Gaming Corp. of America v. Dorsey & Whitney

Citation88 F.3d 536
Decision Date27 June 1996
Docket Number95-3696,Nos. 95-3441,s. 95-3441
PartiesGAMING CORPORATION OF AMERICA; Golden Nickel Casinos, Inc., Plaintiffs/Appellees, v. DORSEY & WHITNEY, a partnership, Defendant/Appellant. In re DORSEY & WHITNEY, a partnership, Petitioner.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Kay Nord Hunt, Minneapolis, MN, argued (Phillip A. Cole, on the brief), for appellant/petitioner.

Michael A. Stearn, Minneapolis, MN, argued, for appellee/respondent.

Before LOKEN, HANSEN, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

Gaming Corporation of America (Gaming Corp.) and Golden Nickel Casinos, Inc. (Golden Nickel) sued the Dorsey & Whitney law firm (Dorsey) in state court, alleging that Dorsey had violated state and federal law while representing a Native American tribe during a tribal casino management licensing process. Dorsey removed the case to federal district court, which remanded to the state court after dismissing several causes of action and concluding that no federal questions remained. Dorsey seeks review either by a petition for a writ of mandamus or by appeal, on the basis that federal questions remain and that the Indian Gaming Regulation Act (IGRA), 25 U.S.C. §§ 2701 et seq., completely preempts the field of Indian gaming regulation.

I.

Gaming Corp. and Golden Nickel (the management companies) are Minnesota corporations involved in the management of gambling casinos. They have overlapping ownership and at one point agreed to merge. Dorsey is a large Minnesota law firm which actively represented Gaming Corp. for some time.

The Ho-Chunk Nation is a recognized Native American tribe in Wisconsin and was known as the Wisconsin Winnebago Tribe until 1994. The nation decided to open a casino and negotiated a tribal-state compact with the state of Wisconsin in 1992 as required by IGRA to allow it to conduct casino gaming. The nation desired to have Dorsey represent it during the process of developing the casino, and Golden Nickel hoped to receive the contract to manage it.

Dorsey had been representing Gaming Corp. but wished to begin representing the tribe. Since the management companies had overlapping ownerships, Dorsey wrote to the nation and Golden Nickel advising them of the possibility that the interests of the nation could be adverse to those of Golden Nickel and requesting their permission to represent the nation. The letter contained assurances that Dorsey would disclose no confidential information gained from its representation of Gaming Corp. In February 1992 Golden Nickel and the nation both consented to Dorsey's representation of the nation, 1 and in July of that year Dorsey became special counsel to the nation under a contract approved by the Bureau of Indian Affairs. Dorsey states it ended its representation of Gaming Corp. in April 1993.

On October 7, 1992 Golden Nickel and the nation entered into an agreement under which Golden Nickel would manage the Ho-Chunk Casino to be constructed in Baraboo, Wisconsin. Golden Nickel was to provide financing for the construction and to maintain at all times a valid license from the Winnebago Gaming Commission, the nation's regulatory body for gaming. Golden Nickel obtained a provisional license from the tribal gaming commission in May 1993, which was valid until the end of that year. The agreement also required Gaming Corp. to obtain a license if the management companies merged as they proposed. The casino was built and began operating.

In December 1993 Golden Nickel applied for a permanent license, and several months later Gaming Corp. also applied for a license. The management companies apparently planned to merge if both applications were approved. Dorsey assisted the tribal gaming commission in assessing the applications and was in charge of presenting evidence at several commission hearings held from December 1993 through May 1994.

After receiving the evidence, the tribal gaming commission denied the applications of both Gaming Corp. and Golden Nickel. The commission concluded that the individuals who owned all of Golden Nickel and much of Gaming Corp. had violated the terms of the provisional license. It found that one of the individuals had improperly attempted to influence a member of the nation's business committee 2 to secure permanent license approval and that the testimony of the owners of the management companies was often contradictory and not credible. It also found that the management companies had failed to sever ties with certain individuals as required by the provisional license. The permanent license applications were denied in July 1994, and the management contract was terminated since Golden Nickel could not continue to operate the Ho-Chunk Casino without a license.

The management companies appealed the tribal commission's decision in the nation's courts and also brought suit against several parties in Wisconsin state court. On February 9, 1995, the management companies and the nation reached a settlement of their disputes. The nation agreed to pay the management companies $42 million in exchange for a release of all claims and for land controlled by the companies. 3

Meanwhile, the management companies filed this action against Dorsey in Minnesota state court on September 17, 1994. The complaint, and the amended complaint filed less than a week later, contained eleven counts. The management companies alleged numerous common law violations. The thrust of these counts was that Dorsey had made the licensing process unfair by intentionally or negligently making the management companies appear unsuitable. Dorsey allegedly used fraudulent and harassing tactics after having represented that the licensing process would be a mere formality. Several counts also alleged that Dorsey had violated a fiduciary duty owed to the management companies arising out of its representation of Gaming Corp. Count IX alleged that Dorsey had violated the Indian Civil Rights Act, 25 U.S.C. § 1302. The management companies claimed damage in excess of $100 million.

Dorsey removed the case to federal court in October 1994. Its amended notice of removal stated that the complaint raised federal questions since many of the allegations related to gaming license proceedings governed by IGRA and since count IX arose under the Indian Civil Rights Act. Dorsey moved to dismiss the complaint in November on the basis that the management company causes of action were completely preempted by IGRA and that count IX did not state a claim because no private right of action exists under the Indian Civil Rights Act. On the same day the management companies moved to remand to state court.

In April 1995 the management companies were allowed to file a second amended complaint. Count IX was amended to allege a conspiracy to violate the Indian Civil Rights Act. Counts XII and XIII were added, alleging violations of the management companies' due process rights under the fourteenth and fifth amendments to the United States Constitution.

On August 30, 1995 the district court issued an order dismissing some claims and remanding the remainder to state court. As a threshold matter it concluded that state law is not completely preempted by IGRA. It dismissed for failure to state a claim the due process allegations in counts XII and XIII and portions of two counts alleging Dorsey's breach of a duty of good faith and fair dealing under IGRA. After concluding that the count IX conspiracy related to the Indian Civil Rights Act arose under state law and that no federal causes of action remained, it declined to exercise supplemental jurisdiction and remanded under 28 U.S.C. § 1367(c)(3).

Dorsey then petitioned for a writ of mandamus and also filed an appeal because of uncertainty about the proper procedure to obtain review. Dorsey argues that the district court had no discretion to remand the case since IGRA completely preempts state law, that all alleged causes of action arise under federal law but fail to state a claim upon which relief can be granted, and that all claims should therefore be dismissed.

II.

The management companies argue that this court does not have jurisdiction to consider the issues raised, either on appeal or on a petition for a writ of mandamus. In support of their position they point out that 28 U.S.C. § 1447(d) bars appellate review when a case is remanded because of improper removal or because the federal court lacks subject matter jurisdiction.

Section 1447(d) provides that an order of remand is not reviewable unless the case was removed under § 1443, the federal civil rights removal statute. This broadly stated restriction has been construed narrowly, however, and the Supreme Court has explained that only cases remanded under 28 U.S.C. § 1447(c) are subject to this nonreviewability provision. 4 Quackenbush v. Allstate Insurance Company, --- U.S. ----, ----, ---- - ----, 116 S.Ct. 1712, 1718, 1720-21, --- L.Ed.2d ---- (1996); Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 346, 96 S.Ct. 584, 590-91, 46 L.Ed.2d 542 (1976). This case was not remanded under 28 U.S.C. § 1447(c), so 1447(d) does not bar review by an appellate court.

Count IX of the original complaint alleged a violation of the Indian Civil Rights Act, 25 U.S.C. § 1302, 5 so the district court had federal question jurisdiction at the time of removal apart from the claimed complete preemption by IGRA. The district court explicitly remanded the case under 28 U.S.C. § 1367(c)(3) after concluding no federal claims remained and declining to exercise supplemental jurisdiction. 6 Gaming Corporation of America and Golden Nickel Casinos, Inc. v. Dorsey & Whitney, No. 4-94-1036, slip op. at 15 (D.Minn. Aug. 30, 1995). Because the district court never lacked subject matter jurisdiction and remanded under § 1367, neither § 1447(d) nor any other statutory bar exists to our jurisdiction. See In re Burns & Wilcox, Ltd., 54 F.3d...

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