Bodkin v. Cook Inlet Region, Inc.

In 1971 Congress passed the Alaska Native Claims Settlement Act, 43 U.S.C. §§ 1601 et seq., “to achieve a fair and just settlement of all aboriginal land [in Alaska] . . . with maximum participation by Natives in decisions affecting their rights and property.”[1] Toward that end, the Act established twelve in-state Native regional corporations to hold land and capital on behalf of Alaska Native shareholders.[2] “Except as otherwise expressly provided,” the Act gives these shareholders “all rights of a shareholder in a business corporation organized under the laws of the State.”[3] In 1987 Congress amended ANCSA to give each regional corporation the authority to establish settlement trusts “to promote the health, education, and welfare of its beneficiaries and preserve the heritage and culture of Natives.”[4] A 1998 amendment “expressly authorized and confirmed” the regional corporations’ authority to pursue those objectives.[5] It further stipulated that “such benefits need not be based on share ownership in the Native Corporation and such benefits may be provided on a basis other than pro rata based on share ownership.”[6]

CIRI is an Alaska Native regional corporation organized under ANCSA. In February 2000 the CIRI board of directors passed a resolution creating the “Elders’ Benefit Program.” The program established a revocable trust that provided quarterly payments of $ 450 to any shareholder aged sixty-five or older who received shares in CIRI as an original enrollee. The Board determined that the program did not require a shareholder vote. Shortly after the Board established the program, Emil Notti, a CIRI shareholder who did not qualify for benefits, filed suit. CIRI removed the case from superior court to the United States District Court for the District of Alaska.</p><p>The district court granted summary judgment in CIRI’s favor. It upheld the validity of the Elders’ Benefit Program because “[s]tate law authorizes ANCSA corporations to take any action authorized by ANCSA” and “ANCSA [§ 7(r)] permits preferential distributions.” The Ninth Circuit Court of Appeals affirmed, reasoning that “[t]he plain language of § 7(r) allows CIRI to make the distributions made in this case.”[7] The United States Supreme Court denied certiorari.[8]

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Adds  precedent that influences how ANCSA corporations, regulators, and  shareholders interpret governance rights and remedies.