United States District Court, S.D. California
RINCON MUSHROOM CORPORATION OF AMERICA, a California Corporation, Plaintiff,
BO MAZZETTI; JOHN CURRIER; VERNON WRIGHT; GILBERT PARADA; STEPHANIE SPENCER; CHARLIE KOLB; DICK WATENPAUGH; DOE CO.; and DOE I and DOE II, Defendants.
WILLIAM Q. HAYES United States District Judge
matters before the Court are the Motion to Re-Open Federal
Case After Exhaustion of Tribal Remedies (ECF No. 83) and the
Second Motion to Re-Open Federal Case-Post Trial In Tribal
Court and the Request for Preliminary Injunction (ECF No. 92)
filed by Plaintiff Rincon Mushroom Corporation of America
October 20, 2009, RMCA initiated this action by filing the
Complaint. (ECF No. 1). The action concerns tribal regulation
of non-Indian fee simple land located within the boundaries
of the reservation of the Rincon Band of Luiseno Mission
Indians. Defendants Bo Mazzetti, John Currier, Vernon Wright,
Gilbert Parada, Stephanie Spencer, Charlies Kolb, and Dick
Watenpaugh (“the Rincon Band Defendants”) are
tribal officials sued in their individual and official
capacities. Id. ¶¶ 4-5.
Complaint alleges the following ten causes of action: (1)
intentional interference with contract; (2) intentional
interference with advantageous economic relationship; (3)
conspiracy to intentionally interfere with contract; (4)
conspiracy to intentionally interfere with advantageous
economic relationship; (5) conspiracy to deprive plaintiff of
equal protection and equal privileges and immunities under 42
U.S.C. § 1985(3); (6) civil RICO; (7) civil RICO
conspiracy; (8) negligent interference with contract; (9)
negligent interference with advantageous economic
relationship; and (10) violation of 42 U.S.C. § 1983.
(ECF No. 1).
September 21, 2010, the Court entered an Order granting a
Motion to Dismiss filed by the Rincon Band Defendants. (ECF
No. 54). The Court concluded that RMCA “satisfied the
requirements to establish Article III standing in this
matter” but dismissed the Complaint for failure to
exhaust tribal court remedies. The Court stated,
Given the breadth of the declaratory and injunctive relief
requested by the Plaintiff, there is a “colorable or
plausible” claim to tribal regulatory and tribal court
jurisdiction pursuant to Montana's second
exception. Elliott, 566 F.3d at 848; cf. Montana
II, 137 F.3d at 1141. Although Montana's second
exception should not “be construed in a manner that
would swallow the rule or severely shrink it, ”
Plains Commerce Bank, 128 S.Ct. at 2720, neither
should it be construed in a manner that would eliminate the
exception entirely. Because tribal court jurisdiction is
plausible, ‘principles of comity require [federal
courts] to give the tribal courts a full opportunity to
determine their own jurisdiction in the first
instance.” Elliott, 566 F.3d at 850-51. The
Court concludes that Plaintiff must exhaust tribal remedies
prior to asserting its claims in this Court.
(ECF No. 54 at 13-14).
Ninth Circuit Court of Appeals affirmed the Court's
determination that RMCA must exhaust its tribal remedies on
the issue of tribal jurisdiction before bringing suit in
federal court. (ECF No. 66). The Court of Appeals stated,
We emphasize that we are not now deciding whether the tribe
actually has jurisdiction under the second Montana
exception. We hold only that where, as here, the tribe's
assertion of jurisdiction is “colorable” or
“plausible, ” the tribal courts get the first
chance to decide whether tribal jurisdiction is actually
permitted. If the tribal courts sustain tribal jurisdiction
and Rincon Mushroom is unhappy with that determination, it
may then repair to federal court.
Id. at 4. However, the Court of Appeals held that
this Court abused its discretion in dismissing the case
rather than staying it. Id. at 5. The Court of
Appeals reversed the court's dismissal and remanded with
instructions to stay the case pending RMCA's exhaustion
of tribal remedies. Id.
August 1, 2012, this Court issued an Order spreading the
mandate, ordering the Clerk of Court to reopen the case, and
staying the case pending the exhaustion of tribal remedies.
(ECF No. 65).
years following the Order staying the case, the Court ordered
and the parties filed three status reports as to the
exhaustion of tribal remedies. (ECF Nos. 72, 78, 81). On June
25, 2015, the Court issued an Order administratively closing
the case “without prejudice to any party to move to
reopen, and without prejudice to the resolution of any
statute of limitations issue associated with the filing of
this complaint.” (ECF No. 82 at 3).
December 16, 2016, RMCA filed the Motion to Reopen Federal
Case after Exhaustion of Tribal Remedies. (ECF No. 83). On
January 9, 2017, the Rincon Band Defendants filed a response
in opposition. (ECF Nos. 84, 85-90). On January 18, 2017,
RMCA filed a reply. (ECF No. 91).
20, 2017, RMCA filed a second Motion to Re-Open Federal
Case-Post Trial In Tribal Court and a Request for a
Preliminary Injunction. (ECF No. 92). The Rincon Band
Defendants filed a response in opposition. (ECF No. 93). RMCA
filed a reply. (ECF No. 94).
Allegations of the Complaint
1982, RMCA, a non-Indian corporation, purchased from a
non-Indian five acres of land within the exterior boundary of
the Rincon Tribal Reservation. (ECF No. 1 at ¶ 9). In
1960, the property was “allotted and conveyed out of
Tribal ownership, ” and since that time, “the
property continuously has been, and now remains, non-Indian
fee land.” Id. (quotation omitted). RMCA owned
the land in fee simple until 1999, when it sold the land to
Marvin Donius, also a non-Indian. Id. ¶ 11.
RMCA “receiv[ed] as partial consideration . . . a
promissory note in a substantial amount, together with a
‘carry-back' deed of trust.” Id.
Donius and RMCA used the land as a “non-tribal mixed
use commercial facility.” Id. at ¶ 13.
“The property is located in an ‘open' part of
the Rincon Reservation . . . from the Rincon Tribe's
public casino.” Id. ¶ 10.
March 15, 1960, the Rincon Tribe enacted Articles of
Association, which state that the “Rincon Tribal
Business Committee ... shall have jurisdiction over the lands
within the boundaries of the Rincon Reservation.”
Id. ¶ 19. On or about April 2007, “the
Rincon Tribe enacted a ‘Tribal Environmental Policy
Ordinance' that . . . purportedly placed under the
governmental jurisdiction of the Tribe the subject parcel, on
the asserted basis that the Tribe's regulatory authority
extended to and included all land within the exterior
boundaries of the Rincon Reservation.” Id.
¶ 20 (quotations omitted). “[T]he Rincon Tribe
enacted an Environmental Enforcement Code that as revised on
or about July 10, 2007 purported to extend tribal
environmental regulatory authority over and as to [the]
subject property, on the basis of the Tribe's claim of
such authority over all lands within the exterior boundaries
of the Rincon Indian Reservation.” Id. ¶
21 (quotations omitted). “On ... September 30, 2008,
these defendants caused the Rincon Tribe to enact a Tribal
Court Jurisdiction Ordinance that purported to claim
regulatory as well as in personam and subject matter
adjudicative jurisdiction over non-tribal member plaintiff,
non-tribal member Donius, and as to subject non-tribal fee
property, ... and also purports to extend the Tribe's
Territorial Jurisdiction over any fee lands within the
external boundaries of the Rincon Reservation....”
Id. ¶ 22 (quotations omitted).
first count of the Complaint seeks a judicial declaration
that “any prospective or future actual or attempted
enforcement by these defendants of” the
above-referenced Articles of Association, Tribal
Environmental Policy Ordinance, Environmental Enforcement
Code, and Tribal Court Jurisdiction Ordinance is
“facially unconstitutional, unconstitutional as
applied, and/or illegal, and/or entirely unenforceable,
pursuant to applicable provisions of federal and California
law, both with respect to plaintiff as well as concerning
subject property.” Id. ¶ 23(a).
second count of the Complaint seeks the issuance of “a
mandatory injunction requiring and ordering that the
above-named Tribal defendants desist and refrain from any
further actual or attempted enforcement, prospectively and in
the future, of any and all purported Rincon Tribe regulatory
or adjudicative authority over or as to plaintiff and/or over
or as to subject property.” Id. ¶ 29.
Recent Tribal Court Proceedings
2010, a tribal court in the Intertribal Court of Southern
California (“the tribal court”) issued an order
granting the Rincon Band of Luiseno Indians' (the
“Rincon Band”) application for a preliminary
injunction against Marvin Donius, Mushroom Express, Inc., and
RMCA. (ECF No. 85-1). The preliminary injunction order states
that Donius, Mushroom Express, Inc., and RMCA are, among
other restrictions, “enjoined from bringing any
additional property onto the subject property.”
Id. at 3.
September 27, 2016, the Rincon Band filed a motion for order
to show cause regarding civil contempt in the tribal court
alleging that Donius and RMCA had began constructing a
structure on the property in violation of the preliminary
injunction. (ECF No. 85-3). On November 2, 2016, the tribal
court held a hearing regarding a motion for partial summary
judgment on the issue of jurisdiction and this motion for an
order to show cause why Donius/RMCA should not be held in
contempt for violating a preliminary injunction. (ECF No.
83-2). At the tribal court proceeding, the tribal court judge
stated, “When I gave that order, with all due respect .
. . It was for everything. Everything was to cease and
desist, period. I don't know how you or anyone else
interpreted it. It was stop everything. That was my
order.” (ECF No. 83-2 at 22). Mr. Corrales, counsel for
Marvin Donius and RMCA, raised the issue of jurisdiction.
MR. CORRALES: Yes, I brought it up because they are going to
interpret your statement that Your Honor made the original
preliminary injunction had to do with not only no further
building, but any activities on the property. And so what the
Court is doing here is the Court is making a determination of
regulatory jurisdiction as to what is going on in the
THE JUDGE: There is no dispute. I've already made the
MR. CORRALES: Okay.
THE JUDGE: This Court has jurisdiction. That's what
we're arguing, rehashing.
MR. CORRALES: Yes. That is-
THE JUDGE: I already made that. It went to the Ninth Circuit.
The Ninth Circuit says, you, Counsel, your side, has not
exhausted its tribal remedies. So we're back in terms of