Fort Sill Apache Tribe v. Nat'l Indian Gaming Comm'n

• Citation: 103 F.Supp.3d 113
• Decision Date: 12 May 2015
• Docket Number: Civil Action No. 14–958 RMC
• Parties: Fort Sill Apache Tribe, Plaintiff, v. National Indian Gaming Commission and Jonadev Chaudhuri, Defendants.
• Court: U.S. District Court — District of Columbia

103 F.Supp.3d 113

Fort Sill Apache Tribe, Plaintiff,

v.National Indian Gaming Commission and Jonadev Chaudhuri, Defendants.

Civil Action No. 14–958 RMC

United States District Court, District of Columbia.

Signed May 12, 2015

Kenneth John Pfaehler, Dentons US LLP, Washington, DC, for Plaintiff.

Jody Helen Schwarz, U.S. Department of Justice, Enro, Washington, DC, for Defendants.

OPINION

ROSEMARY M. COLLYER, United States District Judge

This action concerns a Notice of Violation issued by the Chairman of the National Indian Gaming Commission to the Fort Sill Apache Tribe on July 21, 2009, which the Tribe timely appealed. The Commission has failed to issue a decision on the appeal even though briefing has been complete for several years. The Tribe seeks injunctive and declaratory relief under the Administrative Procedure Act. NIGC moves to dismiss. The motion will be granted in part and denied in part.

I. FACTS

In April 2009, Fort Sill Apache Tribe (the Tribe) opened a gaming facility known as the “Apache Homelands Casino” at Akela Flats, Luna County, New Mexico, on land that the United States had taken into trust for the use and benefit of the Tribe. Compl. [Dkt. 1] ¶¶ 3, 5, 73. The Chairman of National Indian Gaming Commission (NIGC) issued a Notice of Violation 00–35(NOV) on July 21, 2009, which asserted that the Tribe had violated the Indian Gaming Regulatory Act, 25 U.S.C. § 2719 (IGRA), by gaming on Indian lands ineligible for gaming. He ordered the Tribe to cease immediately all gaming operations at Akela Flats. Id. ¶¶ 5, 75; id., Ex. 1(NOV) at 1, 6. The NOV cited the potential for civil fines of up to $25,000 per day if the Apache Homelands Casino remained open. Compl. ¶ 78; NOV at 6. The Tribe timely sought review of the NOV. Compl. ¶ 10. NIGC proposed to stay any civil fines if the Tribe ceased gaming at Akela Flats pending resolution of the NOV appeal and any subsequent judicial review. Id. ¶ 79. The Tribe agreed and the casino has been closed since 2009.Id. ¶ 80.

NIGC then proposed an expedited appeal procedure: the full Commission would issue a decision based solely the Tribe's initial brief, NIGC's responsive brief, and the Tribe's reply brief and without a hearing before an independent presiding officer. Id. ¶ 83. On September 9, 2009, the Tribe notified NIGC that it agreed to waive its right to the hearing in exchange for the expedited appeal procedure. Id. ¶ 85. At that time, NIGC had not informed the Tribe that the State of New Mexico had petitioned to intervene in the Tribe's administrative appeal or that NIGC had decided to permit intervention. Id. ¶ 86–87. By letter dated September 18, 2009, NIGC advised the Tribe that New Mexico would enjoy full party status in the Tribe's appeal. Id. ¶ 88. On February 22, 2010, NIGC notified the Tribe, stating that it would not file a responsive brief. Id. ¶ 90.

Briefing was completed by August 26, 2011. SeeMot. to Dismiss, Affidavit of Michael C. Hoenig [Dkt. 10–4] (Hoenig Decl.), Ex. 28 ¶ 8. Subsequently, the Tribe notified NIGC that it was considering seeking a stay of the NOV appeal pending its efforts to make a joint application with New Mexico to the Department of the Interior (DOI) regarding its gaming eligibility. Pl. Opp'n [Dkt. 16], Declaration of Alan R. Fedman (Fedman Decl.) ¶ 3. On January 9, 2012, the Tribe's counsel informed NIGC that there would be no joint application to DOI with New Mexico and, therefore, the Tribe would not ask for a stay. Id. ¶ 4.

In early May 2013, the Tribe requested a status conference with Eric Shepard, Acting General Counsel of NIGC, to ask for an expedited decision on the appeal. Id. ¶ 7. On a March 22, 2013 conference call, Mr. Shepard informed the Tribe that a decision would be issued within a few months of the call. Id.¶ 9. In June 2013, the Tribe contacted NIGC about the status of the appeal and Michael Hoenig, a Senior Attorney for NIGC, told the Tribe that the Commission was actively working on the appeal. Id. ¶¶ 2, 10. On a November 4, 2013 conference call regarding the status of the appeal, Mr. Shepard advised the Tribe that a decision would be issued by the end of 2013. Id. ¶ 12. No such decision was issued.

The Tribe filed its Complaint on June 6, 2014, advancing claims under the Administrative Procedure Act, 5 U.S.C. § 701 et seq.(APA), based on the Commission's failure to issue a decision on the NOV appeal. Count One cites Section 706(1) and alleges that “[b]y failing to issue a decision within the time required by its own representations, its own regulations and all reasonable standards of administrative procedure, the NIGC has unreasonably delayed and unlawfully withheld a discrete, mandatory action in violation of the APA.” Compl. ¶ 103. The Tribe asks the Court to “compel agency action unlawfully withheld or unreasonably delayed.” Id. ¶ 97. Count Two cites Section 706(2) and alleges that “NIGC's determination, and subsequent affirmation by inaction, that Akela Flats is ineligible for gaming under IGRA, is arbitrary, capricious, an abuse of discretion, otherwise not in accordance with law, and without observance of procedure required by law” and should be invalidated. Id. ¶¶ 105, 120.

On September 23, 2014, NIGC moved to dismiss the Complaint for lack of subject matter jurisdiction and for failure to state a claim, and the Tribe opposes. Mot. to Dismiss [Dkt. 10]; Opp'n [Dkt. 16]; Reply [Dkt. 17].¹

II. STANDARD OF REVIEW

A. Rule 12(b)(1) Motion to Dismiss

Federal Rule of Civil Procedure 12(b)(1)allows a defendant to move to dismiss a complaint, or any portion thereof, for lack of subject matter jurisdiction.Fed.R.Civ.P. 12(b)(1). When reviewing a motion to dismiss for lack of jurisdiction under Rule 12(b)(1), a court must “assume the truth of all material factual allegations in the complaint and ‘construe the complaint liberally, granting plaintiff the benefit of all inferences that can be derived from the facts alleged.’ ” Am. Nat'l Ins. Co. v. FDIC,642 F.3d 1137, 1139 (D.C.Cir.2011)(quoting Thomas v. Principi,394 F.3d 970, 972 (D.C.Cir.2005).

To determine whether it has jurisdiction over the claim, a court may consider materials outside the pleadings. Settles v. U.S. Parole Comm'n,429 F.3d 1098, 1107 (D.C.Cir.2005). No action of the parties can confer subject matter jurisdiction on a federal court because subject matter jurisdiction is an Article III and a statutory requirement. Akinseye v. District of Columbia,339 F.3d 970, 971 (D.C.Cir.2003). The party claiming subject matter jurisdiction bears the burden of demonstrating that such jurisdiction exists. Khadr v. United States,529 F.3d 1112, 1115 (D.C.Cir.2008); seeKokkonen v. Guardian Life Ins. Co. of America,511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)(noting that federal courts are courts of limited jurisdiction and “[i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.”) (internal citations omitted).

B. Rule 12(b)(6)Motion to Dismiss

A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6)challenges the adequacy of a complaint on its face. Fed.R.Civ.P. 12(b)(6). A failure to exhaust administrative remedies is properly brought in a Rule 12(b)(6)motion for failure to state a claim. See Marcelus v. Corr. Corp. of America/Corr. Treatment Facility,540 F.Supp.2d 231, 235 n. 4 (D.D.C.2008)(collecting cases); Brown v. McHugh,972 F.Supp.2d 58, 64 (D.D.C.2013). In such a motion, the defendant bears the burden of proving by a preponderance of the evidence that the plaintiff failed to exhaust mandatory administrative remedies. See e.g.,Hudson v. Children's Nat. Med. Ctr.,645 F.Supp.2d 1, 4 (D.D.C.2009)(citing Bowden v. United States,106 F.3d 433, 437 (D.C.Cir.1997)). In deciding a motion under Rule 12(b)(6), a court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits or incorporated by reference, and matters about which the court may take judicial notice. Abhe & Svoboda, Inc. v. Chao,508 F.3d 1052, 1059 (D.C.Cir.2007).

III. ANALYSIS

NIGC argues that the Complaint must be dismissed because (1) the Tribe cannot establish a waiver of sovereign immunity needed to sue a federal agency and its officer and (2) the APA precludes judicial review of the NOV because (a) it is not final agency action and (b) the Tribe has failed to exhaust its administrative remedies. In opposition, the Tribe argues that the APA provides the requisite waiver of sovereign immunity, that NIGC's continued failure to act makes the NOV the functional equivalent of final agency action, and that the Court can compel NIGC to issue a decision on the Tribe's appeal. The Court finds that NIGC is subject to suit because the APA provides an express waiver of sovereign immunity that is applicable here. The Court agrees with the Tribe that it has jurisdiction over Count 1 to compel agency action that has been unreasonably delayed, but finds that jurisdiction is lacking over Count 2 because there has been no final agency action.

A. Sovereign Immunity

As NIGC correctly points out, there must be a valid waiver of the United States' sovereign immunity for the Tribe to bring claims against an agency of the United States and its official, as it does here. See, e.g.,Block v. North Dakota,461 U.S. 273, 287, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983)(“The basic rule of federal sovereign immunity is that the United States cannot be sued at all without the consent of Congress.”). The principles of sovereign immunity apply equally to federal agencies, officers, and employees acting in their official capacity. SeeFDIC v. Meyer,510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994); Kentucky v. Graham,473 U.S. 159, 165–66, 105 S.Ct. 3099, 87 L.Ed.2d 114 (1985). The United States' exemption from suit is expressed in jurisdictional terms—that is, federal courts lack subject matter jurisdiction over suits against the United States in...