provision exempts "the Unit-
ed States" and here Yukon "stepped into the shoes of" and
"acts exactly for, and as, the United States" because it
operates a federal hospital pursuant to a government-to-
government compact authorized under the ISDA.* Addition-
ally, Yukon argues that for the Board to assert jurisdiction
over it would undermine the purpose of the ISDA, namely, to
increase tribal self-governance.
In the decision under review the Board mentioned but
dismissed the ISDA in a single sentence:
We further reject the Employer's contention that it is
exempt from coverage because in light of the govern-
ment-to-government Compact delegating Federal func-
tions to the tribes on Federal property reserved and
intended for that purpose, the Employer functions as an
arm to [sic] the United States, and is, thus, an 'integral
part of the government of the United States as a whole.'
328 NLRB No. 101 at 4. The Board then repeated its
conclusion that it has limited tribes' exemption under s 2(2)
"to situations in which the tribal enterprise is located on the
reservation." Id. (emphasis in original). The Board appears
simply to have misunderstood the tribe's argument here,
which is that its exemption derives not from its own sover-
eignty as an entity akin to a "State or political subdivision"
but, rather, from the exemption granted to "the United
States." For the Board to limit to the confines of an Indian
__________
* Judge Randolph, in his dissent, states that his "colleagues think
that perhaps Yukon also wanted to be considered the United States
for the purpose of s 2(2)." Lest we be thought utterly mad, he
acknowledges a "hint here and there" in its briefs to this court that
Yukon "might have had this in mind," but says that this was not
"the thrust of its presentation," either before the Board or here.
We think that it was a thrust. The heading of Part IV of Yukon's
brief to the Board asserted that "The 58 Tribes are Exempt as an
Integral Part of the United States [Government]," and the ensuing
five pages (28-33) were devoted to arguing the point. Yukon
renewed the argument before this court in the section of its brief
headed "Tribes operating pursuant to the [ISDA] are treated as the
equivalent of federal agencies under the [NLRA]."
reservation the exemption granted to the United States
makes no sense. Additionally, the Board wholly failed to
address Yukon's argument that asserting jurisdiction over the
hospital would "directly contraven[e] the ISDA's goal" of
increasing tribal self-governance.
As this court explained in New York Shipping v. Federal
Maritime Commission, 854 F.2d 1338, 1370 (1988):
[A]n agency, faced with alternative methods of effectuat-
ing the policies of the statute it administers, (1) must
engage in a careful analysis of the possible effects those
alternative courses of action may have on the functioning
and policies of other statutory regimes, with which a
conflict is claimed; and (2) must explain why the action
taken minimizes, to the extent possible, its intrusion into
policies that are more properly the province of another
agency or statutory regime.
The ISDA is undoubtedly intended to remove tribal programs
from federal oversight. See Oklahoma Tax Comm'n v. Citi-
zen Band Potawatomi Indian Tribe, 498 U.S. 505, 510 (1991)
(noting that ISDA "reflect[s] Congress'[s] desire to promote
the goal of Indian self-government"). Indeed, in the amend-
ments to the ISDA enacted while this case was on review, the
Congress renewed its commitment to Indian self-
determination. See Tribal Self-Governance Amendments of
2000, P.L. 106-260, 114 Stat. 711 s 2(3) (Aug. 18, 2000).
The Board's one-sentence rejection of Yukon's arguments
from the ISDA both relies upon what, in this context, is an
irrelevant distinction and ignores the Board's obligation to
address and to minimize conflict with another statutory re-
gime with which a disparity is claimed. Although the General
Counsel of the Board, in her argument before this court,
addressed in somewhat greater detail the Board's possible
reasons for rejecting Yukon's arguments from the ISDA,
" 'courts may not accept appellate counsel's post hoc rationali-
zations for agency action.' " NLRB v. Metropolitan Life.
Ins., 380 U.S. 438, 444 (1965) (quoting Burlington Truck
Lines v. United States, 371 U.S. 156, 168 (1962)).
The Board's inadequate attention to the ISDA requires
that we remand this matter to the agency for further consid-
eration. See, e.g., Iowa v. FCC, 218 F.3d 756 (D.C. Cir. 2000)
(remanding for agency to address potentially dispositive argu-
ment). On remand, the agency must determine whether
Yukon qualifies as "the United States" for purposes of s 2(2);
in reaching its conclusion, the Board will need to consider
what allowance, if any, the NLRA must make in order to
accommodate federal Indian law, as reflected in the ISDA.
As we noted in New York Shipping, our review of such a
determination "remains a matter of checking the [Board]
against the terms of the [labor] laws. This is precisely the
type of appellate exercise governed by Chevron; our review
must be correlatively deferential." 854 F.2d at 1364. It is
for the agency, therefore, to consider the petitioner's argu-
ment in the first instance.
III. Conclusion
For the reason set out in Part II B above, we deny
enforcement of the order issued by the Board and remand
this case to the agency for further consideration of the
petitioner's argument from the ISDA.
So ordered.
Randolph, Circuit Judge, dissenting in part: I agree with
the court's opinion except for part II.B., which remands the
case to the Board for "further consideration of the petitioner's
argument from the" Indian Self-Determination Act. Maj. op.
at 8.
No principle of administrative law compels an agency to
respond to gibberish. It is therefore understandable that the
Board never responded to an argument that the Indian Self-
Determination Act removed Yukon from the Board's jurisdic-
tion. Maj. op. at 6. The Board did not respond because
Yukon never made any coherent argument to this effect.
And it barely managed to make one in this court. About all
Yukon did before the Board and before us is slap the Self-
Determination Act down on the table in the hope that some-
one will figure out why it should matter.
Here are the few assertions Yukon presented to the Board
regarding the statute. The Self-Determination Act "autho-
rizes and encourages tribal governments to assume operation
of federal Indian programs." Employer's Brief on Review of
Jurisdictional Determination at 5. Indeed it does. "Through
the Act, Congress intended to shift programs from the feder-
al government to tribal governments, thereby reducing feder-
al domination of Indian programs." Id. That appears cor-
rect. "Nothing in the federal government's authorization
requires that the tribes' ... activities [conducted pursuant to
the Self-Determination Act] occur 'on reservation.' " Id. at 8.
This is obvious; Yukon's hospital is not on a reservation. (No
one--the Board included--has required Yukon or any Indian
tribe to conduct such activities on reservations.) What then
is Yukon's point? All of its statements about the Self-
Determination Act are contained in the section of its brief
claiming an exemption as a state or federal government under
s 2(2). The section's heading is entitled "THE HOSPITAL
IS OPERATED BY FEDERALLY RECOGNIZED SOV-
EREIGN TRIBES ENTITLED TO THE GOVERNMEN-
TAL EXEMPTION." Id. at 4. The "governmental exemp-
tion" is s 2(2) of the National Labor Relations Act, 29 U.S.C.
s 152(2), the provision granting an exemption to the federal
government and state and local governments. The Board
rejected this argument, correctly we all agree at least to the
extent Yukon wanted to be considered a state. So what was
left of Yukon's reliance on the Self-Determination Act in its
case before the Board? There are two possibilities--nothing
or nothing comprehensible. In either event, the Board had
no duty to respond.
My colleagues think that perhaps Yukon also wanted to be
considered the United States for the purpose of s 2(2). (The
section provides in relevant part that the term employer
"shall not include the United States or any wholly owned
Government corporation." 29 U.S.C. s 152(2).) Yukon's
briefs in this court hint here and there that it might have had
this in mind, although the thrust of its presentation to this
court and the Board was the rather inconsistent assertion
that it--Yukon--was a separate, independent sovereign. See,
e.g., Brief of Petitioner at 36 (characterizing relationship
under Self-Determination Act as "inter-governmental delega-
tion, transferring responsibility from one sovereign to anoth-
er"); Employer's Brief on Review of Jurisdictional Determi-
nation (No. 19-RC-13271) at 5 ("[a]ccess to the benefits of the
Act is only available to sovereigns"); id. ("by definition under
the Act, only sovereigns may compact as an exercise of their
sovereignty").
At all events, the Board said enough on this subject, given
the incoherence of Yukon's position. The Board wrote: "Sig-
nificantly, the Employer was not brought into existence by a
special legislative Act. Rather, it is a regional nonprofit
corporation formed ... under applicable Alaska laws. Under
these circumstances, we find that the Employer is not exempt
under Section 2(2) 'as an integral part of the government of
the United States as a whole.' " Decision and Order, Yukon
Kuskokwim Health Corp., 329 N.L.R.B. No. 101 at 4 (June
18, 1999). In other words, whatever the Self-Determination
Act means, or whatever Yukon thinks it means, Yukon re-
mains an independent Alaska corporation, not a part of the
government of the United States. If Yukon believes the Act
provides otherwise, it has yet to explain why.