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Yankton Sioux Tribe v. U.S. Dep't of HHS: INDIAN LAW | CIVIL PROCEDURE - res judicata barred some claims; others dismissed per 12(b)(6)

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 07-3096
___________
Yankton Sioux Tribe, a federally- *
recognized tribe of Indians, and its *
individual members; Glenn Drapeau, *
an individual member of the *
Yankton Sioux Tribe, *
*
Plaintiffs Appellants, **
v. **
United States Department of Health * Appeal from the United States
and Human Services; United States * District Court for the
Indian Health Service; Michael * District of South Dakota.
Leavitt, in his capacity as the United *
States Secretary of Health and *
Human Services, or his successor in *
office; Charles Grim, in his capacity *
as the Director of the United States *
Indian Health Service, or his *
successor in office; Donald Lee, in *
his capacity as Aberdeen Area *
Director of the United States Indian *
Health Service, or his successor or *
predecessor in office; Earl Cournoyer, *
in his capacity as the Wagner Service *
Unit Director of the United States *
Indian Health Service; John Doe, *
whose true name is unknown, in his or *
her official capacity, or his successor in *
office; Jane Doe, whose true name is *
unknown, in his or her official *
capacity, or her successor in office, *
*
Defendants Appellees. *
1Defendants and now appellees are government agencies and officials
responsible for the decision to close the emergency room, including IHS and the
Department of Heath and Human Services (collectively referred to as "the
government").
2The Honorable Lawrence L. Piersol, United States District Judge for the
District of South Dakota.
-2-
___________
Submitted: May 13, 2008
Filed: July 7, 2008
___________
Before WOLLMAN, MURPHY, and SMITH Circuit Judges.
___________
MURPHY, Circuit Judge.
The Yankton Sioux Tribe on behalf of its members and individual member
Glenn Drapeau (collectively "the Tribe") brought this action to challenge the decision
of the United States Indian Health Service (IHS) to close an emergency room at the
Wagner IHS Health Care Facility (Wagner emergency room) and to convert it to an
urgent care facility. IHS and the other defendants1 moved to dismiss the Tribe's
claims on the grounds of res judicata and for failure to state a claim. The district
court2 granted the motion, and the Tribe appeals. We affirm.
I.
In the early 1990s IHS made the decision to close the Wagner emergency room
in Wagner, South Dakota and to open an urgent care facility in its place as part of a
broader effort to provide more cost effective health care to the tribal community. One
significant effect of the plan was that while the Wagner emergency room was open 24
hours every day of the week, the urgent care facility would be open only from 7 a.m.
-3-
to 11 p.m. and would be closed on Sundays and federal holidays. Ambulances and
patients requiring emergency services not available at the urgent care facility would
be referred directly to Wagner Community Memorial Hospital located a half mile
from the Wagner IHS facility or to Sacred Heart Hospital in Yankton which is fifty
six miles away.
In 1994 the Tribe and another individual member, Joyce Golus, sought judicial
review under the Administrative Procedure Act of the decision of the IHS to close the
Wagner emergency room, also raising Fifth Amendment due process and equal
protection claims. See Yankton Sioux Tribe v. United States Dep't of Health &
Human Servs., CIV 94-4073 (D.S.D.) (Yankton I). Following a bench trial the district
court granted the Tribe a declaratory judgment that the defendants had not satisfied
the requirements of 25 U.S.C. 1631(b)(1) when making the decision to close the
Wagner emergency room.
Section 1631(b)(1) governs the process by which the government decides to
close IHS health care facilities. The government may not close an IHS facility until
it has submitted an impact report to Congress at least one year before the proposed
closure date. The report must examine various factors including accessibility and
quality of alternative health care after the closure, cost effectiveness of the proposed
closure, availability of funds to maintain existing levels of service, views of the tribes
served by the facility, degree of use by the Indian population of the existing facility,
and the distance between the facility proposed to be closed and the nearest alternative
facility. See 1631(b)(1)(A)(G).
The district court issued a writ of mandamus directing defendants to comply
with the statute's requirements and permanently enjoined IHS from closing the
Wagner emergency room until Congress either took final action on the impact report
or one year lapsed from the date of its submission. See Yankton Sioux Tribe v.
United States Dep't of Health and Human Servs., 869 F. Supp. 760, 767 (D.S.D.
1994). The Tribe and Golus agreed that the district court need not rule on their
3The minutes of the meeting made it clear that the Tribe was concerned about
discrimination at Wagner Community Memorial Hospital, the closest alternative
facility with an emergency room, and that it disagreed with IHS's decision to close the
Wagner emergency room.
-4-
constitutional claims because they had received all of their requested relief. An appeal
of the district court's decision was filed but was dismissed based on a stipulation of
the parties.
In August 2003 the defendants in Yankton I moved to dissolve the permanent
injunction. An impact report had been submitted to Congress in 1997 in accordance
with 1631(b)(1), but one year had passed without Congress acting on it. The Tribe
opposed the motion, arguing that the defendants had not consulted with it regarding
the emergency room closure as required by 1631(b)(1)(E). Section 1631(b)(1)(E)
requires an impact report to include "the views of the Indian tribes served by such
hospital or facility." The district court concluded that the statute does not require a
particular type of consultation with tribes, but only that the impact report include the
"views of the Indian tribes." The defendants had conducted meetings with the Tribe
to solicit its views and incorporated the minutes of those meetings into the impact
report.3 After determining that the impact report submitted to Congress satisfied
1631(b)(1)(E) and that the defendants had complied with the mandates of the
permanent injunction, the district court dissolved the injunction. See Yankton I, CIV
94-4073 (Memorandum Opinion and Order, Doc. 92 (D.S.D. March 23, 2004)).
Neither the Tribe nor Golus appealed this order.
While the district court was considering the motion to dissolve the permanent
injunction, the Tribe asked the court to rule on the constitutional claims initially raised
by their suit but not resolved before the issuance of the permanent injunction. The
district court pointed out that the case was closed and that it did not have continuing
jurisdiction. See id. The Tribe did not attempt an appeal from this ruling.
-5-
After the district court dissolved the permanent injunction, the Department of
Health and Human Services (HHS) issued a new tribal consultation policy in January
2005 to "ensur[e] that access to critical health and human services is maximized [by
federally recognized tribes and HHS engaging in] open, continuous, and meaningful
consultation." The policy expressly states that "[n]othing in the Policy creates a right
of action against the Department [HHS] for failure to comply with this policy."
In 2005 IHS commissioned a report by Sharpless Inc. Health Care Management
Consulting (Sharpless) to conduct a final evaluation of the Wagner facility. The
Sharpless report recognized there would be significant hardships to tribal members if
the emergency room were closed, but nevertheless recommended partial closure of the
Wagner emergency room by replacement with an urgent care facility. The report
noted that "it could be forecasted that lives would certainly be lost" if the Wagner
emergency room closed.
After the district court dissolved the permanent injunction in Yankton I, several
proposed deadlines for closure of the Wagner emergency room passed without the
facility being closed. On January 30, 2006 the Tribe and Drapeau filed an action
seeking a temporary restraining order and injunctive relief to prevent the closure. See
Yankton Sioux Tribe v. United States Dep't of Health and Human Servs., CIV 06-
4022 (D.S.D.). That action was dismissed without prejudice after HHS informed the
Tribe that the emergency room would remain open until the end of the fiscal year.
On September 28, 2006, two days before the Wagner emergency room was
scheduled to close, appellants filed this action seeking mandamus, injunctive, and
declaratory relief. They argued that the government failed to notify Congress of the
impact of the closure of the Wagner emergency room as required by 25 U.S.C.
1631(b)(1); failed to consult meaningfully with the Tribe as required by statute and
the tribal consultation policy; violated the appellants' Fifth Amendment due process
rights by failing to notify them of the closure or to give them an opportunity to be
heard; improperly used the Tribe's IHS health care funds to pay for another tribe's
4Appellants' claim that defendants had not submitted the required reports for
every budget cycle was also dismissed on another ground for failure to state a claim.
-6-
health care; and violated the trust responsibility of the federal government to tribal
members.
The district court dismissed with prejudice all of appellants' claims as either
barred by res judicata or for failure to state a claim. It held that res judicata barred the
due process and lack of consultation claims, as well as their claim that the government
failed to follow 1631(b)(1) requirements, including the allegation that defendants
were required by the statute to submit a new report every budget cycle.4 The
remaining allegations were dismissed for failure to state a claim, including the
contention that defendants failed to consult as required by HHS's new tribal
consultation policy, that defendants improperly used funds dedicated to the Wagner
service unit for the benefit of another tribe, and that defendants violated their federal
trust responsibility. See Yankton Sioux Tribe v. United States Dep't of Health and
Human Servs., 496 F. Supp. 2d 1044 (D.S.D. 2007) (Yankton II). This appeal
followed.
On appeal the Tribe and Drapeau argue that the district court erred in
dismissing their claims. They contend that res judicata does not bar their claims
because the decision to close the Wagner emergency did not comply with federal law,
the continuing claims doctrine protects their claims from the effects of res judicata,
and their constitutional claims arise from new violations of their rights to due process.
As to the claims dismissed under Federal Rule of Civil Procedure 12(b)(6), appellants
argue that they have valid claims that the government violated the tribal consultation
policy, that IHS illegally shifted funds to another tribe which caused a budgetary crisis
that forced the closure of the Wagner emergency room, and that the government
violated the trust relationship between the federal government and the Tribe. The
government responds that the district court properly dismissed these claims.
-7-
II.
We review de novo the dismissal of a claim on the grounds of res judicata,
Lundquist v. Rice Mem'l Hosp., 238 F.3d 975, 976 (8th Cir. 2001), or for failure to
state a claim. Hastings v. Wilson, 516 F.3d 1055, 1058 (8th Cir. 2008).
A.
Under res judicata "a final judgment on the merits of an action precludes the
parties or their privies from relitigating issues that were or could have been raised in
that action." Allen v. McCurry, 449 U.S. 90, 94 (1980). To establish that a claim is
barred by res judicata a party must show: "(1) the first suit resulted in a final judgment
on the merits; (2) the first suit was based on proper jurisdiction; (3) both suits involve
the same parties (or those in privity with them); and (4) both suits are based upon the
same claims or causes of action." Costner v. URS Consultants, Inc., 153 F.3d 667,
673 (8th Cir 1998).
The requirement that the first suit resulted in a final judgment on the merits is
met here. There were two judgments in Yankton I: the grant of the permanent
injunction and the dissolution of it. An appeal was taken from the grant of the
permanent injunction but was dismissed pursuant to the parties' stipulation, rendering
the injunction a final judgment on the merits. The later dissolution of the permanent
injunction became the final judgment when the Tribe opted not to appeal the district
court's decision to dissolve the injunction. There was thus a final judgment with
respect to all issues that were or could have been raised in that action. See Lundquist,
238 F.3d at 977.
Appellants argue that there was not a final judgment on the merits of their
constitutional claims because the district court never ruled on them. Parties are bound,
however, "not only as to every matter which was offered and received to sustain or
defeat the claim or demand, but as to any other admissible matter which might have
-8-
been offered for that purpose." Comm'r v. Sunnen, 333 U.S. 591, 597 (1948), quoting
Cromwell v. County of Sac, 94 U.S. 351, 352 (1876). Appellants asserted their
constitutional claims in Yankton I to support the relief they sought in that action. The
Yankton I court granted their requested relief on statutory grounds, finding it
unnecessary to reach the constitutional claims. Yankton I, 869 F. Supp. at 767. If
appellants were not satisfied with that disposition they should have pursued the matter
at that time. Although an appeal was filed, the parties stipulated to its dismissal prior
to this court ruling on the matter. The result was that the permanent injunction
became a final judgment on the merits of the issues between the parties, thus
satisfying the first requirement for res judicata. Since it is undisputed that the district
court had proper jurisdiction, the second requirement is not at issue.
The third res judicata requirement is that both suits involve the same parties or
those in privity with them. The Tribe was a party in Yankton I along with individual
tribal member Golus, but appellant Drapeau was not. When a person was not a party
to an earlier suit, that person generally "has not had a 'full and fair opportunity to
litigate' the claims and issues settled in that suit." Taylor v. Sturgell, 2008 WL
2368748, at *9 (U.S. June 12, 2008). There are several exceptions to this general rule,
one of which is when the nonparty was "adequately represented by someone with the
same interests who [wa]s a party" to the prior suit. Richards v. Jefferson County, Ala.,
517 U.S. 793, 798 (1996), quoted in Taylor, 2008 WL 2368748, at *10.
Appellants contend that the interests of Drapeau were not adequately
represented in Yankton I. The Supreme Court has established that a "party's
representation of a nonparty is 'adequate' for preclusion purposes only if, at a
minimum: (1) the interests of the nonparty and her representative are aligned and (2)
either the party understood [itself] to be acting in a representative capacity or the
original court took care to protect the interests of the nonparty." Taylor, 2008 WL
2368748, at *13 (internal citations omitted). Adequate representation may sometimes
require "notice of the original suit to the persons alleged to have been represented" but
the Court has assumed without deciding that lack of notice could be overcome in
certain situations. Id., citing Richards, 517 U.S. at 801.
-9-
In this case the interests asserted by the Yankton Sioux Tribe and its individual
members in Yankton I and those asserted by Drapeau here are identical. In Yankton
I the plaintiffs were described as "enrolled members of the Yankton Sioux Tribe who
receive, or have received, free health benefits, including . . . emergency room services
at the Wagner Service Unit." Yankton I, CIV 94-4073 (Amended Complaint, Doc.
17 V D.S.D. 1994). In this action, the complaint describes Drapeau as an enrolled
member who, along with his spouse and children, receives free health care services
from the Wagner service unit of the IHS including access to emergency room services.
His interests in this action derive solely from his status as an individual member of the
Yankton Sioux Tribe. Because the asserted interest in each action are completely
aligned we find this element of adequate representation satisfied.
It is also clear that the Tribe understood itself to be acting in a representative
capacity for the benefit of its individual members, including Drapeau, in Yankton I.
See South Central Bell Telephone Co. v. Alabama, 526 U.S. 160, 168 (1999). The
Yankton I complaint states that "[p]laintiff Yankton Sioux Tribe brings this complaint
on its own behalf and on behalf of its individual members" for whose "health, safety
and welfare" the Tribe is responsible. The Tribe clearly intended to represent its
individual members in Yankton I and prosecuted that case accordingly. The second
element of adequate representation is likewise met.
We find Drapeau, as an individual member of the Yankton Sioux Tribe, had at
least constructive notice of the earlier litigation. The Yankton I complaint names the
individual members of the Tribe as plaintiffs in that action, along with the Tribe itself
and Golus. As an individual tribal member Drapeau was included in that group. We
find his inclusion in the represented group sufficient to establish constructive notice
here. Because the elements of adequate representation are all satisfied in the special
circumstances of this case, we conclude that the third requirement of res judicata is
met.
The fourth requirement of res judicata is that "both suits are based upon the
same claims or causes of action." Costner, 153 F.3d at 673. We have determined that
-10-
"a claim is barred by res judicata if it arises out of the same nucleus of operative facts
as the prior claim." Lane v. Peterson, 899 F.2d 737, 742 (8th Cir.), cert. denied 498
U.S. 823 (1990). Appellants contend that the Yankton II claims involve "a unique
nucleus of new operative facts." Specifically, appellants point to the government's
failure to adhere to the new tribal consultation policy and general failure to consult,
the alleged misuse of funds intended for the Yankton Sioux Tribe's health care costs,
new alleged violations of 25 U.S.C. 1631(b)(1), and recent deprivations of their due
process rights. The tribal consultation policy and misuse of funds arguments are
irrelevant for the purposes of our res judicata analysis because the district court
dismissed them for failure to state a claim, not as barred by res judicata; we examine
those claims in the next section.
Appellants allege that new violations of 1631(b)(1) have occurred which were
not previously litigated. They first assert that each proposed closure date of the
Wagner emergency room after the dissolution of the permanent injunction in Yankton
I was a new closure decision requiring compliance with the mandates of 1631(b)(1)
and that each failure to comply was a new violation. We reject this argument. The
record establishes that the decision to close the Wagner emergency room was made
only once, prior to filing of the Yankton I suit in 1994. Each proposed closure
deadline was part of the process intended to carry out the original decision, not a new
decision to close the Wagner emergency room giving rise to new claims. Although
IHS extensions and litigation have delayed the closure, the original closure decision
was never withdrawn. Because the order dissolving the permanent injunction in
Yankton I concluded that all 1631(b)(1) requirements for closing an Indian health
care facility had been satisfied, we find this claim barred by res judicata.
Appellants also argue that 1631(b)(1) requires the submission of an impact
report in each two year budgetary cycle until the facility in question is closed and that
the government's failure to make those submissions was a new violation of that
provision. Section 1631(b)(1) states that the Secretary of Health and Human Services
shall submit to Congress "at least 1 year prior to the date such hospital or facility . .
. is proposed to be closed an evaluation of the impact of such proposed closure." The
5The district court found in the alternative that this allegation failed to state a
claim. We agree with the district court's analysis on that point. See Yankton II, 496
F. Supp. 2d at 1057.
-11-
government submitted an impact report to Congress in accordance with this provision
in 1997 and waited more than a year until 2003 before moving to dissolve the
permanent injunction and proceeding with closure plans. Under appellants' theory
several additional impact reports should have been submitted between the submission
of the 1997 impact report and the dissolution of the permanent injunction in 2004, but
appellants did not raise this issue when the government moved to dissolve the
permanent injunction. This claim arose out of the same nucleus of operative facts and
could have been raised in Yankton I but was not; it is therefore barred by res judicata.5
In their brief before this court appellants make a general allegation that the
government failed "to adhere to [its] own consultation policies," but we observe that
such an allegation was already brought forward in Yankton I. In response to that
allegation the district court concluded that the report required by 1631(b)(1) only
had to include the "views of the Indian tribes served by" the health care facility
selected for closure and that the impact report submitted in 1997 satisfied this
requirement. Yankton I, CIV 94-4073 (Memorandum Opinion and Order, Doc. 92 at
4 (D.S.D. March 23, 2004)), quoting 1631(b)(1)(E). Appellants now attempt to
argue again that the government did not consult before deciding to close the Wagner
emergency room, but the decision to close that facility was made prior to the Yankton
I litigation and the district court determined there that the mandates of 1631(b)(1)
had been met. We conclude that this consultation claim arises out of the same nucleus
of operative facts presented in Yankton I and is thus barred by res judicata.
Appellants next claim that the government violated their Fifth Amendment right
to due process by not providing "notice and an opportunity to be heard prior to the
taking of a property interest" in the services of the Wagner emergency room.
Complaint 58(2)(a). In addition to arguing that the permanent injunction in Yankton
I was not a final judgment on the merits of this claim, they contend that res judicata
6The Tribe also claims a "new" constitutional violation which leaves its
members in "imminent danger of being deprived of life without due process of law."
The Tribe's appellate briefing does not make clear what action it contends violated this
due process right. If it is now suggesting that the government's decision to close the
Wagner emergency room violates appellants' due process right to life, that argument
was not raised in the district court and has therefore been waived. See Menz v.
Procter & Gamble Health Care Plan, 520 F.3d 865, 868 (8th Cir. 2008).
-12-
does not bar it because Yankton I involved a separate and unique set of operative facts
than those present here.
The due process violation for which appellants sought redress in Yankton I was
the allegedly unconstitutional taking of their property interest in the services of the
Wagner emergency room; they allege the same wrong here. The decision to close this
facility was made prior to the initiation of Yankton I. There has been no "new"
closure decision subsequent to the dissolution of the permanent injunction to give rise
to a new due process cause of action. Because the claim here arises out of the same
nucleus of operative facts as present in that case, appellants' claim for an alleged
taking of a property interest without due process of law is barred by res judicata.6
Appellants also contend that the government owed a continuing duty to submit
updated impact reports to Congress and to prevent the denial of due process and that
the continuing claims doctrine therefore saves their statutory and constitutional claims
from the effect of res judicata. The Court of Claims and its successors have developed
the continuing claims doctrine in applying the six year statute of limitations for
actions against the United States. See 28 U.S.C. 2501 ("Every claim of which the
United States Court of Federal Claims has jurisdiction shall be barred unless the
petition thereon is filed within six years after such claim first accrues."); see generally
Friedman v. United States, 310 F.2d 381, 38485 (Ct. Cl. 1962), cert. denied 373 U.S.
932 (1963); Apache Tribe of Mescalero Reservation v. United States, 43 Fed. Cl. 155,
17172 (1999) (citing to a 1993 order).
The continuing claims doctrine was initially employed to save claims involving
-13-
periodic payments by the government from time bars by treating each incorrect
payment as a new breach. See Friedman, 310 F.2d at 384. The doctrine has since
expanded so that when the government "owes a continuing duty, a new cause of action
arises each time the government breaches that duty" so long as the breach occurred
within the six year limitations period. Apache Tribe, 43 Fed. Cl. at 171. Appellants
cite Apache Tribe, a case dealing with the government's duty to manage tribal
resources on behalf of a tribe, for the proposition that this doctrine should prevent the
application of res judicata in this case. The Court of Federal Claims ultimately
determined, however, that the continuing claims doctrine was inapplicable in Apache
Tribe, see 43 Fed Cl. at 165, and our review of case law shows that this doctrine has
not been applied outside of the statute of limitations context. Nothing in Apache Tribe
or other reported decisions supports the extension of this doctrine to prevent the
application of res judicata here.
B.
The district court determined that appellants' remaining claims were not barred
by res judicata but dismissed them for failure to state a claim under Rule 12(b)(6).
When reviewing de novo a dismissal for failure to state a claim, we accept the
claimant's allegations of fact as true and affirm only if "it is clear that no relief could
be granted under any set of facts that could be proved consistent with the allegations."
Aten v. Scottsdale Ins. Co., 511 F.3d 818, 820 (8th Cir. 2008).
One of appellants' claims new to this action is its argument that the
government's closure decision failed to comply with the requirements of a tribal
consultation policy which only became effective on January 14, 2005. That policy
expressly states, however, that "[n]othing in the Policy creates a right of action against
the Department [HHS] for failure to comply with this Policy." Even if the policy were
to establish an enforceable right, the decision to close the Wagner emergency room
was made before the Yankton I litigation began in 1994. The planned closure resulted
from the original decision rather than from a new one. The new consultation policy
has no bearing on the decisionmaking process completed years before it went into
-14-
effect. For these reasons, the district court did not err by dismissing this claim for
failure to state a claim pursuant to Rule 12(b)(6).
Appellants next claim not barred by res judicata is that the government
arbitrarily and capriciously took funds from the Wagner Service Unit budget and used
them for the benefit of the Santee Sioux Tribe. The Wagner Service Unit funds
health care services for both the Yankton Sioux Tribe and the Santee Sioux Tribe.
Appellants now argue that the Santee Sioux should have been assigned to the
Winnebago Service Unit rather than the Wagner Service Unit. The Tribe asserts that
the Wagner Service Unit's 2005 funding of facilities serving the Santee Sioux Tribe
was an unlawful allocation of funds which caused a budgetary crisis leading to the
decision to close the Wagner emergency room. The decision to close the Wagner
emergency room was made prior to the onset of the Yankton I litigation, however.
Because the alleged unlawful allocation of funds occurred more than a decade after
the decision to close the Wagner emergency room was reached, it could not have
affected the closure decision. Moreover, IHS assigned service of the Santee Sioux
Tribe to the Wagner Service Unit rather than the Winnebago Service Unit over
seventy years ago. The time to challenge that agency decision has long since passed.
The district court properly dismissed this claim for failure to state a claim.
The Tribe's final claim not barred by res judicata is an asserted violation of the
"special trust relationship between the Federal government and the Indians" in
connection with the closure of the Wagner emergency room. It not disputed that a
general trust relationship exists between the United States and Indian people, as for
example when the federal government "takes on or has control or supervision over
tribal monies or properties." United States v. Mitchell, 463 U.S. 206, 225 (1983)
(citation omitted). The Tribe has not identified any assets taken over by the
government such as tribally owned land, timber, or funds which would give rise to a
special trust duty. See Mitchell, 463 U.S. at 225; see also Restatement (Third) of
Trusts 2, cmt. f (2003) (elements of a trust). Nor has it alleged violation of any
statutory or treaty obligation that could be characterized as a breach of trust or
fiduciary duty. The Tribe's vague allegation that the government violated its federal
-15-
trust responsibility is not sufficient to state a claim. The district court did not err in
dismissing this allegation for failure to state a claim.
C.
Accordingly, we affirm the judgment of the district court.
_______________________________
 

 
 
 

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