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Healy Lake Village v. Mt. McKinley Bank & Healy Lake Traditional Council

Supreme Court of Alaska

April 11, 2014

HEALY LAKE VILLAGE, d/b/a MENDAS CHA~AG TRIBE, a Federally Recognized Indian Tribe, Appellant,

Appeal from the Superior Court of the State of Alaska, Fourth Judicial District, Fairbanks, Michael P. McConahy, Judge. Superior Court No. 4FA-12-01800 CI.

Michael J. Walleri, Gazewood & Weiner, P.C., Fairbanks, for Appellant.

James D. DeWitt, Guess & Rudd, P.C., Fairbanks, for Appellee Mt. McKinley Bank.

Richard D. Monkman and Samuel E. Ennis, Sonosky, Chambers, Sachse, Miller & Munson, LLP, Juneau, for Appellee Healy Lake Traditional Council.

Before: Fabe, Chief Justice, Stowers, and Bolger, Justices. [Winfree and Maassen, Justices, not participating.].


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FABE, Chief Justice.


Members of Healy Lake Village Tribe who claim to constitute the newly elected tribal council brought suit in superior court against Mt. McKinley Bank after the Bank refused to change the signatory authority on the Tribe's accounts to reflect the alleged leadership change. A second group of tribal members, who also claim to represent the Tribe based on a competing election, was granted intervention in order to contest the superior court's jurisdiction. The superior court determined that the fundamental issue in the case was the determination of the legitimate governing body of the Tribe, which was an internal self-governance matter within the Tribe's retained inherent sovereignty. The superior court dismissed the case for lack of subject matter jurisdiction, and the group that brought the initial action now appeals. Because determining the real party in interest would have required the superior court to decide matters solely within the Tribe's retained inherent sovereignty, we affirm the superior court's dismissal of the case for lack of subject matter jurisdiction.


A. Tribal Election Dispute

Healy Lake Village, also known as the Mendas Cha~Ag Tribe, is a federally recognized Indian tribe with a tribal constitution adopted in 1997.[1] The tribal constitution provides for the periodic election of a traditional council to serve as the governing body of the Tribe, with the First Chief serving as the presiding officer. A tribal election ordinance was adopted in 1998. Two separate groups each currently contend that they are the properly elected and legitimate traditional council. The appellant group is led by Robert " Ray" Fifer, and the appellee group is led by JoAnn Polston.

Both the Fifer Group and the Polston Group argue that the election that seated the competing group failed to comply with tribal law and regulations. The Fifer Group alleges a series of actions on the part of JoAnn Polston, beginning as far back as 2007, that it claims violated the tribal constitution. In the Fifer Group's version of events, JoAnn Polston was elected to the tribal council sometime prior to 2007. She then " removed" the former First Chief, installed herself, and had de facto control of the Tribe between 2007 and 2012. According to the Fifer Group, between 2007 and 2012 no tribal elections were held, despite the constitutional provision that calls for tribal council elections to be held the last week of March.[2] The tribal constitution does not state whether elections must be held each year; [3] however, it does specify that the term of office for traditional council members is two years.[4] The record does not contain documentary evidence of elections between 2007 and 2012, nor does the Polston Group claim that elections took place during that period.

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The tribal constitution provides for the possibility of tribal courts, but the Tribe has not established one. The tribal council does have the power to establish tribal courts or other judicial bodies,[5] and the council is given authority to regulate matters such as child custody, domestic relations, and inheritance.[6] The Fifer Group states that there is no tribal court, and the Polston Group does not dispute this fact. The tribal constitution provides for the recall of any member of the tribal council and a special election upon receipt of a " [a] valid petition requesting such recall signed by at least 50% of the qualified voters . . . . If the Council fails to call a special election to consider the recall, the tribal membership may hold a tribal membership meeting to conduct such business." [7] The Mendas Cha~Ag Tribal Election Ordinance also provides a procedure for challenging election results:

Section 12. Challenging Election Results

As specified in the Constitution, tribal members may challenge election results if the terms of the Mendas Cha~Ag Traditional Constitution or the tribal Election Ordinance are violated. Such challenge may be done through a petition and election process. A petition must be circulated and signed by at least 50% of qualified tribal voters. The petition shall state the violation of the Mendas Cha~Ag Constitution or Election Ordinance. Once presented to the Council, the Council shall hold a new election following the procedures outlined in the Mendas Cha~Ag Constitution and the tribal Election Ordinance. If the Tribal Council fails to hold such an election within 30 days after receiving the petition, the tribal membership may meet to conduct a new election. At such a meeting, 50% of qualified voters shall constitute a quorum.

In 2011 the Fifer Group circulated a petition calling for new elections, which the Fifer Group claims was signed by over 50% of the tribal membership in compliance with the constitutional and election ordinance provisions. The Fifer Group alleges that the tribal council, led by Polston, took no action on the petition, and that on April 28, 2012, the tribal membership conducted a tribal election with the assistance and under the observation of the Bureau of Indian Affairs [BIA] Fairbanks Agency Superintendent, Kathy Cline, and Tribal Operations staff from the Tanana Chiefs Conference. The Fifer Group was elected as the tribal council at the April 28 election.

The Polston Group alleges various irregularities in the April 28 election and disputes the Fifer Group's leadership claim. In her affidavit, JoAnn Polston claims that the Fifer Group failed to provide notice of the election to many tribal members and to follow constitutional requirements for recalling a sitting council. She asserts that the election dispute is " solely a matter for my Tribe's resolution" and describes an attempt to resolve the dispute at a tribal " Talking Circle." She asserts that the Fifer Group's claim to majority support rests on a disputed definition of tribal membership: " [the Fifer Group] disputes the membership of many lineal descendants of original Tribal enrollees. Its count of Tribal members is much smaller than actual Tribal membership."

On May 14, 2012, JoAnn Polston issued a notice of elections to be held on July 14, 2012, in Fairbanks. The record contains a certificate and report from a tribal election committee certifying that an election was held on July 14 and that JoAnn Polston was elected as First Chief. The certificate form contains spaces to insert the number of undisputed adult tribal members that were present at the election; these spaces are left blank. The Fifer Group alleges a variety of irregularities and tribal constitutional violations in the July 14 election, including disputed issues of tribal membership. On August 23, 2012, the United States Department of Transportation renewed a federal transportation funding agreement with the Tribe, and JoAnn Polston signed on behalf of the Tribe after informing the Department of the internal dispute.

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B. Tribal Account Access

The Mendas Cha~Ag Tribe has over $1,000,000 on deposit in various accounts with Mt. McKinley Bank. The Bank's deposit agreement form for business accounts opened by legal entities provides that the Bank " may require the governing body of the legal entity opening the account to give us a separate authorization telling us who is authorized to act on its behalf. We will honor the authorization until we actually receive written notice of a change from the governing body of the legal entity." Most of the tribal accounts provide for single signatory authority. JoAnn Polston has been a signatory on the accounts since 2005.

After the April 28 election, the Fifer Group informed the Bank that the governing body of the Tribe had changed and sought to gain access to the tribal accounts. On April 30, 2012, Kathy Cline, the BIA Superintendent, sent a letter to Mt. McKinley Bank informing the Bank that she " had official oversight of the 2012 Election for the Healy Lake tribal membership on April 28, 2012 here in Fairbanks and certify its validity. The Bureau of Indian Affairs lawfully recognizes the following elected members [the Fifer Group] to conduct official business on behalf of the Healy Lake Traditional Council."

On May 1, 2012, Cline rescinded her previous letter: " [p]lease [accept] my apologies but I am rescinding my letter dated April 30, 2012. The Bureau of Indian Affairs does not have the authority to certify a tribal election." On the same day, the attorney for the Polston Group sent a letter to the Bank offering his legal opinion that the Fifer Group had no legal authority to act on behalf of the Tribe and requesting that the Bank return full signatory authority to JoAnn Polston. He asserted that the Polston Group remained the current tribal leaders and retained the legal authority to control the tribal bank accounts. On May 7 the attorney for the Fifer Group sent a letter to the Bank reasserting the authority of the Fifer Group, alleging improper accounting and misappropriation of tribal funds by JoAnn Polston, and requesting that the Bank freeze the tribal accounts until the dispute could be resolved or a receiver appointed. On May 11, 2012, the Bank responded to the Fifer Group and informed them that the accounts could not be frozen until the Bank was indemnified or received a court order. The Bank suggested that the Fifer Group take appropriate action through the Alaska Court System.

The Bank referred the Fifer Group to AS 06.05.145, which it believed pertained to conflicting claims of account ownership and signature authority.[8] On May 18, 2012, Ray Fifer filed an affidavit with the Bank pursuant to AS 06.05.145 to put the Bank on notice that the funds on deposit were held subject to fiduciary obligations owed to the Tribe and its members and that Ray Fifer had reason to believe that JoAnn Polston intended to misappropriate the funds.[9]

C. Superior Court Proceedings

On June 6, 2012, the Fifer Group filed a petition for declaratory relief against Mt. McKinley Bank to determine the party authorized to act on behalf of the Tribe and access tribal accounts. The petition did not name the Polston Group as a defendant. On July 25 the Bank answered and moved to dismiss pursuant to Alaska Civil Rules ...

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