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Paskenta Band of Nomlaki Indians v. Crosby

United States District Court, E.D. California

July 15, 2016

PASKENTA BAND OF NOMLAKI INDIANS; and PASKENTA ENTERPRISES CORPORATION, Plaintiffs,
v.
INES CROSBY; et al., Defendants. INES CROSBY; JOHN CROSBY; LESLIE LOHSE; and LARRY LOHSE, Third-Party Plaintiffs,
v.
ANDREW FREEMAN, BRUCE THOMAS, and CHUCK GALFORD, and DOES 1-10, Third-Party Defendants.

          ORDER GRANTING THIRD-PARTY DEFENDANTS' MOTION TO DISMISS

          MORRISON C. ENGLAND, UNITED STATES DISTRICT JUDGE.

         Third-Party Defendants Andrew Freeman, Bruce Thomas and Chuck Galford (collectively, "Third-Party Defendants") move to dismiss (ECF No. 173) Third-Party Plaintiffs Ines Crosby, John Crosby and Leslie Lohse's (collectively, "Third-Party Plaintiffs”) Third-Party Complaint (ECF No. 156) under Federal Rule of Civil Procedure (“Rule”) 12(b)(6).[1] For the reasons that follow, Third-Party Defendants’ motion is GRANTED.

         PROCEDURAL BACKGROUND

         On March 10, 2015, Plaintiffs Paskenta Enterprises Corporation (“PEC”) and Paskenta Band of Nomlaki Indians (“Tribe”) (collectively, “Plaintiffs”) filed their complaint against RICO Defendants alleging, inter alia, claims of racketeering, aiding and abetting, fraud, conspiracy, and violations of fiduciary duties owed to the tribe. (ECF No. 1.) Subsequently, Plaintiffs amended their complaint and filed a First Amended Complaint (“FAC”, ECF No. 30) on April 17, 2015. Multiple motions to dismiss Plaintiffs’ FAC followed. (ECF Nos. 44, 46, 40, 51, 53, & 54.) On August 14, 2015, the Court GRANTED in part and DENIED in part these motions and gave Plaintiffs leave to file a Second Amended Complaint (“SAC”) addressing the deficiencies in their FAC. (ECF No. 101.) On September 25, 2015, Plaintiffs filed their SAC (ECF No. 132) which was again followed by a round of motions to dismiss (ECF Nos. 139, 141, 143. & 145). On April 20, 2016, the Court GRANTED in PART and DENIED in part these motions and gave Plaintiffs partial leave to file a Third Amended Complaint (“TAC”) addressing the deficiencies in their SAC.

         On November 16, 2015, Third-Party Plaintiffs filed their Third-Party Complaint against Third-Party Defendants (ECF No. 156), which Third-Party Defendants now seek to dismiss in its entirety. (ECF No. 173.)

         FACTUAL ALLEGATIONS[2]

         Third-Party Plaintiffs allege that to the extent they are held liable to the Tribe and/or PEC for any alleged wrongdoing, such liability can only be derivative from and/or concurrent with the acts and liability of Third-Party Defendants. Third-Party Plaintiffs allege that the tribe, led by Andrew Freeman as Chairperson of the Tribal Council, targeted and removed Third-Party Plaintiffs from the tribe in order to reduce the Tribe’s membership so as to allow the remaining tribal members to both claim a bigger share of the Tribe’s new wealth and allow Mr. Freeman and his allies to take complete control of the Tribe itself. According to Third-Party Plaintiffs, Mr. Freeman was materially assisted in his tribal coup by Bruce Thomas, CEO of the Tribe’s casino and CEO of a tribal business called MD Barnmaster, and Chuck Galford, a member of PEC’s Board of Directors, and a vice-president of a tribal business called Tepa LLC. Third-Party Plaintiffs assert the following claims for relief: (1) equitable indemnity against all Third-Party Defendants; (2) contribution against all Third-Party Defendants; and (3) declaratory relief against all Third-Party Defendants.

         STANDARD

         On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) “requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief’ in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations. However, “a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. (internal citations and quotations omitted). A court is not required to accept as true a “legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) (stating that the pleading must contain something more than “a statement of facts that merely creates a suspicion [of] a legally cognizable right of action”)).

         Furthermore, “Rule 8(a)(2) . . . requires a showing, rather than a blanket assertion, of entitlement to relief.” Twombly, 550 U.S. at 555 n.3 (internal citations and quotations omitted). Thus, “[w]ithout some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds' on which the claim rests.” Id. (citing Wright & Miller, supra, at 94, 95). A pleading must contain “only enough facts to state a claim to relief that is plausible on its face.” Id. at 570. If the “plaintiffs . . . have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed.” Id. However, “[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and ‘that a recovery is very remote and unlikely.’” Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

         A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. Leave to amend should be “freely given” where there is no “undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to be considered when deciding whether to grant leave to amend). Not all of these factors merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that “the complaint could not be saved by any amendment.” Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) (“Leave need not be granted where the amendment of the complaint . . . constitutes an exercise in futility . . . .”)).

         ANALYSIS

         A. Equitable Indemnity or Contribution for Statutory Violations

         Third-Party Defendants argue that there is no right to contribution or indemnity under the statutory claims asserted by the SAC’s First through Eighth Claims for Relief, (Mot. at 8:23-25.). Although Third-Party Plaintiffs counter that they do not seek to hold Third-Party Defendants liable for statutory violations, the Third-Party Complaint does not clearly reflect this contention. Indeed, the Third-Party Complaint simply states that to the extent Third-Party Plaintiffs are held liable for any causes of action in the SAC, Third-Party Defendants are likewise liable for damages allegedly sustained by the Tribe. Third-Party Plaintiffs therefore claim they are entitled to indemnification from Third-Party Defendants, to the extent permitted by the facts or the law. (SAC ¶ 110.). Based on Third-Party Plaintiffs’ apparent retraction of any such indemnification rights as to the SAC’s statutory claims, however, they appear to be ...


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