The attempt by the Native Village of Karluk to sue Koniag Corporation, Kodiak Island's regional Native corporation has been blocked.

A Federal Judge blocked the attempt by Karluk saying that the Karluk Tribal Court lacked jurisdiction over the island’s regional corporation, Koniag.

The suit had its beginnings in the 1980s when Koniag began assimilating the Village Native Corporations into itself. The island’s villages merged with Koniag after the mergers were voted on by Koniag stockholders as well as Village Corporation stockholders. For a short time the mergers held.

But, a short time later, the Afognak Native Corporation took another look at the deal and decided that it was not in the best financial interests of the corporation to continue in the merger. Oly Olsen, an Afognak shareholder said at the time that Koniag misled the Afognak shareholders by not telling them of the value of their holdings at the time of the merger proposal. Koniag denied the claims.

By 1982, three other village corporations sued to get out of the merger.

By 1983, Koniag shareholders voted and tossed out over half of Koniag’s board of directors.

In 1984, an Anchorage jury found that Koniag President J.F. Morse did in fact mislead village shareholders about the value of their land.

Attorneys would feed like sharks, and after three years after the smoke cleared, more than 10% of the $25 million that Koniag received from the Alaska Native Claims Settlement Act was gone to lawyers.

When all was done, only two villages remained in the merger with Koniag. Larsen Bay and Karluk. While the other village corporations sent out large dividends to their shareholders through the sale of timber,land and other investments, those two communities were left with little to work with. As their payment for the merger, village shareholders in Karluk and Larsen Bay received 100 shares of Class B stock.

The difference is very apparent in the native communities that have held on to their corporations and those that lost theirs to Koniag. Village Corporations are very supportive of their communities and the upkeep involved. That supportive structure is absent in the two communities without Village Corporations.

In March of this year, the Native Village of Karluk filed in Karluk Tribal Court seeking a judgement against Koniag requiring a de-merger and the award of unspecified damages. After the sought after de-merger Karluk would have recreated the Karluk Native Corporation.

But, to stop the lawsuit,Koniag turned to the Federal court to render a decision on the limits of a tribal court. It was there that it was decided that Karluk’s Tribal Court had no jurisdiction over Koniag, which is not a member of the Karluk tribe.