Complicated Legal Snarl in Alaskan Village

     ANCHORAGE (CN) – Koniag Inc., a federal land trust, sued a Native Alaskan village that seeks damages equal to those awarded other parties in a 1984 case that allegedly found the trust had deceived its shareholders to merge with other corporations.



     The Native Village of Karluk wants to de-merge from Koniag and wants its land back, but Koniag claims the tribe is not even one of its members.
     Koniag sued the village’s tribal attorney and tribal court judge in Federal Court.
     It seeks declaratory judgment and an injunction stating that Tribal Court Judge Orbie Mullins and Tribal Attorney Kurt Kanam have no authority to represent “any independent Indian communities,” Indian reservation or Indian trust allotment, in connection with an underlying case involving the de-merger of other tribal corporations.
     According to its website, Koniag is one of 13 Alaska Native Regional Corporations established by Congress under the terms of the Alaska Native Claims Settlement Act (ANCSA) to settle the aboriginal land claims of Alaska’s native people.
     Koniag’s Board of Directors is elected by shareholders. Directors serve 3-year terms and serve at-large, meaning they do not represent specific communities or groups of shareholders.
     “Koniag holds title to approximately 123,000 acres of surface estate and 900,000 acres of subsurface estate. Surface estate is defined as land on the surface, excluding minerals, oil and gas, and sand and gravel,” according to the Koniag website. “Subsurface estate is all or a variety of minerals, oil and gas, and sand and gravel.”
     This includes land on the west side of Kodiak Island, near the Sturgeon and Karluk Rivers, and land scattered throughout the Kodiak and Afgonak Islands. The organization is charged with mitigating natives’ dependence on the land for subsistence with ways to profit from the lands and resources.
     Karluk is a fishing village. Koniag advertises a “Shareholder Cabin” that sits on the Karluk River, which may be rented by making a reservation.
     “Within a few steps from the cabin’s front door you are able to hook a giant 40-pound king salmon,” Koniag claims on its website.
     Koniag claims that although the Native Village of Karluk is a federally recognized Indian tribe, it is not a Koniag shareholder, does not have a reservation recognized by the United States, and that the United States does not hold land in trust for its members.
     Koniag claims that an “Old Karluk Reservation” referred to in the tribe’s affidavits, was revoked by Congress’ enactment of ANCSA, and that because the village is not under “federal superintendence,” it does not exercise territorial jurisdiction.
     Kurt Riggin, one of the tribal attorneys certified to practice with the tribe, told Courthouse News in an interview: “The tribe informed me that Koniag hired a law firm out of Seattle, and they contacted the district court, both in writing and by phone, and made certain threats to the tribal court and their officials. The tribe, being a sovereign nation, took offense to the threats to their sovereignty. They don’t have to take threats, just like any other court. People are jailed for things like that.”
     Riggin said he had not seen Koniag’s complaint yet, added: “If someone’s going to district court and they tell a tribe that they don’t have jurisdiction, they don’t necessarily know what they’re talking about.”
     Riggin said that tribes allow certain activities on the land, such as drilling. But tribes can disincorporate. He said a corporation cannot commit federal violations if it wants to keep its charter.
     The Karluk filed a revived claim in Federal Court on March 19.
     It claimed that Koniag misled the village by never compensating it for a misleading and fraudulent merger by Koniag Corp. that culminated in a 1984 lawsuit.
     In 1984, an Alaska Superior Court jury demerged 4 of 5 corporations under the Alaska Native Claims Settlement Act. (Arnold A. Nelson v. Afognak Native Corporation, Koniag et al.)
     Koniag’s then-president J. F. Morse was a defendant in the case.
     According to an Anchorage Research Report: “This demerger case evolved into a very long and complicated litigation ultimately incorporating four other cases and involving five Alaska Native corporations established under the Alaska Native Claims Settlement Act. Ultimately, the case came down to securities fraud, over misleading statements sent to shareholders of a corporation that resulted in a favorable vote for a merger. The case was ‘bifurcated’ with a separate trial for liability held in January 1984 and one for damages held in March of that year.”
     The jury, in the first trial on liability, convicted James Finley Morse of Koniag Native Corp., and the law firm Duncan Weinberg Miller et al. of securities violations, aiding and abetting and breach of fiduciary duty, according to verdict form from an Alaska Superior Court, attached as an exhibit to the March 19 summons and order to show cause in Karluk Tribal Court.
     In October 2010, 14 “eligible voting members of the Native Village of Karluk,” a federally recognized tribe, signed notarized affidavits as votes “to de-merger the Karluk Village Corporation from Koniag Inc. and return the Old Karluk Reservation lands to the exclusive jurisdiction of the Native Village of Karluk,” according to affidavits attached to the March 19 filing in tribal court.
     In its filing in tribal court, the village said, “The Native Village of Karluk tribe are entitled to the same awards as the other parties were awarded.”
     Koniag this week sought a temporary restraining order and preliminary injunction.
     It said the village gave it 21 days to respond to the March 19, or default judgment would be entered against Koniag in tribal court.
     The village is represented by Kurt Kanam of Olympia, Wash.
     Koniag is represented by James Torgerson with Stoel Rives in Anchorage and Kurt Riggin of Wheat Ridge, Colo.

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