Salt River Project Agricultural Improvement v. Reynold R. Lee;

This disposition is not appropriate for publication and is not precedent*
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SALT RIVER PROJECT
AGRICULTURAL IMPROVEMENT
AND POWER DISTRICT, a municipal
corporation and political subdivision of the
State of Arizona; et al.,
Plaintiffs - Appellants,
v.
REYNOLD R. LEE; et al.,
Defendants - Appellees.
No. 09-15306
D.C. No. 3:08-cv-08028-JAT
MEMORANDUM *
Appeal from the United States District Court
for the District of Arizona
James A. Teilborg, District Judge, Presiding
Argued and Submitted February 10, 2010
San Francisco, California
Before: GOODWIN, BERZON and IKUTA, Circuit Judges.
Salt River Project Agricultural Improvement and Power District and
Headwaters Resources, Inc., collectively referred to as Salt River Project, appeal
FILED
MAR 19 2010
MOLLY C. DWYER, CLERK
U .S. C OU R T OF APPE ALS

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the district court’s grant of a Fed. R. Civ. P. 12(b) motion to dismiss for failure to
exhaust the contractual grievance procedures in a lease between Salt River Project
and the Navajo Nation. We review the district court’s application of substantive
law de novo, and its findings of fact for clear error. Ritz v. Int’l Longshoremen’s &
Warehousemen’s Union, 837 F.2d 365, 369 (9th Cir. 1998) (per curiam). We
reverse.
The district court erred in ordering Salt River Project to refer its claims to
the United States Secretary of the Interior pursuant to the grievance procedures in
§ 25 of the 1969 Lease. Assuming, without deciding, that those procedures apply
to Salt River Project’s claims, Salt River Project has already submitted its dispute
to the Secretary of the Interior under both § 25 of the 1969 Lease and § 10 of the §
323 Grant. The Secretary, without regard to the pending litigation, reviewed the
substance of the dispute and addressed Salt River Project’s request for intervention
by the Secretary. Letter from Carl J. Artman, Assistant Secretary – Indian Affairs,
U.S. Dep’t of the Interior, to Jane D. Alfano, Corporate Counsel, Salt River Project
(May 10, 2008). The Secretary later declined to reconsider his initial decision.
Letter from George T. Skibine, Acting Deputy Assistant for Policy and Economic
Development, U.S. Dep’t of the Interior, to John J. Egbert, Esq., Jennings, Strouss
& Salmon, PLC (October 2, 2008). Contrary to the district court’s supposition,
Salt River Project has no further obligation to submit its dispute to the Secretary

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under the 1969 Lease’s dispute resolution provisions. Its claims are thus properly
before the district court. See Arizona Public Service Co. v. Aspaas, 77 F.3d 1128,
1132-34 (9th Cir. 1995).
REVERSED and REMANDED for further proceedings.

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