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Paul Spruhan – (NM Bar #12513) Navajo Nation Department of Justice PO Box 2010 Window Rock, Arizona 86515 (928) 871-6210 [email protected] Colin Bradley – (AZ Bar #031632) Colin Bradley Law PLLC 2600 N. 44th St., Suite B-101 Phoenix, Arizona 85008 (602) 361-2551 [email protected] Attorneys for the Navajo Defendants
UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA
Zurich American Insurance Company, a New York corporation,
Plaintiff,
vs.
Doreen McPaul, Attorney General of the Navajo Nation, in her official capacity; Judge Cynthia Thompson, in her official capacity as tribal judge of the Navajo Nation District Court, Judge Rudy Bedonie, in his official capacity as current tribal judge of the Navajo Nation District Court;
Defendants.
No. 3:19-cv-08227-SPL
NAVAJO DEFENDANTS’ MOTION FOR SUMMARY
JUDGMENT Oral Argument Requested
Pursuant to Rule 56(a) of the Federal Rules of Civil Procedure and Rule 56.1 of
the Local Rules of Civil Procedure, Defendants Doreen McPaul, Attorney General of
Navajo Nation, in her official capacity, Judge Cynthia Thompson, in her official capacity
as tribal judge of the Navajo Nation District Court, and Judge Rudy Bedonie, in his
official capacity as current tribal judge of the Navajo Nation District Court (hereinafter
collectively “Navajo Defendants” or “Defendants” or “Navajo Nation” or “Nation”)
hereby move this Court for summary judgment against Plaintiff Zurich American
Insurance Company’s (“Zurich”) claims in its Complaint [Doc. 1] as set forth below:
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MEMORANDUM OF POINTS AND AUTHORITIES
I. Background.
a. The Tribal Court Action.
On November 8, 2013, the Navajo Nation filed a Complaint in the Chinle District
Court. Doc. 1-2, at 2. In its Complaint, the Nation sued, among others, Plaintiff, Zurich,
and its insured, Pic-N-Run (“PNR”). (SOF ¶ 1). The Complaint alleged that Zurich issued
a Storage Tank System Third-Party Liability and Cleanup Policy (“Storage Tank Policy”)
to PNR regarding the trust site where PNR was located on the Nation (“Site”). (SOF ¶ 1).
The Complaint also alleged Zurich denied coverage to PNR. (SOF ¶ 1). Against Zurich,
the Nation alleges that it is breaching its duty to defend its insureds, its duty to indemnify
its insureds, and it is also responsible for damages under the Navajo concept of nályééh.
(SOF ¶ 1).
On December 19, 2013, Zurich filed a Motion to Dismiss (“Motion”). (SOF ¶ 2).
In its Motion, Zurich alleges, inter alia, that the Chinle District Court lacks subject matter
jurisdiction over the Nation’s Complaint. (SOF ¶ 2). Zurich stated that “[a]fter the leak
was discovered, PNR tendered the claim to Zurich, which investigated the claim. . . .
[And] Zurich ultimately denied coverage.” (SOF ¶ 2). Zurich expressly stated that it was
“not arguing its coverage defenses at this time.” (SOF ¶ 2). What’s more, Zurich included
the lease between the Baldwins and the Navajo Nation (“Lease”); and the sublease from
the Baldwins to PNR (“Sublease”). (SOF ¶ 2). The Lease stated that the “Lessee
[Baldwins], Lessee’s employees, agents and successors in interest hereby consent to the
jurisdiction of the courts of the Navajo Nation.” (SOF ¶ 2). The Sublease stated that PNR
was to abide by the terms of the Lease and that “during the full term of this sublease” to
have the Site insured. (SOF ¶ 2). And the insurance was to be “written jointly to protect
the Navajo Nation, Sublessor [Baldwins], and Sublessee [PNR].” (SOF ¶ 2).
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On January 21, 2014, the Nation filed its Response to Zurich’s Motion to Dismiss
(“Response”). (SOF ¶ 3). The Nation argued that it had jurisdiction under the Treaty and
Montana. (SOF ¶ 3).
On January 31, 2014, Zurich filed its Reply. (SOF ¶ 4). Zurich argued that the
Treaty and Montana did not grant jurisdiction in this matter. (SOF ¶ 4).
Then, on June 21, 2016, Zurich and the Nation—along with Employers Mutual
Casualty Company (“EMC”)—filed a Stipulated Facts re Subject Matter Jurisdiction As
to Claims Against [EMC] and [Zurich] (“Stipulated Facts”). (SOF ¶ 5). In the Stipulated
Facts, Zurich and the Nation agreed to stipulated facts in determining whether the Chinle
District Court had “subject matter jurisdiction.” (SOF ¶ 5).
On February 8, 2018, the Chinle District Court issued its Order Denying Zurich’s
Motion to Dismiss. (SOF ¶ 6). The Chinle Court used the parties Stipulated Facts to
formulate its order. (SOF ¶ 6).
On March 20, 2018, Zurich filed a Petition for a Writ of Prohibition (“Writ”) in
the Navajo Nation Supreme Court. (SOF ¶ 7).]. In its Writ, Zurich claimed that the Chinle
District Court lacked jurisdiction over Zurich. (SOF ¶ 7).
On April 10, 2018, the Navajo Nation Supreme Court issued its Order Denying
Permanent Writ of Prohibition (“Order Denying Writ”). (SOF ¶ 8).
Finally, Zurich filed its Complaint on July 30, 2019. (SOF ¶ 9). In its Complaint,
Zurich includes its insurance policy with PNR. (SOF ¶ 9). In the Storage Tank Policy, it
states that the policy is “location-specific and storage tank system-specific” and, one of
the covered locations with storage tanks was the PNR site in Chinle, Arizona. (SOF ¶ 9).
And, the policy covered “third party liability” regarding “any loss caused by a release that
emanates from a scheduled storage tank system at scheduled location.” (SOF ¶ 9) (internal
quotations omitted).
b. Stipulated Facts
An abbreviated version of the Stipulated Facts (SOF 4, at 15-16) is set forth below:
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1. The Navajo Nation brought this action for declaratory relief and to recover monetary
damages and nályééh from: 1) various parties whom the Navajo Nation claims caused
releases of over 15,000 gallons of gasoline at a gas station in Chinle, Arizona, on tribal
trust land within the formula Reservation; and 2) the insurance companies, including
EMC and Zurich, that issued policies of insurance to such parties. (SOF ¶ 10).
2. As to Zurich, the Navajo Nation concedes that the first exception under Montana, i.e.,
whether the non-member has entered into a consensual relationship with the Navajo
Nation or one of its members, does not apply. Zurich does not have a contractual
relationship with the Navajo Nation, and its insurance contract is with David E. Flores,
a non-Indian individual, dba Pic-N-Run, a non-Indian company based in Flagstaff,
Arizona. (SOF ¶ 11).
3. The site of petroleum release at issue (“Site”) is the Pic-N-Run gas station located on
highway 7 in Chinle, Arizona on tribal trust lands within the boundary of the formal
Navajo Indian Reservation. (SOF ¶ 12).
4. Since approximately 1955, the Navajo Nation has leased the Site to Sybil Baldwin,
Walter Baldwin and the Estate of Sybil Baldwin (collectively “Baldwins”), who
operated a gas station and convenience store on the Site. The Baldwins are (were)
citizens of the Navajo Nation. The most recent lease was signed in January 1995 and
extends for fifty years. (SOF ¶ 13).
5. In December 1997, Pic-N-Run entered into a sublease for use of the Site. Pic-N-Run
was the operator of the gas station and convenience store at the Site at the time of the
alleged release in 2005. (SOF ¶ 14).
6. Zurich issued a Storage Tank System Third-Party Liability and Cleanup Policy to Pic-
N-Run, effective September 9, 2003 to September 9, 2004. The policy was issued to
Pic-N-Run at its office in Flagstaff, Arizona. (SOF ¶ 15).
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7. In 2004, Pic-N-Run contracted with either SSES or Underground Analytical to remove
the underground storage tanks (USTs) at the Site and to oversee installation of an above-
ground petroleum storage tank system (AST). (SOF ¶ 16).
8. Until 2004, fuel was stored at the Site in three USTs. As a result of leaks from the USTs,
Pic-N-Run performed some corrective action to remediate contamination at the site. At
some point, Pic-N-Run decided to replace the USTs with ASTs. Separately, Pic-N-Run
also determined to do some renovations to the Site and in doing so, hired Milam
Building Associates, Inc., (“Milam”) to do the renovation. Milam subcontracted with
another company, Shiprock Construction Company (“Shiprock”), to do certain concrete
work, including building a concrete wall and installing a concrete driveway. (SOF ¶
17).
9. In March, an employee of Shiprock breached a supply line that fed fuel from the ASTs
to the fuel islands. The incident went undetected until August 2005. It estimated that
15,633 gallons of unleaded premium gasoline was released into the environment due to
the damaged product line. (SOF ¶ 18).
10. Shiprock’s general liability insurer, Ohio Casualty Company, funded an “initial site
investigation” to assess conditions relating to the AST fuel-line release at the Site
resulting in a report that revealed gasoline also leaked from the Site into the
environment sometime from the mid-1940s to the mid-1980s and between 1974 and
1978. (SOF ¶ 19).
11. On August 27, 2009, the United States Environmental Protection Agency (“EPA”)
issued an Administrative Order (“EPA Order”), effective September 11, 2009 under
Section 7003 of the Solid Waste Disposal Act, commonly referred to as the Resource
Conservation and Recovery Act (“RCRA”). The EPA Order was issued against various
potentially responsible parties (“PRPs”), namely, Stella Jeanette Eldridge, dba Milam
Building Associates, Inc., and Vernon W. Eldridge, dba Milam Building Associates,
Inc.; Daniel and Dorothy Felix, dba Shiprock Construction Company; the Estate of
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Sibyl Baldwin, Floyd Baldwin, Chester Baldwin, Bobby Baldwin, and Walter Baldwin;
and David Edward Flores and Pic-N-Run, Inc. The SSES parties were not subject to the
EPA Order. In addition, no insurance companies were subject to the EPA Order. (SOF
¶ 20).
12. According to the EPA Order’s findings of fact, the location of the environmental
contamination is the southwest corner of the intersection on Indian Route 7 and C Street
on the Navajo Nation in Chinle, Arizona. The facility on the Site consists of a kiosk,
six fuel islands, a canopy, and a fuel farm made up of four ASTs. Each AST has a
capacity of 10,000 gallons. (SOF ¶ 21).
13. According to the EPA Order’s findings of fact, the petroleum release at the Site has
contaminated soil and has affected groundwater on the Navajo Nation. (SOF ¶ 22).
14. The EPA Order requires the PRPs to remediate the Site under the direction and control
of the EPA. (SOF ¶ 23).
II. Argument
a. The Nation is Entitled to Summary Judgment Under the Facts Presented to the Chinle District Court.
In this case, the Nation is entitled to summary judgment because “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” F. R. C. P. 56(a). What’s more, “[t]he standard of review for an Indian tribal
court decision deciding jurisdictional issues is de novo on questions of federal law and
clearly erroneous for factual questions.” Big Horn Cty. Elec. Coop. v. Adams, 219 F.3d
944, 949 (9th Cir. 2000). In addition, “the district court's review is akin to appellate review
of the tribal court record.” Water Wheel Camp Rec. Area, Inc. v. Larance, 642 F.3d 802,
817 n.9 (9th Cir. 2011). And, because of this, a court cannot rely on facts “which w[ere]
not before the tribal court.” Id. Here, there is no genuine dispute as to any material fact
because the parties agreed to the Stipulated Facts—which the Chinle District Court used
to determine that it had jurisdiction. (SOF ¶ 6).
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Thus, because the Court will not find any “clearly erroneous” facts, the only real
issue is whether the tribal court made any legal errors. And, in this matter, the tribal court
did not as set forth below:
b. The Chinle District Court Has Subject Matter Jurisdiction Given the Nation’s Right to Exclude from the Treaty of 1868.
Treaties with Indian nations are the “supreme law of the land” recognized by the
United States Constitution. U.S Const. Art. VI, Cl. 2. A treaty is not a grant of rights to an
Indian nation, but a grant of rights from that nation to the United States, and therefore all
rights not surrendered are preserved. United States v. Winans, 198 U.S. 371, 381 (1905);
see United States v. Wheeler, 435 U.S. 313, 327 n. 24 (1978) (applying rule to Navajo
treaty); Babbitt Ford, Inc. v. Navajo Indian Tribe, 710 F.2d 587, 596 (9th Cir. 1983)
(same). A treaty must be interpreted as tribal leaders would have understood them.
Minnesota v. Mille Lac Band of Chippewa Indians, 526 U.S. 172, 196 (1999). Further, any
ambiguities must be resolved in favor of the Indian nation. County of Oneida v. Oneida
Indian Nation, 470 U.S. 226, 247 (1985); McClanahan v. Ariz. State Tax Comm’n, 411
U.S. 164, 174 (1973) (stating in context of Navajo treaty that “any doubtful expressions . .
. should be resolved in the Indians’ favor.”).
The Treaty of 1868 (“Treaty”) is appropriately interpreted within the context of the
Nation’s unique relationship with the United States and the negotiations between the
parties leading to its execution. Through the negotiations, the United States abandoned its
intended exile of the Navajo and agreed the Navajo would return to the newly created
Navajo Reservation to exercise exclusive sovereign authority over their lands. Williams v.
Lee, 358 U.S. 217, 221-22 (1959). And, as a result of their negotiation, Article II of the
Treaty secures the right of the Nation to exclude all outside persons except a narrow subset
of federal officials:
[T]he United States agrees that no persons except those herein so authorized to do, and except such officers, soldiers, agents and employees of the government, or of the Indians, as may be authorized to enter upon Indian reservations in discharge of duties imposed by law, or the orders of the
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President, shall ever be permitted to pass over, settle upon, or reside in, the territory described in this article.
Treaty, art. II, 15 Stat. 667, 668, (SOF ¶ 24) (emphasis added).
However, as the United States Supreme Court has recognized, Article II is broader
than a simple right to exclude nonmembers physically present on tribal trust lands. Article
II affirms the Nation’s exclusive sovereignty over the Navajo Reservation. McClanahan,
411 U.S. at 175. It also bars state jurisdiction over those lands without the Nation’s consent.
Id. (Treaty precludes authority to impose Arizona state income tax to Navajo tribal member
on Reservation); see also Williams v. Lee, 358 U.S. 217, 221-22 (1959) (state court
jurisdiction over contract claim against Navajo citizen would infringe on right of self-
government recognized in the Treaty). From this sovereignty also flows regulatory
authority. See Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316,
332 (2008) (Stating a tribe can regulate nonmember conduct within the reservation that
implicates the tribe's sovereign interests)
This Court has recently applied Article II concerning regulations in Window Rock
Unified Sch. Dist. v. Reeves, 861 F.3d 894 (9th Cir. 2017) (hereinafter “Window Rock”).
Though applied there to the threshold question whether the Nation’s jurisdiction
was “plainly lacking,” the Ninth Circuit recognized Article II as an absolute source of
regulatory authority over nonmembers present on tribal trust land, including state-
organized school districts. 861 F.3d at 904-05 (“Thus, as the treaty makes clear, the land
at issue here is ‘within the exclusive sovereignty of the Navajos,’ and from this
sovereignty, regulatory and adjudicative authority follow.” (quoting McClanahan, 411
U.S. at 175)). As the districts were operating schools on trust lands pursuant to leases
with the Nation, they could be excluded under the Treaty, and therefore the Nation could
adjudicate employment disputes brought by employees of those schools. Id. at 905.
Under Window Rock, and precedent recognizing a federal common law right to
exclude for other Indian nations, Knighton; Grand Canyon Skywalk Dev., LLC v. ‘Sa’ Nyu
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Wa Inc., 715 F.3d 1196, 1205 (9th Cir. 2013), Water Wheel, 642 F.3d 802 (9th Cir. 2011),
it is indisputable that the Nation’s courts have jurisdiction over Zurich’s insured, PNR.
PNR was present, and engaged in business activities, on tribal trust lands through its
Sublease with members of the Navajo Nation wherein it consented to the jurisdiction of
the Navajo Nation. (SOF ¶ 2). Thus, it is unquestionable that PNR can be sued in the
Nation’s courts.
The only real question then presented by this case is whether Zurich, which insured
PNR, is also within the Nation’s jurisdiction and therefore can be joined to the lawsuit
seeking to remedy the catastrophic gas spill and the corollary denials of coverage. Here,
the answer is yes because Zurich’s contracting with PNR for insurance coverage on Navajo
Nation land makes Zurich legally present on the reservation, and, therefore, can be
excluded and regulated by the courts of the Navajo Nation.1
The Nation can exclude Zurich’s legal presence through the exclusion of its
insured’s physical presence. Zurich has never disputed that its Storage Policy covered the
PNR Site in Chinle. (SOF ¶ 2). Zurich’s legal presence therefore follows PNR’s physical
entry onto the Nation because Zurich specifically agreed to insure the Site and the type
of activity—regarding gasoline storage tanks—that was taking place at the Site. (SOF ¶
9). Additionally, Zurich’s presence was actually required by the Sublease—because PNR
was required to have insurance and the insurance was required to have the Nation jointly
named on the policy. (SOF ¶ 2). As the Nation could have excluded PNR before issuing
it a Sublease, the Nation can also exclude Zurich’s policy coverage from its territory
through regulation or the Sublease. The regulation in this case is a tort claim, which is
itself a form of regulation. See Plains Commerce Bank, 554 U.S. 316, 323–24, (2008)
(characterizing a tort claim as a form of regulation). Thus, with the ability to exclude
PNR’s physical presence comes the ability to regulate Zurich’s legal presence. The
1 See Freedom Oil Co. v. Illinois Pollution Control Bd., 655 N.E.2d. 1184, 1190-91 (Ill. Ct.
App. 1995) (Determining a telephone conference was sufficient presence).
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Nation therefore can adjudicate Zurich’s contractual obligations to PNR arising out of
their activities on trust land through joinder in the Nation’s lawsuit in tribal court.
Even so, under the broad reading of Article II by the U.S. Supreme Court and
other federal courts, the Nation’s jurisdiction also extends to Zurich by virtue of the
Nation’s exclusive sovereignty over its territory. As Zurich was legally present on the
Nation through its contractual obligations to its insured, and its insured causing harm to
tribal trust land, Zurich’s acts and omissions relating to such obligations affect tribal trust
land. The Nation’s exclusive authority over its trust land means Zurich can be joined in
the Nation’s courts to resolve the harm. It is immaterial whether Zurich’s sale of its
policies and its decisions to deny coverage were done outside the Nation. The effect was
felt on the tribal trust land where the spill occurred. See State Farm Ins. Co. v. Turtle Mt.
Fleet Farm, LLC, 2014 WL 1883633, at *10 (D.N.D. 2014) (stating a bad faith insurance
claim reasonably “took place within the reservation boundaries” where harm was felt
despite decision to deny coverage occurring outside reservation). The broad sovereign
powers recognized in Article II therefore encompass Zurich’s legal role, as well as the
physical role of its insured, at the Site regarding the gas spill.
Finally, this is consistent with a state’s authority over insurance companies in
similar situations, which is not similarly circumscribed to only those insurance
companies with physical offices in the state. As state jurisdiction has evolved to fit
technological advances, see, e.g. South Dakota v. Wayfair, Inc., 138 S.Ct. 2080, 2093
(2018) (state may tax internet-based retailer with no physical presence within the state if
there is a “substantial nexus” to that jurisdiction), so too has tribal jurisdiction. This is
not 1868, and the means by which nonmembers are “present” on tribal trust lands has
greatly expanded beyond mere physical presence. Given the expansion of
telecommunications and other technology, and the cross-jurisdictional nature of
insurance policies and other contracts, individuals and entities outside of a jurisdictional
territory can have significant, and even greater, impact within that jurisdiction without
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ever setting foot there. It cannot be that tribal leaders negotiating the creation of a
sovereign homeland would have limited the Nation’s authority over its territory to the
technological realities at the time. See Washington State Department of Licensing v.
Cougar Den, Inc., 139 S. Ct. 1000, 1007, 1017-18 (2019) (holding 1855 treaty right to
travel on public highways created exemption from state fuel tax for gasoline distribution
by tribal business); United States v. Washington, 853 F.3d 946, 966 (9th Cir. 2017)
(holding 1854 and 1855 treaty right to fish to require the state to maintain culverts under
state highways to allow fish passage). Accordingly, Zurich must be subject the Nation’s
jurisdiction under these circumstances.
c. The Chinle District Court Has Jurisdiction under the Second Montana Exception.
While the parties do not dispute that the Nation’s jurisdiction is lacking under
Montana’s first exception, the Nation does have jurisdiction the second exception. That
exception recognizes the Nation’s jurisdiction if a nonmember’s “conduct threatens or has
some direct effect on the political integrity, economic security, or the health or welfare of
the tribe.” Montana, 450 U.S. at 56. The U.S. Supreme Court has described the exception
as applying when it is “necessary to protect tribal self-government or to control internal
relations.” Atkinson Trading Post v. Shirley, 532 U.S. 645, 658 (2001). It has further
described the exception, in dicta, as applying when the non-member’s conduct “imperils
the subsistence of the tribal community.” Plains Commerce Bank, 554 U.S. 316, 341
(2008).
It is indisputable that the gasoline spill itself has the necessary effect on the political
integrity, economic security, health, and welfare of the Nation. The Ninth Circuit Court of
Appeals has held that “contamination of a tribe's water quality . . . [is] sufficient to sustain
tribal jurisdiction” under the second Montana exception. Rincon Mushroom Corp. of Am.
v. Mazzetti, 490 F. App'x 11, 13 (9th Cir. 2012) (citing Montana v. EPA, 137 F.3d 1135,
1139-40 (9th Cir. 1998)). Furthermore, the Ninth Circuit Court of Appeals has recognized
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that threats to natural resources constitutes threats to tribal self-governance, health, and
welfare. FMC Corp. v. Shoshone-Bannock Tribes, 942 F.3d 916, 935 (9th Cir. 2019).
As a party that contributed to the spill, Zurich’s insured, PNR, is then within the
Nation’s jurisdiction. The only question is whether an insurance company whose policies
cover the company who caused such harm is within the Nation’s jurisdiction when a
dispute arises as to whether it appropriately denied coverage for the spill. Again, the answer
is yes.
Zurich’s conduct clearly threatens the health and welfare of the Nation, as it affects
the ability of the Nation to remedy damage done to its lands and groundwater and to protect
the Chinle community by cleaning up the site. The provision of clean water is vital to the
Nation’s economy, particularly in the Nation’s arid desert environment. Here, Zurich
directly insured the Site, and the activity taking place at the Site, by providing coverage for
PNR’s petroleum storage tanks located on Navajo land. Specifically, in the Storage Tank
Policy, it states that the policy is “location-specific and storage tank system-specific” and,
one of the covered locations with storage tanks was the PNR Site in Chinle, Arizona. (SOF
¶ 9). And, the policy covered “third party liability” regarding “any loss caused by a release
that emanates from a scheduled storage tank system at scheduled location.” (SOF ¶ 9)
(internal quotations omitted). Consequently, because Zurich’s policy was intended to pay
for the precise type of damage that occurred in this matter, and regarding the tanks and
location that was insured, PNR’s denial of coverage directly threatens the health and
welfare of the Nation. It is therefore essential for the Nation’s self-government for its courts
to adjudicate whether Zurich is liable for its failure to defend, to indemnify, and to provide
nályééh regarding its insured, PNR.
If the Nation is not afforded jurisdiction over a nonmember insurance company
that sold a policy insuring its reservation land, and benefits from selling insurance
policies that insure land on the reservation, there would be a direct effect on the Nation’s
political integrity. The Nation’s political integrity would be affected because its failure to
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have tribal jurisdiction would set precedence that nonmember insurance companies can
sell policies for property located on the Nation, possibly be liable for denying coverage,
but not be subject to the Nation’s laws. The Nation would be economically disadvantaged
because the Nation could not regulate insurers or its own property. Such a system would
leave the Nation in the untenable situation of not being able to regulate insurance
companies who insure property on the Navajo Nation’s reservation. Certainly, such a
large regulatory void would adversely impact the Nation’s health, welfare, and political
integrity. Thus, the Navajo courts properly exercised jurisdiction over Zurich under the
second exception to Montana.
d. EMC v. Branch Fails to Negate Jurisdiction Here.
Though this Court determined in a separate case that a different insurer, EMC,
Employers Mut. Cas. Co. v. Branch, 381 F. Supp. 3d 1144 (D. Ariz. 2019) (hereinafter
“EMC v. Branch”), was not subject to the Nation’s jurisdiction, that case is not binding.
Starbuck v. San Francisco, 556 F.2d 450, 457 n.13 (9th Cir. 1977) (stating “stare decisis
does not compel one district court judge to follow the decision of another”). Moreover, the
Nation disagrees with the decision, and has appealed it. See Case No. 19-15835.
Regardless, the decision in EMC v. Branch is distinguishable, and does not demand a
similar result in this matter, for the reasons set forth below:
In EMC v. Branch, EMC issued general liability policies to non-Indian
subcontractors Service Station Equipment and Sales, Inc ("SSES") and Milam Building
Associates, Inc. ("Milam") who worked on the Site but were off-reservation corporations.
EMC v. Branch, 381 F. Supp. 3d 1144, 1146-47 (D. Ariz. 2019). Here, unlike EMC,
Zurich issued an insurance policy for specific gas storage tanks located on the Site, and
not a general commercial liability policy that failed to exclude the Site.2 Finally, unlike
2 Though the Ninth Circuit considers the failure to exclude a territory as sufficient to grant
jurisdiction, this Court did not in EMC v. Branch, 381 F. Supp. 3d 1144, 1151 n. 4 (D.
Ariz. 2019). Contra Allstate Indem. Co. v. Stump, 191 F.3d 1071, 1075 (9th Cir. 1999).
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Milam and SSES, PNR had a Sublease wherein it consented to the jurisdiction of the
Navajo Nation, agreed to insure the Site, and to name the Navajo Nation on said policy.
(SOF ¶ 2). Thus, while SSES and Milam may have not had any “tribal affiliation[,]” PNR
was directly involved with the Navajo Nation, and its land, by contract. EMC v. Branch,
at 1145.
Therefore, since Zurich “expressly directed . . . activity within the reservation's
borders[,]” the Nation has jurisdiction over Zurich. Compare EMC v. Branch, 381 F.
Supp. 3d 1144, 1150 (D. Ariz. 2019) (stating that the right to exclude framework does
not apply to EMC because it did not express direct any activity within the reservation’s
borders). Accordingly, Zurich is more closely related to Allstate Indem. Co. v. Stump,
191 F.3d 1071 (9th Cir. 1999) (car insurance), State Farm Ins. Co. v. Turtle Mt. Fleet
Farm, LLC, 2014 WL 1883633 (D.N.D. 2014) (homeowners insurance), and Admiral
Ins. Co. v. Blue Lake Rancheria Tribal Ct., 2012 WL 1144331 (N.D. Cal. 2012)
(commercial general liability policy issued to non-Indian construction company) than to
EMC v. Branch. Thus, the Nation has jurisdiction over Zurich because it expressly
directed its policy to cover activities on the Reservation; unlike EMC who did not
expressly cover the Site.
III. Conclusion.
Therefore, for all the reasons set forth above, this Court should grant the Nation’s
request for summary judgment, and, deny Zurich’s Complaint.
Respectfully submitted this 3rd day of January, 2020.
Nonetheless, the Nation maintains that the doctrine from Farmers Ins. Exch. v. Portage La
Prairie Mut. Ins. Co., 907 F.2d 911, 914 (9th Cir. 1990) (hereinafter “Portage”) provides
jurisdiction over a nonmember insurance provider because it is entirely foreseeable, and
therefore appropriate, to be subject to such jurisdiction when the insureds are allowed to
travel on the reservation. See Portage, 907 F.2d at 914 (stating the contractual obligation
to indemnify and defend “foreseeably require[s] litigation in any forum where the insured
risk traveled”).
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COLIN BRADLEY LAW PLLC
s/ Colin Bradley
2600 N. 44th St., Suite B-101
Phoenix, Arizona 85008
(602) 361-2551
CERTIFICATE OF SERVICE
I hereby certify that on January 3, 2020, I electronically submitted the attached
document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a
Notice of Electronic Filing to the following CM/ECF registrant:
Kenneth H. Brendel [email protected] MANGUM, WALL, STOOPS & WARDEN, P.L.L.C. 112 North Elden Street, P.O. Box 10 Flagstaff, Arizona 86002 Attorneys for Plaintiff Zurich American Insurance Co. Adam S. Polson [email protected] Todd A. Rigby [email protected] LEWIS BRISBOIS Phoenix Plaza Tower II 2929 North Central Avenue, Suite 1700 Phoenix, Arizona 85012 Co-Counsel for Plaintiff Zurich American Insurance Co.
s/ Dana Martin Senior Legal Secretary Navajo Nation Department of Justice
Case 3:19-cv-08227-SPL Document 32 Filed 01/03/20 Page 15 of 15
