Davids v. Coyhis

• Decision Date: 09 December 1994
• Docket Number: No. 94-C-689 (JPS).,94-C-689 (JPS).
• Citation: 869 F. Supp. 1401
• Parties: Annette DAVIDS, Bert Davids, Shannon Miller, Verna Johnson-Miller, Sheila Powless, Robert Chicks, Leonard Miller III, Tammy Pecore, Virgil Murphy, and Linda Mohawk, Plaintiffs, v. Laura COYHIS, Harvey Martin, Arnold Tousey, and William Moede, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

869 F. Supp. 1401

Annette DAVIDS, Bert Davids, Shannon Miller, Verna Johnson-Miller, Sheila Powless, Robert Chicks, Leonard Miller III, Tammy Pecore, Virgil Murphy, and Linda Mohawk, Plaintiffs, v. Laura COYHIS, Harvey Martin, Arnold Tousey, and William Moede, Defendants.

No. 94-C-689 (JPS).

United States District Court, E.D. Wisconsin.

December 9, 1994.

Brian L. Pierson, Hall, Patterson & Charne, S.C., Milwaukee, WI, for plaintiffs.

Jerry W. Snider, Ann Marie Hanrahan, Richard A. Duncan, Randall E. Kahnke, Elizabeth M. Hendricks, Faegre & Benson, Minneapolis, MN, John Busch, Michael, Best & Friedrich, Milwaukee, WI, for defendants.

DECISION AND ORDER ORDER

STADTMUELLER, District Judge.

On June 23, 1994, Annette Davids, Bert Davids, Shannon Miller, Verna Johnson-Miller, Sheila Powless, Robert Chicks, Leonard Miller III, and Tammy Pecore, all enrolled members of the Stockbridge-Munsee Community Band of Mohican Indians (the Community), filed this action against Laura Coyhis, Harvey Martin, Arnold Tousey, and William Moede, members of the Community's Tribal Council. The plaintiffs seek injunctive and declaratory relief for the defendants' alleged violations of the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. §§ 2701-21. Before the court is the defendants' motion to dismiss.¹

The Community is a federally recognized tribe which occupies a reservation in Shawano County, Wisconsin. The Community is governed by its Tribal Council, a seven-member body composed of a president, a vice president, a treasurer, and four council members, who are elected by popular vote. All seven members have equal votes, and a simple majority rules. The present members of the Tribal Council, elected in December 1993, are Coyhis, president; Virgil Murphy, vice president; Linda Mohawk, treasurer; Steve Davids; Moede; Tousey; and Martin.

Through the Mohican North Star Casino and Bingo Enterprise, a separate, tribally chartered business organization, the Community owns and operates the Mohican North Star Casino (the Casino). The operations of the Casino are regulated by the IGRA, a Tribal-State compact between the Community and the State of Wisconsin, see 25 U.S.C. § 2710(d)(1)(C), and the Community's Gaming Ordinance, see id. § 2710(b)(1)(B), (b)(2), (d)(1)(A). The Gaming Ordinance provides for the establishment of a Gaming Board to monitor the Community's gaming enterprises and to ensure compliance with all policies, procedures, and regulations. The Gaming Board members are appointed by — and may be dismissed by — the Tribal Council. The Casino's management staff is responsible for day-to-day operations of the Casino. Two management staff positions, the general manager and the financial manager, are hired directly by the Tribal Council.

This case (and a related case²) arose out of political unrest in the Community. Earlier this year, relations between the members of the Tribal Council rifted. Coyhis, Moede, Tousey, and Martin formed a voting majority and took Council action without the cooperation or approval of the remaining three members. Apparently out of frustration at the majority's ability to control the Council's actions without their approval, the three minority members held a "special election" on June 18, 1994, to "elect" a new Tribal Council. Neither the special election nor the new council is recognized by the United States Department of the Interior's Bureau of Indian Affairs. The dissident Council members and their supporters refuse to recognize the authority of the majority led by Coyhis, resulting in considerable unrest within the Community.

The plaintiffs in this case are supporters of the dissident faction of the Tribal Council. Annette Davids, Bert Davids, Shannon Miller, Johnson-Miller, and Powless are members of the Community's Gaming Board; Chicks is the Community's director of economic development; Leonard Miller is the Casino's director of support services; and Pecore is the Casino's assistant general manager. The defendants are the four-member voting majority of the Tribal Council (the Coyhis group). The original complaint³ filed by the plaintiffs alleged that the Coyhis group established an unauthorized bank account for the purpose of diverting gaming revenue from the Casino's special bank account. The establishment of this new account, the plaintiffs allege, constituted a violation of the Gaming Ordinance, which requires the Community to maintain a special account to hold only gaming receipts, with signature authority vested in the Casino's general manager and a designated member of the Gaming Board. The plaintiffs also allege that the Coyhis group appointed an acting treasurer and appropriated control over Community funds in violation of the Community's constitution. Finally, the plaintiffs allege that the Coyhis group appointed individuals to the Gaming Board who were not eligible to serve as members pursuant to the provisions of the Gaming Ordinance, and that they employed a Casino general manager without performing a background check in violation of the IGRA and the Tribal-State Compact.

In the second case, 857 F.Supp. 641, the Coyhis group, on behalf of the Community, filed a complaint against Bruce Miller, Darrel Mason, Leah Miller-Heath, Terry Terrio, Carolyn Miller, Greg Miller, Marcelene Sparks, Blake Smith, Dave Koller, Terrance J. Miller, Leonard ("John") Miller III, Tammy Pecore, Debra LeMieux, and Cynthia Harris, all enrolled members of the Community. Miller-Heath, Terrio, Carolyn Miller, Greg Miller, Sparks, Smith, and Koller are members of the unrecognized tribal council; Terrance J. Miller is the Casino's director of surveillance; LeMieux is the Casino's vault manager; and Harris is the Casino's assistant financial manager. Leonard Miller III and Pecore also are named as plaintiffs in this case, 857 F.Supp. 641. The Community's complaint in 857 F.Supp. 641 alleges that the defendants physically prevented the Coyhis group from entering the Community's government offices and the Casino, thus forcing them to set up temporary headquarters, denying them access to books and records necessary to govern the Community, and preventing them from supervising the Casino's operation. The Community also alleges that the defendants wrongfully removed funds from the Casino, and that they refused to close the Casino temporarily to conduct an audit of funds and to alleviate any potential danger to Casino patrons and other members of the Community, despite a Tribal Council vote in favor of doing so. The Community alleges that the defendants' conduct violates RICO, 18 U.S.C. §§ 1961-68, the IGRA, and the Gaming Ordinance, and that the defendants' actions constitute a trespass of Community property and conversion of Community assets.

In response to the parties' concerns about the political instability within the Community, this court, through my colleague Chief Judge Terence T. Evans, held an evidentiary hearing in both cases with regard to the Community's motion for a preliminary injunction in 857 F.Supp. 641. Chief Judge Evans determined that the court had jurisdiction over the Community's claim that the defendants had prevented the Coyhis group from entering Community government offices, finding the defendants' challenge to the court's jurisdiction unpersuasive. After examining each of the factors necessary in determining whether preliminary injunctive relief is warranted, Chief Judge Evans granted the Community's motion and ordered that the defendants be enjoined from:

(1) preventing Tribal Council members from gaining access to tribal headquarters;

(2) preventing Tribal Council members from gaining access to the Casino; (3) interfering with the Tribal Council's ability to govern the Community or supervise the Casino (including but not limited to interfering with the Tribal Council's ability to change the signature cards on the Norwest Bank accounts and any other bank accounts opened by the defendants with Casino proceeds); and (4) removing any funds and/or property from the Casino or tribal headquarters.

Since the entry of Chief Judge Evans' order, the plaintiffs in 857 F.Supp. 641 have filed a motion for leave to amend their complaint.⁴ The defendants oppose the motion, arguing that the amendments do not cure the flaws of the original complaint, addressed in the defendants' motion to dismiss. Under Fed.R.Civ.P. 15(a), "leave shall be freely given when justice so requires." Generally, a trial court need not grant leave to amend a complaint where the amendments would not survive a motion to dismiss or for summary judgment. See, e.g., Perkins v. Silverstein, 939 F.2d 463, 472 (7th Cir.1991) ("A district court may deny leave to amend if the proposed amendment fails to cure the deficiencies in the original pleading, or could not survive a second motion to dismiss."). Here, however, the amended complaint serves to clarify and simplify the plaintiffs' claims and the parties agree that the same challenges in the defendants' motion to dismiss are applicable to the amended complaint. For those reasons, I will grant the plaintiffs' motion for leave to amend the complaint and consider the defendants' motion to dismiss with reference to the amended complaint.

The plaintiffs' amended complaint names two additional plaintiffs: Virgil Murphy, the vice president of the Tribal Council, and Linda Mohawk, the treasurer of the Tribal Council. The plaintiffs assert federal question jurisdiction based on alleged violations of the IGRA and state four claims arising out of the alleged violations. The first claim alleges that the defendants' transfer of gaming funds from the original account to a new account and the change in the signatory authority, allowing the defendants to sign checks drawn on the account, violates the Tribal-State Compact and the Gaming Ordinance, and thus the IGRA.⁵ The second claim alleges that the defendants have appropriated and expended Community funds, including gaming revenue, in violation...