The U.S. Supreme Court won't be hearing a messy Indian preference lawsuit involving the Navajo Nation, the Equal Employment Opportunity Commission, the Interior Department and Peabody Energy.

Peabody entered into agreements with the tribe to operate coal mines on the reservation. The leases -- which were approved by DOI -- include a provision to grant Navajo tribal members a preference in employment.

The EEOC sued Peabody for allegedly failing to hire Native Americans who are not Navajo. After several rounds of litigation, including a trip to the 9th Circuit Court of Appeals in which the tribe was told to answer to the lawsuit, a judge dismissed the case.

However, in June 2010, the 9th Circuit revived the lawsuit. The court said the tribe can't raise a sovereign immunity defense in a lawsuit filed by the federal government.

At the same time, the court said DOI cannot be joined without its consent. Only the Justice Department can bring an EEOC suit against a government agency, the 9th Circuit ruled.

In response to the decision, three petitions were presented to the Supreme Court in Navajo Nation v. EEOC. All were denied in the first order list for the Supreme Court's October 2011 term.

The ruling means the case can proceed against Peabody and the Navajo Nation. But the 9th Circuit barred the federal government from seeking damages from Peabody for violating federal employment laws.

The 9th Circuit also left open the door for Peabody and the tribe to file a third-party complaint against DOI to address the agency's role in the dispute.

9th Circuit Decision:
EEOC v. Peabody (June 23, 2010)

Related Stories:
9th Circuit revives Indian preference lawsuit against Peabody (6/24)
Judge dismisses lawsuit over tribal preference (10/5)
Court joins Navajo Nation in discrimination case (3/11)