MM&a Prods., LLC v. Nation

• Decision Date: 16 January 2014
• Docket Number: No. 2 CA–CV 2013–0051.,2 CA–CV 2013–0051.
• Citation: 234 Ariz. 60,678 Ariz. Adv. Rep. 11,316 P.3d 1248
• Court: Arizona Court of Appeals
• Parties: MM&A PRODUCTIONS, LLC, An Arizona Limited Liability Company, Plaintiff/Appellant, v. YAVAPAI–APACHE NATION, a Federally Recognized Indian Tribe; Yavapai–Apache Nation's Cliff Castle Casino, a Business Enterprise of the Yavapai–Apache Nation; Tribal Gaming Board; and Cliff Castle Casino Board of Directors, Defendants/Appellees.

234 Ariz. 60

316 P.3d 1248

678 Ariz. Adv. Rep. 11

MM&A PRODUCTIONS, LLC, An Arizona Limited Liability Company, Plaintiff/Appellant,

v.YAVAPAI–APACHE NATION, a Federally Recognized Indian Tribe; Yavapai–Apache Nation's Cliff Castle Casino, a Business Enterprise of the Yavapai–Apache Nation; Tribal Gaming Board; and Cliff Castle Casino Board of Directors, Defendants/Appellees.

No. 2 CA–CV 2013–0051.

Court of Appeals of Arizona,

Division 2.

Jan. 16, 2014.

Law Office of Michael Meehan, By Michael J. Meehan, Tucson, Counsel for Plaintiff/Appellant.

Crowell Law Offices Tribal Advocacy Group, By Scott Crowell William Foreman, Scottsdale, Sedona, Co-counsel for Defendants/Appellees.

Presiding Judge KELLY authored the opinion of the Court, in which Judge ESPINOSA and Judge ECKERSTROM concurred.

OPINION

KELLY, Presiding Judge.

¶ 1 MM&A Productions, LLC, appeals from the trial court's judgment dismissing its contract action against the Yavapai–Apache Nation and related entities for lack of subject matter jurisdiction. It argues the court erred by concluding it had failed to show a valid waiver of the Nation's sovereign immunity, and by not allowing further discovery and holding an evidentiary hearing before ruling. We affirm.

Factual and Procedural Background

¶ 2 In 2008, MM&A filed a complaint against the Yavapai–Apache Nation, its tribal gaming board, the tribe's Cliff Castle Casino, and the casino's board of directors (collectively, the Nation), alleging breach of a 2006 “Exclusive Entertainment and Production Agreement” and associated claims, including breach of the implied covenant of good faith and fair dealing, unjust enrichment, tortious interference with prospective business advantage, and fraud. The complaint stated the casino's marketing director, Steven Wood, had signed the 2006 agreement with MM&A and had waived the Nation's sovereign immunity. Attached to the complaint was a copy of the contract, which had been signed on May 18, 2006, and a “Waiver of Sovereign Immunity Addendum,” which Wood had signed on June 30, 2006. MM&A also attached a 2002 “Exclusive Entertainment Booking Agreement” and a 2003 “Waiver of Sovereign Immunity,” both signed by a previous marketing director.

¶ 3 The Nation filed a motion to dismiss the complaint pursuant to Rule 12(b)(1), Ariz. R. Civ. P., arguing, inter alia, that the trial court lacked subject matter jurisdiction over the action because MM&A had not shown a valid waiver of the Nation's sovereign immunity. In support of its motion, the Nation attached a copy of the Constitution of the Yavapai–Apache Nation, which states in article XIII:

The Yavapai–Apache Tribe hereby declares that, in exercising self-determination and its sovereign powers to the fullest extent, the Tribe is immune from suit except to the extent that the Tribal Council expressly waives sovereign immunity, or as provided by this constitution.

It also provided a copy of the Cliff Castle Casino Board of Directors' Act (Board Act), adopted by the Tribal Council in 2005. The Board Act described the procedure for negotiating and approving contracts, which required either a majority vote of the Board or consent of the Tribal Council. It also stated “[a]ll contracts shall to the greatest extent possible be drafted or negotiated to include language preserving the sovereign immunity of the Nation.”

¶ 4 The Nation submitted two declarations by the Tribal Council's Executive Secretary, which stated that she had reviewed the Tribal Council minutes from January through August 2006 and there had been no motions authorizing any casino employee to execute the 2006 contract or waiver of immunity. She further stated there had been no Tribal Council resolution to that effect in 2006 or 2007. It also attached the declaration of a casino board member, stating there was no resolution in 2006 or 2007 authorizing the board to enter into a contract with MM&A or to waive the Nation's immunity. The casino board's Administrative Assistant further declared there had been no motion from January 2006 through August 2006 for any board member or casino employee to execute the contract or a waiver of immunity. The Nation's Acting Attorney General from October 2005 through December 2006 described the approval procedure for casino contracts and stated the contract with MM&A had not been submitted to her office or approved for consideration by the board.

¶ 5 In its response to the Nation's motion to dismiss, MM&A argued the contract was “an explicit waiver of [the Nation's] sovereign immunity,” Wood “had at least apparent authority” to waive immunity, the Board could have delegated authority to Wood to execute the contract, the Nation's Attorney General had approved the contract, and the Tribal Council or board may have passed a resolution prior to 2006 granting Wood the authority to enter into the contract and waive sovereign immunity. In support of its contentions, MM&A attached the affidavit of its Executive Director, who had negotiated the 2006 contract, stating that Wood had told him the Nation's Attorney General had reviewed the contract and the casino's board of directors had “given him ... authority to sign the Contract and the waiver of sovereign immunity,” and that the Chairperson of the board and a Tribal Council member had told him in “conversations” that the board and council were “aware of and approved the waiver of sovereign immunity.”

¶ 6 After a hearing on the motion, the trial court granted the Nation's motion to dismiss. The court was “not persuaded Mr. Wood possessed authority to waive the sovereign immunity of the ... Nation and its affiliates” and concluded MM&A had failed to demonstrate the Nation had made a “valid sovereign immunity waiver.” It found “the Yavapai–Apache Nation possesses a clear protocol by which a business like MM&A can secure a waiver” and MM&A had “utterly failed to avail itself of these tribal procedures.” ¹ This appeal followed.

Apparent Authority to Waive Immunity

¶ 7 MM&A first argues the trial court erred by concluding the doctrine of apparent authority was not “available” to prove a valid waiver of the Nation's sovereign immunity. Because MM&A raises a purely legal question, we review it de novo. See City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, ¶ 50, 181 P.3d 219, 233–34 (App.2008). And although the trial court may resolve factual issues bearing on its jurisdiction, we review de novo the court's ultimate conclusion that the doctrine of sovereign immunity applies to divest the Arizona courts of jurisdiction over MM&A's claims. See Filer v. Tohono O'Odham Nation Gaming Enter., 212 Ariz. 167, ¶ 5, 129 P.3d 78, 80 (App.2006); Mitchell v. Gamble, 207 Ariz. 364, ¶ 6, 86 P.3d 944, 947 (App.2004).

¶ 8 “Indian tribes have long been recognized as possessing common-law immunities from suit co-extensive with those enjoyed by other sovereign powers including the United States as a means of protecting tribal political autonomy and recognizing their tribal sovereignty which substantially predates [the United States] Constitution.” Pan Am. Co. v. Sycuan Band of Mission Indians, 884 F.2d 416, 418 (9th Cir.1989). Pursuant to the doctrine of sovereign immunity, lawsuits against Indian tribes are barred “absent a clear waiver by the tribe or congressional abrogation.” Okla. Tax Comm'n v. Citizen Band Potawatomi Indian Tribe, 498 U.S. 505, 509, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991). MM&A does not dispute that each defendant in this action, as a tribal entity or economic enterprise, is “clearly entitled to the protection of sovereign immunity.” See In re Greene, 980 F.2d 590, 593 (9th Cir.1992) (subordinate economic enterprise of tribe immune from suit for breach of contract); see also Filer, 212 Ariz. 167, ¶ 6, 129 P.3d at 80–81 (subordinate economic enterprise entitled to same immunity as tribe). But it argues it should be able to “use ... the doctrine of apparent authority to establish that the waiver of sovereign immunity [in this case] was binding against the Nation.”

¶ 9 As the trial court noted in its ruling, waivers of sovereign immunity are strictly construed in favor of the sovereign. Ramey Constr. Co. v. Apache Tribe of Mescalero Reservation, 673 F.2d 315, 320 (10th Cir.1982). The United States Supreme Court has articulated repeatedly 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), quoting United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976). In other words, the waiver must “expressly indicate[ ] the [tribe]'s consent” to suit. Pan Am. Co., 884 F.2d at 418. In addition, “if a tribe ‘does consent to suit, any conditional limitation it imposes on that consent must be strictly construed and applied.’ ” Mo. River Servs., Inc. v. Omaha Tribe of Neb., 267 F.3d 848, 852 (8th Cir.2001), quoting Namekagon Dev. Co. v. Bois Forte Reservation Hous. Auth., 517 F.2d 508, 509 (8th Cir.1975). In this case, the Nation's Constitution states it is “immune from suit except to the extent that the Tribal Council expressly waives sovereign immunity, or as provided by this constitution.” Yavapai–Apache Nation Const., art. XIII.

¶ 10 Federal law indicates that an Indian tribe's authorization to waive its immunity by agreement must be express, contrary to MM&A's suggestion that an official cloaked with apparent authority may execute a valid waiver absent actual authority to do so. Generally, sovereign immunity “cannot be waived by officials” in a way that “subject[s] the [sovereign] to suit in any court in the discretion of its responsible officers.” United States v. U.S. Fid. & Guar. Co. (USF & G), 309 U.S. 506, 513, 60 S.Ct. 653, 84 L.Ed. 894 (1940); see also Native Am. Distrib. v. Seneca–Cayuga Tobacco Co., 546 F.3d 1288, 1295 (10th Cir.2008) (tribal company not equitably estopped from asserting immunity where company officials told...