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Cook Inlet Region, Inc v. Robert W. Rude

August 20, 2012

COOK INLET REGION, INC., PLAINTIFF-APPELLEE,
v.
ROBERT W. RUDE;
HAROLD RUDOLPH,
DEFENDANTS-APPELLANTS.



Appeal from the United States District Court for the District of Alaska Ralph R. Beistline, Chief District Judge, Presiding D.C. No. 3:09-cv-00256-RRB

The opinion of the court was delivered by: W. Fletcher, Circuit Judge:

FOR PUBLICATION

OPINION

Argued and Submitted June 25, 2012-Anchorage, Alaska

Before: Alfred T. Goodwin, William A. Fletcher, and Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge William A. Fletcher

OPINION

Plaintiff-Appellee Cook Inlet Region, Inc. ("CIRI") is an Alaska Native Regional Corporation formed under the Alaska Native Claims Settlement Act ("ANCSA"). Defendants-Appellants Robert W. Rude and Harold F. Rudolph are shareholders of CIRI and former members of CIRI's Board of Directors.

In 2009, Plaintiff CIRI filed suit against Defendants, alleging that they had violated ANCSA and Alaska law. The district court held that it had federal question jurisdiction over the ANCSA claims and supplemental jurisdiction over the state-law claims. On appeal, Defendants challenge the court's holding that it had subject matter jurisdiction over the ANCSA claims. We affirm the district court.

I. Background

Congress enacted ANCSA in 1971, two years after the discovery of oil in Prudhoe Bay. Alaska Native Claims Settlement Act, Pub. Law No. 92-203, 8 Stat. 688 (1971) (codified as amended at 43 U.S.C. §§ 1601-1629h); see also Martha Hirschfield, Note, The Alaska Native Claims Settlement Act: Tribal Sovereignty and the Corporate Form, 101 Yale L.J. 1331, 1335-36 (1992) ("Oil companies eager to exploit Alas-ka's natural resources were unwilling to begin development until title to the land had been quieted."). Under ANCSA, all Native claims to Alaskan land based on aboriginal use and occupancy were extinguished, and Native Alaskans were granted monetary compensation and title to forty million acres of land. See John F. Walsh, Note, Settling the Alaska Native Claims Settlement Act, 38 Stan. L. Rev. 227, 227 (1985).

ANCSA transferred title of the settlement land to twelve regional corporations and numerous village corporations cre- ated by the Act. 43 U.S.C. §§ 1606-07. Under ANCSA, only Native Alaskans could be shareholders in these corporations for the first twenty years of their existence. This restriction on alienation was designed to ensure that Native Alaskan lands would not be sold at low prices as soon as title cleared. § 1606(h)(1) (1982); see also Walsh, 38 Stan. L. Rev. at 232-33 (discussing reasons for alienability restriction).

In 1990 and 1991, as the twenty-year restriction neared its end, Congress amended ANCSA to broaden restrictions on the transfer of corporate stock. See Little Bighorn Battlefield National Monument, Pub. L. No. 102-201, § 301, 105 Stat. 1631, 1633 (1991); Alaska Native Claims Settlement Act, Amendment, Pub. L. No. 101-378, § 301, 104 Stat. 468, 471-72 (1990). Under current law, shareholders in regional corporations established under ANCSA cannot sell or otherwise transfer their stock except under limited circumstances. 43 U.S.C. § 1606(h)(1)(B)-(C).

Lifting ANCSA's alienability restrictions on stock requires an amendment to the regional corporation's articles of incorporation. See ยง 1629c(b). ANCSA provides two mechanisms by which these restrictions can be lifted. One of them is a shareholder vote taken ...


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