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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. McCrary v. Ivanof Bay Village (12/9/2011) sp-6626

McCrary v. Ivanof Bay Village (12/9/2011) sp-6626

        Notice: This opinion is subject to correction before publication in the PACIFIC  REPORTER. 
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MICHAEL McCRARY,                                   ) 
                                                   )    Supreme Court No. S-13972 
                        Appellant,                 ) 
                                                   )    Superior Court No. 3AN-09-10267 CI 
        v.                                         ) 
                                                   )    O P I N I O N 
IVANOF BAY VILLAGE and                             ) 
EDGAR SHANGIN,                                     )   No. 6626 - December 9, 2011 
                        Appellees.                 )

                Appeal from the Superior Court of the State of Alaska, Third 
                Judicial District, Anchorage, Peter A. Michalski, Judge. 

                Appearances:        Donald      Craig   Mitchell,    Anchorage,      for 
                Appellant.  Heather Kendall Miller, Natalie A. Landreth, and 
                Erin C. Dougherty, Native American Rights Fund, and Lloyd 
                B. Miller, Sonosky, Chambers,  Sachse, Miller & Munson, 
                LLP, Anchorage, for Appellees. 

                Before:    Carpeneti, Chief Justice, Fabe, Winfree, Christen, 
                and Stowers,     Justices. 

                WINFREE, Justice. 


                Michael McCrary sued Ivanof Bay Village (Ivanof Bay) and its president, 

Edgar Shangin, under two contracts, alleging breaches of the implied covenants of good 

faith   and   fair   dealing.  The   superior   court   dismissed    the   suit   based  on  sovereign 

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immunity.     McCrary appeals the sovereign immunity ruling, arguing that even though 

the United States Department of Interior lists Ivanof Bay as a federally recognized Indian 

tribe, Ivanof Bay has not been formally designated as a federally recognized tribe.  We 

have previously concluded Alaska Native tribes recognized by Congress or the Executive 

Branch     are  sovereign     under   federal   law,  and   McCrary     has   not  demonstrated      this 

conclusion should be overturned.   We therefore affirm the superior court's dismissal of 

McCrary's suit. 


                The United States Department of Interior (Department) annually publishes 

                                                   1              2 
a list of federally recognized Indian tribes.        Ivanof Bay  has been a recognized tribe on 

the Department's list since the Department issued a "preliminary" list of Alaska Native 
tribes in 1982.3 

                In September 2005 McCrary contracted with Ivanof Bay to oversee its land 

by performing certain duties, such as securing buildings, in exchange for payment of 
$1,500 monthly.4      In December 2005 McCrary and Ivanof Bay cancelled that contract, 

        1       See 25 U.S.C.  479a-1 (2006) (directing Secretary of Interior to publish 

annual list of recognized tribes).        In this opinion, we refer to the "Department's list," 
even though Congress delegated this authority to the Secretary of Interior.  Id. 

        2       We use Ivanof Bay's preferred spelling even though it appears as "Ivanoff 

Bay Village" on the Department's list. 

        3       Indian Tribal Entities Recognized and Eligible to Receive Services from the 

United States Bureau of Indian Affairs, 47 Fed. Reg. 53,130, 53,131, 53,133-35 (Nov. 
24, 1982); e.g., Indian Entities Recognized and Eligible to Receive Services from the 
United States Bureau of Indian Affairs, 74 Fed. Reg. 40,218, 40,222 (Aug. 11, 2009). 

        4       For   the   purposes   of   this   appeal,   we   consider   the   facts   alleged   in   the 

complaint as true.  Fuhs v. Gilbertson, 186 P.3d 551, 554 (Alaska 2008) ("deeming all 
facts in the complaint true and provable" when reviewing motion to dismiss). 

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but   Ivanof   Bay   agreed   McCrary   could   "store   his   personal   belongings   in   the   tribal 


                In June 2006 McCrary and Ivanof Bay formed a new contract for McCrary 

to   "provide    sustainable     economic     development      to  the   Ivanof   Bay    Village    tribal 

members."  Ivanof Bay agreed to pay McCrary a monthly fee for being  "the lead agent 

in the economic development planning, developing, and management effort."  McCrary 

incurred expenses and assumed contractual obligations exceeding $100,000, of which 

Shangin   had   personal   knowledge.        In   September   2006   Shangin   cancelled   the   June 

contract on Ivanof Bay's behalf without reimbursing McCrary's expenses.                       McCrary 

attempted to retrieve his personal property from the tribal building, but Ivanof   Bay 

denied him access. 

                In October 2008 McCrary sued Ivanof Bay and Shangin in state superior 

court, alleging breaches of the implied covenants of good faith and fair dealing in the 
2005 and 2006 contracts.5        In November McCrary dismissed the case without prejudice 

and filed a new suit against Ivanof Bay (but not Shangin) and the Department in federal 

district court.  McCrary later amended his complaint to include as defendants the Acting 

Assistant Secretary of Interior for Indian Affairs and the Secretary of Interior.  McCrary 

sought "a declaratory judgment that neither Congress nor the Secretary of the Interior nor 

any other official of [the Department] . . . has recognized the members of [Ivanof Bay] 

to be a 'federally recognized tribe,' and, as a consequence, [Ivanof Bay] does not possess 

sovereign immunity." 

                In September 2009 the federal district court dismissed McCrary's complaint 

for   lack   of   subject   matter   jurisdiction   because   the   complaint   did   not   raise   a   federal 

question.   The next day McCrary again sued Ivanof Bay and Shangin in superior court, 

        5       The suit named Shangin in his capacity as Ivanof Bay's president. 

                                                   -3-                                               6626 

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making the same claims as his previous superior court suit.6           In January 2010 Ivanof Bay 

and Shangin moved to dismiss McCrary's suit, arguing in part that the superior court 

lacked subject matter jurisdiction because "Ivanof Bay is a federally recognized [t]ribe 

protected by sovereign immunity."   Ivanof Bay and Shangin relied on our conclusion in 

John v. Baker that Alaska Native tribes on the Department's list of federally recognized 
tribes   are   sovereign   entities   entitled   to   sovereign   immunity.7 McCrary   opposed   the 

motion,   arguing   the   list   had   no  effect   because   Ivanof   Bay   has   not   been   formally 

designated as a federally recognized tribe. 

                In June 2010 the superior court dismissed McCrary's suit for lack of subject 

matter   jurisdiction   because   Ivanof   Bay   and   Shangin   were   "protected   by   sovereign 
immunity."     McCrary appeals.8 


                "The applicability of sovereign immunity presents a question of law that 
we review de novo."9        We adopt "the rule that is most persuasive in light of precedent, 

reason, and policy."10 

        6       The   complaint   is   ambiguous,   but   because   McCrary   does   not   argue   on 

appeal that he brought claims against Shangin in any capacity other than as president of 
Ivanof Bay, we assume he did not. 

        7       982 P.2d 738, 748-50 (Alaska 1999). 

        8       The State of Alaska declined our invitation to participate as amicus curiae. 

        9       State v. Alaska State Emps. Ass'n, AFSCME, AFL-CIO, 190 P.3d 720, 722 

(Alaska 2008) (citing Runyon ex rel. B.R. v. Assoc. of Vill. Council Presidents, 84 P.3d 
437, 439 (Alaska 2004)). 

        10      Runyon, 84 P.3d at 439 (citing Bennett v. Bennett, 6 P.3d 724, 726 (Alaska 


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                McCrary contends the superior court's implicit determination that Ivanof 

Bay   is   a   federally   recognized   tribe   was   the   basis   for   its   ruling   that   Ivanof   Bay   and 

Shangin are immune from suit in state court.           McCrary argues the superior court erred 

by dismissing his complaint because Congress has neither recognized Ivanof Bay as an 

Indian tribe nor delegated authority to the Department to do so. He concludes that Ivanof 

Bay and Shangin are not entitled to sovereign immunity because Ivanof Bay is not a 

validly recognized tribe. 

                McCrary asks us to overrule our September 1999 John v. Baker decision, 

which concluded that Alaska Native tribes recognized by Congress or the Executive 
Branch are sovereign under federal law.11           McCrary asserts that the parties in John v. 

Baker did not adversarially brief the tribal recognition issue and therefore our conclusion 

amounted to dictum, not a holding entitled to recognition under the doctrine of stare 

decisis.  He alternatively contends our conclusion was "originally erroneous" and that 

we should overrule this aspect of John v. Baker. 

                InJohn v. Baker we recognized inherent tribal jurisdiction outside of Indian 

country, concurrent with state jurisdiction, to adjudicate certain child custody disputes 
involving tribal members.12       We examined whether Alaska Native tribes are sovereign 

        11      982 P.2d at 749 ("We . . . will defer to the determinations of Congress and 

the Executive Branch on the question of tribal status.             If Congress or the Executive 
Branch recognizes a group of Native Americans as a sovereign tribe, we 'must do the 
same.' " (citation omitted)). 

        12      982 P.2d at 748-49, 759, 765; see also State v. Native Vill. of Tanana, 249 

P.3d 734, 742-44 (Alaska 2011) (discussing John v. Baker). 

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under     federal   law:13   we    observed     that  the  Department       issued   a  list  of  federally 

recognized   tribes   in   1993   including   most   Alaska   Native   villages   and   that   the   list's 

preamble expressed the Department's intention to "reaffirm the sovereign status of the 
recognized tribes."14     The preamble stated that Alaska "villages and regional tribes listed 

. . . have the same governmental status as other federally acknowledged Indian tribes by 

virtue of their status as Indian tribes with a government-to-government relationship with 
the United States."15       We concluded that the Department viewed "recognized Alaska 

villages as sovereign entities."16 

                 The Federally Recognized Indian Tribe List Act of 1994 (Tribe List Act) 

directs the Department to publish annual lists of tribes eligible for special programs and 
services because of their Indian tribe status.17        We stated in John v. Baker that "for those 

who may have doubted the power of the [Department] to recognize sovereign political 
bodies, [the] 1994 act of Congress appears to lay such doubts to rest."18                We concluded 

that the "text and legislative history of the Tribe List Act demonstrate that Congress also 

        13      John v. Baker, 982 P.2d at 748-50. 

        14      Id.   at   749   (citing   Indian   Entities   Recognized   and   Eligible   to   Receive 

Services from the United States Bureau of Indian Affairs, 58 Fed. Reg. 54,364, 54,368- 
69 (Oct. 21, 1993)). 

        15      Id. at 749-50 (emphasis omitted) (quoting 1993 list, 58 Fed. Reg. at 54,365- 


        16      Id. at 749. 

        17      Id. at 750 (citing 25 U.S.C.  479a-1 (West Supp. 1998)). 

        18      Id. (citing 25 U.S.C.  479a et seq. (West Supp. 1998)). 

                                                    -6-                                              6626

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views the recognized   tribes as sovereign bodies,"19and it emphasizes that legislative 

history referring to the recognized tribes' "sovereignty," "quasi-sovereign status," and 

"government-to-government relationship [with] the United States . . . as . . . domestic 
dependent nation[s]."20        We also noted that the Department continued publishing lists 

including Alaska Native villages pursuant to this congressionally delegated authority.21 

In deference to congressional and executive recognition that listed Alaska Native tribes 
are sovereign, we expressly recognized their sovereignty in John v. Baker.22 

                   McCrary argues that John v. Baker should not be considered binding 

precedent because no party in that appeal argued against recognition of the sovereign 

status   of   Alaska   Native   tribes.    He   contends   this   legal   issue   was   not   tested   by   the 

adversarial      process.     But   our   conclusion     regarding     the  Executive      Branch's     tribal 

recognition and Congress's approval through the Tribe List Act was carefully considered 
and adopted by the entire court.23          Our conclusion in John v. Baker was not dictum - 

it was decisional and an essential foundation of the broader holding that Alaska Native 

tribes,   by   virtue   of  their   sovereign    powers,     have   concurrent      tribal  jurisdiction    to 
adjudicate certain child custody disputes involving tribal members.24 

        19       Id. 

        20       Id. 

        21       Id. 

        22       Id. at 749-50. 

        23       Id.; id.  at   776   n.75   (Matthews,   C.J.,   dissenting)   ("In   view   of   the   1993 

recognition . . . of the tribal status of Alaska's Native villages, the existence of their 
sovereignty is not in issue.        They have the same sovereign powers as recognized tribes 
in other states." (citation omitted)). 

        24       Id. at 748-49, 759 (majority opinion); see VECO, Inc. v. Rosebrock, 970 


                                                     -7-                                               6626

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                Our precedent is not lightly set aside. We have repeatedly held "that a party 

raising a claim controlled by an existing decision bears a heavy threshold burden of 
showing compelling reasons for reconsidering the prior ruling."25                "We will overrule a 

prior decision only when clearly convinced that the rule was originally erroneous or is 

no longer sound because of changed conditions, and that more good than harm would 
result from a departure from precedent."26          McCrary does not argue changed conditions 

and   he   has   not   shown   that   our   previous   decision   was   originally   erroneous   or   that 

departure from this precedent would result in more good than harm.                  The U.S. District 

Court for the District of Alaska has held on multiple occasions that the Department has 
authority   to   recognize   Alaska   Native   tribes.27   Federal   courts   of   appeals   have   made 

        24      (...continued) 

P.2d 906, 922 (Alaska 1999) (concluding discussion in previous case "was necessary for 
our holding" and therefore not dictum); Gonzales v. Krueger, 799 P.2d 1318,   1322 
(Alaska 1990) (Moore, J., concurring) (stating language in previous decision was not 
dictum because it was necessary to reach the conclusion). 

        25      Guerrero ex rel. Guerrero v. Alaska Hous. Fin. Corp., 123 P.3d 966, 982 

n.104 (Alaska 2005) (citing Thomas v. Anchorage Equal Rights Comm'n, 102 P.3d 937, 
943 (Alaska 2004)). 

        26      Id. (quoting Thomas, 102 P.3d at 943). 

        27      Native Vill. of Tyonek v. Puckett, No. A82-0369-CV, slip op. at 19-21, 29- 

30 (D. Alaska Oct. 29, 1996) (holding 1993 list recognized Native Village of Tyonek and 
that   tribal   status   rendered   Village   immune   from   suit);  Native  Vill.   of   Venetie   I.R.A. 
Council   v.   Alaska,   Nos.   F86-0075   Civ   (HRH)   &   F87-0051   CIV   (HRH),   1994   WL 
730893,   at   *9-11   (D.   Alaska   Dec.   23,   1994)   (holding   Department   had   authority   to 
acknowledge tribes and noting Tribe List Act bolstered this position because Congress 
chose to repudiate Secretary's decision to remove one Alaska tribe from 1993 list but did 
not repudiate any other portions of same list); see also Native Vill. of Venetie I.R.A. 
Council v. Alaska, No. F86-0075 Civ (HRH), slip op. at 9-10 (D. Alaska Sept. 20, 1995) 
(summarizing holding in previous Venetie order). 

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similar statements.28     Commentators also acknowledge the Department's authority to 

recognize tribes.29 

                If the Department or the courts have misconstrued congressional intent, 

Congress      has   had   ample   opportunity     to  clarify   the  Department's      authority:    the 
Department published its "preliminary list" of eligible Alaska Native tribes in 1982,30 

recognized Alaska Native tribes explicitly in the 1993 list,31 and included Alaska Native 

        28      Miami Nation of Indians of Indiana, Inc. v. U.S. Dep't of the Interior, 255 

F.3d 342, 345 (7th Cir. 2001) (noting that "Congress has delegated to the executive 
branch the power of recognition of Indian tribes"); W. Shoshone Bus. Council v. Babbitt, 
1   F.3d   1052,   1056-57   (10th     Cir.   1993)   (relying  on  Department   tribal   recognition 
regulations to hold tribe's absence from Department's list was dispositive);James v. U.S. 
Dep't of Health & Human Servs., 824 F.2d 1132, 1138 (D.C. Cir. 1987) ("Congress has 
specifically authorized the Executive Branch to prescribe regulations concerning Indian 
affairs and relations.      Regulations establishing procedures for federal recognition of 
Indian tribes certainly come within the area of Indian affairs and relations."). 


LAWS  371 (2d. ed. 2002) ("The publication in 1993 of the Interior Department's list of 
federally    recognized     tribes,  including    some    227   Alaska    tribes,  and   congressional 
ratification of the list a year later resolved any remaining question of Alaska Native tribal 
status."); COHEN 'S HANDBOOK OF FEDERAL INDIAN LAW   3.02[4], at 140 (Nell Jessup 
Newton ed., 2005 ed.) ("Congress has long delegated authority to the executive branch 
to take actions consistent with federal recognition of tribes.             This delegation was the 
source   of   executive   branch   authority   to   adopt   an   administrative   process   for   federal 
recognition, which was done in 1978." (citation omitted)); CONFERENCE OF W. ATTY 'S 
GEN .,AMERICAN INDIAN LAW DESKBOOK 63 (4th ed. 2008) ("Congress occasionally has 
acted    to  acknowledge      tribes  directly   but,  more    importantly,    has   delegated    to  the 
Secretary of the Interior broad authority that encompasses promulgation of regulations 
setting forth criteria for federal acknowledgment." (citations omitted)). 

        30      1982 list, 47 Fed. Reg. at 53,1331, 53,133-35. 

        31      1993 list, 58 Fed. Reg. at 54,364-66 (noting in preamble list's purpose to 

eliminate doubt and unequivocally acknowledge Alaska Native tribes' governmental 

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tribes on each subsequent list.32      Congress chose not to override those actions when it 

enacted the Tribe List Act,33 but conversely overrode the Department's omission of one 

Alaska Indian tribe from the 1993 list.34 

                We conclude McCrary has not sustained his heavy burden to demonstrate 

our precedent in John v. Baker should be overturned.  Because Ivanof Bay is a federally 

recognized tribe, it is entitled to sovereign immunity.          Ivanof Bay and Shangin, as its 
president, are immune from suit in state court.35 

        31      (...continued) 


        32      E.g., 2009 list, 74 Fed. Reg. at 40,222-23. 

        33      Federally Recognized Indian Tribe List Act of 1994, Pub. L. 103-454, 108 

Stat. 4791, 4791-92 (codified at 25 U.S.C.  479a-1 (2006)). 

        34      The Department's 1993 list did not include the Central Council of Tlingit 

and Haida Indian Tribes of Alaska.   In response, Congress passed the Tlingit and Haida 
Status Clarification Act, Pub. L. No. 103-454, 108 Stat. 4791 (Nov. 2, 1994) codified 
at 25 U.S.C.  1212, 1213 (2006).           In this Act, Congress expressly recognized the 
Central Council of Tlingit and Haida Indian Tribes of Alaska.             Additionally, Congress 
noted    that   "[t]he  Secretary  does   not   have  the  authority   to  terminate   the  federally 
recognized status of an Indian tribe as determined by Congress . . . ."  Section 2, Pub. L. 
No.   103-454,   108   Stat.   4791   (Nov.   2,   1994). We   do   not   believe   Congress   would 
expressly   impugn   the   Secretary's   authority   to   terminate   congressionally   recognized 
tribes, but fail to also disaffirm the Secretary's power to recognize tribal status.  See also 
Native Vill. of Venetie I.R.A. Council v. State of Alaska,  1994 WL 730893, *10 (D. 
Alaska Dec. 23, 1994). 

        35      See, e.g., Runyon, 84 P.3d at 439 ("[T]ribes have long been recognized as 

possessing   the   common-law   immunity   from   suit   traditionally   enjoyed   by   sovereign 
powers." (quoting Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978))). 

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              We AFFIRM the superior court's dismissal of McCrary's suit based on 
sovereign immunity.36 

       36     We note the superior court based its dismissal on lack of subject matter 

jurisdiction.   It is unclear whether a tribe's sovereign immunity is merely an affirmative 
defense or a bar to jurisdiction.  Compare Sea Hawk Seafoods, Inc. v. State, 215 P.3d 
333, 339 (Alaska 2009) (holding state sovereign immunity is an affirmative defense "that 
does not affect a court's subject-matter jurisdiction"), with Kiowa Tribe of Okla. v. Mfg. 
Techs., Inc., 523 U.S. 751, 755-56 (1998) ("We have often noted . . . that the immunity 
possessed by Indian tribes is not coextensive with that of the States.")  and Puyallup 
Tribe, Inc. v. Dep't of Game of State of Wash., 433 U.S. 165, 172 (1977) ("Absent an 
effective waiver or consent, it is settled that a state court may not exercise jurisdiction 
over a recognized Indian tribe.").    But because Ivanof Bay properly raised sovereign 
immunity as a defense and we affirm on that ground, we do not need to decide whether 
dismissal for lack of subject matter jurisdiction was proper. 

                                            -11-                                        6626 
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