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Osceola BlackWood Ivory Gaming Group, LLC v. Picayune Rancheria of Chukchansi Indians

United States District Court, E.D. California

July 27, 2017

OSCEOLA BLACKWOOD IVORY GAMING GROUP, LLC, Plaintiff,
v.
PICAYUNE RANCHERIA OF CHUKCHANSI INDIANS, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO DISMISS (DOC. NO. 8)

         This matter came before the court on June 20, 2017, for hearing of defendants' motion to dismiss pursuant to Federal Civil Procedure Rule 12(b)(1) for lack of subject matter jurisdiction. (Doc. No. 8.) Attorney Kimberly Klinsport appeared telephonically on behalf of plaintiff Osceola Blackwood Ivory Gaming Group, LLC. Attorney Michael Robinson appeared telephonically on behalf of defendants Picayune Rancheria of Chukchansi Indians and Chukchansi Economic Development Authority. For the reasons stated below, defendants' motion to dismiss will be granted.

         FACTUAL BACKGROUND

         On March 16, 2017, plaintiff Osceola Blackwood Ivory Gaming Group, LLC (“OBIG”), commenced this action against defendants Picayune Rancheria of Chukchansi Indians (“Chukansi Tribe”) and Chukchansi Economic Development Authority (“CEDA”). (Doc. No. 1.) Plaintiff alleges the following claims: (i) breach of contract; (ii) breach of the covenant of good faith and fair dealing; (iii) breach of oral contract; (iv) breach of implied contract; (v) fraud; (vi) violation of the California Business and Professions Code § 17200, et seq.; (vii) intentional interference with prospective economic advantage; and (viii) negligent interference with prospective economic advantage. (Id.) Plaintiff seeks an award of compensatory damages, restitutionary damages, punitive damages, and attorneys' fees and costs. (Id. at 27.) In the complaint, plaintiff alleges the following.

         Plaintiff OBIG is a Florida-based corporation that provides management and consulting services for Native American hospitality and gaming projects. (Id. at 2, ¶ 1.) Defendant Chukchansi Tribe is a federally recognized Native American tribe located in California, and defendant CEDA is a wholly-owned unincorporated arm of the Chukchansi Tribe that operates the tribe's gaming facility, the Chukchansi Gold Resort & Casino (“Casino”). (Id. at 5, ¶¶ 10-11.)

         In October 2014, the Casino closed. (Id. at 11, ¶ 28.) Defendants subsequently began working to reopen the facility. (Id. at 6, ¶¶ 15-16.) On July 8, 2015, defendants contracted with plaintiff for “business consulting advice and services” related to the reopening of its casino (“the Consulting Contract”). (Id.) The Consulting Contract provided that the agreement would take effect upon execution, and would be effective for a term of twenty-four months or until the “facility becomes managed pursuant to a Management Agreement approved by the National Indian Gaming Commission” (“NIGC”). (Id. at 7, ¶ 18.) The contract also provided that defendants “expressly, unequivocally and irrevocably waive their sovereign immunity” for “any legal proceeding with respect to the Consulting Agreement, or any of the transactions contemplated in the Consulting Agreement.” (Id. at 7, ¶ 19.) The Tribal Council for the Chukchansi Tribe approved the agreement by adopting Resolution No. 2015-31. (Id. at 6, ¶ 15.)

         On the same day the parties entered into the Consulting Contract, the parties also orally agreed to enter into a Management Agreement, and defendants promised to promptly submit the Management Agreement to the NIGC for approval. (Id. at 7-8, ¶¶ 20-21.)

         On July 29, 2015, defendants entered into the Management Agreement with plaintiff, which agreement the Chukchansi Tribal Council approved by adopting Resolution No. 2015-46. (Id. at 8, ¶ 21.) The contract stated that it had a term of five years, and would take effect five days after the following conditions were met: (i) the Chairman of the NIGC granted written approval of the contract; (ii) the Chukchansi Tribe and NIGC concluded background investigations of plaintiff; and (iii) plaintiff received all applicable licenses and permits for the facility. (Id. at 8, ¶¶ 22-23.) Additionally, the contract provided that the Chukchansi Tribe would waive sovereign immunity for any actions filed by plaintiff to enforce the terms of the contract, and that the Chukchansi Tribal Council would enact a resolution adopting this waiver. (Id. at 8, ¶ 24.)

         From July to December 2015, plaintiff provided management and consulting services to defendants. (Id. at 9-10, ¶ 26.) The Casino reopened on December 31, 2015. (Id. at 10, ¶ 27.) In April 2016, the parties agreed to amend the Management Agreement to adjust plaintiff's compensation rate and to extend the term of the agreement from five to seven years. (Id. at 11, ¶ 29.) Defendants also agreed to submit a revised version of the agreement to the NIGC for approval. (Id. at 11, ¶ 29.) To date, defendants have failed to submit either the original Management Agreement or the proposed amended agreement to the NIGC. (Id. at 12, ¶ 30.) As a result of defendants' failure to submit either the agreement or the revised agreement to the NIGC for approval, plaintiff has experienced financial loss. (Id. at 12, ¶¶ 30-31.)

         On May 10, 2017, defendants filed the instant motion to dismiss plaintiff's complaint in its entirety based on this court's lack of subject matter jurisdiction. (Doc. No. 8.) Plaintiff filed its opposition on June 6, 2017, together with a request for judicial notice. (Doc. Nos. 12-13.) On June 13, 2017, defendants filed a reply. (Doc. No. 14.)

         LEGAL STANDARD

         Defendants move to dismiss plaintiff's complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure Rule 12(b)(1).

         Federal Rule of Civil Procedure 12(b)(1) allows a defendant to raise the defense, by motion, that the court lacks jurisdiction over the subject matter of an entire action or of specific claims alleged in the action. See Fed. R. Civ. P. 12(b)(1); see generally Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). Federal district courts generally have subject matter jurisdiction over civil cases through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction, 28 U.S.C. § 1331. See Peralta v. Hispanic Bus., Inc., 419 F.3d 1068 (9th Cir. 2005). In a motion to dismiss for lack of subject jurisdiction, a defendant may either attack the allegations of the complaint or the existence of subject matter jurisdiction in fact. Thornhill Publ'g Co. v. Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979).

         Here, defendants argue that the allegations of the complaint are insufficient to support federal subject matter jurisdiction. (Doc. No. 8.) When a party brings a facial attack to subject matter jurisdiction, that party contends that the allegations of jurisdiction contained in the complaint are insufficient on their face to demonstrate the existence of jurisdiction. Safe Air for Everyone v. Meyer,373 F.3d 1035, 1039 (9th Cir. 2004). In a Rule 12(b)(1) motion of this type, the plaintiff is entitled to safeguards similar to those applicable when a Rule 12(b)(6) motion is made. See Sea Vessel Inc. v. Reyes,23 F.3d 345, 347 (11th Cir. 1994); Osborn v. United States,918 F.2d 724, 729 n.6 (8th Cir. 1990). Accordingly, the factual allegations of the complaint are presumed to be true, and the motion may be granted only if the plaintiff fails to allege an element necessary for subject matter jurisdiction. Savage v. Glendale Union High Sch. Dist., No. 205, 343 F.3d 1036, 1039 n.1 (9th Cir. 2003); Miranda v. Reno, 238 F.3d ...


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