Glenn Oliver, Individually and as Representative of the Class of Other-At-Large Shareholders in Alaska Native Regional Corporations and Village Corporations v. Sealaska Corp. Cook Inlet Region, Inc. Nana Corporation Koniag, Inc. Doyon, Ltd. Chugach Alaska Corp. Calista Corp. Bristol Bay Native Corporation Bering Straits Native Corp. Arctic Slope Regional Corp. The Aleut Corp. Ahtna, Inc., and Ronald G. Brown, Trustee

Citations: 192 F.3d 1220; 99 Daily Journal DAR 9355; 99 Cal. Daily Op. Serv. 7297; 1999 U.S. App. LEXIS 20993Docket: 97-36091

Court: Court of Appeals for the Ninth Circuit; September 3, 1999; Federal Appellate Court

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Glenn Oliver, representing a class of Alaska Native shareholders, appeals the dismissal of his lawsuit aimed at enforcing the revenue-sharing requirements of the Alaska Native Claims Settlement Act (ANCSA). The lawsuit, initially filed in Alaska state court under local statutes, was removed to the U.S. District Court for Alaska, where it was dismissed without prejudice. The district court ruled that ANCSA § 7(i) and § 7(j) did not create an independent cause of action, nor was Oliver's claim valid under the state law he cited.

ANCSA, enacted in 1971, granted Alaskan Natives significant land and monetary compensation in exchange for the relinquishment of their aboriginal title. It established twelve Regional Corporations and over 200 Village Corporations to manage the assets. The stock in these corporations is held by approximately 70,000 Alaska Natives, with at-large shareholders like Oliver owning shares in Regional Corporations. To address disparities in wealth among regions, § 7(i) mandates that 70% of certain revenues be shared among all twelve Regional Corporations based on the number of enrolled Natives, while § 7(j) requires that each Regional Corporation distribute 50% of its shared revenues to Village Corporations and at-large shareholders.

Due to ambiguous language in ANCSA regarding what constitutes "revenues," litigation ensued, culminating in a 1983 settlement approved by the district court, which aimed to clarify the revenue-sharing provisions.

Oliver asserts that the § 7(i) settlement improperly denies him and other shareholders their rightful share of revenue under the Alaska Native Claims Settlement Act (ANCSA). He claims that Cook Inlet Region, Inc. (CIRI) and Sealaska Corp. acted ultra vires by relinquishing their rights under § 7(i), thereby depriving him of funds to which he is entitled under § 7(j), which mandates a 50% distribution of shared revenues to shareholders. Oliver alleges that the settlement will hinder the full revenue sharing required by ANCSA.

The district court ruled that ANCSA and Alaska corporation law do not grant Oliver a direct cause of action to challenge the settlement. It allowed him to amend his complaint to file a derivative action against CIRI and Sealaska, but when he declined to do so, the court dismissed the case without prejudice.

The appellate court reviews the dismissal de novo, affirming if no facts support Oliver's claim that would warrant relief. To determine if an implied private right of action exists under ANCSA § 7(i), the court considers four factors: the plaintiff's status as a beneficiary of the statute, legislative intent regarding the creation of a remedy, consistency with the statute's purposes, and whether the cause of action falls within state law concerns.

The court finds that the first factor supports Oliver's claim, as § 7(j) requires CIRI and Sealaska to distribute shared revenues to shareholders like him, indicating that the statute was designed to benefit individual native shareholders. This analysis aligns with the district court’s interpretation of the Cort factors, leading to the conclusion that Oliver is a party for whom § 7(i) was enacted.

The second Cort factor indicates no legislative intent to create a private right of action under §§ 7(i) and (j), contrary to Oliver's position. The Alaska Native Claims Settlement Act (ANCSA) emphasizes rapid resolution without litigation, and the Act only specifies a limitation period for state actions against the United States. While Congress anticipated litigation, it did not authorize private enforcement of §§ 7(i) and (j). The third Cort factor also does not favor Oliver, as he shares financial interests with Sealaska and CIRI, meaning the corporations protect shareholder rights. The stated policy of minimizing litigation further supports the conclusion against individual rights of action. The fourth factor highlights that Oliver’s claim falls under state law, where he can pursue a derivative action on behalf of CIRI and Sealaska, as mandated by ANCSA. This implies that recognizing a private right of action would infringe upon the state's authority over corporate law. Consequently, the Cort factors collectively do not support the implication of a private right of action, leaving Oliver and his class unable to sue the Regional Corporations under federal law for revenue sharing.

Furthermore, Oliver's attempt to sue directly under Alaska Statutes § 10.06.015 lacks legal basis, as affirmed by the district court and the defendant corporations. While Alaska law allows direct suits against corporations by shareholders under specific circumstances, as illustrated in Hanson v. Kake Tribal Corp., any claims must demonstrate harm to the corporation, which Oliver has not established in his case. The precedent indicates that non-fiduciary shareholders are only liable if they knowingly engaged in unlawful actions, which does not apply to Oliver's situation. Thus, no viable claim exists for his direct action against Sealaska and CIRI.

The court's decision in Hanson emphasized the lack of relief available to the plaintiff, which contrasts with Oliver's case, where a derivative suit on behalf of Sealaska and CIRI offers an adequate remedy. Oliver, as a shareholder, is entitled to 50% of shared revenues from these corporations, meaning any loss he faces is also a loss to them. His claim asserts that Sealaska and CIRI improperly relinquished their revenue rights under § 7(i), warranting a derivative action. Alaska Rule of Civil Procedure 23.1(a) supports this approach, stating that shareholders can sue for corporate wrongs in a derivative capacity.

The court noted that even if Oliver’s claim fit an exception for direct action recognized in Hanson, the discretion to allow such an action lies with the trial court, which chose not to exercise it due to the availability of derivative relief. 

Regarding direct actions against other corporations, the court identified two exceptions: a distinct injury to the plaintiff or a special duty owed to the plaintiff. Oliver did not present evidence of a distinct injury nor claim a special duty from the other ten Regional Corporations involved, which means he cannot maintain a direct lawsuit against them. 

Additionally, the court affirmed the statute of limitations applicable to Oliver's potential direct suit, which follows a six-year limit for contract actions. The § 7(i) settlement was approved in 1983, and Oliver’s claim filed in 1996 exceeded this limitation. The court rejected Oliver’s argument that the statute of limitations should start from the illegal action rather than the settlement date, concluding that any challenge to the settlement should have been initiated at the time of its approval.

Ultimately, the court held that since no private right of action exists under ANCSA § 7(i) and Alaska law does not allow Oliver to directly contest the settlement, his complaint fails to state a valid claim and was therefore affirmed.