Schmasow v. Native American Center

No

No. 97-555

IN THE SUPREME COURT OF THE STATE OF MONTANA

1999 MT 49

SARA SCHMASOW,

Plaintiff and Appellant,

v.

NATIVE AMERICAN CENTER, PAT MAKI,

GRACE FAIRHURST, DON FISH, and DUKE MARTEL,

also John Does 1 through 10,

Defendants and Respondents.

APPEAL FROM: District Court of the Eighth Judicial District,

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (1 of 12)4/11/2007 9:11:17 AM
 No

In and for the County of Cascade,

The Honorable Thomas M. McKittrick, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Cameron Ferguson; Hartelius, Ferguson, Baker & Kazda;

Great Falls, Montana

For Respondents:

Robert L. Sterup; Dorsey & Whitney, LLP; Billings, Montana

Submitted on Briefs: October 15, 1998

Decided: March 16, 1999

Filed:

__________________________________________

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (2 of 12)4/11/2007 9:11:17 AM
 No

Clerk

Justice Jim Regnier delivered the opinion of the Court.

¶1. The appellant, Sara Schmasow, brought an action against the defendants, the
Native American Center, Inc. (NAC) and others, claiming that NAC should have
selected her for the position of executive director pursuant to an Indian employment
preference provision in NAC's contract with the Indian Health Service. NAC hired
another Indian, James Parker Shield, instead. Schmasow argued in the Eighth
Judicial District Court, Cascade County, that Shield did not qualify for the
employment preference since he was not a member of a federally recognized Indian
tribe. Schmasow appeals the District Court's conclusion that Shield was eligible for
the employment preference and its grant of summary judgment in NAC's favor. We
affirm the District Court.

¶2. The dispositive issue in this case is whether Shield, who is not a member of a
federally recognized Indian tribe, qualifies for an Indian employment preference
pursuant to NAC's contract with the Indian Health Service.

FACTUAL BACKGROUND

¶3. The Native American Center (NAC) is a nonprofit urban Indian organization
that offers health care services to urban Indians in Great Falls, Montana. NAC's
board of directors are duly elected by the urban Indian community which it serves,
the majority of whom are members of the Little Shell Chippewa Tribe. The Little
Shells have been without a reservation since the 1890s. Since the early 1990s, nearly
3700 enrolled members of the Little Shell Chippewa Tribe have lived in the Great
Falls area.

¶4. Pursuant to Title V of Pub. L. No. 94-437, the Indian Health Care Improvement
Act (IHCIA), now set forth at 25 U.S.C. §§ 1651-1660d, NAC receives its funding
through a contract with the Bureau of Indian Affairs and the Indian Health Service
(IHS). The contract is administered by the Billings Area Indian Health Service office
(BIHS). At issue in this case is a contract between NAC and IHS that went into effect
January 1, 1994.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (3 of 12)4/11/2007 9:11:17 AM
 No

¶5. In 1976, Congress passed Title V of the IHCIA to authorize IHS to enter into
contracts to provide health care services to growing numbers of urban Indians who
do not receive federal Indian health care assistance on reservations. See 25 U.S.C. §
1651-1652; see also 3 U.S.C.C.A.N. at 2750 (1976). Congress specifically identified
Great Falls as an urban area with a potential need for such services. See 3 U.S.C.C.A.
N. at 2754 (1976). Through Title V, Congress incorporated Indian self-determination
and local control by allowing urban Indian organizations to provide the necessary
health care services. See 25 U.S.C. § 1652. Congress also required that contracts
entered into with urban Indian organizations be made in accordance with other
federal contracting laws and regulations, including the Indian Self-Determination
and Education Assistance Act ("Indian Self-Determination Act"). See 25 U.S.C. §
1656(a).

¶6. At issue in this case is the Indian employment preference provision of the Indian
Self-Determination Act found at 25 U.S.C. § 450e(b). Section 450e(b) requires that an
Indian be given an employment preference for any position filled under "any
contracts . . . or grants to Indian organizations or for the benefit of Indians."

¶7. In accordance with this statute and the regulation found at 48 C.F.R. § 352.270-2,
NAC's contract with IHS contains an Indian employment preference provision. The
provision provides that "[t]he Contractor agrees to give preference in employment
opportunities under the contract to Indians who can perform required work,
regardless of age (subject to existing laws and regulations), sex, religion or tribal
affiliation." This provision was in effect when NAC hired James Parker Shield as its
executive director.

¶8. The NAC reviewed four applications for the executive director position and
ranked them. After the top scoring applicant withdrew from the application process,
the board voted between the second- and third-ranked applicants, who were Shield
and Schmasow respectively. There was a tie between the board members' votes, so
the board chairperson voted and chose Shield for the position.

¶9. Schmasow contends that by not hiring her the NAC board violated the Indian
employment preference provision in its contract with IHS because she met at least
the minimal requirements for the job and, unlike Shield, she qualified for the Indian
employment preference. Schmasow is an enrolled member of the federally
recognized Chippewa-Cree Tribe. Shield is a member of the Little Shell Chippewa

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (4 of 12)4/11/2007 9:11:17 AM
 No

Tribe, which is recognized by the State of Montana but does not share the federally
recognized designation. On this basis, Schmasow contends that she should have been
given preference over Shield in the hiring process.

¶10. Originally, Schmasow complained to the BIHS. In turn, the BIHS contacted the
NAC board. After correspondence between the BIHS and NAC, the BIHS suggested
that it might withdraw NAC's funding for the executive director position unless NAC
provided evidence that Shield was a member of a federally recognized tribe. Faced
with possible loss of funding, the NAC board eventually discontinued Shield's
employment as executive director.

¶11. On May 17, 1996, Schmasow filed an action against NAC in Montana's Eighth
Judicial District Court, Cascade County, seeking damages for the loss of income she
would have received had she been offered the executive director position. Both
Schmasow and NAC moved for summary judgment on this issue. On September 5,
1997, the District Court granted summary judgment in favor of NAC and against
Schmasow.

STANDARD OF REVIEW

¶12. On appeal from a summary judgment, this Court reviews a case de novo based
on the same criteria applied by the district court. See Stutzman v. Safeco Insurance
Co. (1997), 284 Mont. 372, 376, 945 P.2d 32, 34 (citing Treichel v. State Farm Mut.
Auto. Ins. Co. (1997), 280 Mont. 443, 446, 930 P.2d 661, 663). Thus,

[t]he movant must demonstrate that no genuine issues of material fact exist. Once this has
been accomplished, the burden then shifts to the non-moving party to prove by more than
mere denial and speculation that a genuine issue does exist. Having determined that
genuine issues of material fact do not exist, the court must then determine whether the
moving party is entitled to judgment as a matter of law. [This Court] reviews the legal
determination made by a district court as to whether the court erred.

Stutzman, 284 Mont. at 376, 945 P.2d at 34 (quoting Bruner v. Yellowstone County (1995),
272 Mont. 261, 264-65, 900 P.2d 901, 903). Our review of a summary judgment is much
broader than other appeals. See District No. 55 v. Musselshell County (1990), 245 Mont.
525, 527, 802 P.2d 1252, 1253 (quoting McCain v. Batson (1988), 233 Mont. 288, 298,

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (5 of 12)4/11/2007 9:11:17 AM
 No

760 P.2d 725, 731). If we agree with the conclusions of the district court, we can affirm
the district court's decision, if correct, regardless of its reasons. See Norman v. City of
Whitefish (1993), 258 Mont. 26, 30, 852 P.2d 533, 535; Musselshell, 245 Mont. at 527,
802 P.2d at 1253; Jerome v. Pardis (1989), 240 Mont. 187, 192, 783 P.2d 919, 922.

DISCUSSION

¶13. Does Shield, who is not a member of a federally recognized Indian tribe, qualify
for an Indian employment preference pursuant to NAC's contract with the Indian
Health Service?

¶14. In the Indian employment preference provision of NAC's contract with IHS,
Indian is defined pursuant to the Indian Self-Determination Act as "a person who is
a member of an Indian Tribe." Indian tribe is further defined as "a Tribe, pueblo,
band, nation, or other organized group or community, including any Alaska Native
village, which is recognized as eligible for the special programs and services provided
by the United States to Indians because of their status as Indians." See also 25 U.S.C.
§ 450b(d)-(e); 48 C.F.R. § 352.270-2(e)(1)-(2). The parties disagree over whether
Shield is an Indian based on this definition.

¶15. Schmasow argues on appeal that Shield is not an Indian because he is not a
member of a federally recognized Indian tribe. Federally recognized tribes are tribes
which the Secretary of Interior lists pursuant to 25 U.S.C. § 479a-1, with which the
federal government deals on a government-to-government basis in recognition of
their tribal sovereignty. See 25 U.S.C. § 479a notes. Schmasow contends that only
federally recognized Indian tribes generally are eligible for special programs and
services provided by the United States. Thus, only members of these tribes can satisfy
the definition of Indian under the Indian employment preference provision.

¶16. NAC argues that the District Court was correct when it found that the Little
Shell Chippewa Tribe is eligible to receive the benefits of federal Indian programs
and services, even though it is not a federally recognized Indian tribe. NAC contends
that through the health care funding it receives from IHS, the Little Shell Chippewa
Tribe is an eligible tribe and, therefore, Shield, as a member of the Little Shells,
qualifies for the Indian employment preference. Citing the language of Title V of the
IHCIA, at 25 U.S.C. § 1656(f), which states that "[u]rban Indians, as defined in
section 1603(f) of this title, shall be eligible for health care or referral services," NAC

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (6 of 12)4/11/2007 9:11:17 AM
 No

reasons that so long as the Little Shells are urban Indians, they are eligible for special
federal programs and services. An urban Indian is an individual who resides in an
(1)
urban center and who meets one or more of four listed criteria. See 25 U.S.C.
§§ 1603(f) and 1603(c). The District Court concluded, and NAC argues in this appeal,
that Shield meets at least one of these criteria, because he "is a member of a[n] . . .
organized group of Indians, including . . . those recognized now or in the future by
the State in which they reside." 25 U.S.C. § 1603(c)(1) (emphasis added). The State of
Montana has long recognized the Little Shell Chippewa Tribe.

¶17. Although the District Court's analysis is persuasive, we conclude it is not
technically correct. By relying on the definition of urban Indian, the District Court
simply established that Shield, as an individual member of the Little Shell Tribe, is
eligible for federal Indian health care benefits. To satisfy the definitions of Indian
and Indian tribe in the Indian employment preference provision, however, one must
establish that the Little Shell Chippewa Tribe, itself, is eligible for the health care
benefits. The language of the Indian employment preference provision requires there
to be an "organized group or community [of Indians] . . . which is recognized as
eligible for the special programs and services provided by the United States." Thus,
the individual Indian's status is not controlling.

¶18. In the final analysis, we conclude that the District Court reached the proper
result, however. Under 25 U.S.C. § 1652, the United States government is directed to
"enter into contracts with, or make grants to, urban Indian organizations to assist
such organizations in the establishment and administration, within the urban centers
in which such organizations are situated, of programs which meet the requirements
set forth in this subchapter." Before IHS can enter into a contract with an urban
Indian organization, however, several considerations must be made. The statute at 25
U.S.C. § 1653(b) and the regulation at 42 C.F.R. § 36.351 require that the urban
Indian organization serve an ample-sized urban Indian population who have unmet
health care needs. An urban Indian organization is defined as "a nonprofit corporate
body situated in an urban center which . . . is governed by an Indian controlled
board of directors . . . [and which] [p]rovides for the maximum participation of all
interested Indian groups and individuals." 42 C.F.R. § 36.302(v). A review of the
contract between IHS and NAC indicates that its purpose is to provide health care
services to a target population of Indians residing in Great Falls, Montana. Included
in the Great Falls Indian population is the Little Shell Chippewa Tribe.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (7 of 12)4/11/2007 9:11:17 AM
 No

¶19. Under this statutory and regulatory framework, we conclude that Shield was an
Indian entitled to the Indian hiring preference. NAC receives federal funding under
Title V of the IHCIA to provide health care services to a targeted group, or
community, of Indians in Great Falls, including members of the Little Shell
Chippewa Tribe. The definition of Indian tribe for employment preference purposes
includes a "tribe, pueblo, band, nation, or other organized group or community [of
Indians], including any Alaska Native village . . ., which is recognized as eligible for
the special programs and services provided by the United States to Indians because
of their status as Indians." 25 U.S.C. § 450b(e) (emphasis added). Thus, the Little
Shell Chippewa Tribe fits the definition of Indian tribe because it is part of an Indian
community which receives federal Indian funding for special programs and services,
even though it is not a federally recognized tribe. Since Shield is an enrolled member
of the Little Shell Chippewa Tribe, he satisfies the definition of Indian and is eligible
for the Indian hiring preference.

¶20. Any other interpretation of these statutes would be contrary to the very
rationale behind the IHCIA and the Indian Self-Determination Act. By enacting Title
V of the IHCIA, Congress's intention was to provide federal benefits to non-
reservation and non-federally recognized Indian communities. Through the Indian
Self-Determination Act, an Indian employment preference was incorporated into
Title V grants to Indian communities. The United States Supreme Court has stated
that a statutory Indian employment preference is directed to increase participation
by the governed, similar in kind to a locally elected official. See Morton v. Marcari
(1974), 417 U.S. 535, 554, 94 S. Ct. 2474, 2484, 41 L. Ed. 2d 290, 302. An Indian
employment preference enables the federal government, and its contractors, to draw
more heavily from the recipient group when staffing services that will affect the
recipient community. See Marcari, 417 U.S. at 554, 94 S. Ct. at 2484, 41 L. Ed. 2d at
302. Thus, to conclude that Shield, who is a member of the recipient Indian
community, cannot qualify for an Indian preference would be contrary to the
meaning of the Indian preference law and the rationale of the United States Supreme
Court.

¶21. Furthermore, we are not persuaded by Schmasow's argument that only
members of federally recognized tribes listed under 25 U.S.C. § 479a-1 qualify for the
Indian employment preference. Section 479a-1 provides that "[t]he Secretary shall
publish in the Federal Register a list of all Indian tribes which the Secretary
recognizes to be eligible for the special programs and services provided by the United

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (8 of 12)4/11/2007 9:11:17 AM
 No

States to Indians because of their status as Indians." Schmasow argues that since the
language of § 479a-1, "eligible for the special programs and services provided by the
United States to Indians because of their status as Indians," is the same language
used in the definition of Indian tribe in the Indian Self-Determination Act, we should
read § 479a-1 to limit the definition of Indian tribe under the Indian Self-
Determination Act to only those Indian tribes which the Secretary recognizes. We
conclude, however, that § 479a-1 must be read in conjunction with 25 U.S.C. § 479.
Although § 479 defines an Indian as a member of "any recognized Indian tribe now
under Federal jurisdiction," its application is limited to a specific list of statutes
which does not include the IHCIA or the Indian Self-Determination Act. Schmasow
attempts to resolve this by arguing that Congress enacted the IHCIA and the Indian
Self-Determination Act after it enacted § 479 and merely overlooked amending § 479.
We are not persuaded by this argument. To agree with this argument would cause us
to unnecessarily insert language in § 479 that does not already exist. In addition,
Schmasow does not cite any authority to support her position. We likewise do not
agree with Schmasow's argument that the legislative history of § 479a-1 shows that
Congress wanted to clarify the definition of Indian for all special programs and
services provided to Indians by the United States. The legislative history of § 479a-1,
in fact, shows that Congress meant to address only those Indian tribes that have a
quasi-sovereign status and a government-to-government relationship with the United
States. The legislative history indicates no Congressional intent to take away the
federal benefits offered to other Indian tribes that are not federally recognized or to
modify the contractual provisions associated with the federal benefits they receive.
We conclude that statutes like the IHCIA continue to afford federal benefits to
Indian communities that are not federally recognized and, hence, those communities
continue to satisfy the definition of Indian tribe in the Indian Self-Determination Act.

¶22. Thus, we affirm the District Court's grant of summary judgment in favor of
NAC. Accordingly, we need not consider any of the separately stated issues that the
parties included in their briefs.

¶23. We affirm the District Court.

/S/ JIM REGNIER

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (9 of 12)4/11/2007 9:11:17 AM
 No

We Concur:

/S/ J. A. TURNAGE

/S/ WILLIAM E. HUNT, SR.

/S/ W. WILLIAM LEAPHART

/S/ TERRY N. TRIEWEILER

Justice Karla M. Gray, dissenting.

¶24. I concur in part in the Court's opinion, but respectfully dissent from the portion
of that opinion which holds that the District Court reached the right result, although
for the wrong reason, in granting summary judgment to the Native American Center
(NAC). More specifically, I agree with the Court that the trial court erred in
concluding that Shield's Indian status as an "urban Indian" entitled him to the
Indian employment preference. I disagree that this case--which is before us on a
limited summary judgment record premised on the "urban Indian" analysis--can be
properly resolved on an alternative theory.

¶25. There is no question but that the Court states our correct standard in reviewing
a trial court's summary judgment ruling. I also agree that, under certain
circumstances, we can affirm a trial court's decision, if correct, regardless of its
reasons. The cases cited for the "right result, wrong reason" approach here,
however, do not support the Court's reliance on an alternative legal theory not
argued in the District Court or this Court and for which no adequate record exists by
which we can--or the District Court could have, given the state of the record and the
basis for summary judgment argued there--determine that summary judgment in the
NAC's favor is appropriate here.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (10 of 12)4/11/2007 9:11:17 AM
 No

¶26. Norman was before us after a bench trial by the district court and the entry of
extensive findings on the evidence presented. Determining that the findings were not
clearly erroneous, we affirmed the district court's application of the law to those
facts. Norman, 258 Mont. at 30-31, 852 P.2d at 535-36. Unlike Norman, we have no
findings before us based on evidence relating to the alternative legal theory the Court
applies, simply because no trial was held; in addition, the record before us does not
contain affidavits or other evidence in support of--and opposition to--the legal theory
never argued in the District Court. Musselshell County, on the other hand, was a
summary judgment case; the relevant facts there, however, were undisputed and we
used the "right result, wrong reason" approach to affirm the trial court by applying
a different legal theory to the undisputed facts. Musselshell County, 245 Mont. at 527,
802 P.2d at 1253. In the present case, we do not have before us undisputed facts
necessary for application of the Court's alternative legal theory. As a result, it is my
view that the Court ignores the "no genuine issues of material fact" portion of the
summary judgment criteria, creating a significant and troubling departure from our
traditional practice in reviewing summary judgment decisions.

¶27. Indeed, our analysis of a district court's improper reliance on an issue not raised
or argued in the summary judgment context in Kenyon v. Stillwater County (1992),
254 Mont. 142, 835 P.2d 742, is applicable to--and preclusive of--the Court's
approach here. In Kenyon, we held a trial court in error for granting summary
judgment on an issue not raised and argued, determining that the court was bound
by the issues presented and that, "[b]y granting summary judgment on the basis of
an issue not before it, the court effectively denied [the opposing party] notice and an
opportunity to be heard. . . ." Kenyon, 254 Mont. at 149, 835 P.2d at 746-47. The
same reasoning applies to this Court's actions here which, in addition, are in
derogation of fundamental summary judgment principles relating to the moving
party being required--and strictly--to establish both the absence of genuine issues of
material fact and entitlement to judgment as a matter of law. In this case, the fact is
that--since the record before us is so limited--it cannot be determined that no genuine
issue of material fact exists relating to whether either the Little Shell Chippewa Tribe
or the assemblage of urban Indians living in Great Falls is an "urban Indian
organization" or an "organized Indian community" for purposes of applying the
statutes referenced by the Court and, therefore, we cannot properly determine that
the NAC was entitled to judgment as a matter of law. For these reasons, I would
reverse the District Court's grant of summary judgment in NAC's favor and remand
for such proceedings as the parties might determine were appropriate in light of that

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (11 of 12)4/11/2007 9:11:17 AM
 No

reversal; such proceedings might well include, of course, another motion for
summary judgment by the NAC on the alternative legal theory relied on by this
Court and the opportunity for both parties to present relevant evidence in support
of--and opposition to--any such motion.

¶28. In addition to the matters discussed above, I have concerns with portions of the
Court's legal analysis and I submit that, perhaps particularly in the complex arena of
Indian law, it is dangerous and unwise to piece together an analysis not presented by
any party based on unestablished facts. In light of my view that no record exists on
which we can determine that the NAC met its initial burden of establishing the
absence of genuine issues of material fact on an alternative theory never argued,
however, I would not reach the legal analysis necessary to affirm the District Court's
decision here.

¶29. I would reverse the District Court's grant of summary judgment to the NAC
and remand for further proceedings and I respectfully dissent from the Court's
failure to do so.

/S/ KARLA M. GRAY

Justice James C. Nelson joins in the foregoing dissenting Opinion of Justice Karla M.
Gray.

/S/ JAMES C. NELSON

1
1. Section 1603(g) defines urban center as a community which has a sufficient urban Indian population with
unmet health needs.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-555%20Opinion.htm (12 of 12)4/11/2007 9:11:17 AM