ROBERTO A. LANGE, District Judge.
Plaintiff J.L. Ward Associates, Inc. ("J.L. Ward") sued Defendant Great Plains Tribal Chairmen's Health Board ("Great Plains"), claiming that Great Plains committed a breach of contract and infringed on copyrights held by J.L. Ward. Doc. 14. Great Plains seeks, and J.L. Ward opposes, dismissal of the Amended Complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction. Doc. 16, 17, 21, 25, 28. For the reasons explained below, the Court grants in part the motion to dismiss and permits J.L. Ward twenty-one days from the date of this Order to amend its Complaint if it chooses to make a claim to compel arbitration of certain claims.
Great Plains
Great Plains Articles of Incorporation, Art. III. The governing board of Great Plains includes the president or chairperson from each of the sixteen tribes, the chairman from the Rapid City Indian Health Advisory Board, and the chairman from the Trenton Indian Service Area Board. Great Plains Articles of Incorporation, Art. IV; His Horse is Thunder Aff. ¶ 3. Members of the governing board of Great Plains must relinquish their position "when they fail to be re-elected by their Tribal or other governing body to be an official delegate to the [Great Plains] Area Tribal Chairmen's Health Board." Great Plains Articles of Incorporation, Art. VIII.
Although the tribal governing bodies of the sixteen tribes are not required to be involved with Great Plains, "decisions made by [Great Plains] on all ongoing programs shall be final." Id. at Art. DC Article X of Great Plains Articles of Incorporation addresses the finances of Great Plains as follows:
Art. X.
In addition to communicating with IHS on behalf of the sixteen tribes, Great Plains also enters into "self-determination contracts"
J.L. Ward is an American Indian-owned corporation that works with tribes, Indian organizations, universities, and federal agencies to plan, develop, implement, and evaluate programs and services in the areas of primary health care, substance abuse and mental health care, and Indian affairs. Ward Aff. ¶ 2. In early 2006, Great Plains' Board of Directors passed a corporate resolution authorizing Great Plains to work with J.L. Ward to prepare and submit an application to the Substance Abuse and Mental Health Services Administration ("SAMHSA") for a 2007 Access to Recovery ("ATR") grant. Ward Aff. ¶ 4; Doc. 23-3. J.L. Ward prepared the 2007 ATR grant application, which was then submitted to SAMHSA in March or April of 2007. Ward Aff. ¶ 4.
In August of 2007, Great Plains and J.L. Ward entered into a contract for J.L. Ward's scope of work relating to Great Plains' 2007 application. Id.; Doc. 23-1. The 2007 contract provided that "[i]f the [Great Plains] 2007 ATR grant application is not approved and funded, this Agreement shall terminate and neither party shall have any further obligation to the other or duty under this Agreement, except that sections 12, 13, and 14 shall survive termination." Doc. 23-1. Sections 12 and 13 of the 2007 contract addressed the parties' intellectual and copyright interests in the 2007 ATR grant application. Section 14 contained a dispute resolution clause, which stated;
Id. Despite the efforts of J.L. Ward and Great Plains, SAMHSA did not award Great Plains an ATR grant based on the 2007 application. Ward Aff. at ¶ 5.
On August 12, 2009, James Ward ("Ward"), J.L. Ward's president and chief executive officer, and Great Plains' then executive director, Dr. Don Warne ("Warne"), had a conversation about the failed 2007 ATR grant application. Ward and Warne also discussed that funding for 2010 ATR grants was included in President Barack Obama's proposed budget. Id. at ¶ 6. Ward suggested the same arrangement with Great Plains that the parties had agreed to in 2007. That is, Ward proposed that J.L. Ward would prepare the grant/proposal application at no cost to Great Plains in exchange for a commitment to a specific scope of work for the project. Id. According to Ward's affidavit, Warne verbally agreed to an arrangement that was identical to the 2007 agreement between the parties. Id. On August 13, 2009, Ward sent an email to Warne stating;
Id. at ¶ 7; Doc. 23-4.
On January 4, 2010, SAMHSA announced the availability of funds for ATR grants. Doc. 23-13. On January 8, 2010, Ward and Warne again spoke on the telephone about J.L. Ward planning and developing
On January 26, 2010, Ward emailed Warne a copy of a contract ("2010 contract") for J.L. Ward's involvement in Great Plains' 2010 ATR grant application. Ward Aff. ¶ 9. The January 26, 2010 email stated:
Doc. 23-5. The 2010 contract attached to the email discussed the services to be provided by J.L. Ward and contained a dispute resolution clause that was identical to the one in the 2007 contract. Doc. 23-2. On January 29, 2010, Warne sent an email to Ward saying that the two should find time to talk and explained that Great Plains was "reviewing the proposal." Doc. 23-6.
On February 9, 2010, Warne and Ward exchanged emails attempting to set up a time to discuss the 2010 contract. Ward Aff. ¶ 10; Doc. 23-7. On the following day, Ward emailed Warne a copy of the Great Plains Board of Directors 2006 resolution that authorized Great Plains to work with J.L. Ward to prepare and submit an application to SAMHSA for a 2007 ATR grant. Doc. 23-8. On February 11, 2010, Great Plains passed a corporate resolution authorizing its "Executive Director and staff to work with J.L. Ward Associates, Inc. to prepare and submit a grant application for the Access to Recovery Programs of SAMHSA." Doc. 23-9.
J.L. Ward planned and developed the 2010 ATR grant application at no cost to Great Plains. On March 7, 2010, Ward sent the final proposal to Warne. Ward Aff. ¶ 13. Warne signed the requisite ATR forms and the final proposal was submitted to SAMHSA on March 9, 2010. Id.; Doc. 23-14. While the 2010 ATR proposal was pending, Great Plains changed executive directors, replacing Warne with Ron His Horse is Thunder ("His Horse is Thunder"). Ward Aff. at ¶ 14.
On July 27, 2010, Warne received, and forwarded to Ward, an email from SAMHSA requesting information pertaining to a modification of the budget of Great Plains' 2010 ATR grant proposal. Id. at ¶ 14; Doc. 23-10. On the following day, Ward and Warne spoke on the phone twice and discussed the fact that the SAMHSA inquiry was a good indication that Great Plains would receive funding. Ward Aff. ¶ 15. Ward expressed concern to Warne that the parties did not have a signed written contract in place. Id. According to Ward's affidavit, Warne told Ward that Great Plains could not do the 2010 ATR project without J.L. Ward and that Warne would get the 2010 contract executed. Id.
On September 30, 2010, Great Plains received notice that SAMHSA had awarded Great Plains a 2010 ATR grant in the amount of $13,119,400 over a four year period. Id. at ¶ 16; Doc. 23-11. In the days following notification of the SAMHSA award, Ward and Great Plains exchanged communications regarding J.L. Ward's scope of work and proceeding with the 2010 ATR project. Ward Aff. ¶ 17. During an October 4, 2010 telephone conference, His Horse is Thunder requested that Ward email His Horse is Thunder a copy of the unsigned 2010 contract and a request to start work. Id. His Horse is Thunder allegedly said that the 2010 contract would quickly be signed and returned to Ward. Id. Shortly after this conversation, Ward emailed His Horse is Thunder the following message;
Doc. 23-15. Ward also emailed His Horse is Thunder a copy of the 2007 contract and explained that "[w]e will use the same language but will change the dollar amounts and will provide a more detailed scope of work." Doc. 23-16.
On October 7, 2010, Ward emailed His Horse is Thunder the unsigned 2010 contract and wrote "[i]t is the same as the last one that was executed. Except I changed the $ figures and added exhibits to give detail of the scope of work, mostly in year 1. Years 2 through 4 are maintenance years." Doc. 23-17. His Horse is Thunder responded to Ward's email on the following day and stated: "You have our commitment to you, to pay for your work on our ATR project commencing today. We will put in place the official binding contract as soon as we receive an updated scope of work, etc." Doc. 23-18. According to J.L. Ward, the "updated scope of work" already was in the 2010 ATR proposal signed by Warne and submitted to SAMHSA. Ward Aff. ¶ 22. J.L. Ward maintains that there was no question as to what the scope of work was to be between J.L. Ward and Great Plains. Id.
Subsequently, J.L, Ward began work on the 2010 ATR project. Id. On November 5, 2010, Ward received an email from His Horse is Thunder stating:
Doc. 23-19. On November 10, 2010, J.L. Ward received a fax from Great Plains' attorney stating:
Doc. 23-20. After terminating J.L. Ward's services, Great Plains continued to use the 2010 ATR project, including information J.L. Ward believes to be protected by copyrights. Ward Aff. ¶ 25.
J.L. Ward in its Amended Complaint, Doc. 14, against Great Plains alleges breach of contract, promissory estoppel, negligent misrepresentation, fraudulent misrepresentation, unjust enrichment, and infringement of J.L. Ward's copyrighted material. Great Plains filed a Motion to Dismiss, Doc. 16, asserting that it is a tribal organization entitled to sovereign immunity and that this Court lacks jurisdiction over J.L. Ward's Complaint.
Federal Rule of Civil Procedure 12(b)(1) provides for the dismissal of a suit when the court lacks subject matter jurisdiction. Although a motion to dismiss on sovereign immunity grounds can be analyzed under Rule 12(b)(1), Hagen v. Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040, 1043 (8th Cir.2000), the question of whether the tribes' sovereign immunity bars J.L. Ward from bringing this suit against Great Plains is a jurisdictional issue separate from subject matter jurisdiction. In re Prairie Island Dakota Sioux, 21 F.3d 302, 305 (8th Cir.1994) ("We find, therefore, that sovereign immunity is a jurisdictional consideration separate from subject matter jurisdiction ..."); Calvello v. Yankton
Id. at 730 (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977)). Here, the parties have submitted evidence in support of and in resistance to the motion to dismiss, and the Court will consider such evidence as it relates to the jurisdictional challenge.
"Indian tribes have long been recognized as possessing the common-law immunity from suit traditionally enjoyed by sovereign powers." Amerind Risk Mgmt. Corp. v. Malaterre, 633 F.3d 680, 685 (8th Cir. 2011) (quoting Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978)); Colombe v. Rosebud Sioux Tribe, No. Civ. 11-3002, 835 F.Supp.2d 736, 744, 2011 WL 4458795, at *5 (D.S.D. Sept. 23, 2011). J.L. Ward argues that sovereign immunity does not extend to an entity like Great Plains.
The Eighth Circuit has found that a tribe's sovereign immunity may extend to a tribal entity or agency. Hagen, 205 F.3d at 1043 (college that was chartered, funded, and controlled by tribe to provide education to tribal members on Indian land was tribal agency entitled to sovereign immunity); Dillon v. Yankton Sioux Tribe Hous. Auth., 144 F.3d 581, 583 (8th Cir. 1998) (a tribal housing authority, established by a tribal council pursuant to its powers of self-government, is a tribal agency and is therefore entitled to sovereign immunity); Weeks Const., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 670-671 (8th Cir.1986) (tribal housing authority created by a tribal ordinance to develop and administer housing projects on the Pine Ridge Indian Reservation was a tribal agency entitled to sovereign immunity). In Hagen, Dillon, and Weeks, the Eighth Circuit considered it critical to the issue of entitlement to sovereign immunity that the organizations served as "arms of the tribe" and were established by tribal councils pursuant to the councils' powers of self-government. See Hagen, 205 F.3d at 1043 ("[T]he College serves as an arm of the tribe and not as a mere business and is thus entitled to tribal sovereign immunity."); Dillon, 144 F.3d at 583 (tribal housing authority established by tribal council pursuant to its powers of self-government was a tribal agency rather than "a separate corporate entity created by the tribe."); Weeks, 797 F.2d at 670-71 ("As an arm of tribal government, a tribal housing authority possesses attributes of tribal sovereignty and suits against an agency like the housing authority normally are barred absent a waiver of sovereign immunity.") (internal citation omitted); see also Native Am. Council of Tribes v. Weber, No. Civ. 09-4182, 2010 WL 1999352, at *9
Tribal sovereign immunity may extend to an organization created by more than one tribe. See Amerind, 633 F.3d at 685 (administrator of self-insurance risk pool for Indian housing authorities was entitled to sovereign immunity where administrator was incorporated by three charter tribes and issued a federal charter under 25 U.S.C. § 477); Taylor v. Ala. Intertribal Council Title IV, 261 F.3d 1032 (11th Cir.2001). In Taylor, an employee of the Alabama Intertribal Title IV ("AIC") brought a 42 U.S.C. § 1981 employment discrimination claim against AIC. 261 F.3d at 1034. The Eleventh Circuit, finding that subjecting AIC to suit under § 1981 would contradict congressional intent and interfere with tribal self government, concluded that the claims against AIC must be dismissed as "barred by Indian sovereign immunity." Id. at 1034-36. The Eleventh Circuit explained that "AIC is an intertribal consortium, with a Board dominated by tribal chiefs and tribe members, organized to promote business opportunities for and between tribes; as such, we conclude that it is entitled to the same protections as a tribe itself." Id. at 1036; William C. Canby, American Indian Law 102 (5th ed. 2009) (citing Taylor for the proposition that tribal sovereign immunity applies to "intertribal councils.").
Two federal appellate courts, when faced with facts similar to those present in this case, have held that an organization formed by a group of tribes fell within the "Indian tribe" exemption of Title VII. Pink v. Modoc Indian Health Project, Inc., 157 F.3d 1185 (9th Cir.1998); Dille v. Council of Energy Res. Tribes, 801 F.2d 373 (10th Cir.1986). These Title VII cases do not directly concern whether an organization formed by a group of tribes is entitled to the tribes' sovereign immunity, but the discussion in the cases is instructive. Indeed, the Eighth Circuit has cited one of these Title VII cases in its discussion about whether a college was entitled to sovereign immunity. Hagen, 205 F.3d at 1043 (citing Pink); see also Cash Advance & Pref. Cash Loans v. State, 242 P.3d 1099, 1109 (Colo.2010) (explaining that the line of Title VII cases dealing with the "Indian tribe" exemption "is instructive with respect to the facts relevant to the determination whether a tribal entity is closely enough associated with the tribe to be entitled to the tribe's immunity."); Runyon ex rel. B.R. v. AVCP, 84 P.3d 437, 440 (Alaska 2004) (citing Pink for the proposition that "[t]ribal status similarly may extend to an institution that is the arm of multiple tribes, such as a joint agency formed by several tribal governments.").
In Pink, a former employee of the Modoc Indian Health Project ("Modoc") brought suit against Modoc for alleged violations of Title VII. 157 F.3d at 1187. Modoc was a nonprofit corporation created by two federally recognized Indian tribes. Id. Modoc was organized to provide services to tribal members pursuant to the ISDEAA, and contracted with the IHS to provide health services to tribal members. Id. The district court dismissed the suit, concluding that Modoc was a "tribe" for purposes of Title VII and was therefore exempt from Title VII's definition of a covered "employer."
As in Pink, the Tenth Circuit case of Dille involved an employment discrimination claim. 801 F.2d at 374. In Dille, the former employees of the Council of Energy Resource Tribes ("CERT") alleged that CERT had illegally discriminated against them based on their sex. Id. at 374. CERT was a council comprised of 39 Indian tribes that joined together to manage collectively their energy resources. Id. CERT's board of directors was composed of the designated representatives of each tribe, and the tribes maintained exclusive control over CERT's operations. Id. The district court dismissed the employees' claims, finding that CERT was entitled to the Indian tribe exemption of Title VII. Id. In affirming the district court's decision, the Tenth Circuit noted that the establishment of CERT was exactly the sort of activity that Congress sought to promote when it exempted Indian tribes from the requirements of Title VII. Id. at 375. The Tenth Circuit explained that because CERT was "entirely comprised of the member tribes and the decisions of the council are made by the designated representatives of those tribes, CERT falls directly within the scope of the Indian tribe exemption that Congress included in Title VII." Id. at 376.
While the Title VII decisions in Pink and Dille, the Eleventh Circuit's decision in Taylor, and the Eighth Circuit cases of Amerind, Hagen, Weeks, and Dillon provide guidance, they do not establish a specific test or list of factors for courts to consider when determining whether an organization is entitled to tribal sovereign immunity. Several courts have attempted to do so, however. See Breakthrough Mgmt. Grp., Inc. v. Chukchansi Econ. Dev. Auth., 629 F.3d 1173 (10th Cir.2010); Gristede's Foods, Inc. v. Unkechuage Nation, 660 F.Supp.2d 442 (E.D.N.Y.2009); Runyon ex rel. B.R. v. AVCP, 84 P.3d 437 (Alaska 2004); Wright v. Prairie Chicken, 1998 S.D. 46, 579 N.W.2d 7 (1998); Gavle v. Little Six, Inc., 555 N.W.2d 284 (Minn. 1996). The tests employed by these courts are variations of what is typically referred to as the "subordinate economic entity" analysis. See Somerlott v. Cherokee Nation Distrib., Inc., No. CIV-08-429-D, 2010 WL 1541574, *3 n. 1 (W.D.Okla.2010).
In Wright, the Supreme Court of South Dakota outlined a series of factors courts have used to determine whether an organization is entitled to tribal sovereign immunity:
1998 S.D. 46, ¶ 10, 579 N.W.2d at 9-10 (quoting Ransom v. St. Regis Mohawk Educ. & Comm. Fund., Inc., 86 N.Y.2d 553, 635 N.Y.S.2d 116, 658 N.E.2d 989, 992 (1995)); see also Gristede's Foods, 660 F.Supp.2d at 477-78 (listing similar factors).
The Minnesota Supreme Court applied a more truncated version of the "subordinate economic analysis" in Gavle. In Gavle, the plaintiff brought a state court action against Little Six, Inc., a tribal business entity that owned and operated a casino. 555 N.W.2d at 287. The court considered the following factors when determining whether tribal sovereign immunity extended to Little Six, Inc.:
Id. at 294; see also Trudgeon v. Fantasy Springs Casino, 71 Cal.App.4th 632, 84 Cal.Rptr.2d 65, 69 (1999) (adopting the three-factor Gavle analysis).
In support of its argument that Great Plains is not entitled to sovereign immunity, J.L. Ward relies mainly on Runyon, 84 P.3d 437.
Id. at 440-41 (internal marks and citations omitted). Because the tribes would not be financially liable for a judgment against AVCP, the court in Runyon found that the tribes were not the real party in interest and held that AVCP was not entitled to the protection of tribal sovereign immunity. Id. at 441.
J.L. Ward urges this Court to apply the Runyon "real party in interest" test and argues that, because the tribes would not be liable for a judgment against Great Plains, Great Plains is not entitled to sovereign immunity. However, in Breakthrough Mgmt. v. Chukchansi Gold Casino, 629 F.3d 1173 (10th Cir.2010), the Tenth Circuit specifically refused to apply the Runyon "real party in interest" test when determining whether a tribal casino and an entity that owned and operated the casino were entitled to sovereign immunity. Id. at 1186-87. In Breakthrough, BMG, a Colorado corporation, sued the Chukchansi Gold Casino ("Casino") and the Chukchansi Economic Development Authority ("Authority"), which owned and operated the Casino. Id. at 1177. The Casino and the Authority filed a motion to dismiss claiming that they were entitled to sovereign immunity. The district court applied the threshold inquiry of Runyon — as articulated in Johnson v. Harrah's Kan. Casino Corp., No. 04-4142-JAR, 2006 WL 463138 (D.Kan. Feb. 23, 2006)
On appeal, the Tenth Circuit reversed the district court for applying the incorrect legal standard when it "treated the financial impact on a tribe of a judgment against its economic entities as a threshold inquiry. Our precedent demonstrates that there is no threshold determination to be made in deciding whether economic
Rather than following the approach in Runyon, this Court analyzes Great Plains' claim of sovereign immunity based on the factors set forth in cases like Breakthrough, Gavle, and Wright. Two of the factors militate against sovereign immunity for Great Plains. Great Plains was created by incorporation under South Dakota, rather than tribal, law at the behest of sixteen different tribes. A suit against Great Plains would not appear to affect, at least not directly, any particular tribe's fiscal resources.
The remaining factors, however, establish that Great Plains is the sort of tribal entity entitled to sovereign immunity. The purposes for which the sixteen tribes formed Great Plains — to act as a formal representative of the tribes to the federal government and to provide health care and related services to tribal members and member Indian tribes — are closer to the functions of a tribal government than a business. See Pink, 157 F.3d at 1187 (nonprofit organization created by two tribes to provide services to tribal members pursuant to the ISDEAA "served as an arm of the sovereign tribes, acting as more than a mere business."); Gavle, 555 N.W.2d at 294 (extending sovereign immunity to tribal business entity in part because the entity had been created for the purpose of improving the general welfare of the Indian tribe); Ransom, 635 N.Y.S.2d 116, 658 N.E.2d at 992-93 (nonprofit corporation created by tribe was entitled to sovereign immunity in part because the corporation was established to "enhance the health, education and welfare of Tribe members, a function traditionally shouldered by tribal government."); (Patrice H. Kunesh, Tribal Self-Determination in the Age of Scarcity, 54 S.D. L.Rev. 398, 402 (2009)) ("When a tribe establishes an entity to conduct certain activities, such as housing authorities, health agencies, educational institutions, cultural centers, and corporate gaming operations, the entity is immune from suit if it functions as an arm of the tribal government.").
Great Plains and the sixteen tribes are closely linked in terms of management and composition. Great Plains is governed almost exclusively by tribally-elected presidents or chairpersons who must "relinquish their position when they fail to be re-elected by their Tribal or other related governing body to be an official delegate to [Great Plains]." Great Plains Articles of Incorporation, Art. VIII; His Horse is Thunder Aff. ¶ 3. Great Plains is thus accountable to the individual tribes and tribal members through the tribes' representatives on Great Plains' board of directors. See Dille, 801 F.2d at 376 (because council of tribes that joined together to manage their energy resources was "entirely comprised
Finally, the purposes of tribal sovereign immunity would be furthered by extending the tribes' immunity to Great Plains. Providing adequate health care to their constituents — a group that suffers disproportionately from certain diseases and has a lower life expectancy than other Americans
The Court's determination that Great Plains is entitled to sovereign immunity does not necessarily mean that all of J.L. Ward's claims should be dismissed. An immune tribal entity may still be subject to suit if "Congress has authorized the suit or the [tribal entity] has waived its immunity." See Kiowa Tribe v. Mfg. Technologies, Inc., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998). J.L. Ward asserts the existence of both of these conditions, contending that Congress has
"It is settled that a waiver of sovereign immunity cannot be implied but must be unequivocally expressed." Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978) (internal quotation marks omitted); see also N. States Power Co. v. Prairie Island Mdewakanton Sioux Indian Cmty., 991 F.2d 458, 462 (8th Cir.1993) ("Congress has the power to statutorily waive a tribe's sovereign immunity. The Supreme Court pointed out that courts should tread lightly in the absence of clear indications of legislative intent when determining whether a particular federal statute waives tribal sovereign immunity.") (internal quotation marks omitted). J.L. Ward argues that the Copyright Act waives tribal sovereign immunity because it is a statute of general applicability. "The Supreme Court has stated that `general acts of Congress apply to Indians as well as to all others in the absence of a clear expression to the contrary.'" E.E.O.C. v. Fond du Lac Heavy Equip. & Const., 986 F.2d 246, 248 (8th Cir.1993) (citing Fed. Power Comm'n v. Tuscarora Indian Nation, 362 U.S. 99, 120, 80 S.Ct. 543, 4 L.Ed.2d 584 (I960)). That a general federal statute applies to Indian tribes does not mean that Congress has waived tribal sovereign immunity for purposes of private actions to enforce the statute, however. Bassett v. Mashantuckct Pequot Tribe, 204 F.3d 343, 357 (2nd Cir.2000) ("[T]he fact that a statute applies to Indian tribes does not mean that Congress abrogated tribal immunity in adopting it."); Fla. Paraplegic Ass'n, Inc. v. Miccosukee Tribe of Fla., 166 F.3d 1126, 1129-34 (11th Cir.1999) (holding that the Americans with Disabilities Act, although applicable to Indian tribes, did not waive tribes' sovereign immunity for purposes of private suits to enforce the Act).
J.L. Ward's briefs to this Court contain no discussion of the language or legislative history of the Copyright Act, much less a discussion of language in the Copyright Act that unequivocally expresses Congress' intent to abrogate tribal sovereign immunity with respect to copyright claims. The Copyright Act does not eliminate tribal sovereign immunity for suits on copyright claims. See Bassett, 204 F.3d at 357 (2nd Cir.2000) ("[T]he Tribe is immune from suit on [the plaintiff's] copyright claims. Nothing on the face of the Copyright Act purports to subject tribes to the jurisdiction of the federal courts in civil actions brought by private parties and a congressional abrogation of tribal immunity cannot be implied.") (internal quotation marks and citation omitted); Multimedia Games, Inc. v. WLGC Acquisition Corp., 214 F.Supp.2d 1131, 1135 (N.D.Okla.2001) ("Although federal courts have exclusive jurisdiction over causes of action arising under the federal copyright laws, this Court finds that the text of the Copyright Act of 1976 and the accompanying legislative history of the statute did not affirmatively contemplate the inclusion of Indian tribes, and thus, the abrogation of tribal sovereign immunity as to this cause of action.").
An Indian tribe or tribal entity may waive its sovereign immunity by contract if it does so with "requisite clarity." See C & L Enter., Inc. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418, 121 S.Ct. 1589, 149 L.Ed.2d 623 (2001); Colombe, 835 F.Supp.2d at 744-46, 2011
In C & L Enterprises, the Supreme Court of the United States held that a tribe waived its sovereign immunity by entering into a form construction contract with a clause requiring arbitration of all contract-related disputes and agreeing that arbitration awards may be enforced "in any court having jurisdiction thereof." C&L Enterprises, 532 U.S. at 418-19, 121 S.Ct. 1589. The Eighth Circuit has reached similar results. See Oglala Sioux Tribe v. C & W Enter., Inc., 542 F.3d 224, 230 (8th Cir.2008) ("The [Supreme] Court found, as this Circuit has done previously, that an arbitration clause alone was sufficient to expressly waive sovereign immunity to a state court enforcement action.") (citing C & L Enterprises, 532 U.S. at 417-18, 121 S.Ct. 1589); see also Val-U Const., 50 F.3d at 563 (finding that the following language in a contract was a clear expression of waiver of a tribe's sovereign immunity: "All questions of dispute under this Agreement shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association.").
Here, the 2007 contract and the alleged contract from 2010 contained the same dispute resolution clause. This clause provided that disagreements between the parties would be settled by mediation and, if necessary, by arbitration "pursuant to South Dakota Statutes, using the offices of the American Arbitration Association or other neutral arbitration service agreed upon..." Doc. 23-1; Doc. 23-2. The dispute resolution clause further provided that "[t]he parties agree that either party may seek judicial review by way of a petition to the court to confirm, correct or vacate an arbitration award ... The mediation, the arbitration and any application to the court or other court proceedings shall be venued exclusively in Rapid City, South Dakota." Id. The parties do not dispute that they entered into a contract in 2007, which contained this language. This language contemplates a limited waiver of Great Plains' sovereign immunity; the parties have agreed to arbitrate claims arising out of the contract and have provided, by way of judicial review in Rapid City, South Dakota, an enforcement mechanism for any such arbitration award. See Val-U Const., 50 F.3d at 562 ("By designating arbitration in accordance with specified arbitration rules as the forum for dispute resolution, the parties clearly intended a waiver of sovereign immunity with respect to resolving disputes under the contract. By definition such disputes could not be resolved by arbitration if one party intended to assert sovereign immunity as a defense.").
This limited waiver of sovereign immunity does not necessarily grant this Court authority to exercise jurisdiction over all claims in J.L. Ward's Complaint, however. See Colombe, 835 F.Supp.2d at 746-47, 2011 WL 4458795, at *8. When a tribe or tribal entity waives its sovereign immunity, it "may prescribe the terms and conditions on which it consents to be sued, and the manner in which the suit shall be conducted." Mo. River Serv., Inc. v. Omaha Tribe of Neb., 267 F.3d 848, 852 (8th Cir.2001) (citation omitted); Oglala Sioux Tribe, 542 F.3d at 231 ("A sovereign tribe has full authority to limit any waiver of immunity to which it consents."). "In addition, if a tribe does consent to suit, any
The language of the dispute resolution clause limited Great Plains' waiver of sovereign immunity to the arbitration of disputes arising out of the contract and to the judicial enforcement or modification of any arbitration award. In the present case, however, J.L. Ward is alleging not only a breach of contract, but also claims of negligent misrepresentation, fraudulent misrepresentation, and unjust enrichment. J.L. Ward is not seeking to compel arbitration or the enforcement or modification of an arbitration award. In short, the language of the dispute resolution clause does not waive sovereign immunity to allow a federal court to address the merits of the claims in J.L. Ward's Complaint. See Tamiami Partners v. Miccosukee Tribe of Indians of Fla., 63 F.3d 1030, 1048-49 (11th Cir.1995) (language in contract waiving tribe's sovereign immunity with respect to demands for arbitration or enforcement of arbitration awards did not waive tribe's sovereign immunity for purposes of contractor's claim that tribe had breached the contract); Big Valley Band of Porno Indians v. Superior Court, 133 Cal.App.4th 1185, 35 Cal.Rptr.3d 357, 365 (Cal.App. 1 Dist.2005) ("[T]he Tribe's consent to arbitrate and to judicial enforcement of an award cannot be interpreted as its consent to be sued for all causes of action arising from a contract containing an arbitration clause."); Canby, supra, 110 ("A waiver of immunity arising from an arbitration agreement is limited to arbitration and its enforcement, however; it does not extend to all kinds of litigation that might arise from the subject matter of the contract."); Conference of Western Attorneys General, American Indian Law Deskbook, 303 (4th ed. 2008) (explaining that most courts view "typical commercial arbitration provisions as waiving a tribe's immunity both for purposes of the arbitration itself and for any ensuing judicial enforcement proceedings, but as not waiving tribal immunity for any other form of relief").
The parties do not dispute that they entered into a contract in 2007 containing the dispute resolution language as well as provisions protecting J.L. Ward's copyrights. J.L. Ward at a minimum appears to be able to maintain a claim to compel arbitration for Great Plains' alleged violation of copyrights based on the language of the 2007 contract. Whether the parties entered into a contract in 2010 with similar language is in dispute and affects whether Great Plains has or has not waived sovereign immunity for the remaining contract-based claims.
J.L. Ward's Complaint does not seek to compel arbitration, but to have this Court assume jurisdiction and decide the merits of the claims. Such a claim disregards the dispute resolution clause in the 2007 contract and the asserted 2010 contract. The extent of this Court's jurisdictional power in this case at this time is limited to compelling arbitration over the copyright claims under the 2007 contract (which is terminated and which expressly stated that only certain provisions, including those for copyright protection and dispute resolution, survive termination) and over contract-based claims if and only if a contract was reached in 2010. J.L. Ward at this time has not pleaded such a claim. Accordingly, this Court will permit J.L. Ward twenty-one days from the date of this Order to amend its Complaint to state a claim to compel arbitration. If J.L. Ward chooses not to amend its Complaint, then this Court will dismiss J.L. Ward's Complaint for a lack of jurisdiction over the claims pleaded.
In its Reply Brief to Plaintiffs Response to Defendant's Motion to Dismiss (Doc. 25), Great Plains argues that the Court lacks diversity jurisdiction over this case. Federal diversity jurisdiction under 28 U.S.C. § 1332(a)(1) exists if the amount in controversy exceeds $75,000 and the suit is between citizens of different states. Section 1332(c)(1) provides that "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business ..." Here, J.L. Ward's Amended Complaint (Doc. 14) alleges diversity jurisdiction because it is a California corporation with its principal place of business in Lakeside, California, and Great Plains is a South Dakota corporation with its principal place of business in Rapid City, South Dakota.
Great Plains argues that there is no diversity jurisdiction because "`Indian tribes are not citizens of any state for purposes of diversity jurisdiction.'" (Doc. 25) (quoting Whiteco Metrocom v. Yankton Sioux Tribe, 902 F.Supp. 199, 201 (D.S.D. 1995)). Although this is a correct statement of the law, Great Plains is not an Indian tribe itself. Nor is this a situation like the one in Auto-Owners Ins. Co. v. Tribal Court of Spirit Lake Indian Reservation, 495 F.3d 1017 (8th Cir.2007), where the Eighth Circuit found that Tate Topa — an apparently unincorporated tribal education board and school — was part of the Spirit Lake Sioux Tribe and was thus not a citizen of any state for purposes of § 1332 diversity jurisdiction. Id. at 1021 ("In the present case, no diversity jurisdiction exists as a basis for subject matter jurisdiction because Tate Topa — a sub-entity of the Spirit Lake Sioux Tribe — is considered a part of the Indian tribe."); see also Wells Fargo Bank v. Lake of the Torches Econ. Dev. Corp., 658 F.3d 684, 693 (7th Cir. 2011) ("Our colleagues in the Eighth Circuit have held that an unincorporated school board operated by an Indian tribe and `considered part of the Indian tribe' is not a citizen of a state.") (citing Auto-Owners, 495 F.3d at 1021). The facts in this case differ from those in Auto-Owners in one important respect: unlike the tribal education board and school, Great Plains is incorporated under state law. The distinction between an unincorporated tribal entity and an incorporated tribal entity is well-recognized and critical to determining whether Great Plains is a citizen of any state for purposes of diversity jurisdiction. See Wells Fargo, 658 F.3d at 693-94 (finding that a tribal corporation should be treated as a citizen of a state under § 1332(c) and explaining that the Seventh Circuit understood the Eighth Circuit's decision in Auto-Owners as applying "only to unincorporated tribal agencies."); Cook v. AVI Casino Enters., Inc., 548 F.3d 718, 722-23 (9th Cir.2008) (recognizing that an "Indian tribe or an unincorporated arm of a tribe is not a citizen of any state" but finding that "an entity incorporated under tribal law is the equivalent of a corporation created under state or federal law for diversity purposes" and thus "should be analyzed for diversity jurisdiction purposes as if it were a state or federal corporation.") (internal quotation marks omitted); Am. Vantage v. Table Mountain Rancheria, 292 F.3d 1091, 1094 n. 1 (9th Cir.2002) (finding that a tribe's unincorporated casino was a stateless entity but explaining that "[a] tribal sub-entity ... may incorporate under state law. An incorporated tribe, or an incorporated arm of a tribe, is, like any other corporation, ordinarily a citizen of the state in which it resides.") (internal citations omitted); Gaines v. Ski Apache, 8 F.3d 726, 729 (10th Cir.1993) (concluding that an unincorporated tribal
Because Great Plains is a South Dakota corporation with its principal place of business in Rapid City, South Dakota, it is diverse from J.L. Ward for purposes of § 1332 jurisdiction. The analysis of whether Great Plains is a citizen of South Dakota differs from the analysis of whether Great Plains is a tribal entity entitled to sovereign immunity. For the reasons explained above Great Plains has sovereign immunity from the claims as pleaded in the Complaint.
Therefore, it is
ORDERED that J.L. Ward has leave to file an Amended Complaint within twenty-one days of this order to set forth claims to compel arbitration of contract-based claims including the copyright claims. It is further
ORDERED that if J.L. Ward chooses not to amend its Complaint within the time allowed, Great Plains' Motion to Dismiss shall be granted.
