HOLMES, Circuit Judge.
This appeal asks us to explore the relationship between an Indian tribe and the economic entities created by the tribe, and to determine how close that relationship must be in order for those entities to share in the tribe's sovereign immunity. Plaintiff Breakthrough Management Group, Inc. ("BMG"), a provider of business management training and consulting services, filed suit in the United States District Court for the District of Colorado in August 2006. BMG alleged that the Chukchansi Gold Resort & Casino ("the Casino") had paid for a single-person license for one of BMG's online training programs and then recorded and used portions of that program without permission to train more than one employee. Because the Casino is operated for the benefit of a federally recognized Indian tribe, the Picayune
The district court granted the Tribe's motion to dismiss, holding that the Tribe was entitled to sovereign immunity and had not clearly waived that immunity by entering into licensing agreements with BMG that contained forum-selection clauses. The court denied Defendant Ryan Stanley's motion to dismiss, concluding that sovereign immunity did not extend to him because he had been sued in an individual rather than an official capacity. After an evidentiary hearing, the court also denied the Authority and the Casino's motion to dismiss, concluding that they were not entitled to share in the Tribe's sovereign immunity because any judgment imposed against them would not imperil the Tribe's monetary assets.
This appeal followed. The Authority and the Casino have appealed the district court's denial of their motion to dismiss for lack of subject matter jurisdiction (Appeal No. 08-1298), and Mr. Stanley has done likewise (Appeal No. 08-1305). BMG has filed a cross-appeal that raises an alternative ground for affirmance of the district court's order—viz., that the Authority and the Casino, and by extension Mr. Stanley, have waived any immunity that they may otherwise enjoy by entering into BMG's licensing agreements (Appeal No. 08-1317). We have jurisdiction over Defendants' interlocutory appeals under 28 U.S.C. § 1291 and the collateral order doctrine,
BMG is a Colorado Corporation that provides online business management training and consulting services. BMG alleges that employees at the Casino copied and distributed materials from one of BMG's training programs without authorization. The Casino, which operates for the financial benefit of the Tribe, had paid for a single-person license, but allegedly had recorded and used portions of the program without permission to train a large group of employees. Based on these allegations, BMG brought suit against the Tribe,
All of the defendants filed motions to dismiss, arguing in relevant part that dismissal was warranted under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction under the doctrine of tribal sovereign immunity. BMG opposed the motions. BMG also moved to convert the motions into Rule 56 motions for summary judgment and, in the alternative, for leave to conduct limited discovery on the issue of tribal sovereign immunity.
In a September 12, 2007, Opinion and Order, the district court granted the Tribe's motion to dismiss. The court determined that the Tribe "indisputably enjoys sovereign immunity," Aplts. App. at 21, and rejected BMG's argument that the Tribe had waived its immunity by entering into two licensing agreements with BMG that contained forum-selection clauses.
The court reasoned that the Tribe did not expressly agree to submit any dispute for adjudication, it merely agreed where such adjudication would take place if it were to occur.
Id. at 20. The court concluded that, because BMG did not negotiate the terms of the contract with the Tribe, "it should not be surprising that the standard terms of [the licensing agreement] yield seemingly awkward results in this peculiar factual circumstance." Id. at 21.
The court did not rule on the Authority and the Casino's motion to dismiss in the September 12, 2007, Opinion and Order because it could not determine from the pleadings whether the Authority and the Casino "enjoy[ed] a connection to the Tribe close enough to enjoy the Tribe's own immunity." Id. at 23. The court therefore scheduled an evidentiary hearing on that motion and denied as moot BMG's motion to convert the motions to dismiss into Rule 56 motions for summary judgment. The court also denied BMG's request
In that same order, the district court denied Mr. Stanley's motion to dismiss, finding that, because BMG was asserting claims against Mr. Stanley in his individual rather than official capacity, he was not entitled to tribal sovereign immunity. The court also granted the motion to dismiss for lack of personal jurisdiction brought by two employees of the Casino, Jeff Livingston and Vernon D'Mello. They are not parties to this appeal.
The district court held an evidentiary hearing on the Authority and Casino's motion to dismiss on October 23, 2007. At the hearing, the parties stipulated to the admission of approximately seventy-one exhibits "for the sole purpose of whether the Johnson . . . test is met and not for any other issues, such as whether there has been a waiver of immunity." Aplee. Supp.App. at 99-100 (Tr., Evidentiary Hr'g, dated Oct. 23, 2007). The court also heard testimony from Dustin Graham, the chairperson of the Tribal Council. After the hearing, the parties filed a stipulation detailing the agreed-upon facts.
In an August 5, 2008, Opinion & Order, the district court evaluated the relationship between the Tribe and the Authority and the Casino under a ten-factor test articulated in an unpublished district court opinion, Johnson v. Harrah's Kansas Casino Corp., No. 04-4142-JAR, 2006 WL 463138 (D.Kan. Feb.23, 2006). Under Johnson, there is a threshold financial-liability inquiry that must be satisfied before a court will consider other factors measuring the closeness of the relationship between a tribe and its economic entities. As applied here, the inquiry is "whether the Tribe will be financially liable for legal obligations incurred by the Casino and the Authority." Aplts. App. at 45. Based on that threshold inquiry, the district court in this case denied the motion to dismiss.
Specifically, the court found that the Authority was governed by a board with identical membership to the Tribe's governing Council. The court further found that the Authority owns and operates the Casino. But the court nevertheless concluded that the Authority and the Casino were "non-Indian entities" that were not entitled to invoke the Tribe's sovereign immunity because a judgment against them "w[ould] not result in direct financial liability for the Tribe or otherwise imperil the Tribe's assets." Id. at 47. Even though the court found that the Casino's revenues go solely to the Authority and that the Authority then gives that money to the Tribe, the court found that the Tribe's right to receive profits would not be threatened by a judgment, only the amount of profits would be adversely affected.
The court reached that conclusion based on "evidence indicat[ing] that the Authority is obligated to pay over to the Tribe at least $1 million per month, regardless of its actual revenues." Id. at 46. Therefore, "should the actual profits fall short, the Authority will borrow or run a deficit
The Authority and the Casino
Aplts. Opening Br. at 9. They ask us to reject the Johnson test employed by the district court and instead urge us to consider the factors we recently applied in Native American Distributing v. Seneca-Cayuga Tobacco Co., 546 F.3d 1288 (10th Cir.2008)—that is, in particular, the manner in which the entity was created, the purposes the entity was intended to fulfill, and whether the tribe intended for the entity to have immunity. The Authority and the Casino argue that the evidence clearly demonstrates that they were created to serve the Tribe's interests in economic development, self-sufficiency, and self-governance, and that the Tribe intended for them to share in its immunity from suit. The Authority and the Casino maintain that, because all revenues generated by the Casino go to the Tribe through the Authority, and are used exclusively for tribal purposes, any "reduction in revenues [that would be caused by a judgment against the Casino or the Authority would] ha[ve] a direct [adverse] impact on the Tribe and its ability to provide for its economic development, self-sufficiency and welfare of its government and members." Aplts. Opening Br. at 23. And, finally, they argue that the Authority and the
BMG argues that the Authority and the Casino cannot share in the Tribe's sovereign immunity because those entities are too far removed from the Tribe. BMG bases its argument on the following contentions: the Tribe is not liable for a judgment against those entities; the Authority's corporate charter provides that the Authority is a separate entity from the Tribe; the Casino's charter provides that the Tribe is not liable for its actions and that it is owned by the Authority, not the Tribe; and the Authority and the Casino's liability insurance will cover any judgment against them, thereby protecting the Tribe's assets. BMG argues that we should apply the Johnson factors used by the district court to determine whether the Authority and the Casino may share in the Tribe's sovereign immunity and disputes the applicability of Native American Distributing.
BMG also argues that, if we determine that the Authority and the Casino are entitled to tribal sovereign immunity, we should nevertheless hold that they waived such immunity by agreeing to litigate any disputes in Colorado courts as part of BMG's licensing agreements. Finally, BMG maintains that if we do not affirm the district court's denial of the motions to dismiss, we should direct the district court on remand to allow BMG to conduct jurisdictional discovery and call witnesses on the issue of tribal sovereign immunity.
For the reasons discussed below, we conclude that the district court applied the incorrect legal standard—the district court erroneously 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 entities qualify as subordinate economic entities entitled to share in a tribe's immunity. Rather, we should look to a variety of factors when examining the relationship between the economic entities and the tribe, including but not limited to: (1) their method of creation; (2) their purpose; (3) their structure, ownership, and management, including the amount of control the tribe has over the entities; (4) whether the tribe intended for the entities to have tribal sovereign immunity; (5) the financial relationship between the tribe and the entities; and (6) whether the purposes of tribal sovereign immunity are served by granting immunity to the entities.
We conclude that, under these factors, the Authority and the Casino have a sufficiently close relationship to the Tribe to share in its immunity. Because the district court wrongly concluded that the Authority and the Casino were not subordinate economic entities entitled to tribal sovereign immunity, and consequently did not reach the issue of whether the Authority and the Casino waived their immunity from suit through licensing agreements with BMG, we remand for the district court to address that question in the first instance. However, for reasons that we discuss below, we do not direct or require the district court to permit jurisdictional discovery in connection with such further proceedings.
Our inquiry into whether the Authority and the Casino are subordinate economic entities that share in the Tribe's immunity from suit involves a mixed question of law and fact. This case presents a legal issue—the appropriate test to determine whether economic entities associated with a tribe may share in the tribe's immunity.
Ordinarily, "[w]e review de novo a district court's denial of a motion to dismiss based on tribal sovereign immunity." Miner Elec., Inc. v. Muscogee (Creek) Nation, 505 F.3d 1007, 1009 (10th Cir. 2007). But "[w]here, as here, subject-matter jurisdiction turns on a question of fact, we review the district court's factual findings for clear error and review its legal conclusions de novo." Native Am. Distrib., 546 F.3d at 1293 (emphasis omitted); accord United States ex rel. Ondis v. City of Woonsocket, 587 F.3d 49, 54 (1st Cir.2009) ("When the district court does not rule on the pleadings alone but, rather, takes evidence in connection with a motion to dismiss for want of subject matter jurisdiction, the court's factual findings are reviewed for clear error."). In this case, the district court "ha[d] wide discretion to allow affidavits, other documents, and a limited evidentiary hearing," Dry, 235 F.3d at 1253 (quoting Holt v. United States, 46 F.3d 1000, 1003 (10th Cir.1995)) (internal quotation marks omitted), and its "reference to evidence outside the pleadings d[id] not convert the motion to a Rule 56 motion [for summary judgment]." Holt, 46 F.3d at 1003.
We would be remiss if we did not begin our discussion of the issues by acknowledging the relevant Indian-law context that shapes our analysis. Three major interrelated concepts play a role in this case: (1) tribal sovereignty, (2) tribal sovereign immunity, and (3) tribal economic development. As the Supreme Court has recognized, "Indian tribes are distinct, independent political communities, retaining their original natural rights in matters of local self-government. Although no longer possessed of the full attributes of sovereignty, they remain a separate people, with the power of regulating their internal and social relations." Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978) (citations omitted) (internal quotation marks omitted); accord NLRB v. Pueblo of San Juan, 276 F.3d 1186, 1192 (10th Cir.2002) ("Indian tribes are neither states, nor part of the federal government, nor subdivisions of either. Rather, they are sovereign political entities possessed of sovereign authority not derived from the United States, which they predate." (footnote omitted)); Native Am. Church of N. Am. v. Navajo Tribal Council, 272 F.2d 131, 134 (10th Cir.1959) ("Indian tribes are not states. They have a status higher than that of states. They are subordinate and dependent nations possessed of all powers [except] to the extent that they have expressly been required to surrender them by the superior sovereign, the United States.").
Because Indian tribes are sovereign powers, they possess immunity from suit to the extent that Congress has not abrogated that immunity and the tribe has not clearly waived its immunity. Santa Clara Pueblo, 436 U.S. at 58, 98 S.Ct. 1670; Native Am. Distrib., 546 F.3d at 1293; Berrey v. Asarco Inc., 439 F.3d 636, 643 (10th Cir.2006). Not only is sovereign immunity an inherent part of the concept of sovereignty and what it means to be a sovereign, but "immunity [also] is thought [to be] necessary to promote the federal policies of tribal self[-]determination, economic development, and cultural autonomy." Am. Indian Agric. Credit Consortium, Inc. v. Standing Rock Sioux Tribe, 780 F.2d 1374, 1378 (8th Cir.1985); accord Patrice H. Kunesh, Tribal Self-Determination in the Age of Scarcity, 54 S.D. L.Rev. 398, 398 (2009) ("Tribal sovereignty and the jurisdictional counterpart of tribal
Tribal sovereign immunity may extend to subdivisions of a tribe, including those engaged in economic activities, provided that the relationship between the tribe and the entity is sufficiently close to properly permit the entity to share in the tribe's immunity.
One of the ways that Congress has promoted tribal sovereignty through economic development is particularly relevant to this case—the authorization of Indian gaming. See 25 U.S.C. § 2702(1) (stating that the purpose behind the Indian Gaming Regulatory Act is "to provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments"); Cabazon Band of Mission Indians, 480 U.S. at 218-19, 107 S.Ct. 1083 ("The Cabazon and Morongo Reservations contain no natural resources which can be exploited. The tribal games at present provide the sole source of revenues for the operation of the tribal governments and the provision of tribal services. They are also the major sources of employment on the reservations. Self-determination and economic development are not within reach if the Tribes cannot raise revenues and provide employment for their members."); see also generally Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-2721 ("IGRA"); Cohen, supra, §§ 12.01-02, 21.01.
A commentator has observed that "[t]ribal governments directly control or participate in commercial activities more frequently than other [types of] governments.. . . [T]he tribal organization may be part of the tribal government and protected
BMG does not dispute the general principle that subordinate economic entities may share in a tribe's sovereign immunity; rather, BMG contends that, under Johnson, the entities in this case may not do so.
As we have stated, to measure the closeness of the relationship between the Tribe and the Authority and the Casino, the district court applied a test adopted from an unpublished decision from the United States District Court for the District of Kansas, Johnson v. Harrah's Kansas Casino Corp. To understand that standard, we find it necessary to explain the holding in Johnson in some detail. In that case, Harrah's Kansas Casino Corporation ("Harrah's") had urged the district court to hold that the plaintiff's claims against it were barred by the doctrine of tribal sovereign immunity. Harrah's operated Harrah's Prairie Band Casino, pursuant to a Management Agreement between Harrah's and the tribe, on property held in trust by the United States for the Prairie Band Potawatomi Nation. Johnson, 2006 WL 463138, at *2. Under that agreement, Harrah's conducted the casino's daily operations and the tribe received the total net revenue from the casino; in return, the tribe paid Harrah's a management fee. Id. The Johnson court concluded that Harrah's was not a tribal housing authority or a tribal agency and that it therefore needed to determine whether Harrah's "[wa]s a `subordinate economic organization' of the Tribe." Id. at *4. The court then explained that
Id. The Johnson court decided to apply those factors to determine whether the
Johnson, 2006 WL 463138, at *5 (quoting Runyon, 84 P.3d at 440-41).
The district court in Johnson therefore first examined "the financial relationship between the Tribe and Harrah's" to determine if Harrah's was entitled to share in the tribe's sovereign immunity. Id. "If the Tribe may be financially liable for Harrah's legal obligations, the Court w[ould then] proceed to discuss [the] other factors pertaining to the purpose and control of Harrah's." Id. The court concluded that it was not clear whether a judgment against Harrah's would reach the tribe's assets and so proceeded to analyze the remaining factors, ultimately concluding that the balance of the factors "militate[d] against extending tribal sovereign immunity to . . . Harrah's." Id. at *6, *8.
In applying Johnson, the district court in this case concluded that the Authority and the Casino could not satisfy the threshold inquiry; it determined as a dispositive matter that a judgment against the Authority or the Casino would not endanger the Tribe's right to receive profits. On that basis, the court held that those entities were not entitled to tribal sovereign immunity and declined to reach the remaining Johnson factors. We conclude that the district court applied the wrong legal standard to determine whether the Authority and the Casino are entitled to tribal sovereign immunity.
Our recent decision in Native American Distributing reveals the district court's error. In that case, we were asked to decide whether the Seneca-Cayuga Tobacco Company, or "SCTC," an enterprise of the Seneca-Cayuga Indian Tribe, was entitled to sovereign immunity. That question in turn depended upon whether SCTC was a division of the tribal corporation, which had waived its immunity from suit, or of the tribe, which had waived its immunity only as to actions of the tribal corporation. Native Am. Distrib., 546 F.3d at 1293. To answer that question, we examined the tribe's business committee resolution that created SCTC.
We determined that "SCTC was a division of the Tribe" based on the following facts: the resolution's invocation of the business committee's powers under the tribal constitution rather than its powers under the corporate charter, thereby "lend[ing] support to the conclusion that SCTC was created by the Tribe acting in its governmental, rather than corporate, capacity"; the resolution's express declaration that SCTC would act as an economic development project to provide economic opportunities and revenue for the tribe, and its statement that SCTC was an essential governmental function of the tribe; and the resolution's inclusion of an express waiver of immunity as to suits brought by a specific management company, indicating
The most important lesson for our purposes that we glean from Native American Distributing is found in what we did not consider—in that case, we did not examine the financial relationship between SCTC and the tribe and whether a judgment against SCTC would reach the tribe's monetary assets, much less designate that factor as a threshold determination. Although we recognize that the financial relationship between a tribe and its economic entities is a relevant measure of the closeness of their relationship, Native American Distributing plainly demonstrates that it is not a dispositive inquiry. The district court's decision to treat it as such was error.
We therefore must determine the correct legal standard. At this time there is no need to define the precise boundaries of the appropriate test to determine if a tribe's economic entity qualifies as a subordinate economic entity entitled to share in a tribe's immunity. In this case, we conclude that the following factors are helpful in informing our inquiry: (1) the method of creation of the economic entities; (2) their purpose; (3) their structure, ownership, and management, including the amount of control the tribe has over the entities; (4) the tribe's intent with respect to the sharing of its sovereign immunity; and (5) the financial relationship between the tribe and the entities.
Before we evaluate those factors, we first must address BMG's argument that the district court abused its discretion in denying its request for discovery and in preventing BMG from calling what it deemed to be necessary witnesses. If we were to conclude that the district court did abuse its discretion in limiting jurisdictional discovery, we likely would remand the matter for discovery and further factual development.
BMG moved in the district court for leave to conduct limited discovery on the issue of tribal sovereign immunity. The court denied the motion, expressing its concern that discovery would undermine the purposes behind the immunity doctrine. But the district court did permit the parties to subpoena documents and witnesses. Consequently, the evidence upon which the district court based its denial of Defendants' motion to dismiss consisted of documents introduced by the Authority and the Casino at the evidentiary hearing (with an admissibility stipulation from BMG), testimony by the tribal chairperson, Dustin Graham, and the stipulated agreed-upon facts filed by the parties. BMG argues that "the denial of discovery prejudiced BMG because . . . BMG could only utilize documents that the [Authority and the Casino] `cherry picked' in the belief they would support their case." Aplee. Answer Br. & Opening Br. at 54. Additionally, BMG argues it was prejudiced by not being allowed to call as witnesses two individuals it had subpoenaed— Jeff Livingston, the Casino's general manager, and Dixie Jackson, the former chairperson of the Authority. Those witnesses did not appear at the hearing. BMG asserts that Mr. Graham did not have the same amount of knowledge about the Authority and the Casino as the witnesses it would have liked to examine.
Because a 12(b)(1) motion is "a `speaking motion' and can include references to evidence extraneous to the complaint without converting it to a Rule 56 motion," the district court "ha[d] wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts under 12(b)(1)." Wheeler v. Hurdman, 825 F.2d 257, 259 n. 5 (10th Cir.1987); accord Zappia Middle E. Constr. Co. Ltd. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000). "If . . . the court holds an evidentiary hearing to adjudicate the issue of whether the court has jurisdiction . . ., the court determines the credibility of witness testimony, weighs the evidence, and finds the relevant jurisdictional facts." PVC Windoors, Inc. v. Babbitbay Beach Constr., N. V., 598 F.3d 802, 810 (11th Cir.2010).
As with the court's handling of discovery in other stages of litigation, in the context of a 12(b)(1) motion, "[w]e give the
We are not persuaded that the district court abused its discretion in this case. We have held that "a refusal to grant [jurisdictional] discovery constitutes an abuse of discretion if the denial results in prejudice to a litigant" and that "[p]rejudice is present where `pertinent facts bearing on the question of jurisdiction are controverted . . . or where a more satisfactory showing of the facts is necessary.'" Sizova v. Nat'l Inst. of Standards & Tech., 282 F.3d 1320, 1326 (10th Cir.2002) (quoting Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 n. 24 (9th Cir. 1977)). BMG has failed to convince us of its legal entitlement to jurisdictional discovery and, more specifically, that it was prejudiced by the district court's denial of its motion for discovery.
At the evidentiary hearing, BMG stipulated to the admissibility of approximately seventy-one exhibits. Counsel for BMG then essentially conceded that BMG had not been prejudiced by the lack of discovery. Not only did counsel express a desire to go forward with the hearing, but in response to the district court's inquiry about the missing witnesses, counsel stated that, based solely on the evidence presented at the hearing, he was "confident. . . that the Court will see how the documents at hand, in particular one document,. . . establishes this case." Aplee. Supp. App. at 123.
Furthermore, BMG does not tell us what specific documents it would have sought in discovery. Nor does BMG offer any support for its claim that the Authority and the Casino "cherry picked" documents they believed were favorable to their claim of tribal immunity. See Freeman, 556 F.3d at 342 ("The party seeking discovery typically . . . alleg[es] the `specific facts crucial to immunity which demonstrate[] a need for discovery.'" (second alteration in original) (quoting Kelly v. Syria Shell Petroleum Co. B.V., 213 F.3d 841, 852 (5th Cir.2000))); Boschetto, 539 F.3d at 1020 (holding that the district court's denial of a request for jurisdictional discovery was not an abuse of discretion where the request "was based on little more than a hunch that it might yield jurisdictionally relevant facts"); cf. Garcia v. U.S. Air Force, 533 F.3d 1170, 1179 (10th Cir.2008) ("A party may not invoke Rule 56(f) `by simply stating that discovery is incomplete but must state with specificity how the additional material will rebut the summary judgment motion.'" (quoting Libertarian Party of N.M. v. Herrera, 506 F.3d 1303, 1308-09 (10th Cir.2007))). Indeed, BMG's conclusory assertion that jurisdictional discovery was necessary seems almost like an attempt to "use discovery as a fishing expedition" rather than to obtain needed documents to defeat the tribal immunity claim. Anthony v. United States, 667 F.2d 870, 880 (10th Cir.1981).
We also fail to see how the district court abused its discretion in effectively preventing BMG from examining certain witnesses.
As we have stated, we will review the record in light of the following factors: (1) the method of the Authority and the Casino's creation; (2) their purpose; (3) their structure, ownership, and management, including the amount of control the Tribe has over the entities; (4) whether the Tribe intended for them to have tribal sovereign immunity; (5) the financial relationship between the Tribe and the Authority and the Casino; and (6) whether the purposes of tribal sovereign immunity are served by granting them immunity.
The first factor, the method of creation of the Authority and the Casino, weighs in favor of the conclusion that these entities are entitled to tribal sovereign immunity. The parties stipulated that the Tribe created the Authority under tribal law. It is also evident from our review of the tribal resolution creating the Authority that the Tribe created those entities under its constitution. As in Native American Distributing, "[t]his lends support to the conclusion that [the Authority] was created by the Tribe acting in its governmental. . . capacity." 546 F.3d at 1294. We also
The second factor also weighs strongly in favor of immunity because the Authority and the Casino were created for the financial benefit of the Tribe and to enable it to engage in various governmental functions. The resolution states that "the Tribal Council has determined that it is in the best interests of the members of the Tribe for the Tribe to conduct Class II and Class III gaming."
The allocation of revenue from the Casino clearly benefits the Tribe: 50% goes to tribal governmental functions, including programs such as education, health care, cultural preservation, child care, judicial
In a letter to the Bureau of Indian Affairs dated August 20, 2007, Mr. Graham reiterated that "we believe self-sufficiency is once again within our reach"; he stated that the Tribe would use the Casino's revenue to "encourag[e] our young people to improve their own capacities through education," and indicated that the Tribe "plan[ned] to provide extra care and benefits to our youth and our elders through Tribal programs." Aplts. App. at 146-47. Similarly, a Memorandum of Understanding between the Tribe and the County of Madera, California, states that "the purpose of the [Casino] is to promote the Tribal economic development, self-sufficiency, self-determination, strong Tribal government, and the ability to provide services and benefits to Tribal members." Aplee. Supp.App. at 55. The gaming compact between the Tribe and the State of California contains similar statements about the purpose of the Tribe's engagement in gaming.
The third factor in our analysis, the structure, ownership, and management of the Authority and the Casino, weighs both for and against a finding of immunity. The seven members of the Board of Directors of the Authority are members of the Tribe who also are sitting members of the Tribal Council, which makes the Tribe's Council identical to the Authority's Board. The Chairperson of the Tribe also acts as the Chairperson of the Authority. But the Chief Financial Officer of the Authority, the General Manager of the Casino, and the Chief Financial Officer of the Casino are not tribal members. Moreover, the Casino has fifteen directors, twelve of whom are not Tribal members.
As for the fourth factor, we conclude that the Tribe clearly intended for the Authority to have tribal sovereign immunity.
Id. at 131. That provision was later amended to describe the Tribe as "a wholly owned unincorporated enterprise and agency of the Tribe," but the rest of the language remains the same. Id. at 135. The ordinance explicitly waives the Authority's sovereign immunity "in accordance with the terms of the Project and Financing Documents," but as to other instances, it provides that
Id. at 131. Accordingly, much like in Native American Distributing, the Tribe "clearly expressed its belief that [the Authority] was a division of the Tribe that was entitled to its immunity from suit." 546 F.3d at 1294.
We also find that the fifth factor, the financial relationship between the Tribe and the entities, weighs in favor of tribal sovereign immunity. Significantly, we note that BMG appears to acknowledge that the district court's determination that the Authority was obligated to pay the Tribe a minimum payment of $1 million per month was error. See Aplee. Answer Br. & Opening Br. at 12-13, 26 ("It is also important to note that there is no mandatory $1,000,000 payment."). That minimum payment was a key fact that the district court relied upon in its analysis.
In denying the Authority and the Casino's motion to dismiss, the district court stated that "the Authority is obligated to pay over to the Tribe at least $1 million per month, regardless of its actual revenues." Aplts. App. at 46. Therefore, the court reasoned, "should the actual profits fall short, the Authority will borrow or run a deficit to ensure that the Tribe receives that which it is entitled to," id. at 47, and, as a consequence, "the judgment would neither deprive the Tribe of its asset—the right to receive profits—nor its guaranteed minimum payment," id. at 48.
However, Mr. Graham testified at the evidentiary hearing that if the Authority did not have the funds to cover the payment due to a decrease in Casino revenue, that payment "wouldn't happen." Aplee. Supp.App. at 147-48. Furthermore, an auditor's report explains the "minimum guaranteed monthly payment" as follows: "[T]he monthly payments to the Tribe from the Casino may be up to $1,000,000 per month cumulatively. . . ." Id. at 85 (emphasis added). Moreover, "the Authority introduced exhibits at the Evidentiary Hearing that reveal that it has previously failed to pay the Tribe the alleged mandatory $1,000,000 monthly payment for a number of months without any adverse consequences." Aplee. Answer Br. & Opening Br. at 26 (citing Aplee. Supp. App. at 53). Thus, we conclude from our review of the record that the district court's finding concerning the minimum payment was clearly erroneous.
And, finally, we conclude that the sixth factor, the overall purposes of tribal sovereign immunity, is served by a conclusion that the Authority and the Casino have such immunity. They are so closely related to the Tribe that their "activities are properly deemed to be those of the tribe." Allen, 464 F.3d at 1046. The Authority and the Casino plainly promote and fund the Tribe's self-determination through revenue generation and the funding of diversified economic development. See, e.g., Cabazon Band of Mission Indians, 480 U.S. at 218-19, 107 S.Ct. 1083; Allen, 464 F.3d at 1046-47; Gavle, 555 N.W.2d at 294-95; Trudgeon, 84 Cal. Rptr.2d at 70. Not only has "Congress. . . expressed a strong policy in favor of encouraging tribal economic development," Note, Tribal Sovereign Immunity: Searching for Sensible Limits, supra, at 186, but extending immunity to the Authority and the Casino "directly protects the sovereign Tribe's treasury, which is one of the historic purposes of sovereign immunity in general," Allen, 464 F.3d at 1047. In comparison, "[c]ases which have not extended immunity to tribal enterprises typically have involved enterprises formed `solely for business purposes and without any declared objective of promoting the [tribe's] general tribal or economic development.'" Trudgeon, 84 Cal.Rptr.2d at 70 (alteration in the original) (quoting Dixon, 772 P.2d at 1110).
After considering these factors, it is patent to us that the Authority and the Casino are so closely related to the Tribe that they should share in the Tribe's sovereign immunity. Under these circumstances, we must conclude that the district court clearly erred in finding that the Authority and the Casino were not subordinate economic entities entitled to tribal sovereign immunity.
Therefore unless they have waived their immunity,
BMG also raised the issue of waiver in what it calls a "protective" cross-appeal. Specifically, BMG cross-appealed "to preserve, as an additional or alternative basis for affirming that portion of the District Court's order of August 6, 2008[,] finding that Appellants could not invoke tribal sovereign immunity, the issue that Appellants also waived any claim of tribal sovereign immunity by executing the two license agreements with Breakthrough Management." Aplee./Cross-Aplt. Mem. Br. Jurisdiction, Attach. BMG0093 (Notice of Protective Cross-Appeal, filed Sept. 3, 2008). BMG argues that this court should exercise pendent appellate jurisdiction over its cross-appeal because the issue of waiver is "inextricably intertwined" with the Appellants's interlocutory appeals. Aplee./Cross-Aplt. Mem. Br. Jurisdiction at 18-19. BMG contends that there is a single issue at stake: "whether Appellants are entitled to assert tribal sovereign immunity as a defense." Id. at 18.
BMG states in the alternative that "[e]ven if the claims . . . were not `inextricably intertwined,' pendent jurisdiction still would be appropriate here, because review of the cross-appeal is necessary to ensure meaningful review of Appellants' claims of tribal sovereign immunity." Id. at 19. BMG maintains that if its argument regarding waiver is later found to be correct on subsequent appeal, that would render this court's review of the instant appeal meaningless. Id. BMG also contends that the only way it could raise the issue of waiver is through a cross-appeal because it "asks the Court to affirm on grounds that might enlarge the rights afforded the prevailing party" (i.e., the Tribe may be affected by this court's ruling that the parties to this appeal had waived any sovereign immunity they possessed). Id. at 13, 16.
We are unpersuaded. We conclude that it would be improper for us to exercise pendent jurisdiction over BMG's cross-appeal.
Issues are inextricably intertwined if "the pendent claim is coterminous with, or subsumed in, the claim before the court on interlocutory appeal— that is, when the appellate resolution of the collateral appeal necessarily resolves the pendent claim as well." Moore v. City of Wynnewood, 57 F.3d 924, 930 (10th Cir.1995); see Malik v. Arapahoe Cnty. Dept. of Social Servs., 191 F.3d 1306, 1317 (10th Cir.1999) ("Accordingly, our application of the `inextricably intertwined' standard for exercising pendent jurisdiction over interlocutory appeals must be narrowly focused on those claims the review of which would not require the consideration of legal or factual matters distinct from those raised by the claims over which we unquestionably have jurisdiction." (emphasis added)).
As clearly evident from our decision to remand the issue of waiver to the district court, supra, we do not view the waiver issue as being inextricably intertwined with the question of whether the Authority and the Casino share in the Tribe's sovereign immunity. Our decision concerning the latter issue does not "necessarily resolve[] the pendent [waiver] claim as well." Moore, 57 F.3d at 930. The immunity and waiver issues are distinct. See Sac & Fox Nation v. Hanson, 47 F.3d 1061, 1064 (10th Cir.1995) ("[I]f the Nation was entitled to sovereign immunity, it did not waive its immunity from suit. We must therefore address the predicate question of whether the Nation had sovereign immunity in the first instance."); see also Gonzalez v. 7th St. Casino, No. 09-2674-CM, 2010 WL 1875734, at *2 (D.Kan. May 5, 2010) ("Whether an entity is entitled to tribal sovereign immunity to begin with is a separate issue from whether immunity has been waived."); Bales v. Chickasaw Nation Indus., 606 F.Supp.2d 1299, 1305-06 (D.N.M.2009) (as to that case, noting that "waiver is not an issue but rather the issue is whether there is tribal sovereign immunity to begin with"). Our resolution of the former issue (i.e., the availability of tribal sovereign immunity) involves consideration of the relationship between the Tribe and the Authority and the Casino, whereas our resolution of the latter (i.e., waiver of any tribal sovereign immunity) calls for consideration of the effect of the forum-selection clauses of the license agreements. See Aplts./Cross-Aplees. Mem. Br. Jurisdiction at 10 ("[T]he appeal only requires the Court to examine the relationship between Appellants and the Tribe. The effect, if any, of BMG's license agreement is a separate claim under a separate legal theory."). Furthermore, our decision concerning sovereign immunity will stand as meaningful precedent involving complicated Indian-law issues, irrespective of the ultimate conclusion concerning waiver before the district court or in any subsequent appeal.
In the context of an interlocutory appeal, the functional equivalent of the original judgment is the interlocutory order appealed from—viz., in this instance, the district court's order denying sovereign immunity to the Authority and the Casino. See Behrens v. Pelletier, 516 U.S. 299, 307, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996) ("[A]n order rejecting the defense of qualified immunity at either the dismissal stage or the summary judgment stage is a `final' judgment subject to immediate appeal."); Roska ex rel. Roska v. Sneddon, 437 F.3d 964, 970 (10th Cir.2006) ("Although we have jurisdiction over Defendants' appeal from the district court's denial of their motion for summary judgment on qualified immunity, we decline to assert pendent appellate jurisdiction over Defendants' claim that the district court failed to apply
As the Authority and the Casino correctly note, "BMG's `right' conferred by that [interlocutory immunity] order is the right to maintain its lawsuit against these two defendants." Aplts./Cross-Aplees. Mem. Br. Jurisdiction at 12 (emphasis added). If BMG were successful on its waiver argument, that right would not be enlarged. Accordingly, we decline to assert pendent jurisdiction over BMG's waiver-based cross-appeal, and, accordingly, dismiss it.
For these reasons, we
In advocating against the application of Native American Distributing at oral argument, BMG attempted to distinguish between the types of entities created by tribes—on the one hand, those created under tribal law, and, on the other hand, those created under Section 17 of the Indian Reorganization Act, 25 U.S.C. § 477, which authorizes the Secretary of Interior "upon petition by any tribe" to "issue a charter of incorporation to such tribe." Id. According to BMG, the Tribe did not avail itself of § 477 here, but rather created the Authority and the Casino under tribal law. On the other hand, it argues that in Native American Distributing, where we concluded that the tribe-related entity was immune from suit, the analysis turned on whether the tribe had created a § 477 entity. We are inclined, however, to believe that BMG's argument reflects a misreading of that case, which contains no mention of § 477. We also note that
Clay Smith, Tribal Sovereign Immunity: A Primer, 50 Advoc. 19, 20-21 (May 2007) (footnotes omitted). However, we need not opine definitely on this purported distinguishing factor because BMG has waived this argument by not including it in its opening brief. We do not consider issues raised for the first time at oral argument. See Corder v. Lewis Palmer Sch. Dist. No. 38, 566 F.3d 1219, 1235 n. 8 (10th Cir.), cert. denied, ___ U.S. ___, 130 S.Ct. 742, 175 L.Ed.2d 515 (2009).
We also note that in evaluating these factors, we need not decide whether the Authority and the Casino are located on Indian lands. BMG vigorously argues that they are not, contending that their purported location outside of Indian land undermines their claim that their operations further tribal economic development and self-determination. See Aplee. Answer & Opening Br. at 29 ("While the Resort Parties argue that granting immunity will promote `tribal economic development, self sufficiency, and strong tribal governments,' they do not address how compelling a separate business entity that operates outside of `Indian Lands' to comply with U.S. copyright and trademark laws will weaken its government, cause it to be less self-sufficient, or will impact its economic development." (quoting Aplts. Opening Br. at 12)). However, this factor did not appear to be a significant one to the Native American Distributing court; it did not discuss whether SCTC was located on Indian lands. Consequently, we do not feel obliged to give it independent consideration in our tribal immunity analysis here. Furthermore, even if the Authority and the Casino were not located on Indian land, we suspect that this fact would not avail BMG in the tribal immunity analysis. See Kiowa Tribe of Okla., 523 U.S. at 758, 118 S.Ct. 1700 (rejecting the invitation to "confine it [i.e., the doctrine of tribal sovereign immunity] to reservations or to noncommercial activities" (emphasis added)); Cohen, supra, § 21.02[2] at 1285 ("Tribal sovereign immunity extends to off-reservation activities of the tribe and applies to both governmental and commercial activities." (emphasis added)).
We also are not convinced by BMG's contention that the Authority and Casino's insurance policies protect the Tribe from being financially responsible for, or harmed by, an adverse judgment against them, and weigh against a finding of immunity. Even if the insurance policies would provide coverage in this instance, which is far from certain, we would nevertheless conclude that this fact does not outweigh the balance of the other factors in favor of immunity.
